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Home My WebLink About08251975Regular K3eting August 25, 1975 ITEM Minutes of July 28, 1975 Proclamation re U.S. Constitution Anniversaaary Oral Communications Announcement re Executive Session: Resolution 5132 re Salaries of Council Appointed Officers Consent Calendar - Action Items Ordinance For Improvement of the Palo Alto Yacht Harbor Long Term Power Supply Propoaale Resolution re Gas Rate Increases Ordinance re Palo Alto Community Child Care 1975-76 Contract Request of Councilman Sher re Support of County Board of Supervisors' Action Towards Equalizing Assessments ments In Santa Clara County Best of Couacilmen Sher re Postal Facility Site Reao1ution re Merit System Rules and Regulations Changes to the. City of Palo Alto Self -Insured Health and Dental Benefit Plans Joint Povsxe Agreement for Intergoveromental Employee Relations Services Mayor Mortara Request re Salinity of Drive till (Yacht Harbor) Oral Communieetioes Cancellation of Meeting of September 1, 1975 Cancellation of Meeting of Ssptemb r 8, 1975 1 4 1 $023/75 PAGZ 142 142 1 4 3 143 1 4 3 1 4 3 143 1 5 154 1 6 3 164 165 166 167 168 168 169 1 6 9 August 25, 197: The City Council of the City of Palo Alto met on this date at 7:40 p.m. in a regular meeting with Mayor Norton presiding. PRESENT: Baehr., Berwald, Clay, Comstock, Eyerly, Norton, Sher, Witherspoon ABSENT: Carey MEW 07 .Iitl.Y a8, 1975 Councilman Sher requested that see cerrectioas be made on page 59. n the sixth line "1972" should read "1973". On line 8 the second word "not" should be deleted; and on the third line from the bottom of the same page, the word "increment" should be "consequent". On page 63, fifth line, the word "ruling" should be "requirement". Counciiwoese Witherspoon asked that the spelling of the word "actually" be corrected in the fourth line from the bottom, third paragraph, page 65. MOTION: Mayor Norton coved, seconded by Serwald, that the minutes of July 28, 1975, be approved, as corrected. The motion passed on a unanieous vote. (Carey absent) PROCLAMATION RE U.S. CONSTITUTION ANNIVERSARY 8 Mayor Norton welcomed Mr. Hal Leaser, Chairman of the U.S. Constitution Observance Committee. Mayor Norton read the proclamation of the City of Palo Alto and proclaimed the month of September as Constitution Month in the City of Palo Alto. Re encouraged all residents to participate in - the varioue programs commemorating the birth of thia vita, document, and affirming our faith in the Constitution and in our nation. Mr. 101 Leaser, attired in a replica of a 1776 uniform of the Prince of Wales, accepted the proclamation. He briefly commented on how the Magna Carta came into effect. Mtn. Lesser also stated that, as Americans, we. should be proud that this nation is comprised of people either who were • born in foreign lands or vho are descendants of people in foreign lands. Our hisory and culture are drawn from every corner of the globe, and wie have many heritages. The greatest feeling of all is that all men can stand together bier the sane Conot1tution en4 uphold that Consti- tution and individual freedom. Mt announced that a part of the corstie ratio program will be 1..14 September 30th at Flint Auditorius► et 7:30 p.a. 143 1/25/75 ORAL CC Q(LTN1CAT1ONS 1. Mary Beth Washington, 936 Middlefield Road, stated that she wanted to review the story about her home. She claimed that when her mother first cause to Palo Alto and found this home nt the above address, she was told that the hone could be rented but it was up for bull- dozing whenever the City Council passed the ruling for the retirement home. The City of Palo Alto purchased it in 1973, and said that they would have to bring it. up to code before they could receive more rent money, Mayor Norton stated that on Wednesday, August, 20, the Council met in an Executive Session (continued from August 18, 1975) to review Council Appointed Officers. At that time, they adopted Resolution No. 5132 on a 6-0 vote (Carey. Comstock, Sher absent) affixing the salaries for the. Council Appointed Officers, effective June 22, 1975 as follows: TITLE City Manager City Attca sey City Controller City Clerk PER MONTH ANNUALLY $3,125.00 2,530.00 2,175,00 1,600.00 $37,500,00► 33,600.00 26,400.00 19,200.00 MOTION: 1: Coumcilmen ' yarly introduced the following Ordinance and saved, seconded by Seems, its adoption: ORDINANCE NO. 2872 entitled "ORDINANCE OF THE € OUNCIL OF TRE CITY OF PALO ALTO APPROVING AND ADOPTING AMNDED PLANS FOR THE INPROVEMENT OF THE PALO ALTO YACHT HARBOR" The ordinance was adopted on a unanimous vote. (Carey absent). (CM k: 438:5) Mr. Ed Aghjayen, Director of Utilities, stated that this concerns the *2A development fund agreement. The Citizen, Committee to Consider Long -Term Power Supply Alternatives will be filing recommendations to Council early neat year. Staff recommends deferral of commitment by the City until this report is received and evaluated. Staff further recommends that NCFA be requested to afford the city an opportunity to enter the agreement once the committee's rapport hai been received and evaluated. 143 8/25/75 / vs" Councilman Sher expressed some disappointment that the NCPA seems to be taking an all or nothing approach in eliminating the special participa- tion of the City 441empe44 of Palo Alto, when the Council indicated that it wished to pursue and was unanimous in its desire to go forward with the geothermal possibilities. Council ':ad suggested separating the question of participation in nuclear power until the Citizens Committee has had an opportunity to review teat matter and advise the Council. The NCPA felt it is all or nothing. Councilman Sher believed that it was not possible at this time to enter into the developuent fund agree- ment, simply on the basis of pursuing the geothermal idea. His question was with regard to the fact that something new had been added in the participation of the member cities of the NCPA. Since its inception, Palo Alto has been approximately a 252 member. His understanding now was that this had been reduced from nearly 252 to 7.872 which is advantageous from the standpoint that Palo Alto would have to put up only 7.82 of the money that goes into the development fund; on the other hand, this mans that the city would get a share of 7.82 rather than nearly 25% of the power available. Mr. Aghjayan responded that this understanding was correct. The original participation percentage was based on a formula that was related to total demand by each of the cities and the growth rate over a ten year period. Ine new formula takt% into account the fact that some cities are entitled to CVP power and since that power will always be cheaper than whatever new power.: are generated, the cities have limited use or need for addi- tional power. The cities will be looking for growth requirements only. However, the cities that buy from the Pacific, Gas, and Electric, would like to supplement all of their PG&E power with generated power by NCPA. For that reason, NCPA voted to change the formula to reflect this con- sideration. Councilman Sher stated that he noticed there wee no comment made in the staff report. He asked Mr. Aghjayan if it were not something that Council should be taking a posicou about. The final version of the development fund was finally voted on by people from participating cities that bought their power exclusively from POSE. Councilman Sher asked Mr. Aghjayan if the City of Palo Alto participated and had an opportunity for more per. Hz. Aghjayan replied that the_ City indicated its desire to stay with the higher figure but vas outvoted. - Obviously, the 7,872 of the 5tkew plant, if that is the size of the geo- thermal plant put in, is not very march. Since our total demand right now is 140mw, that contribution would be rather minimal to the city, One of the issues that the Citizens Committee will be looking at is the City's growth requirements and alternative sources. They will be looking att how much power Palo Alto nos. It is Mr. Aghjayan's fe:ling that if in six months the City would like to go back to NCPA stating it would like to reenter the development fund agreement, thare is no reason why Palo Alto would have to stay with the dX figure. The City should be able to go back end say it *could like to reenter but would like to be at the higher figure. 144 8/25/75 )11 Councilman Sher commented that there was no reason why the City could not go back in, except at that point NCPA may not see fit to give Palo Alto a greater amount. It seemed to Councilman Sher th it was terribly unfair to have the percentage of Palo Alto's participa on cut to less than a third of what it was, particularly since NCPA's ,ama, has called on - Palo Alto to put up 252 of the costs. Re agreed t'ith Mayor Norton and other Council members that at this time it was difficult to decide whether or not to go into the development fund, but he expressed concern as toe whether it was wise to let this occasion pass without canting on this particular point, indicating that it is unfair to Palo Alto. Mayor Norton said he sensed that when the City decided to be noncommittal because of the nuclear issue, something like this might well happen as a matter of course, particularly in line of the City Manger's indication that power is at a premium for some member* of the organization. So being outmaneuvered did not surprise him. He felt that they could complain ell they wanted to, but the reality is fairly clear that Palo Alto's use i.e apparently coming to an end in NCPA's eyes. Prenkly, he wondered if it was worth 7.87% to stay in this organization. Mayor Norton then celled upon Councilman Eyerly, Council representative to NCPA. Councilman Eyerly stated that since being on the Council he had attended the NCPA meetings and had some observations which he would like to ghee*. At the NCPA meetings one becomes aware of the power play in the organiza- tion. Six of the eleven members are using PG&E power and five art ssers of power from the CVF. The change in the percentage really sterna from Santa Clara's action in filing suit against the CVP of the Federal Bureau of Reclamation. Their success is really going to affect Palo Alto's supply of power when the suit is completed, some years dog the road. But they were able to win the vote to include that into the NCPA's new contract and that is the reason for the drop in the amount of power. Councilman Eyerly did not agree with it but NCPA did have the vote to do it and it was discussed at several meetings. With the City's ability to select what source of power it wanted to spend money on, Pee Alto named geothermal. At this time, maybe it was fortunate that Easy were not able to sign the contract. Be felt that the PEE cities were very sager to move ahead oa the source of power. Might new, they are dealing with geothermal. From vhat information had been presented in the group so far, he realised tha. they seemed to be a little over eager, and they may be dealing with land speculation that may not be as great as it eppearae to ce. Councils n Eyerly did not want to precept the Citizens' Committee, but he agreed with Mr. Aghjaysn's recommendation that the City should withhold the signing of any contract until it hags received a report fro the Citizens Committee. Me felt that at this time, Palo Alto should express distress at tba per in which the cont.rect hes been worked out and try to impress upon them what MCPA was originally ford for and the strength that it has as a group organization to hold PGJE rates in line. Without some eruch organiza tion, Councilman Eyerly expressed concern that PURE would run rampant en their rate increases. He wanted to ask fur some type of amendment to that contract that would allow Palo Alto to enter participation at a! later date, Bs would also like to have thew set up a requisite now, and not six months is the future, in order to get a fair shake. 