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HomeMy WebLinkAbout1976-10-04 City Council Summary MinutesCITY / COUNCIL M1NUTES Regular Meeting October 4, 1976 ITEM Minutes of September 15, 1976 Oral Communications Consent Calendar - Action Items Home Insulation and Solar Energy Utilization: Proposition 3 and 12 Retirement of Homer Collins Public Hearing: Conflict of Interest Code Policy and Procedures Committee Recommendations Re Solid Taste Management Plan for Santa Clara County Finance and Public Works Committee Recommendation Re Police and Fire Communications Contract With Stanford University Finance and Public Works Cemmittee Recommendation Re Long Term Power Supply Alternatives and Procurement of Power El Camino Study Adjournment 336 10/4/76 CITY MLO ALTO PAGE 339 339 339 3 4 0 340 3 4 0 3 4 3 3 4 6 3 4 7 361 364 7 October 4, 1976 The City Council of the City of Palo Alto set on this date st 7:30 p.m. in & regular meeting with Mayor Norton presiding. PRESENT: Carey, Comstock, Eyerly, Norton, Sher, Wither poor, Seahrs, 8erwald ASSENT: Clay Councilmen Eyerly stated that neither he nor Councilman Beahrs were present at the September 15 meeting, and asked that the minutes be changed to so read. Pi /OM: Councilman an Eeahrs moved, seconded by Witherspoon, that the minutes of September 15 be approved as corrected. The motion passed unaniosus1y. . CATIONS -- NON -AGENDA ITEMS 1. Mr, McKaig, 452 Marion Avenue, said he was pleased that the matter of animal control had relaxed, but he did feel the iapouudiug fees were too high. 2. Mr. Hal Hudson, 535 Everett Avenue, was appearing as President of the Palo Alto Housing Corporation to say that the Webster Project had been approved by the California housing Finance Agency last Tuesday. Be said Proposition 3. would be on the November ballot in compliance vith the State Supreme Court mandate that local voters ratify bousing developments being financed by the CHFA. Roth the Council and the League of Women Voters had approved it also. The project bounds are Middlefield, Webster, Addison and Coming, excepting the 'mortuary at Middle- field and Addison. The plan for law -density housing, called Webster mod, to be first-class rental lousing with correeposading rental rates; another portion will be for low-income people including elderly and handicapped who qualify for federal subsidies. Tbeae units will be two -storied. Funding is established, voter approval merely ratifies. In forty-five years the City can buy back the entire development., for $1.00. The development e,u1 oot increase Palo Alto taws, and he urged citizens to vote for Proposition 1. 3. Mite Goddard, 1140 Hamilton, representing the Crescent Park and University Avenue Association, spoke of the Association's desire that the Squire House be kept as a single residence, in compliance with the ?resent zoning. CONSENT CALENDAR - ACTION I Councihvaaam Witherspoon said she wool* iihM to move Its $o. 2 with regard to tbe Ordinance can impoundins fees f ron . ibis- cousent Calendar. 33! 10/4/76 The following item remained for consideration under the Consent Calendar: HOME INSULATION AND SOLAR ENERGY UTILIZATION: PROPOSITIONS 3 AND 12 Staff recommends that the City Council adopt the resolution, indicating its support of Propositions 3 and 13 in the November 2 general elections. RESOLUTION 5261 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ENDORSING PRO, OSITIONS 3 AND 12 ON THE )}ALLOT FOR THE NOVEMBER 2, 1976, GENERAL ELECTION RE HOME INSULATION AND SOLAR ENERGY UTIL- IZATION" NOTION: Mayor Norton moved, seconded by Everly, approval of the Consent Calendar recommendation and adoption of the resolution. NOTION PASSED: The motion to approve the Consent Calendar and adopt Resol- ution 5261 passed unanimously, ly, Vice Mayor t . ev al+seut . (CMR:461:6) Mr". Ed Aghjayan of the Utilities department said that Mr. Collins had begun work as a member of the service installation crew in 1952, and had spent many years prier to his retirement as a faithful member in repairing Gas Systems. MOTION: MayorAorton moved, seconded by Serwa1d, that a plaque. and .thanks be extended Mr. Honer Collins on the occasion of his retirement from 24 years of service in Utilities in Palo Alto, and the Resolution of Apprecia- tion be adopted. RESOLUTION 5260 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIATION TO HOMER COLLINS UPON HIS R.ETIR ENT" NOTION PASSED: The motion passed unanimously, Vice Mayor Clay abet. LIC H.E'ARI. w. NG : Cj T ODD Mayor Norton anted the City staff to present a summarised report of the contents of the code. Robert X. Booth, City Attorney, stated the record should show that the notices of this public hearing were published on Friday add Saturday, October 1 and 2 in the Palo Alto Tines,. although there are no specific revdremente in the law that a formal public hearing be held. Be said this code is presented in a form approved, by the Fair Political Practices Commission sod general.3y incorporates the provision of Proposition 9 for the members of the City Cdouncil. Those are outlined'In the report. At a later time the Council will be asked to establish a lion datefor Conflict of interest Codes for members of boards„ commissions, council -appointed officers and a large number of members of the city staff. It is staff's recommendation that Council not eaeteblisa such a d fte at this time, since the law is being changed by the legislature on an annual basis and the commission continues to render opinions and adopt remotions which have a eubetantia1 effect on the number of persona and the typos of conflict which should be covered. As soon as the 'situation clarifies itself, $toff will be back to askCount!' to establish a data 340 10/4/7 • for persons other than the City Council. The resolution before Council must be the hands of the Commission before October 10, so it is hoped that the action can be completed tonight. Mayor Norton asked Mr. Booth if the resolution incorporates the requirements of Proposition 9. Mr. Booth responded affirmatively. Mayor Norton asked if anyone in the audience wanted to address the Council. He asked if Ms Petrosian was in the audience. He said that Me. Petrosian had given members of the Council a letter dated October 4, 11976, which was self -exp l.anatory . There being no response, Mayor Norton declared the public hearing closed. Councilman Eyerly stated that his comments were prompted by Ms. Petrosian's letter. He said by the tone of her letter she indicated that r altorss should not be an the City Council. He said he was not here to protect any realter that was on the City Council but he did not see how the City could exclude any type of occupation and still represent the people of the City. Councilman Eyerly said the letter was not well taken by him and he hoped not by other members of the Council. Mayor Norton asked Mr. Booth to touch on the legal •propriety of singling out that articular occupation. Mr. Booth said he believed the Constitution of the State of California would prohibit the City from adopting any regulations prohibiting any particular person or occupational group from being elected or holding a public office. It was his opinion that the Fair Political Practices Commission provisions of Proposition 9 are apparently adequate to deal with any potential conflict that affects the real estate business, as well as any other businesses. He commented as to real estate brokers, paying they are subject to far more stringent requirements about their holdings and their income, along with attorney, than other occupational groups covered by Proposition 9, Mayor Norton asked if attorneys are excluded. Council Carey stated that since the subject had been opened and he is in the real estate business, he wanted to comment. He said that a person in the real estate business, when questions before the Council dealt with land use, laced planning, re-z+ooing and . the like, had to be extra cautious. But to said he felt that to say a person isn any certain occupation cannot bold office vas frightening. He said that once they started excluding cl.asssea of people, no swatter how genuine the exclusion vas, initially, it cnvid only lead to some undemocratic processes. Csal tied further, as the Pryor suggested, maybe attorneys should be excluded, or presidents of neighborhood associations because they have certain intermit* in certain areas of the tonnes, and on, and on. He took note of the letter referring to the section of the land developer being on the Council. The San Jose Mercury, after the last election, quoted Ron Miller as aayiag the last thins be developed since 1969 was a roll of file. That is essentially true. Councilmen Carey said he is *lso an attorney so he is doubly tainted. They mot, no scatter what the class is, sakes such a sweeping generalisation. Be said be is well aware of the conflice-of-interest statutes; changes in leg- islation become more and more defined and for the moat part for the hotter, although it does work hardships on certain occupations. Referring to his own occupation, be said the bookkeeping be is required to smthtein for 1976-77 records silo • tua ass a half -year's salary for a secretary. if anyone wants to }snow who be is dealing with, that person need only check tbs public files. Be also answered the cents in the letter with reesenpect to $f =yam is the public did not like they revAution, be was sure tbst this mil would react, listen to comments, and cage the recommendation. E. 341 4174 referred to Section 4, line 6, of the resolution commencing with the words "the public generally, on any financial interest," and he said the word should be "or." Nt. Booth said the word "on" was correct. Councilman Carey asked if there weren't twofold standards in the proposed ordinance, one having to do with a foreseeable and material effect in the future, and the other being essentially Proposition 9, the State requirements having to do with the defined financial interest. Mrs Booth replied it was all one test; the wording following that is contained in Proposition 9 and the regulations the Commission has adopted to define some of these terms. Councilman Carey said that essentially, it is a supplement to the State law on the conflict of interest. Mr. Booth replied affirmatively. Councilman Carey asked if the State legislation applies in addition to the proposed resolution. Mr. Booth