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HomeMy WebLinkAbout1976-06-29 City Council Summary Minutese e CITY COUNCIL MINUTES ITEM CifY or: mix.) (ITC) Adjourned Meeting of June 28, 1976 June 29, 1976 PUBLIC HEARING: 1976.77 ANNUAL BUDGET (continued) Project Mobility Drug Abuse $9,000_ Reduction in Contract Services - Arts Department $5,000 Reduction in Recreation Casual Salaries at 8aylands and Firebreak Mainten*nce Addition of CETA Positions to the Table of Organization Arta Department - Technical Assistant Appropriatior4 of $50,000 in CIF for the Veterans Building Palo Alto Area Information and Referral Service Retired Seniors Volunteer Program Our Health Center Rental Housing Mediation Task Force Ordinance re lecreaaisig Transient Occupancy Tax Ordinance re Setting Various Fees Ordinance re Vehicles Standing or Parking Three A.M. to Six A.M. Ordinance to Regulate Private Intrusion Alarms Ordinance re Utility usere Tax Request to Move Oral Communications Forward on the Agenda Oral Communications kequeet to Bring Forward Items 6 and 7 for Purposes of Continuance Executive Session Ordinance re Utility Usere Tax (Discussion Continued) Resolution re Certain Admi sione and Golf Course and Green Fees Resolution re Utility Muses end Regulations Palo Alto Housing Corporation Contract for Pieta' Year 1976-77 Extension of Contracts - Son/or Coordinating Council and Palo Alto Community Child Care Executive Session Adjournment PAGE 1 3 1 7 1 3 1 7 1325 1 3 2 8 1 3 2 8 1 3 2 9 1 3 3 0 1 3 3 3 1 3 3 4 1 3 3 5 1 3 3 7 1 3 4 1 1 3 4 4 1344 1 3 4 5 1 3 4 5 1 3 5 2 1 3 5 2 !. 3 5 2 1 3 5 3 1 3 5 3 1 3 5 5 1 3 5 7 1357 1 3 5 8 1 3 5 8 1 3 5 8 1316 4/29176 June 29, 1976 The City Council o.t' the City of Palo Alto met on this date at 7:40 p.m. in the adjourned meting of June 28, 19769 with Mayor Norton presiding. Present: Beahra, Berwala, Carey (arrived 7:50 p.m.), Clay (arrived 7:50 p.m.), Comstock, Eyerly, Norton, Sher (arrived 7:55 p.m.), Witherspoon Absent: None Mayor Norton said the ordinance adopting a budget for 1976-77 was before Council (see minutes of Monday, June 28) and amendments to it were in order at this time. gQJECT FiQB1L11'Y AMENDMENT: Councilman, Comstock moved that $13,000.00 be reinstated in Transportation Services for Project Mobility. The amendment died for lack of a second. DRUG ABUSE Councilman Comstock noted that the Finance and Public Works Committee recommended elimination of any funding for this program at all. He said he had not agreed with Council's selection of tha present contractor, but that disagreement did not extends to the need for,end advisability of,Council funding for some service* in this area. Addressing the issue of the need of city government to do something in this particular area, Councilman Comstock said he remained convinced that some city support was required and justified. This its represented one of sufficient community priority so that there should be some funding. 4eINDMENT: Councilman Comstock moved, seconded by Eyerly, that (n) be stricken from the budget (current contract for drug abuse be alloyed to expire and drug program not be refunded is 1976-77 and funding be reduced by $36,000.00, allowing $2,00000 to phase out the program by August 1, 1976), and chat funding be restored to a level of that recommended prior to Committee action. Mayor Norton *eked if the intent was to resume the current contract or if Councilman Comstock seed sea tithing elate in mind. Caenciimen Comstock respoadad that if funds were restored, he still would reserve the right to disagree with Council's previous *election of the contractor. If that recommendation 1317 6/29/76 1)17 were the only one Council would be willing to face, Councilman Comstock stated he would have to oppose it. His thought was that Council and staff would again initiate the: process of a search for a suitable contractor without any prejudice at this point to any existing contractor as being favored or otherwise. Mayor Norton asked if this action would preclude other possible motions to discuss the present contractor on its merits. Councilman Comstock responded negatively. Councilman Beahrs felt that the drug problem should be handled at the broadeet level of the taxing authorities, aud Pe:lo Alto should require higher levels of government to carry their burdens. The kind of outlook, stated by Councilman Comstock would mean that the city would be constantly embroiled in financial difficulties. His suggestion was that if Palo Alto meted drug abuse supported in the north county, Councilmembera should appeal to the Board of Supervisors for funding. In Councilman Beahrs` opinion, the city taxpayers paid heavy taxes to the county and derived little from it compared to other contributors to county funds. He commended Narconon and thought their service had been very refreshing compared to that which had been gi=ven in years gone by; but, basically, he thought the Council should stay out of this trap. Councilwoman Witherspoon asked Councilman Berweld if there might be some support from the county in the drug abuse area for this coming year. Councilman berwald, representative to the County Drug Abuse Commission, responded that thtre was a very good poseibility that the county would initiate a study of drug abuse in the north county. The county has expressed an interest in working with organizations such se the Community Health Abuse Council, the County Drug Abuse Commission, the ?fountain View/Los Altos School District, and the Palo Alto Unified School District to find out whether or not i program could be developed that meld have community support in this part of the county. is long des the city funds the program, the county is not going to go ahead. Palo Alto's unilaterally providing a program does not really get to the heart of the problem at all. Councilman Bervald thought that, at best, a city program would be a maintenance one; and he said that without any criticism of Marconon intended. His own feeling was that a lot of the criticises of Marconi= and of Scientology vas just a lot of horseradish. The job Narconon was doing was fine as far as it goes; but there was only one person in the program of high school age, and that person was not a Palo Alto resident. Councilman Berwald pointed out that the School strict was working in the drug abuse area, Narconon was also working, ( AC was invo lvsd ; and as a result, the program was fragmented. The root problems of the causes and prevention of drug abuse were not being gotten to. There ought to be a reasonable send integrated program. Councilwoman Witherspoon asked if it would help or hinder getting a north county drug abuse' program if Council appropriated mosey in the budget for the problem. 1 3 1 6 6/29176 Councilman Berwald thought that if Palo Alto put funds into the drug abuse area, the county would feel it could put its fuvde into other sections of the county. Vice Mayor Clay remarked that he had intended to make somewhat the same motion as that made by Councilman Comstock, but he did have something just a bit different in mind. Since 1972, the city has determined that there is a drug problem in Palo Alto and that the city should support programs to combat the problem,. It is simple to say that if someone has a drug problem, that is his own fault; and Vice Mayor Clay thought perhaps he could accept that attitude if only adults were being talked about. Parents, when guiding their children, find it is very difficult to overcome the influence of their children's peers. In an affluent community such as Palo Alto, resources are easily available for obtaining drugs; and Vice Mayor Clay felt that drugs were rather freely used in the high schools, the junior high schools, and in the colleges. He said that ht had supported Narconon from the outset and that he introduced the program to Council in 1974. At that time, he had been impressed that the program had been in Palo Alto for two years supporting itself; and at the same time, the city was spending $200,000 a year for a program that was providing a similar type of service. It was Vice Hayor Clay's feeling then that if there were another program, it should be looked at - not necessarily as a substitute, but possibly. A program was needed to deal with the drug pxoble a that had been identified; and if one program could deal with the problem more effectively in terms of getting to the people and in terms of cost to the city, then it should be looked at. Vice Mayor Clay recalled that gfter considerable discussion at Council and Committee levels, staff presented and Council approved what turned out to be the moot rigorous contract ever executed for a human services program in Palo Alto and, possibly, is the United States. He dented that he had some reservations as to whether Narconon or any other organization could live t to those standards; but after readins the compliance report, Vice Mayor Clay cam to the conclusion that Narconon had lived up to the standards, and in some cases, exceeded them. If the city had determined that there is a problem, and if it had determined it wanted to coebst the problem, and if Palo Alto had contracted for a program which has done everything asked, then Vice Mayor Clay could not see why that program s:ro .Id not have continued suppor t . Arguments to the contrary were ones that he could not understand. The whole drug program has been in the political arena, but it was his hope that Council would be objective enough to make a proper decision in this case. AMENDMENT: Vice Mayor Clay moved, seconded by Hervald, that Narconon be refunded in the same manner es reflected in the existing contract for a period of one year, in the amount of $38,000. Councilman, Eyerly stated support of the notion, but he asked that rather than a one year contract, there be two six-month contracts with a simple report to be made at the end of the first six mouths as to boo many people had been treated, etc. 1 31.9 6/29/76 In that way, Council would have an opportunity to discontinue the contract at the end of six months if success could not be shown. Vice Mayor Clay was agreeable to this suggestion. AMENDMENT RESTATED: Vice Mayor Clay moved, seconded by Berwald, that Natconon be refunded in the same manner as reflected in the existing contract for a period of one year in the amount of $38,000.00, with the stipulation that the contract be divided into two six-month ones~ with a report made at the end of the first six months as to how many people had been treated, etc. George A. Sipel, City Manager, stated that the added suggestion to the motion could be worked out in the contract. Councilman Carey understood the contract motion to be a commitment to funds only, and he asked what would be anticipated nest if the motion parsed. Councilman Comstock's intent would be to direct the staff, after the subject had come back from the Policy and Procedures Committee, to initiate a search for contractors once the Council was clear as to its objectives -- that is, initiate a search for contractors against a specified set of standards. Councilman Catey asked if staff had reviewed Narcononss performance and drawn conclusions. Mr. Sipel replied thet there had been a May report which evaluated they Narconon performance; and, generally, the program filled the expected and hoped for performance as suggested in the contract, Councilman Carey concluded then that the report showed that Narconon had not failed to live up to the contract terns. Mr. Sipel said this was correct, and Narconon had lived up to the terns of the contract. Councilman Carey commented that everyone had heard periodically the therge that Narconon is really a religion in disguise. Re had not found any evidence to support that; and until he did, he was not willing to support that conclusion. Council- man Carey asked staff if they had found any such evidence. Mt. Sipel replied that staff had not specifically found any evidence of that type, -but they were in possession of some information which he believed all Councilmesabers had received about a month ago. Staff directed a latter to Mr. Jessup requesting that he respond to that particular information. Mr. Sipe1 said he bad not seen a response, but he assumed Mr. Jessup had made one to other m+eibsrs of the staff or that he Was prepared to msekr a response to Council at this meeting. -Councilman Carey was familiar with this information, and he also was sacage that the sender of the information - or opinions - had neither an address nor a telephone number and lives in another country. He asked if staff had attempted 1320 6/29/76 to contact the individual who sent in the information. Mr. Sipel responded negatively. The situation simply was that staff had the infcrmstion and wanted to get a response from the contractor. Councilman Sher wanted to review briefly the discussion held in the Finance and Public Works Committee meeting with regard to the general question of the city continuing to participate in underwriting a drug abuse program and specifically, the Narconon program. In the first round, Councilman Sher recalled there waa a divided vote. Two members of the Committee felt that Palo Alto had reached a point where it should no longer support a drug abuse program and instead, approach higher levels of government and try to get them to carry out their reaponeibilitiea in this area. More recently, it has developed that three members of the Committee are of that view; and the fourth member of the Committee had questions about the performance of the contractor. Councilman Eyerly has stated tonight that he would rather fund on a six month basis so that there could be a review at the end of that period to see whether questions he had about the program had been cleared up; Civen the history in Palo Alto of the high risk aspect of this kind of a program, Councilman Sher felt it would be better in the human services area to concentrate funds in other programs. With this lukewarm support from the Committee, although each member came from a different place on it, Council- man Sher thought it would be s serious mistake to go forward and continue to underr.Tite the Narconon program, The vote would be a closely divided one; and considering the previous history and divisiveness that this kind of program had generated, Councilman Sher concluded it would be better if the city did not give financial support to Narconon. Obviously, the program was operating before the city becaze involved; and Palo Alto should applaud it3 efforts and give whatever moral support it could. That remained his position. Vice Mayor Clay had hoped this subject would not be a political one, but it is that; and that fact may as well be recognized. The applause from the audience indicated that it has that flavor. Vice Mayor Clay commented that he had not heard Councilman Eyerly make remarks which Councilman Sher contends he had wade. His own response to Councilman Eyerly'e remarks was that it would be reasonable to look at the program within six months; and beyond that, perhaps most of the programs in the cityshould be looked at on a six month basis. Vice Mayor Clay stated he had no reservations up to this point that Narconon had lived up to its contract. His understanding of a six month review was that staff would give Council a report at that time which would state the effectiveness of Narconon. The staff report of June 23, 1976 included the following: "The form of this contract is highly experimental in the field of drag abuse funding. Other such contracts do not require that the program help a client end document this help before being reimbursed with public money. Such a contract places the burden of productivity and effectiveness clearly upon the programs itself. Potentially, such a form could save millions of dollars in drug abuse work and would operate to weed out by attrition ineffectual activity. For this reason, it is * threat to Ross; but its approval was a courageous act on the part of the Palo Alto City Council". 