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Home My WebLink AboutAgenda Packet 1996/10/22 Tuesday, October 22, 1996 6:00 p.m. ",",,~ty of perjury that \ ".m ut declare un "er . , of C:11J','t \.t;s'ta m the em:_,:nc lb. . i1^' '\. ~'-l:' t pvs:ed O. LCO 0~ . (-;:'", ~'l;;~~-,n Board ~:it , ,1 t,il,;. I..' I ti',is A:en . B ""n" "od at City HalI,0:1 ~:T~~;I:?o';~;'"~: ~~~'~ED0!/hf~ REVISED RellUlar Meetinl! of the City of Chula Vista City Council Council Chambers Public Services Building CALL TO ORDER Councilmembers Alevy _' Moot _' Padilla _' Rindone _' and Mayor Hortou_. I. ROLL CALL: 2. PLEDGE OF ALLEGIANCE TO THE FLAG. SILENT PRAYER 3. APPROVAL OF MINUTES: September 24, 1996 (Special Meeting), September 24, 1996 (Regular Meeting), and October 8, 1996 (Special Meeting) 4. SPECIAL ORDERS OF THE DAY: a. Proclamation in recognition of "Red Ribbon Week" October 23 through October 31, 1996. Mayor Horton will present the proclamation to Jane Anderson of the South Bay Red Ribbon Coalition. b. Proclamation in celebration of the Chula Vista Chamber of Commerce "SO Years of Incorporation." Mayor Horton will present the proclamation to Chris Lewis, President, and Rod Davis, Executive Director, Chula Vista Chamber of Commerce. ***** Effective April 1, 1994, there have been new amendments to the Brown Act. The City Council must now reconvene into open session to report any final actions taken in closed session and to adjourn the meeting. Because of the cost involved, there will be no videotaping of the reconvened portion of the meeting. However, final actions reported will be recorded in the minutes which will be available in the City Clerk's Office. ***** CONSENT CALENDAR (Items 5 through 11) The staff recommendations regarding the following items listed under the Consent Calendar will be enacted by the Council by one motion without discussion unless a Councilmember, a member of the public or City staff requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak Form" availllble in the lobby and submit it to the City Clerk prior to the meeting. (Complete the green form to speak in favor of the staff recommendation; complete the pink form to speak in opposition to the staff recommendation.) Items pulled from the Consent Calendar will be discussed after Board and Commission Recommendations and Action Items. Items pulled by the public will be the first items of business. 5. WRITTEN COMMUNICATIONS: a. Letter from the Deputy City Attorney stating that there were no reportable actions taken in Closed Session on 10115/96. It is recommended that the letter be received and filed. b. Letter from Tiffany PT A requesting waiver of any license requirements for their Craft Fair to be held on November 2, 1996. It is recommended that this waiver be granted. Agenda -2- October 22, 1996 6. ORDINANCE 2690 ADOYfING OTAY RANCH PRE-ANNEXATION DEVELOPMENT AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND BALDWIN BUILDERS (second readin2 and adoDtion) - The purpose of this item is to present a development agreement with Baldwin Builders. On 6/25/96, the Planning Commission and Council considered a series of development agreements with Village Properties, United Enterprises, Greg Smith, and the Foundation. (The Foundation agreement was subsequently split into three separate agreements.) The remaining party who is a property owner of a portion of the Otay Ranch property is Baldwin Builders, which is the trustee for the bankruptcy. Staff recommends Council place the ordinance on second reading and adoption. (Deputy City Manager) 7. RESOLUTION 18461 APPROVING THE 1995/96 GRANTEE PERFORMANCE REPORT FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM AND AUTHORIZING ITS SUBMISSION TO THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT - The City annually submits a Grantee Performance Report (GPR) to the U.S. Department of Housing and Urban Development (HUD). The GPR provides detailed information on the use of Community Development Block Grant (CDBG) funds including the progress achieved and the status of funds. HUD reviews the GPR and evaluates whether the City has carried out its activities in accordance with the City's 1993-96 Community Development Plan and federal requirements. Staff recommends approval of the resolution. (Director of Community Development) 8. RESOLUTION 18462 ACCEPTING BIDS AND AWARDING CONTRACT FOR "CONSTRUCTION OF SALTWATER INTAKE SYSTEM AT THE CHULA VISTA NATURE CENTER (GG-155)" - The general scope of the project is to construct a flow-through sea-water system at the Chula Vista Nature Center. The project includes the construction of a concrete block pump house and installationofPVC piping to draw and return sea water from the San Diego Bay. Staff recommends approval of the resolution and awarding contract to AmeriCan Constructors, Inc. (Director of Public Works and Executive Director of Nature Interpretative Center) 9. RESOLUTION 18463 ACCEPTING BIDS AND AWARDING CONTRACT FOR "CONSTRUCTION OF SIDEWALK RAMPS ON VARIOUS STREETS IN THE FISCAL YEAR 1996/97 PROGRAM (ST-513D)" AND AUTHORIZING STAFF TO INCREASE QUANTITIES TO EXPEND ALL AVAILABLE FUNDS FOR TillS PROJECT - The work to be done consists of removal of curb, gutter, sidewalk, and construction of pedestrian ramps on various streets in the City. Staff recommends approval of the resolution and award of contract to MJC Construction. (Director of Public Works) lO.A. RESOLUTION 18464 MODIFYING THE AGREEMENT WITH MUNICIPAL RESOURCE CONSULTANTS (MRC) TO EXPAND THE SCOPE OF SERVICES PROVIDED BY MRC TO INCLUDE UTILITY USERS TAX (UUT) AUDIT SERVICES - The Fiscal Year 1996/97 budget included $50,000 in revenue to be derived from an UUT Audit. Given MRC's satisfactory performance conducting the City's sales tax audit and excellent references from jurisdictions where MRC has audited UUT, it is recommended modifying the City's agreement with MRC to add UUT audit services to be compensated on a contingency basis. To access the records of Utility providers, "Friendly Subpoenas" must be issued as companies are prohibited from voluntarily disclosing confidential customer information. Staff recommends approval of the resolutions. (Director of Finance). Agenda -3- October 22, 1996 B. RESOLUTION 18465 INSTITUTING AN AUDIT PROCEEDING OF THE CITY'S GAS, ELECTRIC AND TELEPHONE UTILITY USERS T AX, DESIGNATING MUNICIPAL RESOURCE CONSULTANTS AS AUTHORIZED REPRESENTATIVES OF THE CITY FOR CONDUCTING THE AUDIT AND AUTHORIZING THE MAYOR TO ISSUE SUBPOENAS FOR TillS PURPOSE 11. REPORT REGARDING THE DEVELOPMENT IMPACT FEE FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 1996 - State government reqnires local agencies assessing Development Impact Funds to make available financial data to the public each fiscal year. It also requires the local agency review this information at a public meeting. Staff recommends Council accept the report and approve of the resolution. (Director of Finance) RESOLUTION 18466 MAKING FINDINGS THAT THE UNEXPENDED FUNDS IN THE VARIOUS DIF FUNDS ARE STILL NEEDED TO PROVIDE CONSTRUCTION OF FACILITIES FOR WIllCH THE FEES WERE COLLECTED · · · END OF CONSENT CALENDAR · · · PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES The following items have been advertised and/or posted as public hearings as required by law. If you wish to speak to any item, please fill out the "Request to Speak Fonn" available in the lobby and submit it to the City Clerk prior to the meeting. (Complete the green fonn to speak in favor of the staff recommendation; complete the pink fonn to speak in opposition to the staff recommendation.) Comments are limited to five minutes per individual. 12. PUBLIC HEARING REGARDING EXISTING AND PROPOSED RATES AND CHARGES FOR COX COMMUNICATIONS' BASIC SERVICE TIER AND ASSOCIATED EQUIPMENT AND CABLE PROGRAMMING SERVICE TIER, AS SUBMITTED BY COX COMMUNICATIONS TO THE CITY VIA FEDERAL COMMUNICATION COMMISSION (FCC) FORMS 1235, 1240 AND 1205 - Cox Communications and staff have discussed potential courses of action regarding the City's regulation of cable rates. Those discussions have also included further contacts with the Federal Communications Commission (FCC) and the City's consultant, Public Knowledge. The staff recommended position would result in a Maximum Permitted Rate of $26.92, but would allow Cox to charge as much as $30.95 per month, unless and until such a charge is invalidated by the FCC. Staff recommends approval of the resolution. (Principal Management Assistant Young) Continued from the meeting of 10115/96. RESOLUTION 18447 DISAPPROVING UPGRADE-RELATED INCREASES IN MAXIMUM PERMITTED RATES FOR THE BASIC SERVICE TIER; DIRECTING STAFF TO FILE A COMPLAINT WITH THE FCC ON BEHALF OF LOCAL SUBSCRIBERS REGARDING UPGRADE-RELATED INCREASES IN THE CABLE PROGRAMMING SERVICE TIER RATES; APPROVING PROPOSED COST-BASED RATE DECREASES FOR ASSOCIATED EQUIPMENT; AND APPROVING PROPOSED COST- BASED INCREASES IN THE MAXIMUM PERMITTED RATES FOR THE BASIC SERVICE TIER Agenda -4- October 22, 1996 13. PUBLIC HEARING CONSIDERATION OF ESTABLISHING UNDERGROUND UTll..ITY DISTRICT NUMBER 129 ALONG OTAY LAKES ROAD FROM RIDGEBACK ROAD TO APACHE DRlVE - Public hearing is to determine whether the public health, safety, or general welfare requires the formation of an underground utility district along Otay Lakes Road from Ridgeback Road to Apache Drive. Staff recommends approval of resolution. (Director of Public Works). . RESOLUTION 18467 ESTABLISHING UNDERGROUND UTll..ITY DISTRlCT NUMBER 129 ALONG OTA YLAKES ROAD FROM RIDGEBACK ROAD TO APACHE DRlVE AND AUTHORlZING THE EXPENDITURE OF UTll..ITY ALLOCATION FUNDS TO SUBSIDIZE PRIVATE SERVICE LATERAL CONVERSION 14.A. RESOLUTION 18416 APPROVING A RESOURCE CONVEYANCE AGREEMENT FOR THE OTAYRANCH SPA ONE, TRACT 96-04- (This is a related item. but does not require a "ublir hearin!!) B. RESOLUTION 18417 APPROVING AN INDEMNlFlCATION AGREEMENT WITH VILLAGE DEVELOPMENT FOR TRACT 96-04 - (This is a related item. but does not reauire a DubHe hearilU!) C. PUBLIC HEARING PCS 96-04: CONSIDERATION OF A REVISED TENTATIVE SUBDIVISION MAP FOR THE OT A Y RANCH SPA ONE, TRACT 96-04 GENERALLY LOCATED SOUTH OF TELEGRAPH CANYON ROAD BETWEEN PASEO RANCHERO AND THE FUTURE SR-125 ALIGNMENT AND EXCLUDING 288 ACRES IN ASSESSOR PARCEL NUMBER (APN) 642-060-11 AND A PORTION OF APN 642-080-11 - Adopt a Second Addendum to FEIR 95-01 and recertify FEIR 95-01 and the First Addendum for the Otay Ranch SPA One and Tentative Subdivision Map for Village One and Phase I-A of Village Five of the Otay Ranch SPA One, Chula Vista Tract 96-04, in accordance with the findings and subject to the condition contained in the in the draft resolution. Staff recommends approval of the resolutions. (Otay Ranch Manager) Continued from the meeting of 9/17/96. D. RESOLUTION 18398 ADOPTING THE SECOND ADDENDUM TO AND CERTIFYING FINAL ENVIRONMENTAL IMPACT REPORT FElR 95-01 (SCH #95021012) AND FIRST ADDENDUM READOPTING THE STATEMENT OF OVERRIDING CONSIDERATIONS AND THE MITIGATION MONITORING AND REPORTING PROGRAM FOR THE FElR AND APPROVING A REVISED TENTATIVE SUBDIVISION MAP FOR PORTIONS OF THE OTAY RANCHO SPA ONE, CHULA VISTA TRACT 96-04, AND MAKING THE NECESSARY FINDINGS AND DENYING APPROVING OF ALTERNATIVE TENTATIVE MAP PROPOSALS 15. PUBLIC HEARING ADOPTING OTAY RANCH PRE-ANNEXATION DEVELOPMENT AGREEMENT WITH VILLAGE DEVELOPMENT - An amendment to the development agreement to further guarantee infrastructure improvements where the developer wants to create parcels for sale prior to finalizing the final subdivision map. The amendment also addresses future problems with regard to any debt payment that might be levied to make public improvemeots or should development be only partially completed on any particular project due to any stoppage of work especially due to a bankruptcy action. Staff recommends Council place the ordinance on first reading. (Deputy City Manager, Planning Director, and Otay Ranch Manager) ORDINANCE 2691 AMENDING OTAY RANCH PRE-ANNEXATION DEVELOPMENT AGREEMENT BETWEEN OTAY RANCH, L.P., A CALIFORNIA LIMITED PARTNERSHIP, VILLAGE DEVELOPMENT ,A CALIFORNIA GENERAL PARTNERSHIP, AND THE CITY OF CHULA VISTA (first readin!!) Agenda -5- October 22, 1996 ORAL COMMUNICATIONS This is an opportunity for the general public to address the City CouncU on any subject matter within the Council'sjurisdiction that is not an item on this agenda for public discussion. (State law, however, generally prohibits the City Council from taking action on any issues not included on the posted agenda.) If you wish to address the Council on such a subject, please complete the yellow "Request to Speak Under Oral Communications Fonn" available in the lobby and submit it to the City Clerk prior to the meeting. Those who wish to speak, please give your name and address for record purposes and follow up action. Your time is limited to three minutes per speaker. BOARD AND COMMISSION RECOMMENDATIONS This is the time the City Council will consider items which have been forwarded to them for consideration by one of the City's Boards, Commissions and/or Committees. None submitted. ACTION ITEMS The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by the Council, staff, or members of the general public. The items will be considered individually by the Council and staff recommendations may in certain cases be presented in the alternative. Those who wish to speak, please fill out a "Request to Speak" fonn available in the lobby and submit it to the City Clerk prior to the meeting. Public comments are limited to five minutes. 16.A. REPORT POLICE GRANT FUNDING OPPORTUNITIES - During the 1996/97 budget process, Council authorized the Police Department to pursue funding for Community Oriented Policing projects. As a result, the department has identified four grant opportunities which work together to fund community oriented policing with minimal impact to the General Fund. These grant opportunities include: the State budget appropriation identified as AB 3229 - Citizens Option for Public Safety; the COPS Universal Hiring Grant; the Domestic Violence Grant; and the Federal Local Law Enforcement Block Grant. Staff recommends Council accept the report and approve the resolutions. (Chief of Police) * * * COPS Universal Hiring Program * * * B. RESOLUTION 18468 AMENDING THE FISCAL YEAR 1996/97 BUDGET TO ADD SIX FULL TIME EQIDV ALENT POLICE OFFICERS AND ACCEPTING $450,000 OVER THREE YEARS FROM THE COPS UNIVERSAL HIRING GRANT AND APPROPRIATING $162,198 OF SUCH FUNDS FOR HIRING SIX ADDITIONAL POLICE OFFICERS IN FISCAL YEAR 1996/97 AND DIRECTING STAFF TO BUDGET THE REMAINING FUNDS AS STIPULATED BY THE GRANT IN SUBSEQUENT YEARS - 4/5th's vote required. C. RESOLUTION 18469 APPROPRIATING $122,364 FROM FUND 214 SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (SLESF) - AB 3229, CITIZENS OPTION FOR PUBLIC SAFETY FOR PAYING FOR THE SIX OFFICERS ADDED UNDER THE UNIVERSAL HIRING GRANT, $184,044 FOR EQUIPMENT PROCUREMENT, AND $50,000 FOR LOCAL LAW ENFORCEMENT SERVICES - 4/5th's vote required. D. RESOLUTION 18470 DESIGNATING REVENUES GENERATED BY ASSIGNMENT OF POLICE OFFICERS TO CERTAIN SPECIALTY ASSIGNMENTS FOR PAYMENT OF FUTURE UNIVERSAL HIRING OFFICER SALARIES AND BENEFITS - 4/5th vote required. Agenda -6- October 22, 1996 lit * * Domestic Violence Program * * * E. RESOLUTION 18471 ACCEPTING $150,000 AND APPROPRIATING $109,462 FOR THE ADDITION OF ONE FULL TIME EQUIVALENT AGENT (TO BE UPGRADED TO SERGEANT), ONE FULL TIME EQUIVALENT ADMlNlSTRATIVE OFFICE ASSISTANT ill, $30,000 FOR FAMILY PROTECTION CONTRACTUAL SERVICES WITH CHILDREN'S HOSPITAL, $10,238 FOR EQUIPMENT, AND $300 FOR TRAVEL RELATED TO DOMESTIC VIOLENCE CASES - 4/5th's vote required. F. RESOLUTION 18472 APPROPRIATING $8,691 FROM AB 3229 - CITIZENS OPTION FOR PUBLlC SAFETY FOR UPGRADE OF THE AGENT POSITION TO SERGEANT FUNDED BY THE DOMESTIC VIOLENCE GRANT - 4/5th's vote required. G. RESOLUTION 18473 AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE A CONTRACT WITH CHILDREN'S HOSPITAL IN A FORM APPROVED BY THE CITY ATTORNEY * >I< * Local Law Enforcement Block Grant Program * * * H. RESOLUTION 18474 AMENDING THE FISCAL YEAR 1996/97 BUDGET TO ADD $38,165 FOR ONE FULL TIME EQUIVALENT ANIMAL CONTROL OFFICER, $23,453 FOR .5 CRIME PREVENTION SPECIALIST, $10,000 FOR PATROL OVERTIME, AND $33,000 FOR CONTRACTUAL GRANT WRITING SERVICES AND $95,783 FOR EQUIPMENT - 4/5th's vote required. 1. RESOLUTION 18475 ACCEPTING $257,401 FROM THE LOCAL LAW ENFORCEMENT BLOCK GRANT AND APPROPRIATING SUCH FUNDS TO PAY FOR THE ADDITIONAL POSITIONS, SERVICES AND EQUIPMENT - 4/5th's vote required. J. RESOLUTION 18476 APPROPRIATING $25,740 (LOCAL MATCH) FROM FUND 214 SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (SLESF)- AB 3229, CITIZENS OPTION FOR PUBLlC SAFETY FOR PURCHASE OF EQUIPMENT - 4/5th's vote required. 17. RESOLUTION 18477 ACCEPTING BIDS AND AWARDING CONTRACT FOR THE PURCHASE OF TWELVE POLlCE PATROL SEDANS - The fiscal year 1996/97 equipment replacement budget provides for the purchase of nine replacement police patrol vehicles. Staffs proposed use of the State of California's COPS funds will require the purchase of three additional vehicles to be purchased from grant funds. Staff recommends approval of the recommendation. (Director of Public Works and Director of Finance) 18. REPORT ANNUAL FISCAL STATUS REPORT FOR FISCAL YEAR 1995/96 AND . QUARTERLY FISCAL STATUS REPORT FOR THE FIRST QUARTER OF FISCAL YEAR 1996/97 - The annual fiscal Status Report for fiscal year 1995/96 and the Quarterly Fiscal Status Report for the First Quarter of fiscal year 1996/97 are presented for Council acceptance in accordance with Charter Section 504(1). Staff recommends that Council accept the report. (Director of Finance). ITEMS PULLED FROM THE CONSENT CALENDAR This is the lime the City Council will discuss items which have been removed Jrom the Consent Calendar. Agenda items pulled at the request oj the public will be considered prior to those pulled by Councilmembers. Public comments are limited to jive minutes per individual. Agenda -7- October 22, 1996 OTHER BUSINESS 19. CITY MANAGER'S REPORTISl a. Scheduling of meetings. . Poll Council! Agency regarding Redevelopment Agency budget workshop. 20. MAYOR'S REPORTlS) 21. COUNCIL COMMENTS ADJOURNMENT The meeting will adjourn to (a closed session and thence to) a Special Meeting/Worksession on Monday, October 21, 1996 at 11:00 a.m. in the Council Conference Room, Administration Building, and thence to the regular City Council meeting on November 5, 1996 at 4:00 p.m. in the City Council Chambers. ***** CLOSED SESSION Unless the City Allorney, the City Manager or the City Council states otherwise at this time, the Council wiU discuss and deliberate on the following items of business which are permilled by lnw to be the subject of a closed session discussion, and which the Council is advised should be discussed in closed session to best protectthe interests of the City. The Council is required by lnw to return to open session, issue any reports of final action taken in closed session, and the votes token. However, due to the typical length of time taken up by closed sessions, the videotaping wiU be terminated at this point in order to save costs so that the Council's return from closed session, reports of final action taken, and adjournment wiU not be videotaped. Nevertheless, the report of final action taken wiU be recorded in the minutes which will be availnble in the City Clerk's Office. 22. CONFERENCE WITH LEGAL COUNSEL REGARDING: 1. Existing litigation pursuant to Government Code Section 54956.9 . Christopher vs. the City of Chula Vista. 2. Anticipated litigation pursuant to Government Code Section 54956.9 . Metro sewer issues. PUBLIC EMPLOYEE RELEASE - Pursuant to Government Code Section 54957 Agenda -8- October 22, 1996 PUBLIC EMPLOYEE APPOINTMENT - Pursuant to Government Code Section 54957 . Title: City Attorney CONFERENCE WITH LABOR NEGOTIATOR - Pursuant to Government Code Section 54957.6 . Agency negotiator: John Goss or designee for CVEA, WCE, POA, IAFF, Executive Management, Mid-Management, and Unrepresented. Employee organization: Chula Vista Employees Association (CVEA) and Western Council of Engineers (WCE), Police Officers Association (POA) and International Association of Fire Fighters (IAFF). Unrepresented employee: Executive Management, Mid-Management, and Unrepresented. . Title/Unrepresented Employee: City Attorney City Negotiator: City Council 23. REPORT OF ACTIONS TAKEN IN CLOSED SESSION ***** October 15, 1996 MEMO TO: Carla Griffin, City Clerk's office A' Patricia salvaCion~ Mayor/Council office FROM: SUBJECT: SPECIAL ORDERS OF THE DAY - OCTOBER 22, 1996 Mayor Horton will be presenting a proclamation to Jane Anderson of the South Bay Red Ribbon Coalition in honor of Red Ribbon Week - October 23 through October 31, 1996. LjC1-~/ October 16, 1996 FROM: Carla Griffin, City Clerk's office Patricia saIVaC@Mayor/Council office MEMO TO: SUBJECT: SPECIAL ORDERS OF THE DAY - OCTOBER 22,1996 Rod Davis, Executive Director of the Chula Vista Chamber of Commerce and Chris Lewis, President of the Chula Vista Chamber of Commerce will be accepting a proclamation from Mayor Horton in celebration of the Chula Vista Chamber of Commerce 50 YEARS OF INCORPORATION. t/b~J ~~~ :- ~~ ~ ~ ~.-...:-..; """"""~~ --- - ~ ON OF CHUlA VISTA OFFICE OF THE CITY ATTORNEY Date: October 16, 1996 From: The Honorable Mayor and city council Glen R. Googins, Deputy City Attorney~ To: Re: Report Regarding Actions Taken in Closed Session for the Meeting of 10/15/96 The city council met in Closed Session to discuss Christopher v. the city of Chula vista and Public Employment Release. The Redevelopment Agency met in Closed Session to discuss Broadway Business Homes. The Deputy City Attorney hereby reports to the best of his knowledge from observance of actions taken in the Closed Session of October 15, 1996, there were no actions that are required to be reported under the Brown Act. GRG: 19k C:\lt\clossess.no ..~.5: ~ / 276 FOURTH AVENUE' CHULA VISTA' CALIFORNIA 91910 . (619) 691.5037 . FAX (619) 585.5612 ,fly Post~Alqd9;lP48 BURTON C. TIffANY ELEMENTARY ~ClfOOL PTA /o~~6 ~ 1691 Elmhurlll c!\lreel Chula Villla. California 91913 (619) 421-6300 October 3, 1996 City Clerk Chula Vista City Council P. O. Box 1087 Chula Vista, CA 91912 ATIN: Mayor and City Council: For the twelfth year, Tiffany PTA is hosting a craft fair to be held November 2, 1996, at the cafeteria of Bonita Vista High School, from 9:00 a.m. to 3:00 p.m. Handicrafters from San Diego County have been invited to participate in this fair. I request that the City Council waive any license requirements for the holding of this fair, inasmuch as all proceeds will go into a general fund to be used by Tiffany PTA on service projects and other programs to benefit the children of our school, and the entire school community. Thank you for presenting this on our behalf. Sincerely, \ .....~ qiJ~ Jaime Estrada raft Fair Chairman 421-1988 Please send correspondence to Jaime at 490 Hickory Terrace, Bonita, CA 91902 Thank you. C'c.: ~t6~~ pH ~'2~/~~j ~ ^ . -r"" m, r L:',. -:, -'~: ",' '-,,:" 1._ Iii ',~~1...c.' ~- i<i\;,';~~ "fl \......"r",_.,,"'\ ,";',:\ '::,:',7. '.,"""v","' .\~'"t;';.. hi ,Wi ~ ct;;VI>.'.1m'{i~4i .~,~~~:~~'~l;U "~" .'" ... I (,,: ITEM TITLE: ~~' City council Meeting D~~el796 IDJ~Jq~ .<t 9v "'~<:;) /'-'1 Ordinance - Adopting otay Ra.~ 'l're-Annexation /e /.2 ), . Development Agreement Betweenl(-<$he city of Chula /.-1 'II? vista and Baldwin Builders ~~ f'.. ~<:;) SUBMITTED BY: Deputy city Managertp~~~c,O REVIEWED BY: City Manager ~ 4'5 vote: Yes .o~ This item was continued on ~st 20, 1996 so that staff might re- review the Agreement to make sure it provides the appropriate protection against the circumstances that occurred in San Marcos on the Palomar project and also to address any provisions that might be relevant to problems resulting from development stoppage in the st. Claire development in Chula vista. A number of changes are suggested as discussed herein. This agenda statement is an addendum to the original agenda statement forwarded to you on August 20. The original is attached for your information as well. COUBCIL AGENDA STATEMENT RECOMMENDATION: That the City Council place the ordinance on First Reading. BOARD/COMMISSION RECOMMENDATION: The Planning commission recommended approval of the Agreement, 5-0, on August 14, 1996. DISCUSSION: In re-examining the Development Agreement, the basic premise stated by staff at the August 20 city Council meeting was sustained. The premise was that this is a development agreement at a broad micro- level applying to a piece of property which at this time only has an adopted General Plan and General Development Plan and no entitlements. As such, most of the basic provisions of the Agreement are unchanged. However, staff has scrutinized closely the sections dealing with future discretionary changes, improvements required by a subdivision map and future formation of assessment districts and public financing mechanisms. Further, a couple of protective statements with regard to st. Claire are recommended as well. A. Chanaes to Insure Greater Protection Aaainst Likelihood of San Marcos Paloma Concerns. Two sections have been strengthened. Section 7.4, Improvements Required by a subdivision Map, has been clarified as to the circumstances where the Developer can utilize a reimbursement district for public improvements. The circumstance is where the 0~ {y-l / ~.. rf / improvement is a requirement of a tentative map and is the responsibility of either another party or is being oversized. The City's consideration to process the request does not limit the City's ability to approve or reject the District in its discretion. The second section which has been strengthened is Section 14. Districts, Public Financing Mechanisms. The revised language more clearly states that while the City may be obligated to initiate, process and take an action on the formation of any public financing districts, it is not obligated to approve any such district in its discretion. Further, specific reference to community facility districts (Mello Roos) is deleted. The City has never used Mello Roos to finance city public improvements nor does it have any intent to do so at this time. Future consideration is not prohibited, however, should the Council wish to consider it. At this time the school districts are the only entity using Mello Roos Districts in Chula Vista. Lastly, two changes are made to Sections 7.2 and 5.2.1 to clarify that the dedication requirement for the project and the actual time frame as to when development occurs could be impacted should there be any future change to the Growth Management Ordinance. It is not anticipated that there would be any significant change to the threshold standards and it is not expected that any such future change would delay a project but the possibility should be protected. B. Chanqes to Address st. Claire Issue A new section, Assurance of Compliance, 7.9, has 'been added to protect the City in the future against project non-compliance. The section states the City will not take any action on a Future Discretionary Applications by an Owner unless the City is assured that the Owner is in full compliance with all governmental requirements as to any real property covered by the Development Agreement. A new second section, Complete Construction, 7.10, addresses the scenario where building permits have been issued and development has stopped. It states that if the City has determined that a nuisance or fire or safety hazard exists, then the Developer agrees to take appropriate steps to cure the nuisance. If he/she does not, then the City can step in and cure the nuisance at the Developer's sole cost and expense. In Section 14, Public Financing Mechanisms, a phase has been added to require the developer to comply with the terms of any assessment district or other financing mechanism and make timely payments thereon. The City retains its rights to take any actions legally authorized to guarantee payment as well. Attached also is a copy of a letter from Baldwin Builders explaining further their position in San Marcos and with regard to the st. Claire Project and the bankruptcy action. The letter dated September 12, 1996 was addressed to the Mayor and Council. /~-J::-~ t:~2 Fiscal Impact It isn't possible to quantify the value of the Agreement to the City or the other parties. Through annexation and the related property tax, sales tax, etc., the city will realize significant benefits. Likewise, the Developers benefit from the vesting and certainty provided by the Agreement to be able to get loans and sell and develop the Property in accordance with current and future approvals. The value of the Agreement is significant to both parties but is not quantifiable. bald113 /t9 ~~ &: -r-] ,o~ ~'" ~O AN ORDINANCE OF THE CITY OF ~ VISTA ADOPTING OTAY RANCH PRE-ANNEXAT~!:;. DEVELOPMENT AGREEMENT BETWEEN THE CITY OF LA VISTA AND ,. BALDWIN BUILDERS ~v~ ~9 0'- WHEREAS, a City of Chulla-C}Vista application to have the otay Valley Parcel included withi~ City's sphere of influence was approved on July 1, 1996 by the Local Agency Formation Commission; an.d ORDINANCE NO. .1/, 'if) WHEREAS, the development of the Otay Valley Parcel will require substantial public improvements phased over a period of time; and WHEREAS, California Government Code 565867.5 et seq_ provides authority for cities to enter into development agreements; and WHEREAS, CEQA review is not required for the development agreement since an in-depth review occurred when the environmental review was approved for the otay Ranch General Development plan and adopted by the City on October 28, 1993. (Lona Beach Sav. & Loan v. Lona Beach Redevel., 232 Cal.Rptr. 772, 881-2 [1986J); and WHEREAS, the Planning Commission held a public hearing on August 14, 1996 to consider the Pre-Annexation Development Agreement and the City Council held a public hearing on August 20, 1996 to consider the Pre-Annexation Development Agreement; and WHEREAS, City Council has found that this Pre-Annexation Development Agreement is consistent with the City's General Plan arid all applicable mandatory and optional elements thereof as well as other applicable policies and regulations of the City; and WHEREAS, the Planning Commission and City Council have reviewed the Pre-Annexation Development Agreement and recommend its approval. NOW, THEREFORE, the city Council of the City of Chula Vista ordains as follows: . SECTION I: pre-Annexation Development Agreement for a portion of the Otay Valley parcel. In accordance with Section 65867.5 of the Government Code, the City Council of the City of Chula Vista has approved that certain document entitled "Pre-Annexation Development Agreement" for a portion of the Otay Valley 1 ~~ &/1 Parcel with Baldwin Builders, on file in the office of the city Clerk as Document No. SECTION II: The Mayor of the City of Chula Vista is hereby authorized and directed to execute said Agreement for and on behalf of the City of Chula vista. SECTION III: This ordinance shall take effect and be in full force on the effective date of annexation as set forth in the Pre-Annexation Development Agreement. Presented by Approved as to form by ~~~o_ Ann Y. Mo re, Acting City Attorney George Krernpl, Deputy city Manager c:\or\baldwin.or 2 / - ___ {P /j!)-J~ ~ ., CITY COUNCIL AGENDA STATEMENT SUBMITTED BY: Item 7 Meeting Date 10/22/96 RESOLUTION / % r d: / ACCEPTING THE 1995/96 GRANTEE PERFORMANCE REPORT AND AUTHORIZING SUBMITTAL TO THE U.S DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AND AUTHORIZING CITY MANAGER TO EXECUTE DOCUMENTS Community Development ~~~1r C ~ S I City ManagerJ~ \0~ ~\ u - / (4/5ths Vote: Yes No~) ITEM TITLE: REVIEWED BY: BACKGROUND: The City annually submits a Grantee Performance Report (GPR) to the U.S. Department of Housing and Urban Development (HUD). The GPR provides detailed information on the use of Community Development Block Grant (CDBG) funds including the progress achieved and the status of funds. HUD reviews the GPR and evaluates whether the City has carried out its activities in accordance with the City's 1993-96 Community Development Plan and federal requirements. RECOMMENDATION: That the City Council adopt the resolution accepting the 1995/96 Grantee Performance Report and authorizing its submittal to HUD. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The Grantee Performance Report (GPR) states, for each project, the amount of CDBG funds expended, the amount of funds remaining, and the progress achieved on each project. The City expended $1,117,817 in CDBG funds during 1995/96. The GPR also includes an assessment outlining that the City met its Community Development objectives, including demographic information on the people who derived direct benefit from CDBG-funded programs. FISCAL IMPACT: For FY 1995/96 CDBG program funds were expended in the amount of $1,117,817 in the following categories: 1) Public Services - $286,408; 2) Community Services- $140,936; 3) Capital Improvement Projects - $433,818; and 4) Administration and Planning - $256,655 7 - f RESOLUTION NO. / g -7 ~ / RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE 1995/96 GRANTEE PERFORMANCE REPORT FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM AND AUTHORIZING ITS SUBMISSION TO THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WHEREAS, the City of Chula Vista receives Community Development Block Grant funds from the U.S. Department of Housing and Urban Development (HUD) for the implementation of programs and projects to benefit low and moderate income persons and aid in the prevention of slum and blight; and, WHEREAS, the City is required to submit annual Grantee Performance Reports to HUD to report on the progress achieved and the status of funds; and, WHEREAS, the 1995/96 Grantee Performance Report has been prepared according to HUD regulations and instructions; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA DOES HEREBY FIND, DETERMINE, ORDER, AND RESOLVE AS FOLLOWS: Section 1. The City Council hereby approves the 1995/96 Grantee Performance Report, attached hereto. Section 2. The City Manager is hereby authorized to submit the 1995/96 Grantee Performance Report to the U.S. Department of Housing and Urban Development. Section 3. This. resolution shall take and be in full force and effect immediately upon the passage and adoption hereof. Section 4. The City Clerk shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions of said City; and shall make a minute of the passage and adoption hereof in the minutes of the meeting at which the same is passed and adopted. Presented by: Approved as to form by: (!L, ~~~ Chris Salomone Community Development Director -7;;.'~ \ '--- 7~2 Cover Page u.s. Department of Housing 81)d Urban Development Grantee Pertormance Report Office of Community Planning and Development Community Development Block Grant Program OMS Approval No. 2506.()Q77 (exp.3f.31194) Public Reporting Burden for this collection of informatlon isestimated to average 0.5 hours perresponse. including the time iorrevlewfng instructions, S88.rchingexisting datasources;gatheringand malntainingthedataneeded. andcomp\eting and reviewing the collection at inlonnalion. Sendcomments regardingthisburd9nestimate or any other 85pQCtof thiscoll9ction of information. including suggestions tor redudng this burden. to the Reports ManagemenlOflicer, Office of Information Policies an~~~s, u''';~artm;:,,:~ Hous;ng andlkban O....lopmon~ Wash;ngton. O.C.2041o-3600 andlo ",.Oft,,"ol Managementand Budge~ pape<WO<l<Reduc1ion Pro" 2506-007. Washin n, D.C. 20503. 00 not send thiscomo\eted lorm to eitherof these addresSG8s. See HUD Handbook 6510.2, "Entitlement Grantee PerformanCE 1. ReportfO(theProgramYear~nding 2. Grant Nuf1'"ber: Report Instructions" for guidance on completing this report (....1' 6-30-96 B95MC060540 :3. Name& Address of Grantoe: 4. Name&Acldress ofCommunity (W.felopmom Director: City of Chula Vista Mr. Christopher Salomone 276 Fourth Avenue 276 Fourth Avenue Chula Vista, CA 91910 Chula Vista, CA 91910 s. Name & T eI4>phone Nuobef of person most familiar with infonnation in this report: 6. Name & Telephone Nurri:ier of person to contact. about disdO$ures required by the HUO ReformA.ctol19S9: Judith Foland (619) 691-5036 Juan P. Arroyo (619) 585-572~ 7. Have 1hese Community Development Block Grant (COBG) funds been used: a. to meet the community development program objectives specified in the final statement for this program year? "no, explain, tj Yes in a narrative attachment, how: (1) the uses did not relate to program objectives; and (2) future activroes or program objectives No might change as a result of this year's experiences. b. exdusively to either benefit low-and-moderate (Iowhnod) income persons, aid in the prevention or elimination of slums or blight, Ej Yes or meet community development needs having a particular urgency? If no, explain in a narrative attachment No c. such that the grantee has comptied with, or will comply with. its certiflC8.tion to expend not iess than 70% of its CDBG funds, B~s d16ing the specified period, on activities which benefit low/mod income persons? If no, explain in a narrative attachment. 8. Were citizen comments about this report and/or the COBG program received? If yes, attach a narrative summary. tires XNo 9. Indicate how the Grantee Performance Report was made available to the public: a By print.d not;ce: (name & dale 01 publication) \ b. By publ;, h.arin9: (place & dat.) c. Other. (explain) Grantee Performance Report will be noticed in the Star News local publication. 10. 'The foRowing forms must be compteted and attached: a. Activity Summary, f<><m HUD-4949.2 d. Ooe-For-One Replacement Summary, form HUD4949.4 b. Activity Summary, form HUD-4949.2A e. Rehabilitation Activities. form HUD-4949.5 c. Rnancial Summary, form HUD-4949.3 f. Displacement Summary, form HUD -4949.6 I hereby certify that: This report contains all requiredilemsidentified above; Federal assistance made avai1ableundertheCommunity Development Block Grant Program (CDBG) has not been utilized to reduce substantially the amount of local financial support for community development activities below the level of such support prior to the start of the most recently completed COBG program year; all the information stated herein, as well as any information provided in the accompaniment herewith, is true and accurate. Warning: HUD will prosecutetalse claims and statements. Conviction may result in criminal andIorcivil peoalties. (18U.S.C. 1001, 1010, 1012;31 U.S.C.3729. 3802) Typed Name & Tttle of Authorized Official Representativ.: Signature: Date: John D. GOBS, City Manager X This fonn may be reproduced on klcal offICe coptQfs. torm HU0-4"',1 (06124.93) prevklus editions are obsolete. P"",,( ) of ( ) f9IHandbook6510.2 Retain this rQCOrd tor 3 years. 7- -, -) , c .. E "- o .c >.. ~& <:0 ~l ~.. ::>0 ."." iiii to to <:<: o."c 5~ "'''- o.~ -" <:~ "E EE 1i8 "-- "0 0.. .Q "!!E ::>0 III - li c Q) III - (.) l!! i5 Cl c 'S: lilt:: ::J:O ~~ 1118 .:!::C >1II .- E 0.. <1:0 -1: OQ) ~D. lIIal E- EC ::II!! We) I <1 M ~ X ~ ~ o 9 w o ~ N o Z ~~ C. 0 ~r3 wll " .< o~ C> <T l!) C> <.0 is ,:E zl!) "'" e", " E '" 2 e c.. - c ~ Cl og ai c: Q) ~ o Q; ii'; o ~li c" ::> e E" 151 <.)~ <.0 '" I C> M I <.0 ]a l!) '" I ..... I r-- E g "0 00 :;S":i uo. 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Financial Summary Grantee Performance Report Community Development Block Grant Program U.S. Department of Housing and Urban Development Office of Community Planning and Develbpment OM8 ApprovalNo_ 2506"()()77 (Exp.3131194) Public Reporting Burden for this collection of information is estimated to average 12 hours per respon se, including the time for reviewing instructions, searctJingexisting data sources, gathering and maintaining the data needed, and compl9ting and reviewing the coIl9clion 01 infonnation. Send comments regarding this burden estimate or any other aspect of this collection ofinlormation, includng suggestions for reducing this burden, to the Reports Management Officer, Office of Information Policies and Systems. U.S. Departmentaf Housingand Urban O$velopment. Washington, D.C. 20410-3600 andto theOfficeofManagomontand Budget. PaperworkR9duction Project (2506-0077), Washington. D.C. 20503. Do not send this complated form to either 01 these addressees. 1. Name of Grant_ 2- Grant Nl,lrrber it of Chula Vista Part I: Summaty of CDBG Resources B95MC060540 1. Unexpended COBG funds at end of previous reporting period (Balance from prior program years) $ 2. Entitlement Grant from form HUO-7OB2 243,387 $ 2,162,000 $ 3. Surplus Urban Renewal Funds o 4. Section 1 DB Guaranteed loan Funds (Principal Amount) $ b. Other (Identify below. II more space is needed use an attachment) Grantee (Column A) Subrecipient (Column 8) 5. Program Income received by: a Rovolving Funds c. Total Program Income {Sum 01 columnsaand b) 6. Prior Period Adjustments (if column is a negative amount, enclose in brackets) 7. Total COBG Funds available for use during this reporting period (sum of lines 1 through 6) Part II: SUmmary of CDBG Expenditures B. Total expenditures reported on Activity Sunvnary.lorms HU0-4949.2 & 4949.2A 9. Total expended for Planning &Administration, form HUD-4949.2 $ 10. Amount sub)ect to lowlMod Benelil Calculation (line 8 minus line 9) 318,354 $ 799,463 11. COBG funds used lor Section 108 principal & interest payments $ 12. Total expenditures (line Bplusline 11) $ 1,117,817 13. Unexpended balance (line 7 minus line 12)) $ Part III: Low/Mod Benefit This Reporting Period 14. TotallowlMod credit lor multi-unit housing expenditures from form HU0-4949.2A $ o 15. T otalfrom aU other activities qualifying as low/mod expenditures from torms HUD-4949.2 and 4949.2A $ 16. Total (Une 14 plus line 15) $ 17. Percent benefit to low/mod persons (line 16 divided by line 10 this reporting period) 100% This form may be reproduced on local office copiers. Previous editions are obsolete. Retain this record for 3 years. page ( )ol( form HUD-4949.3 (06/24/93) rei Handbook6510.2 (-~) program years (PY) cov.ered in cartification py 91 py 94 PY Qt; Part IV: LowlMod Benefit for Mu"i-Vear Certification. (Complete only if certification pericx:l indudos prior yoars) 19. CUroolativo expenditures benofiting low/mod persons $5,931 897 $5,931,897 18. Cumulative net expenditures subject to program bene fit calculation 20. Percent booefit to low/mod persons (line 19 divided by line 18) % Part V: For Public Service (PS) Activities Only. Public Service Cap Calculation 21. Total PS expenditures from column h, 10rrn HUD-4949.2A $ 22. Total PS unliquidated obligations from column r,form HUD-4949.2A $ 49,270 $ 23. Sum 01 line 21 and line 22 24. Total PS unliquidated obligations roported at thB end of th9 pr9vious reporting period $ 72 212 25. Net obligations lor public services (lin9 23 minus line 24) $ $ 26. AlTKlunt of Program Income received in the preceding program year 27. Entitloment Grant Amount (from line 2) $ 2 162 000 28. Sum of line 26 and lino 27 $ 2,213,496 29. Percent lunds obligated for Public Service Activities (line 25 divided by line 28) Part V1: Planning and Program Administration Cap Calculation 30. AlTKlunl subject to planning and administrativ9 cap (grant amount from line 2 plus line 5c) $ 2,216,944 31. Amount expended for Planning & Administration(from line 9 abovo) $ 318 354 14.4% 32. Percent funds expended (line 31divided by line 30) Instructions Name of Grantee: Enter the grantee's name as shown on the approved Grant Agreement (form HUO*7082) for the most recently completed program year. Grant Number: Enter the grant number assigned by HUD to the Convnunity Development Block Grant for the most recently completed program year. Period Covered: Enter the beginning date and ending date for the most recently completed program year. lorm HUD-4949.3 (06124/93) refHandbook6510.2 7-d.-1 Rehabilitation Activities Grantee Performance Report Community Development Block Grant Program u.s. Department of Housing & Urban Development OffICe of Community Planning and Development OMS ApprovalNo. 2506..(}Qn(exp. 3/31194) PublicReporting Burden forthiscollection 01 io1ormation isestimated tl average 5.0 hourspeff8sponse, including the tim9 for fevtewing instructions. searching existing data sources, gatheringand maintaining thedata needed, and completing and reviewing the c:oIleclion of informalion. Send comments rggarding this burd9n 9stimate or any other aspectof this c:oUoction of infonnation, induding suggestions lor reducing this burd9n.lo the Reports Management Offialf. Offico ollnfonnation Policies andSystoms. U.s. Departmental HoosingandUrban [)ovelopment, Washington. D.C. 20410_3600;andtotheOfficeofManagementand Budget. Papel"WOfkReductioo Project (2506-0077) Washington. D.C. 20503. 00 not send this completed fonn to eitherol these addressees Instructions Name of Grantee: Enter the grantee's name as shown on the approved Grant Agfeement (fOfm HUD-7082) for the m:Jst rec9f'ltty completed program year. Grant Number: Enter the grant number assigned by HUn to the Community Development Block Grant tor the m:Jst r&eently completed program year. Period Covered: Enter the beginning date and ending date lor the most recently completed program year. Ham. 04 Gr.- G......lNumb<< Pfog._V_ City of Chula Vista B95MC060540 From 7-1-95 To 6-30-96 Single-unil ActiWi_ (One Unit Structures) Mutti-unit Activiti_ (Two or More Unit Structures) 1. Check box only if gl"llntee had no CQBG rehabilitation activit'" none G:J none 2. Staffing number of Staff-Years(FTE statf years to tenths) c. Private funds obligated $ o None $ $ 0 $ 0 $ $ 0 $ 0 0 9 n 0 $ 0 $ 0 $ 0 $ 0 0 o Unit $ 0 $ 0 $ 0 $ 0 Projects None 3. Current Program Year Expenditures. Activity delivory lXlsts from COBG funds $ a. Statfcosts: Amount expended for staff-years in 2 above b. Other direct costs (not included in line 4) c. Private funds expended $ 0 $ 169,650 $ 0 $ 169,650 $ 0 4. Current Program Year Expenditures. For all projects (both open and completed), enter amount expended during the program year (a+b+e below) a. CDBG funds expended b. Other public (Federal, State, local) funds expended 5. Project.slUnits Rehabilitated/Committed a Numberof projects committed (mJlti-unit only) b. Number of units committed ;1 6. Obligations. Amount obligated (a + b + c below) for projects/units committed in 5a and 5b $ 169 650 $ 0 $ 169 650 a CDBG funds obUgated b. Other public (Federal, State, Local) funds obligated 7. ProjectsJUnitaRehabilitatedJCompleted a Numberot 'ectsco \eted multi-unitool b. Number of units completed Pr 'ects o Units 8. CumUlative Expenditures. Enterthe total amountol funds expended during the CUrT9nt and prior program ytlars lor projects completed during the program $ ear a+b+c. 169,650 a. CDBG funds expended $ b. Other public (Federal, Stat~, LDca~ lunds expended $ o 169,650 c. Private funds expended $ o Individuals may copy this form on office copiers as needed. Previous Editions are Obsolete. Retain this record for 3 years. page ( ) of ( form HU0-4949.5 (06124/93) ref. Handbook6510.2 7 - d-> COUNCIL AGENDA STATEMENT Item ~ Meeting Date 10/22/96 ITEM TITLE: Resolution J!5 i/ i ~cePting bids and awarding contract for "Construction of Saltwater Intake System at the ChuIa Vista Nature Center in the City ofChula Vista, C,alifor7ia (00-155)". SUBMITTED BY: Director of Public workS~~ Executive Director, NIC REVIEWED BY: City Manager j~ ~ 5--.. (4/5ths Vote: Yes _ NoX) At 2:00 on October 2,1996 in Conference Rooms 2 and 3, the Director of Public Works received sealed bids for "Construction of Saltwater Intake System at the Chula Vista Nature Center in the City of ChuIa Vista, California (00-155). The general scope ofthe project is to construct a flow-through sea-water system at the Chula Vista Nature Center. The project includes the construction of a concrete block pump house and installation ofPVC piping to draw and retum sea water from the San Diego Bay. The contractor shall perform earthwork and sea floor work required for construction of two saltwater intakes, sea bottom pipelines, pump station building, buried pipelines with connections to existing system, related mechanical and electrical work, and all other facilities described in the specifications and shown on the plans. RECOMMENDATION: That Council accept bids and award contract to AmeriCon Constructors, Inc. - San Marcos in the amount of $335,623 .00. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: Included in the 1996-97 Capital Improvement Program, are funds for construction of a flow-through seawater system at the Chula Vista Nature Center. The project is funded from the California Coastal Conservancy and San Diego Unified Port District. Bids were received from three contractors to perform the work as follows: Contractor Bid Amount AmeriCon Contractors, Inc. - San Marcos Orion Construction - San Marcos Wier Construction Corporation - Escondido $335,623.00 $347,247.00 $461,892.00 The low bid by AmeriCon Contractors Inc. is below the engineer's estimate of$360,000 to $420,000 to construct this project. Included in the bid documents was a bidders qualification form so staff could evaluate the previous experience of the contractor in performing the type of worked called for ~-/ Page 2, Item Meeting Date 10/22/96 r on the plans. Staff has reviewed the bidders qualifications form and has contacted references provided. Staff believes the Contractor will perform the work satisfactorily. Prevailing Wag:e Statement The funding for this project is provided by grants from the California Coastal Conservancy and the San Diego Unified Port District. It was determined that the project could be funded utilizing non- prevailing wage rates. No special minority or women-owned business requirements were necessary as part of the bid documents. Disadvantaged businesses were encouraged to bid through the sending of notice to contractors through various trade publications. Disclosure Statement Attached as Exhibit A is a Contractor's Disclosure Statement. Enviromnental Status As a result of the fact that most of the project site is within a National Wildlife Refuge, which contains several rare and endangered (listed) species, the project is subject to several permits. Some of those permits contain special conditions regarding what, how, and when certain construction activities are performed. Listed below are some of the pertinent permits and other enviromnental actions taken place to date. I. A National 404 Permit (#7) has been received from the U.S. Army Corps of Engineers dated 11/23/87. The only condition attached to that permit is an exclusion of construction activities during the Least Tern nesting season from April I st through September 15th. 2. We have received authorization from the State Water Resource Control Board to proceed with the project. 3. The San Diego Unified Port District has granted an easement for the intake and outfall piping to cross their sub-title property (Project #90-30-4454, Document #33615, 11-21-95). 4. The City ofChula Vista has issued a Negative Declaration (IS-89-39, 8/31/95) for the project in compliance with the California Enviromnental Quality Act. 5. The U.S. Fish and Wildlife Service has granted an easement for the piping to cross National Wildlife Refuge property. 6. We have received a notice to issue Coastal Development Permit (#6-89-179) from the California Coastal Commission. fS/,2 Page 3, Item 3 Meeting Date 10/22/96 The only substantive conditions attached to those easements and permits are; an exclusion of construction activities during the Least Tern nesting season (April 1st through September 15th); and mitigation of any loss of eel grass. Financial Statement FUNDS REQUIRED FOR CONSTRUCTION A. Contract Amount $335,623.00 B. Staff Costs (inspection and design) $ 80,000.00 C. Contingencies (approximately 25%) $ 84,377.00 TOTAL FUNDS REQUIRED FOR CONSTRUCTION $500,000.00 FUNDS AVAILABLE FOR CONSTRUCTION A. Bayfront Conservancy Trust (00-155) $500,000.00 TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $500,000.00 FISCAL IMPACT: Construction of this project will have a net savings of approximately $5,000 per year on the operating budget of the Chula Vista Nature Center. Attachments: A - City of Chula Vista Disclosure Statement M:\HOME\ENGlNEER\AGENDA \GG 155.SLH (';.---- ...--" o /__5 RESOLUTION NO. ) 2tY~2 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING BIDS AND AWARDING CONTRACT FOR "CONSTRUCTION OF SALTWATER INTAKE SYSTEM AT THE CHULA VISTA NATURE CENTER IN THE CITY OF CHULA VISTA, CALIFORNIA (GG-155)" WHEREAS, at 2:00 on October 2, 1996 in Conference Rooms 2 and 3, the Director of Public Works received the following three sealed bids for "Construction of Saltwater Intake System at the Chula vista Nature Center in the City of Chula Vista, California (GG-155) : Contractor Bid Amount AmeriCon contractors, Inc. - San Marcos Orion Construction - San Marcos Wier Construction Corporation - Escondido $335,623.00 $347,247.00 $461,892.00 WHEREAS, the low bid by AmeriCon Contractors Inc. is below the engineer's estimate of $360,000 to $420,000 to construct this project; and WHEREAS, staff has reviewed the bidders qualifications form and has contacted references provided and believes the Contractor will perform the work quite satisfactorily; and WHEREAS, the funding for this proj ect is provided by grants from the California Coastal Conservancy and the San Diego Unified Port District and it was determined that the project could be funded utilizing non-prevailing wage rates; and WHEREAS, no special minority or women-owned business requirements were necessary as part of the bid documents, however, disadvantaged businesses were encouraged to bid through the sending of notice to contractors through various trade publications; and WHEREAS, as a result of the fact that most of the project site is within a National wildlife Refuge, which contains several rare and endangered (listed) species, the project is subject to to the following permits: 1. A National 404 Permit (#7) has been received from the U.S. Army Corps of Engineers dated 11/23/87. The only condition attached to that permit is an exclusion of construction activities during the Least Tern nesting season from April 1st through September 15th. 2. We have received authorization from the State Water Resource Control Board to proceed with the project. 3. The San Diego Unified Port District has granted an easement for the intake and outfall piping to cross their sub-title property (project #90-30-4454, Document #33615, 11-21-95). g-Lj 4. The City of Chula vista has issued a Negative Declaration 89-39, 8/31/95) for the project in compliance with California Environmental Quality Act. (IS- the 5. The U.S. Fish and wildlife Service has granted an easement for the piping to cross National Wildlife Refuge property. 6. The City has received a notice to issue Coastal Development Permit (#6-89-179) from the California Coastal Commission. The only substantive conditions attached to those easements and permits are; an exclusion of construction activities during the Least Tern nesting season (April 1st through September 15th); and mitigation of any lose of eel grass. NOW, THEREFORE, BE IT RESOLVED the city Council of the City of Chula vista does hereby accept said three bids and awards the contract to AmeriCon Constructors, Inc. - San Marcos in the amount of $335,623.00. BE Chula vista contract for IT FURTHER RESOLVED that the Mayor of the City of is hereby authorized and directed to execute said and on behalf of the city of Chula vista. Presented by Approved as to form by John P. Lippitt, Director of Public Works ~ C:\rs\gg155.bid I5~_C; / THE CITY OF CIillLA VISTA DISCLOSURE STATEMENT AT T r+e H All ~ N -r A You are required to file a Statement of Disclosure of certain ownership or financial interests. payments. or campaign contributions. on all matters which will require discretionary action on the part of the City Council. Planning Commission, and all other official bodies. The following information must be disclosed: List the names of all persons having a financial interest in the property which is the subject of the application or the Contract, e.g.. owner: applicant. Contractor. ~\thcontrac.tnr, m;lft"ri:'ll ~1Jrr1it."'r AME:.lLtCON C","-.\S"'~""-'f'"oIt.S, )--Jc-. 2. If any person* identified pursuant to (1) above is a corporation or partnership. list the names of all individuals owning more than 10% of the shares in the corporation or owning any partnership interest in the partnership. J E.-f'F.e..e: 'i flu......." l..l.-o _ Ptt.e...~ I il e-J., SPe.,.J C-E..,(. 'DA...J"'-!. - S~c.../TR-LA.J'~iL 3. If any person* identified pursuant to (1) above is non-profit organization or a trust, list the names of any person serving as director of the non-profit organization or as trustee or beneficiary or trustor of the trust. 4. Have you had more than $250 worth of business transacted with any member of the City staff, Boards, Commissions, Committees, and Council within the past twelve month? Yes _ No 25. If yes, please indicate person(s): " 5. Please identify each and every person, including any agents, employees, consultants, or independent Contractors who you have assigned to represent you before the City in this matter. 6. Have you and/or your officers or agents, in the aggregate, contributed more than $1.000 to a Council member in the current or preceding election period? Yes _ No X If yes, state which Council members(s): Date: l c> - I - 'I c.c. * · * (NOTE: Attached additional pages as necessary) * · · ~~~ C--/ l~re of Contractor/Applicant C" . Person is defined as: "Any individual, finn. co-pannership, joint venture, association, social club, fraternal organization, corporation, estate. trust, receiver, syndicate, this and any other county, city or country. city municipality, district, or other political subdivision, or any other group or combination acting as a unit. 6 ~ ~ ~~a..e.1 P".....1.."l..'-u. 1\1'15.12., Ca..J C.Q"'..,..a.u............~/;..-<. Print or type name of Contractor/Applicant 13 COUNCIL AGENDA STATEMENT ITEM TITLE: Item 9 Meeting Date 10/22/96 Resolution ) fr 71<?:3 Accepting bids and awarding contract for "Construction of Sidewalk Ramps on Various Streets in the City of Chula Vista, California FY 1996-97 Program (ST-513D)" and authorizing staff to increase quantities to expend all a ailable funds for this project. SUBMITTED BY: Director of Public Works REVIEWED BY: City Manager~ \?VI h (4/Sths Vote: Yes _ NoX) At 2:00 p.m. on September 18, 1996 in ConUen:e;oom 2 in the Public Services Building, the Director of Public Works received sealed bids for "Construction of Sidewalk Ramps on various streets in the City ofChula Vista, California FY 1996-97 Program (ST-513D). The work to be done consists of removal of curb, gutter and sidewalk and the construction of pedestrian ramps on various streets in the City of Chula Vista. The location and type of sidewalk ramp to be constructed is summarized in Table I (Attachment A). The total number of ramps to be constructed is 39. RECOMMENDATION: That Council accept the bids and award a contract for construction of sidewalk ramps on various streets in the City of Chula Vista, California FY 1996-97 Program (ST- 513D) to MJC Construction, Chula Vista, in the amount of$30,208.00 and authorize staff to increase quantities to expend all available funds. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: Funds for this project were budgeted in FY 1996-97 Capital Improvement Program (CIP) budget. This is an annual program funded with Community Development Block Grant funds (CDBG). Its purpose is to construct sidewalk ramps at various locations throughout the City. The locations are generally near schools, shopping areas, or in many cases where we have had specific requests by property owners to install the ramps. Bids for this project were received from six contractors as follows: Contractor Bid amount MJC Construction - Chula Vista Star Paving, Inc. - San Diego Portillo Concrete - Chula Vista Fox Construction - San Diego Hammer Construction Company - Chula Vista Carolyn E. Scheidel - Contractor - La Mesa $30,208.00 $32,825.00 $32,875.00 $34,930.00 $35,270.00 $37,260.00 9~/ Page 2, Item Meeting Date 10/22/96 9 The low bid, submitted by MJC Construction, is below the Engineer's estimate of $33,498.00 by $3,290.00 or 9.8%. Staffs estimate was based on average unit prices received on similar work completed just last year. Because of the current economic conditions and the number of bidders, staff received excellent bids. MJC Construction was just recently awarded the contract for parking lot repairs at Eucalyptus Park. The owner of this company has done other work for the City and that work has been done satisfactorily. Staff, therefore, recommends the contract be awarded to MJC Construction. Because this is an annual program, there are currently some remaining funds left from previous year's budgeted amounts. It is recommended that we use these funds, along with any remaining funds in this year's account, to construct additional ramps if possible. It is anticipated that there will be approximately $4,900.00 available to construct additional ramps. This will build approximately seven more ramps, thus, a total of 46 ramps will be constructed with this contract. The contract documents allow the City to increase the quantities to construct additional ramps. Attachment A shows a table listing locations for additional ramps if funds are available. Disadvantaged Business EntelJlrise Goal The bid documents set forth participation requirements per Federal Regulation for meeting the disadvantaged and women-owned business goals. Juan P. Arroyo, Housing Coordinator, has reviewed the bid documents submitted by the three lowest bidders. His conclusion is that the lowest bidder, MJC Construction does meet the City's requirement for DBE participation (See Attachment B). Staff also reviewed MJC Construction's eligibility status with regard to federal procurement programs and the status of the State contractor's licenses. Neither MJC Construction no any listed subcontractors are excluded from Federal Procurement Programs (list of parties excluded from Federal procurement or non-procurement programs as of August 9, 1996). Disclosure Statement Attached is a copy ofthe Disclosure Statement (Attachment C) for MJC Construction. Environmental Status The City's Environmental Review Coordinator has reviewed the work involved in the project for the ADA curb cuts and has determined them exempt under Section 15301 (d), Class I, of the California Environmental Quality Act. 9~,2 Page 3, Item 7' Meeting Date 10/22/96 Prevailing Wage Statement The source of funding for this project is Community Development Block Grant Funds. Prevailing wage scales are those determined by the Federal Department of Labor. FISCAL IMP ACT: FUNDS REQUIRED FOR CONSTRUCTION A. Contract Amount $30,208.00 B. Staff (Inspection and Design) $12,000.00 C. Additional work and contingencies (approximately 16%) $ 4,695.00 TOTAL FUNDS REQUIRED FOR CONSTRUCTION $46,903.00 FUNDS AVAILABLE FOR CONSTRUCTION A. ADA Curb Cut Annual Program $46,903.00 Various Accounts (ST-513) TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $46,903.00 The above action awarding of the contract will authorize a total expenditure of $46,903.00 from budgeted CIP projects. After construction, only routine City maintenance amounting to mainly sweeping, will be required. Attachments: A - Ramp locations to be installed B - Memo from Housing Coordinator C - Disclosure Statement M:\HOME\ENGINEER\AGENDA \ST513.SLH 9--) RESOLUTION NO. /fSf&.3 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING BIDS AND AWARDING CONTRACT FOR "CONSTRUCTION OF SIDEWALK RAMPS ON VARIOUS STREETS IN THE CITY OF CHULA VISTA, CALIFORNIA FY 1996-97 PROGRAM (ST-513D)" AND AUTHORIZING STAFF TO INCREASE QUANTITIES TO EXPEND ALL AVAILABLE FUNDS FOR THIS PROJECT WHEREAS, at 2:00 p.m. on September 18, 1996 in Conference Room 2 in the Public Services Building, the Director of Public Works received the following six sealed bids for "Construction of Sidewalk Ramps on various streets in the city of Chula Vista, California FY 1996-97 Program (ST-513D): Contractor Bid amount MJC Construction - Chula vista Star Paving, Inc. - San Diego Portillo Concrete - Chula vista Fox Construction - San Diego Hammer Construction Company - Chula vista Carolyn E. Scheidel - Contractor - La Mesa $30,208.00 $32,825.00 $32,875.00 $34,930.00 $35,270.00 $37,260.00 WHEREAS, the low bid, submitted by MJC Construction, is below the Engineer's estimate of $33,498.00 by $3,290.00 or 9.8%; and WHEREAS, the owner of this company has done other work for the City and that work has been done satiSfactorily, staff, therefore, recommends the contract be awarded to MJC Construction; and WHEREAS, because this is an annual program, there are currently some remaining funds left from previous year's budgeted amounts and it is recommended that we use these funds, along with any remaining funds in this year's account, to construct additional ramps if possible; and WHEREAS, it is anticipated that approximately $4,900.00 available to construct which will build approximately seven more ramps, 46 ramps will be constructed with this contract; there will be additional ramps thus, a total of and WHEREAS, the requirements per Federal and women-owned business bid documents set forth participation Regulation for meeting the disadvantaged goals; and WHEREAS, Juan P. Arroyo, Housing Coordinator, has reviewed the bid documents submitted by the three lowest bidders and concluded the lowest bidder, MJC Construction does meet the City's requirement for DBE participation; and 9-i WHEREAS, staff also reviewed MJC Construction's eligibility status with regard to federal procurement programs and the status of the state contractor's licenses; and WHEREAS, neither MJC construction no any listed subcontractors are excluded from Federal Procurement Programs (list of parties excluded from Federal procurement or non-procurement programs as of August 9, 1996); and WHEREAS, the city's Environmental Review Coordinator has reviewed the work involved in the project for the ADA curb cuts and has determined them exempt under section 15301 (d), Class I, of the California Environmental Quality Act. NOW, THEREFORE, BE IT RESOLVED the city Council of the City of Chula vista does hereby accept said six bids and award the contract for construction of sidewalk ramps on various street in the city of Chula vista to MJC Construction in the amount of $30,208.00. BE IT FURTHER RESOLVED that staff is hereby authorized to increase quantities under the approved contract and to expend $1,750 from Account 600-6001-ST-513 and $5,514 from Account 651- 6510-ST-513 from previous budgets and $39,639 from FY 96-97 Account 653-6530-ST-513 for the work in order to finance same. BE IT FURTHER RESOLVED that the Mayor of the city of Chula vista is hereby authorized and directed to execute said contract for and on behalf of the City of Chula vista. Presented by Approved as to form by John P. Lippitt, Director of Public Works o ~~~~ ,/ / 1'.....J(/I' ..'