said that was correct. This does not impose greater burdens or let anyone off the hook on Proposition 9 or any other conflict of interest. Councilman Carey said that it is not a lessening of the standard test set by Proposition 9. Mr. Booth responded, not is the least. Councilman Berwald said he would like to add that the first paragraph of the letter suggests the writer is very interested in participating in a discussion on the subject of conflict of interest code and he assumed the City Attorney would be available to respond to this letter. He said he did not feel competent to respond.to this particular matter and he suggested the City Attorney respond to it. Councilwoman Witherspoon said she understood from the City Attorney's report that he would be costing forth sooner or later with recommendations for codes other than Council -appointed officers. She remembered during the discussion of the handbook, Ann Tanner, the City Clerk, was preparing, containing ba.ekground information . on conflict of interest of Commissioners sod Council -appointed officers. She said Ms. Tanner had thought of drawing up a guideline, not s code, for items that were less definable regarding financial conflicts of interest. Councilwoasd Witherspoon -wondered, if it would be possible for staff to work out some of those considerations into the recommendation and return it to Council in a few moths. If not, maybe take it to the Policy and Procedures Committee to do eome brainstorming on it. She addressed Ht. Boots saying there was discumalon to what extent the voluntary involvement constituted a conflict of interest, if one is or a decision -making board in a community, those were not financial but moral conflict of interests. She said tbe difficulty lay in knowing where to drew the lam. Wr. Booth resided by saying it was eatremely difficult to draw those lines. In his opinion, one of the weaknesses of Proposition 9 is it does not deal with that subject at all. However, the proposed conflict -of - interest code will be coming before the Council, he would estimate in 6 to 8 aontbs, with specific suggestions.. We said it.had been theirpractice in the past to advise hers of boarder and commissions not to participate in decisions where a group in a poling capacity, such as a board of 342 10/4/76' Ye.) directors, bred taken an official stand on an item. He said that under the law there was no conflict at this time, however. Councilman Beahrs said that as a long-term member of the Council he found the general implication of Ms. Petrosian's letter quite offensive. Carrying her logic to extreme, Councilman Beahrs said, it would be impossible for anyone of talent to serve on any public body. Certainly, in view of those implications, for she did not make specific statements, he had some need to say that their colleague had been remarkably helpful and generous in his advice, and that his wisdom and experience were immensely beneficial for the best interests of this City. He said if, as:in the wetter of trust spoken of by one of the presidential contenders, he would say, "I trust Scott Carey." MOTION: Councilman Beahrs introduced the following resolution and moved, seconded by Eyerly, its adoption: RESOLUTION 5262 entitled "RESOLUTION OF-TBE CITY OF PALO ALTO APPROVING A CONFLICT -OF -INTEREST CODE FOR THE CITY COUNCIL" The motion passed with a unanimous vote, Vice Mayor Clay absent. PO . Y 6 P -• 'CEDURE C 4M Ti RECOMMENDATION CI. RA fOe (O(O:R:398:6) MOTION; Mayor Norton moved, in the absence of Vice Mayor Clay, on behalf of the Policy and Procedures Committee re Solid Waste Management Plan for Santa Clara County as follows: 1) Authorize the Planning Policy Comaittee representative to present to the Planning Policy Committee the plan addendum attached to City Manager's Report CHR:39B:b and urge its approval by all fifteen cities so the Plan can be adopted and submitted to the State; 2) Reiterate its commitment to pursuing resource and energy recovery methods; 3) Direct the staff to meet with six North County cities and draft goals, objectives, and alternative methods of study and acti.en for the proposed Joint Powers Authority; and Committee further reeds that Council direct Staff to pursue the question of specific ways to reduce the amount of solid waste in Palo Alto which would include, for example, the banning of naersreturnable bottles. Councilmen Carey urged the Council to pass the recommentations, forgarbage was perhaps the w,st critical issue before the City tow. The term "solid waste" doesn't have the urgency of "garbage." He said that all the technology and money available still would not provide places • to dump the garbage, so that in 1980 there will inevitably be talk about ar scone- third- and fourt_h lift, He urged adoption of the County plea, and negotiating to create a joint powers agency with neighboring cities in the north to solve this forth County problem. Councilmen Berveld said that since he would be hearing about this more in the Plemniig Policy Committee he wanted to hear the thoughts of Staff on • the setter. Ben Pavloski, Director of Public Works, said the Board of Supervisors had set that morning to consider the Solid Waste Management Plan, and they head edbpted items 2, reconeended facilities plan, and 4, the solid waste pen. Neither of than is in conflict with recommendatices for -the Ciao mitten. Comeilwoeinn Witherspoon said echo *4.ratood the reason a joint powers agency could not be started at this Ube was that a pisn bed to be adopted. 34 3 10/4/76 Mr. Pawloski agreed, saying Palo Alto's plans would have to conform to the solid waste management program adopted by the County, and try to find an area -wide solution to the problem. Councilwoman. Witherspoon said she understood further that any funding • available was contingent on conformity with such a plan. MY. Pawloski said not many federal' or state funds were available, and he understood that the funds might become available if there were a county- wide plan. Councilman Eyerly spoke of getting an extension of time some time back from the Army Corps of Engineers so that dumping on the Baylands could continue. The report that Palo Alto might go intn talks with six North County cities and possibly South San -Mateo County cities was commendable, but he said he would like such talcs with other comities to have a cut-off date and perhaps solve Palo Alto's problem on its own land, but not to prolong discussiou so long as to neglect existing deadlines':-. Mr. Pawloski said that the time for talking about schemes for processing or the like had passed, for the landfill area, by 1980, would be gone, and Palo Alto would have to start on a second lift at the present site; chile working out a county -aide plan. Councilman Eyerly asked if there were any other areas in Palo Alto ' suitable for fill. Mr. Pawloski replied tat there were none that wouldn't cause a furor. Councilman Sher concurred with Councilman Carey that a few years ago the Army Corps of Engineers said that garbage disposal was the most serious problem facing Palo Alto, and that the problem now a few years later was just as serious. He asked qtr. Pawloski if there was a date on frhich some joint -effort Would be undereay: Mr. Pawloski said at the moment they were trying to get the area into conformance with requirements of the various regulatory agencies, such as a grading plan, as well as how to proceed with a second lift at the present site. He thought Council would be presented with plans for a second lift shortly, but the other alternatives would not be ready for preaentation for some time. Questions about the second lift would be: which areal how high should it bel what kind of contours would be best toward what taitimate use? Councilman Sher asked if a second lift, then, was inevitable. Mt. Pawloski said that was the "fallback" poeition if no alternative could be worked out under the Joint Planning Authority. lfr. George Sipelq City Manager, agreed with Mr. Pawloski saying that a send lift was the only solution that was totally within the City's control. Councilman Sher said that another alternative was that they could find. another city whom they could pay to take Palo Alto's garbage. He asked if that alternative would also be presented so that Council could Mee the comparative costs. Me Sipel said that five or eiz alternatives were being looked at. The problem was that they required =other party to consent, which presents. difficulties for ether communities bed the eme problems. Hr. Sipel said that he hoped to have, within this fiecal year, amt. alternatives solution for Palo Alto's garbage dieaipoewl vithian the next five to eight years. 14,4/715 Councilman Sher spoke of the part of the motion directed toward reducing the amount of garbage, specifically by banning.nbn-returnable bottles. He said that sometime ago he brought to the Council a proposal that the City support at the State level a law prohibiting nonreturnable beverage containers. .Re said the law had passed here but not in the State legislature; he said that since the State had not acted it waR very likely within the purview of the city. Councilman Sher asked if Council, in the motion before them, was requiring informatic about an -ordinance against non -returnable bottles. Councilman Carey said he had made the motion; and the intent was not to mandate an ordinance but rather to look into as many ways as possible of reducing the amount of garbage, therefore the amount of land needed, end postponing the time when the City would have to go to a second lift. Councilman Sher said that he did not -_want to -mandate floating studiesa. _ _ and he thought a report on specific ways to reduce the amount of garbage could be submitted at the same time the alternatives to garbage disposal were submitted. Mr. Sipel said that with limited staff not much would be accomplished on anything if too many studies were undertaken. councilman Sher said that if it was the most serious problem facing the City it ought to be given a high priority. Mayor Norton said he would like to know if the City had the power to 4adopt an ordinance on the matter of disposability of various consumer items. Mr. Pawloski asked if Council intended that garbage disposal alternatives be presented before the matter dealing with methods of proceeding on the second lift on the present garbage