1 3 1 1 6/29/76 /3 1 •r.• -7.+T • •-T--, .-• .r, T.rar"d---ir•-w• .— Vice Mayor Clay said that was as strong a recommendation as he could think of. For these various reasons, Vice Mayor Clay could not understand why anyone would not want to refund Narconon, especially if one were in favor of putting money into the budget for a drug program. Of all the programs that responded to the city's request for proposals, there was not one that came in at half the amount that was under consideration - $38,000. It seemed to him that all the weight should be in favor of Narconon. Anyone who has reservations about it should give the program another year and see how he feels about it after the six month report is in. Councilmen Eyerly said he supported Narconon in the beginning; but during their first period of funding, certain things surfaced with which he was not in agreement. He discussed these things at the Finance and Public Works Committee meeting when Narconon was being talked to. One of the subjects addressed was broadening ;.he Board cf Directors so there would be members who were not involved with the Church of Scientology. Another was that they work on school pr'ograma, and they were to find out what they could do to have the Jaycee support continued. They were also asked to be careful what kind of filers they distributed and what kind of advertising was used. According to Mr. Jessup, efforts were being made toward broadening the Board of Directors and toward working with the schools. Mr. Jessup also reported to the Committee that the program still, had Jaycee support. Councilman Eyerly felt that Narconon was moving in the right direction. If they straightened out the minor problems that had come up in their administration, they would have his support. Councilman Eyerly felt it mould be wise to split the contract into two six-month periods ao there would be the opportunity to either cut oft the program if it ended up going in the wrong direction or else change it. Councilman berwa.d asked Councilman Eyerly if he were planning on waking an amendment to the motion to the effect that the Board of Directors of Narconon expand membership to reflect a broader community repreacntation. Councilman Eyerly explained that he had not planned any amendment to the motion because he thought they already moving in that direction. He said Narconon that he would not continue to support thous with his unless they continued that effort to wake were understood vote Councilmen lerwald thought Vice Mayor Clay's arguments were pe euasive, and the City Manager has stated that Narconon has fulfilled the terms of its contract. AMENDMENT TO AMENDMENT; Councilman Berwald moved, seconded by Eyerly, that approval of the contract after the six month revisor be determined by Council; that the first six months' cooticact expenditures not exceed $19,000; and that Council. ask the City Manager and the Board of supervisors appointee frog the north county to the County Drug Commission to initiate discussions toward as integrated north county drug abuse action progrms. Councilmen Be-abrs stated that be bad been opposing for five years the city's perticiyatioa in this regional problem. Earlier this evening, be would have voted against both the 1 3 2 2. 6/29/76 Laura venal! Comstock and Clay motions; but he said he could not help but react to unbelievable discourtesy from certain elements in the audience.. That one individual had already created enough problems by such actions and discourtesies in other areas; and for that reason, in pure protest, Councilman beahrs said he would support the Clay motion. Councilman Carey asked Councilman Berwald if the intent of his amendment was to determine in six months whether Narconon had met the terms of the contract. Councilman Berwald responded that at the end of six months, if Narconon were performing as expected; he would commit himself to the support of Narconon to continue as a component of a north county integrated program, He said he felt very strongly that perhaps the $19,000 would give Council some leverage. Councilman Berwald added that he would withhold his commitment as to whether he would continue supporting an independent agent funded only by the city, and he would lean more to including Narconon as a component in a north county program. Councilman Carey thought this was important because six months from now, he did not want to get into long discussions with political overtones and motivations - from the public, in particular - over which program should be funded. That selection has beer, made, and the only question is whe:her or not Narconon performed well aid whether of not anonymous accusations about Narconon were true- If the purpose of the review was for that alone, Councilman Carey was ready to support the Berwald amendment. If there is to be a county program that would be productive, then that should certainly be looked at; and it also made sense to Councilmen Carey to determine whether the Palo Alto program could be integrated into a county effort. He concluded by stating his support of the Berwald amendment. Councilman Comstock asked that the amendment be divided into three parts. He wanted the part dealing with the county being approached about a north county drug abuse effort to be considered separateely,since that is not related to whether or not the city funds a program. Secondly, he thought there was an implication that the only basin on which the city would approach the county would be something that would be tied to Narconon, end Councilman Comstock felt that would prejudice Palo Alto's eppreach to the county as well as the county's response. He said hs was much in favor of asking the county to become involved in a drag program, but he did not want to do anything that would indicate any prejudgment on the city's part or on their part. Mayor Dorton agreed to divide the motion. Councilman Sher said he was unclear about the kind of review that would take place at the end of six months under the amendment that wee on the floor. The Finance and Public Works Committee had considered the possibility of funding various programa for just one half of a year. There are problems with that approach, not only with the expense of having an evaluation more than once a year, but also with the time it takes to review such a report at the Council level. Councilman Sher salt tl s kind of report expected 1 3 2 3 6/29/76 should be clarified, He recalled that when Narconon was funded for a five month period tt the last fiscal year, one of the main argements presented was that the city did not know what its fiscal situation would be; and the advantage of selecting Narccnori was that it was an existing contractor. That being the case, the program could be looked et at the end of the funding period and some decisions made, Now, however, it is being recommended that another report be done after six months with a new determination being made at that point. Councilman Sher asked who would make the evaluation, what the criteria weld be, and what kind of determination by Council would be expected. Specifically, he wanted to know if the Council determination was to be whether or not to go ahead and spend the rest of the money that was being budgeted at this time. Councilman Eyerly explained that he envisioned a five --dollar report giving statistics on what Narconon had accomplished during the first sic months, and it was in no way to be a full blown study. He thought the report might include some idea of how many people had been treated, whether any other prcbler3 areas had eetfaced, etc. Councilwoman Witherspoon said she was somewhat confused since she had asked Couneihai Berwald earlier whether the city's having a ccntea_t with Nar onon would jeopardize Pato Alto's ability to get the county to cooperate with it in developing a north count; pr gt ara, and his response was that he thought it would. Councilman Berwald thought that as lone as the city continued to fund unilaterally a Palo Alto drug program, the county would not go very far in giving the city any iunde. After thinking about this further, Councilman Berwald felt the leverage, perhaps, of Palo Alto's proving its intent to do something about the drug abuse program but at the end of six montne net going en alone with it, would be useful. if during the first six months, staff was approaching the county in a serieue manner about a north county program, then perhaps the whole thing would be worked out the way Council wanted it, Councilwoman Witherspoon felt Conte:ilman Serwald's fltat statement was the coreect one. The only wain Palo Alto would ever get the county to come up in the north end and help everyone work together was to show the county that Palo Alto was not going to go ahead on its own ttae way it had been doing ail along, Therefore, Councilwomau Witherspoon would oppose the motion . Councilman Carey responded to Councilman Sher's comment that those who voted for Narconon the last time did it on the basis that there would be a chance to see how thing* were going in five moths, and also there would be the opportunity to see what the budget looked like. He pointed out that the contract with Narconon was a unique one, and it was one of the few contracts baerid on performance which the city had. Alan Council mentioned $38,000.00, it really was talking about approximately $15,000.00 com ittei; and the balance is bleed on whether or not there is tree +t. If there is no treatment, there is no payment. This is a far cry 13x4 6/29/76 13eta from what the city had before, and that contract was costing Palo Alto $135,000.00 a year. That particular contract had very few controls, very little supervision, and had reporting that was provided unilaterally by the contractor which had to be somewhat biased. Councilman Carey pointed out that the city now had a unique contract that was coating the city one-third of what it was paying before. The third section of the Berwald amendment to amendment to have Council ask the City Manager and the Board of Supervisors appointee from the north county to the County Drug Commission to initiate discussions toward an integrated north county drug abuse action program was approved on a unanimous vote. The first and second sections of the Berwald amendment to amendment, that approval of the contract after the six month review be determined by Council, and that the first six months` contract expenditures not exceed $19,000 peased on the following vote: AYES: Beahrs, Berwald, Carey, Clay, Comstock, Eyerly, Norton, Witherspoon NOES: Sher The Clay amendment, passed on the following vote: AYES: Beahrs, Berwald, Carey, Clay, Eyerly, Norton NOES: Comstock, Sher, Witherspoon 9 000 REDUCT I0 4 iN C'ONT C AI TS DEPARTi ENT AMENDMENT: Councilman Comstock moved, seconded by Witherspoon, that the amount of $9,000 be restored to Contract Services, thereby bringing the total to $37,971 as outlined in the original preliminary budget. Councilmen Comstock said that a number of people had spoken to Council the evening before about the programs that would be affected if the reduction vent through, and they did a fire enough job in their presentations that he would not repeat their counts. The Palo Alto Chamber Orchestra had been ruing city funds in order to have g see t appearances by visiting artists, and it wee that sort of thing that would no longer be possible if the funds were not restored. Councilwoman Witherspoon understood that the city gets money back from the person conducting the class, and tape asked if this money wo+al.d be simply front money for Contract Services. Ca►rrlsen Bedwell, Director of Community and Social Services, responded that these contract services were not related to the courses which the city provides; but they ere for productions, concerts,, dance programs, and that sort of thing. Councilman Berweld wawa interested in having stuff naks comments on the proposed reduction. At the Committee meeting, he 1325 6/29/76 5 had gotten the impression from staff that the impact would not be as great as had been stated by members of the community at the Monday night meeting. City Manager George Sipel thought the issue Council had before it was one that could be found in other portions of the budget; and if the city continued for the next several years along the course that it had set, the issue would have to be confronted more and more frequently. As he saw it, the question was one of retrenchment -• moving out of some services that the city had previously provided. There was no doubt that there would be reductions ;n the level of service as the city began to cut into some of the budgets in really meaningful areas. Also, there was no doubt that the things the city had been doing were important ones; and people will be concerned about those services which are deleted. Mr. Sipel added that for a community the size of Palo Alto, the city did substantially underwrite the arts. it was also true that the city would be doing less if the budget passri as it was proposed, and the $9,000 in question was important to some segments of the community. On the other hand, if the city is going to embark upon a course suggested by the Finance er+d Public Works Committee and supported by the City Manager, Council would have to stand up to the pressures of individual groups asking for things to be reinserted in the budget. Mrs. Bedwell explained that in the Arts Department there was recommended a total reduction of $13,600 in contract services $9,000 are in the performing arts, and $4,000 are in the visual acts. Approximately $80,600 was budgeted in the entire department for contract setvicea; and staff did not see the $9,000 reduction as a decimating one. The reduction would be spread out over many programs, including the Children's Theiter, the Cultural Center, the Purchase Awards of Art, the Dance Program, the Music Program, and the Adult Drama and Experimental Program. That meant that no one of the programs would receive a sizeable cut. Mrs. bedweit added that it also meant that staff would try to spread the reduction as much as possible through services, material and supplies, equipment, royalties, and that sort of thing, One of the original comments had to do with the Chamber Orchestra. Mrs. Bedi ell ,said they were under contract to the city for $3,000; and at the moat, staff anticipated a reduction of a few hundred dollars, .It was also conceivable that there would be no reduction for the Chamber Orchestra. One of the uses of the contract money is to underwrite concerts, artists in residence, etc.; and how the money is actually spent depends upon the programming, the interest of the community, and the availability of groups. Mrs. Bedwell elucidated Mat this was a category where there was quite a bit of.