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HomeMy WebLinkAboutcc min 1971/03/08 MINUTES OF A REGULAR ADJOURNED MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA Held Monday March 8, 1971 A regular adjourned meeting of the City Council was held on the above date begin- ning at 3 P.M., in the Council Chamber, Civic Center, 276 Fourth Avenue, with the following Councilmen present: Scott, Hobel, Hamilton, Hyde, Egdahl Absent: None Also present: Assistant City Manager Bourcier, City Attorney Lindberg, Director of Finance Grant REVIEW OF LEASE PROPOSAL FOR Councilman Scott stated he is abstaining RESTAURANT/BAR FACILITY AT CHULA from this matter because of a possible con- VISTA MUNICIPAL GOLF COURSE, AND flier of interest. REPORT FROM CITYMANAGER City Attorney Lindberg explained that certain definitive terms will be placed into the con- City Attorney explains tract, such as the floor area proposed to be modification of contract constructed, the full amount that would be invested by the prospective lessee, seating capacity, etc., if the Council approves the lessee as selected by the Committee. The Attorney for the lessee is requesting that the terms of the lease be for a period of 15 years rather than 20 years because of the amortization factor. The lending insti- tutions have indicated that the 15 years is more acceptable to them for purposes of ad- vancing the money for the construction of the improvements. Secondly, the Attorney for the lessee has asked that the construction be phased over a 12-month period rather than be completed by 3anuary 1~ 1972, as indicated in the original lease. Mr. Lindberg stated that both of these pro- posals are mutually advantageous. Motion to continue discussion Councilman Hyde moved, seconded by Council- man Hobel and unanimously carried that fur- ther discussion on this matter be continued until Councilman Esdahl arrives. The motion passed by the following vote, to-wit: AYe8: Councilmen Hyde, Hobel, Hamilton Noes: None Absent: Couneilman Egdahl Abstain: Councilman Scott PENDING PROPOSAL AND APPLICATION City Attorney Lindberg explained that the OF THE SAN DIEGO GAS AND ELECTRIC present franchise expires on May 3, 1971. A COMPANY FOR REN~4AL OF FRANCHISE resolution of intention to call a public hearing for March 30, 1971, will be before the Council tomorrow night (March 9). Proposed application explained Mr. Lindberg explained that the proposal is that San Diego Gas and Electric will pay 2% of gros~ annual reeeipts with pa~nnents to be not less than 1% of the gross receipts. This is specified because of the Denuba formula application where the gross receipts are limited to revenues obtained from the City street usage and excluding the private street usage by the Company. Indeterminate franchise The Company desires an indeterminate fran- chise from this City. The request for an indeterminate franchise is consistent with the City's ordinance provisions which pro- vide for either an indeterminate franchise or a franchise limited to 25 years° The last franchise was for a period of 50 years and was amended in 1934. An indeterminate franchise is one which will continue until such time as the grantee were allowed to abandon the services by the Public Utilities Commission, or until such time as the City of Chula Vista either (1) for cause for a failure on the part of the company to properly perform their services would move to terminate it; or (2) the City would exer- cise its powers of eminent domain and acquire the property of the San Diego Gas and Elec- tric Company and chose to operate it itself. (Councilman Egdahl arrived at the meeting at this time). Otis Pemberton, San Diego Gas Mr. Otis Pemberton, representing SDG&E, and Electric Company introduced Mr. Thomas Sager, Staff Attorney, and Mr. Otto Hirr, Assistant to the President. Otto Hirr, 3527 Elliott Street, Mr. Hirr explained that the present franchise San Diego was adopted by the City Council in 1921 and expires May 3, 1971. The terms for the pay- ment are identical as the 1921 franchise. The Company will pay the City 2% but not less than 1% of the gross receipts. Terms of contract In answer to Council's inquiries, Mr. Hirr read the terms of the original franchise granted in 1921: 2% payment for the use of those lines over public rights-of-way, but not of the services over the entire City° Percentage of lines over public Councilman Scott asked what percentage of and private rights-of-way the lines in the City were over the public rights-of-way. Mr. Hirr read