- 'A~. Moore, A ing C' y . 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Z :E: 0) Z >- >< 0 ::IE > z 0 3 I- 0::0::0::0:: :::::> ::; :::::> 0 0 ::IE V) wLaJL.aJL.t..I U1 0 U .... ..... 0 0:: ::IE .... 0:: zzzz :E: Z Q.. L;: a:::: 0::: a::: 0::: 00 I- oltI oltI < zoltl oltI oltI ~~ 0000 <:c z zo .....: Zo z ci 0 uuuu Z I-- o. oz t:i Qz o' O' z U -l- V) -.... -.... 0:: < 1-1-1-1- I-V) ~< 1-< 1-> t;~ :::>l.J..J 0 ~< u< -V) I- 0::> 0::.... 0::.... i:3 ~_f~ ....V) >-V) ....< ....0 ....0 :E::E::E::E: I-Z ....z <z <z 1-1- I- Z I- Z I- <V) 1-1-1-1- ~4: z!:!:! 1-.... ~!:!:! ~!:!:! ~V) z< z< ~ ~ ~ 0::0:::::::>:::::> z_ -.... -.... 0000 - -0:: -0:: 0:: 0:: I!!!: 1 ..... I..... .....:5 I ......'i..J I . 1 . ...........; ...........; zZV)V) 1-.... 1-.... 1-..... 1-0 1-0 I- . l- I I I I :5"*= 0 0 0 0 ..-- N N r<> ....... LO uuuu ..-- ..-- ..-- ..-- ..-- ..-- ..-- ..-- ..-- ..-- ....~....~ a.... z z V) V) '....L.I --..J 0) 4: I-- 9~ fr' A IT rt~ 11f-/lIDv T B MEMORANDUM October 10, 1996 TO: Cliff Swanson, Deputy Director of Public Works/City Engineer FROM: Juan P. Arroyo, Housing coordinator~ SUBJECT: Minority and Women Business Enterprise Construction Program - Construction of Sidewalk Ramps (ST513D) I have reviewed the MCJ bid proposal for compliance with the City's Minority and Wowen Business Enterprise Construction Program and have determined that the contractor has provided the necessary documentation to indicate that the company plans to achieve the City's goals for minority and women business enterprise participation. JAljef cc: Roberto Saucedo, Senior Civil Engineer Shale Hanson, Civil Engineer Judith Foland, Community Development Specialist 7-7 II"" U 1\ UF LHULA VISTA DISLLUSLRL ~ I AII:.,\U,,', ATT~ttM~NT C You are required to file a Statement of Disclosure of certain ownership or financial interests. payments. or campaign contributions. on all matters which will require discretionary action on the part of the City Council. Planning Commission, and all other official bodies. The following information must be disclosed: List the names of all persons having a financial interest in the propeny which is the subject of the application or the Contract . e.g., owner. applicant. Contractor. subcontractor, material supplier. .TAVIEI<> JIHE.~Ez.. 2. If any person" identified pursuant to (I) above is a corporation or pannership, list the names of all individuals owning more than 10% of the shares in the corporation or owning any partnership interest in the partnership. kl/A I 3. If any person" identified pursuant to (I) above is non-profit organization or a trust. list the names of any person serving as director of the non-profit organization or as trustee or beneficiary or trustor of the trust. tv/A 4. Have you had more than $250 worth of business transacted with any member of the City staff, Boards. Commissions. Committees, and Council within the past twelve month? Yes _ NoX If yes, please indicate person(s): 5. Please identify each and every person, including any agents, employees. consultants, or independent Contractors who you have assigned to represent you before the City in this mailer. JAVIER,; J'IHENE'Z. 6. Have you and/or your officers or agents. in the aggregate. contributed more than $1,000 to a Council member in the current or preceding election period? Yes _ No X If yes, state which Council members(s): Date: q..::.JJ - q Co " " " (NOTE: Attached additional pages as necessary) " " " @aoo. ^ .)l^M'~^ Sign~re of Contractorl Applicant .- 2) .::rAvIlSR> 0'1 ME.t-JE~ Print or type name of.Contractorl Applicant ( " Person is defined as: "Any individual. firm, co-pannership, joint venture, association. social club, fratel7Ull organization. corporation, estate. trust, receiver. sYndicate. this and any other county. city or country. city municipality, district. or other political subdivision, or any other group or combination acting as a unit. 46 c}~J& "..;~....... ~-~-"... .~,.., '--..'~-, CITY COUNCIL AGENDA STATEMENT /;;- Item Meeting Date 10/22/96 IT TL LI 1 t' /8"i/P-! . . EM TI E: (7. Reso u 10n : Mod1fY1ng the agreement between the city and Municipal Resource Consultants (MRC) to expand the scope of services provided by MRC to include utility Users Tax (UUT) audit services. .~ I1. Resolution /J('/6-/' Instituting an audit proceeding of the city's gas, electric and telephone UUT, designating MRC as authorized representatives of the city for conducting the audit and authorizing the Mayor or designee to issue subpoenas for this purpose. SUBMITTED BY: Director of FinanceV~ REVIEWED BY: City Manager ~ The FY 1996-97 adopted budget included additional revenue of $50,000 to be derived from an audit of the city's UUT. staff does not have the expertise or resources to conduct this audit. The two firms known to provide UUT audit services in California were requested to submit proposals. Only one firm, MRC, submitted a proposal. The city currently contracts with MRC for sales tax audi t services . Given MRC' s satisfactory performance in this arena and the excellent references from jurisdictions which contract with MRC for UUT audit services, staff recommends the city's current agreement with MRC be modified to include UUT audit services as outlined on Attachment 1. Since MRC is compensated based on a percentage of new revenue the City receives as a result of the audit, the city can only benefit financially from this arrangement. since a UUT audit requires the review of proprietary customer records of the companies to be audited, subpoenas must be issued to access these records. These subpoenas are typically called "friendly subpoenas" as utility providers are prohibited from voluntarily disclosing confidential customer information. By releasing the information only after subpoena, the company being audited is protected against customer complaints of improper release of confidential information. To further ensure customer confidentiality, the resolution also authorizes the City and/or MRC to execute non-disclosure agreements on behalf of the city in appropriate cases where confidential information is subpoenaed and, in the opinion of the City, is not subject to disclosure under the Public Records Act. RECOMMENDATION: 1. That Council adopt Resolution ____ amending MRC's agreement to include UUT audit services 2. That Council adopt authorizing an UUT audit, the city's representative authorizing the Mayor or subpoenas. Resolution designating MRC as for the audit and designee to issue /IJ- / page LItem / () Meeting Date 10/22/96 DISCUSSION: Need for UUT Audit and Expert Advise UUT is a significant revenue source for the city. Last fiscal year the city received $2,756,337 from gas, electric and telephone OUT. Due to the rapidly changing technology, especially in the telecommunications industry, it is imperative to review and possibly amend the city's OUT ordinance to ensure the continuation of this revenue source in the face of technological and legal changes. Over 60 telephone companies pay OUT to the city on a routine basis. However, there are over 600 telephone providers in southern California. Al though the city has been growing, UUT revenue has been flat or decreasing. Given the scope and complexity of OUT and the significance of this revenue source there is a need to conduct an audit to ensure OUT are correctly applied and remitted to the city. The two most common errors uncovered by OUT audits are geo-coding errors which result from the utility improperly cOding a city location as out-of-City and tax application errors in which new companies do not comply with the ordinance. since OUT auditing is such a specialized field and auditing requires the use of sophisticated computer systems, in- house staff lack the expertise and resources to conduct the audit. Consultant Selection Process Both firms which are known to provide UUT audit services in Southern California were contacted, only Municipal Resource Consultants (MRC) submitted a proposal. The city has contracted with MRC since 1992 to provide sales and use tax audit and information services. MRC has done an excellent job on this audit and has been very responsive to staff requests for information and assistance. Staff also contacted municipalities which have contracted with MRC for UUT audit services. These cities have given MRC excellent references and have indicated that MRC has provided ongoing advise on legal issues surrounding UUT as well as generated revenue from the audit services. MRC is the major OUT audit firm in Southern California and their staff is highly experienced in this field. Based on this staff is proposing that the city's agreement with MRC be modified to expand the scope of service to include UUT audit and consulting services on a contingency basis. Consultant Compensation As with the current agreement with MRC for sales tax audit services MRC's compensation will be contingent on the UUT audit generating new revenue for the city. Most audit findings will result in ongoing revenue. MRC will receive 25 percent of the revenue generated by the audit for up to but not exceeding 12 quarters. / ~ - ,;L Page LItem Meeting Date 10/22/96 /0 The city will also receive expert advise on UUT ordinance modifications at no charge. MRC will receive 25% of the new revenue for 12 quarters only. Given this contingency arrangement the city can only benefit financially from this audit. Description of Audit Process Initially, MRC will review the City's ordinance so they can audit tax application appropriately. They will also review the city's ordinance and make recommendations to staff and the city Attorney to keep the ordinance vital in the face of changing technology. MRC will then begin the audit process. subpoenas will be used to obtain information from applicable companies. A subpoena process is necessary because utility providers are prohibited from disclosing confidential customer information. If a utility company is required to provide confidential business records as ordered by issuance of a subpoena than they are protected if a customer logs a complaint for release of such records. To further ensure customer confidentiality the Mayor, city Manager and or Consultant (as required by the responding party) will execute non-disclosure agreements on behalf of the City in appropriate cases where confidentiality or proprietary information is requested or subpoenaed and such information, the City determines, is not subject to disclosure under the Public Records Act. MRC will sample information from each company to ascertain the type of errors which might be expected to result from the audit. MRC will then audit all records from the selected audit period and inform the city as to any findings. MRC will then work with the company to correct any errors so that the City receives the total amount of UUT due it in future periods. On an ongoing basis, MRC will review the City's UUT receipts to ensure that companies are in compliance and that new companies are properly charging and remitting the tax. This is especially important as there are over 600 telephone companies operating in Southern California. FISCAL IMPACT: Based on direction given by the City Council, $50,000 was added to the UUT revenue estimate in the current budget as a result of conducting a UUT audit. The audit could produce more or less revenue depending on the findings. Failure to proceed with the audit in a timely manner would necessitate a reduction in UUT revenues of $50,000 in the current fiscal year and would reduce UUT receipts in future fiscal years. Additional financial benefits should accrue to the city from MRC's review and recommendations regarding the UUT ordinance to ensure that the ordinance retains its revenue generating ability in light of rapidly changing technology. /)/)_ "7 ,!/ ~j RESOLUTION NO. / % iJ i-Jj RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA MODIFYING THE AGREEMENT BETWEEN THE CITY AND MUNICIPAL RESOURCE CONSULTANTS (MRC) TO EXPAND THE SCOPE OF SERVICES PROVIDED BY MRC TO INCLUDE UTILITY USERS TAX (UUT) AUDIT SERVICES WHEREAS, additional revenue City's UUT; and the FY 1996-97 adopted budget included of $50,000 to be derived from an audit of the WHEREAS, staff does not have the expertise or resources to conduct this audit; and WHEREAS, the two firms known to services were requested to submit proposals, firm, MRC, submitted a proposal; and provide UUT audit however, only one WHEREAS, the city currently contracts with MRC for sales tax audit services; and WHEREAS, given MRC's satisfactory performance in this arena and the excellent references from jurisdictions which contract with MRC for UUT audit services, staff recommends the City's current agreement with MRC be modified to include UUT audit services as outlined on Attachment 1; and WHEREAS, since MRC is compensated based on a percentage of new revenue the City receives as a result of the audit, the city can only benefit financially from this arrangement. NOW, THEREFORE, BE IT RESOLVED the city Council of the city of Chula vista does hereby modify the Agreement between the city and Municipal Resource Consultants to expand the scope of services provided by MRC to include utility Users Tax audit services. BE IT FURTHER RESOLVED the Mayor is authorized and directed to execute a modification agreement in substantially the form presented with such minor modifications required or approved by the city Attorney. Presented by Approved as to form by Robert powell, Director of Finance ~~~~)l~ Ann Y. Moore, Acting city Attorney C:\rS\IIH'C,uut )c/J - J ATTACHMENT 1 MODIFICATION TO EXHIBIT A OF CONTRACT WITH MRC TO INCLUDE UUT AUDIT SERVICES This modification to the agreement with Municipal Resource Consul tants (MRC) , which has been in effect since December 28, 1992, is entered into effective as of October 22, 1996. This modification expands the scope of service in the existing agreement to include utility Users Tax (UUT) audit services. The original agreement with MRC includes general duties and language to cover a number of revenue enhancement services but only specifically authorized sales and use tax audit and information services. Specific additions to the existing agreement needed to expand the scope of service to include UUT audit services are specified below. Additional Specific Duties to Be Performed bv MRC 1. Review the applicable provisions of the City's current UUT ordinances, particularly as they relate to telecommunications services and advise the city as to what administrative interpretations and ordinance modifications are necessary to capture all available revenue. 2. MRC will conduct an audit of gas, electric, and telephone UUT payments which will include the following: Review the City's UUT ordinances to determine the basis for calculating UUT payments; Review City's UUT payment receipt records; . Inventory and analyze utility service providers and users subject to the City's ordinances; Examine the status of exempted users to verify proper compliance with ordinances; Validate, on a test basis, that the rate calculation components have been accurately computed; Review the city's receipts for utility/telecommunications services on an ongoing basis to determine whether the city is receiving all UUT due it under ordinance; Prepare, maintain and provide MRC's proprietary address-range databases and or MRC's zip cop service to cellular service providers to enable them to implement UUT billing; Monitor and review the cellular service providers' consumer service packages and verify that the City's cellular UUT is correctly and completely applied to the taxable aspects of each package; / t//-l ~,;L ATTACHMENT 1 After receiving proper authorization from City, examine and receive utility and customer records (hard copy and data format) necessary to assure UUT compliance and execute necessary nondisclosure agreements, as approved by the City Attorney; Provide the city with quarterly and audit progress reports to include, but not be limited, to the following: status of work in progress, including copies of reports provided to taxpayers/intermediaries addressing each reporting error/omission individually, including, where applicable, the individuals contacted, date (s) of contact, nature of business, reason for error/omission and recommended corrective procedure; actual revenue produced for city by MRC's service on a quarterly basis, for the most recent quarter and cumulative; projected revenue forthcoming to the city as result of MRC's audit service, specified according to source, timing and one-time versus on-going; alphabetical listing of all errors/omissions detected for the city by MRC, including for each, payment amount due the City, payment amount received by the city, period to which payment is related and payment type. 3. On an ongoing basis, MRC shall, in a timely manner, advise City of proposed and adopted federal and state legislation and pending and final court decisions which impact or may impact applicability and revenue realization from existing UUT ordinances and franchise agreements, and the fiscal impact thereof. MRC will advise city on legislative positions or recommended actions to retain or increase these revenue bases by mitigating any negative impacts or capitalizing on any new revenue opportunities potentially resulting or resulting from legislation or court decisions. This service is standard in MRC's for fee UUT agreement and is provided at no additional charge while the audit is in progress. Effective Date of Contract Modification MRC is to commence providing the services specified above ten working days from the effective date of this contract amendment. Timelines for Deliverables included in Contract Modification 1. MRC will commence the UUT audit within 10 working days of receiving City authorization (unless instructed otherwise by city). 2. MRC will deliver the initial audit reports documenting the errors/omissions detected within 120 days from receipt of data from utility. 2 .-,""> /l-A - > ATTACHMENT 1 3. MRC will provide the city with audit progress reports on a quarterly basis each quarter subsequent to the initial audit report. Date for completion of service included in Contract Modification On going until terminated in accordance with the terms and conditions of existing Agreement. Additional Duties to be Performed bv city 1. Adopt a resolution authorizing the appropriate City officials to execute subpoenas for the release of utility customer records and which authorizes appropriate city personnel to execute necessary nondisclosure agreements approved by the City Attorney. 2. Provide a letter of authorization to MRC for the purpose of identifying MRC as an authorized agent of the city to perform UUT compliance audits; to receive and examine appropriate utility and customer records (hard copy and data format) necessary to assure utility users tax compliance; and to execute necessary nondisclosure agreements approved by the city Attorney. 3. Upon request, and with the concurrence of city staff and the city Attorney, provide MRC with appropriate "administrative" interpretations of UUT ordinances. 4. Provide timely direction to MRC regarding the preparation and forwarding of written requests for corrective action on errors and omission substantiated by MRC. 5. Retain authority and responsibility to administer, interpret and enforce UUT ordinances, recognizing that MRC's role is to provide the city with technical assistance without assuming such authority or responsibility of city. 6. Obtain prior approval and direction from designated city staff to prepare and forward to the appropriate parties written request for corrective action and revenue recovery consistent with the UUT ordinances. 7. Be available to recommendations, implementation of and taxpayers. meet with MRC to review findings and and receive directions regarding city's UUT ordinance and auditing of tax collectors 3 )!;q ~/ ATTACHMENT 1 8. Invoice the responsible party for tax deficiencies including associated charges for penalties and interest, identified and confirmed by MRC within 30 days following receipt of MRC's report. 9. Notify MRC within 10 working days following receipt by the city of payments resulting from MRC's audit service. Compensation Related to Contract Modification MRC's compensation shall be entirely predicated and contingent upon the audit producing new revenue that would not otherwise have been realized by the City. Under this arrangement, the city agrees to pay MRC an amount equal to 25% of the UUT deficiency recoveries from eligible prior periods (plus 25% of the associated charges for penalties and interest). When MRC' s audit results in the detection and correction of errors/omissions that the City and MRC mutually agree will produce ongoing, future (rather than only one-time, past) benefits to the City, MRC's compensation shall be 25% of the incremental revenue realized by the city from audit of UUT during the first twelve consecutive quarters to which the correction is applied. MRC's compensation shall never be based on more than 12 consecutive quarters, including back and forward quarters. After the city receives payment on invoices generated as a result of MRC audit, the City will notify MRC within 10 working days that the revenue has been received. MRC will then prepare and send an invoice to the city based on the above compensation agreement. The city will pay MRC earned compensation within 15 wo~king days from receipt of invoice. MRC is to receive specified above. reimbursement. no compensation for these services except t~at This agreement has no provisions for expense 4 /&1 ------ - ? -~ ATTACHMENT 1 Except as expressly modified hereby, all other terms and conditions of the existing agreement shall remain in full force and effect. Dated: 19_ Municipal Resource Consultants John T. Austin, Inc. City Of Chula vista By: By: shirley Horton, Mayor John T. Austin Attest: Beverly Authelet, city Clerk Approved as to Frrmj ./l)~ g,,~ ~ f'iY\v.~ ~ Ann Moore, Acting city Attorney /()/J ~ ~ 5 RESOLUTION NO. ;SYt-5 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA INSTITUTING AN AUDIT PROCEEDING OF THE CITY'S GAS, ELECTRIC AND TELEPHONE UTILITY USERS TAX, DESIGNATING MUNICIPAL RESOURCE CONSULTANTS AS AUTHORIZED REPRESENTATIVES OF THE CITY FOR CONDUCTING THE AUDIT AND AUTHORIZING THE MAYOR TO ISSUE SUBPOENAS FOR THIS PURPOSE WHEREAS, the city derives substantial revenues from its utility users taxes and franchise fees; and WHEREAS, it is prudent and appropriate that the City perform a periodic audit of those persons or entities responsible for the collection and/or payment of utility users taxes to the city; and WHEREAS, in order to conduct a thorough and efficient audit, the city requires reasonable access to certain information, records, and data of those persons or entities responsible for the collection and/or payment of utility users taxes to the city; and WHEREAS, with respect to the city's auditing of gas, electric, and telephone utility users taxes, the City has retained the services of Municipal Resource Consultants and Donald H. Maynor (through MRC) , hereinafter "Consultants". NOW, THEREFORE, BE IT RESOLVED that the City Council of the city of Chula vista does hereby: 1. Insti tute an audit proceeding of the City's gas, electric, telephone utility users taxes, wherein the city Staff and Consultants shall periodically report to the City Council the findings of such audit activities. 2. Authorize the Mayor of the City of Chula Vista, or his/her designee to the extent allowed by law, to issue subpoenas pursuant to Government Code ~37104 et seq. requiring the subpoenaed party to provide certain information to the city and/or its authorized representatives for purposes of conducting an audit of the city's gas, electric, and telephone utility users taxes. 3. Designate Consultants as authorized representatives of the city for purposes of conducting an audit of the City's gas, electric, and telephone utility users taxes for purposes of requesting audit information and information described in Public Utilities Code ~6354(j), and for purposes of receiving such subpoenaed or requested information. 1 /6J/S ~ / 4. Authorize the Mayor, city Manager, and/or Consultants, as required by the responding party, to execute non- disclosure agreements on behalf of the City in appropriate cases in which confidential or proprietary information is requested or subpoenaed, and, in the opinion of the City, such information is not subject to disclosure under the Public Record Acts. Presented by Approved as to form by y~~k)V{~ Ann Y. Moore, Acting City Attorney Robert Powell, Director of Finance 2 Ji/LS --d- COUNCIL AGENDA STATEMENT Item // Meeting Date 10/22/96 ITEM TITLE: Report Regarding the Development Impact Fee Funds for the Fiscal Year Ended June 30, 1996 p;yt-~ Resolution No. / Making Findings that the Unexpended Funds in the Various DIF Funds are still needed to provide construction of facilities for which the fees were collected SUBMITTED BY: Director of Finance^-f' Director of Public Work REVIEWED BY: City Manage~\ \'XO (4/STHS Vote: Yes_No_XJ .-------z- State Government Code Section No. 66000 requires local agencies assessing Development Impact Fees ("DIF") to make available specified tinancial data to the public each fiscal year. It also requires that the local agency review this information at a public meeting. Local agencies are also required to make findings once each year for any funds remaining unexpended or uncommitted for five or more years. The findings must identify the purpose for the fee and demonstrate a reasonable relationship between the fee and the purpose for which it was charged. This report includes the required financial information for the fiscal year ended June 30, 1996 and specifies the findings of need for funds held for five or more years. RECOMMENDATION: That Council accept the report and approve the Resolution making findings that the unexpended funds in the various DIF Funds are still needed to provide construction of facilities for which the fees were collected. BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable. DISCUSSION: The City of Chula Vista has several types of Development Impact Fees ("DIF") which were assessed during the fiscal year ended June 30, 1996. The major categories of DIFs are for transportation, traffic signal, park, drainage, sewer and public facilities. During FY95-96 no 11--/ Page 2, Item ) ( Meeting Date 10/22/96 new DIFs were added. All existing DlFs remained at the same rate as the previous year. TRANSPORTATION DEVELOPMENT IMPACT FEE - This fee was adopted by the City to finance and coordinate the construction of new transportation facilities so that streets are built when needed. This fee is applicable to all new development east of I-80S. Prior to the program, streets were built by developers in a fragmented fashion with 6-lane facilities, necking down to 2-lanes and expanding back to 6 lanes again. In addition, there was a fairness issue since some developers fronted on large streets and others did not. Now all developers in the Eastern portion of Chula Vista pay the same fee per dwelling unit and either the City constructs the street or a developer does, using the cost to offset the TransDlF fee at the building permit stage. The fee for FY9s-96 was $3,998 per equivalent dwelling unit (EDU). INTERIM PRE-SRI25 DEVELOPMENT IMPACT FEE - This fee was adopted by the City to finance transportation facilities in the Eastern Territories that would be needed to provide adequate and safe transportation facilities if there are delays in the construction of State Route (SR) 125 by CALTRANS or others. The fee in FY95-96 was $820 per EDU. TRAFFIC SIGNAL FEE - This fee was adopted to provide for the projected traffic signal needs for the City that result from increases in traffic volume caused by development. As funds are accumulated they are expended on traffic signal projects that meet the warrants at the time the funds are available. This is a city-wide fee with a FY9s-96 rate of $13 per trip generated. EASTLAKE PARK DEVELOPMENT IMPACT FEE - This fee was adopted by the City to finance and coordinate the construction of park facilities in the Eastlake area. During FY9s-96, the City and Eastlake revised the original agreement. Under the revised agreement, the City has loaned the principal and interest from this fund to Eastlake at 3 % interest until July I, 1999. When the funds are repaid, they will be used to build a community center. TELEGRAPH CANYON DRAINAGE DIF - This fee is applicable to all new development within the Telegraph Canyon Drainage Basin. The FY9s-96 fee was $3,922 per acre and pays for the construction of the Telegraph Canyon channel between Paseo Ladera and the Eastlake Business Center and a portion of the channel west of 1-805. TELEGRAPH CANYON GRAVITY SEWER DIF - This is a fee for the expansion of the trunk sewer within the basin for tributary properties. The FY95-96 fee was $184 per EDU. TELEGRAPH CANYON PUMPED SEWER DIF - This fee is collected for the expansion of the Telegraph Canyon trunk sewer to serve those properties outside of the basin. These flows are pumped into the trunk line temporarily and it is anticipated they will ultimately drain to another basin, either Poggi or Salt Creek, by gravity. If Telegraph Canyon basin becomes built out, there may be no reserve capacity for the temporary pumped flows and a parallel system must be built. If, however, the capacity is never exceeded once the Telegraph Canyon gravity basin is built out and no parallel system is built because of the temporary flows, the funds will ;/-.2 Page 3, Item K Meeting Date 10/22/96 be returned to the current property owners. The FY95-96 fee was $560 per EDU. SALT CREEK SEWER BASIN DEVELOPMENT IMPACT FEE - This fee was adopted to provide the necessary financing to construct the Salt Creek Interceptor. This fee is applicable to the Salt Creek Sewer Basin, that portion of the Upper Otay Lake Basin north of the Salt Creek Sewer Basin, and that portion of the Lower Otay Lake Basin east of the Salt Creek Sewer Basin. The fee in FY95-96 was $284 per EDU. PUBLIC FACILITIES DlF - The Public Facilities DlF is a city-wide fee with several components levied to fund that portion of public facilities projects attributable to new development. Prior to July 1993, the separate fee components collected for the different public facilities were placed in separate funds. Funds from one facility component fund could not be used to finance projects of another facility component, regardless of the need for, or timing of the various projects. Loans were made from other City funds for project components with insufficient cash. Under the current ordinance, fees collected after July 1993 for the separate fee components are consolidated in a single fund rather than in separate facility funds. Thus, the funds are available for whichever approved project is currently scheduled and interfund loans are minimized. For FY95-96 the total fee for all components was $2,150 per EDU. The components of the Public Facilities DIF with the associated fee are as follows: ADMINISTRATION ($79) - Administration of the Public Facilities DlF program, overseeing of expenditures and revenues collected, preparation of updates, calculation of costs, etc. This fee is set at 2 % of the other Public Facilities DIFs charged. CIVIC CENTER EXPANSION ($527) - Expansion of the Civic Center per the Civic Center Master Plan prepared in 1989, to provide sufficient building space and parking for the existing and anticipated staff and the public. POLICE FACILITY ($235) - Accommodation of the building space needs per the Civic Center Master Plan, which included upgrading of the communications center, construction of a new crime lab, office improvements and installation of new communication consoles. Also included is the purchase and installation of a new computer aided dispatch system (CAD), a new Records Management System, and new Mobile Digital Terminals. CORPORA TION Y ARD RELOCATION ($515) - Relocation of the City's existing corporation yard from the bayfront area to a site more centrally located and of a larger size. The existing site is near capacity. LIBRARIES ($544) - Improvements include construction of the South Chula Vista library and Eastern Territories library(ies), and installation of a new automated library system. I .--, / /.\ ----- Page 4, Item R Meeting Date 10/22/96 FffiE SUPPRESSION SYSTEM ($141) - Projects include the relocation of Fire Station #4 & #3, construction of a fire training tower and classroom, purchase of a brush rig, expansion of Fire Station #1, installation of a radio communications tower and construction of an interim and permanent Station #6. GEOGRAPHIC INFORM A nON SYSTEM ($49) - Purchase and installation of a GIS system for mapping of various base maps and creation of geo-data files to aid in planning and processing of land developments. MAINFRAME COMPUTER ($23) - Purchase and installation of a new mainframe computer and various enhancements to meet existing and future needs for additional memory and storage space and enhanced processing speed. TELEPHONE SYSTEM UPGRADE ($32) - Upgrading and expansion of the City's existing telephone system to accommodate growth, including installation of new conduit, wiring additional telephone lines, and a voice processing system. RECORDS MANAGEMENT SYSTEM ($5) - Updating and modernization of the existing records system to prepare the City for anticipated increases in transactions and volumes of records. Attachment A, Schedule I reports the required financial information about the components of the Public Facilities DIF. Attachment A, Schedule 2 reports the required financial information for the rest of the DIFs. The schedules contain the following items: The beginning balances as of July I, 1995. The DIF fees received during the fiscal year ended June 30, 1996. The interest earned from investing the cash balances available in each DIF fund during the fiscal year ended June 30, 1996. The expenditures from each of the DIF funds during the fiscal year ended June 30,1996. Transfers out to other funds as approved by City Council during FY 1995-96. The ending balances as of June 30, 1996 for each of the DIF Funds The ending balances as of June 30, 1996 are in the process of being audited as part of the audit of City-wide financial statements. )l-i Page 5, Item )! Meeting Date 10/22/96 FINDINGS REQUIRED FOR FUNDS IN POSSESSION OVER 5 YEARS Government Code Section 66001.d requires the local agency to make findings once each fiscal year with respect to any portion of the fee remaining unexpended in its account five or more years after deposit of the fee to identify the purpose for which it was charged. The following projects are listed to satisfy Section 66001.d of the Government Code. a. Transportation Development Impact Fee (TDIF) The projects listed in Attachment B, Table I are to be constructed using monies collected by the Transportation Development Impact Fee. Any funds in the account that are five or more years old have been appropriated for specific projects. No funds in the account five or more years are uncommitted. b. Eastlake Park Development Impact Fee The fees collected prior to FY9l-92 plus the interest earned are still needed for park facilities. Currently, the funds are on loan to Eastlake Development Company to be repaid July 1, 1999. c. Public Facilities DIF - Corporation Yard Relocation The City is in the process of siting a new corporation yard. The fees collected prior to FY91-92 are still needed for the intended purpose. No other DIF funds contain monies that have been on deposit for five or more years. FISCAL IMPACT: With findings that identify the continued need for the unexpended and uncommitted fees, the City retains the DIF fees for the future projects. Without findings that the unexpended funds are still needed for the projects, the City would be obligated to refund the $816,490 in park funds and $166,853 of PFDIF - Corporation Yard funds that have been held five or more years pursuant to State Government Code Section No. 66000. Since the City has loaned $800,000 of the park funds to the developer, EastLake Development Company, money would have to come from some other source to refund the $816,490. The loss of the funds would jeopardize the recently agreed-to EastLake Park Agreement and the future EastLake community center. Without the $166,853 in PFDIF - Corporation Yard funds, alternative funding sources would likely need to be found for the corporation yard project, or the project would have to be scaled back to meet the available funding level. Attachment A - Schedule 1: Financial Information for Public Facilities DIF Attachment A - Schedule 2: Financial Information for All Other DIFs Attachment B - Table 1: Transportation DIF Capital Improvement Projects fm:\data\memos\director\dif96.113 ) /~~~ RESOLUTION NO. Jtr~~0 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA MAKING FINDINGS THAT THE UNEXPENDED FUNDS IN THE VARIOUS DIF FUNDS ARE STILL NEEDED TO PROVIDE CONSTRUCTION OF FACILITIES FOR WHICH THE FEES WERE COLLECTED assessing specified WHEREAS, Government Code ~66000 requires local agencies Development Impact Fees ("DIF") to make available financial data to the public each fiscal year; and WHEREAS, it also required that the local agency review this information at a public meeting; and WHEREAS, local agencies are also required to make findings once each year for any funds remaining unexpended or uncommitted for five or more years, which findings must identify the purpose for the fee and demonstrate a reasonable relationship between the fee ad the purpose for which it was charged. NOW, THEREFORE, BE IT RESOLVED the city Council of the City of Chula vista does hereby make findings that the unexpended funds in the various DIF Funds are still needed to provide construction of facilities for which the fees were collected for the following projects: Transportation Development Impact Fee (TDIF) The projects listed in Attachment B, Table 1, are to be constructed using monies collected by the Transportation Development Impact Fee. Any funds in the account that are five or more years old have been appropriated for specific projects. No funds in the account five or more years are uncommitted. EastLake Park Development Impact Fee The fees collected prior to FY91-92 plus the interest earned are still needed for park facilities. Currently, the funds are on loan to Eastlake Development Company to be repaid July 1, 1999. Public Facilities DIF - corporation Yard Relocation. The city is in the process of siting a new corporation yard. 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Miguel Road to Hunte Parkway 5,377,000 Construction as 6-lane prime (East "H" Street) East Orange Avenue Oleander to Sun bow Eastern Boundary 6,266,000 Construction as 6-1ane prime East Palomar Street Oleander to Sun how Eastern Boundary 6,782,000 Construction as 4-1ane major Hunte Parkway Proctor Valley Road to Telegraph Canyon 4,395,000 Construction as 4-1ane major Road Hunte Parkway Club House Drive to East Orange Avenue 1,250,000 Construction as 4-1ane major East Orange Avenue Eastlake Parkway to Hunte Parkway 6,356,000 Construction as 6-1ane prime Paseo Ranchero Telegraph Canyon Road to East Orange 3,388,000 Construction as 6-lane prime (only Avenue Phase I - 4 lanes included) East Orange Avenue Eastern Sunbow Boundary to Eastlake 18,233,000 Construction as 6-1ane prime Parkway East Orange Avenue I-80S Interchange Modifications 4,064,000 Interchange Improvements East Palomar Street Eastern Sunbow Boundary to Pasco 3,120,000 Construction as 4-lane major Ranchero J /- <]' / / ATTACHMENT B ATTACHMENT B TABLE 1 TRANSPORTATION DIF CAPITAL IMPROVEMENT PROJECTS Revised DIP Street Location Cost as of Status as of June 30, 1996 Jan., 1994 East Palomar Street 1-805 Interchange 2,673,000 Interchange Improvements Telegraph Canyon Road Hunte Parkway to Wueste Road 3,114,000 Construction as 4-Iane major (Otay Lakes Road) East Orange Avenue Hunte Parkway to Olympic Training Center 5,104,000 Construction as 4-1ane major Telegraph Canyon Road SR-125 to Eastlake Parkway 1,493,900 Widening to 8-lane prime (Otay Lakes Road) Eastlake Parkway Fenton Street to Telegraph Canyon Road 980,400 Widening to 6-lane major (Otay Lakes Road) East "H" Street 1-805 to Hidden Vista Drive 901,000 Widening to 8 lanes Bonita Road Olay Lakes Road Intersection 105,000 Intersection Improvements Ola y Lakes Road Elmhurst Drive Intersection 70,000 Intersection Improvements East "H" Street Otay Lakes Road Intersection 221,000 Intersection Improvements Traffic Signal System wide 138,000 Interconnection Eastlake Parkway Eastlake High School Southern Boundary to 3,268,500 Construction as 4-1ane major East Orange Avenue East "H" Street Paseo Del Rey to Tierra Del Rey 682,000 Street Widening (Phase 1 & 2 completed) Bonita Road 1-805 to Plaza Bonita Road 270,000 Street Widening (Completed) TOTAL PROJECT COSTS 94,608,300 OIF program support 5 % of total project cost 4,613,552 GRAND TOTAL 99,221,852 M:\IMenI_,*,,,,,\DIFTABI.113 )) -/ t; ATTACHMENT B COUNCIL AGENDA STATEMENT J) Item ~ Meeting Date 10/22/96 ITEM TITLE Public Hearing: Regarding existing and proposed rates and charges for Cox Communications' Basic Service Tier and associated equipment and Cable Programming Services Tier, as submitted by Cox Communications to the City via Federal Communication Commission (FCC) Forms 1235, 1240 and 1205. Resolution 1) Disapproving upgrade-related increases in Maximum Permitted Rates for the Basic Service Tier; 2) Directing staff to file a complaint with the FCC on behalf of local subscribers regarding upgrade-related increases in the Cable Programming Service Tier rates; 3) Approving proposed cost-based rate decreases for associated equipment;and 4) Approving proposed cost-based increases in the Maximum Permitted Rates for the Basic Service Tier. /> Principal Management Assj~tant Y ount>/ Ci" "'"""',J::1 ~O a~\ (4I5th. V.re, REPORT TO BE DISTRIBUTED ON FRIDAY SUBMITTED BY: REVIEWED BY: Yes_ NoX) Since the end of the hearing Tuesday, staff and Cox Cable have had a continuing series of discussions on the disputed issues. These discussions have also involved the City's consultant, Cox's corporate staff and consultants, and a representative from the FCC. It is anticipated that the final information required will be available Friday morning, with the report finalized and forwarded to you at that time. Staff both understands the need for sufficient time for Council to review such a complex issue and appreciates your patience as these discussions are concluded. IY /~ COUNCIL AGENDA STATEMENT Item ~ Meeting Date 10/22/96 ITEM TITLE Public Hearing: Regarding existing and proposed rates and charges for Cox Communications' Basic Service Tier and associated equipment and Cable Programming Services Tier, as submitted by Cox Communications to the City via Federal Communication Commission (FCC) Forms 1235, 1240 and 1205. Resolution/f7"if'1 1) Disapproving upgrade-related increases in Maximum Permitted Rates for the Basic Service Tier; 2) Directing staff to file a complaint with the FCC on behalf of local subscribers regarding upgrade-related increases in the Cable Programming Service Tier rates; 3) Approving proposed cost-based rate decreases for associated equipment;and 4) Approving proposed cost-based increases in the Maximum Permitted Rates for the Basic Service Tier. SUBMI'ITED BY: Principal Management Assistant Young>>, REVIEWED BY: City ManagerB (4/Sths Vote: Yes_ No...xJ Cox Communications and City staff have discussed potential courses of action regarding the City's regulation of cable rates. Those discussions have also included further contacts with the Federal Communications Commission (FCC) and the City's consultant, Public Knowledge. At this time, staff is presenting three options to Council, which allow for varying degrees of local and federal involvement and varying levels of rate increases. The staff recommended position would result in a Maximum Permitted Rate of $26.92, but would allow Cox to charge as much as $30.95 per month, unless and until such a charge is invalidated by the FCC. The other alternatives presented allow for Cox to reach a Maximum Permitted Rate of $28.95. RECOMMENDATION: That Council conclude the public hearing and adopt the resolution: I) Disapproving upgrade-related increases 'in Maximum Permitted Rates for the Basic Service Tier; 2) Directing staff to file a complaint with the FCC on behalf of local subscribers regarding upgrade-related increases in the Cable Programming Service Tier rates; 3) Approving proposed cost-based rate decreases for associated equipment; and 4) Approving proposed cost-based increases in the Maximum Permitted Rates for the Basic Service Tier. (The intent of this Resolution is to achieve a Maximum Permitted Rate for Cox Classic of $26.92, with Cox having the option of charging as much as $30.95 unless and until the FCC rules otherwise). Based on discussions with Cox Cable and the FCC, staff has also presented various alternatives. BOARD/COMMISSION RECOMMEND A TlON: N/ A BACKGROUND Local vs. Federal roles The Federal Telecommunications Act of 1996 divides regulatory authority into local (Basic Cable) and federal (CPS) jurisdictions. It is Chula Vista's responsibility as a local franchising p-/ Item , Page 2 Meeting Date 10/22/96 authority to regulate Basic Cable rates, assist with customer complaints as appropriate, and file CPS complaints with the FCC as appropriate. It is staffs opinion that in the review of the various rate proposals, the study by Public Knowledge, and the subsequent discussions with Cox Cable and the FCC that the City has met both its formal and informal obligations to due diligence and local stewardship of cable rates. For most of these filings (Basic and CPS cost-based increases and equipment/installation cost- based decreases), staff is able to provide a clear-cut recommendation. For the upgrade portion of the CPS rates, since further evaluation of the appropriateness of the rates would require additional commitment on the part of both a consultant (estimated at $1,000 to $2,000) and in- house staff, it is recommended that this remaining issue be forwarded to the FCC. Issues to date Under federal regulations, cable companies are allowed to justify rate increase requests according to specified forms. In this case, Cox Communications is proposing increases in their Maximum Permitted Rates (MPR) on the basis of both a recent system upgrade (fiber-optics, redundant wiring, additional head-ends/nodes) and inflationary costs. They are also proposing various decreases in equipment rental and installation rates. The inflationary or cost-based increases in the Maximum Permitted Rates and the equipment rate decreases appear to be appropriately justified and staff recommends they be approved. These issues are discussed further in the previous agenda statement (See Attachment #8). A City-commissioned study by Public Knowledge, Inc. of Cox's methodology in spreading its upgrade costs called into question both the Basic Cable and Cable Programming Service (expanded basic or "CPS") share of the upgrade-based request. Thus, staff has recommended the denial of that City-regulated Basic Cable request and a complaint to the FCC regarding the federally-regulated CPS tier request. In May 1996, Cox Communications instituted a $3.79 increase in its CPS tier. A portion of this increase was carried out as part of the upgrade-based rate increase request and exceeded the previously approved Maximum Permitted Rate. This increase would thus be part of the recommended complaint. (See Table 1) BASIC CABLE CPS (Expanded TOTAL: service) BASIC+CPS (Cox Classic) ACTUAL RATES $7.30 $15.90 $23.20 1/ 1/96 RATE INCREASE $0 $3.79 $3.79 5/1/96 TOTAL: $7.30 $19.69 $26.99 Table 1: Actual Rates Charged vs. Maximum Permitted Rate /02 /~ Item , Page 3 Meeting Date 10/22/96 MAXIMUM $7.74 $17.14 $24.88 PERMITIED RATES (as last approved) AMOUNT ($0.44) +$2.55 $2.11 CHARGED ABOVE/(BELOW) MAXIMUM: In response to that study, Cox concurred with some of the City's findings and has adjusted their proposed Maximum Permitted Rates. This included adjustments for advertising revenue from leased-access channels and for reducing the percentage of the upgrade applied to existing channels from 80% to 73%. Thus, rather than an upgrade-based increase of $5.76 in the Maximum Permitted Rates for Basic and CPS service rates, they now propose a maximum increase of $5. 11---a decrease of $0.65 per month from their initial proposal. (See Table 2). Staff appreciates the action Cox has taken to reevaluate their submittal. What remains in dispute is the exact portion of the upgrade that benefits consumers of existing channels (via enhanced signal quality) and what portion properly should be attributed to consumers of newly added premium services or future channel capacity. Discussions with the City's consultant and FCC representatives continue to show this issue as being somewhat ill-defined by the FCC. This puts the City in the position of either contracting for a more detailed rate study on the revised submittal or passing the issue along to the FCC for a definitive ruling. . In reviewing rates, cities are not required to determine what the exact rates should be, just whether the charges as proposed are appropriate or not. The FCC is the final arbiter in -cPS matters and appeals of local franchise authority actions on Basic rates. If the City were to complain to the FCC about any CPS increases or deny any basic cable rate increases, Cox would have recourse to the FCC. While those complaints or appeals were being heard, Cox would lose no ability to charge their requested rates. If the FCC were to find in the City's favor, any overcharges would be subject to refund by Cox. Jd-3 Item , Page 4 Meeting Date 10/22/96 Table 2: PROPOSED RATES: DETAIL BASIC CABLE CPS TOTAL:BASIC+ (EXPANDED CPS (COX SERVICE) CLASSIC) I COX: ORIGINAL PROPOSAL (5/96) - MAXIMUM PERMITTED RATES I MPR as of 111/96 $7.74 $17.14 $24.88 Upgrade-related MPR $1. 73 $4.03 $5.76 increase request (Form 1235) Cost-related MPR $2.00 $0.04 $2.04 increase request (Form 1240) TOTAL MPR Requested: $11.47 $21.21 $32.68 COX: REVISED PROPOSAL (lO/IO/96) -- MAXIMUM PERMITIED RATES MPR as of. 111196 $7.74 $17.14 $24.88 Upgrade-related MPR $1.59 $3.52 $5.11 increase request (Form 1235) Cost-related MPR $2.00 $0.04 $2Jl4 increase request (Form 1240) TOTAL MPR Requested: $11.33 $20.70 $32.03 Difference from initial ($0.14) ($0.51) ($0.65) request: Initial and Revised Positions Most of the discussion below relates to Cox's target "market rate" of $28.95. However, in the proposals they have presented so far, rates have been expressed in terms of Maximum Permitted Rates. As shown above, the rates actually charged are usually somewhere below these maximums. Depending on the course of action taken by Council, the City could govern both the actual rates charged and the maximum rates potentially chargeable. /;2 -1(' Item , Page 5 Meeting Date 10/22/96 Table 3: RATE/POSITION SUMMARY MAXIMUM ORIGINAL COX REVISED COX CITY STAFF PERMITTED RATES POSITION (5/96) POSITION POSITION (MPR) (10/10/96) Cox Classic maximum $26.92 $26.92 $26.92 rates, including cost- related increase Percentage of upgrade 80% 73% Exact percentage attributed to existing to be determined channels by FCC Upgrade-related MPR $5.76 $5.11 To be determined Increase by FCC Total Requested $32.68 $32.03 $26.92+?? Maximum Permitted Rate DIFFERENCE OF MPR REQUEST FROM CURRENT RATES Maximum Permitted Rate $32.68 $32.03 $26.92+?? Less: Cox Classic ($26.99) ($26.99) ($26.99) Potential $5.69 $5.04* ($0.07) maximum Increase/ (Decrease) decrease * NOTE: Of the $5.04 total potential increase, $1.68 is based on existing Maximum Permitted Rates, $2.04 on consensus cost-relat~ increases, and $1.32 in additional upgrade-related increases ($3.79 of the $5.11 request has been charged since May I). Presented below is a discussion of the issues outstanding, several alternatives that have been explored, and the FCC's and consultant's comments on those issues and alternatives. DISCUSSION Cox Priority #1: Desire to reach a "market rate" In meetings with staff, Cox presented two priorities for a rate structure: reaching a consistent (and higher) "market rate" and avoiding a basic rate appeal (as opposed to a CPS complaint). Cox has issued notice to its other franchise cities that it intends to increase rates effective November IS to a total of $28.95 ($10.50 for Basic and $18.45 for CPS; See Attachment #10). Chula Vista's rates are to remain unchanged pe~ the outcome of the current rate filings. /c.:2 ;!7 Item , Page 6 Meeting Date 10/22/96 However, Cox's stated intent is to bring all cities up to a consistent $28.95 level, which they view as a "market rate." Staff understands the desire for consistency in rates throughout the region. There is a concern, however, that in order to reach that identified goal, Cox would be increasing Chula Vista customers' current rates of $26.99 by an additional $1.96. Based on their goals of $10.50 and $18.45, the Basic rate would increase by $3.20 (from $7.30) and CPS rates would decrease by $1.24 (from $19.69). Adding this net $1.96 increase to the $3.79 increase in May 1996 and the preceding $0.50 increase in January 1996, this could be a increase of $6.25 or 27.5% within less than a year's time. The increase to $28.95 would also entail increasing the Maximum Permitted Rate of $24.88 by $2.04 per the cost-based filing and by at least $2.03---of the $5.76 originally requested---per the upgrade-based filing. (NOTE: As shown in Table 3 above, the current rate charged is actually $0.07 higher than the Maximum Permitted Rate, which accounts for the difference between the $1.96 rate increase and the $2.03 MPR increase). Table 4: DIFFERENCE OF COX'S "TARGET RATE" FROM CURRENT RATES ORIGINAL COX REVISED COX CITY STAFF POSITION POSITION POSITION Target Rate $28.95 $28.95 $26.92+?? Less: Cox Classic ($26.99) ($26.99) ($26.99) Likely $1.96 $1.96 ($0.07) maximum Increase! (Decrease) decrease (Making up the difference between City and Cox positions would require an increase in Maximum Permitted Rates of $2.03.) . For 'comparison purposes, comparable cable rates Southwestern, Daniels, and Chula Vista Cable are currently $28.82, $28.25 and $19.95, respectively. Nationally, a recent Wall Street Journal article cites average cable rate increases in the past year of 10.4 %, with the average monthly rate rising to $24.57 as of June, 1996 (See Attachment #9). Cox's position on the size of the increases experienced in Chula Vista and other cities is that they are a quirk of the FCC's regulatory procedures and the timeline of the upgrade. Cox's preferred option for reaching $28.95 (as discussed below) could be perceived as allowing any increase as long as there are few complaints. While this idea does reflect certain free market logic, there remain at this time few local alternatives to Cox Cable. Until the point of "effective competition" is reached, staffs recommendation is to determine rates through objective criteria. In the case of the cost-based filing, this was possible to verify through a reasonably-priced consultant review. In the case of a more detailed rate study on the upgrade, it remains staffs recommendation that this be done by the FCC. ;.;2 -~ Item , Page 7 Meeting Date 10/22/96 Cox Priority #2: Avoid a Basic Rate Appeal In addition to wanting to reach a market rate, Cox has also identified a desire to avoid the need to appeal a City rate-setting decision on Basic Cable. Typically, this type of appeal is more closely scrutinized by the FCC and would be more of a burden for Cox to pursue than resolution of a CPS complaint. CPS complaints typically incur a longer waiting time for an FCC decision, but require minimal follow-up by either the cable company or the City. While it would not be Cox's preference to have a CPS complaint filed, they have expressed a willingness to accept that course of action if they are able to achieve their first priority of a market rate. According to comments from the FCC, complaints about CPS rates (329 forms) are reviewed by a staff accountant based on the documents submitted by the two parties. Although there is a backlog of approximately two years in getting to an individual complaint, the amount of staff time required for the review is approximately 3 days. Although the FCC may contact one of the parties for additional information, there is not typically any oral argument, petitioning or other involvement by the City or cable company beyond their initial documents. For appeals of local agency Basic Cable rate increase denials, an FCC attorney is assigned to the case, a comment and reply process is held, technical input is solicited, and a decision reached. As in Form 329 CPS complaints, the review is not from scratch or "de novo," but rather based on the documents submitted. The processing time for these appeals has been reduced to approximately 6 months, although some 2 year old cases are still outstanding. To the extent possible and justified, staff has considered both of these stated Cox priorities in the resolutions presented. For what share of the up!!rade should customers be charged? In completing their system upgrade, Cox increased from coaxial cable to fiber-optics, for an increase from 450 Megahertz (MHz) to 750 MHz. Of this increase, only 100 of the 300 MHz has so far been put into use in the way of new channels, enhanced signal quality, etc. The remaining 200 MHz remains available to accommodate future channel additions. This would tend to indicate that the maximum share of the uograde to be passed along to existin!! customers might be 33%. rather than the 73%-80% prooosed by Cox. Since that upgrade was completed, Cox added new pay channels (e.g. ESPN-2, Turner Classic Movies) and new leased-access channels (e.g. home shopping/info-mercials). Both types of additions bring revenue streams with them that can appropriately bear the cost of the upgrade. At the same time, Cox was requesting an upgrade-based increase in Basic rates when it had not added any new Basic channels. With certain changes in the Basic and CPS lineups effective September 30, this situation has changed slight! y. However, as discussed in the Public Knowledge report, the share of the upgrade that may be attributable to existing channels (and thus passed along to customers) is ;,;) - :/ Item , Page 8 Meeting Date 10/22/96 potentially much lower than Cox's initial proposal or even the 33% figure (See Attachment #1). As Cox argues in their response, there may be some benefits to existing channels in terms of enhanced reliability and signal quality. Based on Cox's October 10 response, the level of improvements experienced included the following: MEASURES OF FROM TO CHANGE COMMENTS IMPROVEMENT Signal Quality: Carrier 45 C/N 48 C/N 6.6% No "snow" experienced in to Noise ratio either case, but signal may look more crisp @ 48 C/N Reliability: Hours of 14,909 700 95.3% Comparison of 17 months Service Outage/mo. history prior to 1235 filing to 3 1/2 months since.' Reliability: National 99.94% 99.99% 0.05% Reflects 7 years of average for similar improvement from improvements nationwide "ring-in-ring" redundant fiber upgrades Table 5: Identified/Projected Improvements * Comparative data for service outage hours was not available at the time the 1235 was filed and is only available now for a short period (3.5 mo.). Thus, in staffs opinion, the 7 year nationwide data might be more applicable to how the 1235 should have spread costs. The determination of an appropriate price for these improvements is a matter to be decided by a detailed rate study, whether by the FCC, Cox, the City or a paid consultant. In lieu of performing such a study this week, staff-and Cox have discussed potential alternatives or interim solutions. Working backward from rates to methodology What Cox has requested in its $28.95 rate proposal is that the City forego determining what the appropriate percentage share of the upgrade cost should be for existing channels. Rather, they recommend the City work backward from that $28.95 rate to an estimate of what that percentage would be. Although this is certainly not the preferable course of action, it has the potential for arriving at a reasonable figure below the 73%-80% that Cox has so far proposed. For example, if Cox and the City were to agree to no rate increase, that would lead us to an appropriate upgrade share of 0%. Based on the $28.95 rate, the upgrade share would be approximately 43%. This means that ofthe 300 MHz upgrade, 100 MHz of which is currently activated, that 43% of that upgrade was to improve service currently offered on those existing or just-added channels. To determine /c2 -s Item , Page 9 Meeting Date 10/22/96 whether this rate is appropriate would entail a more detailed study of the service quality and reliability factors and overall rate filing. In the absence of that, 43% is at least closer to staff s position than Cox's original proposals. Alternative #1 - Original Resolution: Staff Recommendation Cox and staff have attempted to resolve the outstanding issue of upgrade cost allocation internally. However, since the FCC is still developing the regulations that govern this type of rate request, it may be appropriate to ask the FCC to issue a formal ruling via a Form 329 complaint. As discussed below, their input to this point has consisted of informal opinions only. Under pre-existing Maximum Permitted Rates and the increases in those rates that would be allowed under the cost-based filing, this Resolution would allow a maximum Basic rate of $9.74 (a 33% increase from current rates) and a maximum Cox Classic rate of $26.92 (a $0.07 decrease from current rates). While the CPS rates were under review by the FCC, Cox could continue to charge whatever portion of their increase request they choose. Thus, they could not only continue to charge at a rate of $26.99 (which they have been charging since May 1), but also increase their rates an additional $3.96 for the portion of their upgrade-based CPS request which has yet to be charged. Thus, even without an upgrade-related increase in Basic cable rates (as proposed in Alternative #2), Cox has the potential to charge $30.95---which is $2.00 more than their regional "market rate."1 If Cox is correct and their calculations justify the requested increase, they would be able to charge all or most of this rate with no risk of incurring a liability for refunds. They would also be able to do so without the need to resort to a time-consuming and/or expensive appeal of a local rate order on a Basic Rate increase denial. If the FCC rules that Cox was incorrect in its application of upgrade costs, Cox could be liable to refunds for the difference. Alternatives #2 and #3: Cox's proposed rate. with or without an FCC Complaint If Council were to agree to Cox's request for a $28.95 rate ($10.50 for Basic and $18.45 for CPS), this would allow Cox to reach its desired Basic rate level without resorting to a formal appeal process. The City would still have the authority under this scenario to file a complaint with the FCC regarding the CPS rates. Although an FCC complaint would not be part of Cox's preferred option, they did express a willingness to abide by this option in order to avoid the appeal of a Basic rate increase denial. The FCC review to determine the appropriate upgrade cost shares would then proceed at its own pace (approximately 2 years), with minimal follow-up burden on either Cox or the City. I To cap Cox at the $28.95 rate, logic might dictate that the City thus deny the $2.00 cost- based increase in basic rates (See Table 2). However, since this is part of a separate, appropriately justified rate filing, a denial would likely be overturned. /e2 / / Item , Page 10 Meeting Date 10/22/96 Incorporated in this alternative is a $3.20 (44%) increase in Basic Cable rates. Of this total, $0.44 is allowed under current Maximum Permitted Rates, $2.00 would be allowed under the agreed-upon cost-based increases, and $0.76 would be attributed to the upgrade. This $0.76 share is considerably less than Cox's original proposal of $1. 