# lesibt1ity; and staff did not feel that any of the cuts would be severe, particularly with regard to the Cbaabet Orchestra. Councilman Sher felt the problem was that there was a proposed budget cut without the specifics being available; therefore, a number of organizations which have benefited by contract services feel threatened. The ones feeling the moat threatened are those which have depended upon city support for their 1 3 2 6 6/29/76 survival, Councilman Sher was comforted to hear that in regard to the Chamber Orchestra, the cut would be a few hundred dollars or perhaps no cut at all. He said he would like; to know where the $9,000 would be spent if it were restored; but, apparently, those decisions would be made during the year as demands or needs became apparent. Mrs. 8edwell stated that was correct, and also the availability of performers and artists and the amount of support needed for such activities would be taken into account. Councilman Sher asked if he were correct in understanding that the impact an the Palo Alto Chamber Orchestra would be minimal. Mrs. Bedwell responded that his understanding was correct. Councilman Comstock did not want to argue with staff about where the cuts would fall, but it was clear that $9,000 out of $37,000 meant twenty-five percent would be coming out somewhere. He picked the Palo Alto Chamber Orchestra as an example because it came to kind, but there would certainly be shorter rations someplace. And that is the point - these monies provide not the total source of existence for any group, but they do have a direct effect on the quality of a number of programs. Respond- ing to the City Manager's concern of the Council's attitude toward that of the staff and the Finance Committee toward the entire budget, Councilman Comstock said that the whole Council was present for this very kind of exercise. A similar situation had just been gone through on the drug abuse program. Councilman Comstock hoped that every Councilmemberr was not foreclosed to the right, obligation, or opportunity to speak to individual items where he might disagree with the Committee or the staff. He did not believe that was what was intended, and he understood the concerns of ?fr. Sipel and Councilman Berwald; however, Councilman Comstock stated he reserved the right to go through the items and indicate where be felt staff and Committee went too far. There were some programe he would not be speaking to, such as fireworks, contract services advertising for class registration, etc. Tats reason he focused on certain programs was that they were ones which reached a wide segment of the unity. The city, where it has the control, is proposing an increase in the charges for the programs; so the situation is not all a one --way thing. By ,,slaking his amendment, Councilman Comstock was saying that he disagreed in this particular area with the Committee and staff's recommendations and that the funds should be restored. Councilman Berwald stated that his feeling certainly was that any Councilmember who wanted to make a motion should feel totally free to do so. But Councilman Berwald wanted Councilsembers to realise that the budget was being talked about in a unique year. While there; may be some individual feelings about restoring funds, it was important to keep a perspective on what the heed was for not restoring every fund that Couucilmemabers wild like to. The moot imports at matter that had been talked about, however, was the City Manager's report regarding the increases in expenditures over the last eleven years; and the Arts Department took first prise in the increase in budget. That department went up 480Z; and et that rate, it would pass 1 3 2 7 6/29/76 /5X7 up nature and science, and library, in lust a few yearn. Planning Department had been up higher; but when the Planning Director got through with his very nifty explanations, it was down to 4492. Without meaning any disrespect, Councilman Berwald suggested that Council not let the Arts Department cry the poor mouth. It is anything but that. Some members of the art community who had spoken to Cauncilc►san Berwald expressed concern over loss of fundo but added that they were willing to make the sacrifice for the good of the city. The Comstock amendment failed on the following vote: AYES: Beahre, Clay, Comstock NOES: Berwald, Carey, Eyeriy, Norton, Sher, Witherspoon ,5 000 REDUCTION IN RECHATION £4 k.SAI,AR i E S AT BAY LA' S AND FIREBREAK MAINTENANCE Councilman Comstock said he did not know how the $5,000 vas split in this particular subject, but he wanted to speak to the firebreak maintenace. His concern was the effects the dry winter and prolonged heat waves have had in the area, and it seemed to him that it would be terribly shortsighted to do anything lees in firebreak maintenance than had been done in the past. In fact, Councilman Comstock thought a good argument could be made for doing a great deal more in not only maintaining firebreaks, but upgrading the condition of them. He felt that between now and November there would be a lot of anxiety about more fires occurring than usual. Councilman Comstock was extremely concerned about this, and he wanted the dollar amount to at least be at parity to the city's previous firebreak maintenance program. He asked how much of the $5,000 would be needed to put firebreak maintenance back to the level it would have been without a cut. Clay Brown, Director of Budget and Staff Services, responded that $2,000 of the total was for bayisnds maintenance; and $3,000 was for the firebreak maintenance. The $3,000 reduction was put forward because it was the opinion of the staff that it would not be nece®eery even though there is a substantial fire hazard. Mr. Brown added the firebreaks would not be maintained anyway because they ars in good condition as they are. During the dry winter, vegetation did not grow on the firebreak. AMENDMENT: Councilman Comstock moved that $3,000 be restored to this budget items. The lotion failed for lack of a second. . TIO) OF CE' A _PL35,I It" S T'0 THE TABLE OF ORGANIZATI00, Councilman Carey said the CETA positions were discussed in the Policy and Procedures Committee, and he felt very strongly that the purpose of the CITA funds was to primarily educate 1 3 2 8 6/29/74 137v and train individuals who were without employment so that they would be in a position to seek and obtain employment on their own, Fortner, the purpose of the CETA funds was, in any event, not to balance city budgets and provide for city services unless that was incidental to the primary purposes He asked for assurance that the addition of these CETA positions to the table of organization was not primarily motivated by an attempt to balance the budget by providing personnel who were essentially paid by the federal government, but that the positions these individuals would fill are positions which first of all will provide training and experience so those persons would become qualified for permanent employment with the city or elsewhere. Mr. Sipel explained that the thrust of the program ems baa<ically one of_trsinieg, and that was the way staff tried to use it in the organization. He felt staff had been quite successful in being able to move some of the trainees up into the full time regular organization. That i6 becoming more difficult %Ince on the order ef fifty employees had been eliminated this year. He added that an important incidental purpose of the program was to provide additional people to fill in where staffing is very tight or where staff wanted to get into a program which otherwise could T'ot be carried out. It is understood that the program is funded entirely by the federal government, and Palo Alto is the beneficiary of it as are the employees. When the money stops, the employees will no longer be here; and Mx. Sipel said they are aware of that. Mr. Sipel commented that a good number of the an employees play an i aortant part in the functioning of the city; and when the program is stopped, staff will be less able to do some of its work. Councilman Carey thought that the real purpose of the program was to enable these people to find a job when the CETA funding is discontinued. If an employee were doing nothing more than hanging pictures on walls, than Councilman Carey felt that was a misuse of the funds. When training and education is involved, the programs becomes meaningful; and that was what he !anted to see happening. I. Sipelsaid_he did not know of any of the CETA positions that he would not put into the category of meaningful work. The work done is on various levels, but all of the work being done is important. CETA employee* are receiving good training, -and the city has a fine record of bringing some of these people into the organization or of their finding jobs elsewhere as a reeult of their training with the city. ARTS DEPARTMENT TECHNICA1. ASSISTANT Councilman Sher spoke to the deletion of the position of a technical assistant which had born discussed by a nuabcr of members of the audience the previous evening in terse of - rise safety of the programs involved. He said the same questions were raised by the Committee at the time the budget modifications memorandum wee received, and stuff responded to those questions in its report of June lbtch. Staff stated that the reduction of ons--half of a technical se►sistant pa itton would change the nature of the work but would not affect the safety aspect or thequality of supervision a'vstlable. Councilman Sher utsd to be reassured about this matter in vies of "consents I 3 2 6/29!76 made by people working in the Children's Theater and the Community Theater to the effect that there would be an impact on the safety of the performers and volunteers who participated in those programs. Mrs. Bedwell responded that staff's concern in operating the theaters was also,une of safety. The reduction of this position had been suggested, but there would still be one full time technician and one half time technician for the two theaters. She explained that the existing technicians not only did technical work including the supervision of the activities there and the safe operation of the two theaters, but they also did design.work. Mrs. Bedwell explained that what would be eliminated was the design work, and the safe and responsible use of the theaters and equipment would be maintained. Staff was of t'ae opinion that it was possible to reduce the two positions to one and one-half and still keep all of the safety features, the supervision, and the use of volunteers. The burden that is placed on some of the groups that used the theaters was one of design. With regard to safety, Mr3. Bedweil noted that staff had beer conducting inspections and changing some operations because it was so sensitive to the safety feature. She concluded by saying staff would not recommend any reduction that would jeopardize a good operation, Councilman Sher said he would do nothing further one thie but would rely on staff's assurance that this particular cut to the budget would in no way effect the safety of anyone at the theaters. APPROPRIATION OF 50 000 IN C1P FOkTIEVETERANS )UItbING Councilman Sher raised this question because he felt strongly that the recoremendetion of the Finance and Public Works Committee was wrong is this matter and inconsistent with earlier action taken by the Council. It was Councilman Sher's belief that it was a iieteke to appropriate these monies in the Capital Improvement Program for tuo basic reasons. The first reason is that it is premature to do so. The Council, after considering the citizens' committee report in regard to the Veterans Building, raised three questions which are now under review by staff. The first question related to Whether it would be possible to amend the building code to adopt standards for historic buildings, which were leas stringent than other standards in the code, so that it would be possible to renovate the Veterans Building to make it usable and available for public assembly without the' expense of bringing it up to the Uniform Building Code. Palo Alto's Building inepector has said he would insist on that unless there were some asendaents ?o the code. A second point under review was the recomtedaeton of the citizens' committee as to what it would require to bring the building up to a reasonably safe condition, and staff is reviewing those recommendations to determine whether or not they agree. Thirdly, the cost of bringing the building into a reasonably safe condition was being reviewed and what the source of funding -might beto pay far the necessary renovations. Councilman Sher's concern on rbe first point was that $9,500 already had been appropriated in the Capitel Improvement Fund for the Veterans' building; but by going forward and appropriating 1 3 3 0 6/29/76 still another $50,000 as thatching funds for a grant for which the city has been applied, Council will get locked into a position of going ahead with the renovation of the building without having these important questions answered. He stated that Council should not take this next step down the road and get itself into another situation reminiscent of the Squire House where it became too late to turn back,and more and more money was poured into that building. Another point in regard to the Veterans Building which concerned Councilman Sher was that this was