from a report submitted by Mr. Klauber~ Vice-President of Customer Services, to Mr. Howard Gesley, City Engineer. The distribution in pole line miles as of August 31~ 1970 was 112.98 for public street~ and 41.07 for private rights-of-way, Council diseussion The Council questioned the payment proposed indicating the City would be getting lems under the new contract than that adopted in 1921. Mr, Hirr explains Mr. Hirr explained that the Company is try- ing to be uniform in these payments - that this is the same franchise as that adopted by E1 Cajon and La Mesa. On October 10, 1911, those eities being served with elee- tricity prior to that date, according to the State Constitution, have a "Constitu- tional'' franchise. This option was exer- cised with the City of San Diego, Mr. Hirr then explained the payments made to San Diego. -2- Thomas Sager, 101 Ash Street, Mr. Sagar, in answer to Councilman Hyde's San Diego inquiry as to the City receiving lesser pay- ments with the new contract~ stated that terms for the payments are exactly the same under the new and old contracts. However, it has not been applied that way in the past; the present contract calls for 2% of the use of the public rights-of-way, but the Company has actually been paying the City 2% of the gross receipts. It's a matter of application. Councilman Scott questioned why the Company would do this. Mr. Sager indicated the only answer is that it was inadvertent--it was not intended. He did not kn~w how long this has been going on. Councilman Scott con~nented that the law was passed in 1937, and if they have been paying this amount, the City has been getting too much money all these years. Mayor questions percentage Mayor Hamilton remarked that since Mr. Sagar admitted that his Company has been paying 2% of the gross to Chula Vista--if the Council requested to have it written up in the new contract that they wanted the same percentage of the gross~ would SDG&E charge 1% of that as a surcharge on the bill of the people of Chula Vista, or for the difference of the formula of the old contract vs. the new. Mr. Sager declared that his Company would seriously consider this, adding that what they have done inadvertently in the past is not necessarily going to carry forward under the new contract. Council holds discussion A lengthy discussion followed regarding the terms of the new contract relative to pay- ments to the City. Indeterminate contract discussed Councilman Scott stated he would not go for thc indeterminate contract. He would be in favor of a 25-year contract. City Attorney discusses tel'm City Attorney Lindberg explained Section of contract 14.02 of the City Charter stating a review could be written into the agreement. The Gompany is dealing with 21 different entities; however~ only San Diego and Chula Vista are empowered to adjust the rate since they are the only Charter Cities; the others are all general Law Cities. Mr. Lindberg stated that a hearing will be scheduled for March 30~ 1971, on this matter. GOLF COURSE RESTAURANT/BAR LEASE Councilman Scott stated he is abstaining from this discussion, and left the Chamber at this time. City Attorney explains contract Mr. Lindberg again explained the modifica- tions that will be made in the lease agree- ment if Mr. Agea is approved as lcseee. Assistant City Manager Mr. Bourcier stated that he has contacted 29 restaurant chains: 1t were not interested; 16 did not want to submit a proposal and 2 expressed no interest until such time as Interstate 805 is completed. -3- The Port District was also contacted and they set forth a minimum investment fee which is established by dividing the invest- ment of the lessee by the acreage to be leased. This figure is then divided by the number of years. William Bauer, Attorney for Mr. Bauer explained the requirement for the Dick Agee 20-year lease and the 15-year amortization period. City's financial liability Councilman Egdahl questioned the City's questioned financial responsibility if the selected lessee terminates his lease or cannot con- duct the business. City Attorney explains Mr. Lindberg explained that the City could then take over the loan, secure another lessee, or the existing lessee could assign his contract to another party. Dick Agee, prospective lessee Mr. Agee stated he paid $10,000 for a liquor license today. He explained the improve- ments he plans to make at the restaurant/ bar facility. In answer to Councilman Hobel's inquiry, Mr. Agee stated that the sign would be part of his equipment