145 8/25/73 Councilman Berwald asked Councilman Eyerly whether the decision to reduce 23.11X to 7Q87Z was made by the Executive Committee or by the full member- ship. Mr. Aghjayan stated that the decision was made by the full member- ship and was ratified by the Executive Committee. Councilman Berwald questioned the order. Was the decision made first -by - the Executive Committee and then ratified by the full membership? Mr. Aghjayan replied that in working out the changes to the agreement, a number of meetings, were held and the full membership participated in all of those meetings. Councilman Berwald agreed with Councilmembers Sher and Eyerly, and Mayor Norton, that the recommendation was a sound one but should be amended to: 1) express Palo Alto'e displeasure that the reduction had been made; 2) point out what Councilman Sher said about the fact that Palo Alto had paid up to 23.11% of the costs; 3) request that some procedure be de- veloped now for future participation. MOTION: Councilman Berwald moved, seconded by Eyerly, that Council notify NCPA that the City of Palo Alto will defer a decision on the development fund agreement until a full report has been received from the Citizens Committee to Consider Long Term Power Supply Alternatives; further, that NCPA be requested to afford the City an opportunity to enter the agreement once the report has been received and evaluated; and further, that Palo Alto express to NCPA displeasure with the reduction of City's share of 23.11% to 7.87%, given Palo Alto's participation in the higher share of the cost, and ask NCPA to set up a procedure for Palo Alto to participate at a later date (within six months) . Councilwoman Witherspoon concurred completely with the intent of the motion but her only concern was if there were more clout in riding along with the six months period or yelling from the outside. She had no feeling for the power play going en in the NCPA, but hated to see the door being slammed in Palo Alto's faces. Six months down the road especieli.y when the Committee has reported, she feels that the City should participate. She is willing to risk $39,000 or less to have a chance to be heard by the NCPA. The other question she had was if Palo Alto opts to gat out now and cannot get in later, where does that leave the City. Mr. Agh j cyan replied that this would leave the City out. Her next question was, "Where do we go for power?" Mr. Aghjayan responded that Palo Alto has a contract with PG&E for supplementmty poser require- ments that would still be valid and that would come into piny, obviously, beyond 198X-1983. But that still givers enough tine to work in some supplementary power gsneratton of our own or maybe in connection with Los Angeles or some other agency that would be affiliated with a facility. But there are other alternatives. With regard to Councilvos.an With r- epoon'a earlier point, staff hats tried yelling from within, and from wai thout . Councilwoman Witherspoon said if it looked as if Palo Alto were going to be outside the NCPA, perhaps it ought to include looking tats the situa- tion: in the charge Which was given to the Citisel m Committee. Vice Mayor Clay did not fell that they were ready to make such a decisions because Council did not have the answers to asaaeny questions. 11* asked how the numbers were estimated to the Board? Howi was the power demand of 1985 arrived at - a city by city estimate that was accepted by Mkt - Mr. - Mr. Aghjayan answered that the NCPA asked each of the cities for esti- mate of forecasted power requirements. 146 6/25/73 Vice Mayor Clay asked if Palo Alto's estimates were quadrupled, could it have significantly affected the percentage of power the City would have under the new arrangement. Mr. Aghjayan agreed and stated that it would also quadruple the costs. Vice Mayor Clay wanted r. point out that it is almost an equivocal manner in which to arrive at a decision that is substantially different. Vice Mayor Clay continued that Mr.. Aghjayan had mentioned that it is not likely that much money will_be spent between now and January. The likelihood of $39,000 being spent • from now until then is very remote because of +such things as required permits. Mr. Agh j ayan replied that it was unlikely that the NCPA would .be . spaend- ing much stoney on any of the nuclear projects, but staff indicated . the possibility of money being spent on the geothermal project, and also. the possibility that SMUD may come in to ask for money that has already been spent. They have spent approximately $2,000,000. Vice Mayor Clay stated that the money would be spent only on approval of NCPA members who would administer the budget. If Palo Alto were a participating member, when request fox expenditure funds was recommended, the City would have an opportunity to approve or oppose it. Mr. Aghjayan agreed with the L4mment. Vice Mayor Clay said since the Council does not know how much money they are going to spend, the maximum expenditure is $39 000. They do not know how much it would cost to get in if Palo Alto decided.to get in later. As he analyzed the data, it appeared that by Augu.st'31, any city which hat not given approval to participate would then have Its share divided among the remaining embers. Mr. Aghjayan responded that that was correct. Thane they will recalculate the participation percentage based on wiheteevsr cities failed to enter the *grommet. Vice Mayor Clay said ha assumed that in order for Palo Alto to get back in, it would have to do so at whatever shero the remaining members would be willies to give up and at a price that they asked the City to pity for those shares. Mx. Aghjayan said that the terms and conditions would be gat by tbs NCPA members at that time requested. Vice Mayor Clay stated that it Palo Alto got back in at 7.874, the likelihood is thet it votald cost the City more than 439,000 to reenter. Mr. Aghjayan replied that was a good question. If no sonny ware spent, his guess would be that the City could get in for the 439,000 figure. If the y were spent on a piece of property, mead they drilled for steam and struck oil, obviously they are going to try to mks more then $39,000. Vice Mayor Clay asked it the City were in for $39,000 and there is no acmay spat, and the City decided to get out, does it lose anything?. . If it does not get in now and decides to get in later, and they spend more money, does the City pay an additional amount? He commented that it really is not known at this time what it will cost Palo Alfa . to not participate or to participate and risk deciding against parti- cipating without having sow questions answered, particularly what the reentry costs will be to the City. It seems unfair to ask the City to sale a commitment to participate or not before August 31. That is. if it should appear that alternatives were available to*embers who chi not to participate, there ought to be some statement of estimate of costs or some formula for arriving at the costs, at the time the cities decided to participate. flr. Aghjayan agreed there should be; but there is not an agreement.. Ltwas suggested but they did not follow through. Some of the money that could be spent, during the nest siz months, sight be encumbered which may or say not prove to be successful. They may spend the coney for engineering studies in a particular piece of land or they any purchase land. The likelihood 1 4 !/33/73 of drilling a well and either striking it or hitting dust is probably very small, in the next six months period. Mr. Aghjayan added that Vice Mayor Clay's concern is correct, that Palo Alto does have an interest and staff mentioned in the report about its concern re keeping our interest in NCPA viable. But staff considers that the desire to resolve the alter- nate policy issue with the Citizens Committee, and to resolve some of the other concerns about the devlopment fund agreement, outweigh that -concern. Vice Mayor Clay said that given that Mr. Aghjayan's estimate in correct. to 1985, the C:.tizene Advisory Committee and staff will give Council...a.id to determine how the City will get that power. But should this alterna- tive be turned off, PG&E is there to fall back on because of the agree- ment Palo Alto has on supplemental power. This will cost more than what we are paying for power now under the !CPA plan. Mr. Aghjayan concurred that was correct. But he said it was important to note again that the 7.872 does not give a very large amount of power, in relation to Palo Alto's needs. But previously, with the 232 participation percentage, there vas enough power to satisfy our growth requirement. Mr. Aghjayan indicated earlier that 82 of the 50mw plan is only 4mw. Vice Mayor Clay asked if the 23 plus percent that the City was going to get on the original plan was more than what the City needed, and would it provide the City with a comfortable surplus. Re also asked what would 7.87X do for the City in terms of meeting Palo Alto's require- ments. Mt. Aghjayan responded that it was indicated in the staff report that supplementary power requirements between 1980-1990 would be in a neighborhood cf 55 or 60,w based on 200mv entitlement of the Rancho Seco II geothermal plant. There is 46 or 60 mw that Palo Alto would get es its share. Now 82 of 2O0mw is less than 16mw which is only about 252 of our needs. Vice Mayor Clay com tinted even if Palo Alto did participate, it would not get enough power to satisfy its needs. Does the City still have to look for another alternative`he asked. Mr. Aghjayan stated that it appears to be that way but that is one of the issues the Citizen Committee and staff will be reviewing within the next six months. Vice Mayor Clay said that, too, would be cause to go back idto NCPA, with sots great loss; that under the original plan Palo Alto is going to gat aufficieat power to supply its needs in 1980 to 1985. And now through some formula that appears to be somewhat arbitrary that will reduce to some frsctioa of that. Aside from this decision being mode from data that: bas not been confined regarding Santa Clara'a 500mv and Palo Alto's 252m+, none of these numbers have been confirmed to the point of determining whether or not this formula is really an equitable one for all. IICPa is also saying to Palo Alto to either get in nos► or coma in later at our own risk, at whatever price has to be paid, without saying what the price is going to be, Vice Mayor Clay believed that it vas rather unfair to the City, as veld, as it is to the other cities. There is also the question about the probability of success of '.CPA in pursuing the various power sources. Hy skid that when Palo Alto started with geothermal, the NCPA cars back with a request that Palo Alto entertain tbs possibility of nuclear action projects. Palo Alto responded to that and is now in the poaition.of responding not only to geothermal, but to nuclear action and whatever - e`_ -se there sight be,, without having a clear description. And while doing it, they drastically Changed the percentage allocated to the City. Vice Mayor Clay questioned the stability of the planning.process of the NCPA. Ns would have more reservations in participating in it, from that standpoint than any other. 