73. However, as it translates into attributing 11 % of the upgrade to Basic Cable, staff remains hesitant to recommend such an alternative in the absence of a detailed rate review. While the Basic-only subscriber group is relatively small (823 customers, approx. 2 % of subscribers), it could be argued that some if not all of these are the customers who can afford the increase the least. Cox's preferred option would be to implement this option without the FCC complaint. Based on the lack of surety as to the appropriateness of the upgrade cost split (which in this case, would be the backed-into 43% for existing channels), staff does not recommend this alternative. Two conference calls with the FCC have yielded little new information to alter that recommendation. It should be noted that the FCC Complaint process starts anew with each increase in CPS rates. Thus, If Council does opt not to file a complaint now, the City would lose the ability to protest the May I increase of $3.79. Once a subsequent CPS increase is effective, however, if there are sufficient customer complaints or outcry, Council may opt to file an FCC complaint on that incremental portion of the increase. However, since the $1.96 increase being sought would actually consist of a Basic rate increase and a CPS decrease, there may be little grounds for such a CPS complaint. If Council wishes to pursue this option, it would be in recognition of incomplete information, but a judgement that 43% is perhaps close enough to what the appropriate share may be to justify the rate increase. Cox has indicated a willingness to sign an agreeinent that they will not attempt to recover their upgrade costs beyond the level reflected in the $28.95 rate. Staff has also discussed with them the possibility of specifying a future date when the $1.96 increase would take effect. The minimum notice period for a rate increase is 30 days. Representations in the recent Union-Tribune article on their rate increases indicated a timeframe in "early 1997" (See Attachment #10). Staff has discussed with Cox a potential effective date of May 1 (one year since the last increase), but no formal proposals were made on this subject. FCC Comments Staff, our consultant and representatives from Cox discussed these matters with Hugh Boyle, Chief Accountant in the Finance and Compliance Division of the FCC. Mr. Boyle would typically review draft opinions on Form 329 CPS complaints after they have been processed by a staff analyst. He would be part of the process if Chula Vista were to file a complaint, but he would not have the first or final say in how matter would be decided. Regarding this specific type of upgrade-based rate filing, he commented that this is a very new form for the FCC and this is the first time he has reviewed one. At present, there are no new regulations pending with regard to system upgrade filings, but as forms or complaints are filed, those regulations may evolve. The results of the two conversations are as follows: /;2 ~ /V Item , Page 11 Meeting Date 10/22/96 Mediation: The only formal mediation process that the FCC conducts is in cases of broad policy rulemaking or common carrier/telephone rate cases. Such cases resemble trials in that a hearing judge is appointed and there is a formal discovery process. The impacts of those cases are also typically nationwide. For local rate setting matters, complaints and appeals are handled by FCC staff and the closest avenue to mediation is the type of informal conversation that was conducted in this case. Rate setting: Mr. Boyle had read the documents pertaining to this case but declined to speak to whether the FCC intent and rules were applied correctly or what the appropriate rates should be. In a general and theoretical manner, he agreed that: 1) An upgrade-based filing would be appropriate in addition to other rate actions as long as the same costs were not recovered twice. 2) If there is a non-activated portion of an upgrade, it would not be considered "used and useful." This would tend to corroborate Public Knowledge's assertion that only 100 of the 300 MHz improvement should be considered in spreading costs to existing channels. 3) If there is an improvement in signal quality or reliability, there should be some credit given in spreading the cost of that upgrade to existing channels. On this point, Cox and City staff agree. However, the percentage of that share remains in dispute. 4) If there is a minimal increase in signal quality or reliability, the FCC might just allow a minimal charge to existing channels. On this point, he deferred to the consideration of the facts in a specific case once a complaint has been filed. Consultant Comments In light of the continuing uncertainty in the proper application of the upgrade costs to existing channels, our consultant recommends that the City proceed with a complaint to the FCC. Actions under consideration: Other Cities As noted above, Cox has provided notice to all other franchise cities that it intends to raise its rates to $18.95 effective November 15. As these increases are predominantly based on the cost- based rate filing which was found to be appropriately justified, no action is anticipated by these other cities to oppose the increases. In National City and Imperial Beach, which are also subject to the upgrade-based filing, the deadline for a complaint on the May I increase of $3.79 has already passed, but they retain the authority (as does Chula Vista) to file a complaint on any future increases in CPS rates. Since the pending November 15 rate increases would actually contain a CPS rate decrease, FCC complaints at that time are unlikely. );2 - JI Item , Page 12 Meeting Date 10/22/96 Schedule for Review The timing of this report is meant to accommodate the FCC's process for filing a complaint about Cable Programming Service rates. According to FCC rules, a complaint on CPS rates would need to be filed within 180 days of a rate increase, while first allowing for Cox to review the draft complaint for a period of 30 days. With the increased rates effective May 1, the 180 day deadline would occur on October 28. FISCAL IMPACT: The impact on customers' cable bills from these actions will depend upon final rulings by the FCC and on Cox's rate setting decisions within their Maximum Permitted Rates. Generally, for each dollar of monthly fee increases or decreases, the annual cost/savings to Chula Vista's 34,300 Cox customers is $411,000. It is not incumbent upon the City as franchising authority to determine what the precise charge per service tier should be, but rather to rule on the appropriateness of the charges as proposed. The FCC is not likely to rule against Cox's entire upgrade-based increase, but they may mitigate that increase as it applies to Basic and CPS service tiers. If appropriate, they may also order refunds. Since the actual Basic Cable rates have not been changed (only the MPRs were raised), no refunds would be due following any rulings on the Basic increase denial. If Cox were to raise fees in conjunction with filing an appeal of the City's action on Basic rates, such refunds might be required. Regarding CPS rates, Cox increased these by $3.79 in May. If the FCC decides in the City's favor, customers may be due a refund of as much as $3.79 for each month the higher rates were in effect. As indicated above, a ruling against the entire increase is unlikely. In addition, with the Form 1240 cost-based increases in the MPRs already filed (at $2.00 and $0.04 for Basic and CPS, respectively), Cox would likely be able to structure their future charges to absorb any mandated refunds. The range of possible Maximum Permitted Rates once any upgrade-based appeals have been decided would be between $26.92 (representing 100% FCC disapproval of the upgrade-based fIling, which, as discussed above, is unlikely) and $32.68 (representing full approval) . It should also be noted that since some customers in multi-family residences received discounted bulk-rates on their cable service which were not subject to the May rate increases, these rates would, in turn, not be subject to refunds. In terms of City revenues, since the franchise fee paid by Cox is 3 %, franchise revenue might be reduced or increased slightly via the recommended action and subsequent FCC rulings. Staff has not given any consideration to the potential impact of rate regulation on these fees in conducting the rate regulation function. /;2 /J L Item , Page 13 Meeting Date 10/22/96 Attachments: 1. Report from Public Knowledge, August 27, 1996 2. Cox Communications, Form 1235 Upgrade-based rate increase request 3. Cox Communications, Forms 1215 and 1240 Cost-based equipment rate decrease request and Cost-based service rate increase request 4. Letter from Cox Communications, August 30, 1996 5. Draft Complaint to Federal Communications Commission (Form 329, protesting upgrade-based rate increases) 6. Letter from Cox Communications, October 1, 1996 7. Letter from Cox Communications, October 9, 1996 8. Council Agenda Statement, October 15, 1996 9. Wall Street Journal, "Cable Rates Are Up an Average 10.4% This Year," August 29, 1996 10. Union-Tribune, "Cox raising cable-TV fee $2 for most," October 18, 1996 M:\HOMEIADMIN\CABLEICOXI13.t22 )2~O RESOLUTION NO. 18447 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA 1) DISAPPROVING UPGRADE-RELATED INCREASES IN MAXIMUM PERMITTED RATES FOR THE BASIC SERVICE TIER; 2) DIRECTING STAFF TO FILE A COMPLAINT WITH THE FCC ON BEHALF OF LOCAL SUBSCRIBERS REGARDING UPGRADE-RELATED INCREASES IN THE CABLE PROGRAMMING SERVICE TIER RATES 3) APPROVING PROPOSED COST-BASED RATE DECREASES FOR ASSOCIATED EQUIPMENT; AND 4) APPROVING PROPOSED COST-BASED INCREASES IN THE MAXIMUM PERMITTED RATES FOR THE BASIC SERVICE TIER WHEREAS, in May 1996, Cox Communications instituted a $3.79 increase in its Cable Programming Services (CPS or "expanded service") tier which charge is subject to FCC regulation, thus any complaints must be filed with the FCC; and WHEREAS, at the same time, Cox proposed to Maximum Permitted Rates for the Basic Service Tier, subject to city regulation; and raise its which is WHEREAS, both of these changes were based on costs to upgrade Cox's infrastructure; and WHEREAS, further cost-based increases in Maximum Permitted Rates were requested in July, along with decreases in the rates for associated equipment/installations (e.g. charge per installation; rental of decoder boxes, remote controls); and WHEREAS, a study by Public Knowledge, Inc. of Cox's methodology in spreading its upgrade costs called into question both the Basic and CPS share of the upgrade; and WHEREAS, said study also found the cost-based increases to be appropriately justified; and WHEREAS, accordingly, staff is presenting a recommendation to deny and/or protest the questionable upgrade- related rates, approve the equipment rate decreases and approve the cost-based service charge increases; and WHEREAS, on those portions of the rate requests with which the City disagrees, the FCC is the final arbiter and should Cox wish to institute such rate increases above the city's objections, they would be required to file an appeal with the FCC in conjunction with any rate increase; and 1 /J - / if WHEREAS, if the FCC finds in the City's favor, any overcharges would be subject to refund by Cox. NOW, THEREFORE, BE IT RESOLVED the City Council of the city of Chula vista does hereby 1) disapprove upgrade-related increases in maximum permitted rates for the basic service tier; 2) direct staff to file a complaint with the FCC on behalf of local subscribers regarding upgrade-related increases in the cable programming service tier rates 3) approve proposed cost-based rate decreases for associated equipment; and 4) approve proposed cost- based increases in the maximum permitted rates for the basic service tier. BE IT FURTHER RESOLVED that the intent of these actions is to authorize Cox Communications to institute Maximum Permitted Rates for Basic Cable at $9.74 per month, to approve Maximum Permitted Rates for regulated equipment and installation costs as detailed in Form 1205 as attached hereto and incorporated herein by reference and to file a complaint with the Federal Communications commission (FCC) regarding Cox Communications' cps-tier Maximum Permitted Rates to the extent that they exceed $17.18 per month. Presented by Approved as to form by ~ Gerald Young, Principal Management Assist C:\rs\cable.inc 2 I,:;--r) flJj-27-1'3'9G 14: 46 t"\JtL.l~ N'I ... '-1_::1:. .....-. .- PUBLIC KNOWLEDGE~ ATTACHMENT #1 3510 SUNRIDGE DR. S. SAlEM. OR 97302 (503) 5lIH1878 PAX (503) 581-Z0Z6 Z8~ N.E. s,-"N'rON P01l11.AND, 011. 9721Z (503) '1SI-7Z73 FAX (503) 287-73Z3 A1lgU8t 27, 1996 Mr, Gerald YOUll8 City of(hJla Vlsta 276 Fourth AvemJC CImla VISta, CA 91910 Mr. Bob Ham City orImperia1Beach 825 Imperial Beach Blvd, JJ11peria1 Beach, CA 91932 Ms. Leslie Doesc and Mr. Park Moma City ofNatioual City 1243 National City Blvd. NatiooaI City, CA91950 Dear Mr. young, Mr. Hain, Ms. Deese md Mr. Moms; I have reYiewed the Federal Co..""l1niQUons Commission (FCC) Form 1240. (dated. June 24, 1996) and Form 1235 (corrected Fonndated May 1, 1996) IIIIbmitted to the Cities of ChuIa VISta. Imperial Beaoh. and National City (franchising authorities) by Cox CO""-mlcati.ODS (Cox). The pJrPOfC of the Form lZ40 is to IICt ~mnm permitted ndCS for basic service and cable proll'....ming lIICVic;a (CPS) for a projected period (m tbiJ case. the period between October I, 1996 and september 30, 1991). The purpose of tile Form 1235 is to adjust rCet for cable IIIltVIOrk upgrades - Cox seeb to apply the ponn 1235 to add an "upgrade" inw...aeut to the nwMraltTl permitted rates det.a1iliDcd on iU Form 1240. The Cox fiIinp were identical for these three franchising au!horities. 'Ibe fi1v'r.hiAing authorities diJect1y rquIate basic aervice rates; the FCC "W,l.tes CPS rateS, but UDder certain conditiolll ftan<;bising authorities may trigger an FCC review of the CPS mto by 51ing a proper complaint. 1 reviewed the Cox Form 1240 for compliance with the FCC rullll. dlocn.rl the GIkl>,l~ons, and an-I'lCl the f\lUOllIbltollI of certain key data. Und<< the FCC tulos Cox may adjust its .....mnum permitted rate& to account for inflation, c:baqeI in cxtemal costa (ix amnple, propm ~p;"" COItJ). -' cbanDd additiOlll or de1etioo1. I foIuMl no material problema in the FcmnlZ40. UDder the Form 1Z40 IYItem. the a..ucbisinS I11thorities wID haw an opportuni1Y a yfII! liom now to compare actual ooltS I I CONSULnNG AND UiPOlIMATlOf'/ SliRVlCES FOR PUBliC WJoI,1GJ!MENT J!XCJiJ,lF.NCF. 1 .. ......' ~.. . . o / ') - fl.--I It?- I" FUi-27-1996 14:49 PUa..1C; ""'.~ 1::1U: l~r(~ t".tJ.;) '. to certain COIItS tIutt Cox projected in this filing aod to make IJdju.stmlllltl accordinsly in the prospective maximum .-...ttted basic ICIVice r81C1 for the sublequllllt pmod. WbiIe!found the m;,.;mll"ll""witted basic acrvicc: rate ofS9.74 cletamined on the Form 1240 acceptable, I cliHgroe with the m.... _.eatI that Cox _kJ to Idd to thiI rate and to the CPS rate based on the Form 1235 liIin& for cable network ~. Cox reporta that it upgraded ill cabl. system lIIrVins these mn<-JnoillgIllthoritiCl: provioualy tho system had 450 MHz capacity, and now Cox I'IlpOrU 750 MHz, wiIh 550 MHz 8Ctivaud. 1hu thcIre wu. roported ~ of 100 MHz in activated capacity. I do DOt believe tIIlIl Cox properly llIoc:11ed the Q08ts of the upgrade in determining rate adjual:menU fOr ngaJated MrViClel OD the Form 1235. Jl'9,I..~ Ml'ViClel iDdude the buic MrVice tier. which is dim;t\y ntgUIated by the u,,,,,}'ioi,,, llUthoritic$, and the cable programming Iervices tier (CPS), which is regulBted by the FCC. RIlUOIIS that the Cox anocations were DOt proper iocludc the following: . The FCC rulea dearly provide that IlIbscriben should not pay for plllllt tIutt is not uacd aDd UICfu1 (see. for instaDce, Scc:ood RqIOI't and OrcIcr, Frn Order OD RcconsidendioD, aod Further Notice of Proposed RuIenialciD& FCC 95-S02, rdcascd JlIIllW)' 26, 1996. 136). In tbi& cue, 66.67 peIWIIt of the upgrade (200 MHz of the 300 MHz upgrade) is DOt aJIl'CSI1Iy uac:d 11III uxfuI. Yet Cox ~ oded only 20 Jl<<COIlt of the upgrade cost as not used and UJefuI. The Cox rationale is that an upgrade to coIy 550 MHz would aBllJedIy have cost about 80 pac...lt as much (Cox estimate) as the actual upgrade to 750 MHz. Thus Cox bu Ipplied morglnal colt concepts to its allocation (the conteaIion that the marginal cost of tile Jut 200 MHz of ClIpl!City addition is less thalI the cost oftbe fim 100 MHz aftbe upgrade). However, the FCC rules.pcc;i&caIly require afiJly distributed cost aBocation methodology (see Report and Order and Further Noti~ ofPropoeed Rulemaking, FCC 94-39, N1euod March 30, 1994,1122611:). Under this approach, each UIlit ofldded a1pacity should be treated as if it com the same as the other UlliU of Idded capacity; ooe-third of the cost ahould be 1II1ocated to the first 100 MHz (whicb is uacd and UICfu1), and two- 1hirds of the cost to the last 200 MHz (which is not used and useful). UaIeu the fWIy distnOuted a1Io<:ation approach is IIpplied. the mea paid by subscn"benl to 1""8',10+"'" ICIVices induded in the 100 MHz aclivlted portion of the upgrade will j""h'de a disproportionately \at'ge share of colt compared to those who nlrim.tAly use services (likely to primarily be unregll1ottd) provided in the relII8ining 200 MHz O1ICC it is activated; that is, there wiD be c:roIIlUblidics. . Once it had c:xduded 20 per'CCIIt of the upgrade cost tor the 200 MH% IIOl currenliy activI1ed, Cox a1located the n:mainin& cost based on the total dIannel count by MrVice tiel" (basic, CPS, and III other) after the upgrade. Cox reportI74 activated """""cis after tbe upgrade. -"dina 18buic, 41 CPS, aIId lS "other." So, fOreamp1e, about 24.3 pen:ent (18 divided by 74) of the residual upgrade cost tIuIt Cox ~ as UIed and useful was allocated to tho basic tier. Yet Cox did not at lIlY buic ..JumowJ, in the upgrade - there wen: 18 buic cIwuteIa both Wore and after. Upgnde costs may 2 ". . . '. );2//--;2- FUi-27-19'36 14: se PUlLIC 1<10<' = 1~((~ P.El4 be passed through to IUb..,nbeB only if the operator ~es that the capital jnvesUnellt actually benefits ~bllClibfn to regulated Ml(Vicea (Report md Order and furtberNotice ofPl..,...o'."t llul_lnng. FCC 94-39, ret~ March 30, 1994. , 287). In this case, there is DO demolUU8ted benefit to basio service aubtcribers Iince dM: dwmc1 alloc:aDOIl for the basic tier _ not changed by the up~ Therefore. IIODe of the upgrade oost lIhou1d be al1oc:eted to basic. Further, the alloeaUon between CPS and other sorvic:ca should be based OIl the cIwmel additions directly usociatecl with the upgrade, not thole on the ayttem ovcn1I (Cox already rec;O'YClI'I through ill ~ rates me the c:banPe1J lMi\able befOre the upgrade). . Cox did not indiClSe am: pro!ccted rcvcnuc for the ~ed c;apacity iaY01vcd in the upgrade. The form iBItnlcU0D5 caU for the operator to report prc.j ;t')Cl advertiIiD& C()IIIlIliJsion, and leased aec:ea rcvcmcs. ID\DIIi others. Cox', dwlDd ~up iDdioatea that two of the lidded chanD8Is arc ~ shopping, and one ialoued acee"'; ot:hen umoubtcdly f:Mf'J advcrtisin8 in8erIions for which Cox will be c;ompcnsatcd. 1f' reported. projcc:ted l'e'\f8IWC would be an oIiset to upgrade costs 5tIown on the Form 1235. The Cox proj~on oho added revenue is simply implauaible based on the indieated cban11d dditions. . On previous FCC Form 12101 Cox baa reported c;1wmeI additions em the CPS tier and mc:euod its nwciJram' permitted rateS for the CPS tier' under the FCC', NeapS" method for tRating added cbannels. Cox bad used its fun S 1.20 Neap" (plus programming costs) for the added channels before filing this Form 1235. All but one oIthe c;hannela that Cox added under the NeapS" method ~ made available by the additional 100 MHz that Cox activated in the upgrade from 450 MHz to 550 MHz (one channel was added before the upgrade). By now claiming the upgrade cost that in part rc\a1Cs to the CPS capacity usocisted with the Ncap" rate additions Cox would be reoo~ twice for the added CPS c;aplIcity, once in the "cap" addition and &pin in the upgrade colt aDocated to the CPS tier. This result could not haw real()Nbly been the FCC's intent. and ihould be cleriiicd by an FCC review ofthiJ concern. As & consequence of tbeae c;oacerna. I rec;ommcnd the following actions for the francbisiDg authorities. . Approve a $9.74 m,mn11U permitted rate for basio service (fIltcluding li'anchise fees), but deny Cox at1Y addition to tbia llI&lCimW1l permitted basic seMc:e rate based OIl the Fonn 1235. . Submit a Form 329 IlOmplaint 10 the FCC regardinS the CPS tier. nu c:ornpIaint nmst come a fi'ancbismg wthOritY. but requires that at lout twO ~b~ have complained to the frpcbiIing authoritY within certain time hm- after the opcrstor bas eft.niP"-tl CPS rates (_ attaebJneIIt); Cox reported a CPS rate iDr;rllUe in May, 1996. The FCC Ihou1d then resolve the proper a11ot:lltion ofuppde coSU to the CPS tier. 3 .------ ',- ..- ..-....- j' ~ ._0 er--/1/j FUi-27-1996 14'5l'l PlJlLIC 1'\1'1'" ~l\.t:. .I.~rl~ ,.~ Pleue c:ontact me at 503-287-7273 if you have: lIlY questions. SiDceRoly, rAC~ lIlY Co SD1ith Proaidcn1, Public KnowIedse. ID::. 4 TDTFl.. P. eJ5 J;L~ /1> .-;-7 !d.- ATTACHMENT #2 . March 22, 1996 5159 Federal Boule,3rG San Diego. Cahtorrlla 92105Sl8E. 1619;2639251 Me Jim Thomson Assistant City Manager City ofChula Vista 276 Fourth Avenue Chula Vista, CA 91910 cox COMMUNICATIONS Re: Non-Upgraded Customers Dear Me Thomson: In late February 1996, the Federal Communications Commission approved FCC Form 1235 This new form allows cable companies to recover costs associated with significant cable system upgrades which benefit customers of regulated cable services Cox Communications San Diego's completed FCC Form 1235 is enclosed for your review. Customers who currently receive only our "Limited Basic" service will not be imDacted whatsoever bv this filing Their monthly basic cable rate of$7.30 per month will remain unchanged. Although the FCC Form 1235 permits significant increases in both the Basic and CPS levels of service, it is Cox's goal to achieve a uniform rate; in other words, Cox will simply charge customers in your city the same as those of all other surrounding cities who have similar levels of service The rate for the Cable Programming Services tier will increase by .$379. This rate change is due to the recovery of our investment in the recent cable system upgrade For upgraded customers with a combined level of Basic plus CPS, that total monthly rate will be $2699, as it is in surrounding cities Enclosed please tind one copy of FCC Form ]235 that is being filed thirty (30) days prior to the aforementioned increase in the rate Cox charges for Cable Programming Services. Also enclosed is a copy of the notice sent to our subscribers describing these changes. If you have any questions, please feel free to call me Sincerely, ons ce and Administration Enclosure FCC Form 1235, Customer Notice -I- /) ,/ ", "..-. r;r --.....-" March 22, 1996 Cox Communical10ns 5159 Federal Boulevard San Diego. Caldomls 92105-5,486 161911Q3SZ51 Non-Upgraaea l;ustomers RE: YOUR UPCOMING CABLE UPGRADE & MONTHLY PRICES cox Dear Customer: COMMUNICATIONS In a recent bill, you received information about new channels and prices related to Cox's cable TV system upgrade. Please disregard that notice as the pricing information was incorrect. The following information will apply to your cable service once the additional upgraded channels are activated in your area. The new revised price for Cox Classic service will be $26.99 per month. This adjustment will not be reflected on your bill, however, until you receive the new channels. A list of the new channels appears below The cost for Cox Limited Basic will remain at the current low price of $7.30 per month. This adjustment will bring your billing to an equal level with that of all other upgraded households. We recognize concerns regarding price adjustments. Please be assured that this price is consistent with the Cox Classic price currently paid by Cox customers throughout San Diego County who receive the many new programs and services made possible through the upgrade. Thank you for your continued business. Cox Communications is working hard to provide our customers with superior service. If our cable service is. not meeting your expectations, please call us at 262-1122. Our representatives are available 24-hours- a-day, every day. We can help you! Sincerely, William K Geppert Vice PresidenUGeneral Manager NEW CHANNELS Ch. 62 Encore" Ch. 63 Travel Channel Ch. 64 Gems (Spanish Language) Ch. 65 MTV Latino (Spanish Language) Ch. 66 Home Shopping Network Ch. 67 ValueVision Ch. 68 IX Ch. 69 Mind Exten. University Ch. 70 Outdoor life Ch. 71 Continuous Hits 3"" Ch. 72 ESPN2" Ch. 73 The History Channel" Ch.74 Turner Classic Movies" Ch. 75 Leased Access Ch.76 Continuous Hits 4" . Available in a package for an additional charge of $3.15 per month plus equipment "" Pay.Per-View Service -.:2- / (J. - pc ~('^ ,~ March 22, 1996 5159 Federa~ Boulevard San Oiego. California 92'0:..548S 1619,263925' Mr Jim Thomson Assistant City Manager City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 cox COMMUNICATIONS Re: Upgraded Customers Dear Mr Thomson: In late February 1996, the Federal Communications Commission approved FCC Form 1235 This new form allows cable companies to recover costs associated with significant cable system upgrades which benefit customers of regulated cable services Cox Communications San Diego's completed FCC Form 1235 is enclosed for your review Customers who currently receive only our "Limited Basic" service will not be impacted whatsoever bv this filing Their monthly basic cable rate of $7.30 per month will remain unchanged. Although the FCC Form 1235 permits significant increases in both the Basic and CPS levels of service, it is Cox's goal to achieve a uniform rate; in other words, Cox will simply charge customers in your city the same as those of all other surrounding cities who have similar levels of service The rate for the Cable Programming Services tier will increase by '$2 55, This rate change is due to the recovery of qur investment in the recent cable system upgrade. For upgraded customers with a combined level of Basic plus CPS, that total monthly rate will be $2699, as it is in surrounding cities ' Enclosed please find one copy of FCC Form 1235 that is being filed thirty (30) days prior to the aforementioned increase in the rate Cox charges for Cable Programming Services Also enclosed is a copy of the notice sent to our subscribers describing these changes. . If you have any questions, please feel free to call me. Enclosure: FCC Form ]235, Customer Notice -3- 1:2 . J: P,/ ' March 22, 1996 Cox Communications 5159 federal Boulevard San Diego. California 92105.5486 Upgraded t:MfJfNers RE: YOUR RECENT CABLE UPGRADE & MONTHLY PRICES cox Dear Customer: COMMUNICATIONS As you know, the price you pay for Cox Classic service was adjusted when the addi- tional upgraded channels were activated in your area. This price was based upon then current federal rate regulations governing cable TV system upgrades. But because of local circumstances governing cable TV in your area, even the new, higher price was artifically low for the services you are receiving. New federal telcom- munications rules recognize this inequity and, in fairness to all of our customers, we are adjusting your price accordingly. We recognize concerns regarding price adjustments. Please be assured that this price is consistent with the Cox Classic price currently paid by other Cox customers through- out San Diego County who are receiving our upgraded service. This adjustment will bring your billing to an equal level with that of all other upgraded households. The new revised price for Cox Classic service will be $26.99 per month. This adjustment will be reflected on your next bill received after April 22nd. The cost for Cox Limited Basic will remain at the current low price of $7:30 per month. Thank you for your continued business. Cox Communications is working hard to provide our customers with superior $ervice. If our cable service is not meeting your expectations, please call us at 262-1122. Our representatives are available 24-hours- a-day, every day. We can help you! Sincerely, William K Geppert Vice President/General Manager -Lj - I 'J. h ~ - Federal Communications Commission Washington, D.C. 20554 Approved by OMB 3060-ll688 Abbreviated Cost of Service Filing For Cable Network Upgrades Community Unit or System Operating Name I~ommunity Unit ID . CUlD(s) \ Date of Filing COX Communications San Diego CA0329 3/15/96 Name of Cable Operator Cox Communications San Diego Mailing Address 5159 Federal Blvd. City \~tate '~iP Code San Diego California 92105-5486 Ownership of Franchise or System (Place an ~X~ to the left or the appropriate answeLl: X CoCorp Subchapter S Partnership Sole Proprietor Other PerSon to contact regarding this form: William Fitzsimmons Telephone I ~ax Number (619) 266-5410 (619) 266-5540 Local Franchising Authority City of Chula Vista ailing Address 276 Fourth A'-enue City \~tate TZiP Code Chula Vista California 91910 This form 1$ being filed for: (Check One) X Pre - Approval OR Final Approval Note: If Final Approval filing, attach all Pre-Approval filings, if any, relating to the upgrade. Scope of Filing: (Check One) x Pre. Approval OR System Level Note: Cable System is defined in Section 602(7) of the Communications Act. -5- Page 1 org l J. !/\ FCC Form 1:235 F-=bruaf) 1996 Federal Communications Commission Washington, D.C. 20554 Approved by OMB 3060-0688 Abbreviated Cost of Service Filing For Cable Network Upgrades Part 1. Qualification for Upgrade Rate Adjustment A. Significance of Upgrade Qualification 1. Does the upgrade meet the minimum technical specifications described in the Instructions for Part 1 Qualification for Upgrade Rate Adjustment, Line 1? x Yes No 2. If "No" was answered in question 1, ettach a brief description of how subscribers to Basic and Cable Programming Service Tiers will benefit form the capital improvements. 3. Complete the following items to determine the cost of the capital improvement as a percentage of rate base (Investment in cable property, plant and equipment for the area over which the improvement will be usedl: A. B. C. ThE! net upgrade rate base Total rate base after upgrade Percentage of upgrade to total rate base $ $ 27,298 41,754 65.38% B. Used & Useful Qualification If this form has been completed for a pre-a19proval, please skip to line 3. 1. . Has the upgrade been completed? Yes No 2. If question 1 was answered "yes" enter the date the upgrade was completed and began providing service to subscribers of regulated services: 3. If the Phased-in Approach is elected, attach a description of the subsections involved and the projected dates on which the upgrade will be completed and providing service to subscribers of rate regulated services within those subsections. Imperial Beach Santee Chula Vista Nationa I City No,'-95 Feb-96 May-96 May'-96 -&- - I ~ r:.rr r:.,..,....... ,..,~.:; Federal Communications Commission Washington, D.C. 20554 Approved by OMB 3060-0688 Abbreviated Cost of Service Filling For Cable Network Upgrades Part II. Upgrade Revenue Requirement Computation (a) (b) (e) BST CPSTs CPSTs 3_ a. Rate of Return Percentage b, Computed Return on Upgrade Rate Base {line 1 x line 2a1 Allowance for Income Taxes a. Federal Income Tax Rate b. State Income Tax Rate . .- ~-- - 591.601 248,336 1.361.201 '!-; ~~- 565,655 :...:... ~~-~?~ 0it!t'.i:9tt?if'J; ~~!.;i.". 1. 2. Net Upgrade Rate Base (Worksheet A. Line 4e\ Return on Investment t;-:f '.~" .'1. '.~ ,,-" ~ . ,~-'+:,i~~"-~ ..,-,," '... 5,312,005 ~--~-".':"'::'" 1:Z';'-:::~":::_'--:;, :~~~~:.m 35.00% ~.._.~..::..:.:'c:.~: 9.30'% 4. c. Computed Return on Upgrade Rate Base (Line 2bl i.'_._~. d. Interest expense related to upgrade {Worksheet A. Line gel e. Distributions (Non-C Corp. Filers Only) 1. Contributions (Non-C Corp. Filers Onlyl g. Return Amount subject to income tax h. Income Tax Allowance Projected Net Impact of Upgrade on Operating Expenses (Worksheet A, Line Sel Net Revenue and Income Adjustments ..'.:~'- ,.~.~ ~-.~:'-- 349.264 795,546 ~~~ ':.'f~r~~ -~._...-..- -. ~~::~~_.-::::. .. - -.-.. ;-.:,., ~ /"" c::~.~ T' 257.371 586,233 ..:'.:;.,:._.:.,':..:'::u__ 459.9":3 1.041,111 6. Related to Upgrade .\Worksheet A. Line 12e) Total Upgrade Revenue Requirement (Line 2.,. 3 + 4 + 5) .~ -i:? ....~~_:<.~ ~t--:==-..::...:~~'~"'~ 5. -~.., -..,r_:":~~:T~~ ;"~"-.'~~. -~...::. -~. - _r. ._ o 1.31~.9~5 o '---'" '";.0;; ~ ,,:,.:~i..-~'-.::::i ~;$.-~-i:_"2~":.. -~.~<"~---j,.:.. -:,.-' 2.995.152 Part Ill. Allocation oj Upgrade Revenue ReqUirement to Basic and Cable Programming Service Tiers ,_ Upgrade Revenue Requirements. {Part II. Line 61 2_ Number 01 Subscribers 3_ Annual Revenue ReqUirement Per Sub (Line 1/ Line 2) 4_ Monthly Network Upgrade Add.on (Line 3 { 12) 1,1 Ibl lei BST CPST.l CPST. 2 Total I ,31~.9~5 2,995,151 4.310.0Q6 63.~19 61.920 20,7965 48.3i13 6916;9 \,7330 40309 5,i6~0 5. Selected method of subscriber recovery: (Check Onel Provide description for allocation of CPST Revenue Requirement to CPS Tiers: CERTifiCATION STATEMENT WILLFUL FALSE ST ATEMENTS MAKE ON THIS FORM ARE PUNISHABLE BY FINE AND/OR IMPRISONMENT (U.S. CODE TITLE lB. SECTION 10011. At.JO/OR FORFEITURE IUS CODE. TITLE 47. SECTION 503). . cenify that the statements made in this form are true and correct to the best of my knowledge and belief, and are make in good faith. Name and Title of Person Completing this Form: Sign lute; M Telephone Num er WiJli71m Fitzsimmons. Dirrclor of Financt &. Administration Date: 3/15/96 (619) 266-541 ~ - '7~ 12.-- I\/Ii I ' FCC Form 1235 FcbrU:l0 1996 PJgc 3 ofS Federal Communications Commission Washington, D.C. 20554 Approved by OMB 3060-0688 Abbreviated Cost of Service Filing for Cable Network Upgrades Name of Operator: Cox Communications San Diego CUID (s): CA0329 Worksheet A Cost Assignments and Allocations Ipan 1) Date of Filing: 3/15/96 ($ OOO's) Directly Assigned Cost Elements Balance Ib) Line Number and Description (al BST CPST - 1 CPST - 2 All Other 1. Plant and Equipment 26,076 5,215 2. Allowance for Funds Used During Construction 1,222 244 3. Other Adjustments 0 0 4. NET UPGRADE RATE BASE (Sum Lines 1 - 31 27,298 0 0 0 5,460 PROJECTED: 5. Change in Plant Related Operating Expenses 71 0 6. Change in Plant Related Support Expenses 0 0 7. Upgrade Related Depreciation Expense 2,275 455 8. PROJECTED NET IMPACT OF UPGRADE ON OPERATING EXPENSES ISum Lines 5 - 71 2.346 0 0 0 455 9. INTEREST EXPENSE RELATED TO UPGRADE ] ;276 255 PROJECTED: 10. Other Cable Revenue 0 11. Other Adjustments 0 12. NET REVENUE AND INCOME ADJUSTMENTS RELATED TO UPGRADE (Sum Lines 10 -11) 0 0 0 0 0 -1- ''1-01)- FCC Form J 235 Federal Communications Commission Washington. O.c. 20554 Approved by OMS 3060-0688 Abbreviated Cost of Service Filing for Cable Network Upgrades Name of Operator: Cox Communications San Diego CUID (5): CA0329 Worksheet A Cost Assignments and Allocations (part 2) Date of Filing: 3/15/96 ($ OOO's) Allocated Cost Elements Allocation (c) Key Line Number and Description BST CPST - 1 CPST - 2 All Other Idl 1, Plant and Equipment 5,074 \1,558 4,228 1 2, Allowance for Funds Used During Construction 238 542 198 1 3. Other Adjustments 0 0 0 4, NET UPGRADE RATE BASE (Sum Lines 1 .31 5,312 12,100 .0 4,427 PROJECTED: 5, Change in Plant Related Operating Expenses 17 39 14 1 6. Change in Plant Related Support Expenses 0 0 0 7. Upgrade Related Depreciation Expense 443 1,008 369 1 8. PROJECTED NET IMPACT OF UPGRADE ON OPERATING EXPENSES (Sum Lines 5 . 7) 460 1,048 0 383 9. INTEREST EXPENSE RELATED TO UPGRADE 248 566 207 1 PROJECTED: 10. Other Cable Revenue 11. Other Adjustments 12. NET REVENUE AND INCOME ADJUSTMENTS RELATED TO UPGRADE (Sum Lines' 0.'1 I 0 0 0 0 -9- Pag.~:5 or8 l~-f\-i? FCC Fern) 1235 FebruaI) 1996 Federal Communicalions Commission Washington. D.C. 20554 Approved by OMB 306~88 Abbre,viated Cost of Service Filing for Cable Network Upgrades Name of Operator: Cox Communications San Diego CUlD (s): CA0329 Worksheet A Cost Assignments and Allocations Date of Filing: 3/15/96 ($ OOO's) Total Cost Elements (e) Line Number and Description BST CPST - 1 CPST - 2 All Other 1, Plant and Equipment 5,074 11,558 0 9,444 2. Allowance for Funds Used During Construction 238 542 0 443 3. Other Adjustments . 4. NET UPGRADE RATE BASE (Sum Lines 1 - 3) 5,3 ]2 J2,I00 0 9,886 PROJECTED: 5. Change in Plant Related Operating Expenses ]7 39 0 14 6. Change in Plant Related Support Expenses 0 0 0 0 7. Upgrade Related Depreciation Expense 443 1,008 0 824 8. PROJECTED NET IMPACT OF UPGRADE ON OPERATING EXPENSES (Sum Lines 5 . 7) 460 1,048 0 838 9. INTEREST EXPENSE RELATED TO UPGRADE 248 566 0 462 PROJECTED: 10. Other Cable Revenue 0 0 0 0 1" Other Adjustments 0 0 0 0 12. NET REVENUE AND INCOME ADJUSTMENTS RELATED TO UPGRADE (Sum Lines 10 -11) 0 0 0 0 (part 3) -/0- .A FCC Fonn 1235 Federal Communications Commission Washington, D.C. 20554 Approved by OMB 3060-0688 Abbreviated Cost of Service Filing for Cable Network Upgrades Worksheet B: Allocation Key Name of Operator: Cox Communications San Diego Page 1 of 1 Franchise CUID: CA0329 Organizational Level: Date of Filing: 3/15/96 Allocation Allocation Methodology Description Key (a) (b) 1 Channels post-Rebuild Channels Percentages Basic 18 24.32% CPS 41 55.41 % NCPS-alacane 4 SA1%1 NCPS.Premium 11 14.86% 74 100.00% , ! .-- / I, Pag..: 70rs /' ,\ ''--. ) 'J.. rl' \ J FCC Form 1235 FebruaT') 1996 Federal Communications Commission Washington, D.C. 20554 Approved by OMB 3060-0688 Abbreviated Cost of Service Filing For Cable Network Upgrades Worksheet C: Supplemental Data Name of Operator: Cox Communications San Diego Page: of Franchise CUID: CA0329 I Date of Filing: I 3/15/96 Org level: I Date of Report: I For each of the following property Ind equipment categories stlte the gross deprecilbJe ballnce resutting from the upgrade along with the a....er.ge depreciation life which comprise the property and equipment b.'lnee reported in Worksheet A. Cost of Method of Description Upgrade Years Depreciation 1. Headend 2. Transmission Facilities and Equipment 3. Distribution facilities (Trunk. drops, etc.) 4. Circuit Equipment (amplifiers, power boosters. etc.) 5. Maintenance Facilities (garages, warehouses, etc.) 6. Maintenance Vehicles and Equipment 7. Buildings (oliice) B. Oliice Furniture and Equipment 9. Total Upgrade Rate Base If you wish to disaggregate any of the abo....e because they are not readily combined or if you wish to ildd others , not shown, report such below: Cost of Method of line Number Description Upgrade Years Depreciation 10. (Specify) Aerial Distribution 6,028,399 12 Straight-Line 11. (Specify) Underground Distribution 8,440,771 12 Straight-Line 12. (Specify) System Design & Engineering 727,686 12 Straight-Line 13. (Specify) Aerial Fiber Distribution 1,605,978 12 Straight-Line 14. (Specify) Underground Fiber Distribution 6,786,574 12 Straight-Line 15. (Specify) Optical Electronics 2,486,104 12 Straight-Line ~/-:2- Jln FCC Fonn 1:235 r-."_.__. ,n"" Assumptions T I I i I I , i I I Assumptions used in Worksheet A : I i I I i I I I i , I I I I I Column (a) - Total Assigned Costs i I I i i I , , Line 2 _ Allowance for Funds Used Under Construction i iAssumes that total rebuild costs ofS26,075,512 is spent evenly over a 110 month period (June 95 through April 96). i I I I [Actual Calculation: i i I I I I I S26,075,512 x 11.25% /12 months x 5 months = SI,222,OOO. I I I I I i I ILine 5 - Plant related Operating Expenses I 1 I [Estimated annual net increase in power costs of S71,148.1 I 1 I I [ I i TLine 7 _ Upgrade related depreciation expenses. , I I I , I I ,All upgrade costs are depreciated on a 12 year straight-line basis. ! I , i : , I 1 , I 1 I , : Line 9 - Interest Expense I . , ,Assumes a capital strucrure of 55% debt a 8.5% cost if debt. This is consistent with the FCC's assumption in determining the allowed 11.25% rate of rerum on rate base. I I , Column (b) _ Directly Assigned Costs Elements , Other : , . Although the rebuild will increase plant capacity from 450mhz to 750 MHz, only 550 MHz will be activated immediately,the additional 200 MHz capacity , will be reserved for future use. The incremental cost of this additional capacity (approximately 20% of the total cost) has been directly assigned to the OTHER . categof)' . .//3- Page 1 '1 V\/ \ \ ) '- 5159 Federal Boulevard San Diego. California 92105S485 161912639251 May l, 1996 cox COMMUNICATIONS Mr. Jim Thomson Assistant City Manager City of Chula Vista 276 Founh Avenue Chula Vista, CA 919]0 Re: FCC Form 1235 - Correction Dear Mr. Thomson: Enclosed please find a correction to page 3 of8 for the recently filed FCC Form ]235. The change is to Pan 111, line 5 where we inadvenently omitted checking off the method of subscriber recovery we elect. . If there is anything else that I can do for you, please let me know Sincerely, W~fffJ~4?J?{/7~ William 1 Fitzsimmons Director of Finance -/ If- I VI L.\-' Fedc:ral Communications Commission Washington, D.C 20554 Approved by OMB 3060-0688 Abbreviated Cost of Servica Filling For Cable Network Upgrades Part II. Upgrade Revenue Requirement Computation , . Net Upgrade Rate Base (Worksheet A, Line 4e) 2. Return on Investment B. Rate of Return Percentage b. Computed Return on Upgrade Rate Base lLine 1 x Line 28) 3. Allowance for Income Taxes a. Federal Income Tax Rate b. State Income Tax Rate c. Computed Return on Upgrade Rate Base (Line 2b) d. Interest expense related to upgrade (Worksheet A, Line ge) e. Distributions (Non.C Corp. Filers Only) f. Contributions (Non-C Corp. Filers Only) g. Return Amount subject to income tax n. Income Tax Allowance 4. Projected Net Impact of Upgrade on Operating Expenses (Worksheet A, Line Be) 5. Net Revenue and Income Adjustments Related to Upgrade (Worksheet A, Line 12e) 6. Total Upgrade Revenue Requirement (Line 2 + 3 + 4 + 5) (a) (b) (c) BST CPSTs BST CPSTs 459.973 1.047,717 o 1,314,945 o 2.995.152 ,;,':JlT.;," --,:.-.... .. ...... -. ___-::__.:--~.,... "r' .. .-. . ;~...-. Part Ill. Allocation of Upgrade Revenue Requirement to Basic and Cable Programming Service Tiers ,. Upgrade Revenue Requirements. {Part 11, Line 6} 2. Number of Subscribers 3. Annual Revenue Requirement Per Sub (Line 1 { Line 2) 4. Monthly Network Upgrade Add.on (Line 3 I 12) 5. Selected method of subscriber recovery: . Provide description for allocation of CPST Revenue Requirement to CPS Tiers: CERTIFICATION STATEMENT 101 Ibl lei BST CPST -, CPST - 2 Total 1,314,945 2.995.152 4,310.096 63,229 61,920 20.7965 48.3713 69.1679 1.7330 4.0309 5.7640 . . WILLFUL FALSE STATEMENTS MAKE ON THIS FORM ARE PUNISHABLE BY FINE AND lOR IMPRISONMENT (U.S. CODE TITLE 1B. SECTION 10011. AND/OR FORFEITURE IUS CODE. TITLE 47. SECTION 5031. I certify that the statements made in this form are true and correct to the best of my knowledge and belief, and lire make in good faith. 'ame and Title of Person Completing this Form: Signat William FitzSimmons. Dirtctor of Fin.net & Administration Date: 3/15/96 ( R~~A -/5'- Page 3 of8 /\1 ) '/ _Ex FCC Fonn 1235 FebruaJ') J 996 ~V~ =~~-- ~~~~ - - ~~ May 16,1996 ClN OF CHULA VISTA OFFICE OF THE CITY MANAGER Mr. William 1. Fitzsimmons Director of Finance Cox Communications 5159 Federal Blvd. San Diego, CA 92105-5486 RE: Extension of Review Period for Cox Communication's FCC Form 1235 Dear Mr. Fitzsimmons: On March 25, 1996, the City of Chula Vista received your March 22 letter transmitting your FCC Form 1235, which is dated March 15, 1996. As you know, Cox had inadvertently omitted checking off the method of subscriber recovery that Cox was electing on item 5 of part III on page 3 of the FCC Form 1235. Based partially on this incomplete aspect of Cox's Form 1235 and partially on a discussion I had with another representative of Cox, I was under the misunderstanding that Cox was not intending to increase the rate for the Basic Service Tier or the maximum permitted rate for the Basic Service Tier. At that time, I thought that Cox intended to allocate all of the subscriber recovery shown on th~ Form 1235 to the Cable Programming Service Tier. In subsequently discussing this issue with you later in April, I learned for the first time that Cox was actually intending to increase the maximum permitted rate for the Basic Service Tier, so I asked you to send me a corrected version of page 3 of the FCC Form 1235. On May 6, 1996, the City ofChula Vista received your letter dated May I transmitting the corrected page 3 which does indicate on part III, Item #5 that the selected method of subscriber recovery selected by Cox involves both the Basic Tier and the Cable Programming Service Tier. I therefore consider May 6, 1996 to be the date that Chula Vista officially received the Form 1235 that indicated Cox intended to increase its maximum permitted rate for the Basic Tier. llis letter is to advise you that as provided for in Section 76.933 of the FCC Rules, the City ofChula Vista is extending the review period by an additional ninety days (i.e. through September 3, 1996) in order to obtain additional information and perform a thorough review of the Form 1235. Please contact me at 691-5031 if you have any questions. Thank you for your assistance in clarifYing this issue. Sincerely, JET!-- Deputy City Manager JT:dt .-/~-- MIJiOMEIADMIN\J1\FORMI235.CQX 276 FOURTH AVENUE. CHULA VISTA. CALIFORNIA 91910 . (619) 691.5031 . FAX (619) 585.5612 '.. . 1_ '^ 11 ,--1 ATTACHMENT #3 JUL 8 ',-",-"" ljo'j July 2, 1996 5159 Federal Boulevard San Diego, California 92105.5486 16191263.9251 Mr. Jim Thomson Deputy City Manager City ofChula Vista 276 Fourth Avenue Chula Vista, CA 91910 CO~ COMMUNICATIONS Re. Annual Notice of Rate Adiustment Dear Mr. Thomson: Enclosed please find FCC Forms 1205 and 1240 in connection with Cox Communications San Diego's annual rate notification for its Basic Cable Services and regulated equipment tiers, effective October I, 1996. With this FCC form 1240 filing, in conjunction with form 1235 filed on March 22, ] 996, Cox will increase the maximum permitted rate (MPR) on Basic from $9.47 to $1 ].47. The $2.00 MPR increase is due to past and projected expenses related to $.35 in inflation, $.12 in external costs, $1.20 in channel moves, and $.33 in true- up adjustments. Also effective October I, 1996, Cox will increase the maximum permitted (MPR) rate on the Cable Programming Services (CPS) tier from $21.17 to $21.21. The $.04 MPR increase is due to $.48 in inflation, $.41 in channel additions, $.33 in external costs, ($1.24) in channel moves, and $.06 in true-up adjustments. At this time Cox Communications does not plan to increase the rates currently charged to our customers for Basic and/or CPS levels of service. The enclosed form 1240 rate filing involves only the setting of MPRs. However, please note that based upon the enclosed Form 1205, we will adiust our equipment rates charged to our customers to the new MPR, effective October I, 1996. The new hourly service charge will be $31.03. The new monthly decoder rate will be $2.51; converters will be $1.40; and remotes will be $.28. Please feel free to contact me if you have any questions. Sincerely, Enclosure: FCC Forms 1205, 1240 ""/7- ~\ !:J,_p,c, COX COMMUNICATIONS CHANGE IN REGULA TED RATES FCC FORM 1240 (AND ASSOCIATED FCC FORM 1210 AND 1235) BASIC CPS TOTAL Form 12IO-Upgraded (Filed 11/15/95) $ 7.74 $ 17.14 $ 24.88 Form 1235 (Filed 3/22/96) 1.73 4.03 5.76 Current MPR as of 4/22/96 9.47 21.17 30.64 Form 1240 (Filed 7/3/96) 9.74 17.18 26.92 Form 1235 (Filed 3/22/96) 1.73 4.03 5.76 New MPR as of 10/1/96 11.47 21.21 32.68 Change in MPR 2.00 0.04 2.04 -1'3- ,,"l A-Jr ) 'J - Feeler.>! CommuniCllion. Commi.sion Washington. D.C 20~~4 FORM 1205 DETERMINL"olC REGULATED EQUIPMENT AND INSTALLATION COSTS "EQUIPMENT FORM" ommllnlt) hll tilt! ~r\ )0 eSysttm CAOJ19 =" =, COX CABLE SAN DIEGO ;u mg Il:SSO r.alOr 5159 FEDERAL BL\'D. m SAN DIEGO Name , eO p:BOn comp cling 15 orm Willi.... FiIUiIllIDORl. Dir<<tor llfF....n~.1 A.. cJcp Dum f ....... 619_166-SoI1D ;un~ 0 ran ,slllg A nt) CITV OF mULA. \'ISTA ,nsA reooO lS!nsA" onty 116 FOURTH A\'ENUE 't)' CHULA VISTA. a1eo orm u. '"'OIl 0'101196 ~ = , 619.166-5540 1. This fo..... i. mnl filed: IEntu an ":I" in the oppnpn- ....:11 Din oonjllnction ,,~th FCC FOI1n 1200, FCC Fonn \220, c.- FCC Farm 1225. ..1UoCh the oompletcd FCC Form 1200. FCC Form IllD.orFCC Fom 1225 10 the front orthis ronn 'R ~]nordcrtofulfiI1FCC"'IC5reqU;rinS3llannualfil;ngor"'furm Enlerthedatcon"hichy'oulastfiicdthiofonn I 02l2819~ j(mnllddlyy) Note' This should bc1:hc dac on which th. ~1aSIj~. by lISing either FCC Form 393 o.the prior filing of this fonn, were incf'fec:t 1. Enter ,"" d.te on which you closed your bo-ok. for1bcfacal yuT n:fl<<led in this form: Note Thi.wiJI indiC21lO1:hcendoflbc: 12-mo.uhfist;alY'*b....hich~'OUOI'I:filingthi.fonn ~3~"d~::::.:.::n"..~ .f,", ,,", ~-..-- ".";......"'" ...) SlIbchaptl:rSrorpomion Partnership SoIcProprictorship Othcr[PI=cxplainbcl",,1 Pagel 1lI31f95 /Ic;- Exa:1 4,0 Win, Version 2 0 Ilmmlddly\,) )~- .? )\J-/ I ~ Appro,eel b~' OMB 3060-0592 E~ire541)0J91 FCC Form 1205 Moy 1994 FcOc:r.IJ CommtlniCllioas Commiaion W.......(IDI\.DC 20SS4 SCHEDL'LE A: CAPITAL COSTS OF' SERVICE lNST ALl.ATlON AND MAl"'TINANCE OF' EQL1PME!\o" ANO l"LAl'o" .,Maunu ~r I. u.. A Equill""CIllandPlanl VehidH TNI. Facilitia (Sp.dfy bd_) (Spmfr bdo..) B Gnm Book Val\l~ SI.202.519.oo S405.941.00 SI5U6500 C Accumulalcil~Cl1\ Sl64.148.00 $102.971,00 $105.95500 0 Ddi:rralT.....,. (S30.56900) sn.J72.00 $3.409.00 , NetBooi<ValucjB.(C"Oll $961.,20&0.00 "00 Ibk of Rmfm G CshiD,iOfl ofG,.,......p RJ>,. G< Fcder.LlIn_cTa~lUu: G2 Sca:iaa;lmc-T..~R= GJ NnT=J Income T.,", R-.: ((GI+(i1HGI ~ G2)1 GO Ad."Slrl":f1fIOR.tI~lnfnafDo:duaibil;fY GO, A=aal1n1crel!.",",OUfll $10.039.097,00 GOb ToalNC'fAss~fs 1260.518.14700 "" &se Rcnlm on In'ialmCllf AmOUfl,IIGofb" FI S29.Joa..1.?O "" bumstD.:duaibilif\.'F-.orlG4afG.kl GS Efl"o:ai~.TL'< ~ IG3" {1..Q.6dl! !C<OlllS sl:.ip 10 G7J GO AdjusttnCllufo,"'on-CCo'l'<!l3liotu GO> s.- R.=um on In.-almall Am_I! [G4c! G6b DistributionJ GO< CocItributionJ(......notcxc:a:d06b} "'" Rau....SUbjCClIDIn_.T.."I~t>-<i6c:1 GO< RRtfIU f'etcm~. SubjCCllOlncamc T.." [G6dIG6.:.] G2 ~Up ~ rC~:II[I.(jSl Otftcr 1/(1-(G5 "G6cll] H GrouccI.UplWcofF1.cllJmIF"G71 R.c:armonln~eIlmen.lcm..sed-Up{o,Ta.us[E"H] SI.9.IIS.1747 $26.131.71" 16.47141105 ".00 "00 C.I1'aI.IProvision{o,~ $264....00 SlI.IUOO S7.561oo K """-lCap;wCoro[HI S414.-onnn SI07..319.71IS '$14,039,4905 ".00 "00 L CRAND TOTAL Itum or UtIIr K enlri..! $SJ5,39l.GU7 Boa I. 5p:cifr:oa-l. Spceifr,0d00:r1 SCHEDULE B: ANNUAL OPERATlNC EXPENSES FOR SER"lC[ INSTALLATION AND MAI""TENANCE 01' EQUIPMENT ":u Soapplia I lhilitin I ou..rTiL"<eS 1",.;;;,'.;;.,.,1 (~.bcl_l A "-uaIOp.~forS~c.InstaIL-.:IMai"f.ofEq..;p. 17.'15,93800 .....no.OO 1 ..001 $161.307,001 SI.I17.I~ool ".00 B CIlANDTOTAL I..... .ru- A_rrieJl S9.ua;.l:S9.oo ...~ Specify: 0iIIIer I. CIIIDiOeIabor.AOItI:>~. NIlIl__'---=.M"IXSUpponCosl. Spa:ifr:CNocrl -;20- ...,." . . )Y EADcl 4.0W"1.O., Vema.. 1.0 ).., - f),. ApprO\'cdb)' OMBl060-C592 &pirn 4130197 FCCI'DmI1205 ..."m FccknJ CommUllio;a:i<M>ll Commission W~.D.C. 20~~~ A~ lr:oc OMB 3()6.O..{l~92 bpires:4!30197 SCHEDCLE C: CAPITAL COSTS OF LEASED CUSTOMER EQUIPMENT A Equ;l'mcnl 1l.cm00c 1 H Grosscd'Ul'lWcorRetumIFrornSc:MdA,LineHl 0,1>11 1l.cmOl.<! Rano..J Convene,' C....VCT'LI:.2 C....""ne'3 Othc,Equ;1' ".720 j7.~2~ SO.9U 273.116 3.923.502 35,71".361 l,97~.9j7 23.126.112 lU,449 711,917 "'00 "'.00 "'.00 S127.21.1,4&17 Sl.111:m "'.00 "'.00 ~1l.Jll '.239."36 "'00 SO.OO Sl08,6(lj $'7.061.,231 so 00 "'00 Tot:LI Mainlaw\I;c/Sc",';cc Houn ("ttxh E.'qllan:uion) 13.341 C TocJ_orU"iu;nScrvicc 24S.J23 o GrmsBookValuc 1.9SI.J76 .AtcwnuIacdDcp=Ulion 1.111.417 Or:ll:=<lT:>.""" ~9.41J G Net Book Val... 1O.{E..nl S710,<l06.oo lUomm on lnwsmtcnl Grcmcd-Up forTa.u5 [G:\ Hl $109.411957 Cunc:nIPnovil;onfDr[)cp~alion 299.136 K "JUIl,alCal"cJCosut1"'Jl S40Z.~."9S7 L GRAND TOT Al.I_"'.r Line K e,"riesl Sl.1S5.001.'79"'...) Ik..3. SCHEDULE D: AVER....GE HOURS PER INSTAl.LATION ^ "..e.....e Houn perlJmo.iml Horne bmallation lllllaChan~on) I B A..er:>.ge Houn 1"" P..,.Vriml Horne Install...... (;Il;lad! an c:qllanaUDn) 0.' C A...:rage Hou1S 1"" AAdition.al Conno:aion JlISl&Ilation at T_ or Initiallnstallalion {m:d1 an ClCl'lanationl 0,6S "YCtalI:eHou1SI"'.Addition.alConno:aionlnstallaUon~rin8~lnstaIlation(alUdI an~onl on OlItc.lnslaILIIli"" On' I...... T~...) llo:m l. (Spcci~"l ^..er:>.gc Hours per 1MW1~on (.,uach an-explmationl I 0,6S Itcm2(Spccify') . "..eggcHouBperlllJQ/lalion (anadI"'ClCl'larLmionl I 0,2~ Itcml{Spccifod "~eHou1Spo::'lnstalWion{amo:;/IanCl<l'lar'l:l1ion) 0.7S -;;2/- / beel""O Will. version 2.0 }:J. - p; .., f '- FCC Fonn 120~ Ma)'J99<I Pagel Fcdcr2l eomlnwUQ(ion.s C_wion W.....CUJfI.O.c. 105j.4 WORKSHEET fOR CALCULATING PERMITTED EQUIPMENT AND INSTALLATlO!'" CHARGES STEP A- H....rlr ~m<e Chall:e I ToW Capit:IJ Costs ofinNJLuion and MaizI_CI<ISdocdulcA. 80, II 2 ToW Annual Opcr..ti"g E.,perua for1o.sWlaion IlIId Mailllmano: [Scl\ajuk B. 80, 21 3 TcuI Ca;lit:IJ Costs and ()penUnl Expcrucs for IMlalLWon and Main_o: [Li"" I ... W"" 2) c...u.metEquipmellt and Imt:IJlationI'<-to:IIQjlc(iIlladIancwlan:WolIl ~ c_.. Equipmlll'll M.ainCl:Datll:CMd iIlstaJlaion Costs. E.'<dudill Casu: ofl..cas<d Equipmcn1lLill< 3" W"".I TllQ/ Labor Houn for Main~ ar>d 1:utal1ati0ll ofC......... Equipmenland Services (auaclI f:'qllanation) Ho..tr(~'Snv1a:~efHSC)(LiDcM.illc6) METHOD OF BILllr-'G FOR INSTALLATIONS (p'..e an "."." in the appropn..lcOoI) wwlati..... billed b;-.the ......rbMedOl'lIhcHSC caI<u!-.;1 in Line'. X lIIsal!aialqbilled..allaftdanlcl>atJc. STEP B. IIltUUahaft o..'le A. l.WiormHSC...a1linsWlaIions(F......SrepA,w..7) OR A""l'a(I:co.a.,.forlnsWlatioIlT~.,.. :a. Uo..~n:d Home 1nJ:t:IJlaliOll al.HSCILiIl<') a.:!. A~e Hou.. per Un,..;n:d I-"-c Uu:lallaIiOll (Scbodule D. unc A) a.) , ~ pcr Un,,'in:d Home Iu;allalion f~1 ,,:L!) b~n:dHomcinNJlation bI.HSCfl...U>c7! b2, ....~ICTaI. Houts pc:. ~~n:d Hom. buulllllion (.5docdule D.l.i1oe B) b3, C'-w<pc:. Pr<_~n:d HomclnsWblion Ibl "b!J c. AddiuoaaJ CoMca;on 1nIuJWiOll:Tunc of Initial ""'-allation c1.HSCIl.inc71 cl.....VCQI<Ho..npc:rAddiliorlaJ c.......c.ion '1ISIlLI~a1Tllftcof lniL In.wl. [Sd>c:duleO. UDCC) cl.~perAdd;Uon.:LlCollDo:aiona-JbliOllalTlftlcofiDili:rJ iDsIaIblionjc!lI.21 ll,AddilionalCoancctionlJlSlallationllc:quiriaa~lastaJlation dl,HSC[Li...7) 0:12. AVJ.I-ieoln per Additional CoaDc.;zion lIISIlLI'lIIion Rcq. Scp, Wtall. [Sdocdul. D.l.inc 01 .0. 0-,. pc:rAddiuonal Coc.nccDonwwblionll.atWrinl~ lnsWlaIionflll lId2) c.OIh...nsuJlaIionsl....IIl<CiMdinSdlo:du.IcD.LincEl. el. HSC 1Un.'1 -..2. ....va3FHou..pc.InsWJ.lIIionofl~ I lSchcdu.leD.l.incE.llem I) eJ.Charr:PC:.'llIlOI!blionofltonl[c1l1c2J e-l HSC[Linc') c5........... Houl'l pc. InsuJbliOl'l ofhl:m 2 [SdlcdadcD. Wnc E. b".., 21 0:6. Chargc-pc:rinsl;:oJlationofl_! le-l"d) e7.HSCfl.i...7) d. Avaap- Hou..pc:tWullalion orban) IScMdodo: D.Li... E.11an 31 ri.ChalJcpc:r1MallaliOllofhem3fe7xdl '"',' 3!),U9J,oU7 S9.63U59,OO $'10.173.752 I $IO.tn.7J! nun $31.0339 $310))9 I. $3l.C3)9 .~ SJum9 0:65 .$31.0))9 ." $31.0339 ..., SJl.03l9 0.75 -c2~- &.oe1..OW.... Ven:ioo 1,0 )'1 - "'" Appn;noaIby: OMB3060-ll591 Elqrira:0U30197 Co , ' " FCCFonn 1205 May 191M fcdo;nJ Communic:arioru Commiuion WahiniU>",O.C- 20554 ~'__h...'l"'o'l.<a_"'o''''''. , . , IC.lnoJ...K1>....'elyro.....ch..P;fiUndydirrc-ren'tylt.) R<m=' Jtrmc.... R<m=' " TouJM.:bn(CnatlcclServ;ceH""..ICo~jn columnfn>mSd.cdul.C,Lin.B\ 13345. , , " HSCIl.in<7] 131.0339 131.1))39 131.0:;;9 " ToaI Mainll:rWlcclSt-rviCl: Cost rune 10~ Line III 5-IIO~,S6&4 SO 00 $000 " AMuaI Dpit:J Cosu rComsponding column from Scl>cdule C.UIIC KI . S-01.~,'n7 SO.OO "'.00 " ToaICostofR=~ [une \2 + unc 111 srol,m.sm $000 "'.00 " Number of Uniu in Servi"" [Concsp:ondin coiumnfmm Schoodul. C. Line Cl 24~)23 , ,. " U,,;ICoJl {Line 14!l.in. lSI SJ,35-41 SO 00 SO."" ". IWcpc1'Monlh (Line 161(12)] $(>-179S 0000 SO"" [STLI'll: Ch.'lella. lellled L....~ner tl.UQ , , , fC.ICl.lI.ICM1l.nlelylor..chlirnir,untlydifIe.....ttypcl eo.-,' UJn~r2 Con~r) " Toul M:lintet=cclScrviCl: Hours (Corrc:I:;Iol>dia! e.olwnn from SclIcdule C, une BI "20 37m , " HSC1Lin<71 $31.-0))9 SJUm9 :$31:03)9 '" ToGJM.:bn~crvi""Cost[LineI5"191 1146,.lO,03J2 $1.11>4>41.29'76 '""" " .......u:oI ~i~ Coro (Co~in. col.....n from Schedule C. Wne Kl $7OA.~5 J1.06l.231 $0."" :2 ToulCoJlofConvcnclll.inc2o--.Lil>e21] IDS.080 $032.719 SO.oo ~3 Numbcrof Uniu in Service !Co~ilIgcolumn from S~uJe C.Un< C] jl)935 213716 ,. " Uni,Cost IW""llILinc23] $16.7565 Dopm $000 " f\.;lJ.Cpc.Month ILine2"'(12)) $l.J\lI9 Sl.S06S SO"" STE:P E. Ch.~ (a. Other L.euoKI Equipmenl 16. TOI.1J MainlC!WlcclSc:rvico: Hours {Com:spllld;n, column from Schedule C,!..in< BI , " HSClLine7\ Dl:CJ339 " TCQlM.oin~iCC"Cost'l.itIc26"Linc2'1 SO"" " AIlnual Cal>i~ Com ICo=spanding column from Schedule C. Lin. KI $0.00 ;, Total Cost o(f..quipmcnl {Line n"uIle 291 so.oo ;, Numbc.of UIliu in Servioc [Co~g collUM from Sdrcdule C.Line CI , n Un;tCoJl (u1IC3ll1l.ine 3\] $0.00 " R=pc.Month {LiI>C3Zf(l2)1 SO"" METHOD OF 81LLINC fOR CHANCINC SERVlCE TIERS OR EQUlf'ME",!pl."'.n "," in eM .pp.."ri... bo.1 X IS a Nominal Clwge (EnlCf thc nom;na1 dIarg< in une l4} asaUnifcrnnHourlyServiCC"ClwJ:e asan....vc:rageCharwc (EnlC'fthc......... Ho<.",ro' Changing Sen-icc TICfS in Line 36b I STEf' F. Ch.~ rar a.."lint So-rvirc Tocn Cle Equipmenl ;.0 Nominal ClwEe fur ~u.g Service Tic'" I $2,00 'fyou use an csc;>btinl ocalc o( chmJn. p!xc 2n .". in 1bc bo~ al the ri~hl I OR " Uniform Hourly Scrvi"" ChaTsc -1 ,,;, OR " ....~rageClwl:e(orClwlgingSCrviceT"'''' 360. H5C jLine 'I I Dlll:m ii 36b ....~cragc Hou..to Chanl" Service Tic", I ,i 36c.....""...cCtw-gcfo.C.....gingSe,..-;Cl:T.....lLi...360.~Linc)6b] I ,,;, -~3- - ,^ Excel ~.O W..... Venion 20 o , ' P"'lIeS 1';.- ~byOMB3ll6O-0592 bpil'C::IL'3Cl191 FCC Form nos ..."... FcdenI ComnllUliCllion.o Commiaion WasbiQaton.D.C.20SS4 WORKSHEET FOR CALCULATINC TOTAL EQUlPMElIoo AND INSTALLATION COSTS , TDl,)./ UpiQ! Cosuorlnn:aJJ..uionand Main~ [Sdoc:duleA, Bo~ II $535..>9;.0137 2 Tot:IJ ArmuaJ ClpeQaiIl~ Expr;nx, for Wtallati.... -.d ~ lSd.lllle B, Bo~ 2) S9,6H.3S\lOO ) Tow ANaaI CafHtai Costs orlftSlalJ..uion arw;l Mai""",,- [Line 1+ LiIlC 21 SIO.I73,152 , Cl1SIOlnerEqui hll_dlnmJlationpC1'!:Cn e(aaadlnplanal.ion) , , A.uu&.&l C-cr Equipment MaiIl_OII and Insta.lI.ocioa Costs, E:lIdIldin CoIuorLcascdEqllipmml SIO,I1),751 [LillClI(Line-l1 , Total c..;aJ COItIorLcued Cuaomcr Equipment ISc:tocdulc C, Bo~ 31 SI,IIS..C32 7 AnnIAl Cuaomcr Equipmmt and Il1Nllation Com [Liooc S + LiftC 61 SII.JS9.l&-l . Pcn=taseAlIoatlonIDFrandUscAr= (-~I .. . AllocalCd Aaau.al Equipment and lnfta/latjon Cost ILiac 7 '" Line I] SII,.3$9.11-1 W Monthl,' EquipmentarW blJtaU.ation Cost [Une 9/(12)1 SI.J29,931.99 " Nambcr of &.ic SubKribcn ill FranclIiK 466.617 " Monthly Eqaipment and lnmJWi... Cost per SubseriberlLiDc: 101 Line II] $3.2783 " Jnn..u.... Adjommenl Factor [s..c IlIStI'Ilction.r , " AdjunedMonllllyEquipmmlandInsuJLuionCoslpers.t.scribc:rlLinc12:tLin.: 131 '3.1"" -c:<c;- ...... &=lc.O W.... VcnioQ 2.0 Awrowcd by: OMB 30lS0-0S92 E1lpra:4130J97 C\. '" ) / FCCFonnl20J ....,,"" Fcdt.=l Comm....icmOlU Commission W~DC.20SSoI CIII'TCftI Equip_l a..d l"lUllation Ral.... Il'=nil1Cd ,.- I CluorIesfarCabIcSc-....ieeIBsWLacion. a.tb!lh'lbu:lStqlA.Littc11 I .-;1 b, "~c1m:lalbba..C~' \, laslaI~afU....;redHom"'ISte'PB.U",,9;D] $31.113 2. WtallcionafP=-,ral Hames ISIC'p B. UIIl: 9b3] su.,! 3,InslalbtionafAddilioa.al Coancetion.alTrrncaflniti3l InmllalionlSIC'p B. Lil>c-9c3] 120..11 .!.1nsWl3Ilionaf..wditioG.>lCoroncction.ll.cquirin8~Ins<aII!SIqlB.l.in.9d3] SH.21 , OIhcrtnJWlatia...(tpeeif,.llStq>B.U.....9c3.'9c6.9c9) . $2(1,17 . S1J6 , -sn.28 , Moam\y Chv!!;. far Leuc af~ Conuoh [SIC'p C.Li... 17. ....1_... ....1 IU:mau:Co<nr'DIT'1'" l' SO.2X It.<:atou:ComroIT''P'2' SO.OO R<:mou:C...trotT,'P'3 ",00 , Mc.thlvCbarlcfa,l..cuco(Convcn<:rBo,.,.. [SIC'p D.l.in.25.coI.........-e] C""""''''', 80.. T~1'" I . Sl.4C eo..~Elo'<T~'P';!. Sl.'l ~Elo'<T'l'C3: SCOO . Mochly Ow!'cfar r...:-: ofOdoo:rEqllipmCflI [SlC1' t.Lin= 33] Cll:bcEquiprna>I(Specif,'l $0.001 , --;:::;::::::-forn.....,;ft.To=[of~.)lSIC'pF.Li""3.!.35o,36o;] I nool SUMMARY SCHEDULE .. 'l,BORCOST"'l'o'"[)I'OLICYCHANCES =- ~r aMWCf I<l the fallowiq- d=o questiOft$~' placillS'" ',,' if'I dlc~"" bo~ I. Ha",,~ induda:! d>o: Labo'COIUaIItIciaed widl ...m.er;be, cable o:Iropsif'l ~_rdw'gc:1 forirtili.:lJ WUlb1ion~ WYES D""o m~",,"'-"'''''''__''''wi.~'''''''''',",I''''''''' DNO 3,lf~_lavcfileddU.form~.lavcyoucn.n,..d.nypolicy.C'SCOSl~nSDrCDSta:llo=1lonlNl"""ses...incn:aso:indtc:cons iDduda:! in the ....putWDII DC oqgipo>=I..o iasWla:lioaJ chargcs~ DYES{You_mac:h.alUll~onl [DNa a:RT1nCAT10~ STATEME:-.T WIU.FUL FALSE STATEMENTS MADE ONn-nS FOilM ARE PUNISHABL.E BY FTNE AND/OR IMPRlSONMENT (U.s. COOETTTU II. SECTION \(01). M.L1/0R FORfETTURE (U.S. CODE.1TT1.E 47. SEcnON 5(3) 1~~dIold""'_cna"in1hilform_b'UCandCO=lOdocbc:stDfllll'knc"''-Iod!.andbcli.f.a:nd- N-oc ofa.: UbI. 0flC~ Sipoatu~ Tltl. - r>25'- ....' bc:c1~.IlWift. \I,.,.ionl,ll }:?-.f\ - ir ' Appt'OYUltry OMB3Cl6(}.()591 ~In: ~I3M7 FCC Form Illl, Mal'l99-I -/,'.. " FedtraJ Communications Commission Washington. DC 20554 Approved by OMS 3060-0685 Cable Operator: FCC FORM 1240 UPDA TlNG MAXIMUM PERMITTED RATES FOR REGULA TED CABLE SERVICES ( FILING DATE FOR THIS FORM ) Name of Cable Operator Cox Communications Mailing Address OJ Cable Operator 5159 Federal Blvd. Lity I~tate I~IP Lode San Di~o C. 92105 1. Does this filing involve a single franchise authority and a single community unit? YES lfyes, complete the franchise authority infonnation belowl and enter the associated CUID number here: Ix NO 2. Does this filing involve a single franchise authority but multiple community units? YES If yes, enter the associated CUIDs below and complete the franchise authority information at the bottom of this page: Ix NO I I 3. Does this filing involve multiple franchise authorities? If yes, attach a separate sheet for each franchise authority and include the following franchise authority information with its associated CUID(s): Franchise Authority Information: Name of Local Franchising Authority See Attached: National City, Chula Vista. Imperial Beach. Santee Mailing Address OJ Local Franchising Authority City State IZIP Code . Telephone number Fax Number , 4. For what purpose is this Form 1240 being filed? Please put an "X" in the appropriate box. a Original Form 1240 for Basic Tier b. Amended Form 1240 for Basic Tier c. Original Fonn 1240 for CPS Tier d. Amended Form J 240 for CPS Tier 5. Indicate the ODe year time period for which you are setting rates (the Projected Period). 6. Indicate the time period for which you are performing a true-up. 7. Status of Previous Filing of FCC Form 1240 (enter an "x" in the appropriate box) a. Is this the first FCC Form 1240 filed in any jurisdiction? I b. Has an FCC Fonn 1240 been filed previously with the FCC? If yes, enter the date of the most recent filing: I X (mmldd/yy) NO X (mmldd/yy) FCC Fonn 1240 January 1996 YES c. Has an FCC Form 1240 been filed previously with the Franchising Authority? ! If yes, enter the date of the most recent filing: I -016- Page 1 .. r. "\ ,- /:-- J I-J - (>, ../ Ftdtral Communications Commission Washington, DC 20554 8. Status of Previous Filing of FCC Form 1210 (enter an "x" in the appropriate box) a. Has an FCC Fonn 1210 been previously filed with the FCC? I If yes, enter the date of the most recent filing: I b. Has an FCC Form 1210 been previously filed with the Franchising Authority? I If yes, enter the date of the most recent filing: I 9. Status of FCC Form 1200 Filing (enter an "x" in the appropriate box) a. Has an FCC Form 1200 been previously filed with the FCC? I If yes, enter the date filed: I b. Has an FCC Form 1200 been previously filed with the Franchising Authority? I If yes, enter the date filed: I 10. Cable Programming Services Complaint Status (enter an "x" in the appropriate box) YES X 11/15195 YES X 11/15195 YES X 07115194 YES X 07115194 YES a. Is this fonn being filed in response to an FCC Fonn 329 complaint? If yes, enter the date of the complaint: 11. Selection oC"Going Forward" Channel Addition Methodology (enter an "x" in the appropriate box) D Check here if you are using the original rules [MARKUP METHOD]. JCheck here if you are using the new, alternative rules [CAPS METHOD]. 