area at the Bayshore. Councilman Sher replied affirmatively: Mayor Morton said that he would strongly oppose a second lift. He then asked Mee. Booth whether or not the City was legally entitled to adopt an ordinance regarding usage of glass containers and the like. Mk. Booth replied that the matter had not been tested in California but that, without having done any research an the topic he thought that it could be done. However, he west an, a challenge would certainly follow from the container industry. Councilman Comstock concurred with Mayor Morton on his feelings about a second lift. He referred to a solid -fill site in New York oa about its 100th lift which had achieved a height of 98 feet and was now a scenic lookout site. Be voiced concern that the sense of urgency behind what wan being, said be imparted. Re asked what `t.he `City ,coial.d do if no other co mities would work with Palo Alto, or if the Corps of Engineers would not want a second lift. They are talking, he said, as though both cooperation fro others and permission from the Corps of Engineer, would be granted and Palo Alto could go ahead and build its own "Mount Trashnore." Be thought they should feel more anxiety. Ne offered an amendment to the Committee recommendation, as a preface to Part 3. Ate: Councilman Comstock moved, eeconded by kaitherspoon that No. 3 of. the recommendation be prefaced with: "Palo Alto views with great cometrn the disdaishing sites available for solid waste disposal., feels a need for urgent solutions 3s before us and, to that end, ..etc." 3 4 5 > (f C 10/4,76 0. Mary McLean, 930 Los Robles Avenue, representative of League of Women Voters, conveyed the League's support of environmentally sound measures to handle solid waste, reduce vaste, encourage resource recovery and increase demand for secondary materials. Regional planning, she went on, should begin now emphasizing source separation, recycling, shredding, and energy production. The League supports the formation of a Joint Powers Agreement as a regional solution to waste management. Councilman Berwald said he supported Councilman Comstock's amendment. He said the Council's action on vaste management might, seem redundant for Staff had already begun work on it; he did not favor Staff spending much time on the matter of a local ordinance against nom recyclable goods for he felt State legislation Was the solution. AMENDMENT PASSED! : The amendment passed unanimously, Vice Mayor Clay absent. AMENDMENT: Councilman Sher moved, seconded by Berwald, to add to the end of the motion "...and to direct staff to report on the results of the study on alternatives for solid waste no later than the time of report on the second lift and related matters." -Mr. Mark Harris, Resource and Energy Utilization Analyst, said that Staff was working toward the ends Council recommends, for example, backyard collection of newsprint, encouraging recycling, probably a program in composting to help dispose of a considerable amount of refuse, lie said that condensed reports and some idea of costs involved in. implement- ing waste disposal would also be forthcoming. Councilman Sher said he wanted more than recommendations --he wanted an action program. Councilman Carey said that Council would have to look at how much each step toward eliminating solid wastes wevid cost the City. AMENDMENT PASSED: The amendment passed unanimously, Vice Mayor Clay absent. • MOTION AS AMENDED: The motion as amended passed unanimously, Vice Mayor Clay Absent. .CE ANT) PUBLIC WORR3 `'44i t MOTION: Councilman Berwald, on behalf of the Finance and Public Works Committee, moved approval of the contract and adoption of the budget ordinance. PALO ALTO/STANFORD EMERGENCY COMMUNICATIONS AGREEMENT ORDINANCE 2948 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO A? INC THE SET FOR THE FISCAI. 'TEAR 1976-77 TO ENABLE THE CITY TO PROVIDE EMERGE cm- musicAnws SERVICES TO STANFORD UNIVERSITY" Councilman Sher stated that because he is an employe Of Stanford he will abstain from participation in this natter. Council.aaan saswaid said that this contract, on which approval is seeded, is the third contract with Stanford an emergency communications activity 3 4 3 1O/4n6 s�, and fire services. The Policy and Proce-3ures Committee recommended that this utter be referred to the Finance and Public Works Committee in order to deal with final costs. This agreement and the ordinance amending the budget to enable these services, are at hand. The agreement will result in a savings of some $50,000 annually. The addition of three communicators results in an increased expenditure of $40,443. Councilwomen Witherspoon asked if Staff had any comment. Councilman Berwald said the Committee had discussed. potential couflitt with employees of Stanford, and also the equitable dim ribution of aervicesa for' both Palo Alto and Stanford. MOTION PASSED: The motion approving the contract and adopting Ordinance 2948 passed unanimously, Vice Mayor Clay absent, Councilman Sher not participating. - PE � 3six t1� :!;:�,. !ry! *4.... .PL' AL t' fx Txlt;t i►*ia+�- IIMMIMMOMMO MUM: ; Ceunci1. an Berwald, tn. behalf of the Finance and Public Works Committee, moved adoption of the Committee's recommendations re the Long Term Power Supply Alternatives and Staff Recommendations on Procurement of Power: A) That the City work with the Bureau of Reclamation to encourage conservation of energy by its customers; B) That the following staff recommendations be accepted as city policy: The City consider the commitment for firm power through its contract with the U.S. Bureau of Reclamation as its primary power supply. The City should legally, politically, and financially.oppose all efforts to modify the terms of the contract which has as its purpose to reduce the Bureau's commitment to the City and its existing preference customers. The City should encourage and assist the Bureau throw, the Northern California Power Ageucy (NCPA) to mitigate or eliminate contractixal" conatr iuts imposed' upon the Bureau which unfairly limit and allocate the capacity end energy available from the Bureau's Central Valley project to the preference customers in its service area. It should encourage and assist the Bureau through RCM to make arr e- eesats far the purchase and use of low-cost dump power supply from the Pacific Northwest for delivery to its preference customers of the Pacific Noarthvest-Southwest Intertie; C) That the City should continue to participate as a amber of the MCPA and take advantage of opportunities for developing jointly power supply resources that will meet Palo Alto's needs and cost less than purchasing supplementary power from E; further, Committee recommends +Approval of Palo Alto's participatiosa in the BPA Development Fund Agreement. As a member of MCPA, the City should oppose wbolesale rate increases to any of its steers considered to be unjustified, trasterverires in actions taken by other public or private agencies When it Is considered in its best interest to do so, take action art proposed legislate= in a manner that ,laid be considered in its beet interest, and look for ways to improve the joint -action effort to develop pier sentration. D) That the City abould continue to consider PC4g as s viable pow!' supply resource and to maintain an open and cooperative relationship with tom►. Ir4 the City mould 347 1/4/76 a pursue opportunities to develop power supply resources independently of the NCPA, separately or in joint action with other agencies, and it is recognized that such action may ultimately require additional expertise in the form of consultants and/or staff. E) That the balance of the report be kept in Committee for consideration of other recommendations and statements, and direct staff to comment on them as appropriate from time to time during the year. P) That staff, prior to bringing this back to Council, supply Council with a report on the bonding capacity of members of the Development Committee as well as other members of the NCPA. G) That the City Attorney provide a report on the ability of breaking this contract if procurement of powers goes against the wishes of the majority of the Council. Mr, Sperry, 3958 Duncan Place, commented on sub -paragraph (C) suggesting an amendment. His concern was thatit was recommended that the City become a participant in the Development Fund Agreement of NCPA, and he felt the City should not, through contributing to the Fund, become a participant to the agreement, but that participation be contingent upon adopting a resolution to that effect. City Attorney Booth said it was not intended that any of the actions taken on that topic co it the City to a contract. Mayor Norton told Mr. Sperry that only at a future time would anything contractually binding appear. Mr. Sperry said that he wanted the Council to consider an amendment to sub -paragraph (C) following the phrase "...Committee recommends approval of Palo Alto's participation in the NCPA Development Fund Agreement," . . then, Mt. Sperry said, to add something similar to the following, and he read, "...provided that it shall be the policy of the City that the question of Palo Alto's participation .in any projects brought to fruition by NCPA shall be submitted to the electorate of the City for appropriate voter approval." He said he would lice Council to affirsa that such is the City's policy. 