8i believed that infiusncs should be 148 8/25/73 used in this respect, rather than to reapoad "yea" or "no" by August 31, which seemed unreasonable. Vice Mayor Clay said he could not respond because he did not know how much it would cost the City to get back in if the City decided to do so in January or December. He believed that if the City genuinely wanted to participate, Council would receive some kind of report from the Citizens Committee, prior to January 31. He felt that a substitute motion was in order tonight to inform NCPA that, based on the information that we now have, it is irp esible to respond intelligently to NCPA's request to commit Palo Alto by August 31, and - that Palo Alto would like to have answers to certain questions first, such as what would the costs to Palo Alto be if it were to participate sometime efter August 31. SUBSTITUTE MOTION: Vice Mayor Clay moved, seconded by Beahra, that :CPA be informed that based on the information that Palo Alto now has, it is impossible to respond intelligently to their request to cost by August 31, and before making a commitment Palo Alto needs answers to some questions, such as what would the coat be to Palo Alto if it were to participate sometime after August 31, 1975. Mayor Norton said he did not clearly see the difference between Vice Mayor Clay's suggestion and Councilman dsrwa1d's suggestion of the six months arrangement. Vice Mayor Clay Mated that his motion differed in that he did not want to say at this point, that Palo Alto chooses not to participate at this time. He agreed that Palo Alto should .ask for more information prior to the date a commitment has to be made. Councilman Serwaid said that ghat was really scanted was to have NCPA set up a procedure whereby Palo Alto can get back in at a future time. This is not saying Palo Alto is not interested, but rather Palo Alto is not interested at this time. Pelt) Alto wants the Citizens Committee input; it wants NCPA to afford the opportunity to reenter the play end set up a procedure for so doing, Vice Mayor Clay responded that he agreed with Councils Berwald, and if Pala Alto could use what influence it has to have NCPA reconsider to defer that time by which participating, amber& must respond, this would satisfy his concerns. Councilman Borwald suggested an addition to the motion d adding a paragraph which says that there is no intent on the part of the City of Palo Alto to arbitrarily withdraw; we dust feel that their decision in thin matter is unreasonable. The basic recomrandation is that Palo. Alto would like to defer the decisiot, reeer a judgment as to future participation, and express to SPA that their decision is rather arbitrary. Vice Mayor Clay said his concern is that the decision at). heihs left. to EPA to set the price for the City to be able to get back 121 and if after September 1, Palo Alto is not a participating member, t n our 7.572 sees back into the hopper, and it will be divided among all the other cambers. Now, if Palo Alto comes io later, it will have to be through *ones re -allocation scheme, with whatever price tag is attached. This is what he would like to sae deferred. Councilman Comstock asked Mr. Agh j aysn what the head count was at this point. The agreement says if six cities signed the agrees t, there would be an agreement August 31, and if six cities did not sign by August 31, there would be no agreement. Mr. Aghjaysn replied that if no one signs the agreement, the six PG48 cities could take the nscau zy policy action. 149 8/25/75 1S7 Councilman Beahrs said he agreed with Councilman Comstock that the City has bean outvoted with a vengeance. All the screaming tonight about unfairness, displeasure, and concerns, etc. fa meaningless. He said it reflects on the City's own indecisions and ambivalence on the whole gen- eral parley going back several months now. The only consolation that he sees is that NCPA, in his opinion, is a very weak and ineffective partner- ship or association. He does not feel like they are ever going to get off the ground, the way things are going, and they certainly knocked the City out of the ball gams. He thought Councilwoman Witherspoon came closer to realism . than enyone .the committee should be • told that "we have -had it" as far as the NCPA Is concerned and "where do We go from here?" He empha- sized that Palo Alto should see far enough ahead to recognize it is.out of the balls game, and to take a hardheaded outlook on the whole problem,. He asked where Palo Alto stands with the Sacramento Municipal Utilities District, and if Palo Alto were in the game with Sacramento, or does a high price have to be paid to get in there. The only opportunity waa through NCPA and now that seems to have gone under the board. lir4 Aghjayaan replied that the staff had expressed interest through NCPA and indicated that originally, when the matter first came before the Council, Since that time, Sacramento has asked whether the City wished to buy directly from them or through NCPA. Council, at that time, voted to defer their decision on nuclear powers and Palo Alto's interest in it had to be retracted. Councilman Sher stated that the fact ruins that there are eleven parti- cipating members, six of who are known as the PG6E cities, These cities buy a percentage of the power from PG6E, at a high cost, and are very anxious to develop an alternative source. The leaders in that group are the cities of Santa Clara and Lodi. The other cities follow. When - you talk about the clout at this time, Palo Alto does nut have any clout as far as those six cities deciding on what they want to do. The other five cities get at least a portion of their power, maybe all of it, from the _Bureau of Reclamation through the Central Valley Project. But v wai aliiancaAlteeerh these two groups of cities that all had one thing in c.,': " coameon - primarily, they all own utility systems - and that has been an important thing. Councilman Sher said that should be emphasized in the letter. 11e, at this tine, agreed with Councilman Berwald's nation. He felt that instead of coming down so hard on "displeasure", because NCPA does not cars about displ -eure, it would be useful to talk about the °1unfairnsss" of the new percentage rate, given the previous percentages in which Palo Alto participated and helped this organization to survive, and to work particularly onlike rate setting. He continued that it vat also important to emphasise the importance of theme cities owning their utilities-, staying together in the matter of :ate setting and also in the development of alternative sources of energy, instead of breaking up into two groups. He pointed out that with this current crisis the non-POU cities have begun to see their mutual interests in a ray they never saw before. Re suggested that if Palo Alto ales an appeal on the baste of history, fair se and equity, maybe some of the smaller PGAS cities 'ail/ see the validity of that. Councilman Sher continued that 4perif the revenue bond and the bonding ability of the cities may be in question, be knew that Palo Alto's bending ability was quite impor- tant. Re dial not think it would be remiss to point oat that there will be revenue borate, that there are eleven cities sticking together for that purpoas. Re agreed with Vice Mayor Clay's concern that mare infor- mation should be requested. Me felt that NCPA will not receive that sympathetically; they will talk about having given the City a chance and that they are anxious to go forward. They do net rent to delay. They many give Palo Alto the information but they will not hold up on their decisions. As far as Councilman Sambre' comment that it is a failing 130 1/23/73 C. organization, they probably will get some power from the Sacramento Nuclear Development. They are invited to apply for some; whether they get as much as they applied for is another question. So it is possible when Rancho Seco II comes on line, some power to NCPA is going to other member cities. Of course, Palo Alto is not ready to decide whether it wants to participate or not. He said that Councilman Berwald's motion pretty much sums up his concerns but he would place emphasis on unfairness. He said he will stick with Councilman Berwald's motion. Councilman Berwald said he would change the word "displeasure" to "unfair- ness". His second concurred, Councilman Beahrs asked Mr, Robert Booth, City Attorney, if the point was made that NCPA or any other power generating authority would have recourse to the full tax base revenues of the City of Palo Alto. It is his under, - standing that these bonds are being sold by an association without obliga- tion or a recourse against Pala Alto whatsoever. Mr. Booth replied that was the intent, Councilman Beahrs asked if Palo Alto's credit meant anything to NCPA. Mr. Booth said it dues because the capital needs for the project exceed the ability of the individual members of the non-profit corporation to close the bond issue. The bond may not be handled as local credit but without that credit as long-term back up, thevalue of the bond issue exceeds the ability of the other members, given their existing indebtedness. Councilman Beahe asked if we dc: not have the recourse against the access of Palo Alto, what was the difference. :`fir. Booth answered that one of the differences is ;he i.ntetest rate. If ono shows the inadequate ability to finance the special project in existence, the interest rate is far higher than it would be if backed up by sufficient credit rating. Palo Alto's honor rating is the highest. Another thing, the possible market for the amount of power to be generated has to be sufficient to - support an economically sized plant, and there may not be enough load demand in the other cities without Palo Alto to justify building a plant of 55. Councilman Beahra wanted to emphasize the fact, in his opinion, that Palo Alto is living in a dream world, as usual. Councilman Eyeriy said he did not have much to add. He di.d think that Councilman Berwald's motion put the emphasis whore it ought to be, to bring out those points. It is very important to ask for an amendment of the contract at this time. He thought that it should be pointed out in this letter thet when NCPA starts to develop power, they will probably bs able to develop more poorer than what is being talked about now. Thaws will probably bs ewe sources available and it will be easier to get -power through then then going through It alone. He sees that in San Joaquin, Sacramento, there will be more power available than they have spoken of at this time. He felt that they would need somas type of amendment in the contract to let other people join in to strengthen their hands. Vice Mayor Clay said he would withdraw his substitute motion. MOTION RESTATED: Councilmen Unfold seconded by Eysrly, that Council notify )CPA t et the City of Palo Alto will defer a decision on the develop- ment fund agreement until, a full report has been received from the -Citizens Committee to Coesider Long Tara Power Supply Alternatives; further, that )CPA be requested to afford the City an opportunity to enter the agreement once the report has boon received and evaluated; and further that Palo Alto express to NCPA the unfairness with the reduction of City's chore of 25.112 to 7.87%, given Palo Alto's participation in the higher share of the cost, and ask )CPA to set up a procedure for Palo Alto to participate at a Later data (within six youths). Staff to draft letter taking into account the above concerns. 