1t using the CAPS METHOD, have you elected to revise recovery for channels added during the period May 15, 1994 to Dec 31,1994" YES Approved by OMB 3060-0685 NO (mmlddlyy) NO (mmlddlyy) NO (mmlddlyy) NO (mmlddlyy) NO X (mmlddlyy) NO X 12. Headend Upgrade Methodology -NOTE: OperalOrs must certify to the Commission their eligibility to use this upgrade methodology and attach an equipment list and depreciation schedule. Part I: Preliminary Information Module A: Maximum Permitted Rate From Previous Filing a b , Line Description Basic Tier 2 Tier 3 DCheck here if you are a qualifying small system using the streamlined headend upgrade methodology. d Tier 4 , TierS Line $?.741 $17.141 h' I I 0 ue : u SCrI ers 10 a b e d , Line Line Description Basic Tier 2 Tier 3 Tier 4 TierS 81 Average Subscribership For True-Up Period 1 32,630 31,808 82 Average Subscribership For True-Up Period 2 83 Estimated Average Subscribership For Projected Period 63,058 61,500 I AI Current Maximum Pennitted Rate MdlBSb 'b Module C: Inflation Information Line Line Description CI Inflation Factor For True-Up Period I [Wks 1] -, Inflation Factor For True-Up Period 2 [Wks I] Current FCC Inflation Factor -c27~ Page 2 J:J. - ~,/)\ 1.0218 1.0216 FCC Fonn 1240 January 1996 Federal Communiations Commission Washington, DC 20554 Appmved by OMB 3060-0685 odule : CaIculatine: the Base Rate a b c d e Line LiDe Description Basic Tier 2 Tier3 Tier 4 Tier 5 D] Current Headend Upgrade Segment . D2 Current External Costs Segment $0.4427 $5.677] OJ Current Caps Method Segment $0.0000 $1.5000 D4 Current Marl.."1Ip Method Segment $0.0000 $0.0000 D5 Current Channel MovementlDeletion Segment $0.0000 $0.0000 D6 Current True-Up Segment D7 Current Inflation Segment D8 Base Rate [A]-Dl-D2-D3-D4-D5-D6-D7] $7.2973 $9.9629 M D Part II: True-Up Period Module E: Timin Information Line LiDe Description El How long is the True-Up Period? ("I" for "Less than or equal to 12 months" or first time filers, "2" for "Greater than 12 month If "1", answer E2 and D. If "2", answer E4 and ES E2 Number of Months in the True-Up Period E3 Number of Months between the Filing date of this Form 1240 and the end of the last Projected Period E4 Number of Months in the second part of the True-Up Period Eligible for Interest E5 Number of Months in the second part of the True-Up Period Ineligible for Interest 9 3 0 ue : aXlmUm ermltte ate or rue- JD eno a b c d e Line Lin~ D~scription Basic Tier 2 Tier 3 Tier 4 TierS F] Caps Method Segment For True-Up Period 1 [Wks 2] $1.5000 F2 Markup Method Segment For True-Up Period 1 [Wks 3] F3 Chan Mvmnt Deletn Segment For True-Up Period 1 [Wks' 4/5] $0.1344 ($0.1379) F4 True-Up Period I Rate Eligible For Inflation [D8+FI+F2+F3] $7.4317 $11.325 F5 Inflation Segment for True-Up Period I [(F4.CI)-F4] $0.162 $0.2469 F6 Headend Upgrade Segment For True-Up Period I [Wks 6] F7 External Costs Segment For True-Up Period I [Wks 7) $0.4664 $5.6962 F8 True-Up Segment For True-Up Period 1 F9 Max Perm Rate for True-Up Period I [F4+F5+F6+F7+F8] $8.0601 $17.2681 M d IF M p dR F T UP' d 1 0 ue : aXlmum erml e a e or rue- JD eno a b c d e Line Line' Description Basic Tier 2 Tier 3 Tier 4 TierS Gl Caps Method Segment For True-Up Period 2 [Wks 2] G2 Markup Method Segment For True-Up Period 2 [Wks 3] G3 Chan Mvmnt Deletn Segment For True-Up Period 2 [Wks' 4 5] G4 TU Period 2 Rate Eligible For Inflation [D8+F5+G 1+G2+G3] G5 Inflation Segment for True-Up Period 2 [(G4.C2}-G4] G6 Headend Upgrade Segment For True-Up Period 2 [Wks 6] G7 External Costs Segment For True-Up Period 2 [Wks 7] G8 True-Up Segment For True-Up Period 2 G9 Max Perm Rate for True-Up Period 2 [G4+G5+G6+G7+G8] M dIG M P Ott d RtF T UP' d2 -c:28'- h., C\ f, FCC Form 1240 January 1996 Page 3 Federal Communications Commission Washington, DC 20554 Approved by OMB 3060-0685 Module H: True-Un Adiustment Calculation . b c d c Line Line Description Basic Tier2 Tier 3 Tier 4 Tier5 Adjustment For True-Up Period 1 HI Revenue From Period 1 $2,143,791.00 $4,901,853.825 H2 Revenue From Max Permitted Rate for Period 1 $2,367,020.896 $4,943,309.6339 H3 True-Up Period 1 Adjustment [H2-HI] $223,229.896 $41,455.8089 H4 Interest on Period I Adjustment $15,960.7196 $2,9640499 Adjustment For True-Up Period 2 HI Revenue From Period 2 Eligible for Interest H6 Revenue From Max Perm Rate for Period 2 Eligible For Interest H7 Period 2 Adjustment Eligible For Interest [H6-H5] H8 Interest on Period 2 Adjustment (See instructions for formula) H9 Revenue From Period 2 Ineligible for lnterest HIO Revenue From Max Perm Rate for Period 2 Ineligible for Interes HII Period 2 Adjustment Ineligible For Interest [HIO-H9] Total True-Up Adjustment HI2 Previous Remaining True-Up Adjustment $0.0000 $0.0000 H13 Total True-Up Adjustment [H3+H4+H7+H8+H11+HI2] $239,190.6156 $44,419.8588 HI4 Amount of True-Up Being Claimed This Projected Rate Period $239,190.6156 $44,419.8588 HI5 Remaining True-Up Adjustment [H13-HI4] ($0.0000) ($0.0000) . b c d e Line Line bescription Basic Tier 2 Tier3 Tier 4 Tier 5 II Caps Method Segment For Projected Period [\\lks 2] $1.9073 12 Markup Method Segment For Projected Period [Wks 3] 13 Chan Mvront Deletn Segment For Projected Period [Wks 4/5] $1.2096 ($1.2409) 14 Proj. Period Rate Eligible For Inflation [D8+FS+GS+ll+12+13] $8.6689 $10.8762 15 Inflation Segment for Projected Period ((I4*C3)-14] $0.1872 $0.2349 16 Headend Upgrade Segment For Projected Period [Wks 6] , 17 External Costs Segment For Projected Period [Wks 7] $0.563 $6.0106 18 True.Up Segment For Projected Period $0.3161 $0.0602 19 Max Permitted Rate for Projected Period [14+15+16+17+18] $9.7353 $17.182 110 Operator Selected Rate For Projected Period Part III: Projected Period Module I: New Maximum Permitted Rate Note: The maximumpermiUed rate figures do nof lake into account any refund liability you may have. lfyou have previously been ordered by the Commission or your localjranchising authority to make refunds. you are not relieved of your obligation to make such refunds even if the permitted rate is higher than the contested rate or your current rate. Certification Statement WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE AND/OR IMPRiSONMENT (U.S. CODE TITLE IS, SECTION 1001), AND/OR FORFEITURE (U.S. CODE, TITLE 47, SECTION 503). Date Signature William Fitzsimmons, Director of Finance & Administration Telephone number 619 266-5410 Fax Number 619 266-5540 -. FCC Form 1240 January 1996 .;21'- Page 4 '}-/) J~' k ~ Federal Communications Commission Washington, DC 20554 Worksheet 1 - True-Up Period Inflation For instructions, see Appendix A of Instructions For FCC Form 1240 Question I. How long is True~Up Period 1, in months? Question 2. How long is True.Up Period 2, in months? Line Period FCC Inflation Factor 101 Month 1 2.22% 102 Month 2 2.22% 103 Month 3 2.22% 104 Month 4 2.16% 105 Month 5 2.16% 106 Month 6 2.16% 107 Month 7 2.16% 108 Month 8 2.16% 109 Month 9 2.16% 110 Month 10 III Month II 112 Month 12 113 tver~e wflatwr Factor for 1.0218 rue- P eno 114 Month 13 115 Month 14 116 Month 15 117 Month 16 118 Month 17 119 Month 18 120 Month 19 121 Month 20 122 Month 21 , 123 Month 22 124 Month 23 125 Month 24 126 {\ve~e \l1fl"1f~ Facto, foc rue- p eno Page 1 -30- J~ ' " ' i\, /)C fA v Approved By OMB 3060-0685 9 FCC Form 1240 Januar)' 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 2 - Caps Method True-Up Period, Tier 2 True-Up Projected Period Period X Question I. indicate the period for which this worksheet is being used. (put an "X" in the appropriate box.) Question 2. indicate the tier for which this worksheet is being used. (Put an "X" in the appropriate box.) Basic Tier2 Tier 3 Tier4 Tier 5 X Question 3. How long is the first period, in months,for which rates are being set with this worksheet? 9 Question 4. How long is the second period, in months,for which rates are being set with this worksheet? 2 3 4 5 6 7 8 9 Line Period Previous Regulated Channels Current Regulated Channels Net Change Operators Cap For Channels Added Operator's Cap For License Fees License Fee Total License R U d Fee Reserve eserve se Used Total Operators Cap Used Total Caps Adjustment 201 Previous SO.30 Month SI.20 S\.50 202 Month 1 SO.30 SI.20 S1.50 203 Month 2 SO.30 S\.20 S1.50 204 Month 3 SO.30 SI.20 SI.50 205 Month 4 60 61 SOOO SO.OO SO.OO SO.30 SI.20 S\.50 206 Month 5 SO.30 S\.20 S\.50 207 Month 6 SO.30 S\.20 S\.50 208 Month 7 SO.30 SI.20 S\.50 209 Month 8 SO.30 SI.20 S\.50 210 Month 9 SO.30 SI.20 S\.50 211 Month 10 212 Month II 213 Month 12 214 A vera e Period 1 Ca s Method Ad'ustment S\.5000 215 Month 13 216 Month 14 217 Month 15 218 Month 16 219 Month 17 220 Month 18 221 Month 19 222 Month 20 223 Month 21 224 Month 22 225 Month 23 226 Month 24 227 Avera e Period 2 Ca s Method Ad'ustment -31 ./ FCC Fonn 1240 January 1996 Page 2 .- ) ., _ i.> t:J. i' ,.. Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 2 - Caps Method Projected Period, Tier 2 Question 1. Indicate the period for which this worksheet is being used. (put an "X" in the appropriate box.) True-Up Projected Period Period X Question 2. Indicate the tier for which this worksheet is being used. (put an "X" in the appropriate box.) Basic Tier2 Tier3 Tier4 Tier 5 X Question 3, How long is the first period, in months,for which rates are being set with this worksheet? 12 Question 4. How long is the second period, in months,for which rates are being set with this worksheet? 0 2 3 4 5 6 7 8 9 Previous Current Operators Operator's Total License Total Line Period Regulated Regulated Net Cap For Cap For License Fee Fee Reserve Operators Total Caps Channels Channels Change Channels License Fees Reserve Used Used Cap Used Adjustment Added 201 Previous 50.30 51.20 51.50 Month 202 Month I 50.30 51.20 51.50 203 Month 2 50.30 51.20 51.50 204 Month 3 50.30 51.20 51.50 205 Month 4 61 61 0 50.20 $0.34 50.64 51.40 52.04 206 MonthS 50.64 5 1.40 52.04 207 Month 6 50.64 51.40 52.04 208 Month 7 50.64 51.40 52.04 209 Month 8 50.64 $1.40 52.04 210 Month 9 50.64 51.40 52.04 211 Month 10 50.64 51.40 52.04 212 Month II 50:64 51.40 52.04 213 Month 12 $0.64 51.40 52.04 214 A vera e Period I Ca s Method Ad'ustment 51.9073 -3;;;z- Page 2 ';..:/ Iv/ FCC Form 1240 January 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 4 - Residual True-Up Period For instructions. see Appendix A ofInstructions For FCC Fonn 1240 Question 1. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) True-Up Period Projected Period x Line Line Descri tion a Basic Period One b Tier 2 c Tier 3 d Tier4 c TierS 401 Average Pennitted Charge 57.3000 517.1233 402 Average External Costs 50.4664 55.6962 403 Average Total Per Channel Adjustments after 5/14/94 51.5000 for Channels Added Usine: Cans Method 404 Average Tier Residual [401-402-403] 56.8336 59.9271 405 Average Channels per Regulated Tier 19.0000 41.6666 406 Average Caps Method Channels per Tier 0.0000 9.6666 407 Average Remaining Channels [405-406] 19.0000 32.0000 408 Average Period 1 Per Channel Residual [404/407} 50.3597 50.3102 409 Average Pennitted Charge 410 Average External Costs 411 Average Total Per Channel Adjustments after 5/14/94 for Channels Added Using Caps Method 412 Average Tier Residual [409-410-411] 413 Average Channels per Regulated Tier , 414 Average Caps Method Channels per Tier 415 Average Remaining Channels [413-414] 416 Average Period 2 Per Channel Residual [412/415] Period Two )~ - .0 P"g i. FCC Form 1240 January 1996 - 33~ Page I Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 4 - Residual Projected Period Question 1. Indicate the period for which this worksheet is being used. (put an nxn in the appropriate box.) True-Up Period Projected Period x Line Line Descri tion . Basic Period One b Tier2 e Tier 3 d Tier 4 e TierS 401 Average Permitted Charge S7.7400 S17.1400 402 Average External Costs SO.5630 S6.0106 403 Average Total Per Channel Adjustments after 5/14/94 SI.9073 . for Channels Added Usin.e: Caps Method . 404 Average Tier Residual [401-402-403] S7.]770 S9.2220 405 Average Channels per Regulated Tier 23.0000 38.0000 406 Average Caps Method Channels per Tier 0.0000 8.0000 407 Average Remaining Channels [405-406] 23.0000 30.0000 408 Average Period 1 Per Channel Residual [404/407] SO.3120 SO.3074 Page 2 - 3'1- ,. - '-. {\.II' y~ (/ FCC Form 1240 ianullly 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 For instructions, see Appendix A oflnstructions For FCC Form 1240 Question 1. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) I True.U~ Period Question 2. Indicate the tier for which this worksheet is being used. (put an "X" in the appropriate box.) Basic Tier 2 Tier 3 Tier 4 X Worksheet 5 - Channel Movement and Deletion True-Up Period, Basic Tier Projected Period Tier 5 9 Question 3. How long is the first period, in months, for which rates are being set with this worksheet? Question 4. How long is the second period, in months, for which rates are being set with this worksheet? Line 501 502 503 504 505 506 507 508 509 510 511 512 513 514 2 3 4 Period Residual of Channels Deleted Residual of Channels Moved From Tier (added) to Tier Net Per-Channel Cost Adjustment (Column 2 - Column II Cumulative Net Per- Channel Cost Adjustment SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SL2096 Previous Period Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month II Month 12 Avera e Period I Channel Movement and Deletion Ad'ustment S1.2096 SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SL2096 SO.1344 515 Month 13 516 Month 14 517 Month 15 518 Month 16 519 Month 17 520 Month 18 521 Month 19 522 Month 20 523 Month 21 524 Month 22 525 Month 23 526 Month 24 527 Avera e Period 2 Channel Monment and Deletion Ad'ustment - 35'- FCC Fonn 1240 January 1996 Page I ?-t t. )?, - I' 501 502 503 504 505 506 507 508 509 510 511 512 513 514 Federal Communications Commission Washington, DC 20554 Worksheet 5 - Channel Movement and Deletion True-Up Period, Tier 2 For instructions, see Appendix A oflnstructions For FCC Form 1240 Question I. Indicate the period for which this worksheet -is being used. (Put an "X" in the appropriate box.) I True-u~ Period Question 2. Indicate the tier for which this worksheet is being used. (Put an "X" in the appropriate box.) I Basic I Ti; 2 I Tier 3 I Tier 4 Question 3. How long is the first period, in months. for which rates are being set with this worksheet? Question 4. How long is the second period, in months, for which rates are being set with this worksheet? 2 J Line Rrsidu'sl of Channels Deleted Residual of Channels Moved From Tier (added) to Tier Net Per-Channel Cost Adjustment IColumn 2 . Column I] Period Previous Period Month I Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Avera e Period I Channel Movement and Deletion Ad"ustment SI.2409 So.oooo SO.OOOO SO.OOOO SO.OOOO SO.OOOO So.oOOO SO.OOOO So.oOOO (SI.2409) 5] 5 Month 13 516 Month 14 517 Month IS 518 Month 16 519 Month 17 520 Month 18 521 Month 19 522 Month 20 523 Month 21 524 Month 22 525 Month 23 526 Month 24 527 Avera e Period 2 Channel Movement and Deletion Ad'ustment Page 2 -3b- , . ~.\ " Approved By OMB 3060-0685 Projected Period Tier 5 9 4 Cumulative Net Per- Channel Cost Adjustment SO.OOOO SO.OOOO So.oOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO So.oOOO SO.OOOO (SI.2409) (SO.1379) FCC Form 1240 January 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 5 - Channel Movement and Deletion Projected Period, Basic Tier For instructions, see Appendix A oflnstructions For FCC Form 1240 Question 1. Indicate the period for which this worksheet is being used. (Put an ~X~ in the appropriate box.) I True-Up Period Question 2. Indicate the tier for which this worksheet is being used. (Put an ~X" in the appropriate box.) Basic Tier 2 Tier 3 Tier 4 Projected Period X Tier 5 X Question 3. How long is the first period, in months, for which rates are being set with this worksheet? Question 4. How long is the second period, in months, for which rates are being set with this worksheet? Line 501 502 503 504 505 506 507 508 509 510 511 512 513 514 2 3 Period Residual of Channels Deleted Residual of Channels Moved From Tier (added) to Tier Net Per-Channel Cost Adjustment (Column 2 - Column I) Previous Period Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Avera e Period 1 Channel Movement and Deletion Ad.ustment 50.0000 50.0000 50.0000 50.0000 50.0000 50.0000 50.0000 50.0000 50.0000 50.0000 50.0000 50.0000 -37- , I J ):;1- f" Page 1 12 o 4 Cumulative Net Per-Channel Cost Adjustment 51.2096 51.20% 51.2096 5 1.2096 51.2096 51.2096 51.2096 51.2096 51.2096 51.2096 51.2096 51.2096 51.2096 51.2096 FCC Fonn 1240 January 1996 , I Page 2 Federal Communications Commission Washington, DC 20554 Worksheet 5 - Channel Movement and Deletion Projected Period, Tier 2 For instructions, see Appendix A oflnstructions For FCC Ponn 1240 Question I. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) True.Up Period Question 2. Indicate the tier for which this worksheet is being used. (put an "X" in the appropriate box.) I Basic I Ti;2 I Tier] I Tier4 Question 3. How long is the first period, in months, for which rates are being set with this worksheet? Question 4. How long is the second period, in months, for which rates are being set with this worksheet? 2 3 Line Residual or Channels Deleted Residual or Channels Moved From Tier (added) to Tier Net Per-Channel Cost Adjustment (Column 2- Column I) Puiod 501 502 50] 504 505 506 507 508 509 510 511 512 513 514 Previous Period Month I Manth2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month II Month 12 Anra e Period I Channel Movement and Deletion Ad'ustment sO.oooo SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO SO.OOOO - 3'6 ~ J;;- 1-': {; -.' Approved By OMB 3060-0685 Projected Period X Tier 5 12 o 4 Cumulative Net Per-Channel Cost Adjustment (SI.2409) (SI.2409) (SI.2409) (SI.2409) (SI.2409) (SI.2409) (SI.2409) (SI.2409) (S 1.2409) (SI.2409) (SI.2409) (SI.2409) (SI.2409) (SI.2409) FCC Fonn 1240 January 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 7 - External Costs True-Up Period For instructions, see Appendix A ofInstructions For FCC Fonn 1240 True-Up Period Projected Period Question I. For which time period are you filling out this worksheet? {Put an "X" in the appropriate box.] Question 2. How long is the first period, in months, for which rates are being set with this worksheet? Question 3. How long is the second period, in months, for which rates are being set with this worksheet? x 9 Line Line Description Basic Tier 2 eno 1 Tier 3 Tier4 TierS External Costs Eligible for Markup Cost of Programming For Channels Added Prior to 701 5115194 or After 5115/94 Using Markup Method For $119,573.00 $1,499,951.00 Period 702 Retransmission Consent Fees For Period 703 Copyright Fees For Period 704 External Costs Eligible For 7.5% Markup $119,573,00 $1,499,951.00 705 Marked Up External Costs S128,540,9750 SI,612,447,3250 External Costs Not Eligible for Markup Cable Specific Taxes For Period S8,434.53 SI8.200.79 Franchise Related Costs For Period 708 Commission Regulatory Fees For Period 709 Total External Costs For Pedod SI36_975,5050 SI,630,648,1150 710 Monthly, Per-Subscriber External Costs For Period I SO,4664 S5,6962 External Costs Eligible for Markup Cost of Programming For Channels Added Prior to 711 5/15/94 or After 5/15/94 Using Markup Method For Period 712 Retransmission Consent Fees For Period , 713 Copyright Fees For Period 714 External Costs Eligible For 7.5% Markup 715 Marked Up External Costs External Costs Not Eligible for Markup 716 Cable Specific Taxes For Period 717 Franchise Related Costs For Period 718 Commission Regulatory Fees For Period 719 Total External Costs For Period 720 Monthly, Per~Subscriber External Costs For Period 2 Period 2 -3?~ FCC Fonn 1240 January 1996 Page 1 .) ;", )~ _ V Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 7 - External Costs Projected Period For instructions, see Appendix A of Instructions For FCC Form 1240 True-Up Period Projected Period Question 1. For which time period are you filling out this worksheet? [Put an "X" in the appropriate box.] Question 2. How long is the first period, in months, for which rates are being set with this worksheet? Question 3. How long is the second period, in months, for which rates are being set with this worksheet? X 12 o Line Line Description Basic Tier 2 Tier3 Tier 4 TierS erlo 1 External Costs Eligible for Markup Cost. of Programming For Channels Added Prior to 701 5/15/94 or After 5/15/94 Using Markup Method For $385,839.00 $4,103,797.00 Period 702 Retransmission Consent Fees For Period 703 Copyright Fees For Period 704 External Costs Eligible For 7.5% Markup $385,839,00 $4,103,797,00 705 Marked Up External Costs 54]4,776.9250 54,411,581.7750 External Costs Not Eligible for Markup 706 Cable Specific Taxes For Period $ 11.246.04 $24,267.72 707 Franchise Related Costs for Period 708 Commission Regulatory fees For Period 709 Total External Costs For Period 5426,022.9650 54,435,849.4950 710 Monthly, Per-Subscriber External Costs for Period I 50.5630 $6.0106 Page 2 - -'/0- I... J' '--1 A_/1j I FCC FOml 1240 January 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 8 - True-Up Rate Charged For instructions, see Appendix A oflnstructions For FCC Fonn 1240 Question I. How long is the True-Up Period 1, in months? Question 2. How long is the True-Up Period 2, in months? 9 . b c d e Line Line Description Basic TierZ Tier 3 Tier 4 TinS 801 Month 1 $7.3000 $15.3900 802 Month 2 $7.3000 $15.3900 803 Month 3 $7.3000 $15.3900 804 Month 4 $7.3000 $17.1400 805 Month 5 $7.3000 $17.1400 806 Month 6 $7.3000 $17.1400 807 Month 7 $7.3000 $17.1400 808 Month 8 $7.3000 $19.6900 809 Month 9 $7.3000 $19.6900 810 Month 10 811 Month 11 . 812 Month 12 813 Period I Average Rate $7.3000 $17.1233 814 Month 13 815 Month 14 816 Month 15 817 Month 16 818 Month 17 819 Month 18 820 Month 19 821 Month 20 822 Month 21 823 Month 22 824 Month 23 825 Month 24 826 Period 2 Average Rate -J.j/- FCC Form 1240 January 1996 Page I )~ - ~ .' ", COX COMMUNICATIONS Franchise Authority Information: Name of Local Franchising Authority CUID(s) City of National City CA0419 Mailing Address afLocal Franchising Authority 1243 National City Blvd. City State T~IP Code National City Ca 91950 Telephone number Fax Number (619) 691-5044 (619) 336-4376 Name of Local Franchising Authority CUID(s) City ofChula Vista CA0329 Mailing Address of Local Franchising Authority 276 Fourth Avenue City State I~IP Code Chula Vista Ca 91910 Telephone number Fax Number (619) 691-5044 (619) 691-5171 Name of Local Franchising Authority CUID(s) City ofImperial Beach CA0421 Mailing Address of Local Franchising Authority 825 Imperial Beach City State 1ZlP Code Imperial Beach Ca 91932 Telephone number Fax Number (619) 423-8300 (619) 429-9770 Name ofLoeal Franchising Authority , CUID(s) City of Santee CA0337 Mailing Address of Local Franchising Authority 10601 Magnolia Avenue City State lZIP Code Santee Ca 92071 Telephone number Fax Number (619) 258-4100 (619) 562-0649 -.If;;z- "',:.( I ~ k~ 95 Oct Noy Dec 96 Jan Feb Mar Apr May Jun 96 Oct Noy Dec 97 Jan Feb Mar Apr May Jun Jul COX COMMUNICATIONS PROGRAMMING EXPENSE BY MONTH Aug Sep Chula Vista, National City, Imperial Beach, Santee BASIC CPS Subs Rate Cost Subs Rate Cost 32,630 0.3979 12,983 31,808 5.2498 166,986 32,630 0.3979 12,983 31,808 5.2498 166,986 32,630 0.3979 12,983 31,808 5.2498 166,986 32,630 004118 13,437 31,808 5.2345 166,499 32,630 004118 13,437 31,808 5.2345 166,499 32,630 004118 13,437 31,808 5.2345 166,499 32,630 004118 13,437 31,808 5.2345 166,499 32,630 004118 13,437 31,808 5.2345 166,499 32,630 004118 13,437 31,808 5.2345 166,499 32,630 119,573 31,808 1,499,951 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 0.5099 32,153 61,500 5.5607 ,341,983 63,058 0.5099 32,153 61,500 5.5607 341,983 63,058 385,839 61,500 4,103,797 -2;3- )'J.- I' 1> - L', I' {i . Basi~ Pnmium & PP" in bold A,,'ailable for add charge cox COMMUNICA nON SOUTH CHANNEL LINE UP BY DA T[ Star! True--up End True--up Start Projected End ProjtCled 101lf95 1/1/96 6130/96 10/1/96 10/1/97 USA USA USA USA USA ESPN ESPN ESPN ESPN ESPN . KCOX KCOX . KCOX KCOX . KCOX . KTLA' . KTLA . KTLA . KTLA . KTLA XETV . XETV . XETV XETV . XETV . KNSD . KNSD . Kt-:SD . KNSD . KNSD . KFMB . KFMB . KFMB . KFMB . KFMB KUSI . KUSI . KUSI . KUSI . KUSJ . KGTV . KGTV . KGTV . KGTV . KGTV . KPBS . KPBS . KPBS . KPBS . KPBS . XE\\'T . XEV,rT . XEWT XEWT . XEWT . KCDP . KCDP . KCDP . KCDP KCQP . KITY . KITY . KITY . KTTY KITY Showlimt Showlime . SNEAK . SNEAK . SNEAK HBO HBC . KBNT . KBNT KBNT Cinemn Cinemn . COUNTY GOvr . COUNTY GOvr . COUNTY GOvr . C-SPAN2 . C-SPAN2 . C-SPAN2 . C.SPAN2 . C.SPAN2 Family Family Family Family Family . XHAS . XHAS . XHAS XHAS XHAS . C.SPAN . C-SPAN C-SPAN . C.SPAN . C-SPAN VitwtrsChoice Vinfers Cholet . WEATHER . WEATHER . WEATHER ITV/MEU . ITVfl.,iEU . ITVIMEU . ITVfl.,iEU ITVIMEU . Calif7GO\1Ac~es . CaliUGovtAcces . CalifJGO\1 A~~es . CaliUGovtAc~es . Ca1iUGO\1Acces . QYC . QYC . QYC . QYC . QVC WGN . WON . WGN WGN WON . TBS . TBS TBS TBS . TBS Lifetime Lifetime Lifetime Lifelime Lifelime NASAlPRlME NASAlPRlME NASAlPRlME NASAlPRIME NASAlPRlME MTY MTV MTY MTV MTV CNN CI\'N C/'.'N CNN CNN HeadJineNews Headlinet-:ews Headlinc News Headline News Headline News AMC AMC AMC A1-IC AMC TNT TNT TNT TNT TNT Discovcr)' Discovery Discovery Discovery Discovery Lnrnin& Learning Learning Learning Learning KB~T KBNT PREVIEW PREVIEW PREVIEW Prime Deponi\'a Prime Deponiva Prime Dcportiva Prime Deponiva Prime Dcponiva Inlernalional Inlernalional Inlemalional Inlernational Inlernalional BET BET BET BET BET A&:E A&E A&E A&E A&:E Bravo Bravo Bravo Br3\'O Bravo CNBC CNBC CNBC CNBC CNBC Weamcr Wealher SCI.FI SCI-FI SCI-FI TNN TNN TNN TNN TNN VHI YHI VHI VHI 'YHI Nielelodcon Nickelodeon Nidelodeon Nickelodeon Nickelodcon Comedy Comedy Comedy Comedy Comedy E E E E E Canoon Canoon Cartoon Canoon Canoon Failh&: Values Failh& Vi\{ues Faith & Values Failh&: Valucs Faith&: Values Disney Disney Disney Disney Disney Pfe\'ue Pfe\1Je Showlimc Showlime Showlime Sci-Fi Sci-Fi 1180 1180 HBC Sneal Sneal Cinemn Cinemn Cinemn Coun Court Viewers Choice Vinftrs Choice Viewers Choice IIotChoiee Hot Choice 1I0lChoicc lIotChoice HOlChoice Showtime2 Showtime2 Showtime2 Showtime2 Showtime2 IIB02 IIB02 H802 11802 IIB02 Cimemn2 Cimemn2 Cimtmn2 Cimtmll2 Cimtmax2 CMT on CMT CMT CMT Encore Encore Encore Encore Encore Trlvel Trlvel Trlvel Trlvel Travel Gem~ Gems Gems Gems Gems MTVLllino MTV Lalino Court Court Coun HSN HSN HSN HSN HSN VllueVision Value Vision Value Vision Value Vision Val11eYision rx rx rx FX rx 9 MEU MEU MEU MEU MEU DUldoorLi{e OllldoorLife OllldoorLi{e OutdoofLife Outdoor Li{e I ConlinuousllilsJ Continuous HilsJ ConlinuousllitsJ ConlinuousBilsJ ConlinuousllitsJ 2 ESPN2 ESPN2 ESPN2 ESPN2 ESPN2 History History Hislory Hislory Hislory , TCM TCM reM TCM TCM 5 LeassedAc~ess Leassed A~cess LeassedAccess Leassed A~eess 6 Continuous Hits4 Continuous Hits4 Continuous Hiu4 Continuous IIils 4 Continuous Hiuot 8 SEGA SEGA SEGA 9 Continuous Hits Conlinuous lIils ConlinuousllilS Continuous Hits Conlinuousllits Cho 2 3 , 5 , 7 8 , 10 II 12 13 14 15 16 17 18 19 20 21 22 13 " 2S 26 27 28 29 30 31 32 33 " 3S " 37 38 39 " " " " " " 46 " " " SO 51 52 " " 55 56 " 58 " 60 " " 63 " 6S " 67 68 6 70 7 7 73 7 7 7 7 9 Channel Count Basic CPS Olher 19 " IS 19 " IS 23 38 " 23 38 " n-,JI 23 38 " .. -Jjtj- ATTACHMENT #4 SEP 5 !c,cl'i August 30, 1996 Cox Communications 5159 Federal Boulevard San Diego. California 92105.5486 161912639251 Mr. John Goss City Manager City of Chula Vista 276 Fourth Avenue Chula Vista CA 91910 CO~ COMMUNICATIONS Dear Mr. Goss: RE: NEW PROGRAMMING AND CHANNEL CHANGES Cox Communications strives to give our customers as many programming options as possible. That's why, effective September 30, 1996, Cox Communications will be offering new choices to our customers, including: "SAN DIEGO'S lS"/Cox Channel IS For the first time in San Diego history, cable and broadcast news operations "ill combine efforts to offer local news 24-hours a day on Cox Channel 15. "San Diego's 15" will offer repeated broadcasts of KGTV/ChanneIIO's news progranuning and will simulcast coverage of breaking news. Beginning September 30, 1996, San Diegans "ill have the convenience of getting greater access to in-<iepth local news by watching ~ox Channel 15. MSNBC/Cox Channel 39 Cox is also proud to announce the launch ofMSNBC on Cox Channel 39. MSNBC combines Microsoft's legendary computer software expertise with NBC's world"ide news operation to feature up-to-the-minute news from around the globe using three media technologies: broadcast, cable television and the Internet. MSNBC will begin airing on Cox Channel 39 on September 30, 1996. The History ChannellESPN2 Cox Communications strives to constantly bring more value to our customers. In the past, Cox subscribers were charged a premium for The History Channel and ESPN2, but as of September 30, 1996, this award- winning programming will be included in the programming line-up for Expanded-Basic Tier customers at no extra charge. The History Channel will feature educational documentaries, mini-series and movies on Cox Channel 73 and ESPN2 will be aired on Cox Channel 38. In order to provide these new programming opportunities to our customers, changes in the channel line-up will be occurring. Details on those changes are included in the enclosed notice which will be sent to all of our customers. If you have any questions or require additional information, please feel free to contact me at 266-5203. - ';15 - ) ;2.- p, - ~;i / '../ COX COMMUNICATIONS MSNBC AND SAN DIEGO'S NEWS CommgSeptember30th J996 C . CHANNEL 15 OME TO em new services. San Dieg;'s Ne';' ox Commumcations is proud to anno . channel 15. featuring local s~ Channel IS, an exclusive local unce the addilion 011\\" news ,rom KGTV-lO 24 h . news channel wilJ deb I 'OuTsaday 'U Oil In addition, MSNBC .11 . . WI come to C C orgamzation to embrace three . ox ommunications on chann brings you UP-to-the-minute n~edl~ technologies - broadcast, cable an~lt;9I' As the only l1e\\. ws ,rom around the globe. e nternet-MS\8( Also, ESPN? and The H. S - Istory Cha I . eptember 30th mak' nne wl11 move to OUr C channel 38. Fin~11v. d~:tthem available to a11 Cox Expanded c:s~ Expanded level of service 011 will switch chann~1 POsiti~~:ntractual agreements, KTLA-5 ando;;~y' ESPN2 wi11 be found on . -14 (Soon to he KSV'B . ) (over) . . ., . ,.., (' On September 29th, Faith & Values channel 51 ceases showing strictly praise and worship programming and becomes a ne~ channel called Odyssey. As a result df this change, and the addition of new channels. Odyssey will not be carried effective September 30th. I n addition, Continuous Hits 1 will no longer be carried on our lineup, and Continuous Hits 3 will now share time on channel 99. Continuous Hih "- will run from 6 A.M. to 10 P.M.. \ As part of this change, the International Channel will move to channel 7], and Prime Deportiva will move to channel 72. Finally, Sneak Prevue will move to channel 51, offering Pay-Per- Vie'l previews and programming information. FOR MORE INFORMATION, CALL 262-1122 -7/.- .\ I. '~." 1J.- /~'-. /...., ~~f~ ~ ~~~~ Cln' Of CHULA VISTA OFFICE OF THE CITY MANAGER ATTACHMENT #5 September 11, 1996 Mary Tietz Government Relations Manager Cox Communications RE: Form 1235, 1240 and 1205 Rate Requests, Draft 329 Complaint; Public Hearing This letter is to inform you that in regard to the various rate filings received from your company, the Chula Vista City Council is tentatively scheduled to hold a public hearing on Tuesday, October 1. The meeting will be held at the City Council Chambers, 276 Fourth Avenue, beginning at 4:00 p.m. Attached to this letter is a draft FCC Form 329 Complaint. It is staffs understanding that an advance copy ofthe Public Knowledge report included in this complaint was also provided to Mr. William Fitzsimmons and Jack Jacobs on August 27. Based on any initial reading of that report or of the draft herein provided, we look forward to receiving Cox's comments within the next 30 days as provided by FCC regulations. After that date, if a complaint still appears justified, it would be filed with the FCC in conjunction with any written comments submitted to the City by Cox. In revie....ing the forms submitted, the City's consultant found the 1240 to be satisfactorily completed. The 1205 filing, as it did not present rate increases for Chula Vista customers, was not subject to their review. The primary concerns to be raised by staff at the public hearing ....ill be 1) the appropriateness of the spread of upgrade costs via the 1235 to Basic and CPS tiers and 2) the justification for filing an FCC Form 329 complaint on the upgrade-based CPS rates. As this can be both a technical and bureaucratic process, 1 look forward to working ....ith you to clarify any of the issues in question to present the most balanced and informative report possible for OUT Council's consideration. In addition to any written comments you may have, I am fully available to discuss these matters with you by phone at 585-5649. I can also be reached via fax at 585-5612. Sincerely, ft...P~~ Gerald Y g Principa M gement Assistant Attachments: Draft Fonn 329 Complaint Public Knowledge report, August 27. 1996 Public Hearing Notice for October I. 1996 ce: City Council William fiusimmons" Cox Communications. Director of Finance Jack Jacobs, Cox Communications. Financial Analyst -lf7~ 276 FOURTH AvENUE' CHULA VISTA' CALIFORNIA 91910 . (619) 691.5031 . FAX (619) 585.5612 ,~ ..---- I 'J. - p.- S \ :- (bfAFT) Federal Communications Commission Approved by OMS 3060-05<19 FCC FORM 329 CABLE PROGRAMMING SERVICES RATE COMPLAINT FORM PLEASE READ THE INSTRUCTIONS PRIOR TO COMPLETING THIS FORM All of the requested information must be provided to enable us to consider the complaint. Incomplete filings cannot be processed and will be returned. Franchise Authority Name: Street Address: City of Chula Vista 276 Fourth Avenue City Chub Vista Phone Number: State CA Zip Code 91910 (619) Cable System Name: Street Address: 691-5031 Cox Communications 5159 Federal Blvd. City Phone Number: San Diel1;o State CA Zip Code 92105-5486 FCC community unit identifier number for cable system. CA0329 Subscriber complaints regarding a rate increase to the cable programming services tier(s) were received by the local franchise authority within 90 days of the effective date of the Increase. (If no, the complaint cannot be filed.) YES NO Specify in detail the cable programming services tier being complained about: CPST-l The complaints referred to Indicate the following Increase(s): Current rate: S 19.69 Effective date of Increase: Prior rate: S 15.90 5/01/96 (month, day, year) Were any channels added to or dropped from the cable programming services tier concurrent with the Increase In the rate? YES NO Indicate the number of channels added: 0 o Indicate the number of channels dropped: - Jrg- FCC FORM 329 ) '. /'0 April lW6 h _ t ,,",cr- 0/... ,;. <J Approved by OMB 3060~549 Federal Communications commission CERTIFICATIONS: By signing this form the local franchise authority certifies to the FCC that, to the best of its knowledge and belief, the following is true and correct: 1) The local franchise authority has received subscriber complaints in accordance with the Commission's rules regarding a rate increase to the cable programming services tier(s) provided by the cable system within 90 days of the date of the increase first appearing on the subscriber's cable bill. 2) Consistent with the requirements of this form, the cable system was provided a draft copy of this form by certified mail and given a minimum of 30 days from that date to give the local franchise authority a rate justification on the appropriate FCC Form or, alternatively, a certification that it is not subject to rate regulation. 3) Consistent with the requirements of this form, this information provided by the cable system is attached to and made a part of this filing by the local franchise authority. If no such attachments are filed with this form, the franchise authority certifies that the cable system operator failed to file the appropriate information with the local franchise authority within the specified time period. and requests that the FCC act upon the information as submitted. 4) In the event additional information relevant to the filing of this FCC Form 329 is obtained by the local franchise authority prior to the Commission taking final action thereon, the local franchise authority will immediately notify the Commission of such additional information and provide the same to the Commission. 5) The local franchise authority has filed this complaint with the Commission within 180 days of the date the rate increase became effective. Name Signature Date FCC NOTICE TO INDMDUALS REQUIRED B'I' THE PRIVAC'l' ACT AND THE pAPERWORK REDUCTION ACT The .0Ucitation 01 personal inform.tion in this form is authorized by the Communication. /1u:1. 01183'1, .. lmended. The Commission wm use the information provided in this Iorm III d.termine the ....onablen... 01 I cable company's rate.. In ..aching th.t det.rmination. or lor law enlorcement purpo.... . may become no.....ry III provida personal inlormation contained in this Iorm to another gov.mmentag.ney. All inlormation provid.d In this form wm be lvailable for public lnapection, lubjeel to local requirements. IndividuIIs Ire not ..quired III ...pond to coloction. oIlnlormaliOn thlt clo no! oontain I ve10c1 ()IIice 01 Mlnegementlnd Budget (OMB) oon1lOl number. Public reponing lor this oolection Is ._ted to ....rag. .5 _ute. per Ning. incIudin8 the lime lor ..vlrNing inalNction.. "Irching .xistin8 clata 10UrceS. 81thering .nd maintaining the data need.d, .nd oompleting the ooloction 01 information. Send comments regarding this burden .stimet. or .ny other a.peel 01 thil collection 01 inlormation, including suggestion. for raducing the burd.n, to the Federal Communication. Commlsaion, Racord. Manag.ment Bronch, W..hington, DC 20554. Do 02! send completed tormI to this address THE FORGOING NOTICE IS REQUIRED B'I'THE PRIVAC'I' ACT OF 187., P.L. 83-57g. DECEMBER 31.187.. U.S.C. 552.(.)(3). AND THE PAPERWORK P.l:DUCTION ACT OF 19.5. P.L. 10..13, MA'I' 22, 1895..7 U.S.C. 3507. ~-V? - FCC FORM 32Q ):2 - f\/~cJ April 1896 OCT 61 '96 1l2:45PM COX EXEC STWF FRX 619/266-5555 Y. P.2/2 515 FodolJI8oWMnI s.. Diogo, Collario llZlll5-548S 16191;zc.~1 Attachment #6 October I, 1996 Mr. 0eraId Young PriDcipal ManagP.1J'em Analyst City ofClmla Vata 276 Fourth Avc:oue 0:mIa VISta, CA 91910 cox eOMMUJlleATIOJlI ........ BE: ApDda Item 121CoJ: Collllll1U1iulioos:J!'CC l10llllJ 1235, 1240 and 1205 Dem-Mr. Young; Cox Ccmnnm~tiom appreciates YO\Jl' willingness to re<:o"""""tl a two-week continuance of AgeDda Item 12. We will be submittiDg written Cv"" "",,,fo pc:rtainiDg to the city's draft FCC F0I1I1329 comp1aint within the prescribed 3<k1ay review period as provided by FCC regulations. You can antidpllte receiviDg those written col1lJ1lelrts no Jatec than October 10, 1996. In addition, Cox Comnmnic:sotiollS will not be mmgi'1g equipme!lt lIIId imtal];,tion nltes on October 1, 1996 as was C(lmnn"IWed'to the city in OUT FCC Form 1205 fiIiog dated June 28, 1996. In lICCOrdance with FCC regulatiollS, we will notify the city 3(H\ays in adVllllU of auy regulated rate changes induded in the FCC Forms 1205, 1235 and 1240. If you have any questions of require additional iofolllllltion, please don't t-;tate to call me at 266-5410. ~e1y'j r/ , I ~~ WILLIAM FITZSIMMONS Director ofFinanu lIlId Admiuistration Cox CommuDicatioDS .~; ",;:, , f:; , , ;: ~: ,[ I 1/.. ~\ 5Y OCT HI '96 04:23PM COX EXEC STRFF FAX 6191'266-5555 P.2 5158 FtdeI8lllo11lMrd San DiIlIJ. CoifotJIIa 82tOS-641l6 (e19121N-S2S1 A7TAO--l/i1gvT 7 CO~ COMMUNICATIONS October 10,1996 Mr. Gerald Young Principal Management Analyst CityofChuIa VIBta 276 Fourth Avenue Chula ViJta"CA 91910" r',:'~ ~'- -v~~:': -,- :-j/-r;f,- RE: Cox Communication.' FCC Form 1235/Draft 329 CompJaint DellJ"Mr. Young: In response to the draft FCC F01'll1 329 Complaint submitted by the City to Cox CommunicatioDS on September 11, 1996, we llJ"e submitting the enclosed letter to Mr. Jay Smith of Publk; Knowledge and a revised FCC Form 1235. We wUJ.look fOlWard to discussing this matter further at the Chula Vista City Council on October 15, 1996. If you have any questions of requite additional information, please don't hesitate to call me at 266-5410. Sincerely, , Njp~ " WILLIAM J. IMMONS Director ofF' ce and Administration Cox Co1t11Tlnni""tions '1. ) 'l "j, ~- ;'/i ,/ ".-', '" OCT HI '96 04:23PM COX EXEC STRFF FRX 619/266-5555 P.3 5158 FodOllIS..1mmf Son DIIIIO. California 921CJ5.5411l (618)263-1251 coX' COMMUNICATIONS October la, 1996 VIA FACSlMILE AND FIRST CLASSM.m. \,'.' -,..-~, :- ,",.- ;,' . ',:1,'2'-;,:;- Mr. Jay Smith . . Pruiclem Public Knowledge, l.Ill:. 5510 Swuidge Dr. S. Salem, Oregon 97302 Rc: Cox Communication. SO Diel!O . . FCC FOl1II 1235 am:! PClI'IlI. 1240 Race Filings D~ Mr. Smith: Wc have revlcwcd your August 27, 1996, letter to tile Cities of Cbula Vista, Imperial Boach. llIUI NalioDal ell;)' rcgardlIl3 Cox CommllllicatiollS San Diego's (.COX's") FCC Form 123$ and Fenn 1240 rate filIIIgs for rbOfC communities. This letter dlscuases Several of the issues addressed in your !cttIsr which we believe cla1:ifw the FecIezaI Commllmca.tiOJlll Comml'sion's (the .Colllmissioll's") rules 8Ild policies regardblg Form 1235 rate fiJblgs as they perum to your anaIys!. IllId OW' m:CIIt di5cussIOII5. You SUigest III )lour leaer that cox may not adjU,1 rates for added cable progr>mrnl'lg $ftVice (.CPS~)1ier c1wmels WIder the Rcap$. method aml also file a Pcmu 123S to reflect Detwork upgrade~. Letter at 3. Howcver, the Commission has stated specifiCally l'bat the Ponn 1235 Network Upgnde methOdology does petlllil operator. to acCOWlt far the goats /.2-A~S;& OCT 113 '96 I 134:23PM COX EXEC STAFF FAX 619/266-5555 I ~ P.4 Mr. Jay Smith October 10, 1996 Page:! of substarltillllCtwork. upgrades above and beyo11d any .tt!lSIlfS made purIIWJt to the beDeMnllOtklpric:e cap appro~h.lI , In the Commission's report and order adopting interim cost of service EUles,lI the Commission a4opee4 an abbreviated cost of service showing for system aetWOl'k upgradea. The C-omm;'siOD at that time stated that, U!Illef the new approad1: I . . . op=ator[s] would be permittcc1 to 'set a rate bue4 011 two e1emems. The f"trIlt element is the bel',.,Inn.~k ralll, UEerDCd by dla Rate Order and t1ul price cap. The secOJlll e1P.l'1'l'il"l will be capiTal improvement add-on. The sum. 0/ thae two element' will. yjeld th . ]1IQ%lmum allowable rate tllar might be charged:to IlIbscrlbe.rs. .'-, co/",;' Interim Cost Order, 9 FCC Red at 4676 (emphasis added). The Commission reiterated thiI policy in ilS order adopting final cost of service rules: "The recoverable amouur of IIlllh capital ~ruvements may be added to a syslef11's beDCbmark rate, G8 a41ust<<l by tM price cap, to genCrare a "'.'timum permitted rate. ~31, Thus, it is clear !hat the Commission !mended for operatorti to recover extema1 costs, inflation, aDd going-forward ~h.nnel additions under the price cap., and aclclitioml Upgrade costs under a cost-based approach.!' I ' 1/ 'TIle f"1tSt bencbmark approad1 wu adoprecl in.19~. S" &porf and Order and Funher Nutlce of Proposed RulemD1clng, 8 PCC Reel 5631 (1993). The Co",...4ul,on IeVi~ its bencp"il'u and adopted its qllanerly price eap methodology (alOlli wi~ FCC Form 1210) in its SBCOM Ortkr on kc01l4ideraW1J, Founh RsporrIQ1l4 Order, and Fifth Notics 'of Proposed Rule_ng, 9 FCC Rccl4119 (1994~. Tl1c IJlDUII 'price cap methoclology, for use with FCC Fom 1240, was adopre4 by tbIl COIIU1llssion in its Thirfeent1l Order DII Rsco1l.$idsrQlioTl, 11 FCC Rcii 388 (l~S). I . y ~eport and OM and ~he" NDti<f' 0/ Propoled RulDMking, 9 FCC Red. 4527 (1994) (-Interim Cost Order"). .\ ' , 1/ Secorul Rspon GIld Order. First o*, 011 RsCfJ1Uideratlon. GIld hrthsr Notice of Proposed RulemQ/dng, 11 FCC Red ~. '229.~...(lSl96) ("Fillll1 Cog Order") (emphasis added). . .l !I The C.nnnnlqioa.'s vision of tbis t'llV? prong 1'lItc settlllg methodology was first voiced in. its ~at of service notice of proposecirulemaking: We also I~lki.t commCllt 00. W~ther we \could,eet8blilh an abbreviated ~st-of.service showing for si.g11ificant prospective capital expenditures used to improve tbe quality 0 (oollC1a>>ocS. I. " ;/ 'I /'l-)~d ,-r- I' OCT 10 '96 04:24PM COX EXEC STAFF FAX 619/266-5555 P.5 Mr. Jay Smith October 10, 1996 Pqo3 I You alao suggest ill your letter that subscriber benetits are tied directly and solely to the addition of I!hll"_ls to a system. You c:onclude. thezeforo, that: . . .' there Ia DO demonstrated beDafit to basic service SUblcribers since the cb.......1 aIlocaticm for the basic tier was DOt changed by the upgrade. 1'I1ezefote, DOM of die UPSmdll c:osts should be alJ........h>(j to basic. FurtImr, the allocation between CPS lIDd other services should be basecl OIl the r.hK""'tl additions directly associated with the upgra4c. . . . Letter at 3. We StrOllgly bc:1icve !:bat your po.L_n is con~ to the Comm1csiou's rules aIIll policies legardibg uetwork t!pgrade ~~ ~~~118 as disc:ussed ill its lnterlm Coal Order .and Final ~,0nJer. InJ':lIct, now~ irl:,~:9OJt of service ruI~I',,'lt-j"8 Pf"Cef.fillgs doea the COmmission ",uncwe.'s\K;h a polley. JDdmi, if an operator WCle mqulred to Id4 en.......1.s as a condition of impktulllll:ing a lire increase WIder the Form 1235 merhDdolo~, it Ia roasonab~e, to BlSu.mc 5lICA a policy would llave been stated clearly by the Ccmunissicm. Five factors determine the perI:oissibillty of network upgrade costs, AmoDi tbem is tIJat the opontor must demn~aus that IUbscri.bers will beDofit "through improvemenJS ill the re!l1lale4 service subject to the tare increa,se."f! "Improvemems" elJCOtnpass several variables, not just the addition of eh........ls. Por example, Colt is upgrading its Syslem to a fiber-rich HPC network. which is mOle eJCpCIISive but subsr..nri.1ly more rellable than the Y (...i:ominued) . service or to provide additicmal services" Under this abbreviaced showing, operators 8l!eki11g to nise rates to recover the costs of a p!auned upgrade would submit only the costs of the upJl'8de. . . . /TI1re costs of the "P11'tIde wOllld then be odded to the rare permUted Ulllkr the benchm4r/c and price ctIp Dpp1't)QC1l to the eXlent costs con14 not be =OVered under that ~. ImPlem....,.,;on of Sections of the Cable TeJevision Coasumer Protection and Competition Act of 1992.,.... Rate Raplatlon, NMce oj Proposed Rule11lllking, MM Dkl. No. 93-215. FCC 93-353 (reI. Jul. 16, 1993) l' 75 (emphasis added). ~ It is also relevant that tile Cmnmi1sion's 20 ceut price tap methodology was based On historical 8II1'Vey data from 1986 to 1991. Duriug that period, VCIy few cable operators were CODllr:meting t1ber p~, . 8!Id therefore the cap could not iD.colpOrate I "mbstll1tia1" upgrade c:osts. Sb:rh Orrkr on ReCOlUideralion, Fifth Repon and Ord4r, afJd Sevenrh NDlice of Proposed RU/emaking, 10 FCC Red 1226, 1300 (1994). . , .. 6/ r"tttrlm CArr 07'd6'" g FCC llad .. U;7~. /0 /L~ /.., t,~ ( - ,;.;; - J) OCT 10'96 04:25PM COX EXEC STAFF FAX 619/266-5555 P.G Mr. Jay Smith OCtober 10, 1996 PllP4 previously-used p~nanlly coaxial plant. The fiber configuration that Cox is deploying. is p'",,,.d~,,~, and thus a failUIC of ODIlloop will not result in loss of service to sub$cribers. '" the attached charta demonstrate. tho iDcrease in fibc:r plant in the system bu improved system reliabUity substantiallY. Fiber also proWles better sigoal quality to more subscribers over larger llIITVil:c areas. without signal degradation (due. for eumple, to successive necessary amplification). The attached Declaration from Stephen D. Gautete&ux. Vice President of Teclmical DevelopmCDt, attests to both system reliability and signal quality indicating that the sysrem's canicr to noise ("ClNU) ratio improved from 4S CIN to 48 CJN when the 750 MHz fiber upgrade wu implemented.. 'The intrinsic value of I particular added channel may acmaUy.be less than the value to subscribers of such improv"",..nt, in system reliability ~ s.igna1 quality., ..' ..," ., ,,~ ':.~, -:.'':"-r~ r' r'(~:' :-,~ s/~(;--- Bee....... subscribers' to any Cox smric:es - including previously available servic:ea - derive substantial bet1cfits from Cox's syem upgrade. costs IbouId be allocated based on rotal ....h""""'s. not just added cl1."n~15. Thus, your conclusion that tbc allocation of COstJ among basic, CPS, and Uother. aervil;os Ibould be bued on chaImels dirlctly alSOI'I..r"l'J with the upgrade. is inconsimmt with the Commission's policles. On a related issue, you stale mat Cox's allocation of costs is improper because Cox seeks to recover the costs of certain plaDt that is not "used and uset\l.l." You c1eu:rmiDed that bec1Use Cox is only "usiila", the capacity of the first 100 MHz of tbe 300 additional MHz of capacity by which tbe system has beeJ1lncre&sed (i.e., from 450 MHz C&pWty before the upgrade to 750 MHz after the upgrade), Cox lDllY only claim that 335 of the upgrade is used aM usefu1lUld must exclude 675. Therefore, you col1clvde that Cox's exclusion of only , about 205 of the upgrad.c cost is Improper.ZI . You justify your position by statillg that the Commission's rules provide that "each unit of addtd capacity should be ueated IS if it costs the same as the other UDlts of added capacity. , , .. Lcuc:r at 2. Thus: ' . . , unless tbe fully distributed allooadon approach is appliecl. the rates paid by subscriberS to regulated serviges included in the 100 MHz activated pol'tion of the upgrado will inClude a diaproponionate1y Wle ,bare of cost compared to those who vJtimllte!Y ~&C services (likely to primarily be lIDIllgularec1) 11 While Cox's inltlJ.J. filing elU:1uded about 205 of the coSlS, it lwI ameu4ed im filing to exclude 27% of these COSU.Cox computed iu 27~ allocation based on the allocated COst to colllttUCta SSO MHzsysmn. BecallSe Cox is, in fact, COllStlVCtiDB a 7S0 MHz sysrem. the Included portion of tbe capacity (~t which is IISCd ~ useful) i8 SSO divided by 750 or ?:HlI. ~C/-l iC, /)._ _ p: / .7 , ,. OCT 10 '96 04:25PM COX EXEC STAFF FAX 619/266-5555 I ! , , P.? Mr. lay Smith Oc:r.ober 10, 1996 Pa,e 5 provided in Cb.e relllainiqg 200 MHz onte it is activated; that is, there will be cross SUbsidiel. We believe that you have miainterpreted tile C.....mission's regulatiOllS reprding the allocation of upgrade COsta. As a Pfl!'limin"7 matter, Cox is DOt mereJ,y "uppadjDg" a 4SO MHz Iyltem co TSO MHz capacity; it iI'replacing ira JlfeCk'minantty coaxial Plaut with stale- of-dle-1I:t fiber optic plant. This !let Ullderlies Cox's COR allocation lJIlltbodololY, ami is entirely consistent with the Comml.uOl1'S rules. As discussed above, the added. vllue of uparadiDg plant is DOt merely in the added chanDel capacity. WbiIe it might appear that the only eff'ect of the upgrade was to iDcmase Cox'sl)'Irem c:apacity, pctbaps the great\lIt value of the upgr~eis in rile ~,ijy lIDd mtabJIityotCox's service de1ivezy sy~rem. BVeJl though bulc SUbscribers still rc:cej,v"tbe (\n"1s:lbeynceived prior to the upgmle, the plant over Which those .enncea are deliveIl:d i, of Sigl'lifil"-"nrly better quality. In fact, it is often the cue that subscribers va1\1e tbe quality and reliability of c:able service tllan the .Mlrl'Jn of a /"h.......I. Cox bas revised its Fmm 1235 to take into consideration your position that DOt all plant Is "usedanc! useful" by reYiaiDg ita llIocation based on Cox', used and useful porticm (up to SSO MHz) of the 750 MHz baudWU1th. Thus, a zwgority of tbe upgraded pJaat (In Cox's revised c:ase, 73.) is "Used aud uaetUl." FiDa11y, your letter.lDdicares chat Cox's Porm 123S does not reflect the et'fect of advenisiDg sales reve.uue.' Cox' s iDcr8lnental advertisizJg reveuue associated with FOnD 1235 chAnn~ atftlltioDS tofa1a approximaleJy $130,000 "n"''''lly. The _...hed revised Fonn 1235 Ief1o;t& adjusanems baaed on this e.srimatHl advertising revenue as well as /he Cox's adju.anem to the UICd and useful a1loCation from 80% to 73,.. ClIaIIgmg the UJed and. usefW allocation reduce. the add-on portions of Cox', basic me from $1.73 to $1.59 and d1e CPS dDr rate from $4.03 CO $3.6995. Accaumiug for the ad reYeJme furthet redw:ea the add- on portion to the CPS rare from 53.6995 ro $3.525. We hope lhat this letter addresSes your.COllCelm regarding Cox'a Porm 1235 rate filiug. Should you have IJJ)'questi01lB~~ contact me. """"osmu cc: Citr of ChWa Vista .. ami MmiDlsrradon ^ ,',oJ /2 - 0' '.('. OCT 10 '96 04: 26PM CQ.X~.~?g;._~T.fIff. [A2! ,g;1-~!..~E?l?;;;::?:??System RellDbility P.8 Fibe, Miles ! 80Clll 7000 6000 BODO 4000 3000 2000 1000 0 leS9 1990 11191 72a5 1___Mil..1 199! 1996, 1"" 1995 1995 99.94~ 99.ee~ 99.9110% ge.96O'lI 99-570% 99.9S0'l!. 1_ Aef,abilily I 99.990,," 9U'~ 1989 1990 1991 1988 i993 19911 1995 19911 !' " , ~' . ~-"i l: . 't',: '.,. I' fi ji \:: \., I,-&r / 1 - '-'( ,r- OCT 1121 '96 1214:28PM COX EXEC STAFF FAX 619/266-5555 ! -~. P.9 DEN' AI:!.6.TIONOFSTEPJmNGAU'I'RRl1A~ 1. My name is Stephen Gautereaux aud!-am Vice-President TecluUcal Dev~ of Cox Communj,cations San Diego (''Cox''), 2. 11t&ve ~-cigbt years offield and ll1aDagement ~ence at tbc SaD Diego System ("System") and mr the last folll'l=D. years have been respcmsible for s11 System engineering, COQStructjOD, aud upgrade activities. 3. I have reaci tho foJllgoing lOUertO Mr. lay Smith dated Odober 10, 1996,. decIaIe the following: 4. lha.vc,QverleeQ the upgradeofQ)x'''System.tiom a 450 MHzsystam to a 750 MHz I~and c::an atte&tto the beueJits brave ~ted &om the upgrade. S. The upsracle subltantially iDtl1'eaIed. the reliability otlhe Cox System. 1. When the cable plant wu uppaded to 450 MHz in 1990 to l!l!ll, a fiber optic netwod;"wu CODSlnlCted which decreased the number of ampli&ra in cascade from over 30 to 16. Tbese areas. ccmstnIclted llfiH",.,S Dine fiber optic receiven with each nocle selVic::iDg approximately 12,000 homes. ODe altbe lDlijor lOutceS of outlgea in a cable l1etwork is amplifier failure. With the munber ofampli1iers redUtled in~cu.stomers are able to receive a higher degree ~f reliability. b. DuriDg 1995 and 1996. this SIlIlO plant was upgraded to 750 MHz. Another level ofreliabillty was lIllbievecl during this upgrade. The numblit offiber optic nodes was iaoreuc:d frOm nine to 143 nodes. The nwnber of lIUIplifiers in cascade . decrcllllld to six amplifiers. The average Dumber ofhomea served jiom a DOcIe was reduced to under 80,0 homes per Dode. c. Any time the I1\lZI1ber of amplUie:s in casc::ades is millCed, the more reliable the utwork. Additionally, fiber optic "rings" were installed durinu tlw 750 MHz upgrade. 11me riJ288 wen inatallec1 to caable the l7akw. to continue to operate in the event of a :liber t'aillJle. With the:fiut:ber reduction in amplifier OII(.'lIdes and . the installation of' fiber riDp, the cable network hu become atate-of-tbe-art, d. Whenever /I, cable outage occurs in our neiwork, detaUecllogs are kept indioating the location of the outage. the time the outage oc:c:uzzed, the tUne it W8II filced. the length of the outage, and the nllmber of ouszome: hours affeeted. U8lDa thoSII logs in the major zip codes of'the 450 MHz to 750 MHz upgrade lIleIIlS II. reference, the custm:ner ouIage hOIln have doereased dramatically. During II 17 mo.ath time Jleriod iiom J8IS\Iary 1905 th...Uldo M.." of 191)&. the e..._ ouQp " I ...., /2 - fl i/'~ OCT 10 '96 04:28PM COX EXEC STAFF FAX 619/266-55SS P.10 -2- c:. hours pc:r monm in tho.. areas WlI5 14,909 aI8tOJn&nl hOUlS of O1ItlIges (Ill)' au., caused by UJlgrade activiw duria.s this time period has been mnoved from these totals). After the 750 MHz upgrade was cO.ll1pleted the total customer outase hOUlS WIll mdueed to 700 hours per month (using the time period from ]1II1ll 1996 to Septe.mber 14, 1996). This dramatic decrease in cusmmer outage haUlS Nrther illustrates the OI'lnli"'"-:d reliability of the cable plllZlt after completion of the 7S0 MHz up;rade. The life expectancy of the cable lletwoJk bas been extended by four or five )'elIrS by thl'llnstallation of all new fiber. opto electronics, smplitien, and associated equipment. IP' ,.,... "-'" 6. The u~ SUbstantially increUedsemce quality in the Cox System. a. lbe reQuction of ~1i1ier casr~d"" increased quality ofmceptiOD. .AJ1ytime a cable teleVision signal is llI!Iplified the quality of the signal dllsradel. Reducing the distmce llZld the IlUIDber of lI.II1plifim that signals Ilavel increasea the quality 6f'reception. \ b. These signal. can be me~ by canier to noise r'CIN'') ratios. Those ratios were. 45 elN during the 45.... Or7' .. . upgrade lUld improved to 48 C/N during the 750 MHz upgrade. ,', ';' . .,1 .~ " c. Ourins the 750 MHz upgrade the, design of the cable plant inr;1udecl fnr-.....a;"g the signalleve1s at the diteotional taps (the point on the street whiml the house chop , attaches to the cable distribJlliClllplant) to allow the necessiry signa.! for second outlets m the homes. Seconcla:y outlets needed to be coDsiderec1 during the design of the 750 MHzplam. " .... : n 7. I affirm that facti rtated herein are tzue and correct to the best of my knowledge. inionnation and bellef. c?/J ~~c .' ~~~ux Title: Vice.President .. T~cal Development Cox Conununications San Diego ~. -. /d--P~{P) l_ ocr10-'796-04~29PMCOX EXEC STAFF FAX 619/266-5555 -. ----. Approved byP. 113060.0688 Abbreviated Cost of Service Filing For Cable Network Upgrades Community Unit Or System Oper.ting Name I~mmunlty Unit ID - CUJDI.1 IData of FUlng COx Communlcationl San Diego CA03~lI 3115/116 Name of c..b1e Operator Cox Communlcationl San Diego Mailing Add",.. . 5159 Pedenl Blvd. City r:tate I:IP Code San Diego California 92105-5486 Ownet.hlp of Franohlsa ot SV&tam (PIB~ .n IIX" to tha left or the appropriate answer.): X C.Corp Subchapter S Partnership Soil! Proprietor Other Per...n to contact regarding this fomll WillIam Fitzaimmonl Telephone . ,. .,..- ':f~eXNUmber ''''.''I~ '.,,,,, (619) 266-5410 1"1. :"', . ,,-,~ F'" ',', ~i9j ~66.5540 " Local Fran'hiting AuthOrity CIty ofChuta Vista , Mailing Addr... 276 Fourth Avenue CIty I~tate IZiP COde Chula Vista Californla 911110 This form 18 being filed for: l~heck One) x Pro - Approval OR Final Approval Note: If Finel Approval filing; mac::h all Pre-Approval filings, if any. relating to tM upgrade, Scope of Filing, (Check Ono) x Pte - Approve' :OR 8yatem Leval Nota' cabla Sy.,em i. d.flned in Soction 802(7) of tho Communications Act. /,2 -......;-- ,- .../ fl FCC Fonn 1235 Fobnwy 1996 Page 1 oC8 '-~i0)'960'~~t'3'x EXEC STAFF FAX 619/266-5555 ~.L-..-~ _._. __1.: Approved bye,.t~060'()688. Abbreviated Cost of Service Filing For Cable Network Upgrades Part 1. Qualification for Upgrade Rate Adjustment A. Signlfioance of Upgrade QuallficB1lon 1. Does the upgrade meet the minimum technical specifications described in the Instructions for Part 1 Qualification for Upgrade Rate Adjustment, Line 1"? x Vas No 2. If "No. was answered in question 1, attac.h a brief. d~C. rlption of how subscribers to Baalc and Cable Programming Service Tiers will benefit form the caplt I improvements. .~_ .._~ . ,... ~.;.L "~" .._. ...."..., ',. . . -,l::~~..!:?, ,'~"r ( I":' l:.S:-/:f,~ . ~ ~: ;-:~: I' 3. Complete the following Items to determine the coet of the capital improvement as a percentage of rate bue (Investment In cable property, plant and equiPmfnt for the aree over which the Improvement will be used): . . 1 A. B. C. The net upgrade rate base Total rate base after upgrade Percentage of upgrade to total rate base $ $ 17,298 41,754 65.38% B. Used 81 Uaeful Qualification i If this form has been completed for a pre-approval, plJase skip to line 3. 1 . Has the upgrade been completed? Ves No I 2. If question 1 was answered .yes" enter the' date the ,Jpgrade was completed and began providing service to subscribers of regulated services: . l I i 3. If the Phased.ln Approach is elected, attach a description of the subsections involved and the projected dates on which the upgrade will be completed and pro~idlng service to subscribers of rate regulated services within those subsections. I I Imperial Beach Santee Cbub Vista National City Nov.9S Feb-ll6 May.96 May.96 I I'ISC Z oU I I I I /;2- /' ," 1'1./ if ,) ,i-1 PCCl'onnl23S 1l.bruU)' 1996 QQJ.jf~~:.~~~ffi< EXEC STAFF FAX 619/266-5555 Applllved by 1::.1.<!l060-0688 Abbreviated Cost 01 Servioe Filling For Ceble Network Upgrades Part II. Upgrade Revenue Requlremant Computation la) Ib) BST CPSTe (0) 1. ~ Upgrodo RlIIe Bo.. (Workshoet A, Un. 4el 2. Return on Investment a. Rato of Return percentove b. Camputod Retum an Upgrado Rate Ba.o (Line 1 x Line 2al 3. Allawonce far Incame Toxe. a. Federal Incorne Tax Flate b. Stot. Inoamo Tex R.ta a. Computed Roturn on Upgrade Rate Ba.e (Un. 2b) d. Intereat exp.".. related to upgrade (Worksheet A. line Sel e. Distributions INon-C Carp. Filers Onlyl f. Contribution. (Nar>-CCorp. File,. Only)''';' g. "Gtum Amounti~~b)~~ to 1ncome~ taX: ~-. r ;~. . h. Inoome Tex Allowenae 4. Projected Net Impaot of Upgrede on Opereting Expen... (Workshe.. A, Une eol 5. Not Revenuo and Inoamo AdJuotmonta Rolotod to Upgrado (Workohoe' A, Line 12~1 6. Total Upgrode Revenue Requirement Iline 2+3+4+51, BST CPS,.. 423.014 963;692 Parr III. Alla.ation of Upgrede Rovenue Roqulrement '0 Ba..o ond Ceble 'imp,ammlng Servioo TillI ... "'l.f!! I .1. ,';;.., (0) (bl (0) ',,1 'BST CPST.l CPST . 2 Total 1. Upgrade Rovenue Requirements . (Pert II. Line SI , " J ,206,808 2,619,241 3.826,049 2. Number of Subscrlbell ' " . :,ji': 63,229 61,!l2l) 3. Annuel Revonue R",ulrement Per Sub (Uno 1 I line 2) 'ii-it i\ 19.0863 42.3004 61.3867 4. Monthly Network Upgrodo Add-on (Line 3 I 12) 1,5905 3.5250 5.1156 . ; 5. Selectod method of .ubecribar recovery: (Cheok Onol~ }i!,! . " , '_ _;f'!i:: . ProVide d"oriPtlon far ,1I.carion 01 CPST Revonue Requlronient 10 Ci>s"Tie..: !: " ' , :' I ! _' ~ , CERTIFICATION STATEMENT,;!.:!; ;1,,;'::, WillFUL FAlSE STATEMENTS MAKE ON THIS FORM ARE PUNISHABlE'ilY piNE ANDIOR IMPRISONMENT IU.S. CODE TITLE 18, SECTION 10011. ANDIOR FORFEITURE (US CODE, TITLE 47, BECTION 503). loortify th811h. otetemo"", m.deln thl& form 're true and correct t. th.beCi'of my knOWledge 0 Name end Title of Person Complo~ng thll Form:, Signet"", W1IUIID FlrzolIllIDO", Dlrec10r .rFiDO.<e ., Adml.lIlrl1lion Dlto: ':')- 3I1S196 Pose 3 of8 PCC Porm 1235 PcbfWDll 1996 );2 - A- &:r &:"'If"t~""'J~61"&'4:~lPM:"Eox EXEC STAFF FAX 519/255-5555 nIlllIUlIIWJI, U,\".. 6U:>:li4 Approved by EMi,4.J06M681 t.bbrevlated Cost of Service Filing for Cable Network Upgrlldes Name of Operator: Cox CommunlcatioDll San Diego CUIO (s): CA0329 Workshl!et A Coat Assignments end Allocatione (pert 11 Date of Filing: 3/15/96 ($ OOO'sl Directly Assigned Cost Elements Balance (bl Line Number and Description (al BST CPST . 1 CPST - 2 All Other , , 1. Plant lInd Egulpment 26,076 6953 2. Allowance for Funds Used Durinci-Construction 1,222 326 3. Other Adjuetments 0 0 4. NET UPGRADE RATE BASE (Sum Linee 1 . 3) 27,298 0 0 0 7:n9 , PROJECTED: ,...,'",- Chenge in Plant Belated Operatiri'g'Expense.." ,.'h 5. '" ,/~cr 71 0 6. Change in Plant'Related Suppo'rt 'Expenees 0 0 7. Upgrade Aeleted Depreciation Expense 2,275 607 e. PROJECTED NET IMPACT OF UPGRADE ON OPERATING EXPENSES {Sum Unea 5 . 71 , 2,346 0 0 0 607 9. INTEREST EXPENSE RELATED TO UPGRADE 1,276 340 " PROJECTED: (130' 10. Other Cable Revenue (130) 11. Other Adjustments ,. , 0 12. NET REVENUE AND INCOME ADJUSTMENTS ReLATED TO UPGRADE (Sum Lines 10.111 (130) 0 (130) 0 0 pagc40rs FCC Fonn 1235 pobnlllll' 1996 / ') - n"f,/ /.or- f-;/l}/, &yj..~~r.:m'J~~IW"c&'X EXEC STAFF FAX 619/266-5555 Approved by '=,,1.SJ060'()61I, Abbreviated Cost of Service FIling for Cable Network Upgrades Name of Operator: COI Commaalcatlon, San Diego CUID (s): CA0329 Worksheet A Cost Aaslgnmentc lInd Allocations (part 2) Date of FlIlng: 3/15/96 1$ OOO's' Allocated Cost Elements Allocation Ie) Kev Line Number and Description BST CPST - 1 CPST - 2 All Other Id) 1. Plant and Equipment 4.651 10,S9S 3,876 1 2. AllOwance for Funds Used During Construction 218 497 182 I, 3. Other Adjustmentc 0 0 0 4. NET UPGRADE RATE BASE ISum Lines 1 _ 3) 4,869 11,091 0 4,058 , PROJECTED: 5. Change In Plar11;:;f\elated Operatlnli'ExpenS~8' .H, ....., 17 39 14 1 6. Chaf!ge in PlantRel8t~ Support 'Expenses . '.. ", 0 0 0 7. Upgrade Related Depreciation Expense 406 924 338 1 B. PROJECTED NET IMPACT OF UPGRADE ON OPERATING EXPENSES (Sum lines 5.71 ' " 423 964 0 353 9. INTEREST EXPENSE RELATED TO UPGRADE 228 519 190 1 PROJECTED: 10. Other Cable Revenue I ; 11. Other Adjustmflnts ", " 12. NET REVENUE AND INCOME ADJUSTMENTS RELATED TO UPGRADE (Sum LInes 10 -11) 0 0 0 0 .. .; / '( /;-/1-,;;" ",?""'- ,. \ FCC Form 1235 February 1996 hac 5 on 'T-10'J'96UOW0Z~~3'x EXEC STAFF FAX 619/266-5555 ~-..- ............,,- Approved by~,.1.15j060.()6&1 Abbreviated Cost of Service Filing for Cable Network Upgrades Name of Operator: Cox CommuDicatIonl San Diego CUID (s): CA0329 Worksheet A Cost Assignments IlI1d Allocations Date of Filing: 3/15196 ($ OOO's) Total Cost Elements (e) Line Number and Description BST CPST - 1 CPST - 2 All Other ..,.'" 1. Plent and Equipment 4,651 10,595 0 10,830 2. Allowance for Funds Used During Construction 218 497 0 S08 3. Other Adiustments 4. NET UPGRADE RATE BASE (Sum LInea 1 - 3) 4,869 11,091 0 11,337 PROJECTED: 5. Chenae in Plant, Related Ooeretind'Expenslls'" to..; .,..... 17 39 0 14 6. Change in Plant Related Support Expenses " " 0 0 0 0 7. Uparade Related Depreciation Expense 406 924 0 94S 8. PROJECTED NET IMPACT OF UPGRADE ON OPERATING EXPENSES (Sum LInes 5 - 7). .. . 423 964 0 959 9. INTEREST EXPENSE RELATED TO UPGRADE 228 519 0 530 PROJECTED: 10. Other Cable Flevenue 0 (130) 0 0 11- Other Aajustments 0 0 0 0 12, NET REVENUE AND INCOME ADJUSTMENTS RELATED TO UPGRADE (Sum LInes 10 -11) . 0 (130) 0 0 (part 31 :." Page 6 ofs FCC POlllll235 February 19% I :~'.' /~ - t.-.oJ; ! <- ..-( ott"10""J96""~4:~j5Fj'"cox EXEC STAFF FAX 619/266-5555 nuulUl~ U,l,;. '"'u,:,.).. .... Approved byEJ,1.73060-06IS Abbreviated Cost of Service Filing for Cable Network Upgrades Worksheet B: AllOCation Key Name of Operator: Cox CommunlcatloDs SaD Diego Page 1 of 1. Franchise CUIO; CA0329 Organizational Level: Oate of Filing: 3/15/96 , AIIooation Allocation Methodology Detcrlption Key (al I (bl .' 1 Chllllllels I Post.Rebuild Channels Peroenlatlos Baslc ! 18 24.32% '.. - ~. ,....~ ,.,j", ,.."" CPS" ,.-. ..... ..."...... 41 55.41% C,1...n!H.,.,._, . '-'~ ;~:I~ r" '-~', -. r' /"V', 'r<::ji'::i NCPS-aIacarie . ..' " 4 5.41% :'1 NCPS,Pl'elIlium 11 I4.8G% 74 100.00% ,-,-,-, . - . , '-,' , , . '" " .. ... -. c , " . , v7j /c2-fi~ ! FCC FOIlll123s I'4lmIIIIY 1996 poge 7 ota 6t'rHr"~'g"'~~4!