1 Mr. Richard Rosenbaum, 7]7 Garland, Chairman of the Citizens' Cosmittee on Lang Term Power Supply Alternatives, stated he had addressed the Finance and Public Works Committee. He said the general issue before the Council was hoe Palo Alto could supply its long team power needs independent of PC&E. He felt Staffs report did not answer that question. The specific issue, Mt. Rosenbaum said, was whether or not Palo Alto would accept 8 percent of what CPA would ld generate or if Palo Alto would insist on returning to the 23 percent allotment which had been agreed upon for a number of years. Be felt Staff's recommendation that Palo Alto accept the 8 percent vas counter to long range interests of the City. He said the 23 percent requirement was based on the fact that Palo Alto's requirements were in fact 23 percent of the total used by NCPA cities. He said Palo Alto had been paying, accordingly, 23 percent of dues and fees required by.HCPA. He said the 8 percent number was reached by subtracting the amount of power Palo -Alto would be getting from the Central Valley Project (CVP) in 19$5, from its estimated needs at that time. Central Valley Power, he said, was a transient phenomenon. Hu es►id the contract expired in 28 years, 2004 A.D., a relatively short time when planning for power needs. in 2004 there will be no more power for this city, be +aeetdv orb 1f there is, it will be divided equitably among all the municipal systems in California, 34 $ 10/4176 1 b°hich gives Palo Alto no advaptage. A power plant built under the terms of this development fund, might start operation in 1985. If it ran for 40 years Palo Alto would have 20 years of operation of that plant, though they would have no CVP power but they would be getting 8 pe cent of the output of that plant. The 23 percent, he said, represented Palo Alto's proportionate use of power, and Palo Alto would have to Insist on getting it. Another, threat to Palo Alto power is that the City of Santa Clara is suing the Bureau of Reclamation to get a firm allocation of CVP power. If Santa Clara succeeds, their allocation would cone at Pelo Alto's expense. If that happens, the calculations that led to Palo Alto's receiving 8 percent would still be valid, and that is all they would get.:Mr. Rosenbaum went on to say that the capacity of the NCPA is strictly limited by their bonding capacity. Staff prepared a short report and the report bore out that capability. In 1976 the bonding capacity of $CPA cities, aside from Palo Alto and Redding, is $63.5 million dollars. Staff report of August 26, page eight, shows current estimates of cost for geothermal power are at variance with the report on bonding capacity which estieates that geothermal power could be built at $400 a megawatt, which figures come: from the citizens' report. But later information developed by the NCPA using those same figures suggests that costs by 1977 would be $600 a megawatt. Using the $600 figure, the bonding capacity of the NCPA is 100 megaxatts...uo more. In 1985 with estimated bonding capacity assuming that profits of electrical systems hold up, the bonding capacity would only be 200 megswatts.. Perhaps, Mr. Rosenbaum said, bonding capacity was assumed to be equivalent to power in 1985, but the power has to be looked at a good deal earlier, when the bonds were sold, which is always considerably in advance of when power is generated. Even disregarding that, only 200 megawatts would be acquired, not the figure of 310 given in the report. Eight percent of 200 megawatts, Palo Alto's share, would be 16 megawatts, an inadequate asount for the needs of the City. And so Palo Alto's acquiescence to 8 percent sri11 not produce what is needed to become independent of Pubs. Still, he said, the Staff report gave no alternatives, except for some mention of following the efforts of Alameda and the report of Redwood City about burning garbage to generate power. The reports on this are pessimistic, and it is not likely to happen in the Bay Area. In the course of discussing power generation some years back the City of Santa Clara insisted that cities using 10 percent of the power of :CPA have veto power over accepting or rejecting proposals on how funds were to be spent. The choice of the number of 10 percent is not clear for Santa Clara itself wa.s entitled to 36 percent, : and Palo Alto was glad to go along and also to have the veto power. Sometime later, the City of Santa Clara realized their inequality, and in the absence of either of Palo Alto's representatives, tor. Rosenbaum and Mr. Eyerly, decided to change the percentage allocations, and that was when Palo Alto went down to 8 percent, though there was little basic justification for it having Ikea place. Xn any case, Staff let it take place with a "let'ae--go--alang- whatecan " attitude, and that is bow Palo Alto got into this intolerable position. Last Friday an item in the paper said that the City of Santa Clare is bidding on land in the geothermal area. Ay? Under the current development fund agreement they are entitled to 49 percent. Their present power needs are ooe and one-half tie** Palo Alto's. They are more interested in rapid growth than Palo Alto is, and their percentage might increase some- what. As the egreement now stands they are going to get six times the powee Palo Alto gets (with Pala Alto getting 8 percent) rind in addition they are hunting power on their ones, whereas the position of thia city is that Palo Alto should be _happy with mat it gets er4 wait for heaven to give additional power. Palo Alto if only 100 mails from the only g eottberm- al producing area in this country —an a ports ity for **curia; power at aeoarewhat lower costae than PG&E can produce lisps in that geothermal area. M r..losenbaun acid that there vies no guarantee that anyone other than PG&E was ever god to have any success up there. He felt, however, that en effort should be made, and be felt that Staff did not acknowledge that opportunity nor suseest any aggressive plans for reatediatiting Palo Alto's unfavorable position in NOTA. Mr. Rosenbaum summed up his comments saying that unless Palo Alto old get 23 percent, they should agressively seek **urea* of geothermal power on their own. 340 10/4/76 Councilman Beahrs commended Mr. Rosenbaum for his thoughts, though he was not sure everyone on the Council would agree. He said that in relation to solid waste disposal, however, they had to act as soon as possible, for, as Mr. Rosenbaum had pointed out, there was considerable lag time involved. He spoke of all reserve funds having been spent, which certainly made going out on their own unreasonable. Mr. Rosenbaum stated that he thought Palo Alto was relatively wealthy compared to Santa Clara. He said he thought the money -making utility operation had to be kept separate from the general operation of'the City. As is the case with profit -oriented undertakings, there were times when money had to be invested in order to secure the future, and he thought this was one of those times. He said a surcharge could be added to the electric bill and users would recognize the virtue of the investment. Councilman Carey asked Mr. Rosenbaum if the citizens' committee had made any analysis of the bonding capacity of the City, were the City to decide to go it alone. Mr. .Rosenbaum responded negatively. Mayor Norton told Mr. Rosenbaum that he would appreciate it if he would be around to answer questions. Councilman Berwald said there was much merit to what Mr. Rosenbaum had said, and also that Staff agreed that some "dirty tricks" had been pulled in the percentages allocation when the Palo Alto percentage became 8 instead of 23. He said Staff was doing a professionaljob of looking into the future, not waiting for heaven to provide, and he wanted Staff to have an opportunity to respond. He wanted to be candid, and in relation to the report the Counci?.members had received from the City Attorney, he wondered if it were best to discuss it in Executive Session or in public --he left it up to Mayor Norton. He would leave that for the time being, however, and ask Mr. Aghjayan to respond to some of Mr. Ro seebau `s points. • Mr. Ed 4ghjayan,_Director of Utilities, said different levels had to be exam- ined to put the 8 vis-a-vis 23 percent into perspective. The various degrees of desperation of the different cities had to be looked at. Cities such as Lodi and Alameda who were buying rower directly from PG,&E were paying 20 mills for power, 2c per killovatt-hour, which figure was expected to escalate rapidly. Cities like Palo Alto, Redding, and Rosev-alle' t#asst have a bureau allocation are paying 5 ills for power. Accordingly, he went on, Palo Alto's present cost for power is far lower, and will be for the foreseeable future, than what the other cities are paying. So the other cities have to do something right uow so that they cas stay in business.; may of them are losing money with rates that are higher than surrounds areas served by PG4E. Expectation is that the cost of "n*w" power will fall somewhere between 5 and 20 milts, and estimates are that the costs for geothermal power in 1977 and 1978 will be between 13 and 20 mulls. All the 7G4E,citiea vill replace power they now get from PG4E. On the other hand, cities like Palo Alto and Roseville are really only looking for supplemental paver ---growth needs beyond the year in which the Bureau will serve them with a maximum aunt. For Palo Alto, in the year 1983 they hope to be buying no power from any source other than the Bureau of Reclamation, They are talking *bout 10 megawatts by the year 1985; by the year 1990, they are talking about 40 alegewatte. Besaid that the new power after 1983 will came from some sup- plemental source, and he thought that would be generated most cheaply by the City, He said the 23 percent figure had to be looked at with an eye to what opportunities were available. He gave the Rancho Seco lI project as en example. win had asked for 200 megawatts, and if Palo Alto were to get 23 percent of that, their shore would be 46 megawatts, which would be coming on the line around 3985--m hooding capacity, if tbs project is ever built, of $55 minim. 