151 8125,75 The motion passed on the following vote: AYES: Berwald, Clay, Comstock, Eyerly, Norton, Sher, Witherspoon NOES: Beahre ABSENT: Carey :441:5) Mayor Norton suggested that this item be considered in two steps. One would be a motion or action to accept and approve the principles of the City that the gas ntilitiea will not operate in a deficit, and the respective loss of $355,715 will be recovered. He thought that if Council could agree on that principle, the subject would reduce itself to a decision on one of the formulas that staff has recommended, or the matter could be referned to Committee. In the event that the Committee comes back with different recommendations, this will cause a minimum impact to the average residen- tial consumer. He had in mind, to accept some kind of rate design formula that would be coneiatent with the PUC's. If the staff recommendation were accepted, which is Alter -native B, there will be a slight incremental increase on the residential consumer. His concern was that if Alternative B were- . accepted at this time, then the residential consumer rates will be boosted a good deal now and perhaps need to be lowered at a later date. MOTION: Mayor Norton moved, seconded by Comstock, to accept and approve the principle that the city gas utilitiee wi1l not operate at a deficit, and the respective leas of $355,715 shall be recovered. The motion passed on a unanimous vote. (Carey absent) Councilman Sher commented that it bhould not ego unsaid that the new approach reflected by the PUC, which treats Palo Alto's retail gas company as any .:u:etoaer of PG&E, is incredible. That kind of action would put the City in re posifion of having to charge the city's gas users more than the users in neighboring ccmunities, who buy directly from PG&E. There are _, is that PG&E desires that Palo Alto not sell gas and apparently the PUC -empaaleda• He hoped that YUC will see Palo Alto's posi- tion, which has been all along that Palo Alto as a wholesaler should not be paying gas rates as high as they presently are and if they do not sae the wisdom of the position, then the courts should see the wisdom of it.. Councilman Sher felt, like TWayor xton, tat h Palo Alto should not operate with a deficit, but `' load too much on the residential users, which is inconsistent with the PM philosophy (generally, they say allow PG&E to have en increase but it should be borne by the industrial, commercial users) . He thinks that Palo Alto should be careful *bout putting too much of it on the residential usurer, at this time. Se of the three plans, Councilman Sher vary not in favor of Alternative S. V* would go for Alter- native A es an appropriate compromise until the 1`inence and Public Works Committee ham an opportunity to consider rate design end an apportionment bed the two kinds of usete, MOTION.: Councilman Sher moved, seconded by Comstock to accept Alternative A as set forth in CMR:441:5, dated August 21, 1975. 152 1/23173 ✓cy Mayor Norton agreed with Councilman Sher's observation that PUC is totally off base in however they arrived at passing on the 16% increase to Palo Alto. Mayor Norton asked the staff if they could track the formula PUC has mandated on PG&E in the most recent action. Mr. Aghjayan replied that the problem is most of the increase which Palo Alto anticipated was passed on to PG&E's interruptable customers. PG&E had an increase gas cost of $164,000,000 a year due to the rise in price of Canadian gas. So hearings and testimonies were given by the City of Palo Alto tracking those hearings, tracking those testimonies given, and all indicated that they were passed on a cents per therm basis ae they have on 17 other rate increases over the past two and half years. There was not the slightest indication on the record that they would do anything different from that. But the Commissioners, in private, in looking at the record of the case, decided to take a right turn somewhere. This was to implement a rate schedule that would pass most of the increase on to the big, heavy, interruptable industrial user, -- the so-called low priority user, according to the FPC classification of priority. Mayor Norton asked if Mr. Aghjayan could give him a "yes" or "no" answer, then interpret what PUC did to PG&E, translate it to the Palo Alto ccene and pass it on in the same ratio to the different classifi- cation to the user. Mr. Aghjayan stated that he was headed for a "no" answer but was trying to expand it by giving Mayor Norton his reasons why. Mayer Norton asked how far off Alternative A is in achieving the goal. Mr. Aghjayan responded that Palo Alto does not have any :interruptable customers, so if staff were to track the increase and paws it on in the same proportion, he did not feel it would be successful as we would have no one to pay the interruptable rate. Alternative A would recover the total amount of dollars that are needed to cover the deficit that presently exists. So would Alternative B and Alternative C. They all erxive at the came amount of money. But there is no way to use the same formula as PGSE. Councilmen Co stock thought that this resolution should be referred to the Finance and Public Works Committee. Hs weed support the notion before Council with the understanding that 1) it does not forclosa the possibility that further exaelination by the Finance and Public Works Committee will perhaps generate some suggsatione for adjustments; and 2) by the time the Committee has reviewed this, there nay be further response from the Public Utilities Commission. With these thoughts in mind, he euggeste going for Alternative A. Councilman 8erwald stated that nine interpretation of this particular subject wakes it a very complex matter. Be commented that after a telephone conversation with Mr. Aghjayan, he thought the recommendation with respect to Alternative b was the most logical one. One of the deficiencies of A, and certainly C is that while it is true that you give modest relief to residential owners, in 'arms of dollars a month, it is really loaded on to the industrial consumer in Palo Alto, who recently received a significant boost. He believed that this puts the Pala Alto imdustrial user at a tremendous disadvantage competitively with industrial firma in the other areas because of the 19.21 increase in this rate With Alternative a, he is still paying 12.9% more. In view of the facts stated in paragraphs 2 and 3 on page 2 of the staff report the'. there will be significant rate block revisions, and that it is difficult to review in a Council meeting, he believes that Alternative B is the equitable solution ana that it spreads the costar on the beats of en equitable rationale reported and recommended by staff. Ha also hoped that the council will refer the matter to the Finance and 133 1/23/15 Public Works Committee with the responsibility to thoroughly review the report and make recommeedations with respect to Palo Alto policy for all utilities, particularly gas. SUBSTITUTE MOTION: Councilman Berwald moved, seconded by Beahr+e, that the staff recommendation of rate schedule Alternative B be accepted, effective September 1, 1975, and that the following resolution be adopted: RESOLUTION NO. 5133 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OP PALO ALTO AMENDING SCHEDULE G-1 OF THE CITY OF PALO ALTO UTILITIES RATES AND CHARGES PERTAIN- ING TO GAS RATES" Councilman Beahrs said he supported Alternative B recommended by Staff. He asked Mr. Booth should Alternative A pass, what percentage did he give to meeting a legal challenge to the very obvious disparity here. Mr. Booth replied that be thought that it was substantially enhanced over their previous efforts. Differentiation in rate blocks is generally upheld as long as they bear some reasonable relationship to the overall picture. Councilman Eyerly pointed out that the PGSE general service rate has been increased by only 22 and ours has been increased by !7f because Palo Alto buys in at a different setup. He felt that Alternative B would be the one that carries it along with similar: percentage of rates. In Alternative I, there will to a similar rate for both residential and commercial. Mayor Norton felt that there are two aeparate parte of thia 17%. Passing it on to Palo Alto across the board is clearly unfair and that most of them would agree. He said he was in favor of Alternative A. The substitute motion passed and the resolution was adopted on the following vote: AYES: Bsahra, Somali, Clay, Eyerly, Witherspoon WOES: Comstock, Norton, Sher AESSNT: Carey MOTION: Councilman Coaetock moved, duly seconded, that the matter be referred zo tha Finance and Public Works Committee fox s permanent solution. The referral motion passed on a unanimous vote. (Carey absent) Mayor Morton *nuanced that there was a report from staff plus a draft of tha contract. lie complimented staff on what appear to be an excellent contract. This was an indication that staff le refining a 154 025/75 its approach to methods for contracting for certain kinds of social services, and he felt that this was a step to the right direction. ?MOTION: Mayor Norton introduced the fcllowing ordinance and moved, seconded by Comstock, its adoption: ORDINANCE NO. 2873 entitled "ORDINANCE OF THE COUNCIL FO THE CITY OF PALO ALTO AMEN')ING THE BUDGET FOR THE FISCAL YEAR 1975-76 TO PROVIDE ADDITIONAL FUNDS TO THE CHILD CARE PROGRAM" Tom Cahill, 2701 Waverley Street, stated that he was on the Board ofDirectors Palo Alto Community Child Care Program and introduced himself as their representative. With him was Miriam Miller, a child care mobilizer who was available to answer any questions. Mr. Cahill stated that subsequent to the approval of the budget, extended contract negotiations had been carried out with the City staff. He believed that again this year the negotiations have led to a good con- tract providing for a truly comprehensive child care program. The Child. Care staff felt that this document would enable them to provide a much needed service fer the community and at the same time to assist in the creative development of one of our most important resources, the children of Palo Alto. The document would also be for dialogue between the City Council and the Corporation. The past relationship with the Council has been excellent, and members of the Corporation have had the opportu- nity to meet with most of the new Councilperso.ie in order to open new lines of communication. Mr. Cahill