a recommended appropriation in the Capital Improvements program at a time when Council had just taken very drastic action to freeze every project that is - in the CIP except those few where there were contract or legal obligations. Funds had been transferred out of various projects to the Araatra settlement account, and Council put a freeze on the other projects. The danger in going forward and appropriating money for this favored project (which is the way it will be regarded by members of the cotuuuity) is that Council was automatically inviting other members of the public to come in and insist that funds be appropriated for their favorite projects. Councilman Sher had understcod at the time Council took its action in regard to the Arastra settlement that an agreement had been reached that, of necessity, capital projects would be frozen since the position of being able to pick and choose no longer existed, This was a controversial subject, and there was a lot, of community support for .it. Councilman Sher explained t at he would be in support also, if there were a source of feeding other than that of the Capital Improvement Fund which has been sorely depleted. AKEN MINT: Councilman Sher moved, seconded by Comstock, that an appropriation of $50,000 from the Capital Improvement Fund for the Veterans Building be deleted from the budget. Councilman Beahrs felt there were certain considerations of equity which had to be weighed in the balance. The veterans had struggled for fifty years without any recognition or support from the community, and he felt they were entitled to an exception to the tole which Councilman Sher tried to establish.. He potnted out that there was hope that the support of the Council would generate another $50,000 for the project. In Councilman Beare' opinion, it would be unconscionable to not support this project when one considers the hundreds of thousands of dollare that have been literally squandered in the community in recent years. Be asked what the status of the lease was. Mz.. Broom responded that the lease would expire in October, 1976. Councilman Beahre thought this matter should be put on the front burner because this was more important than some of the arguments that had been made at this meeting. Without a incase, it was rather ridiculous for Council to be discussing the subject et all; and an early determination on that problem iihould be made. Hz, Bros said this was park of a staff assignment, and a report would be ready for Council at the end of August or in early SepLe ber. 1 3 3 1 6/29/76 Councilwoman Witherspoon reported there was no commitment to spend the money, and she noticed that the Finance and Public Works Committee had put in a further caveat that the money would go back to the Capital Improvement Fund if it is not used to match the hoped for grant. She expressed concern about the effects on the building if there were a lot of rain this winter. Councilwoman Witherspoon felt this would be an appropriate time for Messrs. John Snow and Axel Johnson to speak regarding the Veterans Building. Mayor Norton noted that the public hearing had been closed. MOTION: Councilwoman Witherspoon moved that the public hearing be reopened. The motion failed for lack of a second. Councilman Berwald said that Councilman Sher's arguments were quite persuasive except for one point. It seemed to him that when the Capital Improvement Program were removed, there were questions asked as to which ones could be removed without any substantial loss in physical improvements or whatever else. So certain projects were being deferred, but Councilman Bern Id voted for this because Council had been told the building could not be improved and made rainproof unless other structural improvements were carried out. Therefore, he looked upon this appropriation as one for emergency preservation of the building. If Council did not want to preserve the building, then "no" votes should be cast. If Council wanted to preserve it, then substantial improvements wcul.d have to be completed before the next rains; and that is what Councilman Berwald preferred to see happen. Councilman Eyerly stated that he made the motion in the Finance and Public Works Committee meeting to appropriate $50,000 for the Veterans Building, end he did it for one reason. The same thing had been done for Boi Park because they had some money available for the improvement of the park; and if the city did not go ahead and appropriate money for it, the park would be lost. The seine thing was true of the Veterans Building. Grants had been applied for, and the chance was good that grant :coney would be given. Councilman Eyerly explained that if the city had not appropriated money for the project, it would find itself in a difficult situation when the grant money became available. His conclusion was that Council should approve the recommendation of is Csmmittee. Councilman Carey indicated this was an appropriation and not an authorization for spending mousy, and so he wee not concerned at this tiaer The other point be wanted to make was that his understanding of the budget freeze was that the freeze involved fiscal year 1975-76, end Council was now discussing 1976-77. Councilman Sher clarified the port made by Councilman Carey with regard to "appropriation" and "authorization". The resolution that was adopted in applying for the grant was that Palo Alto would provide matching funds; so if the grant is made, the city has made a commitment to appropriate and authorize the spending of $50000 to match the grant. He realized that the city could turn down the grant, bit he saw no indication 1332 6/29/76 that Council would be willing to do that. The second point Councilman Sher clarified had to do with Councilman Eyerly's comments to the effect that money was available, and that was why the Bol Park puthorixation was made. There is no money available here; end more frightening than that, even if the $50,000 grant should be made and the city contributes $50,000, that tataj. of $100,000 might be insufficient to du the work necessary for the restoration of the Veterans Building. Councilman Sher recalled the report received from staff which suggested that putting the building in a condition to meet the requirements of the building code and be safe for public assembly would exceed $100,000 by three or four times that much. The problem was one of going down the road and getting locked into spending money partly in relation to the matching grant, and then ending up with a building that cannot be used for public assembly because it still could not meet the requirements of the building code. The Sher amendment failed or; the following vote: AYES: Comstock, Sher NOES: Beahrs, Berwald, Carey, Clay, Eyerly, Norton, Witherspoon PALO ALTO AREA INFORMATION IIIIIMMOSIMMiatziehazimainigicommoer Councilwoman Witherspoon introduced the subject of the proposal made by the Palo Alto Area Information and Referral Service. Her understanding was that they were proposing a contract for under $9,000 for the year. Under this year's constraints, council had found it necessary to cut drastically into social services; and of all the social services the city had been asked to fund, Councilwoman Witherspoon felt this was one where the money would be most effective because this organization served all of the private and public social service agencies in the area. Another point Councilwoman Witherspoon made was that a little over two --thirds of the cost came from the county. In her opinion that was very appropriate; and she felt strongly that if the city contracted with FAAIRS, the contract should be contingent upon the county funding continuing. This would be a safeguard so that if for some reason the county funding fell through, the organisation would not assume it would. he able to come to the city to make up the difference. In the Committee hearings, Mss Wilson, the Director of PAATAS, pointed out that this organization was available to any citizen in Palo Alto; and unlike messy wervica s, an increase in cells and response to inquiries reduces the cost per call rather than increasing it. Councilwoman man Witherspoon's understanding was that the proposal for $9,000 would include screening for the Reetal liousieg Mediatien Task Farce, a. service which they have been providing in the past. She added that this was not a new eereice, and the city has bash involved with the organisation since its beginning three years ago. AMENDNENTt CouncilCouncilwomea Withers awed, seconded by Norton, that Council -Consider a contract with P AAIBS for the suet of $0,800; and that the contract be contingent upon the county continuing its funding at the prat level. - 1333 6/29/76 The amendment passed on the following vote: AYES: Beahrs, Clay, Comstock, Norton, Sher, Witherspoon NOES: Berwald, Carey, Eyerly RETIRED SENIORS VOLUNTEER PROGRAM Councilman Sher explained that this program tries to get elder members of :he community engaged in volunteer work., and RSVP hair been quite successful in raising funds from other sources. They requested funding from the city in the amount $1,28G; and together with the city's a.dminietrative costa, that would bring the total amount for the program to $1,500. Councilman Sher thought this program was particularly valuable to Palo Alto because of what it does to involve senior citizens in useful work and give theca the sense of value which comes from helping other people. More importantly, these seniors are working in the city's own senior citizen program. AMENDMENT: Councilman Sher moved, seconded by Beahrs, that $1,500 be added to the budget for the Retired Seniors Volunteer Program, Coui cilm4n Beahrs asked if this function would be in the jurisdiction of the Senior Coordinating Council. Councilman Sher responded that the Senior Coordinating Council was asked to review the application of this agency, and they did recommend it for funding. His understanding was that there would be a direct contract with RSVP for funding of $1,280 in return for services provided; and he thought that this would not be part of the Senior Coordinating Council's budget, but a direct contract. Councilman Beahrs stated that he liked the idea except that. he thought it was dangerous to permit too much scattering of authority and too much fragmentation of the interest and effort in this area. Mrs. Bedwell said this was staff's concern also. The role the Senior Coordinating Council plays for the city is that of being the centralising agency for seniors. The screening of the requests have come from the Senior Coordinating Council, and Mrs. Bedweil expected that they would continue to play a responsible role there. Staff has agreed with the SCC that at least for the next veer, the city should administer any of these contracts because the mechanises are established for that. Mrs. Bedwell felt that in any progress concerning seniors, the SCC has a prima reeponeibility; and they would be expected to play a role in monitoring, evaluating, etc. Councils Sher offered to incorporate this general idea into his motion. Vice Mayor Clay stated that his camerae were those expressed by Councils Beahrs►, and he really wanted to see these programs all cone under the Senior Coordinating Council. Be felt 1334 6/29/76 that one ratter that needed clarification was just what the duties of the SCC were. It had been his understanding that they would incorporate into their area of responsibility all senior activities, thus preventing fragmentation of efforts. If that is what is being worked toward, then Vice Mayor Clay said he would support the idea. Councilman Eyerly reminded Councilmembers than when they voted for new programs, they made people happy; on the other hand, money would have to be raised to support those program. Council would have to be willing to vote for new taxes, and that would not make people happy. All of the new program had been gone through in the Finance Cormmittee, and the Committee members *ore or less agreed that no new ones would be fended because the city had budget constraints. Councilman Eyerly thought the city would find itself in trouble if Council continued along this road. The programs were all worthwhile; and if the city were in better financial condition, Councilmen Eyerly would be sympathetic toward them; but he said he could not support this kind of action this year. The amendment passed on the following vote: AYES: Beahrs, Carey, Comstock, Clay, Norton, Sher, Witherspoon NOES: Berwald, Eyariy Councilman Sher responded to Councilman Eyerly's statomentt about the consensus in the Finance Committee to not go for new programs. in a sense that was true; but Councilman Sher said he reserved the possibility of looking at these second priority recommendations of the staff after it was known what happened to the first priority recommendations, keeping in mind I t it was necessary to stay below the budget ceiling set for the human services programs. Therefore, he did not feel his amendment was inconsistent with anything that happened in Committee. OUR HEALTH CEPTER Councilman Sher explained that this program provided health care for a substantial number of Palo Alto residents. The evaluation report on Out Health Center established that because of the limited physical aitu*tios of the Center, they are prevented from providing health car* services to a number of pecplt who are, in sense, on a waiting list. Their budget request to the city was for $50,000.00, of which $35,000.00 would have ben need at a onetime expenditure to relocate to a Larger and better facility. The remaining $15,000.00 was seeded for annual operating costs and other expenditures. It seemed to Councilman Sher that if the city could make an expenditure within the ceiling that would enable Our Health Center to provide support aced care for more people in Palo Alto, then itwould be a worthwhile spending of money a d old provide considerable leverage. The funding could be regarded as seed money to make it possible to esrvice e larger percentage of the city. Councilman Sher noted that the evaluation report on Our Health Center vas very affirmative. The evaluator told the Committee that she had taken on the 1335 6/29/4 assignment having real reservations about the program; however, when she finished her study she was very strongly supportive of the fine service in the health area that Our Health Center is providing in Palo Alto. Apparently, there are plenty of doctors and other staff members to provide the services, but there is a real physical limitation. Councilman Sher asked his colleagues to make what he would term a "one time grant" to Our Health Center to enable that organization to provide more services to more people in