350 1014176 Rancho Seco 1, the first nuclear unit built by SMTJD has been out of action for a year he said. He thought that for a relatively small need of 10 megawatts by the year 1985, Palo Alto would be committing itself to a $55 million indebtedness with the hope that they would get 46 megawatts, ten, of which they could use, and perhaps sell 36. Mr. Aghjayan felt that gas too high a risk for the benefits to be attained. He went on to soy that Palo Alto's choice lay not between 8 percent and 23 percent, but rather 8 percent and zero percent. The Development Fund Agreement, he said, was signed in July, 1975; it has been in oper- ation for about 16 months, and if they approach NCPA saying they want 23 percent or they will riot be participants, they would say Palo Alto only has $4.5 million. in the fund already. Ms. Aghjayan continued that the argument about diversifying risk spoken about in Finance Committee meetings is important. At the present NCPA is looking at sesreral.geothermal projects and also a hydroproject, as well as nuclear, and a joint project in solid waste generation. Staff's recommenda- tion for an 8 percent entitlement would allow Palo Alto to take a moderate mount from each of the projects that are developed and thus diversify the risk. He said in conclusion that the present agreement was not a final answer to the needs of Palo Alto, and was intended to be a short- term approach toward the development of power for the eleven cities, and it runs out in 1985. It appears that all of the money that is in that agreement is committed to geothermal projects. It was Staff's expectation that future agreements had to be formulated, and that if needs change there was no necessity to abide with the agreement, Councilman Bervald asked Mr. Aghjayan to comment on Santa Clara's move toward geothermal power end what effect that could have on Palo Alto's decisions. Mr. Aghjayan said tlrat Santa Clara was bidding on 130 acres which afforded a generating capacity of only 20 megawatts --considered too small for an NCPA development and further there was not enough time to act on it. Mr. Aghjayan said that he understood the NCPA knew about it and turned it down. Santa Clara bid in excess of $1.1 million, for the potential of a 20 -megawatt plant, for land that still has to be proved out. In relation to the $600 versus $400 per megawatt figure costs in geothermal plant installation, mentioned by Ms. Rosenbaum, Mr. Aghjayan said the figurea did not include the cost of the ateamgttthering system. Councilman Sher said he wanted to commend the Citizens` Committee, par- ticularly 3r. Rosenbaum, the Chairman, for a helpful report._ He then asked Mr. Aghjayan about "the desperation level" of other cities saying that the development fund was talked about with the expectation of Palo Alta being a 23 percent participant consonant with the share the City bore in the costa of NCPA, and that all the cities bad the same desperation level at that time. Mr. Aghjayan agreed, saying that meet of that money eras spent for attorneys sad engineers defending NCPA cities in rate cases before the CVP or the Power Commission and in that respect Palo Alto received fair share of the benefits. Councilman Sher said he did not vent to place Mr. Aghjayan in the position of being an advocate of the 8 percent rate, but that the original contemplated participation of Palo Alto had been 23 percent, determined by the amount of power they used, and so the 8 percent figure vas arbitrary in spite of any aadventages; it wale not historically an equitable percentage. and not acceptable in spite of "desperation level" of other cities. Councilman Sher then aaked about the $55million commitment if the *nacho Seco cue on line 3n 1985. He asked if cities bad to partticipate if they did- not wish. 351 10/4/76 Mr. Aghjayan said they did not. Each city could elect to participate when it came up to the bonding stage. If the city were bondable, the city in question could elect to receive its coney back. Councilman Sher asked the total investment for Palo Alto if the Rancho Seco II project did come on line based on Palo Alto's $55 million share, based on 23 percent. ?tr. Aghjayan said that the total investment would be about $220 million which would exceed their projected bonding capacity based on their income levels as they are projected from now. But they could raise their rates and raise their net income allowing them to have additional bonding - capacity in anticipation of investing in such a venture. He pointed out that Staff had concluded in their report that bonding capacity did not appear to be a serious problem. Councilman Sher said he understood that, and asked if the $600 figure included the steam -gathering facilities. Mr. Aghjayan said that was true for the geothermal figures. The $400 figure was based on buying steam at the generating plant, with steam delivered to the facility. The $200 jump was for installing steam - gathering equipment over a sizable portion of land. - Councilman Sher asked if the 310 --megawatt capacity was based on the $400 figure. Mr. Aghjayan said it was, saying the difference between the $400 and $600 figure depends cn which company is making the proposal to sell the steam and the land, and was a smatter of how the contract was developed. *e said there was some benefit to budding a steam -gathering system because there was equity, and it could be built at lower interest rates. The benefit of having the steam delivered right to the facility came in the lower cost of $400. Councilman Sher said that perhaps the only 'leverage Palo Alto had with NCPA might be that if Palo Alto withdrew its 23 percent, it would lower MCPA's bonding capacity. He thought, however, that it would be best if. Palo Alto participated at its historic 23 percent. Be shared the concern that CVP was a transient source, and that Santa Clara's action to get a share of CVP could reduce Palo Alto's share even before 2004; he felt NCPA should be called to account for their unfair treatment and that Palo Alto should have its rightful entitlement. He said MCP.A should resist the change in percentage allocation; he said that at the appropriate time he would so move. Councilman Eyerly said he was in agreement with the general staff report. e said that for 15 months he was a representative to NCPA and attended innumerable mrceetidgs, that he, Mr. Aghjayan and Joe 3csza also net often, and he felt progress was being made in settling some problems regarding the light and power in Palo Alto. He thought Staff was succeeding in setting as well as attaining some conservation goals, but that the Citizens' Committee said that such conservation only delayed, not removed, need fur additional energy. Councilman Eyerly said that Central Valley Poser wee the primary source of energy ---teat Palo Alto should protect that source of energy ---that nevertheless by 2000 they would need 'S to 110 megawatts over the CVP supply. By 1933 they vin. need more than .CVP can provide. Palo Alto's viable contract with PG&E should be protected -- it is a fallback source. PG&E is expensive, of course, and each mill per kilowatt hoar saved equals $7.70,000 and from 1933 to 2000 it would *mount to about G3 million, per mill. He added that if they do use PG&E power, they gust bear in mind that it is• e algawated power, coming 332 10/4/76 ~•1 from a variety of sources, that is, hydro, oil, nuclear. The decision to be made at this time was whether or not Palo Alto wanted to join their development committee. Then, he said, Palo Alto would not be going it alone, as Mr. Aghjayan had said. Palo Alto also was working on other contracts, such as with Shell. This search for energy sources was difficult but paid off in money saved and sources protected. The development contract with NCPA, he went on, is signed by each city. While the percentage for Palo Alto is disappointing, those eleven other cities are not about to give Palo Alto additional percent. Palo Alto would be foolish to bring it to a showdown, in his opinion. If NCI% was successful in searching other sources, Palo Altr, would be helped in the 1980's,. If Palo Alto did have 23 percent, it would have more power than needed, but to sell it would not be morally right, = for NCPA was founded to prevent profiteering by providing an alternative for PG&E. If Palo Alto had to buy free PG&E, it would still be lower, cost than what thev are gathering from CVP, which, he thought, was another reaaon for not taking the risk of going it alone. The nuclear worry has bean expressed, and while Palo Alto cannot control where themoney is spent that they put into NCPA, they can control where they draw their energy. NCPA has litigation underway, not only for PG�L cities but also for CVP and Staff should help fight rate increases. In a group effort Palo Alto boa more influence than if they go it alone. The Citizens' Committee has done much good for the City; and their efforts have helped the Council, The Council recessed from 9:40 to 10:00 p.m. Council . Comstock spoke to the uneasiness citizens might have hearing this discussion about power, arising from Palo Alto's seeming stance of trying -- to -get -along with these power. sources. The City, he said, recognized that in the strictest sense the residents were customers, and that the City would continue to see that the service was good, the price was right, and community interests were served. He said further that if those standards were not u®et,they would have to get out of the business, but that at present those criteria were being met, and he voiced the wish that extreme vigilance be kept toward any efforts to diminish those goals, including the talked -about reduction of allocation by some suppliers. Palo Alto has to serve its interests first, and if others happened to benefit, finer .f not, that was not Palo Alto's problem. Councilman Comstock said that he had been angry at Santa Clara for trying to find separate sources, but he had to admit they were doing what was best for theme.. He thought Palo Alto would do well also to risk some venture capital, as well as participating in development funds and specific projects. Se said he did not think 8 percent would be adequate in 20 years, and that Palo Alto had to stake preparations for many contingencies, and he hoped for an aeendaent to the motion that would strengthen Palo Alto's position of providing residents with continued good service at reasonable prices. Councilman Mehra expressed appreciation of the learnedness of "...all of our pro's tonight." Councilman Carey voiced agreement t with Councilman Co stock's concerns for service as wall as the cut by NCPA from 23 to 8 percent. Re wondered if in getting 8 percent of the power Palo Alto -was paying only 8 percent of the cost; he asked also if Palo Alto's bonding capacity was bed used only to the extent of its allocation. i Mir. Aghjayan said Palo Alto's bonding capacity was only to the extent of 8 percent. Cost of NCPA projects was only 8 percent. Councilmen Carey pointed out that Palo Alto had $400,000 in the NCPA kitty, whereas Santa Clara bald $2.S million, so logically they get more; if Palo Alto had wanted to take more of the pie in putting up more gambling stakes, it could perhaapo have been done. With the present risk of 8 percent, and benefits of 8 percent, Palo Alto easnor turn down e chance of setting power it will need, at a reasonable cost. 3S3 10/4/76 1 1 e 1 I Councilwoman Witherspoon referred to the bottom'of page 17 of the Finance and Public Works Committee minutes and Mr. Aghjayan's