welcomed Councilman Eyeriy, as their neer liaison person. Re also took the opportunity to publicly thank Councilman Beahrs who served as the liaison person last year, for the valuable time, efforts, advice and support he gave. Mr. Cahill said he looked forward to working with all the Councilme:ebers this year and asked for continued support in the future for the Palo Alto Community Child Care, a valuable and vital community resource. Councilwoman Witherspoon referred to the redUction indicated on page 3 of the staff report and asked if when the donations of non -city funds reached the $55,000 level, the number of child hours for which tha City contracts would be reduced correspondingly. She wanted to know hoe any child hours for Palo Alto children would be reduced and how that formula was worked out. Carlson Bedroll, Director of Community and Social. Services, responded that that determination was not made et this point. First, the situa- tion mot be reached with the corporation where they have funds beyond the $55,000 which the City is permitting them. She explain that this section of the contract meant in order for the City to be able to reduce its funds, it mast also expect that it is reducing the child care hour* being purchased. We do not know what the number of hours will be because we do not know the amount weer $55,000 which they will have available to the. What it does insure. to use the word that Mr. Cahill used, is "dialogue", because they would return to us. The fact of the additional funding end the fact of reducing their contractual obligation to the City would mesee we would have a choice of continuing the contract with those hours end the city money, or seeing thew go to another contract and reducing our own hours for Palo Alto residents. X35 8/25/75 Councilwoman Witherspoon commented that assuming that the program is full, and they get more donations than $55,000, and they decide whatever formula the staff arrives at for reducing the number of Palo Alto child hours, you could not throw a Palo Alto child out to make room for a Sunnyvale child. She could not see how that was going to work. Mrs. Bedwell responded that the point is that if they have funds. from someone else, then that someone else has the right to eligibility. Mrs. Bedwell did not feel that it would be likely that Palo Alto children would be thrown out, but as an example, if an industry wished to contract $100,000 worth, it would be expected that the industry would set its own eligibility requirement. Otherwise, thet:e would be no reason why they would consider contracting with the program. Councilwoman Witherspoon assumed that at that level, they would have to expand the program correspondingly rather than rearrange the child hours and where the children came from. Her second question was whether "in kind" services were being considered as "donations" in arriving at the $55,000 quota. It was her understanding that if a number of "in kind" donations were received, the city would have to declare some value for tax purposes. Mr. Cahill replied that he was not in the position to say that the "in kind" services would reduce the funds. Councilman Berwald said he could well put himself in the position of the Community Child Care people, such as Mr. Cahill and the others who - - would want an affirmative answer now. He was not suggesting that he was disapproving of the program; on the contrary, he felt that it was a very good program. But he said this is a program that contracts; and from what he had seen, it was a very complex one. He stated that in four years, approximately $1,000,000, will have been spent on a very important program. Time was needed to understand and digest -the contract to be sure it was a very good contract. Council needed to be mindful of the fact that it entered into two contracts recently in- ch* City with good intentions that did not turn out too well. Council- man Berwald referred back to the meeting of the Finance and Public Works. Committee of May 28. Some of the questions have to deal with the contract wording itself, and some have to do with the policy. One of the question has to do with the subsidy; others have to do with the amount of miney that the City is providing for various economic groups of people in the - City. The rationale of providing child care services to people of ratty high income needed to be understood and s decision made as to whether_ they should have any subsidy at all, particularly whom the rates that they are charged do not include overhead and supervision. The standards and eligibility for the striating schools with the possibility of the . voucher system where the children could be esnt to any facility in. the. city that ha. quality cars could be looked into. This way there would be n possibility of diverting children from other institutions or dim- criminating between various institution! in the city whether they were.. privately or publicly operated, and whether they were under or not .under tke jurisdiction of the child care group. Some of these are contract considaratio a. Councilmen Berwald pointed out that under Section 6, on page 3, for example, Section (c) said: "Corporation shall- coordinate the services of the program with the services of existing organiaiUona . providing 'similar services in order to foster community ceoperation.s el: - to avoid unnecessary duplication of services". It seemed to hiss that omit of the reesoe* for coordination is to maximise dsise the cost effectiveness and not rely cis public subsidies vb n private uoups can manage for themselves!. To rove the quality of ssrvieaa, perhaps, uniform standards could be decided upon. 156 8/23/73 On page 3, Section 7 .j, Councilman Berwald commented on the meaning of term "during the course of this agreement the parties at their option may renegotiate any or all of its terms". He assumed that may be inconsistent with a later sectio•a that says, in effect, that the budget could not be changed in the middle of the stream. He wondered if that would, undo the restriction against the city. He referred to the question of an audit. The audit should be conducted by a certified public accountant designated jointly by t'r,e city and the Corporation. Here is a case where the Corporation is accepting public funds in the amount of $240,000; plus CETA and other revenue sharing tunds up to $261,000. He questioned that figure also. He wanted to know if it was not $271,000 now. Mrs. Bedwellt explained that $10,000 is not included in the budget figure because the money does not flow into the Corporation. Councilman Berwald asked if that were another $10,000, and Mrs. Bedwell confirmed that it is indicated in the contract. Councilman Berwald c pressed the opinion that the audit should be can, ducted by a certified public accountant designated by the City and not by the City and Corporation. Councilman Berwald referred to the section on children's records, at the and of Section 11, on page 7, that states "accexs to any information or records concerning the patrons of the program should not be denied to the City and or its agents or auditor'. Access to any of the information and records that is pertinent to the city's evaluation of services when measured against public interest :hcvid not be denied. He thought the same of Section 13, that it could be added that no fewer than 10 members of the Board of Directors would be residents of the city. Lf one want on to the voting majority of 8 of the authorized members, you could in effect, have a majority of the people at the meeting voting that would not ba residents of the city. if they voted unanimously, of coutse, you will still have three votes; five votes outside the city, three within the city. Councilman Berwald commented that he could not discover how many meetings were to be held. He felt that there should be some kind of provision for a De ting schedule. There is no provision for aetio;aae of the Executive Committee being ratified by the membership. Actu.ally+, there la a provision; but there is no time limit. Actions should be ratified at the next epecial meeting. Councilman Berwald said he would be in favor of the contract only after his concerns were responded to satisfactorily. SUBSTITUTE MOTION: Councilman Berwald moved, seconded by Eyerly, that tha PACCC contract be referred to the Finance and Public Works Committee. Councilman Comstock asked Councilman Berwald when .he anticipated the Iisance ae►aed Public Works Committee would take up this matter. Councilmen Berwald replied that the Committee could take up the matter within the nest two weeks, depending upon his colleagues on the Committee. In the. meantime, he thought that Council should pass s motion, if it is regal, to do the same thing it did at the outset of the program. He said that if Council gave one -sixth of the budget now, it could release another one -twelfth on September 5, the date the funds are supposed to be released, so that would take care of the Corporation for another month. Councilman Comstock asked Mr. Booth what the current status of the contract is, what we are doing now and what would be the impact of referral that might add to the four weeks to the date the Council would be taking this up. Mr. Booth replied that the current contract expires August 31. It was his recommendation to extend that for one month with a payment of an additic, al one -twelfth of the compensation contemplated. 137 e/25/75 Councilman Comstock said there are two things about the contract: First, the attempt to reflect the financial side of the arrangement and that was explored almost exhaustively at the Finance and Public Works Committee when it dealt with the budget. He thought the contract fairly safely refelects the financing as it was laid out in the budget and all of the discussions that took place there, how the money was to be advanced to the Corporation and what financing arrangement they were to be contructed. He said that Council had the benefit of a level of services that they were. going to contract for financially. That was even discussed subsequently when the budget was before Council. Secondly, the document is comprehen- give; and by that very nature, Council was bound to be impressed -by it and would want to be sure of what it was voting for. Beyond that, Councilman Comstock thought staff and the Corporation should be commended for the contract. Clearly, the staff could not unilaterally construct. no thing like this if it did not have a high degree of cooperation from the Corporation. It seemed to Councilman Comstock that the direct thrust of the contract was to not only define the money and the level of eervice, but to define with a fair degree of precision the objectives of the program to be carried out in specific child care centers and what have you. He. wondered about an alternative approach. He suggested that the Council vote for the contract and ask for Committee referral to pursue some of the issues which are not uniquely related to the Child Care Corporation. It seemed to hire if the Committee disccvered something :.hat was a gross over- sight and a misinterpretation of Council policies or what have you, that Council and the Cnrporatior.would make revisions to reflect those concerns. We do have in the