~~pR;'~ox EXEC STAFF FAX 619/266-5555 "~nwUWUJ .1.1,...... "YJ~" Appnlved byE:.1.8.l06M6Bl Abbl'Gvlatad Cost of Service Filing For Cable Network Upgrades Worksheet C: Supplemental Data Name of Operator: Cox CommunleatioD8 San Diego Page: of , Franchise CUID: CA0329 I Date of Filing: I 3/15196 Org Level: 1 Date of Report: I for eech of the following property end equipment oatogorie8 sme the gross depreciebl. balance r..ulting from the upgrade along with the eVeragD depreciation life which comprise the property and equipment balance reported in Worksheet A. Cost of Method of ,. ., . .' . ".~ .....-.. ,".. ..'.-,.... rl,r,.'f" r"p '. .<'(if" DeDreciation Oescription \.: '::r,.:: ,,-- ., Upgrade Years 1. Headend , 2. Transmission Facilities and Equipment 3. Distribution facilities (Trunk, drops, etc.) 4. Circuit Equipment (amplifiers, power boosters, etc.l 5. Maintenance FaCilities (garages, warehouses, etc.l 6. Maintenance Vehicles and Equioment , 7. Buildings (office) 8. Office Fumiture and Equipment 9. Total Upgrade Rate, Base If you wish to diaaggregate any of tha above because they are not readily combined or It you wish to add others not shown, report such below: Cost of Method of ~. , Une Number Description Upgrade Years Depreciation 10. {SpecifVj Aerial Distribution 6,028,399 12 sttaWit-Line 11. (Specify) Underground Distribution 8,440,771 12 Straight-Line 12. (Specify) Sy&tem Design & EngineerinR 727,686 12 SttalRht.Line 13. (Specify) Aerial Fiber Distribution 1,605,978 12 Straight-Line 14. (Specify) Underground Fiber Distribution 6,786,574 12 Straight-Line 15. (SpecIfy) Optical Electronics 2,486,104 12 S Line Pago 8 on FCC Form 1235 Febroary 1996 /7 ,~ , " .~.~ ,i .r " , i OCT 10 '96 04:33PM COX EXEC STRFF FAX 619/255-5555 Assumptions AallmpllODl lISed In Workoheet A ColuIIIn (a) - Total Alllgaed Colla Line 2 - Allowance for Funds Used Under ConstruOtioD AllUlUes lbaIlolal rebuild 0011I of$26.075,512 i. spent avenly over a 10 month perlall (JUDe 9S through April 96). Actual Calculation: $26,075,512 X 11.250/0/12 montluo x S montlu - $1.222,000. Llno 5 - Plant related Operating Expeu.es IlItimated annual net mereue In power ooSlJ of $71.148. Line 7 . Upgrad4 relsled depreciation lIXpeJ18e8. All uPSrede collfllm depreciated on a 12 year straight-line b8Jis. Line 9 -luterelt Bxpense . A~... a eepital.~ of S5o/i'~'bt a"~fr~~iit if debt. This is consUteat with the FOOl -*umplion in de!olmiriing the alkiwOd.IL259'.rate ofretum on rate bue. Column (b) . Directly Aallped Coata Elament! Other Although the rebuild willlncrease plant capeclly from 450mhz to 750 ~ only 550 ~ w!ll be amlvated hmnedlamly, the addilioual200 MHz capacity will be reserwd fer fUtu:e \lie. ThO mcmnenl8! oost ofthia addltlonal capacity (approximately 20% of the tots) oost) has been directly assi&ncd to Ibc OlEBR ., .'.;.- , "'i' Clllel!cry. , , .1 :~~,;.i .'i:_. ~ 'I Pagel ).2 ~ iJ L...' i' // ) C- .,.-: P.19 Item #12 Meeting Date 10/1 5/96 AMENDMENT TO RESOLUTION #18447 -- Cox Communications: In the Cox Communications public hearing tonight, staff will be recommending two amendments to the resolution. The first of these will clarify the intent of the resolution. The second is in response to Cox's request for additional time to discuss alternative rate structures with staff. The form of this second item allows for any alternative agreement to be brought back to Council on October 22, but if no agreement can be reached, it authorizes the actions contained in the initial resolution. Staff recommends the following text be added to Resolution #18447: 1) "BE IT FURTHER RESOLVED that the intent of these actions is to authorize Cox Communications to institute Maximum Permitted Rates for Basie eable at $9.74 per month, to approve Maximum Permitted Rates for regulated equipment and installation costs as detailed in Form 1205 as attached hereto and incorporated herein by reference and to file a complaint with the Federal Communications Commission (FCC) regarding Cox Communications' CPS-tier Maximum Permitted Rates to the extent that they exceed $17.18 per month." 2) "BE IT FURTHER RESOLVED that Council hereby authorizes staff to continue to discuss the subject rate requests with Cox Communications, with any complaints to the FCC tabled until the conclusion of those discussions, but in no case tabled beyond October 23. If alternative terms can be structured to the satisfaction of both parties, they shall be brought back to Council on October 22 for final consideration." Staff recommends approval of the resolution as amended. , Presented by Approved as to form by ,/ ;t /~" - /-<"~/ ~~/ Gerald Y9lu1gyJ>tmcipal Management Assistant C:~, ~ . ;!:~r-n~~ ~~- c n Y. Moore, Acting City.' . Att'2.fI1ey/' .~~- )J- /1';;;:2, ,/ ~ I >,,/' /. r F ITEM #12 --- OVERHEADS BASIC CABLE CPS (EXPANDED TOT AL:BASIC+CPS SERVICE) (COX CLASSIC) ORIGINAL PROPOSAL -- MAXIMUM PERMITTED RATES MPR as of 1/1/96 $7.74 $17.14 $24.88 Upgrade-related $1. 73 $4.03 $5.76 MPR increase request (Form 1235) Cost-related MPR $2.00 $0.04 $2.04 increase request (Form 1240) TOTAL MPR $11.47 $21.21 $32.68 Requested: , I I REVISED PROPOS~L -- MAXIMUM P~RMITTED RATES I MPR as of 1/1/96 $7.74 $17.14 $24.88 Upgrade-related $1.59 $3.52 $5.11 MPR increase request (Form 1235) Cost-related MPR $2.00 $0.04 $2.04 increase request , (Form 1240) TOTAL MPR $11.33 $20.70 $32.03 Requested: ACTUAL RATES CHARGED As of 1/1/96 $7.30 $15.90 $23.20 Increase 5/1/96 $0 $3.79 $3.79 Total $7.30 $19.69 $26.99 EXHIBIT A: PROPOSED RATES: DETAIL )1 ./' ,- -, I ;: /!'1 -v' , i ' ~ 0) ~ 0) N 0) U U c-. c-. 0\ '" c-. 0\ '" 0: .D U U c-. c-. 0\ oj c-. 0\ oj + + (1) + (1) '-D .8""' ""' N N '-D .... N '-D .... 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CIJ (1) O 0 () () .5 [..I.l 3 CIJ t--<CIJ" O c: (1) (1) bJl Z CIJ.... c: oj o..c *()() COUNCIL AGENDA STATEMENT ATTACHMENT #8 for 10/22 .n.____.~ Item t 2-" Meeting Qate 10/15/96 ) -------.--------' ITEM TITLE: A Public Hearing Regarding existing and proposed rates and charges for Cox Communications' Basic Service Tier and associated equipment and Cable Programming Services Tier, as submitted by Cox Communications to the City via Federal Communication Commission (FCC) Forms 1235, 1240 and 1205. B. Resolution 11'i47 I) Disapproving upgrade-related increases in Maximum Permitted Rates for the Basic Service Tier; 2) Directing staff to file a complaint with the FCC on behalf of local subscribers regarding upgrade-related increases in the Cable Programming Service Tier rates; 3) Approving proposed cost-based rate decreases for associated equipment;and 4) Approving proposed cost-based increases in the Maximum Permitted Rates for the Basic Service Tier. SUBMITTED BY: Principal Management ~\si{~t Young/S / REVIEWED BY: City Manager~ ~ ~ \ / (4/5ths Vote: Yes_ No X) In May 1996, Cox Communications institute~a $3.79 increase in its Cable Programming Services (CPS or "expanded service") tier. This charge is subject to FCC regulation, thus any complaints must be filed with the FCC. At the same time, Cox proposed to raise its Maximum Permitted Rates for the Basic Service Tier, which is subject to City regulation. Both of these changes were based on costs to upgrade Cox's infrastructure. Further cost-based increases in Maximum Permitted Rates were requested in July, along with decreases in the rates for associated equipment/installations (e.g. charge per installation; rental of decoder boxes, remote controls). A study by Public Knowledge, Inc. of Cox's methodology in spreading its upgrade costs called into question both the Basic and CPS share of the upgrade. That same study found the cost-based increases to be appropriately justified. Accordingly, staff is presenting a recommendation to deny and/or protest the questionable upgrade-related rates, approve the equipment rate decreases and approve the cost-based service charge increases. On those portions of the rate requests with which the City disagrees, the FCC is the final arbiter. Should Cox wish to institute such rate increases above the City's objections, they would be required to file an appeal with the FCC in conjunction with any rate increase. If the FCC finds in the City's favor, any overcharges would be subject to refund by Cox. RECOMMENDATION: That Council: I. Conduct the public hearing; and 2. Adopt the resolution: I) Disapproving upgrade-related increases in Maximum Permitted Rates for the Basic Service Tier; 2) Directing staff to file a complaint with the FCC on behalf of local subscribers regarding upgrade-related increases in the Cable Programming Service Tier rates; 3) Approving proposed cost-based rate decreases for associated I r!/ '/ . 6-,r Item \ ~ , Page 2 Meeting Date 10/15/96 equipment; and 4) Approving proposed cost-based increases in the Maximum Permitted Rates for the Basic Service Tier. BOARD/COMMISSION RECOMMENDATION: N/A BACKGROUND Rate Structures and Subscribership Cable service rates are structured and regulated as follows: SERVICE TIER EXAMPLES REGULATION Basic Cable Broadcast networks, Local Franchising Government Access, WGN, Authorities (Cities) C-SPAN, TBS Cable Programming Service CNN, ESPN, A&E, Bravo, Federal Communications MTV, Disney, Nickelodeon Commission Premium Charmels, Pay- HBO, Showtime, Viewers Unregulated per-view aild other "a la Choice, ESPN-2 (see carte" services discussion below), Turner Classic Movies Table I: Tiers of Service The 1992 Cable Act provided local cable television franchising authorities with limited ability to regulate Basic Cable and certain associated equipment rates. Limitations on Basic Cable rates are intended to protect residents who wi!nt just bare-bones television service from paying higher prices due to technological or other barriers to effective competition. Under the terms of the 1992 Cable Act and City Council action, ChuIa Vista's limited rate regulation authority became effective September 1, 1993. Rates for expanded tiers, which include such charmels as CNN, ESPN and MTV, are now known as "Cable Programming Services" and are regulated by the FCC upon the filing of complaints by subscribers, submitted through a local franchising authority. Rates for premium and pay-per- view charmels, such as Cinemax or HBO, are not regulated by any agency under the Cable Act of 1992. With the lesser rate regulation applied to CPS and premium services like HBO and Showtime, cable companies can theoretically make up for the regulated nature of Basic Cable by effectively marketing the optional programming. In Chula Vista, Cox currently has 823 customers recelVlng Basic Cable only, with 33,484 receiving Basic + Expanded (marketed as 'Cox Classic') service. Thus, of Cox's 34,713 residential customers, only 2.4% receive Basic Cable only. (These totals do not include 1,229 17./ /J. ~ I ! '7 I I !; Item 11- , Page 3 Meeting Date 1011 5/96 commercial customers such as restaurants and bars, which typically subscribe to expanded service). Ongoing Cable Rate Deregulation The Federal Telecommunications Act of 1996 was signed into law in February. It has since been followed by a number of proposed, interim and final regulations which are the tip of the iceberg in terms of how this landmark law will be interpreted and implemented in the coming years. In terms of cable rate regulation, this law continues to allow for local regulation of Basic Cable rates until such a time as effective competition is reached. Cable Progranuning Service regulation by the FCC also continues, but with a sunset date of March 31,1999. It is assumed that by that date, and probably much sooner, there will be a host of new competitors providing similar services. These services may be delivered by telephone companies, via fiber optics, via satellite, or through "open video systems" which are pass-through companies facilitating customers striking their own deals with entertainment retailers. Regardless of what form this "effective competition" takes, the mere presence of an alternative with sufficient capacity and market share would be considered by the 1996 Act to be evidence that local (Basic Cable) and federal (CPS) rate regulation is no longer necessary. Locally, Chula Vista Cable is judged to have effective competition based on the market share held by Cox. Federal law thus allows Chula Vista Cable free rein to set their own rates on the assumption that if they priced themselves too high, customers could switch to Cox. However, since Chula Vista Cable has a much smaller customer base and area of service, it does not serve to give Cox "effective competition" and thus Cox's rates are still regulated. DISCUSSION Maximum Permitted Rates When filing for rate increases with the local franchise authority or FCC, cable companies can request designation of a Maximum Permitted Rate (MPR). In practice, Cox has not charged for cable service at the full MPR. Their MPRs as of 1/1/96, the changes that have been proposed in them, and the actual rates currently assessed are as shown in Table 2. As of 1/1/96, Cox was charging $1.68 less than their Maximum Permitted Rate ($24.88 _ $23.20). When they began charging their upgrade-related increased rates in May, they were charging $2.11 more than their previous MPR, but $3.65 less than their requested increase in the MPR. Although some rate increase would be expected following an MPR increase, it is difficult to predict what cable rates will be in the aftermath of these various rate filings. Based on past experience and considerations of what the market will bear, it is unlikely that Cox will seek to increase the actual rates to the full MPR. J: ".-;.-' ( 2- A-. i 1 Item \ ~ , Page 4 Meeting Date lOll 5/96 BASIC CABLE CPS (EXPANDED TOTALBASIC+CPS I , SERVICE) (COX CLASSIC) \ MAXIMUM PERMITTED RATES ! I MPR as of 1/1/96 $7.74 $17.14 $24.88 Upgrade-related $1.73 $4.03 $5.76 MPR increase request (Form 1235) Cost-related MPR $2.00 $0.04 $2.04 increase request (Form 1240) TOTAL MPR $11.47 $21.21 $32.68 Requested: I , \ ACTUAL RATES $23.20 I I Rates Charged as of $7.30 $15.90 1/1/96 Rates Charged as of $7.30 $19.69 $26.99 51l/96 (Current rates) Actual Increase to , $0 $3.79 $3./9 date: Table 2: Maximum Permitted Rates (MPR) vs. Actual Rates Upgrade-Based Rate Proposal (1235 Filing) Under FCC rules, cable companies may file for rate increases for either: I) costs related to service or infrastructure upgrades or 2) increased costs of doing business. Earlier this year, Cox filed a rate increase request related to upgrades to their transmission facilities from 450 megahertz (MHz) to 750 MHz. From this upgrade, a 100 MHz increase (from 450 to 500) was activated in the form of new channels and services. It is this "used and useful" portion of the upgrade that Cox proposed assessing to the Basic and CPS service tiers. The rate proposal was for an increase in the Maximum Permitted Rates for Basic Cable of $1. 73 per month and for Expanded (or CPS) rates of $4.03 per month. The actual rates for Basic cable 11- - {t / {'::;: Item \ 1-- , Page 5 Meeting Date 10/15/96 remain unchanged at $7.30 per month. CPS charges were increased in May from $15.90 to $19.69 (an increase of $3.79 of the total $4.03 of the requested MPR). In cooperation with San Diego, Poway, National City, La Mesa and Imperial Beach, Chula Vista once again contracted with Public Knowledge, Inc. to perform a detailed review of Cox's rate proposals (at a cost of $200 per form per city -- $400 for Chula Vista for the 1235 and 1240 review). That review found the cost-spread to be flawed (see Attachment #1). In essence, the upgrade has been used primarily to provide new premium services, while the costs have been assessed primarily to non-premium services. Based primarily on this review and also on customer complaints received by the City, I staff recommends filing a formal complaint with the FCC. As a postscript, subsequent to Public Knowledge's discussions with Cox and sending them a copy of the attached report, Cox has since notified the City (See attachment # 4) that it intends to realign their channel line-up effective September 30 to place ESPN-2 and the History Channel (added for an additional charge after the upgrade) on the CPS-tier. They also plan to add two new channels to the Basic Tier. These changes may serve to mitigate the overcharge, but based on the months the overcharge has been in effect, staff would still recommend proceeding with the FCC complaint. Cost-based Rate Proposal (1240 Filing) The subsequent proposal received in July contained two requests: I) an additional inflation and operating cost-based increase in maximum permitted monthly rates, and 2) a decrease in equipment and installation rates (see discussion of Form 1205 below). The cost-based proposal would increase the Maximum Permitted Rates for Basic Cable by $2.00, and increase the maximum permitted CPS rates by $0.04. This is a combination of projected inflation costs (as per FCC procedures), ('true-up" for variation in previous inflationary estimates, and adjustments for changes in the channel line-up. True-up adjustments do not typically enable full after-the-fact cost recovery. Thus, cable companies have an incentive to project their inflationary costs ahead of time. An increase in the MPRs based on projected inflation allows companies to raise their rates as additional costs are incurred and minimize any cost-recovery loss through the true-up process. Public Knowledge's report found the methodology followed in Cox's cost-based MPR increase proposal to be appropriate. I Typically, when customers have complaints about their cable rates, they complain to their cable companies rather than to the franchising authority (city). This may be due to a lack of understanding of who oversees a franchise and to federal moves toward deregulation. However, current FCC regulations require at least two customer complaints be received by a city before a complaint may be filed with the FCC. Chula Vista's proposed FCC complaint follows complaints by two city employees who are also Chula Vista customers of Cox Communications. , ---:' r7_-f!_ . ) Item \ 7-- , Page 6 Meeting Date 10/15/96 Although Cox has stated that there is no plan to increase the actual rates at this time, they would have the discretion to charge their MPRs at any time. If the City were to object to an MPR increase and Cox were to increase their rates in spite of that action, the matter would be adjudged by the FCC, with refunds ordered if appropriate. Equipment and Installation Cost-Based Rate Proposal (1205 Filing) The following chart shows the proposed changes in equipment and installation charges. Due to the fact that the Chula Vista, National City and Imperial Beach rates in each case were proposed to decrease from the current rates, staff from these three cities concurred in not requesting a detailed evaluation of this proposal by Public Knowledge. In the cities of La Mesa and Poway, Cox had originally proposed increasing the equipment and installation charges to bring them up to the level charged elsewhere in the county. That proposed increase has since been postponed. If it were to be revisited, the detailed review to be undertaken by those agencies would serve as a valuable benchmark for the south bay cities to use in evaluating their own equipment and installation rates. (NOTE: These rates were last analyzed in 1994 and found by Public Knowledge to be justified). It is staff s recommendation that these lower rates be approved. Table 3: Equipment Rates (1205 Filing) Current Proposed Change Installation (unwired) 43.00 31.03 -$11.97 Installation (pre-wired) 22.00 15.52 -$6.48 Add'l Outlet (@ installation) 30.00 20.17 -$9.83 Add'l outlet (after install.) 30.00 23.28 -$6.72 Upgrade/Downgrade 10.50 2.00 -$8.50 Decoder rental/month 2.94 2.51 -$0.43 Converter rental/mo. 1.51 1.40 -$0.11 Remote rental/mo. .35 .28 -$0.07 12-A ) ( Item \ 1~ , Page 7 Meeting Date 10/15/96 Feedback received from Cox As of this writing, Cox has taken the position that all rate filings represented appropriate cost distributions to the various service tiers. They have been provided copies of the draft FCC complaint and the Public Knowledge report, and their formal response is attached (See Attachment #7). Cox has reported that they are not planning to make any changes in their equipment/installation or cost-based monthly service charges until some future date. These changes would be subject to 30-days prior notice to the City. However, since they would be changing those rates according to the FCC forms already submitted to the City, it would be appropriate to act on those filings now. Staff recommends that the City Council approve the resolution as presented. Actions under consideration: Other Cities The Cities of Chula Vista, National City, Imperial Beach, La Mesa, Poway and San Diego cooperated in the hiring of Public Knowledge to review the cost-based filing. Public Knowledge confirmed, as discussed above, that the cost-based increases were appropriately justified. Assuming Cox pursues these increases as originally planned, those cities anticipate action to approve those cost-based MPR increases in the near future. The upgrade-based rate increases applied only to Chula Vista, National City and Imperial Beach, with the same apparent overcharge in each case. At this time, National City and Imperial Beach have yet to take a position on filing an FCC complaint on the CPS increase or rejecting the Basic cable MPR increase. Recommended Action The various FCC forms involve complex formulas to determine allowable rate increases. The FCC suggests that cities should proceed to make rate determinations in good faith, and have indicated that they will defer to the franchising authority's decision if it is supported by a reasonable basis. Based on the review by Public Knowledge, it appears that the formulas for a cost-based increase were applied correctly, but those for an upgrade-based increase were not. Staff has concluded that the City has made a good faith effort to properly interpret the FCC regulations and that it is appropriate to take action at this point. Staff recommends proceeding with the various recommendations embodied in the resolution. Subject to written confirmation from Cox that they are deferring action on their cost-based equipment and MPR filings, staff would recommend deferring action on parts 3 and 4 of the resolution. If Cox disagrees with the City's action, it may appeal the decision directly to the FCC. To date, staff has received no formal or informal response from Cox on the draft FCC complaint. If Cox has any further input regarding the FCC Complaint, it will be attached to the complaint prior to mailing per FCC regulations. 1'2-A - r:'/' ).r-- , " Item \~, Page 8 Meeting Date 10/15/96 Notice Provisions/Schedule for Review Notice of this public hearing has been published in a newspaper of general circulation for two weeks, with additional notice of the hearing and the draft FCC complaint provided to Cox. The published notice specified that the hearing concerned I) changes to the MPRs, not the actual rates charged, 2) decreases in the equipment and installation rates, and 3) consideration of a complaint to the FCC regarding a previous rate increase that is subject to FCC, not City regulation. Since the rates Cox is seeking to increase are Maximum Permitted Rates only, the notice clarified that the effective date of any rate increases is unknown and subject to Cox's discretion (with no further filing required) once the MPRs are approved. According to FCC noticing provisions, Cox is to be afforded a 30 day review period prior to a CPS-tier complaint being filed with the FCC. That review period has now been in effect for approximately 19 days (draft complaint mailed on September II). Unofficially, Cox also received an advance copy of the Public Knowledge report on August 27. It is staff s opinion that this should be sufficient time for Cox to provide reasonable input for the City's purposes in filing the CPS-tier complaint. Ifin the next ten days Cox provides some further response to the City's draft complaint to the FCC, staff will attach this response to the official complaint, per FCC requirements. The timing of this report is meant to accommodate the FCC's process for filing a complaint about Cable Programming Service rates. It is also meant to coincide with Cox's planned October I cost-based increase in the Maximum Permitted Rates for Basic and CPS cable services. According to FCC rules, a complaint on CPS rates would need to be filed within 180 days of a rate increase, while first allowing for Cox to review the draft complaint for a period of 30 days. With the increased rates effective May I, the 180 day deadline would occur on October 28. To facilitate Cox's 30 day review, they were sent a copy of the draft FCC complaint by certified mail on September II. If Council Goncurs with staffs recommendation to file the FCC complaint, that complaint would only be filed following the conclusion of the 30 day notice period and any further response from Cox. FISCAL IMP ACT: The impact on customers' cable bills from these actions will depend upon final rulings by the FCC and on Cox's rate setting decisions within their Maximum Permitted Rates. It is not incumbent upon the City as franchising authority to determine what the precise charge per service tier should be, but rather to rule on the appropriateness of the charges as proposed. The FCC is not likely to rule against Cox's entire upgrade-based increase, but they may mitigate that increase as it applies to Basic and CPS service tiers. If appropriate, they may also order refunds. Since the actual Basic Cable rates have not been changed (only the MPRs were raised), no refunds would be due following any rulings on the Basic increase denial. If Cox were to raise 1'2--A r~ \ ,,-'; ~ L"J Item 17/, Page 9 Meeting Date 10/15/96 fees in conjunction with filing an appeal of the City's action on Basic rates, such refunds might be required. Regarding CPS rates, Cox increased these by $3.79 in May. If the FCC decides in the City's favor, customers may be due a refund of as much as $3.79 for each month the higher rates were in effect. As indicated above, a ruling against the entire increase is unlikely. In addition, with the Form 1240 cost-based increases in the MPRs already filed (at $2.00 and $0.04 for Basic and CPS, respectively), Cox would likely be able to structure their future charges to absorb any mandated refunds. The range of possible Maximum Permitted Rates once any upgrade-based appeals have been decided would be between $26.92 (representing 100% FCC disapproval of the upgrade-based filing, which, as discussed above, is unlikely) and $32.68 (representing full approval). Generally, for each dollar of monthly fee increases or decreases, the annual cost/savings to Chula Vista's 34,300 Cox customers is $411,000. It should also be noted that since some customers in multi-family residences received discounted bulk-rates on their cable service which were not subject to the May rate increases, these rates would, in turn, not be subj ect to refunds. In terms of City revenues, since the franchise fee paid by Cox is 3%, franchise revenue might be reduced o~ increased slightly via the recommended action and subsequent FCC rulings. Staff has not given any consideration to the potential impact of rate regulation on these fees in conducting the rate regulation function. Attachments: 1. Report from Public Knowledge, August 27, 1996 2. Cox Communications, Form 1235 Upgrade-based rate increase request 3. Cox Communications, Forms 1215 and 1~40 Cost-based equipment rate decrease request and Cost-based service rate increase request 4. Letter from Cox Communications, August 30, 1996 5. Draft Complaint to Federal Communications Commission (Form 329, protesting upgrade-based rate increases) 6. Letter from Cox Communications, October 1, 1996 7. 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L -. 4 S _ -~~..............------._; ."--.......-..... --- ~ --:-"7---'--"-~ '. \ '-~j).i~ THE WALL STREIIT JOURNAL THURSDAY, AUGUST 29, 1996 A7 their stake is worth nearly S120 million to- original PrograInming. Last year. he hired day. This year, they each aWarded them- Anthony Thomopolous, who fonnerly ran . selVes options on 625,000 IFE shares valued . ABC Entertainment and the United Artists at more than S10 million. CBN, which Pat studio, to resuscitate MTM Entertainment PPY-' . Robertsoncontinnes to control, collected .. Ine.. aonce-snccessfnl TV Produeliorr and. ' " . more than S600 million in eash.slock and distribution company acquired a fewyearg ling: . other benefits on the IFE publie offering. ago and being turned around by IFE. The Tim Robertson insists that CBN and HollYWood-base<i. Mr.; Thomopolous has ~:; i' IFE ' are separate entities, and in some 'also made deaJs to supply shows for broad. Continued From Page A2 arti 0' ways they are worlds apart. IFE operates east networks, such as "The Pretender," that would end just as competition [for ca: out of nondeseript offices on the north side which NBC says is its highest-testing pilot ble TV] is arriving," the Markey aide said. ,s~ of Vrrginia Beach and is staffed with pro- sin.,. "ER," and "Sparks," a sitcom for The cable industry and its political sup- ,fessiOnal sales, marketing and program- the new UPN network for this fall. porters say cable companies must be mind- ~ ming exeeutives. Across town, CBN sits on . , "We want to return MTM to its POSition ful of competitive threats_ Direct broadcast the same manicured grounds as. CBN- of prominen.,.," Mr. Thomopolous says. satellite companies, such as DirecTV Inc. . owned Regent University and Founders "We wantto show you canmake safe, pos- . and EchoSlar Communications Corp.. have ~i . Inn, amid posters of developing-country - ilive-vaJue prograInming that is vital,. en- : been slashing the costs of satellite dishes- usi- missions. But in other waYS.1FE and CBN . ergetic, entertaining." :.: -' ',.'" ,. offering promotional prices as low as the, .' are inseparable. Because the ministry, is so ',.To extend the Family ChanneL fran- $199-seeking to lure unhappy cable sub- e- reliant on Pat Robertson's fund-l'aISUIg :cbisebeYOndteievision.lFEreeently~~:-" sc:ribers<Bob Thomson, TCl's vice pres!- .. ,- sIliI1s, CBN's holdings in lEKare partofa ,.luted ~ Channel Seaiof,Quality,. "~e' nUor -government affairs. said cable spr- 0';.:i1 '''Iiroad, plliidQ: fund the ritiniSt:ry after the' 'for"iriovr..' and" books and sponsOred vice and rates are still better than satelllle :b- ': li!;-year-old Pat is gone. , celebrity golf tournaments and a Nascar.services_Satellite programming generally 'ts .;,.. Today, about 70% of Pat. Robertson s . racecar:~Webave to.eJ!sta~from the ranges from S20 toS6O a month. while cable ] c "76,842 salary and bonus goes to CBN and II!ght-l?-night s1uggmg ]t out. on telev:: fees.average about $25 a month. we other charities, and a charitable trust . SlOu"TimRobertsonsays..c, "c""'!'''--:'-'''!-i'Th'''-FCC's Mlles let cable companies ~ IloIding 3.1 million IFE shares' wiD be- ,,' :-.,But he.is learning that ambitious plans ,i=ak rates to accountfor inflation _ a year . . turned over to CBN in 2010. The elder Mr.. require deep )IOCkets_ The Game CbanneI; _' 'ahead--'aS well as expenses for new chao- :: Robertson has used IFE Stock as collateral: '. IFE:S'boId splasJr inloth~ llIter:a~~ J!eIl!tli~prOgramming, Cable providers . f'l!r!J1'lpstl!,,9ther-CBN~unl1lfes1;; m~:~ '~~.sUiIira:iJ:lOf". , di/in'lraise rates Significantly until the ~., '.SlII:Ii>a&AnM!riClllt S'aJes Cofp.:a-now-de-' ,SliiiW8--::was a bns4IOSU1gCseveral milli!>n.: . TeIeeom.Actwas all but certain. This funct ..company ..that "SOld;."BibJ.e-stud.i_, 'l'bed'''Capader; w!d~, . ,.' 're&:'sincreases.theysay, comply with the . ~..". tIlscomit coupon booilets andvit- '. bougIttllllll, sold In,1995r lIIKI,!,:~ ~Partlymake up for increases he "!llDins--CBN also owns ajet-ebarteringrJI"in,;ent~com~~, ,. "_. . ttakeearlier_ ""-. -Sel:yi<:e...a. ~ageoCY.:Jhe;;~lIlIllIr~of,S5ml11ionlast ...... ':::1":(,Meantfme; the Ftc appears to have ~.- ~ Inn; and otlrer-bnsIn~;~ rm'JF!l:"sn~filnesschanneJ.F!t . ,.isn:~ 'Wash"" "'hands of the situation. "We're n. ;'aIOng-with contributions fromCBN: vieIv;-~ ;~~lotum,":)lI'Otitn.ntiII998dFlf:~~J!iSII'rOlloWing the new law," said FCC ~ ',-.,had-combined 1995 J;'eVe;"deotS21}.r ':::,!Ir~Ils~~.qf1hg,!!:'J"'~ . ,', .'-'Reed' Hundt. "I haven'lhad ~ ' niiDI~,_............~,_,-~ . .".........~~~ liiigi!? jU~, '. anyone tell me there have been any VIola- lie ~ :,': years ago, the Cbi1Siian Broad- . mmg ~ wl1oSl> maJonty owner>:>.,:",-, . tionS~.tConsumers should take their prob- Iy eastlng Network used IFEStock to gIVe' a ' ;And.1FE "! posting small losses for lts.m;- ".Iemsupwith Congress, he said, a . SlIT million endowment to Regent UruVl!I'-: . vestment In China Entertainment TeJevi:" .' ,s,_ l'- ; silY,which Mr. Robertson founded and sionIlroadcastLP.afamily-entertainmenf.' T ""Ge' AirF C is 'st!rves as chairman. While CBN and Re- sem.,. carried on more than 500 Chinese . raoor ts orce ontract .....,gent bave gradually sold more than half cable-lYsystems" ....,;. '" .... ' AUSTIN, Texas-Tracor Inc_ won a Ie :'lheir original IFE stake, they stiII hold a UDrumed by skeptics, Tim has faith in $20.8 J?illion contract from Wlight-Patter- Ie - combined 17'T. interest.. . ". 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MAILED PER GC ~54992 Legislative Staff, Construction Industry Fed, 6336 Greenwich Dr Suite F. San Diego, 92122 LOGGED IN AGENDA BOOK /,i/! ? /9 k / / COPIES TO: Administration (4) v Planning Originating Department Engineering / - , Others / /?/9/1b' / . City Clerk's Office (2) POST ON BULLETIN BOARDS SPECIAL INSTRUCTIONS: 7/93 .55. / <' ~_. / _~-F--{ L---e;l... ti/---< /} ~-,"" J COUNCIL AGENDA STATEMENT ) ~ ~L/< . J j V--~ / Item1 Meeting Date 9/17196 ITEM TITLE: . S' Resolution Jg 1/JDec1aring City's intention to hold a public hearing to ascertain whether to underground overhead utilities along Otay Lakes Road from Ridgeback Road to Apache Drive and setting a public hearing for the formation of Utility Underground District Number 129 for October 22, 1996 at 6:00 p.m. SUBMITTED BY: Director of Public Works REVIEWED BY: City Manager ~ ~ '/" (4/Sths Vote: Yes.-No...K..) On November 12, 1991, the City Council approved Resolution No. 16415 accepting a report on the City's Utility Undergrounding Conversion Program and approving a revised list of utility underground conversion projects. The subject section of Otay Lakes Road was ranked as the eleventh utility conversion project in the City's adopted program. Proposed construction work to widen the intersection in FY 1996/97 has also improved the project's priority point rating, making the subject street section a top priority. In addition, the installation of SDG&E's "Pipeline 2000" is just being completed along this segment of Otay Lakes Road. It's staff's goal to coordinate all the work in the area, (SDG&E's Pipeline 2000, street widening, and this utility undergrounding project) in order to minimize disruption to the public. To achieve that goal, this district is necessary. On August 14, 19%, an Underground Utility Advisory Committee (UUAC) meeting was held at the site to determine the proposed boundary of an underground utility district for the conversion of existing overhead utilities. The proposed boundary is shown on attached Exhibit A. The district's limits extend along Otay Lakes Road from Ridgeback Road to Apache Drive. RECOMMENDATION: That Council approve the resolution declaring the City's intention to underground overhead utilities along Otay Lakes Road from Ridgeback Road to Apache Drive and setting a public hearing for the formation of Utility Underground District Number 129 for October 22, 1996 at 6:00 p.m. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The Underground Utility Advisory Committee (UUAC) consisting of representatives of SDG&E, Pacific Bell, Cox Communications, Chula Vista Cable and the City agreed to propose to the City Council the formation of a utility undergrounding district for the conversion of overhead utilities along Otay Lakes Road from Ridgeback Road to Apache Drive in connection with the proposed widening of Otay Lakes Road during FY 1996/97. The proposed utility undergrounding district along Otay Lakes Road is about 4,000 feet long running from Ridgeback Road to Apache Drive ~ ~~~ :~~~ ~-..;""t..~ ~~~~ CITY OF CHULA VISTA OFFICE OF THE CITY CLERK TELEFAX COVER LEITER Telecopier No. (619) 585-5612 DATE: /1)/:;/9 t: / TO: Star News Lel!al / Joann FAX NO: (619) 426-6346 FROM: Carla J. Griffin SUBJECf:_ r2 ',' ~ \ A~/~:.c 7< aulA. r') TOTAL NO. PAGES (including cover): ') C7'--- PUBUCATION DATE: .. /~~':;/J'b If all pages are not received, please call Carla @ (619) 691-5041. f/~~ ~~ , . 276 FOURTH AVE/CHULA VISTA, CALIFORNIA 91910/(619} 691.50'1 NOTICE OF PUBLIC HEARING BY THE CHULA VISTA CITY COUNCIL CHULA VISTA, CALIFORNIA NOTICE IS HEREBY GIVEN THAT THE CHULA VISTA CITY COUNCIL will hold public hearing to consider the following: Intention to underground overhead utilities along Otay Lakes Road from Ridgeback Road to Apache Drive. For further information call Dennis Davies, Civil Engineer, at 691-5021. If you wish to challenge the City's action on these matters in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Clerk's Office at or prior to the public hearing. SAID PUBLIC HEARING WILL BE HELD BY THE CITY COUNCIL on Tuesday, October 22, 1996, at 6:00 p.m. in the Council Chambers, Public Services Building, 276 Fourth Avenue, at which time any person desiring to be heard may appear. DATED: October 9, 1996 l~tar-News P.O. Box 1207 1279 Third Avenue ChuJa ViSla, CA. 91912 ChuJa Vista, CA.91910 FaX# (619) 426-6346 Phone # (619) 427-3000 uSIa 317 P01 OCT 08 '96 21:410 IV/lltV" Seoo to: C! to:1 ~ C r/ - Cib-Je Atln: C! ~ t\-. Machine Phone #: 58'S' - S~ I J. '. Number of pages sent, counting this cover page: ~ Sentby: "p~V\/k~ /kLu Message : froo + ~~~~/> /'nl.UJ 1-..69. ~ by II /J{/J} -r~ . 10;10 ~:. ~... !.'. \i I: '" ~. T~.mr:~~~S ........... ....'. ..... .... " . ." ".. .. 10 ql'7~ r? 317 P02 OCT El8 '96 21:46 N01ICE OF PUBUC HEARING 8YlHE CHULA VISTA CITY COUNCIL CHULA VISTA, CALIFORNIA NOTICE IS HEREBY G~ YEN THAT 1lE CHlU VISTA CITY COUNCIL will hokI I public heeril'G \0 COI1IiIder Ole foIIowi!l9: InlelltIoll III tJRde;g1llllllcl 0lIIlIhad ..... .ro~ 0Iay I.aIlieUload ,110m RldGOback Road to ~ DriVe. For fwlher Inloimalion caB Din- nis Davies, CiYI1 Engln_.at 691.s021- n JOII with 10 chal-. 1he ~..1CtIon on this 11I8I- leI" _lit bllim- itecJDllO~~on~ is- sues you or someone else lIlsed at 1he pubk hesri1g cIeetribed In Ihls IIOtIco, or iii wrItIIn ~ de- Rvered 10 the City qIln's Of. fice at or prior 10 the publlo hearing. SADPU8L~ ~NG WILL BE HELD BY THE CITY COUNCIL on Tuell- daJI Oelaber 22, 1096, at 6:00 p.m. In the Councl1 Chambers, PlJljJc Services BuildinG, 276 Fourth Awnue, at whlch dme eny penon desiring 1ll be heard maylJlll8l!. DATED: OctDbIrll.1996 CV08348 10112.'36 .,,,,., I.' Meeting Date Item ) ~) 10 /22 /96 COUNCIL AGENDA STATEMENT ITEM TITLE: Public Hearing Consideration of Establishing Underground Utility District No. 129 Along Otay Lakes Road from Ridgeback Road to Apache Drive Resolution jJ'Ljt ~stablishing Underground Utility District No. 129 along Otay Lakes Road from Ridgeback Road to Apache Drive and authorizing the expenditure of Utility Allocation Funds to subsidize private service lateral conversion SUBMITTED BY: Director of Public worksf.AK REVIEWED BY: City ManagW bvx ~ (4/5ths Vote: Yes_NoX) On September 17, 1996 by Resolution No. I(J35 the City Council ordered a public hearing to be held on October 22, 1996 to determine whether the public health, safety or general welfare requires the formation of an underground utility district along Otay Lakes Road from Ridgeback Road to Apache Drive. RECOMMENDATION: That Council: I. Conduct a Public Hearing on the formation of the conversion district; 2. Approve a Resolution forming the district and authorizing the use of approximately $716,900 in utility allocation funds to cover the cost of pole removal, undergrounding overhead facilities, and private property conversion reimbursements. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The Underground Utility Advisory Committee consisting of representatives of SDG&E, Pacific Bell, Cox Communications, Chula Vista Cable and the City agreed to propose to the City Council the formation of a district to convert the overhead facilities along Otay Lakes Road from Ridgeback Road to Apache Drive. The conversion project will be done in conjunction with the proposed widening of Otay Lakes Road during FY 1996/97. The proposed utility undergrounding district along Otay Lakes Road is about 4,000 feet long running from Ridgeback Road to Apache Drive (See Exhibit A). The estimated cost for undergrounding the utilities is $616,900. North and south of the proposed district, undergrounding of overhead utilities has been completed. The Average Daily Traffic (ADT) count on Otay Lakes Road from Ridgeback Road to Apache Drive varies between 18,000 and 21,000. /3 -J /3 Page 2, Item Meeting Date 10/22 /96 Staff recommends the formation of this conversion district along this section of Otay Lakes Road because: I. Otay Lakes Road is a major north/south thoroughfare in the eastern portion of Chula Vista. The undergrounding of existing overhead utilities will contribute to the creation of an aesthetically pleasing major street. 2. The subject section of Otay Lakes Road is classified in the General Plan's Circulation Element as a six-lane prime arterial and is designated as a Scenic Highway. 3. Undergrounding of 12 KV lines, telephone and cable TV, has been completed on Otay Lakes Road north of Ridgeback Road and south of Apache Drive, thus making the proposed district a closing link between previously undergrounded facilities. There remains 69 KV lines on Otay Lakes Road north of the SDG&E easement (approx. 600' north of Ridgeback Road). 4. The proposed widening and reconstruction along portions of Otay Lakes Road between Ridgeback Road and Apache Drive significantly increased the ranking of the subject street section in the City's adopted utility conversion program, thus making it a priority project. The street improvement project is in the City's CIP Program as project STM-322; Otay Lakes Road north and south of East "H" Street to be constructed in FY 1996/97. In addition, the installation of SDG&E's "Pipeline 2000" is just being completed. Section 15.32.130 of the Chula Vista Municipal Code requires the City Council to set a public hearing to determine whether the public health, safety, and general welfare requires the under- grounding of existing overhead utilities within designated areas of the City to give persons the opportunity to speak in favor of or against the formation of a proposed district to underground utilities. The purpose of forming the district is to require the utility companies to underground all overhead lines and to remove all existing wooden utility poles within the District and to require property owners to convert their service connections to underground. The conversion work by the property owners involves trenching, backfill and conduit installation from property line to point of connection. Chula Vista City Council Policy No. 585-1 established a mechanism that helps property owners with the cost of the conversion work from the distribution lines to the structure (must involve overhead electrical services). Said policy provides for the reimbursement of property owners at a rate of$30 per foot of trenching. Exhibit B lists all 9 affected properties, including the 5 properties being reimbursed a total of$6,900. Four properties already receive underground electrical service thus do not qualify for a reimbursement. Bonita Vista High School and one homeowner receive only overhead cable service and Cox Communications will place these underground at no charge. The third property with an overhead cable connection is not currently receiving cable service. The City is responsible for the trench work and placement of telephone conduit for the fire station's conversion. The City's cost to convert the fire station's )3.2 Page 3, Item /) Meeting Date 10/22/96 telephone and cable services is estimated to be $1,100 bringing the overall estimated cost of conversion to $618,000. A public hearing notice has been mailed to all property owners and occupants of property located within the boundaries of the proposed district. FISCAL IMP ACT: The cost of pole removal, undergrounding overhead facilities and private property conversion reimbursements as outlined above is estimated to be $616,900. SDG&E's allocation funds (Rule 20-A) will cover the estimated cost of the project. The City's cost to convert the fire station's telephone and cable services is estimated to be $1,100. It is staff's intention to include this cost in the street improvement project. Attachments: Exhibit A - Boundary Map Exhibit B - Reimbursement Schedule DCD: File No: 0810-20-A Y-098 File No: 0735-10-STM-322-9 (M:I.. IEngineerlAgendalUUD 129b.dcd) /3"3 RESOLUTION NO. J Fft 7 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ESTABLISHING UNDERGROUND UTILITY DISTRICT NO. 129 ALONG OTAY LAKES ROAD FROM RIDGEBACK ROAD TO APACHE DRIVE AND AUTHORIZING THE EXPENDITURE OF UTILITY ALLOCATION FUNDS TO SUBSIDIZE PRIVATE SERVICE LATERAL CONVERSION WHEREAS, by Resolution No. 18435, a public hearing was called for 6:00 p.m. on Tuesday, the 22nd day of October, 1996, in the Council Chambers of the City of Chu1a vista at 276 Fourth Avenue in said city, to ascertain whether the public health, safety or welfare requires the removal of poles, overhead wires and associated overhead structures and the underground installation of wires and facilities for supplying electric, communication or similar or associated service within that certain area of the City more particularly described as follows: All that property lying along Otay Lakes Road from Ridgeback Road to Apache Drive and enclosed within the boundary as shown on the plat attached hereto as Attachment "A" of subject Underground Utility District. and WHEREAS, notice of such hearing has been given to all affected property owners as shown on the last equalized assessment roll, and to the utility companies concerned in the manner and for the time required by law, and WHEREAS, such hearing has been duly and regularly held, and all persons interested have been given an opportunity to be heard. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula vista hereby finds and determines that the public health, safety and welfare requires the removal of poles, overhead wires and associated structures, and the underground installation of wires and facilities for supplying electric, communication or similar associated services, the above-described area is hereby declared an Underground Utility District, and is designated as such in the city of Chula vista. Attached hereto, marked Exhibit "A", and incorporated herein by reference is a map delineating the boundaries of said District. BE IT FURTHER RESOLVED that the city council shall, by subsequent resolution, fix the date on which affected property owners must be ready to receive underground service, and does 1 /31 hereby order the removal of all poles, overhead wires and associated overhead structures and the underground installation of wires and facilities for supplying electric, communication or similar associated service within said Underground Utility District. BE IT FURTHER RESOLVED that the City Clerk is hereby instructed to notify all affected utilities and all persons owning real property within said Underground utility District of the adoption of this resolution within fifteen days after the date of said adoption. Said city Clerk shall further notify said property owners of the necessity that, if they or any person occupying such property desires to continue to receive electric, communication or other similar or associated service, they, or such occupant shall, by the date fixed in a subsequent resolution provide all necessary facility changes on their premises so as to receive such service from the lines of the supplying utility or utilities at a new location, subject to the applicable rules, regulations and tariffs of the respective utility or utilities on file with the Public utilities commission of the State of California as of the date of adoption of this resolution. Such notification shall be made by mailing a copy of this resolution to affected property owners as shown on the last equalized assessment roll and to the affected utility companies. BE IT FURTHER RESOLVED that the City Council hereby finds that the Underground Utility District herein created is in the general public interest for the following reasons: 1. Otay Lakes Road is a major north/south thoroughfare in the eastern portion of Chula vista. The undergrounding of existing overhead utilities will contribute to the creation of an aesthetically pleasing major street. 2 . The subject section of Otay Lakes Road is classified in the General Plan's Circulation Element as a six-lane prime arterial and is designated as a Scenic Highway. 3 . Undergrounding of 12 KV lines, telephone and cable TV, has been completed on otay Lakes Road north of Ridgeback Road and south of Apache Drive, thus making the proposed district a closing link between previously undergrounded facilities. There remains 69 KV lines on Otay Lakes Road north of the SDG&E easement (approx. 600' north of Ridgeback Road). 4 . The proposed widening and reconstruction along portions of Otay Lakes Road between Ridgeback Road and Apache Drive significantly increased the ranking of the subject street section in the city's adopted utility conversion program, thus making it a priority project. The street improvement proj ect is in the city's CIP Program as 2 '7 / /J '~_S project STM-322; Otay Lakes Road north and "H" street to be constructed in FY 1996/97. the installation of SDG&E' s "Pipeline 2000" completed. south of East In addition, is just being BE IT FURTHER RESOLVED that the City Council does hereby authorize the use of approximately $716,900 in utility allocation funds to cover the cost of pole removal, undergrounding overhead facilities, and private property conversion reimbursements. Presented by Approved as to form by ~\ John P. Lippitt, Director of Public Works C:\rs\underg.dis 3 /3/t - - - - - - - - - - cl w - . > . ~ 0 - . - . z a: - -j . - Q - ~~/- c . . ~ Z . ~~ w . :;) . J: . - \ 0 . 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E-< . . ct :: . :J a: . 0 . . 0 0 . . - . . . tI] . . . . )3-5 EXHIBIT " B " CHULA VISTA UTILITY UNDERGROUNDING DISTRICT NO. 129 o T A Y R 0 A 0 LAKES 8/29196 BETWEEN RIDGEBACK ROAD AND APACHE DRIVE (Tax APN Info - 8 / 8 / 96) REIMBURSMENT SCHEDULE Page ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- DIST. PAR NO. BUSINESS/NAME UT ILIT I ES TO BE UNDERGROUND ED REIMBURSEMENT AMOUNT mmER'S NAME! C/O LENGTH OF TRENCH SITE ADDRESS APN ADDRESS/ CITY, STATE, ZIP ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- . Fire Station 64218001 861 Otay Lakes Road $0 City of Chula Vista c/o City Manager T C 276 Fourth Ave. Chula Vista, CA 91910 2 s. F. Home 64211001 871 Otay Lakes Road $0 Jose & Cecilia Vazquez ---------------------------------------------------------------------------------------------------------------------------------- C 871 Otay Lakes Road Chula Vista, CA 91913 3 s. F. Home 64211002 875 Otay Lakes Road $0 Belo Family Trust ---------------------------------------------------------------------------------------------------------------------------------- C 3246 Orchard Hill Road Bonita, CA 91902 4 S. F. Home 64211003 879 Otay Lakes Road 60 $1,800 Mario & Margarete Failla ---------------------------------------------------------------------------------------------------------------------------------- E C 879 Otay Lakes Road Chula Vista, CA 91913 5 S. F. Home 64211004 883 Otay Lakes Road 40 $1,200 Carlos & Carmen Valencia ---------------------------------------------------------------------------------------------------------------------------------- E C 883 Otay Lakes Road Chula Vista, CA 91913 6 S. F. Home 64211005 887 Otay Lak~s Road 40 $1,200 Joseph & Elizabeth Bonin ---------------------------------------------------------------------------------------------------------------------------------- 887 Otay Lakes Road Chula Vista, CA 91913 E C 7 S. F. Home 64211006 891 Otay Lakes Road 55 $1,650 Urban & Veronica Jones ---------------------------------------------------------------------------------------------------------------------------------- 891 Otay Lakes Road Chula Vista, CA 91913 E C 8 S. F. Home 64211007 895 Otay Lakes Road 35 $1,050 Jesus Trejo ---------------------------------------------------------------------------------------------------------------------------------- 226 East Naples Street Chula Vista, CA 91911 E C 9 Bonita Vista H. S 59413028 751 Otay Lakes Road $0 ---------------------------------------------------------------------------------------------------------------------------------- Sweetwater Union High School District C 1130 Fifth Avenue Chula Vista, CA 91911 ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- 5 PARCELS TO BE REIMBURSED A TOTAL OF $6,900 FOR 230 FEET OF TRENCHING. ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------ * E Electrical Service * T Telephone Service * C Cable Service (M:\UUOist\BrdwyC-E\.DIST-PAR.Rl-P) /3'/ COUNCIL AGENDA STATEMENT Item: / i Meeting Date: October 22. 1996 ITEM TITLE: A) RESOLUTION No. 18416: Approving a Resource Conveyance Agreement for the Otay Ranch SPA One, Tract 96-04. (This is a related item, but does not require a public hearing.) B.) RESOLUTION No. 18417: Approving the Indemnification with Village Development for Tract 96-04. (This is a related item, but does not require a public hearing.) C.) PUBLIC HEARING: PCS 96-04: Consideration ofa revised tentative subdivision map for the Otay Ranch SPA One, Tract 96-04, generally located south of Telegraph Canyon Road between Paseo Ranchero and the future SR- 125 alignment and excluding 288 acres in Assessor Parcel No. 642-060-11 and a portion of APN: 642-080-01. D.) RESOLUTION No. 18398-2: Adopting the Second Addendum to and recertifYing Final Environmental Impact Report FEIR 95-01 (SCH #95021012) and First Addendum, readopting the Statement of Oveniding Considerations and the Mitigation Monitoring and Reporting Program for the FEIR and approving a Revised Tentative Subdivision Map for portions of the Otay Ranch SPA One, Tract 96-04, and making the necessary findings, and denying approval of alternative tentative map proposals. SUBMITTED BY: Special Planning Projects Manhger, Otay Ran REVIEWED BY, Ci~ ~~ ~~~\ - <15th. V're, Vn_N' X ) The public hearing on this revised Tentative Map application was continued from the August 20, 1996 and September 10, 1996 meetings to September 17, 1996. The Tentative Map was again continued from the September 17, 1996 meeting to give staff the opportunity to review the conditions of approval and related Development Agreement in light of the new ownership situation. These issues were addressed in the October 15, 1996 Council Informational Memo. Village Development has submitted a revised subdivision map for a portion of Otay Ranch SPA One, Chula Vista Tract 96-04, to subdivide approximately 819.6 acres into 1,850 single-family residential lots, approximately 2,023 multi-family residential units, one elementary school site, seven park sites totaling 28.0 acres, 172.1 acres of open space, 11.5 acres of commercial and 18.2 acres of community purpose facility land. The application has been modified since the original submittal to delete the portion ofland on which West Coast Land Fund (WCLF) holds title. VIllage Development proposes JLj-/ ~ Item: ~ Page 2 Meeting Date: October 22. 1996 to delete this approximately 288-acre area from the original Tentative Map and redesign the lots in Village One and Five adjacent to the WCLF properties. The Environmental Review Coordinator has reviewed the proposed revised Tentative Map and the alternatives and has determined that, while the revised map is in substantial conformance with the Otay Ranch SPA One Plan for which Final Environmental Impact Report 95-01 and the First Addendum were certified by the City Council, the revision to delete approximately 288 acres win require a second Addendum. After preparation, the Second Addendum did not identifY any adverse environmental impacts. Removing acres of development and reducing the number of dwening units win reduce the severity of the environmental impacts identified in EIR 95-01. Therefore, statfrecommends adoption of the Second Addendum to and recertification ofFEIR 95-01 and First Addendum and reapproval of the Statement of Overriding Considerations and the Mitigation Monitoring Program related thereto. ISSUES: The first two points are policy and design issues, while the second two are not outstanding issues but are discussed later in this report: · Implications of deleting 288 acres from the previously proposed Tentative Map (WCLF) · Gated Neighborhoods (Council requested issue) · Resource Conveyance Agreement (Resolution 18416) · Indemnification Agreement (Resolution 18417) STAFF RECOMMENDATION: Adopt a Second Addendum to and recertify FEIR 95-01 and the First Addendum for the Otay Ranch SPA One and Tentative Map for Otay Ranch, Chula Vista Tract 96-04. Adopt the attached resolution of approval (13898-2) for the Tentative Subdivision Map for Village One and Phase I-A of Village Five of the Otay Ranch SPA One, Chula Vista Tract 96-04, in accordance with the findings and subject to the conditions contained in the attached Draft City Council Resolution (Attachment 2). BOARDS/COMMISSIONS RECOMMENDATIONS: The Planning Commission met on August 14, 1996 and voted unanimously to recommend to the City Council approval of the Tentative Map for ViUage One and Phase I-A of Vinage Five. Adoption of the Second Addendum to the SPA One EIR was also included in their recommendation. The Commission reiterated their opposition to gates. The Commission's recommendation is Attachment 2. /~/J f;L-;)- Item: -----' Page 3 Meeting Date: October 22. 1996 DISCUSSION: 1. BACKGROUND Development Agreement: A Pre-Annexation Development Agreement for Village Development was approved by the City Council on July 16, 1996. This agreement provided the developer with vested rights regarding the entitlements and regulations that will be applicable to the development of the property consistent with the City of Chula Vista General and the Otay Ranch General Development Plan/Subregional Plan and SPA One. Any replanning that might be initiated by West Coast Land Fund would have to consider Village Development's Development Agreement and remain consistent with it unless agreed to and approved by Village Development. The original agreement was subsequently revised and was approved by the Planning Commission on October 9, 1996. The revised agreement further guarantees infrastructure improvements in cases where the developer wants to create parcels for sale prior to fInalizing the typical subdivision map. Additionally, the revised agreement was strengthened with regard to any debt payment that might be levied to install public improvements or should the development be only partially completed. The revised development agreement is on the City Council for this evening. 2. APPLICANT'S PROPOSAL The Applicant is proposing to revise the tentative map to delete the 288 acres of WCLF properties in Village One and Village Five. Neighborhood R-12 is not proposed to be subdivided at this time because the property line bisects the area. Neighborhood R-lO has been relotted to reflect the WCLF boundary. Village Development's revised subdivision map for their portion ofOtay Ranch SPA One, Chula Vista Tract 96-04, proposed to subdivide approximately 819.6 acres into: 1,850 single-family residential lots 2,023 multi-family residential units One 10-acre elementary school site 7 park sites (and a portion of another) totaling 28 acres 172.1 acres of open space 11. 5 acres of commercial 18.2 acres of community purpose facility land Should the City Council wish to approve the applicant's proposal, they should adopt Resolution 13898-1 and Conditions of Approval in Attachment 1. 3. ISSUES A. Implications of deleting approximately 288 acres from the previously proposed tentative map Technical Committee: The Technical Committee consisting of representatives from Fire, Police, Planning and Public Works Departments and the Project Team, met on August 8, 1996 to review the proposal Staff concerns are as follows: /r~? t;/L3 Item: ----' Page 4 Meeting Date: October 22. 1996 1) Sta1fis concerned that future flexibility to replan Village Five would be lost if the center portion of SPA One were deleted, i.e., private gates, access, and phasing of development, etc. In addition, WCLF has previously voiced their concern regarding the park, school and CPF uses located on their property in the ViUage Five Core. It is, therefore, foreseeable that WCLF will seek a SPA amendment to relocate these uses elsewhere in Village Five, which would require discussions with City staff and approval of Village Development. City staff believes that these issues should be addressed between all parties prior to approval of any Tentative Map for ViUage Five. 2) Staff sees the eastern part of Village Five as just a large subdivision without the support of the village core or other amenities that are a key ingredient of a neo-traditional village. 3) Staff is also concerned about the development of the pedestrian paseos if split by the property holdings. This pedestrian facility will not have a destination until the village core is developed. 4) The Planning Department is concerned with proposed access through non-gated neighborhoods. There are portions ofWCLF ownership that are accessed only through a gated ViUage Development neighborhood. This access would not comply with City ordinances or the proposed gated issue policies. 5) Grading adjacent to or on the WCLF properties for Village Development is also a concern. While the subdivision may be approved, actual development could be held back from the undeveloped property between 50 to 100 feet to avoid future grading conflicts when the WCLF property does develop. Any grading on WCLF property will require their approval. 6) Both the Police and Fire Departments continue to express concern regarding the applicant's proposal. They want to be ensured that La Media Road and East Palomar Street will be in place no later than the trigger points which were established for the original Tentative Map proposal. They reiterated that, if possible, they would strongly prefer that these road segments be installed earlier than originally approved. While initial analysis indicated the thresholds could be met, the departments remain concerned with the current proposal and the timing of La Media and East Palomar. Both departments also indicated their concern with Neighborhood R-33 in Village Five and would like to have a temporary secondary access into this neighborhood from Telegraph Canyon Road. The existing sewer road could potentially be used as an emergency access to this neighborhood. B. Gated Neighborhoods During the SPA One Plan hearings, the Planning Commission recommended denial of gates as proposed by the project applicant in the SPA One Plan. At the May 14, 1996 City Council meeting, the Council took tentative votes on individual SPA issues. On a motion by Councilmember Rindone, the Council tentatively voted 3-2 with Horton and Alevy opposed, to support the Planning Commission's recommendation of denial of all gates. At the June 4, 1996 meeting, the Council took final action on all their tentative decisions on the SPA. Councilmember Padilla and Mayor Horton agreed to consider the gated communities issue at the Tentative Map level. Councilmember Alevy offered the resolution which did not include approval of gates, and the motion passed unanimously. /1)-( -'I Item: --' Page 5 Meeting Date: October 22. 