Palo Alto. A4E vi: Councilman Sher moved, seconded by Comstock, that the city fund Our Health Center in the amount of $35,000. Councilman &:ervald stated that he was not pleased with the direction the meeting was taking. The Finance and Public Works Cammittee went through a series of meetings where the members tried to expree►s what he believed were the feelings of the community and the majority of Council. The staff was asked to do a human services study, and they came up with Priority 1 and Priority 11 programs. The Committee looked at all of them and decided that the Priority 11 programs should not be funded. Councilman Berwald reminded Councilman Sher that when the subject of PAAIRS came up, he and the other members commented that even though PAAIRS had been funded oa an urgency basis, it was consieered a new service; and the Committee did not wane to set any precedents in funding new services. One precedent had aIresdy been set. Now Councilman Sher was suggesting that a brand new service be funded, even though, it was questionable that the service being provided was a responsibility of municipal government. An official study had not been made, and the city had not officially talked to the county about it p and Councilman Serwald thought this was the wrens direction for Council to go. There seemed to be some feeling that beceuae people want a program and because it seems to be a awed program, that such an organization then automatically became a municipal responsibility. Also, where there has not been deliberation on the Council and where there is something very new that many feel strongly about, then Council Should *seriously consider approving these. However, Councilman Herwaid did mo' think this was the case since this programs waa reviewed. At this meeting, after about five minutes of diecusstton, PAAIRS was funded even though the moinutes of the Finance and Public Works Committee of June 15 indicate that the non- funding of PAAIRS was directly related to the Committee's action with regard to the $5,000 for the Rental Housing Mediation Task Force. That amount of money for R!31LfF screening vas put in because the staff felt RHMTF should do some of this work. If PAAIRS doss it, then that $5,000 should come,.; out. If Couusaecil vented to consider funding Our Health Center, then Councilmen Remold urged that it be referred back to the Finance e and Public Works Committee or the Policy and Procedures Committee -ro or both - with the direction that the setter be studied to determine whether or not it should be funded. If it is determined the Center should be funded, then a dollar amount needed to be set. Councilman Serweld concluded by saying that the concept of spending money just because the city had a few dollars in it* pocket was the one that led governments to the point where they were trying frantically to get out of serious financial difficulties. Counciluomae Witherspoon asked if Our Health Center was funded one Modred percent by the county at the preeent time. 1336 6/2,f76 Councilman Sher thought the county supported the operating expenditures of Our Health Center, and his amendment if passed, would make possible a move out of very constrained quarters. The amendment failed on the following vote: AYES: Comstock, Sher NOES: Beahre, Berweld, Carey, Clay, Eyerly, Norton, Witherspoon RENTAL HOUSING MEDIATION TASK FORCE Councilman Berwald stated that because of the action at this meeting in regard to PAAIRS and because the retention of $5,000 in the budget for the Rental Housing Mediation Task Force was now redundant and unnecessary, he would slake the following amendment% AMENDMENT: Councilman Berwald roved, seconded by Beahrs, that the amount of $5,000 for the Rental Housing Mediation Task Force be dieted from the budget. Mrs. Bedwell stated that this action was appropriate be cruse the $5,000 action in the budget had been made on the assumption that a PAAYRS contract was not being recommended. Councilwoman Witherspoon understood PAAIRS would be doing the screening on the calls, but she wanted to know if a full tiitte or half time person would be working in Mrs. Bedwe11's department making appointments and working from RBMTF's point of view. Mrs. Bedwell reeponded that the reduction of staff's half- time management assistant deleted the person who took care of the referral of calls to RHMTF and working with the Task Force and the Human Relations Commission. This places a burden on the Human Relations Commission of doing some of its own staff work, and only limited sirvice would to able to be given to RHMTF. Councilwoman Witherspoon asked if the decision to delete that position was unrelated try _the $5,000 in question. Mkt. Bedwell replied that the $5,000 was unrelated to the deletion of the position. Councilman Carey asked if there were any overlap involved with the $5,000. Its. Bedwell explained that if the $5,000 were moved, there would be no overlap. Councilman Carey asked if the $5,000 were deleted whether the city would lose anything that PALM la not going to provide that would otherwise have been provided. ifre. X11.: expended that in deleting the management assistant, staff recognised tbst the service was being reduced; and she could not say et this ,wrnt hue that would be carried aut. 1337 6/29/76 „.3 She added that she could not guarantee to Council how that would be worked out with referral of the mediation calls once they are screened by MRS. PAAIRS had developed a fair amount of experience in this regard, and staff was meeting with RI F and ELRC representatives to determine the best way to proceed. Councilmen Carey noted that originally staff wan going to be working with $5,000 and HKIF and without PAAIRS; now, it is suggested that staff work with PAAIRS and without the $5,000. He asked how staff felt about the level of service by going this other way. Mrs. Bedwell replied that PAAIRS was satisfactory to staff in this regard providing that some of the information and conclusions reached in the evaluation are incorporated in the contract. She thought staff would try to get a contract that more closely meets the city's service needs now, particularly since the management assistant position was being eliminated. What staff expected to get from PAAIRS now that the city would be contracting with them were basically the same~ things that would have been accomplished with the $5,000. One of the possibilities of the $5,000 application had been a limited contract with PAAIRS for just the screening service, What will affect the landlord/tenant program is the reduction ;,f the half -tie management assistant. Mts. Bedwell said that staff recognized that and would be working with the HRC and RHMTF so that they will be able to absorb that. The reduction in the position occurs inJaueuary, so there was time available to work that through with staff at signment and a process that would now involve PAAIRS. Councilwoman Witherspoon thought it might make more sense to leave the $5,000 in the budget but designate it for the half -tip management assistant wh, would have Et}1Xi'F responsibilities and other HRC related functions. Councilmen Carey's feeling was that the half-time poeition ought to be restored rather than just cut out the funds. Councilman Comstock asked if the amendment on the floor failed, whether staff would take that as direction to deal with the half-time position or whether Council would have to take another aeries of actions to get to that point. Mr. Sipel 'stated that Council would have to add that position beds into the table of organization. Councilman Coeatock recalled that Council some time ago, as a matter of policy, abandoned the Apartment Manager Licensing Ordinance since it felt there were alternative ways the Council could commit itself to assuring equity in housing ouch as encouraging the HRC to work with landlords. In addition, Council authorized the City Attorney to file actions when approrriete. Finally, Council indicated its support of the mediation services that were being offered. Councilman Coemtock thought a series of actions was being ett up that would increase the level of screwing and referral. He indicated he was in favor of what had been dons about the PMIAS contract, but that would certainly direct a lot more specific inquiries 1338 6/29/16 CO( to City Mall. The problem was with the other action under consideration which diminished staff's capabilities for dealing with that. It seemed to Councilman Comstock that the half- time management assistant was a key position for eupporting the mediation and referral activities, and he was not sure that simply defeating Councilman Berwaid'e motion would get to that point. Councilman Comstock was trying to determine appropriate action that would restore the position which means both money and table of organization. Mary Cottrell, Chairman of the Human Relations Commission, remarked that she was becoming concerned over comments that the IiRC would have to absorb more staff work. She pointed out that there were only two members on the Commission presently who were not employed, and they put in a forty hour work week on Commission business. Me. Cottrell said they did more than try to carry their share, but she did not see how they could do any more. Without a staff person, all sorts of problems could develop. There would not be direct communication with staff, and there was the possibility of efforts being duplicated. She understood that the HRC would now be responsible for finding someone to take minutes of its meetings. Ms. Cottrell concluded by saying that the Commission wanted to do as much as it could, but she thought they would be less effective if they had to take on additional staff work. Councilman Eyerly thought everyone needed to keep in mind that in order to work out a budget, the level of service was being reduced. At the Finance and Public Works discussions, the half-time position Was brought up; and staff indicated that they would be able to cover that position with some shuffling of responsibilities, He trusted what staff said during the Committee meetings, and he did not feel it was necessary to reinetet'e that position. If the half-time management assistant were reinstated, that would mean benefits as well as salary so more money than jumt $5,000 was involved. With regard to the $5,000 contract with PAAIR , Councilman Eyerly pointed out that RIMTF originally wanted $5,000 to be left with staff for negotiating as to how the funding might ue used to the beet advantage. Considering the action taken tonight, PAAIRS should certainly be able to cover the referrals for RBK P; and the only thing that needed doing was for an indication to be included in the contract that UMW wants included for referrals. Councilman Eyerly sew no reason for not supporting Councilman Berwaaldas amendment to remove the $5,000. Further, he did not think the part time position should be reinstated for $5,000. Vice Mayor Clay asked if Council had an understanding of what it had to do in order to take out the $5,000 but still hold on to the half-time position. Mr. Sipel said the answer to that was that Council would have to add into the table of organization the management assistant position from January to June, and they would have to further add in $5,000 to cover the salary and fringe benefits for that period of time. 1339 6/29/76. The Berwald amendment passed on the following vote: 1 1 AYES: Beahrs, Berwald, Carey, Clay, Eyerly, Norton NOES: Comstock, Sher, Witherspoon AMENDMENT: Councilman Carey moved, seconded by Comstock, that the half --time management positions be added to the table of organization for January to June, and that $5,000 be added to the budget to cover the nateesaty salary and fringe benefits. Councilman Berwald asked for staff comments one this. In view of what had just teen talked ,about, he thought this was just another way of getting the $5,000 back in. It was Councilman Berwald's understanding that staff was not suggesting this change; and as he recalled the Committee meeting where the problem was discussed, there was mutual agreement between Committee and staff as to what should be done. He felt the Hunan Relations budget stood alone, and the PAAIRS budget stood alone. Councilman Berwald stated his opposition to the motion. Mr. Sipes thought it was important to point out that in staff's efforts to reduce the budget, it provided to the Committee and Council a package of cuts. In that package was a group of positions to be cut, and tome of those were management positions. Along with that, staff indicated it would come back nest year with some additional cuts in positions; and a number of those would be management positions. Mr. Sipe1 commented that he had never turned down a management position that had been offered, but he suggested that staff would like to try to work out what it could on this particular service. He did not think the service level would be as high as the present time. If the city is going to begin to cut back, each programs needed to be looked at; and staff felt there were some opportunities to do soothing in this particular one. NZ. Sipel said he could not predict what would happen, but staff would like to have a shot at it. If things such as this were not done, he could not see how the budget would be cut beck in any meaningful leap. The amendment failed on the following vote: AYES: Carey, Clay, Comstock, Witherspoon NOES: Beahrs, Berwald, Eyerly, Morton, Sher Mayor Norton stated that with the amendments now completed Council had before it Ordinance No, 2929 to adopt a budget -for the City of Palo Alto for fiscal year 1976-77 and to authorize the closing of the budget for fiscal year 1975-764 He asked Clay Brown, Director of Budget and Staff Services, to indicate the net difference, plus or sinus, the appropriations made as a result of the its to the basic ordinance. Nr. Brown stated there was a total change of $50,390 added to a budget that vas before Council of $18,645,996. This addition now made the city's budget $18,696,386. 