contract provisions for re -negotiating individual. portions of the contract and we also have, if the Council so desires¢ direct cancellation provisions, I; the services were considered to be unsatisfactory, Council has the right to initiate action to cancel the contract if the deficiencies were not remedied. Councilman Comstock felt that the City was protected there. If there are questions of the finer po5nts in the contract, the Committee could deal with those. The Council and the Corporaton could be depended on to receive the Ccom ittee's thoughts and make adjustments to the contract, if necessary. In the meantime, the City would have the benefit of what van a much more comprehensive and de- sirable contract being in operation as opposad to an extension of a contract which all Courcilmembets probably conaidered less satisfactory, provided more questions, more openings, and more rziole for misinterpretations and misunderstandings than the proposal before Council. Council»; Comstock said he would, probn.y vote against the motion that would simply refer this contract to the Committee without the Council having teken any action. Be addend that he would be happy to vote for the contract and for a referral motion that would deal with the issues that had been raised, and he would commit himself to take anything the Committee came back with and consider it very seriously and expect tha Corporation to do that also. Councilmen Eyerly felt that any contract as long as this one should be referred to the Menem and Public Werrke Committee before Council considered it. One of Councilman Eysrly's major sources of concern had to do with the substantiation of family income and whore the child comes from. He knew that the Housing Authority demanded a substantiated income report from the emiplcysr as a way of determining qualifications of an individual or a family. A number of things needed to be gone over in the Finance acrd Public Works Committee and then brought beck to Council for approval, seam if all esmbers of Council were in favor of the general ids*. Councilmen 8aeabrs stated that he opposed the motion. He bad listened closely to Councilmen Beerwa1d'aa statements, and he tit they were more questions of form rather than of aubatanee. The contract could 15$ 1/x5(75. 4,0 be terminated in thirty days, and it would be thirty days before the Finance and Public Works Committee agendizes it. Meanwhile, the situation becomes confused because the insurance contract has expired. In Councilman Beahrs' opinion, the staff had done an excellent job. Having worked with this group, he had great respect for their sense of respon- sibility and general excellence in perforce. It would be a mistake to do any further nit-picking. Vice Mayor Clay commented that he had a different interpretation of the scope of services which the city was buying. His ispreseion was that there was a $295,000 budget for a child care program, and that that figure represented capacity; therefore, the program is really Palo Alto's program. There was $240,000 in csah, and the hope was that the reat would be coming in from other sources. At this point, the City of Palo Alto was the reason that there was a fund; and the program is, in its entirety Palo Alto's. Vice Mayor Clay added that as part of the program, Palo Alto wanted to accommodate parents who lived and/or worked is Palo Alto; and he had envisioned this program as one where a fringe benefit would be provided to a working parent. If some Corporation gave the program $100,000, that company would be sharing part of the city's burden but not reducing Palo Alto's share on a prorate basis. In the absence of any corporate participation, the city was carrying part of the responsibility that it would expect companies to do for their own employees. if the city were to get a contribution from some Corporation, then probably some renegotiating would have to be done in terms of what that meant with prorate sharing. Vice Mayor Clay said that in that case, he would be satisfied with simply modifying that section of the contract. He stated that at this time, he was not inclined to have the contract referred to Committee; also, there was some doubt in his mind as to which Committee the matter should be referred to since there are some matters which might best be discussed in the Policy and Procedures Committee. If the motion is defeated, Council could go back and make modifications in the contract. Councilwoman Witherspoon had been trying to correlate Section 8-B with the staff report, and her initial confusion was due to the fact that there was xao mention of $35,000. She asked for some reassurance from the City Attorney that the legal language restated would be the formula that Mr. Booth worked up with the Corporation on the county funding, etc., total- ing $55,000. lir. Booth said that section dealt with the situation she was concerned about. Councilwoman Witherspoon explained that her problem was that the contract did not say it the way the staff report said it. Mr. Booth agreed it was stated a little. differently. Councils Witherspoon said she did not care which one vas stating the situation bsttsx, but she wanted to know which one wee binding; and she wanted the contract to agree with the staff report. Mr. Boots responded chat the matter worked the same way no natter bow it was read. Councilwoman Witherspoon did not feel it vas necessary to have the whole contract reviewed in one of the committees. She suggested that it might be sufficient to aey that in the event that the levrl of service had to be renegotiated because of contributions, it would be underastood that the Corporation and staff would coaxes back to either the Finance and Public Works Committee or the Policy and Procedures Committee for that negotistion. The mattev would not than be left to staff to negotiate alone with the Corporation. 159 e/25/75 The substitute motion to refer this matter to the Finance and Public Works Committee and extend the old contract for a month failed on the following vote: Councilman Berwald said he would not be amenable to having the contract signed and then referred to Committee. He added that if all the "wits" were picked off the contract, then the city would end up with a healthy contract. 1 AYES: Berwald, Eyerly NOES: Beehrs, Clay, Cometock, Norton, Sher, Witherspoon ABSENT: Carey AMENDMENT: Vice Mayor Clay moved, seconded by Norton, that 8 (b) read as follows: 81....to sources other than City, 'hall reduce on a prorate basis the City's direct compensation to the program", with the rest of the paragraph remaining as stated Councilman Ccrostock remarked this amendment is stating that the city can have its cake and eat it too. Ono of the points in dealing with tradeoffs in money and services was that the total suit of money being spent on this program had increased rather sherply over the preceding year, and the county revenue sharing funds wsre reduced appreciably from the previous year. The agreement was to put up the money, but with the hope that people on the outside would contribute some ales). This would enable the city to reduce its financial commitment to the program. But while the city .wan supporting the program at the present level.o, it would define what the services were for which Palo Alto wee contracting, The idea, though, is that if someone else contributes money, he should - have some say as to the services gotten for thet coney. The Board could expend the program to meet that demand for service, but that would not reduce the city's financial invo lvee t . The philosophy that was Adopted was that if that occurred, there would be an exchange of money. The city's contributions would decrease, and the outside contributions would inucreese. What the city was contracting for would decrease, and what those on the outside were contracting for would increase. If you carried this to its logical extension and you were able to raise $240,000 independently of. tie city, the people PACCC raised it from would be the people they weed. be doing business with. If the city at that juncture wanted to contract - for fifty or one hundred thousand dollars worth of services, it could do it and say that for so much money it vented certain services. The ems d- : sane saying that it was all right for PACCC to collect money outside, but it would be necessary to tell the contributors that the city will determine hoer the money would be epent . There will be problems trying to raise money that way. Councilman Comstock thought that if the city:. were being asked to participate in a *sailer kind of arrangement, Council would take exception to it. Vice Mayor Clay thought that Councilman Comstock understood the amendment, but he felt that there was a difference of opinioe es to the basic object- ive of the program. Me did not ass this program as bemp Any more - the city's responsibility the it was of some company's. Councilmen Sher commected that !hen this subject see discussed,. he voted . for the $240,000 elthough he thought that wea soffit an tbs high side. it moos understood that if that Cotporstlon could raise $33,000, then the city would not cut back on its contribution; and hopefully, they would. get more than $35,000 so the city could cut down on its amount. It mss 150 8/25/75 not Councilmmar. Sher's understanding, however, that there would be any cut in the scope of services provided. He said that Vice Mayor Clay's pro- posed amendment reflected his own understanding of what had been agreed_ to at budget time. Councilman_ Sher said he would be interested sometime in finding out if there had been any positive results with regard to the. Corporation's efforts to recruit funds from outside sources. Mr. Cahill stated that if the amendment were passed, the chances of reaching a level where there would be a discussion regarding a reduction of funds from the city became totally removed. One focus that needed to be aeen was that the program as presently deigned is not intended totally for a working person who happens to be in Palo Alto, It is intended for the residents of Palo Alto who happen to be working,. so there is little different approach with regard to industries. Industries' non- residential employees ere not currently eligible for the program. Last year the primary source of eligibility was for an employee to be a resident of Palo Alto; and then if the Corporation got an industriel. contributions, a modification could be made if the contribution reached a substantial level so that possibly nonresident workers could be accom- modated. When the Corporation went to industry with that approach, they could not understand why they had to pay a premium to get into the program. They already were supporting the City of Palo Alto with their tax dollars, and they did not think a premium should be put on them in. order for their employees to receive the benefits fo the program. T e Corporation got the impression from the industries that if it could get away from that initial requirement that they contribute without why guarantee of getting into the program that there might be a chan:e getting f;rrds. The amendment is saying that the Corporation would accept any amount of money from an industry, but it would have to tell that industry that the program