1996 Eight gates are proposed by the applicant on the Revised Tentative Map restricting access to all the single-family neighborhoods in both villages. Under the SPA proposal, only the single-family neighborhoods north of Palomar Street in Village One were proposed to be gated. The Tentative Map proposes gates for the neighborhoods south of Palomar Street as well as the others proposed under the SPA One Plan. For analysis, staff has numbered the gates I through 10 on the previous Tentative Map. On the revised map, Gates 4 and 8 are on the WCLF property. Gates I, 2 and 3 now restrict auto access to the Village One neighborhoods north of Palomar Street. There are 874 single-family homes behind these gates on Village Development property. There were liS lots in Neighborhoods R-9 and R-II that are on WCLF collateral on the original Tentative Map. Gates 5,6 and 7 restrict vehicular access to the 159 homes proposed south of Palomar Street in Village One. On the original Tentative Map, there were 199 lots in the WCLF collateral and 185 in Village Developments property (Neighborhoods R-12, 13 and 14). Vehicular access to the Village Development's portion of Village Five is now restricted by Gates 9 and 10. All the gates restrict vehicular access only. Pedestrians, bicyclists and carts will have full access under the proposed gating plan. Gates having the most amount of traffic are tentatively proposed to be staffed. Under the proposed phasing plan, it should be noted that the gates will remain open for a number of years prior to being closed to the general public. While staff believes the proposal to gate neighborhoods can be functional with appropriate conditions in either alternative, we believe the City Council should consider the following points which are not specifically addressed in the table: Exclusivity vs. Community: There are many arguments for and against gated communities from a social perspective. Concerns have been raised that separating segments of society behind gates will only lead to further economic and racial segregation within our community. There is the fear that those who live behind gates have a greater apathy for those outside. On the other hand, others argue that gates create more of a sense of neighborhood and community than a traditional subdivision. The feeling is that people will work better together to support their 'tlefined" neighborhood rather than losing that focus in a sprawling subdivision. Crime: Fear of crime is the most important factor leading to the move toward gated communities. People see gates and guards and assume an area is inherently more secure. That fact, however, is debatable and is dependent on the type of crime studied. Some reports on crime in gated communities show that certain offenses, such as petty theft or voyeurism, are reduced with the presence of gates. However, certain violent crimes that usually involve people who are known to each other, like murder and rape, may not be reduced. Nonetheless, the perception of any affected homeowner is that gated neighborhoods are safer. Traffic and Circulation: Reducing traffic flow and making streets safer is one of the main reasons gates are proposed. Proponents of gated communities argue that diverting traffic from high volume residential streets makes the streets quieter and safer for children. In addition, if only residents are .~ / ~ -_S -5 Item: --' Page 6 Meeting Date: October 22. 1996 allowed access to the streets, monitoring strangers driving through neighborhoods will be easier, therefore, making the area safer for the residents. Opponents argue that gating a community may do nothing more than transfer the problem of residential traffic from one street to another. They believe that these communities may create more congestion by concentrating traffic on collector streets outside the development. Although if the gated community is only a feeder to the major arterial (like a street system that is basically a series of cul-de- sacs), it makes little difference if it is gated or not in terms of the traffic coming into a collector street. Some literature argues that the gating of communities reduces choice and opportunities for vehicular travel routes. This could be true depending upon the design of the street system. If it were a grid system it couId be true, but it wouId not be true ifit were a cuI-de-sac system. Emergency Access: Gated communities pose challenges for emergency responses from police, fire and paramedics. Unless properly controlled, gates can lead to minor delays or can result in major difficulties in responding to emergencies or acting to evacuate areas. Mechanical access systems to these communities exist but may not operate effectively at all times. Systems that rely solely on entry codes face the problem of notiJYing emergency services when the code is changed. If these emergency services are not notified in time, delays may result. Additionally, if gated communities have limited points of entry and, if one entry is blocked, there is an increased delay in access to the emergency. Currently, systems like the 'Opticom"Vehicle Strobe Detector Systems, Knox Boxes and Knox Key Switches are provided to eliminate any difficulty in responding to emergencies that police, fire or paramedics might have. These systems work effectively and have not led to substantially lower response times. To ensure that, redundant multiple systems could be required. Even with these systems, the Police and Fire Departments are still concerned and believe that gates should be staffed 24 hours a day if the gated communities cover the large number of units as proposed by the applicant. Multiple Ownerships: The utilization of gates to restrict public access is effective when the properties behind the gates are under the control of a single property owner. With West Coast Land Fund (WCLF) ownership of a portion of SPA One and Five, the design, operation, and location of restricted access gates becomes very difficult to implement to the satisfaction of the residents of those areas and the City operational departments. As now designed, vehicular access for the residents of WCLF properties in Village One and Village Five would be restricted to Palomar and La Media and to La Media and Orange Avenue, respectively. This creates a serious design issue for the residents of Village Five ofWCLF properties due to the shape ofthose properties and the approved design of the SPA One Plan. Metropolitan Transit Development Board (MTDB): MTDB staff is not supportive of gated communities primarily because they believe gating contributes to a discontinuous street system and restricts mobility. They believe that discontinuous streets inhibit pedestrian, bicycle and transit circulation and increase automobile dependence. In addition, they believe gates form artificial barriers between neighborhoods. MTDB sees this action as contrary to the neo-traditional goals of the Otay Ranch GDP. J7I-t -& Item: ---' Page 7 Meeting Date: October 22. 1996 During the SPA One Plan review, staff prepared a gated communities policy paper containing general and specific guidelines for gating neighborhoods. The general guidelines focused on the following items: . Discourage gates in communities where the Growth Management Threshold Standards could not be met . Maintain pedestrian and bicycle access to parks, open space and other facilities . Require that all State and City criteria be met for street design, including access for school buses, trash pick-up and mail delivery and enforce the traffic and parking regulations of the Vehicle Code . Review and approve the number of units behind gates to reduce impacts to surrounding communities. The specific guidelines and requirements focused on the following: . Signs indicating gated street areas and location of trails and parks open to the public . No public services such as libraries, fire or police stations located behind gates . Maintain alternative access to public facilities . Enforcement of the Vehicle Code in gated communities . Require staffing on some or all of the gates The Engineering Department criteria for gated communities requires: . Sufficient stacking for peak flows . Construct streets to City standards but privately maintained . Private storm drains . Private street lights conforming to public standards In addition, the Chula Vista Elementary School District wants to ensure access for the school buses, require hold harmless and indemnification agreements and insurance from the homeowners association. Recommendation: The gates, as proposed on the Tentative Map, meet the criteria as proposed by staff in the following table. While restricting vehicular access to a limited number of the single-family neighborhoods could be acceptable, staff is still concerned about the number of units proposed behind gates in this project and recommends denial of the gates as proposed. Gated products on a reduced scale may be acceptable and might be advantageous to the overall project by providing an additional mix of residential opportunities to the overall community. So, while the applicants proposal is not recommended, less intense gated areas could be acceptable. Additionally, at the July 10 Planning Commission hearing, the Commission reiterated their previous position which was not in support of gating the project. /1-7 -7 Item: ----' Page 8 Meeting Date: October 22. 1996 The following table analyzes the 10 proposed gates in relationship to the above criteria: Gates " S Village 1 Village 1 Village 5 WCLF Total # of N/O Palomar I S/O Palomar Gates 1 I 2 I 3 5 I 6 I 7 9 I 10 4 I 8 10 Genetal Criteria I GMOC Yes Yes Yes Yes Yes Threshold Standards Ped access Yes Yes Yes Yes Yes City Ord Yes No Yes Yes Ye&'No Other Yes Yes Yes Yes Yes Ae:encies Number of 874 159 1098 989 I 1198 4318 Units Specific Criteria Signs Yes Yes Yes Yes Yes Signs to Yes Yes Yes Yes Yes m.blic :fac Facilities Yes Yes Yes Yes Yes Acoess to Yes Yes Yes Yes Yes other attractors Public Yes Yes Yes Yes Yes enfulCIllllt Staffed No I Yes No Yes Yes YesINo Stacking Yes Yes Yes Yes Yes ,Pvt.Street Yes Yes Yes Yes Yes Pvt. Drain Yes Yes Yes Yes Yes 7.ilitinl! St. Yes Yes Yes Yes Yes U . School Bus Yes Yes Yes Yes Yes I /;/- 7 --0 Item: --' Page 9 Meeting Date: October 22. 1996 C. Comparison of Otay Ranch to the Paloma Planned Community in San Marcos At the August 20, 1996 public hearing on the Development Agreement for Baldwin Builders, a number of residents from the Paloma Master Planned Community in the City of San Marcos, as well as a council member, testified in opposition to the Development Agreement. They testified regarding problems being experienced in their community which was planned and constructed by the Baldwin Company. Their concerns centered around three major topics: financing for the project, provision of public facilities and quality of construction. The first two items are discussed below and compared to policies in place with the City of Chula Vista and the Otay Ranch Project. The third area of concern is the subject of a related report. 1.) FINANCING San Marcos Chula Vista Otay Ranch Utilized Mello-Roos CFD to CV does not utilize Mello-Roos Consistent with City policy finance parks, schools and a fire CFD for any public facilities. CFD for elementary school has station Only the School District utilizes been formed. CFDs. Assessment District to fund To date, the developer has not infrastructure may be formed at requested the formation of an the request of developer and Assessment District. City is must be approved by City under no obligation to authorize Council. Typically formed prior formation of district. to any occupancy and used for backbone streets, sewer and water facilities. Subdivision improvement bonds Consistent with City policy required for all public improvements. Developer has three years to complete all improvements and if not, the bonds can be called in. CFD and property taxes exceed Council policy that combined Consistent with City policy 2% of assessed value of homes property taxes and Assessment District fees may not exceed 2% of original assessed value of home at time of sale. Baldwin became delinquent in No CFDs except for schools. Consistent with City policy payment of their fair share ofthe CFD )1-; -q Item: --' Page 10 Meeting Date: October 22. 1996 Lighting and Landscape District Open Space Maintenance Open Space Maintenance fees were utilized District is formed prior to or District has been requested for concurrent with approval of final the entire SPA One area. map. City Council approves Monthly fees approximately formation of District. $23. HOA fees estimated at $24-$52 monthlv. Mello-Roos fees increased Full disclosure of any Mello- Consistent with City policy yearly Roos fees or Assessment District fees required at time of home Durchase. 2.) PROVISION OF PUBLIC FACILITIES San Marcos Chula Vista Otay Ranch Parks and fire station have not PAD fees collected for parks PAD fees collected for been completed on schedule which ensures money is in place community park (located off if park not completed by site) and for the first 500 du for developer. Neighborhood Parks. Developer to provide turn-key neighborhood parke s) after the first 500 duo Required to never be in deficit or building permits may be withheld. (Conditions of Approval #3,71 and 79). PAD fees will be reimbursed if turn- key facility provided. Fire stations financed through No fire stations proposed with PFDIF. Fees collected at time of first TM, however, future building permit issuance. stations will be financed in a manner consistent with City policy. Update ofPFDIF required to be financed by developer with credit given toward future fee (Cond. # 90). Major streets financed through Consistent with City policy TD IF. Fees collected at building permit issuance or developer builds facility and receives credit . towards future TDIF fees. JLj ~/!J -/0 Item: ---' Page 11 Meeting Date: October 22. 1996 In conjunction with the above financing provisions, the following trigger points were established with approval of the SPA One Plan which ensure that facilities will be provided in a timely fashion. 500 units 1,150 units 2,650 units 3,000 units 3,900 units Deliver graded first elementary school site with access road & utilities to the site, in 500 units ViUalZe One 150 students First Elementary School opened (ViUage One) 1,150 units 336 students Deliver graded second elementary school site with access road & utilities to the site, 2,500 units in ViIl";e Five 750 students Second Elementary School opened (Village Five) 3,450 units 1,000 students Deliver graded third elementary school site with access road & utilities to the site, 4,500 units west of Pas eo Ranchero 1,350 students Third Elementary School opened (West of Pas eo Ranchero) 5,300 units 1,668 students Deliver graded high school site with access road & utilities to the site 2,650 units 504 students High School opened 5,300 units 1,007 students SCHOOLS T~CRELATEDINiWROVEMENTS Construct or guarantee the construction of offsite Telegraph 300 units on Road I-805trel h Can on Road interchan e 500 units Either: offsite 4 lane East Palomar St. and 1/2 diamond; Or: Oran Ave as a 6 lane rime arterial to Paseo Ranchero 1,414 uivalent dwellin units Either: offsite E. Palomar St. & Orange Ave. to 4 lane majors with 1/2 diamond at 1-805/Palomar; Or: Palomar St. to a 4 lane major & Orange Ave. to a 6 lane prime 4,009 equivalent dwelling units arterial to Paseo Ranchero . C . detentionldesiltin basin h C . detention basin SEWER INiWROVEMENTS detennined b flow s & some offsites with first unit DRAINAGE INiWROVEMENTS wi . ofan area in can on wi construction of La Media / 1/- / / -II Item: --' Page 12 Meeting Date: October 22. 1996 D. Status of Saint Claire (Telegraph Canyon Estates) At the August 20, 1996 hearing for the Baldwin Builders Development Agreement hearing, a resident spoke regarding the status of the Telegraph Canyon Estates project. He indicated that many of the homes were still unfinished or abandoned, cited a lack of maintenance and indicated that the homes were of poor construction. These issues have been addressed in a Council Informational Memo and the staff report for the Baldwin Builders Development Agreement which was presented to the City Council on October 15. E. Resource Conveyance Agreement A Resource Conveyance Agreement, which was a condition of approval for SPA One, to be completed prior to approval of the Tentative Map, has been prepared and is included as an attachment to this report along with a Resolution approving said agreement. F. Indemnification Agreement An Indemnification Agreement between Village Development and the City has also been prepared and is included along with a Resolution approving said agreement. 4. STAFF RECOMMENDATIONS Alternative A - Approve Village 1 and Phase I-A of Village 5 Only The Planning Commission supports approval of the Tentative Map for only Vtllage Development's portion of Village One plus Phase I-A of Village 5 which will subdivide 592.7 acres into: 1,253 single-family residential lots 1,675 multi-family residential units One 10.4 acre elementary school site 5 park sites totaling 23.5 acres 122.7 acres of open space 11. 5 acres of commercial 14.6 acres of community purpose facility land. This alternative would give Village Development additional entitlements for their land sales program. Staff believes that, because of the limited size of Phase I-A in Village Five (236 units on 52 acres), City services can easily be extended and threshold standards can still be maintained while not restricting future flexibility to reallocate land uses. Construction of Gate 10 would also be possible. Approval of the Tentative Map for all of Village Five together with the previously approved development agreement substantially restricts the City's flexibility to adjust land uses in the future for the WCLF properties in Village One and Five. West Coast Land Fund has previously indicated they are not satisfied with the SPA One land use plan, and they may desire an amendment to adjust the }J/ ~ /:2 -/;J,. Item: ----' Page 13 Meeting Date: October 22. 1996 school and park locations, increase the commercial acreage, delete multi-family areas and add single- family neighborhoods. Any modification proposed by WCLF to the existing SPA One land use plan will require a SPA amendment and a new Tentative Map and potentially a GDP amendment. Attachment 2 is the City Council resolution approving this alternative. The conditions address just Village One and Phase I-A of Village Five. Alternative A-I - Approve Village 1 and Phase lA of Village 5 Continue the balance of ViUage 5 for 60 days or until the City Council meeting of December 17, 1996 This alternative is essentially the same as Alternative A. However, by continuing rather than denying the balance of Village 5 it would allow the applicant the flexibility to continue negotiating with West Coast Land Fund on replanning for the areas. If the balance of Village 5 were denied, the applicant would be required to resubmit and refile an entirely new application in the future, at such time as land use issues are negotiated with the City and WCLF. Should the City Council choose this option, Attachment 2 is the appropriate Resolution and conditions for the Council to approve. Staff should be directed to amend the Resolution 13898-2 to delete references to 'tlenial "and substitute with 't:ontinuance". Alternative B - Approve Village One Only Another alternative is approval of the Tentative Map for only Village Development's portion of Village One and denial of the map for Village Five. The recommendation for only Village Development's portion of Village One would subdivide 540.7 acres into: 1,017 single-family residential lots 1,675 multi-family residential units One 10.4 acre elementary school site 11.5 acres of commercial 14.6 acres of community purpose facility 4 park sites totaling 22.2 acres 11 7.1 acres of open space If the City Council wishes to approve the staff alternative for only Village One, resolution of approval (13898-3) with conditions is available for Council consideration (Attachment 3). FISCAL IMPACT: There is no impact of processing the tentative map application on the General Fund because Village Development is reimbursing the City through a deposit account. At this point in time, Village J1j- /~1 --/3 Item: ----' Page 14 Meeting Date: October 22. 1996 Development is one month delinquent. On September 25, 1996 $35,997.42 was due and payable. ViUage Development representatives anticipate the September payment will be paid on or before October 15, 1996. It is staffs recommendation that the project be continued until ViUage Development is current on all delinquent accounts. Staff will present an oral report to Council on the status of the account. Attachments: Exhibit A: Exhibit B: Exhibit C: Exhibit D: Exhibit E: Exhibit F: Exhibit G: Exhibit H: Exhibit 1: Attachment I Attachment 2 Attachment 3 Revised Tentative Map Proposed Phasing Plan Second Addendum to Otay Ranch SPA One ElR 95'{) I Otay Ranch Tentative Map Data Otay Ranch Ownership Map Resource Conveyance Agreement Resolution 18416 approving Resoun:e Conveyance Agreement Indemnification Agreement Resolution 18417 approving Indemnification Agreement Draft City Council Resolution # 18398-1 Approving Applicant's Proposal Draft City Council Resolution #18398-2 Approving SllIff Alternative A - Village I and Phase I-A Draft City Council Resolution #18398-3 Approving SllIff Alternative B - Village I /f~/i -/L.f / Village DEVELOPMENT ~ OCT 21 Quality maste,plal111cd communities since J 974 October 18, 1996 I , Via relejax and US Mair Mayor Horton and Members of the Chula Vista City Council CITY OF CHULA VISTA 276 4th Avenue Chula Vista, California 91910 Re: SPA One Tentative Map and Pre-annexation Development Agreement Dear Mayor Horton and Councilmembers: As discussed in the attached letter to the City Manager, Village Development been unable to successfully resolve with Staff some key issues concerning the proposed SPA One Tentative Map and the revised Pre-annexation Development Agreement. I am hopeful these issues can be brought to closure through further discussions. As a consequence, I request that the City Council continue the October 22, 1996 agenda item concerning this topic to your next Council session. Your consideration of this request is appreciated. Sincerely, VILLAGE DEVELOPMENT KJK/mdm cc: John Goss, City Manager, City of Chula Vista Ann Moore, Acting City Attorney, City ofChula Vista Jerry Jamriska, Otay Ranch Project Team Jim Baldwin, Village Development c:\Mora\Kim\Letters\Hortl 0 18 10/18/96,1:12 PM 11975 El Camino Real, Suite 104. San Diego. CA 92130 TeL 619-259-2934. Fax. 619~2S9-+364 )/~ /~ Village DEVELOPMENT Quality master planned communities since 1974 . October 18, 1996 VIa Tete/ax and US Mail Mr. John Goss City Manager CITY OF CHULA VISTA 276 4th Avenue Chula Vista, California 91910 , Dear John: Thank you for taking time to meet yesterday concerning the draft SPA One Tentative Map conditions and revised Pre-annexation Development Agreement. While I appreciate the fact that we were able to reach closure on several issues, I regret some other key issues remained unresolved. In light of these unresolved issues, I am requesting that the City Council continue consideration of the Tentative Map and Development Agreement until its next meeting. Sincerely, VILLAGE DEVELOPMENT KJK/mdm cc: Chula Vista City Council Ann Moore, Acting City Attorney, City ofChula Vista Jerry Jamriska, Otay Ranch Project Team Bill Brasher, Baldwin Builders Chris Patek, SNMB Michael Woodward, West Coast Land Fund- Greg Srnith Jim Baldwin, Village Development c:\Mora\Kim\Letters\Goss 1 0 18 10/18/96.12:31 PM 11975 El Camino ReOl.1, Suite 104- . S~ Diego. CA 92130 Tel. 619-259-2934' F~. 619-259~4364 /cj~/J I..AW Of"l"JCES OF' ~/Lj P.<\.LTL. HASTINGS. JANOPSKY & WALKER LLP '" I.lfOIlTCCI l.,,,,,,,.I..1''' .......1''''C..~.,''' ,"'CI......'NCO ..........ell5I".....1. ,:,<:1l-t..I:I.....1'.IONII "'~IIII1:"'1' ,. H.<l.~.I'NI:.lI!l- ('~IQ.ISStl) C'QJ,H4iSl:l. LLI:: '" ,.Aul. .e;ONAl'1lO1 II "'ANO"'~";V CH...,.,....!:~ M ........L..;CA 5SS SOUTH FI..OWl:::.R STAEE:T 3~:3 ~AN;:Q~E s'r, O:.TE '01;'0 S....N I"j'U"NCISCO, e....I.'..O"lNIA -:,...10.... .:J~;). .re:l..O:::.......ON[; (""15\ ......l:/j-7'777 L.OS .ANCaL.EI:i, CAL.IFORNIA 90071-2371 Te:I.E~HON" 1a:131 1i51!l3-eooO FAC.s'IMI'.l: (iI3) 6l!'"/-Oi'Oe> JOI'j;I1iI OCItA"" A.....;:I'lWE ~..NTA 1010 I'l I c:...., t;:AL..IFOF~NIA g0-401"C'/,: Tt:!:t.EI"HCNO::: 1.;:110) 3IS-J:ilOO eoCJ II'C:A':;~TI'IEE 5"1', N ~, !!I:Tl!I;, a",oo ATLAI'olTA. c!:I:!:OlltQIA, 3030S-!~t:e Tl::l..lI:FlHOI'olE (....0.0.1 !lI!!l'Z...t;)O INTt::,I.4N~T WWW pnJ~corn 10&6 'WAS....INCTO'J aOUL.i:;.........~O 6T....MI'l;Il'lg, CONNEC'~IC:UT O'OElOI-:<:.::,', TEL.E......ONl:! tzO~) B61-,....~o l:iBIS TOWN Cl:!NTi:R OFlIVE COSTA Me-a..., C:AI..III"OP,NIA 92:62El.lmz,.... Tll;I..'''HONE (;141 th:lI;S-ljiOO ;j$J6 .......I'h\ ...Vi:NWtl: IIjEW 'fO~H(. NEW 'fORK looaa:_..g,. TI!:I..E"'....ONE (aiel ::!IICi-ooj.ooO October 22, 1996 A~K ~OFII IolU'1..0'NO, 30'H I"L...Qr;l1Q 1...:IiI A.KAa..."'A 1~l;""O,..,r: ~IN,lIi:ro.II.U, TOII.YO 10'1, ...;....P....'" 'Tt::I..ICIIMONE la~l :2=07-0,:,-0 I~O!l:l l"EN"'&'rl..V"''',A ....V~...u". ~J"'" W,&5HINCfTON, O,C: aooo....:!~oo TI!:I..IC"HQ...E flO!O~) ::;oe-9seo WAi'1'E/,('~ OIRI!:C:T ACCESS OUR ,Il'1L..E: NO 213/683-6188 @phjw.com 21784.61555 V:IA J'ACSIKILE City Council City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 Re: Item No. 14 - Tentative Map and Development Agreement for Otay Ranch SPA-One (Resolution Nos. 18416, 18417 and 18398-2 and PCS 96-04). Honorable Members: We have received notice that the applicant in the above-referenced matters on tonight's agenda, Village Development, has requested a continuanoe in order to reach closure on several issues. Our client, West Coast Land Fund, a neighboring property owner whose interests will be ilffe<:ted by theca m<ltters, Concur! and as}t;;s tl1dL Lhesa matters be continued. The City Manager's office has informed us that these matters will be continued and that we can check with the city Clerk's office for the continued hearing date. Very truly yours, I - i ~ \Nl.(}-ut~ .Wtot4v~tf Michael S. Woodward of PAUL, HASTINGS, JANOFSKY & WALKER LLP LA-AEL-A1238134.1 'O~1l8 1:42 pm Gl2 d 6gm919gS 'ON/Sg: S I 'lS/g;: S I 96 ,2221 (~nl: ',10,; '\': ~ ,< _...L Paul, Hastings, Janofsky & Walker A PARTNERSIo1IP INCLUDING PROFESSIONAL CORPORATIONS lWENTY-THIRD FLOOR 566 SOUTH FLOWER STREET LOS ANGELES, CALIFORNIA 90071 TELEPHONE (213) 683-6000 FACSIMILE (2131 627-0705 CONFIDENTIAL RUSH X o /lfe,} xu ~ DATE: ~0/22196 FROM: Kei Uyeda DIRECT DIAL #; (213) 683-6~88 I TO: OF: FACSIMilE #: CITY COUllCIL City of Chula Vista 619/476-5379 GEllALJ) JAGISKA Otay Ranch project 619/585-5740 SWITCHBOARD #: 619/619-5041 TO: OF: FACSIMILE #: Team, Chula vista e!Z6- SWITCHBOARD #: 619/.t:$5-5394 CLIENT NAME: West Coast Land Fund CLIENT#: 217a4.6~555 TIo1IS M. UAL 0 NTITY T WHIC IT ADD ~s DAY C NT' ORM ON THA P IVI .0 N .NTIA EX M DOE U ER AP C W, IF TH. READER OF THIS Ml:SSAGE IS NOT THE INTENDED RECIPIENT. OR THE EMPLOYEE OR AGENT RES PONS ISLE FOR DELIVERING TIo1E MESSAGE TO THE INTENDED RECIPieNT. VOU ARE HEREBY NOTIFIED Tio1AT ANV DISSEMINATION, DISTRIBUTION OR COPYING OF TIo1IS COMMUNICATION IS STRICTLY PROIo1IBITED. IF YOU HAVE ReC~IVED THI'.' COMMUNICATION IN ERROR. PLEASE NOTIFY US IMMEDIATELY IlYnLEPH(lNE. AND RETURN THE ORIGINAL MESSAGETO US AT THE AIlOVE ADDRESS VIA TIo1E U,S. POSTAL SERVICE. THANK VOU. T otill number of pages, Including this cover sheet: IF YOU DO NOT RECEIVE ALL PAGES. PLEASE CALL IMMEDIATELY FACSIMilE CENTER: (213) 683-6059 ORIGINAL Will FOU.OW VIA: FAX OPERATOR'S NAME: DATE: TIME: MESSAGE: V /Z.6L3;1,/T Mt!E-..ry-A be A-r7A-CHl5tD 0/1 d 6gm91ggS 'ON/snllS/p; :21 g6 .G0 '0: :~nl: _1 ADDITIONAL INFORMATION RELATED TO ITEM NO. 18 GENERAL FUND RESERVES 10000000 ill ~ 8000000 .... <( .-J <( 6000000 m. co ill ~ 4000000 m ill Sj 2000000 .... 0::: o ......_.nnmm...................m..................mmnm_nh........_..md........_.__mnnon........................................._....m 91-2 . 92-3 93-4 94-5 95-6 96-7 FISCAL YEAR NOTE: Minimum Reserve Level Policy adopted in July, 1996 would yield a target level of $4.8 million. COUNCIL AGENDA STATEMENT . Item No. JIf( city council Meeting Date 10/2~ Ordinance ~ J- Amending otay Ranch Pre-Annexation Development Agreement Between Otay Ranch, L.P., a California limited partnership, Village Development, a California general partnership, and the city of Chula vista SUBMITTED BY: Deputy City Manager~f.~ Planning Director ;rpl~ ~ ~ ~ otay Ranch Project Manager ~ REVIEWED BY: City Manager &' 4/5 Vote: Yes No---1L On June 25, 1996, the plarhZng Commission and City council met jointly and approved a development agreement for the above parties. There is now a mutual desire (by village Development and Otay L.P.) to amend the agreement to further guarantee infrastructure improvements where the developer wants to create parcels for sale prior to finalizing the typical final subdivision map. In addition, on August 20, 1996, the council asked if the agreement could be tightened up to head off any problems with regard to any debt payment that might be levied to make public improvements or should development be only partially completed on any particular project. A case in point would be the st. Claire project on Telegraph canyon Road where development was stopped for a time due to a bankruptcy action. ITEM TITLE: RECOMMENDATION: That the City Council place the ordinance on first reading. BD/COMMISSION RECOMMENDATION At their October 9, 1996 meeting, the Commission recommended adoption ordinance. Planning of the DISCUSSION: On June 25, 1996, the City approved three development agreements with United Enterprises, Greg smith, and Village Development, et al. On August 20, 1996, three additional agreements were placed on first reading of the ordinance for the Jewels of Charity, SNMB, Ltd. and the Foundation (those agreements are awaiting signature by the applicant prior to second reading). On October 1, 1996, the council placed on first reading the ordinance for Baldwin Builders, the trustee for the bankruptcy. These various entities cover the Otay Ranch Western Parcel land holdings. West Coast Land was included in the original Village Development Agreement. 1,-/ Attached for Council information, Exhibit A is the previous agenda statement from June 25, 1996 when this Development Agreement was first considered for Villaae Development along with other parties. The basic business terms are explained therein, have not changed, and will not be readdressed. What is focused on are the changes to the agreement proposed since city Council/Planning Commission approval in June. These changes are all in a strikeout/underline format in the attached agreement text for ease of reading. 1. Overview with the Baldwin Builders agreement, a number of changes were added at the request of city Council to help avoid any similar situations such as st. Claire. The additional language included the City's ability to withhold action on any of the applicant's Future Discretionary Approval requests (7.10); a statement that if development stops on a project and there is a nuisance, health or safety hazard, the developer agrees to cure the situation or the city will have the authority to enter private property as well as public and take correction action at the developer's expense (7.11); and a requirement that the developer shall comply with the terms of any assessment districts and make timely payments thereon or the City can take any legally authorized action appropriate to guarantee payment (14). All of these provisions, as well as other clarifying language the city wanted, have been incorporated into the Village/Otay L.P. agreement amendment in their entirety. These three sections, 7.10, 7.11 and 14 on Pages 16 and 23 of the Agreement, are the major substantive changes, plus 7.1 discussed below (see Page 12 of the Agreement) . 2. Reauest bv Villaae Development to Not have to Bond at the Master Subdivision ("A" Map) Showina "Super Block" lots for backbone infrastructure facilities. (Section 7.1) By way of background, on large scale developments there are usually two levels of final map approvals. The first level is referred to as the "A" Map and is used to create large parcels of land or "Super Block" lots to be conveyed to Builders. At the next level, "B" Maps are prepared. The "B" Map is the traditional final map that creates smaller lots for sale to homebuyers. Normally, a Master Developer dedicates, bonds or constructs backbone infrastructure such as major roads, trunk sewer lines, project serving drainage facilities or unique features such as pedestrian bridges, etc. with the "A" map. This dedication and improvement guarantee is performed in conjunction with creating the Super Block Map which creates parcels for sale to merchant builders. Those builders then assume the typical improvement requirements associated with the final "B" map which creates building lots for sale to homeowners. I ~-"t In this instance, Village Development requests that the City allow it to sell off large parcels to Developers in advance of guaranteeing the backbone facilities. Village Development can then satisfy its debt obligations to Bank of America, the lienholder for the tentative map land, and remain viable to construct the balance of the project. Staff is comfortable with this arrangement as long as: (1) Village Development, otay Ranch L.P., or their successor in interest covenant in the development agreement that it is their sole and separate responsibility to provide or finance the cost of backbone facilities required by any final map including both the "A" and "B" Maps; and (2) Village Development, otay Ranch L.P., or their successor in interest will provide adequate funds as determined by the city Engineer for the implementation and construction of the first phase backbone facilities prior to approval of the first final "B" map. These provisions are contained in the text of section 7.1 on Page 12 of the draft agreement. 3. Imoact of Bankruotcv or Foreclosure A final City issue is what a bankruptcy or foreclosure action might do to the validity of the already granted Nuisance Easements by Village Development and the legality of the Development Agreement itself. sections 7.2.2 and 12.5 address that possibility. New language has been added stating that the developer agrees to enter into subordination agreements with all lienholders having any interest in the property to ensure that the agreement has a priority position over all other liens. This will make it clear that the obligations as well as the rights of the agreement will not be subsequently suspended or abrogated by a senior lienholder. In addition, the and guarantees requirements to approval. tentative map for via the Public be satisfied in SPA I contains 147 Facility Finance conjunction with conditions Plan and final map Fiscal Imoact It isn't possible to quantify the value of the Agreement to the city or the other parties. Through annexation and the related property tax, sales tax, etc., the City will realize significant benefits. Likewise, the Developers benefit from the vesting and certainty provided by the Agreement to be able to get loans and sell and develop the Property in accordance with current and future approvals. village113 J5- 3 ORDINANCE NO. 2691 AN ORDINANCE OF THE CITY OF CHULA VISTA AMENDING OTAY RANCH PRE-ANNEXATION DEVELOPMENT AGREEMENT BETWEEN OTAY RANCH, L.P., A CALIFORNIA LIMITED PARTNERSHIP, VILLAGE DEVELOPMENT, A CALIFORNIA GENERAL PARTNERSHIP, AND THE CITY OF CHULA VISTA WHEREAS, on June 25, 1996, the City Council approved a Pre-Annexation Agreement between the City of Chula vista and Otay Ranch, L.P., a California partnership, et al pursuant to Ordinance No. 2679; and WHEREAS, on June 25, 1996, the Planning Commission and city Council met jointly and approved a development agreement for the above parties; and WHEREAS, there is now a mutual desire by the city and Village Development and Otay Ranch L.P. to amend the agreement to further guarantee infrastructure improvements where the developer wants to create parcels for sale prior to finalizing the typical final subdivision map; and WHEREAS, in addition, on August 20, 1996, the Council requested and Otay Ranch, L. P. and Village Development agreed that the agreement could be revised to address any potential problems with regard to any debt payment that might be levied to make public improvements or should development be only partially completed on any particular project. NOW, THEREFORE, the City Council of the City of Chula vista ordains as follows: SECTION I: The Otay Ranch Pre-Annexation Development Agreement between Otay Ranch, L.P., a California limited partnership, Village Development, a California general partnership, and the City of Chula Vista is hereby amended as set forth in the Amended Agreement on file in the office of the City Clerk as Document No. SECTION II: The Mayor of the City of Chula vista is hereby authorized and directed to execute said Amended Agreement for and on behalf of the city of Chula vista. SECTION III: This ordinance shall take effect and be in full force on the effective date of annexation as set forth in the attached Pre-Annexation Development Agreement as amended. SECTION IV: The previously approved Pre-Annexation Development Agreement only between Otay Ranch L. P. and vi llage Development and the City adopted by the City Council by Ordinance No. 2679 shall be null and void with respect to these parties upon adoption of this ordinance. Presented by Approved as to form by ~ 1vt.A~ n ,- Ann Y. Moore, Actlng city Attorney George Krempl, Deputy City Manager IS-Y /eJ -)1-;;6 PRE-ANNEXATION DEVELOPMENT AGREEMENT THIS PRE-ANNEXATION DEVELOPMENT AGREEMENT ("Agreement") is made effective on the date hereinafter set forth below by and among THE OTAY RANCH, L.P., a California limited partnership, TICER DEVELOrUEllT 'l'l'10, a CaliferRia limi tea. partncrohip I by TICEruI&'\RT, IHO. I a CaliferRia esrperatisR, ita gcncr.:ll partrIC:r I VILLAGE DEVELOPMENT, a California general partnership ("Developer") and THE CITY OF CHULA VISTA, a municipal corporation, who agree as follows: 1. RECITALS. following facts: This Agreement is made with respect to the 1.1 Owner. The owners of the properties subj ect to this Agreement (hereinafter collectively referred to as "Owner" or as "Developer") are as follows: 1.1.1 Otay Ranch, L.P. is the owner of approxi- mately 3,545 acres of undeveloped real property in the unincorporated area of the county of San Diego ("County"), described in Exhibits "A" and .14;1L "F", attached hereto and incorporated herein by this reference. 1.1. 2 Ti~er DevelepmeRt T\.'o i13 the o'..mer of Zl13prsuimatcl}" 1, QJl aere.!:] ef uRac.;cle13ca Fe:).l property in the uniRcerparatea area sf the. CeuRty, ae.seribcd in Exhibito IIB" aRe. "C" I ClttCloheel bereta and incorporate.a hcrciri lsy this rcfcrcnec. 1.1.3 Village Development is the owner of approximately 35 acres of undeveloped real property in the unincorporated area of the County, described in Exhibits ll€ll "B" and ~ "F", attached hereto and incorporated herein by this reference. 1.2 ci tV. The City of Chula vista is a municipal corporation and an incorporated city within the County. 1.3 Code Authorization and Acknowledarnents. 1. 3 . 1 ci ty Government Code sections development agreements certainty for both City development process. is authorized pursuant to California 65864 through 65869.5 to enter into for the purpose of establishing and owners of real property in the 1.3.2 Government Code section 65865 expressly authorizes a city to enter int~ a development agreement with any person having a legal or equitable interest in real property in unincorporated territory within that city's sphere of influence for the development of property as provided in the Development Agreement Law; provided that the agreement shall not become operative unless annexation proceedings /' -1- IS:-.-5:> annexing the property to the city are completed within the time specified by the agreement. 1.3.3 City enters into this Agreement pursuant to the provisions of the California Government Code, its home- rule powers, and applicable city ordinances, rules, regula- tions and policies. 1.3. 4 City and Owner acknowledge: Owner acknowledge this Agreement will provide: ci ty and 1.3.4.1 Certainty in the planning process so that the property can be developed efficiently. This will avoid unnecessary waste of resources and increases in housing and other development costs. The Agreement will allow comprehensive planning of a large property so as to make maximum efficient utilization of resources at the least economic cost to the public; 1. 3 . 4 . 2 To provide and assure to the City the participation of Developer in the accelerated, coordinat- ed and more economic construction, funding and dedication to the public of certain needed public facilities and benefits, and to provide for anticipated levels of service to residents and populations of the property, the city, and adjacent areas; 1.3.4.3 To provide and assure that the City receive sales tax revenues, increase in the property tax base, residential housing and other development, sewer, water and street facilities; 1.3.4.4 To provide and assure that the City receives public facilities in excess of project generated impacts and such facilities shall be of supplemental size, number capacity or length, which shall be provide earlier than could be provided either by funds from the city or than would strictly be necessary to mitigate project related impacts at any development phase; 1.3.4.5 To provide Developer assurances regarding the entitlements and regulations that will be applicable to the development of the property consistent wi th the Chula vista General Plan and the Otay Ranch General Development Plan/Subregional Plan; 1.3.4.6 To provide the City the opportunity to secure immediate annexation of the lands depicted in Attachment ~ "C" and secure a related tax revenue sharing agreement with the county of San Diego to assure that development of the properties will generate suffi- cient tax revenues to offset the costs of providing services to the properties; -2- J~ t 1.3.4.7 To enable the City to secure title to the land with the boundaries of the property necessary to complete the Chula vista greenbelt system as defined in the Chula Vista General Plan; 1.3.4.8 To enable the city to advance its stated goal to identify and secure a site for a potential four year university; 1.3.4.9 To assure the City that the Developer will dedicate right-of-way for SR-125, a route which when constructed will substantially alleviate congestion on 1- 805 and 1-5, and also will facilitate the economic development of Chula Vista; and 1. 3.4.10 To enable the city to prepare and adopt a Habitat Conservation Plan consistent with the requirements of the Natural Communities Conservation Act, including the phased conveyance of open space land to the Otay Ranch Preserve. 1.4 The Annexation. Tfle City flaa applied te tRe Leea1 h~CRCJ. FermatioR CemmiooisR ("lJ'.FCQ") fer aRRClcatieR af Cphcrc af IRflaeRoe PlaFlRinlJ Id!'ea 1 liTRe otay Parael", I'laRRiR'!l' Area 2 "IR9;ertcEl L" and the nary r::l.'trielt Estate I":lrecl (see Attachment "0"). On Julv 1. 1996. the Local Aoencv Formation commission ("LAFCO") approved annexation of Sphere of Influence Plannino Area 1 liThe Otav Parcel II . Plannino Area 2 "Inverted L" and the Marv Patrick Estate Parcel (see Attachment "C"). 1.5 Sohere of Influence. L City applieatieR is pCRaiR~ bcferc Ll~FCO ta ha~c the otay V~llcy rareel includea ~ithiR City's ophcrc sf infl\icRee:. OR Fcbru.:lry S, 199(: the. Leeal .~..13cRey Fermatisfl cemmiooion :lppre..~cEl the iRe-lacieR af appreuimatcly "7 I (9G aere.s iRta t.he city cphcre af IRfl\::1CROe:. (E]?Bcre. sf IRfll;1CRee: rlQRRiR~ Lrca 2 aRe. the RerthcrR two taiLeo sf rl:lRRiR~ Lre.a 1), ~Ra ae.ai~Ratca the otay Ri~cr V:lllcy aR ~illagc J as s~ccial ~tudy area!). On Februarv 5. 1996 and Julv 1. 1996 the Local Aoencv Formation Commission approved the inclusion of Plannino Area 1. "The Otav Parcel", into the citv Sphere of Influence (Sphere of Influence Plannino Area 1 "The Otav Parcel", Plannino Area 2 "Inverted L" and the Marv Patrick Estate Parcel - see Attachment "C") . 1.6 Plannino Documents. On October 28, 1993, City and County adopted the Otay Ranch General Development Plan/Subregional Plan (lithe GDP") which includes the otay Ranch Village Phasing Plan, Facility Implementation Plan, Resource Management Plan and Service Revenue Plan, for approximately 23,000 acres of the Otay Ranch, including the Otay Valley Parcel and the SNMB, Jewels and Foundation Properties. The city amended the GDP on June 4, 1996. -3- ;S7 1.6.1 SPA One Plan. On June 4, 1996, the Chula Vista city council approved the Otay Ranch sectional Planning Area (SPA) One Plan including the Planned Community District Regulations, Overall Design Plan, Village Design Plan, Public Facilities Plan, Parks, Recreation, Open space and Trails Plan, Regional Facilities Report, Phase 2 Resource Management Plan, Non-renewable Energy Conservation Plan, Ranch-wide Affordable Housing Plan, SPA One Affordable Housing Plan, and Geotechnical Report. 1. 7 Owner Consent. city desires to have the cooperation and consent of Owner to include the Property in the Annexation in order to better plan, finance, construct and maintain the infra- structure for the Otay Valley parcelj and the Otay Ranch L.P., a California limited partnership, Ti!jJer Dc'..c18pllleat '1'\.8, a Califoraia limitca partnership, by Ti~erhcart, IRe., a Califernia eerper3tion, its !jJeaeral partaer, and Village Development, a califorriia general partnership desire to give their cooperation and consent, provided that they obtain certain assurances, as set forth in this Agreement. 1.8 citv Ordinance. July 9, 1996 is the date of adoption by the city Council of Ordinance No. 2679 approving this Agreement. The ordinance shall take effect and be in full force on the effective date of Annexation. 2. Definitions. otherwise requires: In this Agreement, unless the context 2.1 "Annexation" means the proposed annexation of that portion of the Otay Ranch into the City as depicted on Exhibit "D". 2.2 "City" means the city of Chula Vista; in the County of San Diego, State of California. 2.3 "County" means the county of San Diego, State -of California. 2.4 "Development Plan" means the GDP. 2.5 "GDP" means the General Development Plan/Subregional Plan for the Otay Ranch, described in Paragraph 1.6, above. 2.6 "Owner" or "Developer" means the person, persons, or entity having a legal and equitable interest in the Property, or parts thereof, and includes Owner's successors-in-interest. 2.7 "Project" means the physical development of the private and public improvements on the Property as provided for in the Existing Project Approvals and as may be authorized by the City in Future Discretionary Approvals. 2.8 "Property" means the real property described in Paragraphs 1.1.1, 1.1.2, and 1.1.3. -4-jyr 2.9 The "Term" of this Agreement means the period defined in Paragraph 3, below. 2.10 "Builder" means developer to whom Developer has sold or conveyed property within the Property for purposes of its improvement for residential, commercial, industrial or other use. 2.11 "CEQA" means the California Environmental Quality Act, California Public Resources Code section 21000, et seq. 2.12 "City Council" means the city of Chula vista City Council. 2.13 "Commit" or "Committed" means all of the following requirements have been met with respect to any public facility: 2.13.1 For a public facility within 'the city's jurisdictional boundaries and a responsibility of the develop- er. 2.13 . 1. 1 All discretionary permits required of the Developer have been obtained for construction of the public facility; 2.13 . 1. 2 Plans for the construction of the public facility have all the necessary governmental approvals; and 2.13.1.3 Adequate funds (i.e., letters of credit, cash deposits, performance bonds or land secured public financing, including facility benefit assessments, Mello-Roos assessment districts of similar assessment mechanism) are available such that the City can construct the public facility if construction has not commenced within thirty (30) days of issuance of a notice to proceed by the Director of Public Works, or construction is not progressing towards completion in a reasonable manner as reasonably deemed by the Director of Public Works. 2.13.2 For a public facility within the City's jurisdictional boundaries, but to be provided by other than Developer. 2.13.2.1 Developer's proportionate share of the cost of such public facility as defined in the existing project Approvals and Future Discretionary Approvals has been provided or assured by Developer through the payment or impositions of development impact fee or other similar exaction mechanism. 2.13.3 For public jurisdictional boundaries: facility not within city's -5- )~/7 2.13.3.1 Developer's proportionate share of the cost of such public facility as defined in the existing project Approvals and Future Discretionary Approvals has been provided for or otherwise assured by Developer to the reasonable satisfaction of the Director of PUblic Works. 2.14 "Development Impact Fee (DIF)" means fees imposed upon new development pursuant to the City of Chula Vista Development Impact Fee Program, for example, including but not limited to the Transportation Development Impact Fee Program, the Interim SR-125 Development Impact Fee Program, the Salt Creek Sewer DIF and the Public Facilities DIF. 2.15 "Existing Project Approvals" means all discretionary approvals affecting the Project which have been approved or established in conjunction with, or preceding, the effective date consisting of, but not limited to the GDP, the Chula vista General Plan, the Otay Ranch Reserve Fund Program adopted pursuant to Resolution 18288, the SPA One Plan and the Phase II Resource Management Plan (RMP) , as may be amended from time to time consistent with this agreement. 2.16 "Final Map(s)" means any final subdivision map for all or any portion of the Property other than the Superblock Final Map ("A" Maps). 2.17 "Future Discretionary Approvals" means all permits and approvals by the City granted after the effective date and excluding existing project Approvals, including, but not limited to: (i) grading permits; (ii) site plan reviews; (iii) design guidelines and reviews; (iv) precise plan reviews; (v) subdivisions of the Property or re-subdivisions of the Property previously subdivided pursuant to the Subdivision Map Act; (vi) conditional use permits; (vii) variances; (viii) encroachment permits; (ix) Sectional Planning Area plans; (x) all other reviews, permits, and approvals of any type which may be required from time to time to authorize public or private on- or off-site facilities which are a part of the Project. 2.18 "Planning commission" means the Planning Commission of the city of Chula vista. 2.19 "Preserve Conveyance Plan" means a plan that sets forth policies and identifies land to be transferred and/or fees to be paid to insure the orderly conveyance of the otay Ranch land to the Preserve Owner Manager. The purpose of the plan is to fulfill the obligations to convey resource sensitive land, per the criteria contained in the phase I and II Resource Management Plans and to mitigate environmental impacts of the Otay Ranch Project. 2.20 "Public Facility" public facilities described Implementation Plan. or "Public Facilities" means those in the Otay Ranch Facility -6-~ /y/O 2.20.1 "SPA One Plan" means The Otay Ranch sectional Planning Area (SPA) One Plan approved by the City of Chula vista on June 4, 1996, including the Planned community District Regulations, Overall Design Plan, Village Design Plan, Public Facilities Finance Plan, Parks, Recreation, Open Space and Trails Plan, Regional Facilities Report, Phase 2 Resource Management Plan, Non-renewable Energy Conservation Plan, Ranch-wide Affordable Housing Plan, SPA One Affordable Housing Plan, and Geotechnical Report. 2.21 "Subdivision Map Act" means the Subdivision Map Act, Government Code section 66410, its amendments as may from time to time be adopted. California et seq., and 2.22 "Substantial Compliance" means that the party charged with the performance of a covenant herein has sufficiently followed the terms of this Agreement so as to carry out.the intent of the parties in entering into this Agreement. 2.23 "Threshold" means the facility thresholds set forth in the City's.Municipal Code section 19.19.040. 3. Term. This Agreement shall become effective as a development agreement upon the effective date of the Annexation ("the Effective Date"); provided, however, that if the Annexation does not occur on or before January 1, 1997, this Agreement shall be null and void. Any of the foregoing to the contrary notwith- standing, from the date of first reading of the ordinance approving this Agreement, and unless or until this Agreement becomes null and void, Owner shall be bound by the terms of Paragraph 4. The Term of this Agreement for purposes other than Paragraph 4 shall begin upon the Effective Date, and shall continue for a period of twenty (20) years ("the Term"). The term shall also be extended for any period of time during which issuance of building permits to Developer is suspended for any reason other than the default of Developer, and for a period of time equal to the period of time during which any action by the City or court action limits the processing of future discretionary approvals, issuance of building permits or any other development of the property consistent with this Agreement. 4. Owner Consent to Annexation. Owner hereby consents to and shall cooperate with the applications of city to declare that the land depicted in Exhibit f} Q is within city's sphere of influence and to annex the land depicted in Exhibit f} Q to the city; provided, however, that Owner may withdraw such consent and withhold further cooperation if the city, prior to the Effective Date, adopts rules, regulations, ordinances, policies, conditions, environmental regulations, phasing controls, exactions, entitle- ments, assessments or fees applicable to and governing development of the Property which are inconsistent with, or render impractical development of the Property according to, the Development Plan. /~// -7- 5. Vested Riqhts. Notwi thstanding any future action or inaction of the city during the term of this Agreement, whether such action is by ordinance, resolution or policy of the City, Owner and Developer shall have a vested right, provided however the developer is not in default of its obliqations under this Aqree- ment. and except as may be otherwise provided in this section 5, to construct the Project in accordance with: 5.1 Existing Project Approvals. 5.2 Development of Propertv. The development of the Property will be governed by this Agreement and Existing Project Approvals and such development shall comply and be governed by all rules, regulations, policies, resolutions, ordinances, and standards in effect as of the Effective Date subject to the provisions of section 5.2.1 below. The City shall retain its discretionary authority as to Future Discretionary. Approvals, provided however, such Future Discretionary Approvals shall be regulated by the Existing Project Approvals, this Agreement, and city rules, regulations, standards, ordinances, resolutions and policies in effect on the Effective Date of this Agreement and subject to section 5.2.1. Notwithstanding the foregoing, the City may make such changes to the city's Growth Management Ordinance applicable to the Project as are reasonable and consistent with the purpose and intent of the existing Growth Management Ordinance and which are generally applicable to all private projects citywide or east of 1-805 or within a specific benefit, fee or reimbursement district created pursuant to the California Government Code. 5.2.1 New or Amended Rules. Requlations. Policies. Standards. Ordinances and Resolutions. The City may apply to the Project, including Future Discretionary Approv- als, new or amended rules, laws, regulations, policies, ordinances, resolutions and standards generally applicable-to all private projects east of 1-805 or within a specific benefit fee or reimbursement district created pursuant to the California Government Code. The application of such new rules, or amended laws, regulations, resolutions, policies, ordinances and standards will not unreasonably prevent or unreasonablY delay development of the Property to the uses, densities or intensities of development specified herein or as authorized by the Existing Project Approvals. The City may also apply changes in city laws, regulations, ordinances, standards or policies specifically mandated by changes in state or federal law in compliance with section 13.3 herein. 5.2.2 Developer may elect with city's consent, to have applied to the project any rules, regulations, policies, ordinances or standards enacted after the date of this Agreement. Such an election has to be made in a manner consistent with section 5.2 of this Agreement. /Y/2 -8- 5.2.3 Modifications to Existinq proiect Approv- als. It is contemplated by the parties to this Agreement that the city and Developer may mutually seek and agree to modifi- cations to the Existing Project Approvals. Such modifications are contemplated as within the scope of this Agreement, and shall, upon written acceptance by all parties, constitute for all purposes an Existing Project Approval. The parties agree that any such modifications may not constitute an amendment to this Agreement nor require an amendment to the Agreement. 5.2.4 Future Discretionarv Approvals. It is contemplated by the parties to this Agreement that the city and Developer may agree to Future Discretionary Approvals. The parties agree that any such Future Approvals may not consti- tute an amendment to this Agreement nor require an amendment to the Agreement. Developer aqrees to reasonablY cooperate with any amendments to Existinq and Future Discretionarv Approvals as may be requested bv the city from time to time. 5.3 Dedication and Reservation of Land for Public Purposes. Except as expressly required by this Agreement or the Existing Project Approvals and Future Discretionary Approvals (excepting dedications required within the boundaries of any parcel created by the subsequent subdivision of the Property as required by the Subdivision Map Act), no dedication or reservation of real property within or outside the Property shall be required by city or Developer in conjunction with the Project. Any dedications and reservations of land imposed shall be in accordance with Section 7.2 and Section 7.8 herein. 5.4 Time for Construction and completion of Proiect. Because the California supreme Court held in Pardee Construction Company v. city of Camarillo (1984) 27 Cal.3d 465, ~hat the failure of the parties to provide for the timing of development resulted in a later-adopted initiative restricting the timing of development to prevail over such parties' Agreement, it is the intention of the parties to this Agreement to cure that deficiency by specifically acknowledging that timing and phasing of development is completely and exclusively governed by the Existing Project Approvals, including the Chula vista Growth Management Ordinance. The purpose of the Chula vista Growth Management Ordinance is to "control the timing and location of development by tying the pace of development to the provision of public facilities and improvements to conform to the city's threshold standards." (Municipal Code Section 19.09.010A.7) The findings in support of the Growth Management Ordinance conclude that the ordinance "does not affect the number of houses which may be built." (Municipal Code section 19.09.010B.3) Therefore, the parties acknowledge that the Chula vista Growth Management Ordinance completely occupies the topic of development timing and phasing and expressly precludes the adoption of housing caps, urban reserves or any other means by which the rate of development may be controlled or regulated. The City agrees that the Developer shall be entitled to, apply for and receive all permits necessary for the development of property, /s--- 13 -9- consistent with the Growth Management Ordinance, Existing Project Approvals, Future Discretionary Approvals and this Agreement. 5.5 Benefit of vestinq. Nothing in this Agreement will be construed as limiting or impairing Developer's vested right, if any, to proceed with the development and use of the Property pursuant to the Federal and state Constitutions, and pursuant to statutory and decisional law. 5.6 vestinq of Entitlements. All rights conferred by this Agreement vest with the Effective Date hereof. The approval of Future Discretionary approvals shall not be deemed to limit Developer's rights authorized by this Agreement, and once such approvals are obtained they shall be vested to the same extent as the Existing Project Approvals. 6. DEVELOPMENT PROGRAM. 6.1 processinq of Future Discretionarv Approvals. City will accept and diligently process development applications and requests for Future Discretionary Approvals, or other entitlements with respect to the development and use of the Property, provided said applications and requests are in accordance with this Agreement. city costs for processing work related to the Project, including hiring of additional city personnel and/or the retaining of professional consultants, will be reimbursed to city by Developer. 6.2 Lenqth of Validitv of Tentative Subdivision Maps. Government Code section 66452.6 provides that tentative subdivision map(s) may remain valid for a length up to the term of a Develop- ment Agreement. The city agrees that tentative subdivision maps for the Property shall be for a term of six (6) years and may be extended by the city Council for a period of time not to exceed a total of twenty (20) years and in no event beyond the term of this Agreement. 6.3 Pre-Final Map Development. If Developer desires to do certain work on the Property after approval of a tentative map (for example, grading) prior to the recordation of a final map, it may do so by obtaining a grading and/or other required approvals from the city which are authorized by the city prior to recordation of a final map. The permit mav be approved or denied bv the citv in accordance with the City's Municipal Code. requlations and policies and provided Developer is in compliance with this Aareement and with the terms of all Existinq and Future Discretion- ary Approvals. In addition. the Developer shall be required to 8UCR permit GRall BC issuea to Dcvel~per, or its contractor, upon Dcveloper's application, approval, ana proviaea Dcveloper posts a bond or other reasonably adequate security required by City in an amount determined bY the City to assure the rehabilitation of the land if the applicable final map does not record. 6.4 Final Maps. /~,/t( -10- 6.4.1 "A" Maps and "B" Maps. HDevelopershall ae elee~s, the city shall aeeept aRa process a master subdivi- sion or parcel map ("A" Map) showing "super Block" lots and backbone street dedications. "Super Block" lots shall be consistent with the GDP and subsequent sectional Plan Area plans, and shall not subdivide land into individual single- family lots. All "Super Blocks" created shall have access to dedicated public streets. The city shall not require improve- ment plans in order to record a final map for any "A" Map lots, SHt the city shall re~ire sORaiRg fsr the esmpletioR of aae]taenc faeili t.ics prier te rcearain~ in DR ameaRt. to l3e EietermiReEi 13y the city. Following the approval by city of any final map for an "A" Map lot and its recordation, Developer may convey the "Super Block" lot. The buyer of a "Super Block" lot shall then process final improvement plans and grading plans and a final map ("B" Map) for each "Super Block" lot which the city shall process if such documents are in compliance with the City's Municipal Code. standard policies. and the applicable tentative map. The "B" Maps shall be in substantial conformance with the related approved "A" Map. In the instance of the multi-family dwelling unit areas, a separate tentative subdivision map may be submitted to the city and the "B" Map(s) for these areas may be submitted to the city after the city Planning Commission approves said tentative subdivision map. 6.4.2 Recordation of Final Subdivision Map in Name of Builder or Third Party. Developer may, if it so elects, convey to a Builder or third party any "super block" lot(s) shown on the recorded Superblock Final Map. In such case, the Builder or third party will (i) process any neces- sary final improvement and grading plans and a final map for each such "super block" lot ("B" map), which'map City shall accept and process if such map is in compliance with the ci tv's Municipal Code. standard policies. the applicable tentative map. and the provisions of 7.1 of this Aqreement-if applicable as subsequent phases in a multi-phase project, (ii) enter into a subdivision improvement agreement with city with respect to the subdivision improvements which are required for such super block lot, and (iii) provide security and insurance satisfactory to City for the completion of the subdivision improvements. (iv) aqree. in such case. with the citv's consent to complv with the obliqations set forth in 7.1. 6.4.3 Recordation of Final Subdivision Map in Developer's Name: Transfer of Obliqations Under Subdivision Improvement Aqreement(s). If Developer so elects, it may defer the conveyance of any super block lot to a Builder or third party until after the final map of such super block lot has been recorded. If Developer elects to proceed in this manner, it will enter into City's standard subdivision improvement agreement(s) with city for the improvements required as a condition to the approval of such map(s). Upon sale to a Builder or third party, if such Builder or third party assumes Developer's obligations with the City's consent /S:/5 -11- under the improvement agreement and provides its own security and insurance for the completion of the subdivision improve- ments satisfactorv to the citv and as approved by the City, Developer shall be released from liability under the subdivi- sion improvement agreement(s) and Developer's security shall be released. 6.4.4 Transfer of Riqhts and Obliqations of Development. Whenever Developer conveys a portion of the Property, the rights and obligations of this Agreement shall transfer in accordance with Section 15 herein. 7. DEVELOPER'S OBLIGATIONS. 