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HomeMy WebLinkAboutcc min 1981/12/10 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA Held Thursday, December 10, 1981 - 4 P.M. Council Conference Room - City Hall ROLL CALL Councilmen present: Mayor Cox, Councilmen Campbell, Gillow, Scott, McCandliss Councilmen absent: None Staff present: City Manager Cole, City Attorney Lindberg, Assistant City Manager Asmus, Development Services Administrator Robens 1. REPORT ON PROPOSED CHANGES TO THE SDG&E UNDERGROUND UTILITIES ALLOCATION FORMULA Industrial Development Bonds (IDB) - City Engineer Lippitt noted the memo from Community Development Director Desrochers in which Mr. Desrochers stated he talked to the City's bond counsel, Jones Hall Hill & White, and was advised that the Security Exchange Commission regulations governing the issuance of industrial development bonds prohibit their use for undergrounding projects within or outside redevelopment districts. Indexing Program - Mr. Lippitt presented graphs noting the 4% formula and the 2% formula ~t§i!hg 19T2 alloc:ation ~ a'ba~e year '(Hand¥~W)iitm~n"Ih'dex),. This was compared to the C~onsumer Price Index (CPI) and found to be approximately equal. He added that for a growing city like Chula Vista it would be advantageous to use the 2% formula over the indexing because, as the city grows, the revenues will increase at a fairly good rate; however, most of the undergrounding that needs to be done is in the older part of the city. The 2% formula takes into account the population growth. Public Utilities Commission (PUC) Alternatives - City Engineer Lippitt discussed the following PUC alternatives: (1) They could approve the 4% formula. (2) They could approve the formula and put a surcharge on the Chula Vista rates since the cost would be higher. (3) They could approve the 2% formula. (4)Have no undergrounding program or the PUC could come up with their own formula. Staff Recommendation - The recommendation is to go ahead with the 2% formula -- this is close to what it would be in the index -- it is something that the whole region will be doing -- the PUC will look at this -- the City's program will be extended: there will still be as much undergrounding on an annual basis as was done in the last two years; however, not as much as with the 4% program. Mr. Lippitt further recommended that the franchise not be changed but that it be reviewed on an annual basis, at least for a five-year period. In response to Mr. Lippitt's statement that the City of San Diego has changed its allocation to the 2% formula, Councilman Scott questioned the rationale of Chula Vista following in this lead. Surcharge.- Mayor Cox said he asked the staff to look into the possibility of instead of going into a percentage formula, that there be a straight surcharge - a specific doll ar amount each year. Jerrs Carnahan, representing San Diego Gas & Electric, noted the City's utility users' tax which could be changed to incorporate the surcharge; to have SDG&E impose the surcharge would take an approval of the PUC. Mr. Carnahan submitted a graph showing the allocation costs; stating that the request · was before the Council todaY due to the high bills the rate payers are paying; that this area's utility bills are higher than that in Los Angeles and other counties; ~ the Council can ~low the rate of growth on the utility bills; the average bill ..~.~ for undergrounding is $10 to $11 per year; hoWev'er, if nothing is done and the City ~?~. continues on its present course, the bill would be $135 a year in about 17 years. Council Conference -2- December 10, 1981 In answer to the Mayor's query, City Engineer Lippitt remarked that the cost to the ratepayer on the 4% formula allocation would be $13.02. This year, using the 2%, it is from $10.77 to $12.19. Council discussion followed regarding the "magic of compounding" - the way the rates are figured by SDG&E; the amount of reduction in undergrounding projects if the 2% formula was approved; going for the surcharge and needing PUC approval; the utility company capitalizing the costs; specifics of the franchise requirements; support from SDG&E for PUC approval of the surcharge. MS (Cox/Campbell) to continue with the present formula - the 4% allocation formula - for this next year, and that it be considered (hopefully) a little bit earlier in the calendar year next year (November or whenever) whether the Council wants to adjust it; further, that the staff prepare a resolution to the PUC basically proposing a surchanqe approach for the purposes of undergrounding utilities for a period of one year. SUBSTITUTE MOTION MSUC (Scott/Cox) that there be a two-part approach: 1st part is to have a zero allo- cation with a surcharge; the second part, if that doesn't work, would be to state simply that the Council would accept the 2%. DISCUSSION OF MOTION Councilwoman McCandliss expressed her on-going concern about SDG&E, commenting that she hoped there was some way to get some organization moving to investigate this company along with the operations of the PUC and the methods by which the rates are set adding that it was beyond her comprehension why this area's rates are so high and continue to go up. Mr. Carnahan asked for a letter from the City Manager and a copy of the Council's resolution stating that they will support this surcharge. MSUC (McCandliss/Cox) that a letter be drafted (by the City Manager) and sent to SDG&E explaining the Council's motion and asking for support. 