was limited to Palo Alto residents. Mr. Cahill felt that industry's reaction would be that if they were going to give $100,000 fox a program, it wanted some say over who would be eligible. The only way money would be gotten under these circumstances would be if someone simply chooses to make a gift of potty to the City of Palo Alto. It sew unrealistic to Hr. Cahill to expect the compen- sation from the city to the Corporation to go down and yet maintain the ease level of services. Mayor Morton thought the program was more likely to expand than to shrink if it got more money. Mt. Cahill thought if the gaunt of money from the city wee reduced, the services would be also reduced prc-portionatley. Mayor Morton did not think it wee realistic to believe the Corporation would be raisin a great deal of money, when after a certain amount it would be turning that money over to tha city. Mr. Cahill said the primary purpose of the program was to provide child care. Obviously, the broaden the economic bee., the more secure the Corporation; end PACCC wee committed to finding money from any. sources that were aevailetla. At the =moat theta was e tight market, but PACCC wed be looking for flay, If it were possible to fiud $30,000, for instance, PACE wild be happy to come to Council and say that it was is a poei.tion to reduce the city's level of financial support to the Corrperat ion . Councilman Sher riles if 3 (b) in the contract did not say that chiiidrre e of peroote other then resident* of Palo Alto would be eligible for program services if the abets of sub program service is paid in whole from some source other thee the city, Assuming the Corporation would get some sum of vow tree industry eventually, Ceuecilmen Sher asked if the employees eke did net live tire Pelt Alta moult rapt be eligible anyway because of 5 ib) . 1 6 1 di35s#ib Mr. Cahill said they would be eligible, of services as provided in the contract would still be attributable to the City be no room for changing the eligibility Councilman Sher asked if the hours were Mr. Cahill responded affirmatively. but technically the amount 180,000 hours for the $260,000 - of Palo Alto; no there would within that section. not required for eligible children. Councilman Sher said then, by definition, if the contribution were made, children of parents who did not live in Palo Alto world be eligible for the services because of clause 5 (b). Mr. Cahill understood the 180,000 hours to be for residents of the city. Mayor Norton said there were 21,000 from the county already attributable, or set aside for non-residents. Mr. Cahill explained that was provided for in the 180,000 hours which takes care of the present city and county contributions. Meyer Norton commented that, in theory, there were already non-residents involved. Mr. Cahill agreed. He added taht 5 {b) took care of county residents presently in the program and would also take care of any other eligible people if the Corporation wen . over the $295,000 level. Councilman Ber-wald was somewhat annoyed that good questions were cot^;:. up, and that was why he wanted the matter referred to the Finance and Public Works Committee. He wondered if Councilman Comato:k'a idea of referring an Approved contract to Committee 'could not be a worth -- while idea. Vice Mayor Clay said he had been inclined before the last few marks to accepc the contract fairly much as it stood with some modifications; but from comments made, it appeared there was a major difference in the sleeting of minds. When he voted to approve the $295,000 budget, it was with the thought that the city's minus exposure was $240,000; and there was a chance of reducing that. Vice Mayor Clay said he did not hear anyone at that ■esting say anything to the contrary. Last year the budget was roughly $140,000, and it was lest year that the dis- cussions were held with regard to getting corporate participation. For this period of time, no outside money has been gotten; and there still was enough faith in corporate entities to sake these park of the program to the extent that Palo Alto most give up part of its share. Yet, Palo Alto is the only entity supporting the programs. Vice Mayor Clay was certain that what was approved was a $295,000 budget with the possibility that some of that $240,000 sight be reduced. Councilman beahrs did not think Coun it was being realistic it expect- ing the corporations to pick up the tab on thia program. His ovn opinion was that the chief efforts should be sedge at the state legis- lative level. Time corporetione are well aware of the fact that shay contribute about 652 of the income to Palo Alto, and they get very little service in return compared to their employees living in this town - which totals probsbly less than -252. 1 6 2 6/2505 The amendment passed on the following vote: AYES: Sher, Clay, Norton, Witherspoon, Eyerly NOES: Beahrs, Comstock ABSTAIN: Berwald ABSENT: Carey The contract, as amended, vas approved and the Ordinance adopted on a unanimous vote. NOTION: Councilman Serwald moved, seconded by Eyeriy, that the approved contract be referred to the Finance and Public Works Committee for re- viev,and recommendation to Council any amendments that body deems to be desirably. Mr. Booth pointed out that the Child Care Corporation would have to approve any amendments which Council proposed. The referral motioa passed on the following vote: A/ES: Berwald, Clay, Comstock, Eyerly, Sher, Witherspoon NOES: Beahrs, Norton ABSENT: Carey The Council recessed to Faecutive Session at 10:25 p.m. The meeting rested at 10:50 p.m. MOTION: Council Sasbrs moved, seconded by Bervald that Item 8 on the agenda regarding Councilman Sher's request for support of County Ord of Supervisors' action re equalising assessments be saved forward for conetideratiosn at this tines. The action passed on a unanimous vote (Carey abeeut) . .1110. CAI Councilmen Sher referred to the previous week's discussion *bout the tax rote. One suggestion from the audience at that time was that Palo Alto take a position in auppoTt of the Board of Supervisors' request that the County Tax Assessor reviser the method of assessment between industrial and commercial property on the one band and residential property on :he other hand. It is an effort to equalise the treatment. At one time, Palo Alto had ite own tax assessor, who vas a council - appointed officer, bitt when it chose, for purpose of economy, to hens assessments handled by the county, Palo Alto had to go along with the County Tem Ane4seorle uniform eseeeement of property end lost that control. 1 6 3 8/23/73 Therefore, it is most appropriate that Council direct such a communication to the assessor in support of the Board of Supervisoro' request. He felt that the request was prompted by the fact that the assessor admitted that the re -assessment of commercial and industrial property had not kept pees with the re--assesament of residential property in the upward direction. The assessor relied on sales of property in a block of the city and an area as an indication of vnat the general property on that block or in the arse- was worth; he would automatically be required by State law to re -assess upward ae a fair market value. But without the same kind of turnover in commercial and industrial property, and being understaffed, the assessor was not making the same kind of upward assessment with respect to commercial and industrial property. As a result, the resi- dential taxpayer is bearing a greater and greater percentage of the load because these assessments have dramatically increased,par5•ularly North County. The Board of Supervisors have asked theta:AJ.o tkt�Ct•'1#�/ look at this situation and try to produce a better equality 7 / ? or between the two kinds of taxpayers. He agreed that Palo Alto ehoui4 join with the Supervisors in requesting re -assessment of commercial and industrial to provide equal treatment for all properties. MOTION: Councilman. :her moved, eeeonded by Beabxe, that st tf be authorized to prepare a resolution of support, ssse ,scent commercial and industrial property, Councilman Berwald asked what the state law is to residential and non-residential property. H . Booth answered that all property is supposed to be assessed at 25Z of the fair market value. however, it, is determined in different ways with different kinds of property. The motion passed on a unanimous vote. (Corey absent) of Y` 1, T- on assessment with respect 1,14;,./..sier-Lor f t-4 me /iced Councilman Sher referred to an advertisement teat appeared is that evening `s newspaper. Apparently the postal service had seriously � e ce s. eil- cousidered an alternative site to the one on West &eyebor looking at a site at Stanford Industrial Center and now t advertised for six OT seven and one-half acre parcels ccursa, this is a question of alternatives, which has been discussed with the postal officials at some length within the past several. menthe. He believed that they were working towards sn alternative site, either bast of Bayshore, or an sepmnied site where the present postal facility is. MOTI gi: Councilman Sher moved, ascended by Berweld, that the staff prepare a report for the neat Cecil meeting on the status of the location of that postal faculty, The motion carried unanimously. (Caney abut) Mayor Norton asked if included in that motion was that if the City aver obtained en sptioe on either of the post office sites, it will be weerciasble by the postal " service or the City. 164 3/25/73 / 6 Councilman Sher agreed that he would like a report on the steps the City staff has taken in regards to this alternative site particularly what is happening in regard to the east of Bayshore site that has been talked about as being the most logical, viable site as compared to the West Bayshore site that the Post Office originally selected. Mayor Norton addressed Mr. Crown stating .it has hle understanding, based on conversations with certain persons in the City Manager's office to- gether with reading the newspaper, that the City was negotiating options on property adjoining the prevent site on the east side of Bayshore with the view of putting together approximately four acres, and that the Poet Office Department thought it would be an adequate sized site. W. Clay Brown, Director of Budget and Staff Services, stated that the information in the Post Office press release abandoned their intent to use the property on Lorna Verde for a postal facility. They are interested in looking at additional property, either at Stanford Industrial Park or south of Elwell. Court. Staff has had discussions with the post office people with regard to some property neer the nursery, fairly close to the current postal site and they pursued getting options on approximately ten acres of property. Staff recently got those optima and will be trans- mitting then to the post office officials. Councflman Sher said he found it difficult to understand why the Post Office is advertising for a six end one-half acre site near the Bayshore Freeway within the teepee -Ate -limits of Palo Alto. It would seem to include the saner two sites that Mr. ii;Itertrimentioned. Councilman Sher said that it would still be appropriate to get a report at the next meeting. Councilman Berwald wanted to know the reasons, if any, the Post Office -Department-would give for not taking up the option that Palo Alto made available. Mr.