7.1 Condition to Developer's Obliqations to Dedicate. Fund or Construct Public Facilities. Developer agrees to develop or provide the public' improvements, facilities, dedications, or reservations of land and satisfy other exactions conditioning the development of the Property which are set forth hereinbelow. In addition to anv other obliaations the Developer mav have. villaae Development. otav Ranch L.P. or their successor in interest as its sole and separate responsibilitv. covenants and aarees to provide or finance the cost of backbone facilities as identified on the appropriate Tentative Map and required bv anv final map (includina "B" Maps). This requirement mav be satisfied throuah the construc- tion or financina of said facilities or with the citv's approval of anv of the followina: the establishment of a reimbursement mechanism. a development impact fee proaram. an assessment mechanism. or other equitable facilitv financinq proaram within the city's discretion. This requirement shall be deemed satisfied in the event that the Builder(s) of a "B" Map expressly assume the obliqations with the consent of the citv to provide said backbone facilities. Villaae Development. otay Ranch L'.P.. or their successor in interest shall provide adequate funds as determined by the cityEnaineer for the implementation and construction of the first phase backbone facilities prior to the approval of the first final "B" Map. For purposes of this section. backbone facilities mean those facilities such as water. sewer. storm drain and public streets necessary to serve demands aenerated for the backbone facility beyond that of any sinqle "B" map. but are not included within a wider area city development improvement fee proaram. The obliaations of the Developer. pursuant to this Aareement. are conditioned upon: (il the city not beinq in default of its obliqations under this aqreement; and (ii) the city not unreason- ablY preventinq or unreasonablY delayina the development of the property; and (iii) if the Aareement has been suspended in response to chanaes in state or federal law or due to said obliaations beina suspended pursuant to section 13.2. ~aid obliaations of Developer shall be suspended for the same period of time. 7.2 Dedications and Reservations of Land for Public Purposes. The policies by which property will be required to be reserved, dedicated or improved for public purposes are identified in the Existing Project Approvals. A more precise delineation of the -12- /~/t property to be preserved, dedicated or improved for public purposes shall occur as part of Future Discretionary Approvals, consistent with development of propertv as set forth in section 5.2 herein. 7.2.1 Dedication of Land for SR 125. Developer agrees to dedicate land for right-of-way purposes and property owned by the Developer that is reasonably necessary for the SR-125 configuration that is generally depicted in the SR-125 draft Environmental Impact Report/statement and as revised in the Final Environmental Impact Report/statement to respond to engineering, design, environmental and similar constraints. The dedications shall be to the city or by an alternate method acceptable to the city at such time as requested by the city. city agrees that in the event city shall negotiate with California Transportation Ventures (CTV) or other toll road builder any participation or advantages to city' that City shall share such rights with subsequent owner/resident of the property. 7.2.2 Landfill Nuisance Easements. Developer shall grant to the County by July 1, 1996 "Landfill Nuisance Easements" substantially in the form attached as Exhibit E. The Easement shall cover all land which is within the Otay Landfill Buffer Area of villages 2, 3 and Planning Area laB of the otay Ranch GDPP as shown on Exhibit E hereto. In addition. Developer aqrees to enter into subordination aqreements. acceptable to the County. with all lienholders havinq an interest in the Property to ensure that this Aareement has a priority position over all other liens. The subordination aqreements shall be delivered to the city prior to the second readinq of the Ordinance approvinq the Aqree- ment. If there is no second readinq of this Aqreement. the city shall return said subordination aqreements to the Developer. If the County Board of supervisors does not accept or approve said easements. this Aqreement shall be automati- callY terminated with neither party bearinq any liability hereunder. 7.2.3 Preserve Conveyance Plan. The Developer shall comply with any existing or yet to be adopted Preserve Conveyance Plan and convey property as set forth in such Plan. 7.3 Growth Manaqement ordinance. Developer shall commit the public facilities and city shall issue building permits as provided in this section and in accordance with Existinq proiect Approvals and Future Discretionarv Approvals. The City shall have the right to withhold the issuance of building permits any time after the City reasonably determines a Threshold has been exceeded, unless and until the Developer has mitigated the deficiency in accordance with the city's Growth Management Ordinance. Developer agrees that building permits may be withheld where the public facilities described in the Existing Project Approvals/ -13- /3-/;; Future Discretionary Approvals required for a particular Threshold have not been committed. In the event a Threshold is not met and future building permit issuance may be withheld, the notice provisions and procedures contained in section 19.09. 100C of the Municipal Code will be followed. In the event the issuance of building permits is suspended pursuant to the provisions herein, such suspension shall not constitute a breach of the terms of this Agreement by Develop- er. Furthermore, any such suspension which is not caused by the actions or omissions of the Developer, shall toll the term of this Agreement as provided for in section 16.12 of this Agreement, and suspend the Developer's obligations pursuant to this Agreement. 7.3.1 Required Condemnation. The City and Developer recognize that certain portions of the Resource Preserve and of the public facilities identified in the Existing Project Approvals/Future Discretionary Approvals and required to comply with a threshold are located on properties which neither the Developer nor the City has, or will have, title to or control of. The City shall identify such property or properties and at the time of filing of the final map commence timely negotiations or, where the property is wi thin the city's jurisdiction, commence timely proceedings pursuant to Title 7 (commencing with S 1230.010) of Part 3 of the Code of civil Procedure to acquire an interest in the property or properties. Developer's share of the cost involved in any such acquisition shall be based on its proportionate share of the public facility as defined in the Existing Project Approvals/Future Discretionary Approvals. Notwithstanding the foregoing, Nnothing in this Agreement shall be deemed to preclude the city from requiring the Developer to pay the cost of acquiring such off-site land. For that portion of the cost beyond the Developer's fair share responsibility, the city shall take all reasonable steps to establish a procedure whereby the developer is reimbursed for such costs beyond its fair share. 7.3.2 Information Reqardinq Thresholds. Upon Developer's written requests of the City Manager, the city will provide Developer with information regarding the current status of a Threshold. Developer shall be responsible for any staff costs incurred in providing said written response. 7.4 Improvements Required bv a Tentative Subdivi- sion Map. As may be required pursuant to the terms of a tentative subdivision map approval, it shall be the responsibility of Developer to construct the improvements required by the a subdivi- sion map. Where Developer is required to construct a public improvement which has been identified as the responsibility of another party or to provide public improvements of supplemental size, capacity, number or length benefiting property not within the tentative subdivision map, city shall process for consideration to approve or deny in its sole discretion a reimbursement agreement to -14- /~/r the Developer in accordance with the citv's Municipal Code and Article 6 of Chapter 4 of the Subdivision Map Act, commencing with Government Code section 66485, and section 7.5, below. This does not preclude the Developer or the city from considerinq alternative financinq mechanisms. 7.5 Facilities Which Are the Obliqations of Another Party. or Are of Excessive Size. capacity. Lenqth or Number. Developer may offer to advance monies and/or construct public improvements which are the responsibility of another land owner, or outside the City's jurisdictional boundaries, or which are of supplemental size, capacity, number or length for the benefit of land not within the Property. City, where requesting such funding or construction of oversized public improvements, shall consider after a public hearing, contemporaneous with the imposition of the obligation, the formation of a reimbursement district, assessment district, facility benefit assessment, or reimbursement agreement or other reimbursement mechanism. 7.6 pioneerinq of Facilities. To the extent Developer itself constructs (Le., "pioneers") any public facilities or public improvements which are covered by a DIF Program, Developer shall be given a credit against DIFs otherwise payable, subject to the City's Director of Public Works reasonable determination that such costs are allowable under the applicable DIF Program. It is specifically intended that Developer be given DIF credit for the DIF Program improvements it makes. The fact that such improvements may be financed by an assessment district or other financing mechanism, shall not prevent DIF credit from being given to the extent that such costs are allowed under the applicable DIF Program 7.7 Insurance. insured for all insurance Project as pertains to the the Project. Developer shall name city as additional policies obtained by Developer for the Developer's activities and operation on 7 . 8 Other Land Owners. Developer hereby agrees to dedicate adequate rights-of-way within the boundaries of the Property for other land owners to "Pioneer" public facilities on the Property; provided, however, as follows: (i) dedications shall be restricted to those reasonably necessary for the construction of facilities identified in the city's adopted public facility plans; (ii) this provision shall not be binding on the successors-in- interest or assignees of Developer following recordation of the final "Super Block" or "A" Map; and (iii) the City shall use its reasonable best efforts to obtain agreements similar to this subsection from other developers and to obtain equitable reimburse- ment for Developer for any excess dedications. 7.9 Construction of East-West Access. Pursuant to city's requirements, Developer is required to pay Transportation Development Fees (TDIF) for a variety of purposes including construction of east-west arterial access through the Property connecting to I-80S. Alternatively, the Developer may be required to actually construct all or portions of such access if, at the -15- /5-'/ / time of need, the TDIF fund does not contain sufficient revenues to finance the construction of the needed facilities. Such east-west arterial access from SPA One to 1-805 could occur on either East Orange Avenue or on East Palomar street. It is not now possible to determine with certainty when it will be necessary to actually construct the arterials in order to comply with the threshold requirements because the rate and location of future development is unknown. The total cost and length of the arterial, which might be constructed by the Developer, are unknown at this time because it cannot be determined if and when development west of the property (Sunbow) will construct the Western portion of the arterials. Such uncertainty makes it difficult to plan and finance the orderly development of the property and needed on-site and off-site facilities. To provide greater certainty as to the timing and construction of east-west arterial access, the city agrees to reasonably consider in good faith a traffic capacity agreement with "Developer which would reserve traffic capacity for all "or part of SPA One in exchange for Developer'S agreement to pioneer all or part of planned east-west access to SPA One. 7.10 Assurances of Compliance. Owner acknowledqes that the citv is not required to and will not take anv action on anv of Owner's applications for Future Discretionary Approvals under this Aqreement. or any modifications or amendments thereof. until and unless the city Manaqer determines that the Owner is not in default of its obliqations under this Aqreement includinq but not limited to those set forth in Section 7.11 and 14. 7.11 Complete Construction. Developer/Builder or any third partv aqree to diliqentlY complete construction once a buildinq permit has been issued for Property which is covered bY this Aqreement. Should construction stop once the buildinq permits have been issued by the city. which the citv in its sole discretion determines has created a nuisance or fire or safety hazard. the Developer aqrees to take such steps necessary to cure the nuisance or hazard. Should Developer fail to do so to the city's satisfac- tion. the city may take what steps it deems necessary to cure the nuisance or hazard at Developer's sole cost and expense. 8. DEVELOPMENT IMPACT FEES. 8.1 Existinq Development Impact Fee Proqram Payments. Developer shall pay to the City a DIF, or construct improvements in lieu of payment, for improvements which are conditions of a tentative subdivision map upon the issuance of building permits(s), or at a later time as specified by city ordinance, the Subdivision Map Act, or Public Facility Financing Plan (PFFP). The DIF will be in the amount in effect at the time payment is made and may only be increased pursuant to section 8.6 herein. 8.2 Other Undeveloped Properties. The City will use its reasonable best efforts to impose and collect, or cause the imposition and collection of, the same DIF program on all the undeveloped real properties which benefit from the provision of the ---- /c5 -" ~O -16- public facility through the DIF program, or provided as a condition of Project Approvals. 8.3 Use of Development Impact Fee Proqram. The DIF amounts paid to the city by Developer and others with respect to the Area of Benefit shall be placed by the City in a capital facility fund account established pursuant to California Government Code sections 66000-66009. The city shall expend such funds only for the projects described in the adopted fee program as may be modified from time to time. The City will use its reasonable best efforts to cause such Projects to be completed as soon as practica- ble; however, the city shall not be obligated to use its general funds for such Projects. 8.4 Withholdina of Permits. Developer agrees that city shall have the right to withhold issuance of the building permit for any structure or improvement on the Property unless and until the DIF is paid for such structure or improvement. 8.5 Development Impact Fee Credit. Upon the completion and acceptance by the city of any public facility, the City shall immediately credit Developer with the appropriate amount of cash credits ("EDUs") as determined by Developer and city. However, if the improvements are paid for through an Assessment District, the City shall credit the Developer with the appropriate number of Equivalent Dwelling unit Credits (EDU's). Developer shall be entitled to apply any and all credits accrued pursuant to this subsection toward the required payment of future DIF for any phase, stage or increment of development of the project. 8.6 Modification of Development Impact Fees. The parties recognize that from time to time during the duration of the Agreement it will be necessary for the city to update and modify its DIF fees. Such reasonable modifications are contemplated by the city and the Developer and shall not constitute a modification to the Agreement so long as: (i) the modification incorporates the reasonable costs of providing facilities identified in the Existing or Future Project Approvals; (ii) are based upon methodologies in substantial compliance with the methodology contained in the existing DIF programs; or other methodology approved by the city Council following a public hearing; (iii) complies with the provisions of Government Code sections 66000-66009. 8.7 Standards for Financina Obliaations of Owner. In connection with the development of the Property, the following standards regarding the financing of public improvements shall apply: 8.7.1 Owner Shall-participate in the DIF Program for the otay Valley Parcel with other owners in proportion to the total dwelling units or equivalent dwelling units allowed on the Property as compared with the total of such units allowed on properties in that particular DIF or by some other equitable methodology decided by the city Council. -17- l~ cJ- / 8.7.2 The city shall diligently pursue the requirements that the Eastern Territories' DIF requires offsite third parties and adjacent jurisdictions to bear their fair share of all Otay River Valley crossings. 9. CITY OBLIGATIONS. 9.1 Urban Infrastructure. To the extent it is within the authority and abilitv of the City to provide, City shall accommodate urban infrastructure to the project, consistent with Existing Project Approvals. Where it is necessary to utilize city property to provide urban infrastructure consistent with the Existing project Approvals, the City agrees to make such land available for such uses, provided that the City if it so chooses is compensated at fair market value for the property. To the extent that the provision of urban infrastructure is within the authority of another public or quasi-public agency or utility, the City agrees to fully cooperate with such agency or agencies to accommo- date the urban infrastructure, consistent with Existing Project Approvals. Urban infrastructure shall include, but not be limited to gas, electricity, telephone, cable and facilities identified in the otay Ranch Facility Implementation Plan. 9.2 Sewer Capaci tv. The city agrees to provide adequate sewer capacity for the project, upon the payment of ordinary and necessary sewer connection, capacity and/or service fees. 9.3 Nuisance Easement. The city shall reasonably consider with proper environmental review a request to amend the otay Ranch GDP to relocate, within the property, the land uses affected by the execution of a "nuisance easement" pursuant to the otay Ranch Landfill Agreement, (dated May 15, 1996). This GDP amendment shall be processed prior to or concurrent with the GDP amendment covering the landfill buffer area required by the Landfill Agreement. The amendment shall be deemed vested to the same extent as Existing Project Approvals and shall not require-or constitute an amendment to this Agreement. The Developer agrees to pay the reasonable city cost for processing the amendments. 10. ANNUAL REVIEW. 10.1 citv and Owner Responsibilities. city will, at least every twelve (12) months during the Term of this Agreement, pursuant to California Government Code 565865.1, review the extent of good faith substantial compliance by Owner with the terms of this Agreement. Pursuant to California Government Code section 65865.1, as amended, Owner shall have the duty to demonstrate by substantial evidence its good faith compliance with the terms of this Agreement at the periodic review. Either City or Owner may address any requirement of the Agreement during the review. 10.2 Evidence. The parties recognize that this Agreement and the documents incorporated herein could be deemed to contain hundreds of requirements and that evidence of each and every requirement would be a wasteful exercise of the parties' resources. ---- -18- /3 --~~ Accordingly, Developer shall be deemed to have satisfied its good faith compliance when it presents evidence of substantial com- pliance with the major provisions of this Agreement. Generalized evidence or statements shall be accepted in the absence of any evidence that such evidence is untrue. 10.3 Review Letter. If Owner is found to be in com- pliance with this Agreement after the annual review, City shall, within forty-five (45) days after Owner's written request, issue a review letter in recordable form to Owner ("Letter") stating that based upon information known or made known to the Council, the city Planning Commission and/or the city Planning Director, this Agreement remains in effect and Owner is not in default. Owner may record the Letter in the Official Records of the county of San Diego. 10.4 Failure of Periodic Review. city's failure to review at least annually Owner's compliance with the terms and conditions of this Agreement shall not constitute, or be asserted by city or Owner as, a breach of the Agreement. 11. DEFAULT. 11.1 Events of Default. A default under this Agreement shall be deemed to have occurred upon the happening of one or more of the following events or conditions: 11.1.1 A warranty, representation or statement made or furnished by Owner to City is false or proves to have been false in any material respect when it was made. 11.1.2 A finding and determination by city made following a periodic review under the procedure provided for in California Government Code section 65865.1 that upon the basis of substantial evidence Owner has not complied in good faith with one or more of the terms or conditions of this Agreement. consider submitted 11.1.3 city does not accept, requested development permits in accordance with the provisions timely review, or or entitlements of this Agreement. 11.1.4 .'.BY ether act or SllIit3t3isB by City or O'iHcr ....;hiel;. materially interfereD. ~.."itR the termo at this l'..~rccmcFlt. All remedies at law or in eauitv which are consistent with the provisions of this Aareement are available to City and Owner to pursue in the event there is a breach provided. however. neither party shall have the remedv of monetary damaaes aaainst the other except for an-award of litiaation costs and attorneys fees. 11.2 Procedure Upon Default. 11.2.1 Upon the occurrence of default by the other party, City or Owner may terminate this Agreement after -19- /~" ~ 3 providing the other party thirty (30) days written notice specifying the nature of the alleged default and, when appropriate, the manner in which said default may be satis- factorily cured. After proper notice and expiration of said thirty (30) day cure period without cure, this Agreement may be terminated. In the event that City's or Owner's default is not subject to cure within the thirty (30) day period, city or Owner shall be deemed not to remain in default in the event that city or Owner commences to cure within such thirty (30) day period and diligently prosecutes such cure to completion. Failure or delay in giving notice of any default shall not constitute a waiver of any default, nor shall it change the time of default. Notwithstanding any other provision of this Agreement, city reserves the right to formulate and propose to Owner options for curing any defaults under this Agreement for which a cure is not specified in this Agreement. 11. 2.2 city does not waive any claim of defect in performance by Owner if, on periodic review, city does not propose to modify or terminate this Agreement. 11.2.3 Subject to Paragraph 16.12 of this Agreement, the failure of a third person shall not excuse a party's nonperformance under this agreement. 11. 2 . 4 All other remedies at law or in equity which are consistent with the provisions of this Agreement are available to city and Owner to pursue in the event there is a breach. 12. ENCUMBRANCES AND RELEASES ON PROPERTY. 12.1 Discretion to Encumber. This Agreement shall not prevent or limit Owner in any manner at Owner's sole discretion, from encumbering the Property, or any portion of the Property, or any improvement on the Property, by any mortgage, deed of trust, ~r other security device securing financing with respect to the property or its improvement. 12.2 Mortqaqee Riqhts and Obliqations. The mortgagee of a mortgage or beneficiary of a deed of trust encumbering the Property, or any part thereof, and their successors and assigns shall, upon written request to City, be entitled to receive from city written notification of any default by Owner of the performance of Owner's obligations under the Agreement which has not been cured within thirty (30) days following the date of default. 12.3 Releases. City agrees that upon written request of Owner and payment of all fees and performance of the requirements and conditions required of Owner by this Agreement with respect to the Property, or any portion thereof, city may execute and deliver to Owner appropriate release(s) of further obligations imposed by this Agreement in form and substance acceptable to the San Diego County Recorder and title insurance company, if any, or as may -20- IS ~1 otherwise be necessary to effect the release. city Manager shall not unreasonably withhold approval of such release(s) . 12.4 Obliqation to Modifv. city acknowledges that the lenders providing financing for the Project may require certain modifications to this Agreement and City agrees, upon request from time to time, to meet with Owner and/or representatives of such lenders to negotiate in good faith any .such requirement for modification. City will not unreasonably withhold its consent to any such requested modification. 12.5 Subordination. Developer aqrees to enter into subordination aqreements with all lienholders havinq anv interest in the Property to ensure that the provisions of this Aqreement bind such lienholders should they take title to all or part of the property throuqh quit claim deed. sale. foreclosure or any other means of transfer of property. Developer shall deliver .to the city the fullY executed subordination aqreements in a form acceptable to the city Attorney and suitable for recordinq on or before the second readinq or the Ordinance. 13. MODIFICATION OR SUSPENSION. 13.1 Modification to Aqreement by Mutual Consent. This Agreement may be modified, from time to time, by the mutual consent of the parties only in the same manner as its adoption by an ordinance as set forth in California Government Code sections 65867, 65867.5 and 65868. The term, "this Agreement" as used in this Agreement, will include any such modification properly approved and executed. 13.2 Unforeseen Health or Safetv Circumstances. If, as a result of facts, events, or circumstances presently unknown, unforeseeable, and which could not have been known to the parties prior to the commencement of this Agreement, City finds that failure to suspend this Agreement would pose an plase taB resiaeRts of cit.~i iH a sc...crc uRa immed.iate: e.mcrgcRey te their immediate threat to the health or safety of the citv's residents or the citv. The followinq shall occur: 13.2.1 Notification of Unforeseen Circumstances. Notify Developer of (i) city's determination; and (ii) the reasons for City'S determination, and all facts upon which such reasons are based; 13.2.2 Notice of Hearinq. Notify Developer in writing at least fourteen (14) days prior to the date, of the date, time and place of the hearing and forward to Developer a minimum of ten (10) days prior to the hearings described in section 13.2.3, all documents related to such determination and reasons therefor; and 13.2.3 Hearinq. Hold a hearing on the deter- mination, at which hearing Developer will have the right to address the City Council. At the conclusion of said hearing, -21- 6',2S-- city may take action to suspend this Agreement as provided herein. The city may suspend this Agreement if, at the conclusion of said hearing, based upon the evidence presented by the parties, the city finds failure to suspend would place the rc~idc~tD ef the city iR a Devere aHa immcdi3te emergency ta thcir health aT safety. pose an immediate threat to the health or safety of the City's residents or the City. 13.3 Chanqe in state or Federal Law or Requlations. If any state or federal law or regulation enacted during the Term of this Agreement, or the action or inaction of any other affected governmental jurisdiction, precludes compliance with one or more provisions of this Agreement, or requires changes in plans, maps, or permits approved by city, the parties will act pursuant to sections 13.3.1 and 13.3.2, below. 13.3.1 Notice; Meetinq. The party first becoming aware of such enactment or action or inaction will grovide the other party(ies) with written notice of such state or federal law or regulation and provide a copy of such l~~or regulation and a statement regarding its conflict with-he provisions of this Agreement. The parties will promptl eet and confer in a good faith and reasonable attempt to aify or suspend this Agreement to comply with such federal r state law or regula- tion. 13.3.2 Hearinq. If an agreed upon modification or suspension would not require an amendment to this Agree- ment, no hearing shall be held. otherwise, the matter of such federal or state law or regulation will be scheduled for hearing before the city. Fifteen (15) days' written notice of such hearing shall be provided to Developer, and the City, at such hearing, will determine and issue findings on the modification or suspension which is required py such federal or state law or regulation. Developer, at the hearing, shall have the right to offer testimony and other evidence. If the parties fail to agree after said hearing, the matter may be submitted to mediation pursuant to subsection 13.3.3, below. Any modification or suspension shall be taken by the affirma- tive vote of not less than a majority of the authorized voting members of the city. Any suspension or modification may be subject to judicial review in conformance with subsection 16.19 of this Agreement. 13.3.3 Mediation of Disputes. In the event the dispute between the parties with respect to the provisions of this paragraph has not been resolved to the satisfaction of both parties following the City hearing required by subsection 13.3.2, the matter shall be su~mitted to mediation prior to the filing of any legal action by any party. The mediation will be conducted by the San Diego Mediation Center; if San Diego Mediation Center is unable to conduct the mediation, the parties shall submit the dispute for mediation to the Judicial Arbitration and Mediation service or similar organization and make a good faith effort to resolve the dispute. The cost of /s'---~V -22- any such mediation shall be divided equally between the Developer and city. 13.4 Natural Communities Conservation Act (NCCPl. The parties recognize that Developer and the City are individually negotiating agreements with the United states Fish and Wildlife service ("USF&W") and the California Department of Fish and Game pursuant to the ongoing regional effort to implement the Natural Communi ties conservation Act ("NCCP"), locally proposed to be implemented through the Multi-species conservation Program ("MSCP"). The parties further recognize that implementation of the agreements may necessitate modification to the Existing Project Approvals. The City agrees to utilize its best efforts to implement these agreements, once executed, through the timely processing of modifications to the Existing Project Approvals as such modifications applv to Developer' spropertv. The Developer agrees to pay the reasonable city cost for processing work related to the modifications. Once such modifications are obtained they shall be vested to the same extent as Existing project Approvals. Such modifications shall be substantially similar to the provisions contained in Exhibit "F", the May 17, 1996 Administrative draft of the city of Chula vista SubArea Plan for the Multi-species Conservation Program, except for the proposed deletion of the Maritime Succulent Scrub restoration requirement [Section 3(b) of the SubArea Plan (page 27)]. 14. DISTRICTS. PUBLIC FINANCING MECHANISMS. This Agreement and the Existing Project Approvals recognize that assessment districts, community facility districts, or other public financing mechanisms, may be necessary to finance the cost of public improvements borne by this Proj ect. If Developer, pursuant to the Existing Project Approvals/Future Discretionary Approvals, is required bv the city to install improvements through the use of assessment districts, eemmaRity faeility aistrieta, or other public financing mechanisms, the city shall initiate and take final action to approve or deny eSRelaae appropriate proceedings for the formation of such financing district or funding mechanism, under applicable lawsL &P ordinances. or policies. Developer may request that the city. but the city is not obliqated to. utilize any other financing methods which may become available under City laws or ordinances. All costs associated with the consideration and formation of such financing districts or funding mechanisms shall be paid by Developer subject to reimbursement, as may be legally authorized out of the proceeds of any financing district or funding mechanism. Developer shall complY with the terms of any assessment districts or other financinq mechanisms so approved bY the city for Property covered bY this Aqreement and shall make timely payments as required bY said financinq mechanism. The city retains its riqhts to take any action it deems reasonablY appropriate to quarantee payment. /5/04- 7 -23- 15. ASSIGNMENT AND DELEGATION. 15.1 Assiqnment. Owner shall have the right to transfer or assign its interest in the Property, in whole or in part, to any persons, partnership, joint venture, firm, or corporation at any time during the Term of this Agreement without the consent of City. Owner also shall have the right to assign or transfer all or any portion of its interest or rights under this Agreement to third parties acquiring an interest or estate in the Property at any time during the Term of this Agreement without the consent of city. 15.2 Deleqation. In addition, Owner shall have the right to delegate or transfer its obligations under this Agreement to third parties acquiring an interest or estate in the Property provided the owner is in compliance with the terms of this Aqreement and after receiving the prior written consent of the city Manager, which consent shall not be unreasonably wi thheldT or delayedT or conditioned. Provided. however. the citv mav denv such release if the ci tv determines that the performance of such obliqation would be ieopardized bv such transfer. Once the city Manager has consented to a transfer, delivery to and acceptance by the City Manager of an unqualified written assumption of Owner's obligations under this Agreement by such transferee shall relieve Owner of the obligations under this Agreement to the extent the obligations have been expressly assumed by the transferee and as approved bv the citv. Such transferee shall not be entitled to amend this Agreement without the written consent of the entity that, as of the Effective Date; is Owner, which consent shall not be unreasonably withheld, delayed, or conditioned. The entity that is Owner as of the Effective Date, however, shall be entitled to amend this Agreement without the written consent of such transfer- ee. 16. MISCELLANEOUS PROVISIONS. 16.1 Bindinq Effect of Aqreement. Except to the extent otherwise provided in this Agreement, the burdens of this Agreement bind, and the benefits of this Agreement inure, to city's and Owner's successors-in-interest and shall run with the land. 16.2 Relationship of citv and Owner. The contractual relationship between city and Owner arising out of this Agreement is one of independent contractor and not agency. This Agreement does not create any third-party beneficiary rights. 16.3 Notices. All notices, demands, and correspondence required or permitted by this Agreement shall be in writing and delivered in person, or mailed by first-class or certified mail, postage prepaid, addressed as follows: If to city, to: city of Chula vista 276 Fourth Avenue Chula vista, CA 91910 Attention: City Manager -24- /~'c2Y If to Owner, to: Jim Baldwin Otay Ranch, L.P. Newport Center Dr., Newport Beach, CA suite 700 92660 Kim John Kilkenny Otay Ranch, L.P. 11975 El Camino Real, suite 104 San Diego, CA 92130 City or Owner may change its address by giving notice in writing to the other. Thereafter, notices, demands, and correspondence shall be addressed and transmitted to the new address. Notice shall be deemed given upon personal delivery, or, if mailed, two (2) business days following deposit in the United States mail. with a Copy to: 16.4 Rules of Construction. In this Agreement, the use of the singular includes the plural; the masculine gender includes the feminine; "shall" is mandatory; "may" is permissive. 16.5 Entire Aqreement. waivers. and Recorded Statement. This Agreement constitutes the entire understanding and agreement of city and Owner with respect to the matters set forth in this Agreement. This Agreement supersedes all negotiations or previous agreements between City and Owner respecting this Agreement. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of city and Owner. Upon the completion of performance of this Agreement, or its revocation or termination, a statement evidencing completion, revocation, or termination signed by the appropriate agents of city shall be recorded in the Official Records of San Diego County, California. 16.6 proiect as a Private Undertakinq. . It is specifically understood by city and Owner that (i) the Project is a private development; (ii) City has no interest in or responsibilities for or duty to third parties concerning any improvements to the Property until city accepts the improvements pursuant to the provisions of the Agreement or in connection with subdivision map approvals; and (iii) Owner shall have the full power and exclusive control of the Property subject to the obligations of Owner set forth in this Agreement. 16.7 Incorporation of Recitals. The recitals set forth in Paragraph 1 of this Agreement are part of this Agreement. 16.8 captions. The captions of this Agreement are for convenience and reference only and shall not define, explain, modify, construe, limit, amplify, or aid in the interpretation, construction, or meaning of any -of the provisions of this Agreement. 16.9 Consent. Where the consent or approval of City or Owner is required or necessary under this Agreement, the consent or approval shall not be unreasonably withheld, delayed, or con- ditioned. -25- Jf~oL 7 16.10 Covenant of Cooperation. cooperate and deal with each other in good other in the performance of the provisions city and Owner shall faith, and assist each of this Agreement. 16.11 Recordinq. The city Clerk shall cause a copy of this Agreement to be recorded with the Office of the County Recorder of San Diego County, California, within ten (10) days following the Effective Date. 16.12 Delav. Extension of Time for Performance. In addition to any specific provision of this ~greement, performance by either city or Owner of its obligations hereunder shall be excused, and the Term of this Agreement and the Development Plan extended, during any period of delay caused at any time by reason of any event beyond the control of city or Owner which prevents or delays and impacts city's or Owner's ability to perform obligations under this Agreement, including, but not limited to, acts of God, enactment of new conflicting federal or state laws or regulations (example: listing of a species as threatened or endangered), judicial actions such as the issuance of restraining orders and injunctions, riots, strikes, or damage to work in process by reason of fire, floods, earthquake, or other such casualties. If city or Owner seeks excuse from performance, it shall provide written notice of such delay to the other within thirty (30) days of the commencement of such delay. If the delay or default is beyond the control of city or Owner, and is excused, an extension of time for such cause will be granted in writing for the period of the enforced delay, or longer as may be mutually agreed upon. 16.13 Covenant of Good Faith and Fair Dealinqs. Noparty shall do anything which shall have the effect of harming or injuring the right of the other parties to receive the benefits of this Agreement; each party shall refrain from doing'anything which would render its performance under this Agreement impossible; and each party shall do everything which this Agreement contemplates that such party shall do in order to accomplish the objectives and purposes of this Agreement. 16.14 Operatinq Memorandum. The parties acknowledge that the provisions of this Agreement require a close degree of cooperation between city and Developer, and that the refinements and further development of the Project may demonstrate that minor changes are appropriate with respect to the details of performance of the parties. The parties, therefore, retain a certain degree of flexibility with respect to those items covered in general under this Agreement. When and if the parties mutually find that minor changes or adjustments are necessary or appropriate, they may effectuate changes or adjustments through operating memoranda approved by the parties. For purposes of this section 16.14, the city Manager, or his designee, shall have the authority to approve the operating memoranda on behalf of city. No operating memoranda shall require notice or hearing or constitute an amendment to this Agreement. -26- ;f:J c/' 16.15 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element. 16.16 Amendment or Cancellation of Aqreement. This Agreement may be amended from time to time or canceled by the mutual consent of city and Owner only in the same manner as its adoption, by an ordinance as set forth in California Government Code section 65868, ~nd shall be in a form suitable for recording in the Official Records of San Diego County, California. The term "Agreement" shall include any such amendment properly approved and executed. city and Owner acknowledge that the provisions of this Agreement require a close degree of cooperation between them, and that minor or insubstantial changes to the Project and the Development Plan may be required from time to time to accommodate design changes, engineering changes, and other refinements. Accordingly, changes to the Project and the Development Plan that do not result in a change in use, an increase in density or intensity of use, cause new or increased environmental impacts, or violate any applicable health and safety regulations, may be considered minor or insubstantial by the city Manager and made without amending this Agreement. 16.17 Estoppel certificate. within 30 calendar days following a written request. by any of the parties, the other parties to this Agreement shall execute and deliver to the requesting party a statement certifying that (i) this Agreement is unmodified and in full force and effect, or if there have been modifications hereto, that this Agreement is in full force and effect as modified and stating the date and nature of such modifications; (ii) there are no known current uncured defaults under this Agreement, or specifying the dates and nature of any such default; and (iii) any other reasonable information requested. The failure to deliver such a statement within such time shall constitute a conclusive presumption against the party which fails to deliver such statement that this Agreement is in full force and effect without modification, except as may be represented by the requesting party, and that there are no uncured defaults in the performance of the requesting party, except as may be represented by the requesting party. 16.18 Severabilitv. If any material provision of this Agreement is held invalid, this Agreement will be automatically terminated unless within 15 days after such provision is held invalid the party holding rights under the invalidated provision affirms the balance of this Agreement in writing. This provision will not affect the right of the parties to modify or suspend this Agreement by mutual consent pursuant to Paragraph 12.4. 16.19 Institution of Leqal Proceedinq. In addition to any other rights or remedies, any party may institute legal action to cure, correct, or remedy any default, to enforce any covenants or agreements herein, or to enjoin any threatened or attempted violation thereof; to recover damages for any default or to obtain any remedies consistent with the purpose of this Agreement. Such legal actions -27- /Y .3 I must be instituted in the Superior Court of the County of San Diego, state of California. 16.20 Attorneys' Fees and Costs. If any party commences litigation or other proceedings (including, without limitation, arbitration) for the interpretation, reformation, enforcement, or rescission of this Agreement, the prevailing party, as determined by the court, will be entitled to its reasonable attorneys' fees and costs. 16.21 Hold Harmless. Developer agrees to and shall hold city, its officers, agents, employees and representatives harmless from liability for damage or claims for damage for personal injury, including death, and claims for property damage which may arise from the direct or indirect operations of Developer or those of its contractors, subcontractors, agents, employees or other persons acting on Developer's behalf which relate to the Project. Developer agrees to and shall defend city and its officers, agents, employees and representatives from actions for damage caused or alleged to have been caused by reason of Developer's activities in connection with the Project. Developer agrees to indemnify, hold harmless, pay all costs and provide a defense for City in any legal action filed in a court of competent jurisdiction by a third party challenging the validity of this Agreement. The provisions of this section 16.21 shall not apply to the extent such damage, liability or claim is caused by the intentional or negligent act or omission of city, its officers, agents, employees or representatives. /5/3'2 -28- SIGNATURE PAGE TO PRE-ANNEXATION DEVELOPMENT AGREEMENT Dated this ____ day of , 1996. "CITY" CITY OF CHULA VISTA By: Its: Mavor "OWNER" THE OTAY RANCH, L.P. a California limited partnership, by Sky Communities, Inc. a California corporation, its general partner By: James P. Baldwin, President VILLAGE DEVELOPMENT . a California general partnership By: James P. Baldwin, President of the foregoing Pre- day of I hereby approve the form and legality Annexation Development Agreement this 1996. Ann Moore Interim city Attorney city of Chula vista By: /yJ) -29- EXHIBIT A ~, ) ~\r?- -.- . - -- --- -- OTAY RANCH, LP. \ /,5> J r OTY Of CHULA VISTA PLA."''''I'''G DEPA.RHIE'T' &.\ 9'~5 EXHIBIT B ~Nt- -.- r~_ _ __- -- C11Y OF CHUlA VISTA VILLAGE DEVELOPMENT , /f:35 PLANNING DEPARTMENT 9 '25 '~6 Cl Z WJ L' WJ ....I C;' r'3 r'3 _"0 III C -- ~ > 0 !!ClJ ~ >- ..c .": UU r'3 Vi- ._ 0 C.l >",u .......c -",'" ~~~ .c 0..= UVlE -0 '" "0 c:c: "'0 E-;:: ... Ex", 0"'... uc:", "'c:.... o::ctct \ 1 \ \ 1 I - c: -0'" "'E "'.c Ou c....... 0-'" ...."'.... a.cct - ... -0 0.> ;-~ ....I... .- >- >'U-o ...",~ -c...:;; OV)tn :t ~ ~ Z~ ~ ~ .~ ~ ~~ z: c l\g~ ~ 4 , - e 7JL I u:" ~ J: .. U 4 = .: c ~ ~ ~m . ~ ~ << .. , I .. --I \ \ c L_, ....J 1 ..,. L, \ ~ ,\ . -.} 0 Z , t: \....--/ ~ 0 J ...- .- J IJ) ...- .- ~ ('r- > N .- () ~ t: - - ~ ~ en .0 r- .- - I... .s:: U 0 >< '+- OJ ill 00::: >.J:: ....... () .- U c ~ 0::: >. IS '36 ~ ....... 0 :r.:XHIBIT "D" Recording Requested By, and When Recorded Please Return to: Chief Administrative Officer County of San Diego 1600 Pacific Hwy. San Diego, CA 92101 [Space above for Recorder's Use] LANDFILL NUISANCE EASEMENT AND COVENANTS RUNNING WITH THE LAND (hereinafter referred to as "Grantor"), for valuable consideration, does hereby GRANT to the COUNTY OF SAN DIEGO, a political subdivision of the State of California (hereinafter referred to as "Grantee") as the owner of the real property located in the County of San Diego, California known as the "Otay Landfill" which is more particularly described in "Exhibit A" hereto (hereinafter referred to as the "Dominant Tenement") and its successors in interest to the Dominant Tenement, an EASEMENT (hereinafter referred to as "Nuisance Easement") over all that real property located in the County of San Diego, California described in "Exhibit B" hereto_thereinafter referred to as the "Servient Tenement"). This Nuisance Easement is for the use and benefit of Grantee and its successors in interest and invited guests in the conduct of solid waste landfilling operations on the Dominant Tenement, for the free and unobstructed passage on, onto, in, through, and across the surface and airspace above the surface of the Servient Tenement of the following things (hereinafter referred to as "Nuisance Items"): dust; noise; vibrations; any and all chemicals or particles suspended (permanently or temporarily) in the air and wind including but not limited to methane gas; odors; fumes; fuel particles; seagulls and other scavenger birds and the excrement droppings therefrom; and the unobstructed passage below the surface of leachate and other pollutants; and for each, every and all effects as may be caused by or result from the operation of a landfill which is now in existence or which may be developed in the future, together with the continuing right ~o cause or allow in all of such Servient Tenement such Nuisance Items, it being understood and agreed that Grantee, or its successors in interest, intends to develop, maintain and expand the landfill on the adjacent Dominant Tenement in such a manner that said landfill and the easement grated herein will be used at all times in compliance with all applicable State and Federal laws and the lawful orders /f>37 of state and Federal agencies regulating environmental factors, toxic and/or hazardous waste, and the operation of the landfill. Grantor, for itself and its successors and assigns, does hereby fully waive and release any right or cause of action which they or any of them may now have or may have in the future against Grantee, its successors and assigns, on account of or arising out of such Nuisance Items heretofore and hereafter caused by the operation of a landfill. Grantor, for itself and its successors and assigns, covenants and agrees, with the understanding and intent that such shall run with the land, and which shall run with the land, that neither they nor any of them will commence or maintain a suit, action, writ, arbitration, or other legal or equitable proceeding against Grantee or its successors or assigns wherein the relief sought is the cessation or limitation on the use of the Dominant Tenement as a landfill. Grantor, for itself and its successors and assigns, covenants and agrees, with the understanding and intent that such shall run with the land, and which shall run with the land, that in the event that they violate the above covenants of the foregoing sentence, they shall pay to Grantee such attorneys' fees and costs as may be determined to be reasonable by a Court of competent jurisdiction. Inquires or requests for enforcement made by Grantor, its successors or assigns to state or Federal agencies with regulatory authority over the operation of landfills shall not be considered a violation of this paragraph. Upon the termination of use ofthe-Dominant_Tenement for landfill purposes, (including completion of active landfill operations and all closure and post-closure activities),_Grantor, its successors or assigns may request that Grantee, its successors or assigns, through the applicable legal procedure, vacate or terminate this easement, which request will not be unreasonably withheld. Executed this California. day of , 1996, at San Diego, GRANTOR llb:\SPA:\landfill,doc )5/.3 r "0 S' , ........ '- <C ~ \ ;5 I VI \ CX) .J I--- ..J .". \ u.. lJJ 0 D oC '"' 0 z \ c( ci -.J ... I w i ~ >- l.L CD <:( u. I- .::l '. m 0 c0 \ ~ , , W I , U j 0:::: - <C ---- D.... ~ 0:::: W LL LL :J m o z <C ~ ~ LL o Z <C ~ . . , I , . " ;, '- / < ':=J --.~,fl",.. - ~; '1// 0- S?, </ - 1 ;.'. '" tll - " H " OJ c H I X I \ '" I U ZN "':<0 "'CO >-0.. ;::...: 0:::;; "., ~.' ~, LL o z' <G::. ~, >- ~ o ,..........", ..p' ./ , ~"lTr.'ll.o--- ..,. I- o -' ..,. "- ,;;: r-- Vl .U ..,. w "-Vl I- o -' ;;: Vl &/ ,)'" S' ~ ~ / ; ,', o I I /Y.J J- EXHIBIT "F" I I I PRE-ANNEXATION DEVELOPMENT AGREEMENT Planning Area Assessor Ownership Acreage Parcel Numbers Olay Valley Parcel 595-070-33 Olay Ranch L.P. 15.39 Olav VaIlev Parcel 641-020-15 Olay Ranch L.P. 21.89 Olav VaIley Parcel 641-020-18 Ot3vRanch L.P. 10.00 Olav VaIlev Parcel 641-030-13 Olay Ranch L.P. 97.36 Olav VaIlev Parcel 641-040-05 Olay Ranch L.P. 151.17 Olay VaIley Parcel 641-060-04 Olay Ranch L.P. 8.16 Olav VaIlev Parcel 641-060-06 Olav Ranch L.P. 17.91 Olav VaIlev Parcel 641-070-01 Olay Ranch L.P. 87.86 Olay VaIlev Parcel 641-080-01 Olay Ranch L.P. 88.89 Olay VaIley Parcel 642-040-16 Olay Ranch L.P. 13.99 Olav VaIlev Parcel 642-050-14 Olay Ranch L.P. 44.62 Olay VaIlev Parcel 642-050-24 Olay Ranch L.P. 29.36 Olay VaIlev Parcel 642-070-01 Olav Ranch L.P. 160.00 Olay VaIlev Parcel 642-090-01 Olav Ranch L.P. 92.78 Olav VaIlev Parcel 643-010-03 Olay Ranch L.P. 19.92 Olav VaIley Parcel 643-010-09 Olay Ranch L.P. 51.63 Olay VaIlev Parcel 643-020-10 Olav Ranch L.P. 159.37 Olay VaIlev Parcel 643-020-28 Olay Ranch L.P. 48.13 Olav VaIley Parcel 643-020-32 Olav Ranch L.P. 32.70 Olay VaIlev Parcel 643-050-01 Olav Ranch L.P. 53.51 Olav VaIlev Parcel 643-060-04 Olay Ranch L.P. 268.55 Olay VaIley Parcel 644-030-01 Olay Ranch L.P. 311.03 Olay VaIlev Parcel 644-030-06 Olav Ranch L.P. 255.85 Olav VaIlev Parcel 644-060-11 O!2vRanch L.P. 159.18 Olav VaIley Parcel 644-070-01 Olav Ranch L.P. 313.52 Olay VaIlev Parcel 644-070-07 Olay Ranch L.P. 285.85 Olav VaIlev Parcel 644-080-09 Olav Ranch L.P. 152.40 Olay VaIley Parcel 644-090-02 Olav Ranch L.P. 299.60 Olav VaIley Parcel 645-030-15 Olav Ranch L.P. 16.89 Olav VaIlev Parcel 645-030-18 Olav Ranch L.P. 102.1 0 Olav VaIlev Parcel 646-010-03 Olay Ranch L.P. 175.14 3,544.75 Total Olay Valley Parcel 643-010-10 VilIa2e Develonment 17.06 Inverted 'L' 595-050-04 I Villa2e Develonment 10.00 Inverted 'L' 595-050-07 Villa2e Develonment I 2.50 I Inverted 'L' I 595-050-08 Villa2e Development 2.50 I Inverted'L' I 595-050-09 I Villa2e Development I 2.50 I I I ! 34.56 i Total /y'/O COUNCIL AGENDA STATEMENT ITEM jd/J MEETING DATE 10/22/96 ITEM TITLE: Report Police Grant Funding Opportunities (1 Chief of Police fMt City Manage~ (4/STHS VOTE: YES___ NO-K-) j, SUBMITTED BY: REVIEWED BY: During the 1996-97 budget process, Council authorized the Police Department to pursue funding for Community Oriented Policing projects. As a result, the department has identified four grant opportunities (Attachment 1) which work together to fund community oriented policing with minimal impact to the General Fund. These grant opportunities include: The State budget appropriation identified as AB 3229 - Citizens Option for Public Safety; the COPS Uni versal Hiring Grant, the Domestic Violence Grant; and the Federal Local Law Enforcement Block Grant. The purpose of this report is to provide a brief overview of the four grants and how they work together. Staff recommends Council accept this report as information only and approve the specific program and expenditures plans, as proposed, in the following agenda statements. RECOMMENDATION: That Council Accept the Report as Information Only. BOARDS/COMMISSION RECOMMENDATION: N/A BACKGROUND: The most visible component of the Crime bill is the community Oriented Policing services (COPS) Program. The COPS Program authorizes the United States Department of Justice (DOJ) , under the direction of the United States Attorney General, to provide funding to local governments for additional sworn law enforcement officers, equipment and other "front line" police needs. / tf;/J-; Existinq Grant Proqrams PAGE 2, ITEM ~~,~ MEETING DATE 10/22/96 Four officers were added in FY 95-96 and funded $299,994 over three years by the Crime Bill (COPS AHEAD) and $80,000 annually from CDBG funds. As approved in the CAD/MDT Capital Improvement Project (PS 115), Mobile Computer Terminals (MCT's) will be purchased this year from a $637,500 COPS MORE grant. Additionally, two desk agents will be redeployed and replaced by two civilian Police Service Officers from a COPS MORE grant in the amount of $179,616. New Grant Opportunities As part of the Police Department's on-going effort to obtain COPS funding and minimize the cost of police services to the General Fund, agenda statements recommending specific expenditure plans for each grant program are docketed for Council's consideration tonight. Together, these new grant programs provide $1.5 Mover three years in new funds for supplemental local law enforcement services. Police staff implementation recommendations for each grant are being forwarded as a package for two reasons. First, this allows Council to review the proposed program and expenditure recommendations in the context of all new grant opportunities available. Second, the State appropriation per AB 3229; Citizen's Option for Public Safety is being used to offset local match requirements in the COPS Universal Hiring, and Federal Local Law Enforcement Block Grants and upgrade of the Agent to Sergeant position in the COPS Domestic Violence Grant. The only general requirement is for "front line police services" and that these funds be used to supplement and not supplant. The following is a summary of each grant and it's requirements: State Budget Appropriation; AB 3229 ($356,408) - These funds were allocated to the City based on a $2.30 per capita basis and are to be used for "front line police services." This includes additional police personnel, overtime, equipment or services. This allocation is subject to annual State budget deliberations. The funds have a 25% ($89,102) in-kind contribution requirement. Use of these funds requires approval from a Regional Oversight Committee and a public hearing each year to notice use of the State COPS funding to pay for "front line police services." Council held the public hearing on October 1, 1996 as stipulated by the legislation. An expenditure plan for use of these funds must be adopted by the City Council no later than sixty days from the public hearing. This expenditure plan will then be forwarded to the Regional Oversight Committee as stipulated by the grant. / t/,,1 ~ ;L PAGE 3, ITEM /tf;!J MEETING DATE 10/22/96 COPS Universal Hiring Grant ($450,000) - Based on the previous COPS AHEAD grant submittal, the DOJ developed COPS Universal Hiring Grant to deploy additional new officers devoted to community policing. In May 1996, DOJ announced that the City of Chula Vista was eligible to receive $450,000 for six new officers under the Universal Hiring Grant Program. A Budget Supplemental Report (Attachment 2), with the Police Department's initial thoughts on the potential use of funds, was forwarded to Council during the FY 96-97 budget process. This is a three year grant for six additional officer positions to enhance community policing efforts. The Universal Hiring Grant provides up to a maximum of $75,000 per officer over a three year period. The grant offsets approximately 57%, 50% and 36% of the City's salary and benefit costs per position for the three-year funding period. Local Law Enforcement Block Grant ($257,401) - The Omnibus Fiscal Year 1996 Appropriation Act, Public Law 104-134, implemented a Local Law Enforcement Block Grant Program which allocated $257,401 to the City. These funds were allocated based on the three year average Part I Violent Crime statistics. Part I Violent Crimes are murder and non-negligent manslaughters, forcible rape, robbery, and aggravated assault as reported by the FBI. This is a one time allocation. These funds may be used for hiring, training, and employing new law enforcement officers and support staff (includes animal control) as well as procuring equipment and technological advances related directly to local law enforcement. The grant has a 10% ($25,740) local match requirement and requires a Local Advisory Board's approval of the use of funds prior to disbursement. The local advisory board must consist of one representative from: a Local Law Enforcement Agency, the Prosecutors Office, the Court System, the School system, and a non- profit. As directed by Council during the FY 96-97 budget process, a local advisory board was established to review the proposed use of these funds. The advisory board recommends approval of the proposed use of funds. COPS Domestic Violence Grant ($150,000 renewable for 3 years) - In mid September, the Police Department received a formal notice of award for $150,000 COPS Domestic Violence Grant in partnership with Children's Hospital. This grant provides for the establishment of a Family Protection Unit. This unit is a unique collaboration between the Police Department and Children's Hospital to combat domestic violence. /tf,.7J ~3 PAGE 4, ITEM / j; /</ 10/22/96 This is a $150,000 grant renewable for three years. The funds pay for one full time Agent (proposed to be upgraded to Sergeant), one Administrative Office Assistant III, $10,238 in computer/office equipment, $30,000 for contractual services with Children's Hospital and $300 for travel related to domestic violence cases. Additionally, it has a $30,000 in-kind contribution requirement. MEETING DATE FISCAL IMPACT: Staff recommends this report be accepted as information only. There is no fiscal impact to the general fund as a result of this action. However, a set of spreadsheets (Attachment 3 a,b,c,&d) are attached summarizing the grant funds available, proposed expenditures and long-term implications. These spreadsheets may be used as a reference point for review of the following grant proposals. Furthermore, the specific fiscal impact for each program and expenditure plan are discussed in more detail in the following grant proposals. Attachments: 1) New Grant Opportunities Chart 2) Supplemental Budget Report 3) a,b,c,&d - Fiscal Impact Spreadsheets ) ~ ;9-1 ATTACHMENT 1 NEW GRANT OPPORTUNITIES FOR POLICE DEPARTMENT COPS UNIVERSAL HIRING $450 Kover 3 YRS I \ / \ / \ I $122K \ \ 6 Officer I Local Match \ for1YR / / I 6 OFFICERS Community Outreach $25,000 Animal Control Officer $38,165 Equipment $95,783 y Agent $71,141 Cap~al Improvement Project Security Measures $57,000 FEDERAL LOCAL L W ENFORCEMENT BOCK GRANT $257 K DV GRANT $150 K Renewable for 3 YRS A.oA III $38,321 /4.1___5 ATTACHMENT 2 SUPPLEMENTAL BUDGET REPORT NO. DATE June 17, 1996 TO Honorable Mayor and City Council VIA John D. Goss, City Manager Richard P. Emerson, Chief of POlic~ FROM SUBJECT COP~ ,Universal Hiring Grant and Local Law Enforcement Block Grant In May 1996 President Clinton announced that the City of Chula Vista was eligible to receive $450,000 for six (6) new officers as part of the COPS Universal Hiring Grant Program. Subsequently Congress announced the availability of Local Law Enforcement Block grants. This memorandum will transmit additional information regarding staffs on-going effort to ensure the City of Chula Vista obtains all appropriate funding under the Universal Hiring Grant and the Local Law Enforcement Block Grant programs. The following proposals are the Police Departments initial thoughts on the potential use of the funds available as a result of these two new grants. These are preliminary ideas. As more information is provided regrading the grants and research conducted, police .~taff will return to Council with a complete report. RECOMMENDATION 1) That Council authorize the Chief of Police to explore funding options for 6 new police officers under the COPS Universal Hiring Program; and 2) That Council authorize the Chief of Police to work with the City Manager and Mayor to establish a local advisory board for purposes orallocating funds received under the Local Law Enforcement Block Grant Program and develop a proposal for the use of such funds as required by the grant. BACKGROUND As you will recall, the most visible component of the Crime Bill is the Community Oriented Policing Services (COPS) Program. The COPS Program authorizes the United States Department of Justice (DOJ) , under the direction of the United States Attorney General, to provide funding to local governments for additional sworn law enforcement officers. 'Four (4) new officers were added to the Police Department and funded by the Crime bill (COPS AHEAD) in FY 95-96. Based on that grant submittal, the DOJ developed the COPS Universal Hiring Program to deploy additional new officers devoted to community policing. Chula Vista Police DepanmelU /j,',1- ~~ DISCUSSION COPS Universal Hiring Program required that jurisdictions return to the DOJ, budget information cost per officer over a three year period, no. later than June 15, 1996. A copy of that form is attached to this memorandum. Staff submitted the COPS Universal Hiring Program budget information on June 11, 1996. Keeping in mind that the Crime Bill is designed to be incrementally implemented over six federal fiscal years and that only a small percentage of the Crime Bill's authorized funding has been appropriated. The COPS Universal Hiring Program authorizes funding from the Crime Bill for up to six (6) additional officers for the City of Chula Vista. Additionally, the COPS Universal Hiring Program limits funding for new officers to a maximum of $75,000 per position over three (3) years. The COPS Universal Hiring Program will cover approximately 57%, 50% and 36% of the City's salary and benefit costs per position for the three-year funding period. On the fourth year, the City would pay the full costs associated with each position added. A variety of components other than the COPS AHEAD and Universal Hiring Programs are also included in the Crime Bill. As specific information becomes available on these other programs, the Police Department will take the lead in distributing that information and, where appropriate, coordinate the application activities through the City Manager's Office. The cost for adding one new officer under the COPS Universal Hiring Grant Program is as follows: Year 1 Year 2 Year 3 Total- 3Yr Federal Share $27,033 (57%) $26,662 (50%) $21,248 (36%) $74,943 City Share 20,394 (43%) 26,661 (50%) 37,773.