2. CONSIDERATION OF ORDINANCE RELATING TO COMMUNITY PLANNING COMMITTEES City Manager Cole briefly referred to the background of having this item on the agenda. Mayor Cox commented that this item could conceivably apply to only two areas: Bonita and Montgomery, and questioned the need for a petition of 25% of the registered voters that must be submitted before the Community Planning Committee could be created. Councilman Scott felt that the language of the ordinance should be changed to have another section in the ordinance indicating that any area annexing to the City of Chula Vista which is deemed to be appropriate as far as the scope and meets the criteria for a planning group, at the same time as the election to the City for annexa- tion, will vote on whether or not they want a planning group in that area plus at that same time, the seven members will be elected. Council discussion followed regarding the election process; the 20 signatures needed on a petition for the candidates to run for that office; the boundaries of the election area and the eligibility of the candidates to run for office. MSUC (Scott/Gillow) to amend the ordinance so that those areas that are up for annexation that make a logical planning group at the determination of the City Council, be put on the ballot and be made into a planning group and those people be elected to that body by said election. 3. CITY MANAGER'S REPORT a. Bids on The Glenn Restaurant Assistant City Manager Asmus submitted the following bids received on Pecember 8, 1981 for remodeling the restaurant: (1) Ray Martin Construction - $848,751 (2) Raymond D. Haas & Sons - $909,397 (3) Gentosi Brothers, Inc. - $1,070,499 Council Conference -3- December l0 1981 He stated that the bids came in $200,000 over what was estimated. However, three things were included in the bid specifications that were not included in the original estimate: (1) the outside rest rooms for the golfers; (2) the three-sided vending machine; (3) the outside changes in the parking arrangements. Mr. Asmus reported that the low bidder, Ray Martin Construction, has reduced their bid to $801,250 by going back to all the subs and explaining the problems confronting the City. As far as the funding is concerned, Director of Finance Grant explained that $325,000 will be taken back from the Redevelopment Agency loan from the City plus use of the monies remaining in the Special Capital Outlay - $190,000 along with $2~8,000 in the Residential Construction Tax. Mr. Asmus explained that the other alternative is to have the City front-end $500,000 to $600,000 of this and Jimmy's Restaurant owners would have to borrow the difference, whichamoun'twould have to be amortized over a number of years. Mr. Asmus stated that he recommends going ahead with the project. There is a commit- ment from Jimmy's to increase the monthly rent to $8,000 (from $4,000) plus the 5% from the gross amount. Jimmy's projection for sales within 12 months is that they will be getting $200,000 a month. In answer to Councilman Campbell's query, tlr. Asmus explained the reason for only three bids and Director of Building and Housing Grady noted the relationship of the Ray Martin firm with Jimmy's Restaurant. MSUC (Scott/Cox) to bring whatever documents are necessary to the City Council for final approval. Councilman Campbell stated that in the future where there is a public bidding on contracts and where there are estimates, even though changes are made, that the estimate procedures keep up with the changes and the Council be furnished with the estimates before or at least at the same time as the Council is called upon to take action. b. SAN DIEGO COUNTY CRIMINAL JUSTICE FACILITIES TEMPORARY CONSTRUCTION FUND - Assistant City Manager Asmus stated he met today with the Judges and representatives of the County. The Judges stated this was not their ~roblem - they cannot do anything about it - they are not a collection agency - whatever fines they levy, if it isn't enough to maintain status quo in terms of the money the County has been getting, with the sur- charge coming off the top, they can't help that. The Judges were critical of the State Legislature in allowing this procedure to finance the jails and courts. ~lr. Asmus added that the County staff is recommending to the Board at the December 15 meeting to apply the surcharge to the parking fines effective February 1; otherwise, if the ~Board acts, the surcharge could apply on January 1. (Mayor Cox left the meeting at this time - 6:15 P.M. Mayor pro Tempore McCandliss chaired the rest of the meeting.) It was moved by Councilman Scott that this Council still maintain its protest. The motion died for lack of a second. Council discussion followed regarding the "weak" protest issued by the City of Escondido and this City having a more solid base for protesting. It was moved by Mayor pro Tempore McC~ndliss that a letter be drafted to the Board of Supervisors notifying them that the Council has filed its protest. The motion died for lack of a second. Council discussion followed regarding alternatives to the motion and Councilman Campbell asked that the motion be restated. MS (McCandliss/Campbell) to direct a letter to the Board of Supervisors notifying them that this Council has withdrawn its protest. Council Conference -4- necember 10, 1981 The motion failed by the following vote, to wit: AYES: Mayor pro Tempore McCandliss, Councilman Campbell NOES: Councilmen Scott, Gillow ABSENT: Mayor Cox 4. MAYOR'S REPORT -- None 5. COUNCIL COMMENTS a. Councilman Scott stated he brought up the "L" Street petition at the SCOOT meeting the other day and the need for more transit service especially for Ratner's. ADJOURNMENT at 6:30 P.M. to the meeting sceduled for Tuesday, December 15, 1981, at 7 P.M. Fula~z :~6nie M. , C~, City ~erk