-leepo.te replied that the Post Office Department had not indicated one way or another on that piece of property and frankly, he was surprised at their interest in Stanford Industrial Park. He thought they were interested in staying clone to Bayshore and on the east side. It was agreed that staff will haves a report ready before the'next Council seeeting MOTION: Mayor Norton introduced the following resolution and moved, seconded by Comstock its adoption: RESOLUT ON NO, 5134 entitled `7.2.50i.UTION OF THE COUNCIL -OF THE CITY OF PAL ALTO AMENDING SECTION 1401 OF THE MERIT SYSTEM RULES AND REGULATIONS" Councilman Berwald felt that it was a little bit after the fact to discuss what has been negotiated by staff. He wanted to be careful that the cow - meats he bad to make were not related to this year's negotiations but were general comments to indicate some fairly strong questions. 134 did not ex- pect discussion at that time, but in the near future hoped that management would review with Council *owe of the following items: 1) Section 2, page 2,attached to the resolution -- Doss the management also advise the employee that it is his option to elect to join the union or not: 2) Doss management notify the employee at an appropriate time during the period be- tween sixty to ninety days prior to the expiration of the memorandum of the agreement; 3) with regard to payroll deductions, he understood that his- torically payroll deductions were used when the organisation and management had very pliable moons +end unions that were more or less friendly to manage- ment. Whoa the union movement matured, the pa)roll deduction had become 165 8/2S/75 a tradition, and this method was continued on the basis that management, or the municipal corpoartion or whatever the case may be, would be dis- criminating if the unions could not have deducted membership dues under payroll deductions. Does management have any obligations to deduct dues for any other organization? 4) In Section 5, Bulletin Boards and Depart- mental Mail, it was his understanding, that it would technically be a violation of the NRA if it were inapplicable. His understanding was that may be imperfect to prevent corporations in aiding the union with any special treatment in that regard. Re felt that the same thing would he true in using the corporate meeting places, etc.; 5) In Section 3, Article 4, there is no provision there that sass in operating conditions, permits are required as determined by management; 6) In Section 4, it states the union agrees thet an employee will receive advance notice except in those cases involving emergencies, where advance notice cannot be given. It is difficult to understand what constitutes an emergency. 7) In Section 6, Using space and desk for storage of unionmaterials; Councilman Berwald stated that he did not have any particular problem with the agreement conditions except in ar e cases. 8) On page 13, Article 10, Holidays, he did not know whether it was eleven and one-half days holidays or sixteen and one-half days holidays. He would like that explained at some point. Added to that explanation, he would like to know why a person can accrue vacations up to three years. It seemed to him that it would be important that employees get a vacation annually, for the rest and relaxation that - Comes by having a regular vacation. 9) Regarding the matter of the "one percent of salary or the so-called annual adjustment, Councilman Berwald would like to see it phased out and incorporated with the system so that it is not a separate item. The resolution was adopted on a unanimous vote. (Carey absent) MOTION: Mayor Norton introduced the following resolution and moved, seconded by Comstock, its adoption: RESOLUTION NO. 5135 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF P110 ALTO ADDING CHAPTER 15 TO TOE MERIT SYSTEM RULES AND REGULATIONS RE MEMORANDUM OF UNDERSTANDING DDING BETWEEN THE CITY OF PALO ALTO AND LOCAL 1319, INTERNATI0$AL ASSOCIATION OF FIRE FIGHTERS" The resolution vas adopted on a unanimous vote. (Carey *besot) Mr. ,Tay Rounds, Director of Peraonnsi, stated that the aetfone proposed are with regard to the City' a self-iaeured health tad dental benefit per. MOTION: C*MACi1*in Beehrs moved, seconded by Comstock, authorisation of the ameadmente to the *elf- insured health plea zd the implmmestation of a self insured dental pib es described in CHW04 ' g5.by taking the following actions 1. Authorise adoption of the attached Covens. Provision Document of the City of Palo Alto Employees' Health Plea. 146 •/5/75" 2. Authorize the attached amendment to the Agreement for Professional Services -- Management and Administration of City of Falo Alto's Employees' Health Plan with R. L. Kautz and Company. 3. Authorize the attached California Dental Service Agreement to Provide Dental Care Services. 4. Authorize the attached Amendment No. 2 to Contract For Procurement of Insurance Coverage and Related Services for Employee Group Insurace Rates with Marsh and McLennan, Incorporated. The motion carried unanimously. (Carey absent) QINT PAS �.&R 1NT FOR_ ,? #.e.r_cereeellre;+:111.4 4:441 Mayer Merton had one question es to whether the proposed representative to this new County committee, paragraph 14, of the agreement, contemplates there will be a new county agent; he thought that there were enough already, but there will be an executive board consisting of a member of each original ratty re the agreement. He asked if that contemplated another Councilmen's night out or ;could it be for a member of the staff: Hr. Rounds replied that this would be attended by staff. The executive board consists of staff representatives from each of the contracting agencies. Mayor Norton said it was not deer that it was staff and that some covnci1s would probably choose to send a councilmember. Mr. Rounds agreed. Mayor Norton asked Mr. Rounds if he ear any possible conflicts in having the staff participate in this sort of fact-finding function which may potentially affect the staff. Mr. Rounds replied that the staff group gives overall policy direction to the administrator of this program. However, this dill not preclude any spscif;e roco meendatione or any specific data being offered by someone else, for example, a aver of the council, or the Mayor, as long as this rawest is made through the staff. This is a data bank; all the executive board will be doing is to deter ins what goes into the data bank and each member or agency can draw out from the data bank whatever they wish. Mr. Rounds said bo did not bee a possibility of any conflict of interest. Mayor Norton wanted to know for how long this executive board wonad exist. Mr. Rounds responded that this contract is renewed eery vier, This was the second full year. The action presented is to renew the contract for another year; tbba executive board is to be constituted for that time, The represent- ative to the executive board is designated by the agency. In this case, the City Manager has the authority to designate that representative. The group meets only on an on -call basis during the term of the agreement. This execu- tive board cannot possibly last, insofar as Palo Alto's participation is concerned, beyond the fiscal year. All of the preparations for negotiation: the past year and all of the surveys that were called upon were done through this service. It had sieved the staff considerable number of hours plus duplication of effort. Staff receives requests for twenty to thirty surveys to be completed from other jurisdictions during the:.tourse of the year which staff _ casn now refer to this agency. But by the same toiler,, if Palo Alto meted some survey data, for instance, in conjunction with the upcoming fire negotiations, it can make a request and the data is provided hoc the data beak. 167 $/25/75 /6-j MOTION: Councilman Beshrs moved, duly seconded, that the Mayor be authorized to execute the Joint Powers Agreement. The motion carried unanimously. (Carey Absent) MAYO MRTON RF,�_ITEST RE SALINITY OF DRIVE FILL (YACHT HARBOR) Mayor Norton stated that he had one item in conjunction with the Yacht Harbor second reading of the ordinance approving the plan, which had been adopted +oiler in the evening. Information that was passed on to Mayor Norton indicated that there have been acme preliminary tests of the salinity of the drive fill.at the Yacht Harbor. The preliminary results indicated that the level of salinity was twice that which would sustain any type of plant life, including any landscaping plans. Mayor Norton requested that Staff check it out and report back to Council on it. He suggested that Staff talk to Mrs, Helen Proctor, among others, about the situation. MOTION: Mayor Norton moved, seconded by Comstock, to direct staff to prepare a report for the next Council meeting on the salinity of the drive fill at the Yacht Harbor. The motion carried unanimously. (Carey absent) ORAL COMMUNICATIONS 1. Carl Daises, 510 Jefferson Drive, commented about the isseue of the Dumbarton 3ridge. He wondered if it were going to be a common procedure to bring up thaw issues without having genera: public notifi- cation prior to the diacuseion as far as the Council vas concerned. The other request was he would like to have a copy of the letter sent to the Governor regarding Dumbarton Bridge: Mayor Norton sai4 that Mr. Rcunds would see to it that he received a 'copy of the letter. With respect to the matter where the Dumbarton Bridge van discussed, Councilmen Sher stated that he was the ono who brought up the issues at the eleventh hour. In response to Mr, Delta` question- if this were going to be a common procedure, Councilman Sher stated this sight happen when the Governor has acted and it is too late to agendise the item and a Councilwoman feels it is important it be discwised by the Council. 2. Councilman Comstock expressed pleseure, as a co cci bar an4 also as a citisen, that to and his family bad been able this peat sumsmr to at tsad the summer seasonal workshop production. He said be wonted personally to commend the staff and the people with whom they worked for adding a grant deal of richrass to this summer lids of Palo Alto. 1.1 $/x5/75 /6, CANCELLATION OF MEETING SEPTEMBER 1, 1975 MOTION: Councilman Comstock moved, seconded by Sher, to cancel the meeting of September 1, 1975. The motion carried unanimously. (Carey absent) CANCELLATION OF MEETING SEPTEMBER 8z 1975 Mayor Norton consulted Mr. Rounds re the pros and cons of cancelling the meeting of September 8. Mr. Rounds responded Chart while he did not have all the information available, it appeared after checking with the City Attorney and Controller, that it would be possible to cancel the meeting of the 8th. In the event. that id is found necessary to hold that meeting, it could be called by the Mayor at a later dete. MOTION: Mayor Norton moved, seconded by Comstock, that the meeting of September 8, be cancelled with the understanding that if Mayor Norton found valid reason to rcechedule it, the meeting vi11 be recalled. The motion carried unanimously. (Carey ebe nt) The meatieg adjourned at 11:30 p.m, ATTEST: Cft Clark 1.6 9 •/25/75 t APFROVE: 1