statement "...Even though the city may have only. shared in 8 percent of the development of that resource,the city can still buy 15 or 20 percent of the project." Councilwoman Witherspoon .asked how long the City was committed to 8 percent. Mr. Aghjayan replied that the Development Fund Agreement was limited by both time and money; the fund was $4.5 million to $5 million. Projects might use up that money by 1985, and then a modification agreement would have to be made; also other agreements will have to be entered into and at those times the City can contract for percentages according to its needs. Councilman Sher said he agreed with Councils Carey's statement that the extent of the City's share in the gains from risks toward finding alternative energy sources was only as great as its participation, yet, historically, Palo Alto was entitled to 23 percent participation, Also, he said, he worried about how much Palo Alto's utility revenues could pay toward retiring bonding indebtedness. He suggested that should charges have to be charged to the utility revenues of the City, that those charges be only in proportion to Palo Alto's share in the project. Councilman Sher said the City did not want to participate In a joint powers agreement for bonding in which the City could be looked to for a full amount of the revenue, for Palo Alto had the greateet bonding capacity. Re said that In Part B he would later move an amendment to read that the City would call upon NCPA to join the City in opposing any efforts to modify customers contracts with the Bureau -- an action lung overdue, he said. In Part C of the motion, ne said, he would move at an appropriate time, an amendment that Palo Alto would join in the development fund if it admitted at a participating level of 23 percent. Failing the passage of that amendment, he said he would move Palo Altc join at a lower percentage but only if the Bureau of Reclamation allocation is adjusted, and that participation shares of the members in the development fund be adjusted in a proportionate amount. He said he would put his amendments on the floor singly, to expedite the process. Mayor Norton suggested they vote upon items 7A through 7C separately, and he called for a vote on 7A. MOTION PASSED: The motion to adopt Section 7A passed unanimously, Vice Mayor Clay absent. Mayor Norton said Section 78 was now before Council AMENDMENT: Councilman Sher weaved, seconded by Comstock, that $.n Section S after the words "...its existing preference customers," the statement read, "land that the City should call upon I*CPA to join Palo Alto in opposition to modifying the contract." 0 AMENDMENT PASSED: The amendment to Section g passed with the following vote: AYES: Carey Comstock, Norton, Sher, Witherspoon NOES: kleabrs, lerwald, !yerly ANENT: Clay APTiON PASSED: The motion to adopt Section 78, as mod, passed unanimously, Vic. Mayor Clay absent. Mayor Norton said Section 7C was now on the floor. 334 10/4/76 nen AMENDMENT: Councilman Sher moved, seconded by Comstock, that there be added the phrase, "provided that Palo Alto is admitted at a participation level of 23 percent." Mayor Norton said he did not favor that for he felt 8 percent was better than no percent. AMENDMENT FAILED: The amendment to Section 7C failed with the following vote: AYES: Comstock, Sher NOES: Carey, Beahrs, Morton, Witherspoon, Eerwaald, Eyerly ABSENT: Clay Councilman Sher said that vote was not unexpected, and he moved an alternative. AMENDMENT: Councilman Sher moved, seconded by Comstock, to add to Section C "provided that if the CVP allocation to any nester city is adjusted either upward or downward that the participatiop share in the Development Fund will be adjusted in a proportionate amount." Councilman Sher expanded on the reasons behind his proposed amendment, saying that if the City cf Santa Clara is successful in its lawsuit against the Bureau of Reclamation, Palo Alto would have to give up some of its power to Santa Clara The basis for share in the Development Fend was that power received. from Central Valley Power he excluded. Mx. Bosea pointed out that if each member's participation were so based, then each member would have to go to its respective Council to have the agreenent voted upon again, He said he doubted if that would come about. Councilman Sher asked if qVP members did not have to ask their Councils even if Palo Alto came in. Mr. Bosza replied in the negative, and said that the organization did not have to vote on that. As the agreement is written, it has the potential of all the cities joining and that the only entrance requirement is to meet some of N i'A°s terms. Councilman Sher stated he would just as soon other cities did have to go back and ask t1eir councils. Mr. Agbjayan said that most likely the participating members would not approve, for it room doubt as to exactly how muth power is being signed up for when they enter into a development fun 'agreement. if they commit a elty like B*aldsburg or Ukiah or Lodi or Lompoc for a sue of mosses, and the rules change, they are put in as precarious position. Reallocation might affect Pao Altos but not other cities. Pro rata participation in the agreement, Mr. Aghjayan agreed, hewer, was based on certain assumptions of CVP per allocations, and subsequent agreements wCuld have tetake a possible change in CVP allocation into consideration. Councilman Sher said that be saw no future agreements in the picture, end that Ibis 8 percent agreement served to be "the only game in town," and Palo Alto was locked into it. Mr. Bosea said the 8 percent weals only with the pretest fund agreement running out in 1985, and there vill be others ea time peaces. Mayor Norton asked COUACiiMili Sher if the 8 percent formal* affected the amount from federal funding, or from Northern California Power funding. Councilman Sher replied tbet it would reflect a change in federal funding. Councilmen der added that when the contract with NCPA came up for renenel ,_J it appeared that PG6I ciao nosed have control by numbers, 555 10/4/76 Councilman Carey asked who was instrumental in changing the Palo Alto allocation. Mr. Agbjayan said the majority of the cities, and that the 23 percent was based on a projection of Palo Alto's peak demand, a period of perhaps 1975 to 1980, as a ratio of the total peak demands of all the cities, with most of the PG&E cities theorising that Roseville. and Redding and Pluaaa-Sierra really wouldn't need that much power, for what they wanted was supplemental power; whereas some of the other -cities were looking to replace all of their power rather than buy from PG6E, And so, Mr. Aghjayan said, they subtracted Palo Alto's allocation from the Bureau, which they were sure Palo Alto would keep, using that as a ratio for the total peak demands of all of the cities Councilman Carey asked what the vote was, and who got the allocation. Mr. Agbjayan said he did not know the vote; CVP cities had their allocations lowered --Redding, Lodi, and others ---then those reductions were reallocated to ?WEE cities who were buying all of their power from supplementary sources. Councilman Carey said he was favorable to the motion, for he thought adjust- ments ahoeald be evade on the same basis as allocations were made. He spoke of concern on other cities having to get approval if their allocations were reduced, for such reductions would seen an increase in cost to their users. He added that such an investment power e tment i n pc� er source exploration was similar to drilling for oil --that it was risk money, and Palo Alto's $40,000 was risk money, but when CVP reallocates thane will not be the risk, and in 1985 when Palo Alto puts up development money there will not be the risk, should this amendment pass. ?fir. Booth, replied there were great difficulties in trying to change allocations at this paint. For one thing; - roe of the citi€'e had already paid their -allocations in full, and change in allocations would put them in a position to ask for their money back with interest; and if the project were successful, they might not want it back under any circumstances, yet, if the search turned out to be a "dry hole," they might be very happy to pass larger allocations on to others. Councilman Carey asked Mr. Booth_about the possibility of modifying the renewal provisions. That is, the agreement could be extended by a majority vote, probably eaade up of non-CVP cites, but that when the agreement was renamed, it be done by power needs based on the sage formula that justified the reduction o!Palo Alto's allocation. The City Attorney thought that at good suggestion. Councilman Carey asked if the cities would have to go back to their Councils for approval. Mt. Booth replied affirmatively, saying they would have to in any event. Councilmen Carey urged that renewal conditions be evade z stipulation in than present paerticipatioa. ae;greement under consideration in the discussion of the amendment to Section C. 1 Mayor Norton suggested that Council Carey's suggestion be taken as a separate amendient. Councilmen $eeahrs felt thatt to areaeks it a condition of agreement for a time in 1485 or 1986 would be ill-advised,- a telegraphing of intentions which Is often ter -productive, and that it would be wise to do a little maneuvering instead of asking it a bard-anr»faat policy statement. Be thought it would be vise to "hang loose," that Palo Altomagic even vent sore than 23 pent, and by as little wheeling and dealing it sidgbt be obtainable. Councilman Eyerly said that in view of the number of cities involved Councilman Sheer's amendment aright not come to pass, in spite of its morality. Councilman Sheer summarised his proposed amendment: to condition Palo Alto's entrance into the Development Fund on a modification agreement to make an adjustment in the shares of the participating cities that would reflect any adjustment in the CVP allocations fro the Federal governzaent. Councilman Serweld asked if the majority of cities voted it down, would Palo Alto not enter the fund? Councilman Sher said that if it were voted down, he would like to address it at that tie, and that be would like to sere Palo Alto go to the NCPA on the basis stated in the want. Councilman Berweld said that ha thought the defect was still the all -or -nothing base. AKEND4ENT FA/LED: The amendment to Section C failed with the following