1 3'4 0 5/19/76 I3 4-0 The ordinance adopting a budget for fiscal year 1976-77, as amended was adopted on the following vote: AYES: Beahrs, Berwald, Carey, Clay, Eyerly, Norton, Sher, Witherspoon NOES: Comstock ORDINANCE RE INCREASING TIM iterriMMErTT MOTION: Mayor Norton introduced the following ordinance and moved, seconded by Comstock, its adoption: ORDINANCE NO. 2928 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SECTION 2.33.020 OF TUE PALO ALTO MUNICIPAL CODE TO INCREASE THE TRANSIENT OCCUPANCY TAX FROM FIVE TO SIX PERCENT" Councilman Rerweld stated his belief that the total burden of any new revenues should fall on the taxpayer in this city in the same proportion and the same ratio that it now falls on the taxpayer of the city - about two-thirds paid by business and one --third paid by residents. He further believed that Council should do nothing about imposing a property tax in place of a transient occupancy tax, a telephone tax, or an electric tax. It seemed to Councilman Berwald that this ordinance was just an effort, intended or not, to place a burden on a group of people who were not present to represent themselves. For that reason alone, he said he would vote against the transient occupancy tax. It. bothered him that no one had addressed one word to two questions about this tax. One of them was that there already vas a ttanaieut occupancy tax in Palo Alto, and it vas a burden on the businesses in the city in return for which they received nothing. Secondly, as far as he knew, no one had made any attempt to find out what the burden was by talking to these people; therefore Councilman Bervald said he would vote against the ordinances. Councilman Eyerly said he was not against increasing the transient occupancy tax to six percent because that brought Palo Alto into a competitive position with Santa Clara, San Jose and most of San Mateo County. However, he did have some problems with the idea of putting continued burdens an business when they are already paying the big end of the tax in Palo Alto. He thought it w important for Council to try to understand aoae of the problems that business had and to try to be more sympathetic to their con eras. With regard to the occupancy tax, Councilman Eyerly understood that Palo Alto had about an eighty parent occupancy, and if Council wee going to raise that extra percent of occupancy tax, there should be a Visitor's Bureau structured out of that income. The aim should be to get the occupancy level up as close to one hundred percent as possible. The aim would not be to get more motels or to increase traffic, but to get the maximum tax dollars out of what is already hare. Councilman Eyerly thought that could be done with a Visitor's 1 ureau. 1 3 4 1 6/29/76 AMENDMENT: Councilman Eyerly moved, seconded by Berwald, that the ordinance be amended to include a budget item of $35,010 for the funding of a Visitor's Bureau, with an outside contractor. Councilman Eyerly commented that before going ahead with a contract; staff would be asked to report contract details, which included occupancy figures, to the Policy and Procedures Committee. Councilman Comstock stated that this could presumably be done only through budgeted funds, and a budget had just been adopted. This meant that if provisions were going to be made for this kind of thing in the budget; the !Fidget would have to be acseaded; and that meant six votes. Robert K. Booth, City Attorney, agreed with Councilman Comstock's statements. Mayer Norton said the procedure would have to be that the ordinance would be voted on, and then would have to be a separate motion later which would need six votes in order to divert the 35,000 for the purpose stated by Councilman Eyerly. Councilman Eyerly's amendment should be a separate motion. Councilmen Eyerly remarked that he would expect Mayor Norton's vote on the motion late, since the Mayor had asked that it be done by way of an amendment to the ordinance. Mayor Norton asked for Councilman Eyerly's mcauing. Councilman Eyerly explained that he had asked Mayor Norton before the meeting how this would be handled. His own suggestion was that he introduce it along with the budget amendments, end Mayor Norton thought that it would be a better idea to introduce it when the ordinance was on the floor. Mayor Norton said he would vote for Councilman Eyerly's notion solely on that basis. Councilman Beahrs recognized the dilate for *one people. He expressed concern about the general trend of several revenue positions before Council because property taxes were the true basis for traditional municipal services. It vas his feeling that various levels of government kept taring to find new tam attire to avoid the whiplash which inevitably occurred when property taxes were increased. Councilman Beahrs considered this particular tax to be highly discriminatory. If a business to is going to be passed. it should be one that will involve all businesses. 14* said he could not support eny further encroachments into the general area of taxation. and he thought they were designed largely to be painless to the people who rote.' Councilman Boehm did not like indirect taxation becaust it made citizens think they were getting a free ride when there is no such thing. Countilm an Sher responded to Councilman Berwa ld' s concern_ that there Mooed bees no discussion of the increase in the transient occupancy tax. Oa the contrary, the subject vas discussed in the tike and Public Works Committee. Reports were received 1342 6/29/76 from the four budget task forces formed by the City Manager. In the report received from the task force on revenues, Mr. Al Mitchell made these comments: "At the time the motel tax was started, it was set to equal the sales tax rate which at that time was 5%. Since then the sales tax rate has risen to 6%. Increasing the motel tax rate to 6% would yield an additional $80,000 in annual revenue with no increase in collection costs. In the way of comparison, here are the rates now in affect in some neighboring cities: Menlo Park, 6X; Mountain View, 42; Redwood City, 6%; Sunnyvale, S%; San Jose, 6%; San Francisco, 6X." Councilman Berwald explained that what he meant was there had been no discussion with the people who would be affected most by the tax. Mr. Sipel pointed out. that in a large sense, this tax would be in lieu of a sales tax because there is no sales tax on this kind of activity. The tax does not fall on business, but it falls on people who use hotels and motels. Further, it Is a competitive thing in that San Joee and San Francisco both leery a tax of 6%; and they are the largesthotel/motel places in the Bay Area outside of Palo Alto. In addition to that, Mr. Sipel expressed concern about making a commitment for a Visitor's Bureau on the spot without having seen any proposals from anyone who could provide that kind of a facility. Generally, he was against earmarking revenues for any purposes; but he thought it would be worthwhile to look at ways to build up revenues. If a Visitor's Bureau was a way of doing that, Mr. Sipel wanted to look into it. But he thought suggestin3 tonight out of the blue that the city has $35,000 for a Visitor's Bureau was the kind of a blank check that he would really not like to see. If Council had an interest in doing this kind of thing, iYr. Sipel said he would like to have an assigr;ment to explore it with the Chamber of Coe rce or whoever else might want to do this kind of thing. Concluding his remarks, Mr. Sipel said that when the city went to a hotel/motel tax a number of years ago, the hue and cry was that this would drive the hotel/motel business out of Palo Alto; and he did not really think that had happened. Further, he did not think raising the tax frou five to six percent would do it either. Councilwoman Witherspoon asked if the aggregate tax at six percent was $497,680; and if the ono percent increase would add approximately $70,000 per year. Mr. Brown responded that if the estimates for the next fiscal year were correct at six percent, then one percent would be worth a little over $$0,000. Councilman Eyerly explained that with the budget figure, he asked for staff to work up a contract and occupancy figures which would be taken to the Policy _armed Procedures Committee. lie said he was - not asking for it to be set up tonight, but he was asking that the money be set aside so that staff could proceed with the project. _ Mr. Sipel responded that what concerned him was the $35,000. That seems to suppose a certain level of service and a scope of a contract that he was not able to visualize. 1 3 ii 3 6/29/76 The ordinance was adopted on the following vote: AYES: Carey, Comstock, Eyerly, Norton, Sher, Witherspoon NOES: Beahrs , Berwald, Clay MOTION: Councilman Eyerly moved, seconded by Berwald, that Council make a general appropriatioe of $35,000 for the funding of a Visitor's Bureau with an outside contractor; and staff be directed to report contract details, including occupancy figures, to the Policy and Procedures Committee. Councilman Sher said that in view of Mr. Sipel's remarks about the newness of the subject and his desire to have it reviewed just as any other new proposal, he would make the following referral motion, which takes precedence. REFERRAL MOTION: Councilman Sher moved, seconded by Clay, that the question of a Visitor's Bureau and a budget amendment to support it be referred to the Policy and Procedures Committee. The referral motion pass::d on the following vote: AYES: Beahrs, Berwald, Carey, Clay, Eyerly, Norton, Sher, Witherspoon NOES: Comstock " �IdAPiC RE SB'iiNG VARI(3US FEES MOTION: Councilman Berwald introduced the following ordinance and moved, seconded by Beahrs, its approval for first reading: ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING CERTAIN SECTIONS OF THE I'ALO ALTO MUNICIPAL CODE SETTING VARIOUS, FEES Councilwoman Witherspoon indicated that she would vote against this ordina=nce because she thought the ramifications of some of the raised fees should be looked into. When the ordinance was presented which had to do with animal services in particular, she would have something more to say. The ordinance vas adopted on the following vote: AYES: Beahre, Berwald, Carry, Clay, Eyerly, Norton, Sher NOES: Comstock, Witherspoon ORDLNANCE RE VEHICLES STANDING .H. NOTION: Councilman Comstock introduced the following ordinance and moved, seconded by Comstock, its approval for first reading: 1344 6/29/76 44 ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO REPEALING UCTION 10.44.020 (STANDING OR PARKING, THREE A.M. TO SIX A.M.) OF THE PALO ALTO MUNICIPAL CODE Councilman Eyeriy stated that on the recommendation of staff, the Finance and Public Works Committee had deleted a person from the Police Department who would be responsible for policing overnight parking. However, he saw no wisdom in repealing the ordinance because there could be a variety of reasons - in the future for wanting to enforce it. There would still be residents and street sweepers who would be reporting iafractione. Councilman Berwald agreed completely with Councilman Eyerly's mass rks . Councilwoman Witherspoon indicated opposition to the motion. She had received two calls from people in the Barron Park area who were concerned about excessive cars on their narrow streets. Perhaps the ordinance could be kept on the books with a review in six months as to whether or not the pooition could be reinstated next year. The ordinance was approved for first reading on the following vote: AYES: Beahrs, Carey, Clay, Comstock, Sher NOES: Berwa1d, Eyerly, Norton, Witherspoon ORDINANCE TO REGULATE MOTION: Councilman Bewald introduced the following ordinance and saved, seconded by Norton, its approval for first reading: ORDINANCE OF THE COUNCIL OF THE CITY 07 PALO ALTO ADDING CHAPTER 4.39 TO THE PALO ALTO MUNICIPAL CODE REGULATING PRIVATE INTRUSION ALARMS The motion was approved on s unanimous vote. emilialE UTILITY USERSai MOTION: Councilmen Berwatild introduced the following ordinance and on behalf of the Finance and Public Works Committee moved its approval for first reading: ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THR PALO ALTO MUNICIPAL CODE TO ADD CHAPTER 2.35 (UTILITY USERS TAR) (Finance and Public Works Committee records that the ordinance imposing the Utility Jeers Tax become invalid one year from date it becomes effective) 1345 6129/76 1 Councilman Berwald stated that he would oppose the electric utility tax and the telephone tax. He added that any of his counts in no way reflect the need for revenues. It may be that the city could stretch out for a year the financial needs of the city by removing the telephone tax - or by removing o;ee or the other. They each would provide about $4SJ,000. Councilman Berwald asked Mr. Brown what the transfer to the Capital Improvement. Fund would be, Mr. Brown responded that as the budget stood the evening before, there would have been a transfer of 1.6 million dollars to the fund plus the $600,000 thet was already in the unappropriated balance of the Capital Improvement Fund. There are expenditures in the Capital Improvement Fund of slightly over $600,000 and the potential for year-end balance this year was about $300,000. Mr. Brown concluded that the net effect was a reserve of $2,029,000; and that was if the revenue package was approved, and all of the revenue estimates are realized. Councilman Berwald asked if that was about the minimum at which staff wanted it. Mr. Brown replied that staff had recommended a minimum reserve of two million dollars. Councilman Berwald did not see how Council could go against the staff recommendation without considerable debate. His own feeling was that the $900,000 that would be collected as a result of the telephone tax and the utility tax should be gotten from property tares instead. Some of the problems of collecting the telephone tax are tremendous; and determining what was taxable would be done by the Telephone Company, but it would have to be audited by business. Councilman Berwald said that government did not make the property taxpayers - business and residential face up to the costs of the actions of their government. Rather than that, Council was considering adding a new tax that may or may not be taken off in a year. He referred to earlier discs:asion where he pointed out that the transient occupancy tax was a burden on business, and Mr, Sipel stated that it was passed along to the consumers. Councilman Berwald pointed out that all taxes on business were passed along to the conaau er in one way or another, competition permitting; but Anyone who has studied economics knows that even an excise tax or a sales tax puts a burden on that product that is involved. There is no way to get around that fact. When you are dealing with products that are in a competitive market, these taxes are an additional burden. Secondly, there was a state-wide task force in California spending an unbelievable number of hours in trying to determine how the business sector can get from being forty-eighth to forty-seventh in the motion. The business climate is not good in California, and the employment climate is not good. Councilman Berwald thought changing the traditional ratio of taxing from 65/35 for business and residential., which is mat would hippsn if the utility tax were adopted, was neither warranted or justified. Councilman Berwald