unless the City wanted to put the name of the Golf Course on it. In that respect, the City would be asked to pay for part of the cost. He added that he did not name this facility as yet, but would not carry his present trade name since it is associated with coffee shops. Director of Parks and Recreation Mr. Jasinek explained the payments currently discusses payments to City being paid to the City, and that which will be paid under the new contract. Director of Finance eormments Mr. Grant stated that under the existing contract, the City receives $6,000 a year or a minimum of $250 per month. Council discussion The Council then discussed the purpose of the meeting - whether or not they wished to reconsider their decision. Motion to approve It was moved by Councilman Hyde~ seconded by Mayor t~anilton, and unanimously carried that the previous action of the Council awarding the lease of the operation to Mr. Dick Agee be sustained. Mayor's comment Mayor Hamilton asked the staff, in thc future, not to predispose Council's action in coming back to Council with a contract having a person's name on ito The selections should come to Council and it should be a decision of the Council. TRANSPORTATION PROBLEM Mayor Hamilton commented that he met with the Mayors of the County. Mr. McKenna with San Diego Transit stated they are now will- ing to negotiate. The San Diego City Council declared that any city willing to negotiate prior to April 15, that their service would be continued until it could come to budget session, and this money could then be appro- priated. -4- Mayor Hamilton left the meeting at this time, and Vice-Mayor Scott presided over the rest of the meeting. REQUESTS OF CHAIRMAN OF SWEETWATER The Council discussed the three requests VALLEY ANNEXATION COF~4ITTEE made by Mr. Howell, Chairman of the Sweet- water Valley Annexation Cormnittee: 1. Reactivate the cormnittee of Valley residents appointed one year ago to study prezoning of the Valley; 2. Planning Department start to work actively with their Animal Regulations Committee Chairman; 3. Appoint a committee of City representa- tives to work with them on representation. Prezoning Committee Councilman Egdahl noted that the prezoning con,mitres has already been set up. Mr. William Magill Mr. William Magill explained how the com- mittee was selected. Mr. Warren indicated that it has reached a point now where this matter should be turned over to the Planning staff. As to the animal zoning, Mr. Warren stated that he presented Mr. Howell with a staff analysis of this, and they have indicated it was somewhat in- adequate. The Planning staff will be sub- mitting alternate methods. Subdivision improvements Councilman Hyde questioned improvements in subdivisions--cu~%, gutter and sidewalks. Mr. Warren cormnented that this phase has not been studied. The Council felt a good approach to this problem would be to have a new zone. Town-Council concept Discussing the Town-Council concept, Council- man Hyde noted the survey made by Adminis- trative Assistant Jack Ratelle some time ago. Mr. Warren remarked that his assistant, Norman Williams, has had considerable perience in this field. Set for conference It was moved by Councilman Hyde, seconded by Councilman Scott and unanimously carried that this matter be set for discussion for the next Council conference. TRANSPORTATION DECISION MAKING Mr. Boureisr, Assistant City Manager, stated he will have some back-up material on this problem from the San Diego Transit within a few days. The COuncil discussed the need for some type of regional entity to handle this matter-- whether it should be the County or creation of a new entity. Councilman Scott spoke against having the County handle transportation. He felt the only solution would be to have a third party --one that would take care only of regional problems. -5- Matter to be held over Mayor Pro Tem Scott stated that this matter will be held over until such time as the staff receives the information from the San Diego Transit Company. REPORTER LEAVING Mayor Pro Tem Scott noted that Mr. Jerry Reeves, Council reporter for the San Diego Union, was being transferred to the San Diego office. Resolution to be brought back It was moved by Councilman Hyde, seconded by Councilman Egdahl and unanimously carried that a resolution be brought back commending Mr. Reeves for his services rendered to the City. ADJOURNMENT Mayor Pro Tem Scott adjourned the meeting at 5:25 P.M., to the meeting scheduled for Tuesday, March 9, 1971. city Cle