vote: ATES: Sher, Comstock, Norton NOES: Beahra, Carey, Witherspoon, Berwald, Eyerly ABSENT: Clay Councilman Sher spoke of hi approval in participating with NCPA to the extent of 23 percent but he did want to know about what exposure Palo Alto utility revenues and those of othat cities would have if revenue bonds were issued, and is wanted to make it clear to NCPA that when any revenue bonds are sold to finance any of the enterprise, Palo Alto will agree to charge on the utility bills only to the extent of its proportionate participation in the Development Fund. In other weeds, he explained, if $100 million in bonds are sold, Palo Alto will take on liability only for 8 percent, or $S million. He urged that it be made explicit. Ate': Council Sher moved, seconded by Comstock, that Section C be aameeded to say that the revere: bonding obligation of Palo Alto should not exceed the pro rate *hare of the project. oemeilmen Baehr* asked Mk. Booth the customary practice in the question of liability in revenue bonding. Mr. Booth answered that he understood that Palo Alto was responsible only for its share, though three wets no hares in being explicit with the emendment Mr. Bosse said that under the present plan of financing 14CPA would be responsible for issuing the revenue bonds, to be secured by pledges or taker -pay contract signed by each of the cities for their share of the contract, with WCPA. Should any of those bonds default, the h PA would be responsible. The cities would be obligated to the extent of pledging their revenues, thus paying for their taker -pay contract. If therm were a default, rates would be adjusted in order to at the band-eeervicieg requirements. Councilmen Baehr* observed that it was than possible to pick up some nobility beyomi that original obligation. Me asked if cities that defaulted lost their power. Mr. keaa replied that MCPA would have to look to other sus of marketing the power. Conaetlseea Mehra asked then if 4 city defaulted it wield the lase it* snarl tion? .3 5 7 10/4/76 Councilman Sher said he was prepared to have Mr. Buaza rephrase the amendment, and that his own main wish was to be on record that no revenue bonds were to be issued which would increase Palo Alto's charge beyond their own .contractual obligation. Re thought too, that at some time Council should talk about what the terms of the bonds would be; he wee quite sure they would be what the market required, and if those bands cannot be marketed without pledging greater revenue, and Palo Alto happens to be the City that has the biggest possibility in its electric utility, thou bonds may not be so marketable, and he felt extreme clarity was needed so that Palo Alto did not get stuck with more than its proportional share. MOMENT R3? -STATED: That the revenue bonding obligation of Palo Alto would not exceed the pro rate share of the project it was joined with.. Mayor Norton wanted to know if Palo Alto's general utility revenue were being pledged? Mir. Aghjayan replied in the negative, that the vote would affirm that Palo Alto would not incur any obligation beyond its prorate share, Council Sher said that since the contract wastor takepay, Palo Alto would not pay for what it did not take. Councilman Eyerly asked if it was an amendment to the contract, or just a statement of position. Co.uacilsaan Carey said he was still concerned and from a September 30 letter to Councileembers from Mr. Aghjayan aad Mr. Sipsl he read "It is evident that with Palo Alto and Redding participating with the Development Fund ambers, the burden ou them for capital funding vould be considerably eased since almost 60 percent alarm bonding capacity could be realized." He wanted to knot if pledging our bonding capacity were the sane as pledging its general fund capacity. He asked what the security for the boss was-- oblieation on the part of the parties to purchase the power? Councilman Carey went on to say that obligation to purchase power did not sears to be the answer, because Palo Alto is also wanted because it represents 40 percent of the bonding capacity. If that is the caee, he said, the City was entitled to 40 percent of the power. Mr. Aghjayan clarified tbat .the banding capacity assume that as fixed -value plant of a specific dollar value would be built, and therefore other communities would have lase dead on them because Fele Alto oases be buying a share of that plant. Councilman Carey asked if late Alto's prowls* to buy power is the security for issuing revenue bands. Mr. 3'loisca referred to the history of this undertaking. Re cited the Bartle hells study, giving an off-the-cuff estimate on the order of magnitude of the capacity that could be realised with the revenues from the distribution system of the member cttLe.s of NCFA. Councilman Cerny d sgSst if Palo Alto's promise to buy power wee the sole security for boaedra. Mk. lose replied affirmatively. `- Councilman fibre pointed out that any inveetment banker would .buy these bonds with the assumption that Palo Alto would be behind the d percent orb hundred percent.." ANNOMINT pis The to Section 7C reseed with the following x:: ;': 35e 10/4/76 AYES: Sher, Carey, Norton, Witherspoon, Comstock, Betwald, Eyerly NOES: 5eaahre ABSENT: Clay Councileel Carey asked if there vat any estimation haw much money in revenue bonds would have to be floated to acco pIieb the proposed Development Fund project. Mr. Aghjayan said that .the Staff report on September 30 gave the answer, that approximately. 130 megawatts were needed, and assuming geothermal vas built, 500 ow could be built throng .t.he 1985 bonding level, with a deficit of 330 ow, based on projected operating income. Councilman Carey asked what such a plant would cost to build. Mi.Bosxa calculated at currant estimated coats, about $250 million. Councilman Carey questioned that such an aunt in bonds could be issued without individual cities bonding capacity being looked at. Mx. A.ghjaya n replied that when NCPA. floats bowls, the tekeepay agreements with all the cities will be put up as collateral. The financial advisors will look at the bonding capability of the individual cities; the un erwriter and the bondwriter will look a a at them as well. There will be an implicit obligation attested to by the marketability of the bonds. Councilman Carey queatioYeed what bonding experts would deduce when they asw Santa Clara was going to want half the power., yet had a bonding capacity of only $22 million; but Palo Alto, with double the bonding capacity, i3 going to buy only 8 percent of the power, Mr. Agb j ayaan said $ ntaa Clara would have to save some improvements to be given that kind of credibilit3. It has the option of doing that by raising its rates and increasing its net operating income and along with that its }ding capacity. If it falls to do that and has a poor financial statement in the year the bonds are floated, it in probable the consultant end f.inasanciel underwriter will advise Santa Clara not to get involved in the floating of bonds for that particular project, or to that extent. Counci..lmen Carey said that be jot wanted to asks it clear that Palo Alto tae only committing $ percent, aud people vbo do bonding ebould look at that fact only. He said that hip,proposed amendment had to do with p rapaph 1.2 on page 13 of the proposed aereament, and had to do with termination. At4BMPT: Councilmen Carey moved, seconded by Beahre, that the following three* be wed to Section C: "In the event of any renewal of this Agreement, it shall be uaderstoed that tha .anticipation parcel -it -ages for the cities will be adjusted to reflect current allocations of power by the Cam." Mayor Norton suggested that "Palo Alto" take the place of "cities." Mr. Bossy said he tit the coodition should apply to the other CVP cities vbo were just as involved as Palo Alto. Mr. Aghjayon asked it the amesubent urea intended to apply retroactively, or veld ,apply to extension • and . growth. oCo a op red ilman Carey answe t a t. . sea no ns it retry tive 'meanest mousey. COmmflmt,a Uk .bill netts e end theneht it meld be 11 alit the ttee oaf reeeeel the pow seeds et the cities mere e revs eked 3S9 10/4/?'i Councilman Carey replied that if his eecnnd,agreed he would make that addition. AMENDMENT R:STATED:"In the event of any renewal of this agreement, power needs of particip*ting.c.itiea will be reviewed and participation percentages for the cities will be adjusted to reflect current allocations of power by the CVP;" AMENDMENT PASSE):. Inuaamendment to Section C passed unanimously, Vice Mayor Clay absent. moTroN AS AMENDED PASSED: Section C as amended passed on a unanimous vote. Mayor Norton~ suggested voting for Sections D through G as a group. Councilman Berwald suggested only Sections D -F be voted on. Section G was merely direction to Staff and no separate vote was necessary. Re said that he had a question about it after the voting. MOTION PASSED: The motion.to adopt Sections D through F passed unanimously, Vice Mayor Clay absent. Speaking on Section G, Councilman Berwald said that since the City Attorney had stated various pnaelh4litqes, in particular that should the City elect not to participate in a prrject the money Palo Alto had in the Fund could not be recov- ered. Councilman Berwald read: "Were Palo Alto to join this agreement and there- after wish to withdsaw,it is highly likely that any installments then due and owing would ccntinue to beso. and moreover a claim could be made th&t.;the City is committed to all future installments as they become due." The letter went on to say the matter had to be studied in more detail, and that since the issue is comple , _Cow ei lmen Berwald said that Council should await some answers to :aosme_queations in the September 30 memorandum -from the City Attorney. He suggested .Staff find out just what the City's liabilities were, so that the possibility of damages being sued for wouldbe. avoided. Mr. Booth said he thought getting agreement from other Sateabara_ ht be a difficult tack right now, for Pale. Alto was not in the best bargaining. position and the time to decide wheXher. ,at. not to get into the Developeent Fund _wae running out. He pointed ont that it Paie:Alto did not like a particular project, they could opt out and the money would not be lost. He felt the agres t.did not allow for withdrawal .arf any .party prior to the termination of it. ThaDevelopment Fund needs a fixed ameient and its viability would be affected . try, ha ties coming in and out of it en whim, and. he did not think the agreement would permit modification of it in that feeble+:. A.MENDNY Tr Councilman Berwa►id moved that when the agreement comes back for a second time, the City Attcrney,.,after discussing with NCPA, provide report for the City Council ao to the semen¢ . cel Palo Alto's obligation and tbllr.possibility of termination and withdramrae1 frees the Development fund Agreement. Mayor Norton $ if that were intended to be different from the way Section 0 now reads. Councilman Berwald said it spoke to the fact that oomething more definitive was in the wording now. The motion died for lack of a second. Mayor Norton asked if. Mr. Booth understood the intent of Couecilmae 1atweld's notion. Mac. Both saidseid'.tbettneee-informetien could probably be providaad., atth further research. H aaid_that_the report in the packet had dischetedeLJOmt.aseigmment of Council for t . & tt. t .present tine. He said that if the Council wished to give furrier assignment they should do so. Meyer Benoit asked Mammy Booth if - be felt it was pointless for the Council to act on *lotion 0. 