concluded he would oppose the utility tax and the telephone tax with the thought in wind that the first alternative would be to transfer the source of revenue to the property tax. Councilman Beahrs stated that over the last ten years there has been a noticeable, pronounced transfer of business interests from high -tax jurisdictions (notably California, the northeast, and some of the midwsstern states) to Nev Maxito, Arizona, 1 3 4 6 6/29/76 Texr.s, and the southeastern states. The net result is that New York City and Detroit are in a desperate condition, and other states are approaching the same condition. If Council wanted to create an adverse climate in Palo Alto for business, then everyone would witness business progressively leaving the community; and the residentialists will be left holding the bag. The citizens of Palo Alto seem to think that they buy their own amenities when the fact is, business pays for sixty-five percent of the cost of those amenities. Councilman Beahrs felt that the property owners needed to see the picture realistically, and he would vote against this ordinance. Councilman Eyerly thought the telephone tax had too many unclear impacts connected with it, and it was an unfair tax. Neither staff nor the telephone company has been able to advise the city just how much money such a tax would generate. When he came to the meeting, Councilman Eyerly thought he would move to take the telephone tax out of the ordin.ance and leave just the electrical tax. He said he felt free to do that since Palo Alto's electrical rates were considerably lower than neighboring communities, and industry does have that advantage. Councilman Eyerly said he had been reminded by Mr. Sipel that there was a major law suit concerning CVP filed by Santa. Clara. They are trying to get more energy from the CVP authority; end if they do, that will definitely have an effect on host couch energy Palo Alto would have in future years. The weakness of leaving the tax only on the electrical utility is that it is a point in their favor on the litigation. Counc{ lr.,.an Eyerly suggested that Council, after removing the telephone tax, include in the ordinance a tax on water which would result in a broader distribution of the tax in the community. It was hip unde':standing that this would then have no impact on the lawsuit. Speaking to the proposed revenues in general, Councilman Eyerly reminded Council that the city would be taking advantage of a windfall on property taxes due to an increased valuation this year; and that would mean about $377,000. To raise the revenues needed for a reserve and a cash flow the next year, Councilman Eyerly proposed splitting up the incomes. There would be $377,000 on the property tax; something like $500,000 on the electrical tax; and six percent on the water uaage would generate something like $250,000. AMENDMENT: Councilman Eyerly moved, seconded by Norton, the deletion from the ordinance of Sections 2,35.100, 2.35.110, 2.35.120, and 2.35.130. Mayor Norton explained that this amendment would delete the tax as applied to telephones. Councilman Carey stated that this proposed amendment would remove about $450,000 in revenues, and he wanted tj know hew that amount would be raised. Councilmen Eyerly responded that the water tax would bring in about $250,000; and as for the balance, he did not feel the city needed quite the reserve at the end of this coca. g fiscal year that staff had indicated it would like. Councilman Carey was interested in having Section 2.3,S.04O 1 3 4 7 6/29/76 added to those being deleted from the ordinance. This action would change the last wording of that section to "shall reuaain in effect until the sum of $500,000 has been collected by the city, but in no event shall the ordinance remain in effect until September 30, 1977". The reason Councilman Carey wanted to do this was that one of the criticisms of the users tax is that it would go on and on, and he wanted to see a limit established as to what would be collected from the utility users tax as opposed to simply a time limit. Mayor Norton suggested that the thoughts expressed by Councilman Carey be part of a separate amendment. Councilman Sher asked what the impact on the property tax would be if the telephone tax were deleted and the necessary funds raised by increasing the property tax. Nr, Brown responded that the impact would be twelve and one-- half cents, or less than that depending upon the valuaticns for the next fiscal year. Mr. Sipel added that one of the reasons why it was a little bit higher was because there was a seventy cent rate applied already to part of the valuation. The unsecured property is already being taxed at seventy cents, and that could not be changed. This meant that the total assessed valuation was a little lower, and one cent would get the city about $36,000 based on current estimatee which are probably a little low, Conceivably, the increase could go down to ten cents. Councilman Sher wanted to underscore the fact that some people did not feel the need to restore the operating reserve to two million dollars, and the problem is easier for them. For those persons who felt that amount was the bare minimum for the Capital Improvement Fund, it was a problem because $900,000 needed to be found in new revenues as part of the budget process. The possibility of a tax on water hid been discussed in the Finance and Public Works Committee. Staff had originally had that idea as part of their recommendation, but they changed it because the tax would mean the citizens of Palo Alto were paying more for water than people in neighboring communities. Councilman Sher did not believe he would be able to vote for an imposition of a tax an the water utility, and the stme thing was true in connection with the gas utility. Also, Councilman Sher said he would .feel some constraint about adding twelve and one-half cents or any amount of that magnitude to the property tax, which now stands at seventy cents. That would be a tremendous percentage increase. People have been saying that the utility tax was a new tax; and once you institute a new tax, it does not go away, In response to that, Councilman Sher pointed out that the ordinance itself states that the tax sauaat go away in one year; end there had been a suggestion that a dollar limit be put on the tax, with which he might agree. The only way the tax could be restored would be by an affirmative vote by a future Council. The other thing not being mentioned was that when you add twelve and one --half cents, or any amount, to the property tax, that may not go away either. The reliance on new revenues produced would be exactly the same whether the money comas from a property tax, a utility users tam, or any other kind of a tax. It is true that the property tax is imposed each year in a tax 1348 6/29/76 setting session, but thet is the effect of this ordinance as well. Councilman Sher felt that anyone who voted to delete this part of the ordinance had to make up his mind in advance that he or she is willing to make that kind of an increase in the property tax or else find the money zomewhere else. It was his opiion that the city needed to have two million dollars restored as of the end of the next fiscal year, and he regarded that amount as a bare minimum operating reserve. Councilman Beahrs said the logic in Councilman Sher's arguments escaped him. The subject being talked about was money, and it did not wake too much difference where it came from. His feeling was that the town needed a good stiff done of medicine, and the property tax was the way to do that. He thought Council- man Sher emphasized that very point by running away from the percentage increase, when the need was for people to face up to reality. Councilman Eyerly reminded his colleagues that if they voted to remove the telephone utility tax, they were really committing themselves to vote for a six percent tax on the water utility. There was the possibility of losing a lawsuit, and that would cost a lot more money if the tax were left only on the electric utility. Councilman Carey said he was going to vote for the Eyerly amendment, and he was going to vote against the water tax. After all of that had been gone through, he stated he would move to raise the property taxes. Councilman Carey felt the telephone usage tax should be voted out because it is inequitable. There are more equitable sources of revenue, and the property tax is one of then. The important thing to remember is that if the telephone users tax is passed, the traditional ratio of two-thirds/one-third with respect to what business contributed toward running the city compared to the residents' contribution would be further distorted to about eighty/twenty. Even if you say the ratio is sixty/forty, it is actfialiy worse than that; because there are about four firma which would generate about half that money. Councilman Carey wanted to find a revenue source that would be more equitable; and in his opinion, that would be the property tax. Mr. Sipel explained that the basic problem was the bureau contract, which requites Palo Alto to utilize the Bureau power in an equitable, business -like manner. Staff's concern was that since the city's rates were very low, if a tax were slapped on top of that, someone might be able to maim the argument convincingly that we are abusing our use of federal power. Staff did not know what chance this argument had in prevailing, but the stakes were very high; and Palo Alto should stay clear of any problem of that nature. Staff's concern is with a tax exclusively on the electric utility, but it would feel comfortable if the tax ware applied to more than one utility. Staff would feel comfortable if a tax were applied to all five utilities, and it would be all right if a tax were applied to electric and water utilities or any other combination. Edward Aghjayarn, Director of Utilities, stated there was a specific covenant in the contract with the Bureau which requires that the benefits of federally generated power will be availatle at fairly reasonable tome to all of us at the lowest possible e 1 3 4 S 6/29/76 rates consistent with sound buoiness principles. His concern was that if the city adopted a tax which applied just to the electric utility, that might be construed as tantamount to a rate increase since all the other utilities would be excluded. Mr. Aghjayan did not think he could go on the witness stand and explain why Palo Alto had a tax only on the electric utility. The Eyerly amendment passed on the following vote: AYES: Beahrs, Bervald, Carey, Clay, Eyerly, Witherspoon NOES: Comstock, Norton, Sher MOTION: Mayor Norton moved, seconded by Comstock, that the portion of the ordinance just deleted, and its ratifications, be referred to the Finance and Public Work.o Committee for purposes of working out some of the differences that have been addessed by members of the public in the budget hearings. The referral motion passed on the following vote: AYES: Berwald, Comstock, Eyerly, Norton, Sher, Witherspoon NOES: Beahrs, Carey, Clay A'fENDM N'T : Councilman Eyerly moved, seconded by Norton, that a six percent tax be imposed ou the water utility. Mr. Sipel explained that if the city were to have a six percent utility tax on electric and water, staff could implement that on the first of August; and the yield for the year would he about $770,000.00. Councilwoman Witherspoon asked if the proportion of use in the water utility fell roughly the sane way - 60/40. Mr. Brown responded that it was 53% residential and 47% all other usage. Councilwoman W therapoou noted that the tax would be based on the cost of the water, and she asked if that worked out to be about fifty/fifty. Mr. Sipel replied that there was a five to one ratio. Councilwoman Witherspoon understood that the water generated was about 50/50, and she wanted to know if the money generated was 50/50. Mr. Brown reiterated that the money generated was 53/47. The amendment failed on the following vote: AYES: Eyerly, Norton, Witherspoon NOES: BRahra, Bervald, Carey, Clay, Comstock, Sher 1.3 5 0 6/29/76 AMENDMENT: Councilman Eyerly moved, seconded by Carey, that in Sectsen 2.35.040, the following words be added at the end of the sentence: "shall remain in effect no longer than the date by which $500,006 has been generated". Mr. Brower said this wcuid have to relate to the billing cycle of the utilities, so perhaps something should be added to the, amendment ec that the tax could be stopped at the end of the billing cycle when the S5O0,000 had been received. Councilman Sher stated that in view of what Mr, Sipel had said about the ability to start the tax on August 1, the dates should be from August 1, 1976 through July 31, 1977. The Eyerly amendment passed on the following vote: AYES: Beahrs, Berva1d, Carey, Clay, Comstock, Eyerly NOES: Norton, Sher, Witherspoon AMENDMENT: Councilman Sher moved, seconded by Comstock, that the beginning date in Section 2.35.040 shall be September 1, 1976 and the closing date, August 31, 1977. The Sher amendment passed on a unanimous vote. Vice Mayor Clay, speaking to the main motion, said he did not understand the rationale of all the discussion that had taken place. Council was choosing a very complex method of raising an amount of money that it knew it needed. The simplest and meet direct way of raising the funds is through increasing the property tax. There is a better estivate of revenue this way, the system is easier to administer, and the spread is equitable. Further, the purpose of the money is to take care of the expense of property that had been purchased. The added potential problem of a lawsuit had been brought up tonight. Vice Mayor Clay sass a very fine line of dietioction between adding other utilities, for example, to it, as long as there is electrical power in there. That fact makes the city liable. He stated he would vote against the ordinance and propose that the property tax be raised by an appropriate amount. Vice Mayor Clay reported that the sadism price of a tax in Palo Alto today is $56,000. If the property tax: were to be raised by twenty cents, the coat on a $56,000 home would be $28.00 per year; therefore, a large amount of money was not being talked about. Perhaps that tame would have to be raised by twenty-two and one-half cents, but that would mean just $31.00. For a hundred thousand dollar house, the amount being talked about would be $50.00. Vice Mayor Clay wanted to know why Council was going through all of these various suggestions to find ways to raise the money in a complicated manner, when this direct rtute was available. He said he would vote against the motion; and if it failed, he would propose that the property tax rate be increased. AMENDMENT; MENT: Mayor Norton moved, seconded by 8erwald, that Sections 2.35.164 and 2.35.190 regarding a delinquent penalty of ten percent or $5.00 whichever is greater, and an imposition of a onaa percent per month late charge, respectively, be deleted from the ordinance. 1 3 5 1 6/29/76 135 1 Mayor Norton noted that in the second resolution which Council would be asked to adopt later, late payment charges on utility bills would be instituted. To his way of thinking, that would take care of the whole problem. If, in addition to that by this ordinance, Council would be putting a ten percent penalty or a five dollar charge on the unpaid tax after thirty days delinquency, there would be quite an impact. For example, a $30.00 electric bill would be tired $1.80. If that bill were not paid in thirty days, the person involved would pay 10% on the $1.30 or $5.00, whichever is greater. Mayor Norton said that if that happened to him, he would be very angry. The other problem is that the proposal is to charge one percent per month late charge in the ordinance, and a late payment charge would be added by the resolution later on in the everiiag; and that means a double penalty. In Mayor Norton's opinion, neither one of those was needed in this ordinance. If the late payment is being covered in the resolution, that seemed to take care of the whole situation The Norton amendment passed on the following vote: AYES: Bercrald, Carey, Clay, Comstock, Eyerly, Norton, Sher, Witherspoon NOES: Bechrs City Attorney Booth stated there were one or two correspondiug changes which he would make which would support what the Council has enacted. There would be one or two changes in the ordinance and at least one change in the utility rules that 1,-ould make the transition a smooth one. The discussion of the ordinance was postponed at this point pending the following items and Executive Session. BEQUEST TO MOVE ORAL COMMUNICATIONS MOTION: Mayor Norton moved, seconded by Witherspoon, that oral communications be moved forward on the agenda. The motion passed on a unanimous vote. ORAL COMMUNICATIONS 1. Axel . Johnson, 1120 Fulton Street, thanked staff and Council for the seventy-five foot aluminum flagpole that was to be installed at the Veterans Building. 2. Tom Cahill, 2701 Waverley Street, wanted to know whether or not Item 6 concerning PACK would be addressed at this meeting. ;P TO BB FOiA ITS b AND 7 / MOTION: Councilman Comstock coved, seconded by Norton, that Items 6 and 7 on the agenda concerning PACCC and Paramedic Services be moved forwsrd for purposes of continuance. 1 3 5 2 6/29/76 The motion passed on a unanimous vote, MOTION: Councilman Comstock moved, seconded by Witherspoon, that Items 6 and 7 be continued to the July 6 meeting at which time they would be addressed under Unfinished Business. The motion passed on a unanimous vote. EXECUTIVE SESSION At 11:55 p.m. Council adjourned to Executive Session re litigation and utility rates for fifteen minutes. ORDINANCE RE UTILIT? USERS TAX AMENDMENT: Mayor Norton moved, seconded by Comstock, that staff amend the ordinance to impose a 2.4I users tax across- the-board on all five utilities, pins telephone, and change the effective date back to October 1, 1976. Councilman Carey said his inclination was to balance the budget by an increase in real property tax. He brought this up understanding that ouch action could not be taken at this meeting, but in order to argue against the motion. If the budget is balanced through an increase in real property taxes, the budget will remain unbalanced until August when the rate would be set. Councilman Carey wanted to put forward a number so that the idea could be put into context. Council was talking about raising an additional $900,000 in order to balance the budget; but he used $1,000,000 so he could divide evenly. If a piece of property had an appraised value of $60,000.00 for tax purposes, the assessed valuation would be $15,000.00. One cent on the property tax rate would be some $4O,0OO; therefore, the property taxes would have to be increased by twenty --five cents in order to raise a million dollars, Councilman Carey explained that a twenty-five cent increase in the Palo Alto property taxes on a $60,000 assessed house would cost that homeowner $37.00 for that year. He thought that when people heard of a twenty cent increase on the tax rate, they envisioned it to be something more than $37.00; beat they do not realise that of the eleven - pies dollars they pay every year, over ten dollars goes to the county and to the school. aysteae. A twenty-five' cent increase would be something that Councilman Carey saw as being workable. Finally, he mentioned that the Palo Alto tax rate is the lowest in the county. If one looked at What the people in Palo Alto had paid in property taxes aver the last teen years, he would eliecover the taxes bad not gone up at all if inflation were factored in. Councilman Can's inclination for balancing the budget was through an approximate twenty- tvo cent increase in property taxa * Councilman Baehr: asked whet the comparative cost would be in collecting property taxes and utility toes. Mt. Sipel said there was no cost in collecting the property tames; on the other hand, the utility users tax would cope in faster and earlier. 1353 6/29/76 Councilman Berwald agreed with Councilman Carey`s statements. Earlier when Councilman Eyerly was making his motion for a water tax, Councilman Berwald calculated that would bring in a final figure of $770,000 instead of $900,000; and he did not think that $130,000 was a very big reduction anyway. That would reduce the Capital Improvement somewhat, but not very much. The property owner in Palo Alto pays 6.36% of his taxes to the city at the present time. With the increase, re would be paying 8.1%; and that would be just an increase of 1.74% in the property tax. Councilman Berwald preferred and strongly recommended that there be a one-time property tax and have it understood that the total would be a figure of $770,000. Councilman Eyerly said he would vote against the ordinance since he could not see adding a tax to the telephone no 'setter what the rate was. The Norton amendment failed on the following vote: AYES: Comstock, Norton, Sher NOES: Beihrs, Berwald, Carey, Clay, Eyerly, Witherspoon The ordinance as amended failed OD the following vote: AYES: Comstock, Norton NOES: Beahra, Berwald, Carey, Clry, Eyerly, Sher, Witherspoon MOTION: Councilman Berwald moved, seconded by Eyerly, that staff be instructed to come back to Council with an ordinance fixing the property tax at a rate equal to an income of $770,000; and that, of course, would be in addition to the other fees, revenues, and transient occupancy tax. Mayor Norton stated that he strenuously opposed any raise in the property taxes, and he would oppose the motion. Councilwoman Witherspoon assumed this would take place after Palo Alto heard from the county es to the assessed. valuation. 4r. Sipel said that was correct. Once that report is received, etaff will send Council a report stating what the increase would be. Councilman Carey asked how the :figure of $770,000 had been arrived at. Mt. Sipel explained that the figure evolved from calculating a *ix percent tax on both electric end water for eleven months. Councilman Carey concluded from his figures thet the city needed to raise roximately $450.00. Councilman lira asked if the five -0 recently diecussed would accommodate the Lag which would be involved compared to the pickup of other revenues on the utility tax system. 1354 6/29/76 a3 1r itt. Sipel responded that staff would be coming to Council at the next meeting with a request for authorization to get about five million dollars worth of notes. Councilman Comstock asked Councilman Berwald if he would consider withdrawing his motion. Everyone was grasping for numbers; and in a week's time, tie staff could present a precise definition of whet had been done. Councilman Comstock thought that would be impacted by whether or not Council cores to some sort of an agreement as to fees for Foothill Park. He suggested that this posit could be gotten to in August, axa.d Council could probably launch itself a little better a in week or so since staff n w understands what the concerns are. Councilman Berwald responded that he would be willing to remove any dollar figure and just ask staff to compute the amount of taxes necessary to balance the budget. At the time the subject is taken up in August, Council could discuss the dollars. MOTION RESTATED: Councilman Berwald moved, seconded by Eyerrly, that the policy of the Council be that the budget would be balanced by revenues from property taxes. Councilman Sher expressed strenuous opposition: to a gigantic increase in the property tax. There was a carefully worked out proposal for raising the necessary revenues to restore the operating reserve. He felt that the property tax, once installed, would remain at that level. Councilman Sher noted that the previously proposed ordinance had a termination date in it, whereas the taxi rats increase will not have that. There had been some discussion about the impact of the various soerces of revenue on the average house owner, In terms of property tax, Council had received an analysis from staff showing that the impact on the average utility user would be lover than that of a property tax,• and the same arouut of money would be realized. His ow preference was for the utility tax acroas-the-board; therefore, Councilmen Sher would not vote for a property tax increase. The notion as restated passed on the following vote: ATES: Beahrm, Berwald, Carey, Clay, Eyerly, Witherspoon NOES: Comstock, Norton, Sher RESOLUTION i CERTAIN ADMMSSIONS MOTION: Mayor Norton introduced the following resolution and moved, seconded by Witherspoon, its adoption: RESOLUTION N". 5223 entitled "RESOLUTION OF TZ COUNCIL OF T Z CITT 07 PALO ALTO AUTHORIZING CERTAIN GOLF AND COURSE AND GREEN FEES" AMENDMENT: Councilman Comstock saved, seconded by Witherspoon, that Section 3 of the ordinance haves to do with Foothill Park be deleted and Section 4 be renumbered as Section 3. 1355 6/29/76 Mayor Norton explained that the effect of this amendment would be no admission fee whatever to Foothill Park. Councilman: Sher noted that Councf i.aaan Comstock's amendment encompassed part of an amending oration that he had planned to make. He thought there was some confusion es to what action the Finance and Public Works Committee took in regard to the admission fee. It wen his understanding that this was just a vehicle fee and no fee would be charged to pedestrians and cyclists. He asked that the matter be divided into two parts. Councilman Umbra asked what the ultimate net would be on the increases; and in particular, he wanted to know how much would be netted on the Foothill admission charges. Ma. Brown responded that the gross revenues should be approximately $100,000; the expenses involved in collecting the fees would be about $15,000; and there would be a net, then, of about $55,000. The vehicles would provide the biggest portion of the income. Councilman Beahrs asked what the budget was for Foothill Park. Mr. Broom replied that it was about $150000. Councilman Beahrs concluded that the cost of the park would be approximately offeet by the charges. Mr. Brown said that wee correct. Councilman Serwa1d thought the majority views of the Finance Committee was that admission should not be charged to pedestrians and bicyclists. It remained the recommendation of the Finance Committee that a charge to vehicles be *ado. That part of Councilman Comstock's amendment having to do with eliminating a charge for vehicles failed on the following vote: AYES: Beahrs, Clay, Comstockk. NOES: Eerwald, Carey, Eysrly, Morton, Sher, Witherspoon That part of Councilmen Cnwtock's amendment having to with eliminating a charge for pedestrians and bicyclists passed on the folloving vote: AYES: 3erweld, Carey, Clay, Coeeetock, Eyerly, Norton, Sher, Witherspoon IDES: Seahre AM T: Councilman Carey wed, seconded by Clay, that the lees at the golf course take effect on July 15 rather than September 1; and that the following changes in rates be enacted: nonresidents - $4,00 on weekdays with no distinction between mornings and afternoons; $5.50 on Saturdays, Sundays, and holidays with no distinction between mornings and afternoons; and monthly playing cards .. $22.50. 1356 5/29/76 Mayor Norton understood that nothing in the amendment would affect fees charged to residents. Councilman Carey said that was correct. This would push the nonresident rates up to those charged by other competing municipal golf courses, and he saw no reason why Palo Alto should subsidize nonresidents. Over 100,000 players were there uow; and if the rates are raised to those of competing course's, the city would not lose that much play. If some were lost, the increased revenues would far offset that; and it will make the eitustion easier for residents, Councilman Carey's quick calculations irdicate4 that there should be a net increese in golf course revenues of around $30.000. Councilman Bervald thought the.t from the standpoint of good communication, perhaps a thirty day period to alloy for posting of the increased rates would be in order. AMENDMENT RESTATED: Councilmen Carey moved, seconded by Cleay, that the fees at the golf course take effect on July 15 rather then August 1; and that the following changes in rates be enacted: Nonresidents - $4.00 on weekdays with no distinction between mornings and afternoon; $6.50 on Saturdays, Sundays, and holidays with no distinction between mornings and afternoons; and monthly playing cards p-- $22.50. The amendment passed on a unanimous vote. The resolution as emended wen adopted an a unanimous vote, RESOLUTION RE UTILITY RULES AND REGULATIONS Mayor Norton introduced the followi'n'g resolution and moved, seconded by Comstock, its adoption: RESOLUTION NO. 5224 entitled "RESOLUTION OF THE CECIL OF THE CITY OF PALO ALTO AMENDS RULE NOS. 4, 8, AND 10 OF THE UTILITY IDLES AND RAGULATIOUS OF THE CITY 9F PALO ALTO" The resolution was adopted on a unanieous vote. PALO ALTO HOUSING CORPORATION MOTION; Councilman Barmaid coved, seconded by Clay, re reel of Palo Alto 1 ousi g Corporation contract for fiscal year 1976.77, approvel of Aix No. 3 to Contract No. 3526 - 1or and moderate income housing services. The motion passed on a unanieous vote. 1357 6129/76 MOTION: Councilman Berwa1d moved, seconded by Comstock, approval of Amendment No. 2 to Contract No. 3701, Consulting Services - Senior Coordinating Council, and Amendment No. 2 to Contract No. 3682, Comprehensive Child Care Program.