36 1 10/4/76 Mr. Booth replied affirmatively, unless Council wanted more information, which he understood Mr. Berwald'a motion to mean. He said the Council had to peas a motion saying the policy statement is not a project, ao that an environmental impact report to not needed. MOTION!: Councilman Bervald moved, seconded by Coalstoek, that the Council find that all of what has been done and said with regard to Item 7 was not to be cons 4ered a project, MOTION PASSED: The motion passed unanimously, Vice Mayor Clay absent, Councilman Comstock said that the time ,aa 11:30 and that .some agenda items would generate some discussion and also that the Council was due to have a discussion about classified officers and he made the foilcwirg motion; ? TJOEI: Councilman Comstock moved, seconded by Norton, that Council take up Item 8 and at the conclusion, adjourn to 7:30 p.m., Tuesday, October 5, at which tine it will consider the remainder of the agenda, (Items 8a-13). Mayor Norton asked if it was Councilman Comstock's intention that the personnel business not be done on this evening. Councilman Comstock replied affirmatively. Mayor Norton informed the audience of the items that would be discussed so they could choose to stay or leaver MOTION PASSED: The motion to discuss only item 8 and then adjourn to 7:30 p.m. on Tuesday, October 5, passed with the following vote: AM: Carey, Beahrs, Norton, Witherspoon, Comstock, Eyerly, Berwald N0 S: Sher A,BSR fT Clay si_ a stn cv (Continued from September 27, 1976) Councilman Eyerly reminded Mayor Norton that six votes were needed for a budget amendeent and that Vice Mayor Clay, who was absent, was one of the supporters, so he did not know if the six votes needed would be aavaitable. Be suggested the die- cueatoo os the ordinance for funding an urban design study be continued, and that they move on to discuss the moratorium. Re thought the moratorium item rams not a budget item, Mayor Morton said they could have a first reading on -the moratorium item, but ,opt as an urgency item, and that would require a second reading in two week, and it would mart go into effect for thirty days, which might be better than trying to fd a full Council. MOTION: Maur Norton moved, seconded by Berwaid, to approve the budget ordinance emending the budget for fiscal year 1976-77 in that amount of $15,000 to provide funds for an urban design study of El. Camino Real. ORDINANCE OF Tag C C1I. OF THE CITY OF PALO ALTO AMENDIM THE BEET FOR FISCAL TEAR 1976--77 TO FROV/DE FONDS TOR. AN CRAM DES/GO STUDY OF EL CAMINO REAL MOTION FAILED: The motions to approve the budget ordinance felled with the following vote: 361 10/4/76 AYES: Carey, Norton, Witherspoon, 8erwald, Eyerly NOES: Sher, Beahrs, Comstock ABSENT: Clay MOTION: Mayor Norton moved, seconded by Berwald, to continue the Budget Ordinance to the regular meeting of October 12. MOTION PASSED: The motion carried with the following vote: AYES; Norton, Witherspoon, Comstock, Eyerly, Carey NOES: Beahrs, Sher ABSENT: Clay Councilman Carey stated he would not participate in the vote on the moratorium. He left at 11:3? p.m. MOTION: Mayor Norton roved, seconded by Eyerly, adoption of the moratorium ordinance, ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO IMPOSING A MORATORIUM ON ALL NEW BUILDING PROJECTS, ZONE CHANGES, AND CHANGES GES OF USE FOR SIX MONTHS ALONG A PORTION OF EL CAMINO REAL AND PROVIDING AN EXCEPTION PROCEDURE E FOR RESIDENTIAL AND NEIGHBORHOOD COMMERCIAL USES IN P -C ZONES, AND DECLARING AN EMERGENCY Councilman Sher teked about point 2 in Section 2, talking about exceptions for applications previously approved, and he wondered which applications that applied to. Mr. Boot, replied thst one vaa Dividend Industries Project, the other Avis Rent- l.CCeer, which were strs4dy underway. Councilmen Sher said that at the time the ordinance was moved he had an amendment. Mayor Newton pointed out that there was the necessity for eight votes on an urgency matter, or first reading if ft is a non -urgency matter. Mr. Booth said that a vote of four -fifths of the Counci.lme*bers present,, or 6 votes, wms required. 1O spots about Item 3 in the staff report = the Seder property. The property bad been developed as a sporting gds store and an applicatiem vas pendia; for planned City zoning to legalize the existing business, need that it could be proposed as as amendment to Section 3. Mayor Norton said he had a question on Section 2, paragraph 2, to verify that it referrerd pat only to existing P -C zones but zones which might come up duriaa the eeoretorirae2 period to be approved by the Council. tom. Berth said that was correct. Councilmen Ber old said he did not want to vote for the moratorium without more study. Councilmen Sher asked Mr. Booth if item 3 meant it could coma into P -C rearing or could sot. qtr. Booth replied that it could, aced that he bed acme proposes lausuage to m01610 3 6 2 10/6/16 sure that application continued through its processing, and that it was scheduled to be heard this week by the Planning Commission. He said he would like to add "...ex.cept applications for P -C zones" to Section 3 of the ordinance. Councilman Sher asked why it did root come in on Section 2.2. Mr. Booth Raid there was queettr'n about whether or not it was "nieghborhood commercial" and also the term "accepted for process" want only new applications, and he wanted to make that clear. Councilman Sher said he wanted to amend Section 2.2 to delete the exceptions. APSE: T CoLencilman Sher moved that Section 2.2 have the ential and commercial uses in P -C planning in these zones." The motion died for lack sf a second. language "for raesid- Mayor Norton asked Mr. Booth if he wanted to introduce the ordinance as an urgency matter. Mr. Booth replied affirmatively and aatd he also wanted to add to Section 3, after the word "wherein" the following, "except applications for P -C zones" which would deal with the sporting goods store. Mr. Daniel Modena, 421 Grand Avenue, South San Francisco, Attorney -at -Law, spoke on behalf of his client, Mr. Sal Niossi, who was in the process of building an automobile shop on El Camino Real. He said they asked the City two months ago if itwas all right to go ahead. They spent money for an architect who proceeded to draw plans. One month ago they dale application to the City and the City took all their papers, indicating that the project was legitimate and that they could go ahead, which they did. Mr. Modena said they had a hearing before the Architectural Review Board Thursday and then this morning they found out there is a moratorium. He said Mr. Niosst had owned the property since 1972, and prior to his purchase he asked the City about putting a transmission shop there. Mr. Niotsai era two other shops, one in San Bruno and one in Belmont. He explained that tba shop is not objectionable, for the only business is to tasks out old transmissions and put in new transmissions. In 1973, Mr. Modena went on, they contacted the Playing Department, who told them to ,go ahead with the construction. The City, he said, had never told them of their proposed changes in El Camino planning. They have spent several thousands of dollars on architectural fees, end submitted the plea to the Architectural Review Board and also bed an Environmental Impact Report, thus complying with everything. Also, he said, the company entered into a contract with a chain etore in llorthern California to do their ttamme miseia i vork, which they now will not be able to tuitil1. He appreciated that Palo Alto was trying to upgrade the El Camino and at the same time he thought it was the business of the Afl to do that. He said it was not fair to deny him permission to go a.head at this late date. He explained that the smell lot was located between Shaksy's Pima and a massage parlor. Mt. Steve Mylroie, 415 Fernando Avenue, said he supported the moratorium,except to in agreement with present as well as Council to press toward 'speeding up the speaking for the Ventura Avenue Association, for the McElroy Lumberyard project which potential use its the are*. He urged the improvement of El Cassino. Mr. *icherd Oliver of Dividend Industries, Eon 2903, Santa Clara, wanted to confirm that their project was passed. Mr. Booth confirmed that it would be if the ordinance is passed. MDT/ON FAILED: The motion to approve the moratorium ordinance failed with the following vote (six votes required to pass): AYES Norton, Withaerepoon. Eys t1y, Comstock • a . ors, Sher ASSENT* - Clay • ' , Purictratmcs Carey 363 10/4/76 NOTION: Mayor Norton moved, seconded by Berwald, to continue the moratorium ordinance to the regular meeting of October 12, 1976. MOTION PASSED: The motion to continue the moratorium ordinance to the regular meeting of October 12, passed on the following vote: AYES: Norton, Witherspoon, Eyerly, Comstock NOES: Beahrs, Sher ABSENT: Clay NOT PARTICIPATING: Carey The meeting adjourned at 12:00 midnight to 7:30 p.m. on Tuesday, October 5, 1976, at 7:30 p.m., with the agenda to begin with item 8a (Ordinance relating to impounding fees). ATTEST: L i i fit. _. •, City Clerk / APPROVE: Mayor