(64%) $84,828 Total $47,427 $53,323 $59,021 $159,771 The cost for adding 6 new officers under the COPS Universal Hiring Grant Program is as follows: Year 1 Year 2 Year 3 Total - 3Yr Federal Share $162,198 $159,972 $127,488 $224,829 City Share 122,364 159,966 226,638 $508,968 Total $284,562 $319,938 $354,126 $733,797 Police staff has identified offsetting funding. sources for the City's share for some of the 6 positions. These proposals are described in more detail below: CllUla Vista Police Department //?A -7 New Police Officer Prooosals- The following proposals were developed by the Police Department in a relatively short period of time due to the request to have a Supplemental Budget Report ready for Council's review during the budget workshops. The following proposals (I & 2) discussed below are preliminary options available for Council action if Council wishes to add police officers under the COPS Universal Hiring Grant. Proposal #1 - Add a second position to the Narcotics Task Force (NTF). The police department currently has one officer assigned to NTF. This position's costs are offset by funds received as a result of asset sharing. The City receives 1.75 % of countywide asset seizures. A total of $61,743 was received as a result of this positions participation in NTF in 1996. Adding a second position would generate an additional 1.25% of countywide asset seizure funds annually. FIScal Impact: The revenue generated by the addition of one position to NTF would exceed the City's share requirement, in Years 1 through 3 and generate $44,000 annually in new revenue to the general fund. In year four and after the grant expires the 1.25 % of countywide asset seizure sharing would pay for 75 % of the position. Proposal #2 - Add a ITraTlSitional" School Resource Officer (SRO). The police department currently has a total of 7 SRO's (4 at the high school and 3 at the elementary). A need exists for an SRO between the high school and elementary districts. It would be beneficial to both the City and the schools districts to add a SRO to help transition children from elementary to high school. FIScal Impact: The City's matching share could potentially be funded by both the high school and elementary school districts. Police staff is currently working with the school,districts to explore possibilities. If the City's share is paid by the school districts (thru direct payment or grants), there is no net impact to the general fund until Year 4 when federal funds cease to exist. Additional research needs to be conducted on the following Proposals 3 thru 6. Police staff is working on developing these proposals further and identifying offsetting revenue. Every effort is being made to identify local law enforcement needs in the community and limit the general funds liability: Police staff would be glad to explore any of these or other proposals further. . . Proposal #3 - Code Enforcement/Neighborhood & Business Policing. Recently patrol officers have reported a number of code and business license enforcement violations. Consistent with our community policing efforts, the department would propose to add an officer which will work with the business community to promote compliance and educate them on prevention measure. Fiscal Impact: The City's share could be partially offset by increase revenues in licensing. Proposal #4 - Add a grant writer. During the past few years the Police department has made every effort to secure funding other than general fund for it's operating costs. The department currently has 12.18 positions paid by grant for a total of $800,701. The City of San Diego Police department has also strived to accomplish a reduction in general fund reliance. Their efforts have been successful due to the dedicated assignment of a grant writer position (funded by a grant) to secure non general funds Chula Vista Police Depamnen! )d/J -~ for their department. Last year the City of San Diego received approximately $6,000,000 in grant funds as compared to Chula Vista. Over the past 8 years SDPD has been eligible to receive approximately $21M in grants for Police Operation and Development. The Chula Vista Police Department would benefit from having a dedicated position responsible for tracking and applying for new funding opportunities. FIScal Impact: The cost of the position would pay for it self over a period of two years, generate revenue and reduce the Police departments reliance on the general fund. Proposal #5 - Add a Motor Officer/Traffic Car. Additional motor officers will be needed to service the new amphitheater and waterpark (if implemented). The nature of these businesses and related traffic control problems will require dedicated motor officer time. Additionally, this position would work together with the DUl Car discussed in Proposal #6 below. We recognize this proposal comes at an awkward time when the FY 96-97 proposes to delete one motor officer to save money. However, we believe it is a viable option that merits further consideration. In the event the traffic' officer is eliminated from the budget we would propose the reduction be accomplished by an internal realignment of police officer positions in the department. Fiscal Impact: The City's share in years 1 to 3 would be partially offset with revenue generated by citations and DUI full cost recovery charges. Approximately 40 to 60% of the position would continue to be offset by citation revenue after the grant expires. Proposal #6 - Add a DUI Car. The police department would propose to add a Driving Under the Influence (DUl) officer to focus specifically on drunk driving. In addition, this position would work together with the Motor Officer position discussed in Proposal #5 above. Fiscal Impact: The cost of the officer would be partially offset by full cost recovery charges to individual cited/jailed. Further research needs to be conducted on the amount of revenue that could be potentially derived from this proposal. Local Law Enforcement Block Grant The Local Law Enforcement Block Grant in the amount of $503 million is to be distributed to local governments as set forth in HR 728 passed by the House on February 14, 1995. Of the $503 million appropriation, $18 million is earmarked for drug courts, $11 million for Boys and Girls Clubs and $15 million for the Washington Metropolitan Police Department, thus leaving $459 million for local law enforcement. These funds are to be allocated to each City based on the three-year average part 1 violent crimes. Part 1 violent crimes are murger and non-negligent manslaughter, forcible rape, robbery, and aggravated asSault as reported by the FBI. Using this formula Chula Vista is scheduled to receive approximately $257,000 which is less than surrounding local jurisdictions because our crime rate is lower. Unfortunately, this grant does not allocate the funds on the basis of cases cleared or a Job well done. The percent of local match required is ten (10) percent. Funds must supplement and not supplant. The funds can be used to reduce crime and improve public safety for activities such as hiring, training and employing new law enforcement officers and support staff as well as procuring equipment and technological advances related directly to local law enforcement. To qualify for the funds, a local advisory board must be established which includes reprt'sentatives from police, prosecutor, courts, public schools and a nonprofit (educational, religious or community) group active in crime prevention, Chula Vista Police Depanmeru ) ~A - / drug use prevention or treatment. The boards purpose is to review the City's application and make non- binding recommendations. Subsequently, the governor would get 20 days to review and comment on the application prior to submittal to DOl and a public hearing would be held. The application for requesting funds is scheduled to be sent to Mayor's on June 15, 1996. In the interim, staff will continue to identify law enforcement needs and identify funds (where possible) to offset the local match requirement of 10%. The following are a few ideas identified by police staff at this time and, to be explored further upon receipt of the application and detailed requirements: Proposal #1 - COPS Hiring local match (potential match for the 6 new officers). Proposal #2 - Grant Writer (described above) Proposal #3 - Ticket Writers & Automation The police department has been working with the Administrator of the South Bay Municipal Court on the potential for state funding of a transition to automated traffic ticketing for moving and parking violations. Fiscal Impact: At this time, State monies from the South Bay Municipal Court will cover 50% of the equipment and transition costs. We believe this could offset the City's match requirement of 10% resulting in no impact to the general fund. Proposal #4 - Police Body Wire, equipment, undercover vehicles, etc. The above ideas are preliminary and intended to provide Council with an array of possibilities being explored for funding under the Local Law Enforcement Block Grant. Police staff will continue to explore local law enforcement needs. In the interim, police staff welcomes any suggestions you may have to improve local law enforcement. Staff will continue to keep you apprised of any new developments in regards to the Local Law Enforcement Grant. Chula Vista Police Departmelll //.-,1/[ rtl ,M ..., 0: (j) I'; .<:: tJ rtl ..., ..., .0: ,... en I CD 0) >- LL 0000 NN,...Lt)('I') COMN<.OLO Lt)OO("')..-...... -..:i a; tXJ- CO C")- COt-MMN N en w E z ::> I- 0::: o 0- 0- o I- Z ~ C) w (J :J o 0- '" M co'" ~..... "'M M N ~~ ....N ~M. ~'" ..... M '" 0> ~ N co ~ ..... 0::: <( W >- ....~ coO> MCO NcO N ~ - ~ C> OJ Ul 0 o ::E r3 ; 0(1) Q) oW, "C -=> '^~ g~ "0. 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CD '" 0 ~ 0':;; 0 " C/l '" to - - -< m )> ;;0 ~ "tI 0 r- - 0 m G') ~ Z -I 0 ""C "tI 0 ~ c: z - :::! m CJ) "T1 -< CD CD I N 0 0 0 :J,o rt rt III () ::r <3 ro ::J rt w 0. 000 ~ ~ co '" ~ '" '" '" 0 0 0 0 0 0 0 0 0 ~ ~ ~ '" ~ co '" "'(,..)......01 ~~ ~ '" '" {,.t.)ooco~ '" '" 0 0 0 ~(.o,)OO..... 00 0 0 0 O)MWN 00 0 0 .9 O\....lo.f\,)O> ~ / j;. /5l ~y G') ~ Z -I ." c- Z c z G') ~- "'\] AI m c COUNCIL AGENDA STATEMENT ITEM /tf:,_~ S}) Meeting Date: 10/22/96 ITEM TITLE: jJ. Resolution /x;l,?ls::"mending the FY 1996-97 budget to add 6 FTE Police Officers and Accepting $450,000 over three years from the COPS Universal Hiring Grant and Appropriating $162,198 of such funds for hiring 6 additional Police Officers in FY 1996-97 and directing staff to budget the remaining funds as stipulated by the grant in subsequent years. L. Resolution I IS 1/? 7 Appropriating (1) $122,364 from Fund 214 Supplemental Law Enforcement Services Fund (SLESF) AB 3229, Citizens Option for Public Safety for paying for the six officers added under the Universal Hiring Grant, (2) $184,044 for equipment procurement, and (3) $50,000 for local law enforcement services. J), Resolution /8"'/ /'{'Designating revenues generated by assignment of police officers to certain specialty assignments for payment of future Universal Hiring officer salaries & benefits. SUBMITTED BY: Chief of po~ City Manager ff (4/5ths VOTE: Yes.lL No--> REVIEWED BY: During the FY 96-97 Budget process Council was apprised of a $450,000 allocation to the City under the COPS Universal Hiring Grant. The Police Department's initial thoughts on the potential use of the funds were forwarded to Council in a Budget Supplemental Report (Attachment 1). Council directed staff to look for alternative funding or revenue generating opportunities to offset the General Fund local match requirement under the COPS Universal Hiring Grant. Following Council's action, the state budget appropriated $356,408 to the City as a result of Assembly Bill 3229, Brulte. Police staff recommends use of these funds to offset the local match requirement under the Universal Hiring Grant. As Council may recall, this bill allocated state money to police departments for purposes stipulated by the Citizens Option for Public Safety (COPS) Program. A public hearing was held on October 1, 1996, as required by the legislation, to accept these funds for police persomrel and related equipment to be identified (Attachment 2). This agenda statement proposes to use funds from the state budget appropriation, AB 3229 (Fund 214) for personnel ($122,364), equipment ($184,044) and local law enforcement services ($50,000). /~l?) Page 2 ITEM Meeting Date: 10/22/96 RECOMMENDATION: That Council: I) Amend the FY 96-97 budget adding six officers to enhance community policing efforts under the Universal Hiring Grant; and Appropriate funds from the Universal Hiring Grant and AB 3229 - Citizens Option for Public Safety to pay for the six officers. 2) That Council appropriate funds from the Citizens Option for Public Safety for procurement of local law enforcement equipment ($184,044) and services ($50,000). 3) Designate revenues generated from the Universal Hiring police officer positions for payment of future officer salaries and benefits associated with this program. BOARDS/COMMISSION RECOMMENDATION: N/A BACKGROUND: COPS Universal Hiring Grant - The most visible component of the Crime Bill is the Community Oriented Policing Services (COPS) Program. The COPS Program authorizes the United States Department of Justice (DOn, under the direction of the United States Attorney General, to provide funding to local governments for additional sworn law enforcement officers. Four officers were added to the Police Department and funded by the Crime Bill (COPS AHEAD) in FY 95-96. Based on that grant submittal, the DOJ developed the COPS Universal Hiring Program to deploy additional new officers devoted to community policing. In May 1996, DOJ announced that the City of Chula Vista was eligible to receive $450,000 for six new officers under the Universal Hiring Grant Program. A Budget Supplemental Report, with the Police Department's initial thoughts on the potential use of funds, was forwarded to Council during the FY 96-97 budget process. State Budl]:et Appropriation lAB 3229) - The California Legislature and the Governor enacted AB 3229 (Chapter 134) into law during the 1996 legislature and state budget session. the legislation allocated $100 million statewide to local Police Departments, County sheriffs and District Attorneys. Of this money, $75 million was divided among patrol-responsible law enforcement agencies, $12.5 million was distributed equally to Sheriffs for county construction and operation and the remaining $12.5 million was divided among all district Attorneys in the state for criminal prosecution. The funds for local law enforcement were divided on a $2.30 per capita basis. Chula Vista was allocated $356,408 to fund "front line police services." J d-lJ -.2 Page 3 ITEM_ Meeting Date: 10/22/96 DISCUSSION: During the budget process, the Police Department presented Council with preliminary thoughts on hiring six new officers under the Universal Hiring Grant. The Police Department proposes . to use the state appropriation; AB 3229 - Citizens Option for Public Safety to add the six police officers to patrol with no impact to the general fund. UNIVERSAL HIRING PROGRAM COST The COPS Universal Hiring Program authorizes funding under the Crime Bill for six additional police officers for Chula Vista. Up to a maximum of $75,000 per officer is provided over a three year period. The grant offsets approximately 57%,50% and 36% of the City's salary and benefit costs per position for the three-year funding period. On the fourth year, the City would pay the full cost associated with each position added. The following is a breakdown of the cost of adding new police officers. The cost for adding one new officer under the COPS Universal Hiring Grant Program is as follows: Year 1 Year 2 Year 3 Total - 3 Yr. Federal Share $27,033 (57%) $26,662 (50%) $21,248 (36%) $ 74,943 City Share! 20,394 (43%) 26,661 (50%) 37,773 (64%) $ 84,828 Total $47,427 $53,323 $59,021 $159,771 The personnel cost for adding six new officers is as follows: Source Year 1 Year 2 Year 3 Total - 3Yr Federal Share $162,198 $159,972 $127,488 $449,658 City Share2 122,364 159,966 226,638 $508,968 Total $284,562 $319,938 $354,126 $958,626 For the first year, the police department proposes that $122,364 from the State budget appropriation (AB 3229) of $356,408 be used as the City's share. The annual appropriation of these funds will be subject to the annual State budget deliberations. !The "City Share" is proposed to be paid from the State budget appropriation, AB 3229 - Citizens Option for Public Safety. 2See footnote 1 /U' [5 ~~--; Page 4 ITEM Meeting Date: 10/22/96 PROPOSED ASSIGNMENT The additional six officers will be added to patrol. These officers will be paid from the COPS Universal Hiring Grant and the State budget appropriation per AB 3229. Six existing officers (currently paid from the general fund) with the level of experience required will be assigned to the following specialty assignments as a result of this grant program. There are no additional costs to the general fund as a result of these assignments. Moreover, the following position assignments will contribute to the departments on-going efforts to reduce police response times and meet Growth Management Oversight committee (GMOC) thresholds. The specific assignments are as follows: One Officer would be added to the Narcotics Task Force (NTF). The Police Department currently has one officer assigned to NTF. This position's costs are offset by funds received as a result of asset sharing. The City receives 1.75% of countywide asset seizures based on one officer with the NTF. A total of $61,743 was received as a result of the existing position's participation in NTF in FY 95-96. Adding a second position would generate an additional 1. 25 % of countywide asset seizure funds annually. We estimate this position will generate $45,000 in new on-going revenue to be specifically designated to offset the future cost of salaries and benefits associated with positions added under the COPS Universal Hiring Grant. These funds will be used in the event the three year Universal Hiring Grant expires or the State budget appropriation is eliminated. In the event both funding sources are available during the three year grant period an estimated $135,000 ($45,000 x 3 yrs) in revenue generated by this position would be available to offset costs associated with this position and other positions added under this grant proposal. The $45,000 annually in revenue will continue to be an on-going revenue source for this program. Two Officers would be added as School Resource Officers (SRO). The Police Department currently has a total of seven SRO's (four at the high school and three at the elementary level). SRO's are uniformed officers assigned full time to local high schools or elementary schools to perform patrol enforcement functions on campus. They are responsible for documenting crime incidents at campuses and making necessary arrests. During calendar year 1995, 246 arrests were made by SRO's. In addition to their role as enforcers of the law, SRO's are attentive to student and campus personnel, follow-up with truant students, facilitate parent/teacher/student meetings for students with behavioral problems, and serve as mentors and role models. The elementary school district currently has three officers assigned. The elementary school district currently reimburses the city for the cost of one SRO. Two additional SRO positions have been requested. The Police Department concurs that a need exists for two additional SRO positions at the elementary level. Consistent with the existing practice, the Elementary School District has indicated that they are willing to reimburse the City for the cost of one position. As a result, the Police Department recommends the two Elementary School District SRO positions be authorized contingent on the elementary school district paying for one position. The $65,000 in revenue to be generated from this proposal would be designated toward payment of future costs associated with these positions after the grant expires. /~[;-i Page 5 ITEM_ Meeting Date: 10/22/96 One Officer would be hired to enhance business policing efforts. Consistent with our community policing efforts, the department would propose to add an officer to work directly with the business community to promote compliance, streamline the special event process, and educate the business community on crime prevention measures. For example, this position would work closely with the Amphitheater (MCA) to make sure all security, traffic control and law enforcement activities related to the Amphitheater are to the satisfaction of the Chief of Police. The staff time spent on MCA activities will be reimbursed. In addition, to special event policing, this position will liaison with the business community to facilitate their needs, promote compliance with City ordinances and implement crime prevention measures. For example, this position would facilitate on-going fraud training to the North Island Credit Union (NIFCU). This training was recently provided and helped reduce NIFCU's actual check fraud losses by $126,000 and the number of fraud cases by 50%. In addition NIFCU, documented that they avoided $300,000 in losses during the past 12 months through early detection as a result of the fraud training received by the Police Department. Two Officers would be added to form the street team to enhance Community Policing efforts. The Police Department has made proactive policing a priority. Our approach has been that it is more effective to prevent crime before it occurs. The Street Team was implemented in FY 1993-94 to help reduce street level crime like robberies and deter drug dealing. The Street Team is a proactive enforcement unit providing resolution strategies to crime problems identified by crime analysis, patrol and investigative personnel. Through citizen contacts, team members stay informed about crime problems identified by residents and business owners in the community. The Street Team would continue to focus on community outreach and increasing the use of Problem Oriented Policing (POP) projects to pro-actively problem solve at specific locations in Chula Vista. Current Street Team members participated in several POP projects during the year. By focusing on identified problem areas within the City, including shopping centers and swap meets, the team had a direct impact on reducing auto theft, violent crime and burglary. By using the Street Team approach, the Police Department will continue to serve as a catalyst to bring together appropriate resources to address specific community safety problems and prevent crime before it occurs. This is another way of adapting to challenges facing a community that continues to grow. EOUIPMENT & SERVICE PROCUREMENT After paying for the previously mentioned local match requirement, $199,569 from AB 3229 - Citizens Option for Public Safety remains available for local law enforcement equipment and services. The Police department recommends these funds be appropriated as described on the next page: $126,000 in equipment, $23,569 minor CIP, and $50,000 for police related services. /~.[J-~s- Page 6 ITEM_ Meeting Date: 10/22/96 EQUIPMENT - $126.000 Patrol Vehicles & Officer Associated Equipment (Radio, MDT, etc.) The Police Department would propose to purchase three patrol vehicles at a cost of ($21,258 each) plus related equipment ($12,669 each), and outfitting costs ($2,740 each) for a total of $110,000 for use by the six new officers. Related equipment costs include: the Code 3 MX7000 Lightbar, Flashlight charger, Shotgun Lock timer, Mount & Lock, Unitrol Touchmaster Siren & Lightbar Control, Siren Speaker, Headlight Wigwag, Troy Console, Setina S-8 Prisoner Screen, Decals, Prisoner Cage Extension, Radio/PA Microphone, Motorola Radio Hi-band, Mobile Data Terminal, etc. The department recommends $110,000 be appropriated for this purpose from funding per AB 3229 - Citizens Option for Public Safety. K-9 dog and related equipment ($6,000). The Police Department K-9 program is currently short two dogs and anticipates a third dog is near retirement. Past fiscal constraints have made it difficult to maintain full K -9 staffing. One dog is authorized to be purchased this year, as a result the department will be one dog short and two short after the upcoming retirement. Based on the upcoming retirement, the Police department would propose that a dog be purchased from this grant. Purchase of a Firewall ($10,000) to protect police records. A firewall is a device (smaller than the CPU of a PC) that connects to the front of a network, to prevent unauthorized access to files. The Police Department is in the process of hooking up to the citywide network. Management Information Services has recommended the purchase of a firewall to protect police records and confidential information. MINOR CIP - $23.569 Automated Traffic Ticketing ($ 23,569) - The Police Department is exploring the possibility of automating traffic ticketing for moving and parking violations. Additional staff work is needed prior to proceeding with this project and making a final staff recommendation. For example, police staff is working with South Bay Municipal Court to identify State monies to cover 50 % of the equipment and transition costs and Finance staff to determine if the use of parking meter funds is appropriate. The department recommends earmarking these funds for the purpose of purchasing automated traffic ticketing equipment to be used by the Police Department and Parking Meter staff. Staff will return to Council at a later date with a detailed report on this project including available funding. SERVICES - $50.000 Community Outreach ($25,000). The Police Department recommends funds be appropriated to support Community Policing services provided by various groups (SVPP, CAST, Explorers, School Patrol, Reserves, PAL and Volunteers) under the umbrella of the Police Department. These groups help enhance the Community Policing efforts. /c:;;g.. j.. Page 7 ITEM_ Meeting Date: 10/22/96 Training & Strategic Planning ($25,000). In light of a growing community, training and strategic planning are vital. Additionally, the Growth Management Committee (GMOC) has recommended the Police Department develop a strategic plan to manage future growth and meet GMOC thresholds. The Police Department recommends funds be earmarked for this purpose. FISCAL IMPACT Year 1 - The personnel costs of the six officers would be paid for from funding the State appropriation per AB 3229, Citizens Option for Public Safety and the COPS Universal Hiring Grant. Approval of Staff's recommendation would generate $45,000 from the officer position to be assigned to the Narcotics Task Force (NTF) and a minimum of $65,000 from the School Resource Position (SRO) to be assigned to the elementary school district. In addition, to an unknown amount of revenue from the Amphitheater. Automotive equipment purchased from this grant will be placed on the replacement schedule when placed in service. There will be approximately $12,800 in recurring maintenance costs for the three patrol vehicles and the one undercover vehicle added to the general fund in year 2. There are no recurring service costs proposed. Years 2 & 3 - Assuming continuance of the State appropriation (AB 3229), no net impact to the General Fund and revenue generation of $110,000 annually as described earlier. After Year 3, the cost of the six officers, will be offset by the revenue generated by the NTF, and SRO positions and possible continued State funding. The state appropriation is subject to the state budget annual deliberations. In the event the State funding is eliminated the net cost to the General Fund is $159,966 for year two and $226,638 for year three. LONG-TERM IMPLICA nONS These positions will be paid for through year three by the combination of the COPS Universal Hiring Grant and the State budget appropriation (AB 3229) discussed in this agenda statement. Additionally revenue generated by these positions will be collected and earmarked to pay for the fourth year. It is estimated that $110,000 will be collected annually from the revenue generating positions discussed in this agenda statement. Based on this assumption, at the end of three years, $330,000 would be available to offset $354,126 in annual salary and benefits associated with the proposed six positions. The city will incur $24,126 in the fourth year (FY 2000-2001). The City will start incurring the full cost of the proposed positions minus on-going revenue of $110,000 in the fifth year (FY 2001-2002). The on-going cost to the City starting the fifth year is estimated to be $254,126. This cost does not include any future salary or benefit increases. Attachments: 1) Budget Supplemental Report 2) AB 3229 - Citizens Option for Public Safety A113 3) Budget Detail (Spreadsheet) /~LJ/? RESOLUTION NO. j/?iiS RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE FY 1996-97 BUDGET TO ADD 6 FTE POLICE OFFICERS AND ACCEPTING $450,000 OVER THREE YEARS FROM THE COPS UNIVERSAL HIRING GRANT AND APPROPRIATING $162,198 OF SUCH FUNDS FOR HIRING 6 ADDITIONAL POLICE OFFICERS IN FY 1996-97 AND DIRECTING STAFF TO BUDGET THE REMAINING FUNDS AS STIPULATED BY THE GRANT IN SUBSEQUENT YEARS WHEREAS, the Community Oriented POlicing Services (COPS) Program authorizes the U. S. Department of Justice, under the direction of the U. S. Attorney General, to provide funding to local governments for additional sworn law enforcement officers; and WHEREAS, during the FY 1996-97 Budget process, Council was apprised of a $450,000 allocation to the city under the COPS Universal Hiring Grant. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula vista does hereby: (1) amend the FY 1996-97 budget to add 6 FTE Police Officers (2) accept $450,000 over three years from the COPS Universal Hiring Grant (3) appropriate $162,198 of such funds for hiring 6 additional Police Officers in FY 1996-97 and (4) direct staff to budget the remaining funds as stipulated by the grant in subsequent years. Presented by Approved as to form by .~ :-> Richard P. Emerson, Chief of Police /f:,fS ~ If ATTACHMENT 1 SUPPLEMENTAL BUDGET REPORT NO. DATE June 17, 1996 TO Honorable Mayor and City Council VIA John D. Goss, City Manager Richard P. Emerson, Chief of POliC~ FROM SUBJECT COPS,Universal Hiring Grant and Loca1 Law Enforcement Block Grant In May 1996 President Clinton announced that the City of Chula Vista was eligible to receive $450,000 for six (6) new officers as part of the COPS Universal Hiring Grant Program. Subsequently Congress announced the availability of Local Law Enforcement Block grants. This memorandum will transmit additional information regarding staffs on-going effort to ensure the City of Chula Vista obtains all appropriate funding under the Universal Hiring Grant and the Local Law Enforcement Block Grant programs. The following proposals are the Police Departments initial thoughts on the potential use of the funds available as a result of these two new grants. These are preliminary ideas. As more information is provided regrading the grants and research conducted, police .staff will return to Council with a complete report. RECOMMENDATION 1) That Council authorize the Chief of Police to explore funding options for 6 new police officers under the COPS Universal Hiring Program; and 2) That Council authorize the Chief of Police to work with the City Manager and Mayor to establish a local advisory board for purposes of. allocating funds received under the Loca1 Law Enforcement Block Grant Program and develop a proposal for the use of such funds as required by the grant. BACKGROUND As you will recall, the most visible component of the Crime Bill is the Community Oriented Policing Services (COPS) Program. The COPS Program authorizes the United States Department of Justice (001), under the direction of the United States Attorney General, to provide funding to local governments for additional sworn law enforcement officers. Four (4) new officers were added to the Police Department and funded by the Crime bill (COPS AHEAD) in FY 95-96. Based on that grant submittal, the D01 developed the COPS Universal Hiring Program to deploy additional new officers devoted to community policing. Chula Vista Police Department J?E-'1 DISCUSSION COPS Universal Hiring Program required that jurisdictions return to the DOl, budget information cost per officer over a three year period, no. later than June 15, 1996. A copy of that form is attached to this memorandum. Staff submitted the COPS Universal Hiring Program budget information on June 11, 1996. Keeping in mind that the Crime Bill is designed to be incrementally implemented over six federal fiscal years and that only a small percentage of the Crime Bill's authorized funding has been appropriated. The COPS Universal Hiring Program authorizes funding from the Crime Bill for up to six (6) additional officers for the City of Chula Vista. Additionally, the COPS Universal Hiring Program limits funding for new officers to a maximum of $75,000 per position over three (3) years. The COPS Universal Hiring Program will cover approximately 57%,50% and 36% of the City's salary and benefit costs per position for the three-year funding period. On the fourth year, the City would pay the full costs associated with each position added. A variety of components other than the COPS AHEAD and Universal Hiring Programs are also included in the Crime Bill. As specific information becomes available on these other programs, the Police Department will take the lead in distributing that information and, where appropriate, coordinate the application activities through the City Manager's Office. The cost for adding one new officer under the COPS Universal Hiring Grant Program is as follows: Year I Year 2 Year 3 Total- 3Yr Federal Share $27,033 (57%) $26,662 (50%) $21,248 (36%) $74,943 City Share 20,394 (43%) 26,661 (50%) 37,773 (64%) $84,828 Total $47,427 $53,323 $59,021 $159,771 The cost for adding 6 new officers under the COPS Universal Hiring Grant Program is as follows: Year 1 Year 2 Year 3 Total - 3Yr Federal Share $162,198 $159,972 $127,488 $224,829 City Share 122,364 159,966 226,638 $508,968 Total $284,562 $319,938 $354,126 $733,797 Police staff has identified offsetting funding sources for the City's share for some of the 6 positions. These proposals are described in more detail below: Chula Vista Police Department /t j]'~/V New Police Officer Prooosals- The following proposals were developed by the Police Department in a relatively short period of time due to the request to have a Supplemental Budget Report ready for Council's review during the budget workshops. The following proposals (1 & 2) discussed below are preliminary options available for Council action if Council wishes to add police officers under the COPS Universal Hiring Grant. Proposal #1 - Add a second position to the Narcotics Task Force (NTF). The police department currently has one officer assigned to NTF. This position's costs are offset by funds received as a result of asset sharing. The City receives 1.75% of countywide asset seizures. A total of $61,743 was received as a result of this positions participation in NTF in 1996. Adding a second position would generate an additional 1.25% of countywide asset seizure funds annually. FIScal Impact: The revenue generated by the addition of one position to NTF would exceed the City's share requirement in Years 1 through 3 and generate $44,000 annually in new revenue to the general fund. In year four and after the grant expires the 1.25% of countywide asset seizure sharing would pay for 75% of the position. Proposal #2 - Add a "TrarlSitional" School Resource Officer (SRO). The police department currently has a total of 7 SRO's (4 at the high school and 3 at the elementary). A need exists for an SRO between the high school and elementary districts. It would be beneficial to both the City and the schools districts to add a SRO to help transition children from elementary to high school. Fiscal Impact: The City's matching share could potentially be funded by both the high school and elementary school districts. Police staff is currently working with the school. districts to explore possibilities. If the City's share is paid by the school districts (thru direct payment or grants), there is no net impact to the general fund until Year 4 when federal funds cease to exist. Additional research needs to be conducted on the following Proposals 3 thru 6. Police staff is working on developing these proposals further and identifying offsetting revenue. Every effort is being made to identify loca1law enforcement needs in the community and limit the general funds liability.- Police staff would be glad to explore any of these or other proposals further. Proposal #3 - Code Enforcement/Neighborhood & Business Policing. Recently patrol officers have reported a number of code and business license enforcement violations. Consistent with our community policing efforts, the department would propose to add an officer which will work with the business community to promote compliance and educate them on prevention measure. Fiscal Impact: The City's share could be partially offset by increase revenues in licensing. Proposal #4 - Add a grant writer. During the past few years the Police department has made every effort to secure funding other than general fund for it's operating costs. The department currently has 12.18 positions paid by grant for a total of $800,701. The City of San Diego Police department has also strived to accomplish a reduction in general fund reliance. Their efforts have been successful due to the dedicated assignment of a grant writer position (funded by a grant) to secure non general funds Chula Vista Police Department /t!3 -j j for their department. Last year the City of San Diego received approximately $6,000,000 in grant funds as compared to Chula Vista. Over the past 8 years SDPD has been eligible to receive approximately $2lM in grants for Police Operation and Development. The Chula Vista Police Department would benefit from having a dedicated position responsible for tracking and applying for new funding opportunities. FIScal Impact: The cost of the position would pay for it self over a period of two years, generate revenue and reduce the Police departments reliance on the general fund. Proposal #5 - Add a Motor Officer/Traffic Car. Additional motor officers will be needed to service the new amphitheater and waterpark (if implemented). The nature of these businesses and related traffic control problems will require dedicated motor officer time. Additionally, this position would work together with the DUI Car discussed in Proposal #6 below. We recognize this proposal comes at an awkward time when the FY 96-97 proposes to delete one motor officer to save money. However, we believe it is a viable option that merits further consideration. In th~ event. the traffic officer is eliminated from the budget we would propose the reduction be accomplished by an internal realignment of police officer positions in the department. Fiscal Impact: The City's share in years 1 to 3 would be partially offset with revenue generated by citations and DUI full cost recovery charges. Approximately 40 to 60% of the position would continue to be offset by citation revenue after the grant expires. Proposal #6 - Add a Dill Car. The police department would propose to add a Driving Under the Influence (OUI) officer to focus specifically on drunk driving. In addition, this position would work together with the Motor Officer position discussed in Proposal #5 above. Fiscal Impact: The cost of the officer would be partially offset by full cost recovery charges to individual cited/jailed. Further research needs to be conducted on the amount of revenue that could be potentially derived from this proposal. Local Law Enforcement Block Grant The Local Law Enforcement Block Grant in the amount of $503 million is to be distributed to local governments as set forth in HR 728 passed by the House on February 14, 1995. Of the $503 million appropriation, $18 million is earmarked for drug courts, $11 million for Boys and Girls Clubs and $15 million for the Washington Metropolitan Police Department, thus leaving $459 million for local law enforcement. These funds are to be allocated to each City based on the three-year average part I violent crimes. Part 1 violent crimes are murder and non-negligent manslaughter, forcible rape, robbery, and aggravated assault as reported by the FBI. Using this formula Chula Vista is scheduled to receive approximately $257,000 which is less than surrounding local jurisdictions because our crime rate is lower. Unfortunately, this grant does not allocate the funds on the basis of cases cleared or a Job well done. The percent of local match required is ten (10) percent. Funds must supplement and not supplant. The funds can be used to reduce crime and improve public safety for activities such as hiring, training and employing new law enforcement officers and support staff as well as procuring equipment and technological advances related directly to local law enforcement. To qualify for the funds, a local advisory board must be established which includes reprrsentatives from police, prosecutor, courts, public schools and a nonprofit (educational, religious or community) group active in crime prevention, Chula Vista Police Depamnent J,? g - J.:2.. drug use prevention or treatment. The boards purpose is to review the City's application and make non- binding recommendations. Subsequently, the governor would get 20 days to review and comment on the application prior to submittal to DOJ and a public hearing would be held. The application for requesting funds is scheduled to be sent to Mayor's on June 15, 1996. In the interim, staff will continue to identify law enforcement needs and identify funds (where possible) to offset the local match requirement of 10%. The following are a few ideas identified by police staff at this time and, to be explored further upon receipt of the application and detailed requirements: Proposal #1 - COPS Hiring local match (potential match for the 6 new officers). Proposal #2 - Grant Writer (described above) Proposal #3 - Ticket Writers & Automation The police department has been working with the Administrator of the South Bay Municipal Court on the potential for state funding of a transition to automated traffic ticketing for moving and parking violations. Fiscal Impact: At this time, State monies from the South Bay Municipal Court will cover 50% of the equipment and transition costs. We believe this could offset the City's match requirement of 10% resulting in no impact to the general fund. Proposal #4 - Police Body Wire, equipment, undercover vehicles, etc. The above ideas are preliminary and intended to provide Council with an array of possibilities being explored for funding under the Local Law Enforcement Block Grant. Police staff will continue to explore local law enforcement needs. In the interim. police staff welcomes any suggestions you may have to improve local law enforcement. Staff will continue to keep you apprised of any new developments in regards to the Local Law Enforcement Grant. Chula Vista Police DepartmenJ / b g - ) 3 ATTACHMENT 2 COUNCIL AGENDA STATEMENT ITEM MEETING DATE 10/1/96 ITEM TITI,E: Public Hearing to notice use of COPS Funding . per AB 3229 Citizens Option for Public Safety for Local Law Enforcement Services SUBMITTED BY: Resolution Accepting $356,408 for Local Law Enforcement from the state budget to pay for police personnel and related equipment to be identified Chief of pOlice~~~./ City Manager (4/5THS VOTE: YES~ NO_ REVIEWED BY: During the 1996-97 budget process, Council authorized the Police Department to pursue funding for Community Oriented Policing projects. The state budget was adopted appropriating $356,408 to the City of Chula Vista as a result of Assembly Bill 3229, Brulte. This bill allocates state money to police departments for purposes stipulated by the Citizens Option for Public Safety (COPS) Program. RECOMMENDATION: That Council hold a public hearing to notice use of COPS funding to pay for "front line police services" and adopt a Resolution accepting $356,408 from the state budget. (This action does not put the City at risk or obligate it to accept the funds.) BOARDS/COMMISSION RECOMMENDATION: The state appropriation requires a Regional Oversight Committee's approval of the funds prior to disbursement. In response, an Oversight Committee was established in San Diego County. The Commi t tee recommends approval of the state local law enforcement funds as proposed. The San Diego County Oversight Committee is comprised as follows: 1) One municipal Police Chief - Rick Emerson, CVPD 2) The County Sheriff - B. Kolender 3) The District Attorney - P. Pfingst 4) The County's Administrative Officer - Lawrence Prior, III 5) One City Manager - J. Bowersox, J~[l-)f poway ATTACHMENT 2 PAGE 2, ITEM MEETING DATE 10/1/96 BACKGROUND: The California Legislature, with support of Governor Wilson, enacted AB 3229 (Chapter 134) into law during the 1996 legislature and state budget session. The legislation allocated $100 million statewide to local Police Departments, County Sheriffs and District Attorneys. Of this money, $75 million was divided among patrol- responsible law enforcement agencies, $12.5 million was distributed equally to Sheriffs for county construction and operation a~the remaining $12.5 million was divided among all District Attorneys in the state for criminal prosecution. The funds for local law enforcement were divided on a $2.30 per capita basis. Based on this formula, Chula Vista was allocated $356,408 to fund "front line police services." DISCUSSION: As part of the Police Department's on-going effort to obtain COPS funding and minimize the cost of police services to the General fund four grant programs (including AB 3229) will be forwarded to Council for consideration on October 8, 1996. A summary of these programs (AB 3229, COPS Universal Hiring, Domestic Violence and the Federal Local Law Enforcement Block Grant) is attached to serve as a reference point in reviewing these agenda statements. In brief, together these programs provide $1.2 M in new funds for supplemental local law enforcement services. The funds are to be used to supplement and not supplant. Some of the grant monies require a local match and have future fiscal implications to the General fund. Staff will address these issues in the Agenda statements to be forwarded to Council on October 8, 1996. AB 3229 - Citizens Option for Public safety is one of four grant programs to be forwarded to Council for consideration on October 8, 1996. However, in order to be eligible for funding, AB 3229 _ Citizens Option for Public Safety stipulates that 1) a public hearing be held in September noticing the intent to use these funds for local law enforcement services; and 2) that a plan for the use of the funds be approved by Council within 60 days of the public hearing. The police department was advised of this requirement in late September and was unable to meet the public hearing notice requirements.. As a result, this public hearing is scheduled for this meeting. Staff does not anticipate any appropriation problems as a result of this action. ~< / k j]lS ATTACHMENT 2 PAGE 3, ITEM MEETING DATE As mentioned above, the agenda item with staff's recommendation for specific use of the funds will be forwarded to Council on October 8, 1996. This will provide Council with the opportunity to review .use of these funds in the context of all grant opportunities available at this time. In the interim, the police department recommends that the City Council accept the state allocation and approve, in concept, potential use of the funds for personnel and equipment costs related to the expansion of the "front line police services. " Staff will describe the short and long term implications of proposed personnel or equipment purchases to be funded by this appropriation in the agenda items to be forwarded. In the event, Council chooses not to accept staff's recommenG3tion for use of these funds, Council is under no obligation to accept the State appropriation per AB 3229. FISCAL IMPACT: Acceptance of the funds would make $356,408 available for local law enforcement needs. The funds have a 25% in-kind contribution requirement; thus, no impact to the General Fund. However, the funds must be used to supplement local law enforcement not supplant. Reoccurring costs to the City would depend on the use of the funds. Fiscal implications will be described in agenda items to be forwarded to Council. ATTACHMENT 1 - Summary of New Grant Opportunities J tIJ .-/~ ATTACHMENT 2 SUMMARY OF NEW POLICE GRANT FUNDING OPPORTUNITIES Grant Title Amount Local Status Recommended Use Match of Funds AB 3229 - Citizens $356,408 In-kind To be $122,364 to offset Option for Public Services disbursed local match for 6 Safety (State Budget October 1996 officers under Appropriation) Universal Hiring Grant; $10,000 for Upgrade of Agr.~to Sgt for Domestic Violence Grant $184,044 for equipment; & $50,000 for services. Universal Hiring $450,000 Spreadsheet Disbursement Pay for 6 Officers Grant - Pays partial over three Attached of A ward salaries & benefits years Pending for 6 new officers over three years. Domestic Violence $150,000 $30,000 in- Awarded; Pay for one Grant - Pays for one to renewed kind funds may be Sergeant, one Agent, one Admin. annually servIces drawn pending Admin. Office Office Asst III, and for three Council's Assist. III, and $30,000 in years Approval contractual services contractual services with Children's with Children's Hospital Hospital for Family Protection Services (Federal) Local Law $257,401 10% local A ward & Pay $94,618 for Enforcement Block match disbursement one Animal control Grant - Pays for ($25,741) of funds Officer, .5 Crime personnel, overtime, pending Prevention equipment, enhanced Council's Specialist; .5 Grant security measures. Approval Writer; $10,000 for A ward based on overtime; $95,783 Crime Rate and equipment and distributed on a per $57,000 in security capita basis. measures. /&:.1\- J '/ -- / ATTACHMENT 2 UNIVERSAL HIRING PROGRAiVl COST The COPS Universal Hiring Program authorizes funding under the Crime Bill for six additional police officers for Chula Vista. Up to a maximum of $75,000 per officer is provided over a three year period. The grant offsets approximately 57%,50% and 36% of the City's salary and benefit costs per position for the three-year funding period. On the fourth year, the City would pay the full cost associated with each position added, The following is a breakdown of the cost of adding new police officers. The cost for adding one new officer under the COPS Universal Hiring Grant Program is as follows: . Year 1 Year 2 Year 3 Total - 3 Yr. Federal Share $27,033 (57%) $26,662 (50%) $21,248 (36%) $ 74,943 City Share 20,394 (43%) 26,661 (50%) 37,773 (64%) $ 84,828 Total $47,427 $53,323 $59,021 $159,771 The personnel cost for adding six new officers is as follows: Source Year 1 Year 2 Year 3 Total - 3Yr Federal Share $162,198 $159,972 $127,488 $449,658 City Share2 122,364 159,966 226,638 $508,968 Total $284,562 $319,938 $354,126 $958,626 2The City's share is to be offset by COPS funding per AB 3229 _ Citizens Option for Public Safety. ~ /~/J -/6 ~ ATTACHMENT 3 BUDGET DETAIL COPS UNIVERSAL HIRING & SUPPL. LOCAL ENFORCMENT SERVICE FUND (FUND 100-1089) (FUND 100-1086) Salaries & Benefits for 6 POLICE OFFICER positions: Object Description U HIRING SLESF Total 5101 Salary $124,033 $93,569 $217,602 - 5141 Retirement 30,688 23,150 $53,838 5142 Flex Plan 5,681 4,285 $9,966 5143 Medicare 1,799 1,357 $3,156 $162,200 $122,362 $284,562 LOCAL MATCH REQUIREMENT (FUND 100-1086) $122,364 (For Year 1 - Six Officer Positions) CORRESPONDING REVENUE ACCT - UNIVERSAL HIRING (100-3649) EQUIPMENT TO BE PURCHASED FROM FUND 100-1086 SLESF (AB 3229) 5201 Professional Services (K-9) $6,000 5202 Other Speialized Serives (Community Outreach) $25,000 5298 Other Contractual Svc (Training & Strategic Planning) $25,000 5565 Automotive Equipment (Patrol Vehicles) 5568 Related Equipment $75,000 $35,000 $10,000 5560 Computer Equipment 5567 Minor CIP (Auto. Traffic Ticketing) $23,569 Total $199,569 CORRESPONDING REVENUE ACCOUNT FOR SLESF (100-3648) LOCAL MATCH REQUIREMENT: IN-KIND SERVICES /J;g -J; RESOLUTION NO. /5(J/I7' RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING $122,364 FROM FUND 214 SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (SLESF) - AB 3229, CITIZENS OPTION FOR PUBLIC SAFETY SERVICES FOR PAYING FOR THE SIX OFFICERS ADDED UNDER THE UNIVERSAL HIRING GRANT, $184,044 FOR EQUIPMENT PROCUREMENT AND $50,000 FOR LOCAL LAW ENFORCEMENT SERVICES WHEREAS, the Community Oriented Policing Services (COPS) Program authorizes the U. S. Department of Justice, under the direction of the U. S. Attorney General, to provide funding to local governments for additional sworn law enforcement officers; and WHEREAS, during the FY 1996-97 Budget process, Council was apprised of a $450,000 allocation to the City under the COPS Universal Hiring Grant; and WHEREAS, it is recommended that the City council appropriate $122,364 from AB 3229 - citizens Option for Public Safety in order to pay the required local match funding for the six officers added under the Universal Hiring Grant; and WHEREAS, after paying for the six officer local match, $199,569 remains available for local enforcement equipment and services and the Police Department recommends these funds be appropriated for the following: Equipment - $126,000 Patrol Vehicles & Associated Equipment (Radio, MDT, etc.) $110,000 K-9 dog and related equipment Purchase of a Firewall $ 6,000 $ 10,000 Minor CIP - $23,569 Automated Traffic Ticketing $ 23,569 Services - $50,000 Community Outreach $ 25,000 Training & Strategic Planning $ 25,000 NOW, THEREFORE, BE IT RESOLVED the City council of the city of Chula vista does hereby appropriate $122,364 from Fund 214 Supplemental Law Enforcement Services Fund (SLESF) - AB 3229, citizens Option for Public Safety Services for paying for the six /~c - ) officers added under the Universal equipment procurement and $50,000 services as set forth hereinabove. Presented by Richard P. Emerson, Chief of Police Hiring Grant, $184,044 for for local law enforcement Approved as to form by /tf-C-~ RESOLUTION NO. ) ~J//tJ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DESIGNATING REVENUES GENERATED BY ASSIGNMENT OF POLICE OFFICERS TO CERTAIN SPECIALTY ASSIGNMENTS FOR PAYMENT OF FUTURE UNIVERSAL HIRING OFFICER SALARIES & BENEFITS WHEREAS, the Elementary School District will reimburse for salary and benefits of one school resource officer on an annual basis; and WHEREAS, one officer will be assigned to the Task Force and the City will receive an additional countywide asset seizure funds annually; and Narcotics 1. 25% of WHEREAS, officers staff time will be reimbursed from the MCA for law enforcement activities related to the amphitheater. NOW, THEREFORE, BE IT RESOLVED the City Council of the city of Chula vista does hereby designate revenues generated by the officers reassigned to the Narcotics Task Force (one officer), Elementary School Resources (one officer), and Business Policing (one officer) for payment of future Universal Hiring officer salaries and benefits. Presented by Approved as to form by A Y . --Moore " A~ Richard Emerson,_ Chief of Police C:\rs\COPS /kP~ / COUNCIL AGENDA STATEMENT ITEM /6E; F @- MEETING DATE: .10/22(96'/ ITEM TITLE: E Resolution Jf5f7/ Accepting $150,000 and Appropriating $109,462 for the addition of one FTE Agent (to be upgraded to Sergeant), one FTE Administrative Office Assistant III, $30,000 for family protection contractual services with Children's Hospital, $10,238 for computer equipment and $300 for travel related to domestic violence cases. ;::-. Resoluti6n/8"17Aipropriating $8,691 from AB 3229 - Citizens Option for Public Safety for upgrade of the Agent position to Sergeant funded by the Domestic Violence Grant. /) R 1 t' jg-1j? ?h .. h . . u eso u lon l'i:'i:lt orlzlng t e Clty Manager or designee to execute a contract with Children's Hospital in a form approved by the City Attorney. . SUBMITTED BY: Chief of pOlice~ REVIEWED BY: City Manager~ (4/5THS VOTE: YES~ NO_ In November 1995, the Chula Vista~lice Department, in partnership wi th Children's Hospital, developed a Family Protect.ion proj ect and applied for a COPS Grant to Combat Domestic Violence.. The City received formal notice of the grant award in mid-September, 1996. The Grant provides for reorganization of the' existing CVPD Domestic Violence Unit and adds one full time Agent (proposed to be upgraded to Sergeant), one full time Administrative Office Assistant III and $30,000 for family protection contractual services with Children's Hospital, $10,238 for computer equipment and $300 for travel related to domestic violence cases. RECOMMENDATION: That Council accept $150,000 from the COPS Domestic Violence Grant to pay $109,462 for the addition of 1 FTE Agent (to be upgraded to Sergeant), 1 FTE Administrative Office Assistant III, $30,000 for contractual services with Children's Hospital, $10,238 for equipment and $300 for travel related to domestic violence cases. . That Council appropriate $8,691 from AB 3229 - Citizens Option for Public Safety to upgrade the Agent position added by the Domestic Violence Grant to Sergeant. BOARDS/COMMISSION RECOMMENDATION: N/A /~E/ PAGE 2, ITEM MEETING DATE 10/22/96 BACKGROUND The City of Chu1a Vista has an increasing number of families where domestic violence and other related forms of family violence are occurring. Domestic violence incidents comprise more than 13% of the 21,000 Part I and Part II offenses reported for Chula Vista in 1995. Of these, 25% involved no injury and 75% involved injuries. The number of domestic violence incidents in 1996 is projected to be the same as in 1995. The use of weapons in domestic violence incidents has continued to increase. Based on the increase and type of weapons being used, it is apparent that domestic violence now involves more than verbal altercations; physical violence is prevalent. The Police Department proposes increasing resources to investigate and clear domestic violence cases, so that victims can be protected and perpetrators held accountable. The Family Protection Project is a unique collaboration between the Chula Vista Police Department and a major teaching and research hospital, Children's Hospital which we hope will put a halt to domestic violence. The Children's Hospital includes the internationally renowned Center for Child Protection (CCP). The Center will provide planning and evaluation support to the Project as well as assistance in the further development of services to domestic violence victims and their families. Additionally, Children's Hospital will locate treatment resources at the Police Department. DISCUSSION The project is designed to simultaneously strengthen law enforcement resources devoted to domestic violence while linking police officers closer to protection and treatment services for victims. The overall goal of the project is to make victims of domestic violence, and their children safer. In addition to strengthening enforcement efforts, this proj ect includes an innovative linking of enforcement, protection and treatment services for victims and their familie's. Because domestic violence often occurs within a context of family violence, the proj ect will take a broad view of the needs of domestic violence victims and their children. The project calls for the creation of a Family Protection Coordinating Council which will bring together all organizations serving domestic violence victims. There are many well meaning and constructive organizations serving families and victims of family violence in Chula Vista. As in many communities, service providers work in isolation. The Coordinating Council will greatly strengthen local service provider collaboration and advi.se the CVPD on domestic violence. The Police Department envisions the Coordinating Council providing a forum for effectively relating the work of the department to the needs of the /f,E-;L PAGE 3, ITEM MEETING DATE 10/22/96 community. Domestic violence prevention efforts will be examined closely. In addition, because Chula Vista is a culturally diverse setting, CVPD methods in working with domestic violence victims and' offenders will be examined for cultural appropriateness. The Project will increase resources to better investigate and clear domestic violence cases so that victims can be protected and perpetrators held accountable. Using community volunteer programs and service providers the Police Department will improve domestic violence victim protection services, assuring better access for victims to the logistical and emotional support they need for their immediate safety. The hospital will co-locate treatment resources at the Police Department in order to help victims and their children break out of the cycle of family violence and reduce repeat victimization. IMPLEMENTATION The grant provides $150,000 for development of the Family Protection Unit in collaboration with Children's Hospital. These funds pay for one full time Agent (to be upgraded to Sergeant) and one full time Administrative Office Assistant III position ($109,462), as well as contractual services with Children's Hospital ($30,000), $10,238 for the purchase of two computers and $300 for travel related to domestic violence cases. Implementation will require contractual services from Children's Hospital and the reorqanizations of the domestic violence unit at CVPD. CONTRACTUAL SERVICES - CHILDREN'S HOSPITAL: Children's Hospital is a non profit community hospital providing a wide variety of health related services to children and .their families. The hospital has been in existence since 1955. In 1978 the hospital developed the internationally recognized Center for Child Protection (CCP). CCP is San Diego County's 'source of evidentiary examination, forensic evaluation and treatment in child abuse and neglect .cases. CCP has recently developed a general community Family Violence Program which focuses on preventing violence in families where there are children, including domestic violence. Their programs specifically address violence in families, particularly as it affects children, with the premise that violence of any sort in the family environment has a detrimental outcome for all family members on a number of significant'developmental and life course dimensions. It is the aim of these programs to strengthen families and to reduce the impact of family violence by .preventing its occurrence and assisting its victims. JJ;E~ .3 PAGE 4, ITEM MEETING DATE 10/22/96 The proposed project is a continuation of existing collaborative relationships between Children's Hospital and the Chula Vista Police Department. - As the primary provider of evidentiary and forensic services, CCP and CVPD work closely together to assure that physical examinations and forensic interviews are carried out in child abuse and sexual assault cases. Children's Hospi t'al also provides inpatient acute care for children injured in traffic accidents in our community. The negotiated memorandum! (Attachment 2) with Children's Hospital builds on this existing collaboration ~nd provides the following: 1) A full time professionally supervised Advocate, who will be co~located at the Department and provide supportive services directly to family violence victims through the provision of intake, coordination of systems, and supportive services. The Advocate will also be responsible for case management activities, written documentation, coordination and assist in counseling family violence victims. In addition, the Advocate will assist victims in.attaining safety and offering emotional support, transportation to shelters, medical care and court accompaniment. Families will be followed for the duration of the Project. 2) Make the Advocate available the equivalent of five days a week (hours and days to vary In accordance with project) . 3) Provide liability insurance, supplies, training, administrative and clinical oversight to the Advocate. 4) Provide victims with access to professional mental health treatment as needed. 5) Provide necessary service statistics, and financial records' as requested'by CVPD. 6) Make relevant Hospital programs available to victims and family members referred by CVPD. Such programs include the "Kids in Court" program which assists children to understand the court process and testify confidently in court in domestic violence and child abuse cases. !This 'memorandum was developed during the initial grant application process. A negotiated contract between Children's Hospital and the Police Department will be entered into for purposes of implementing this program. Staff is recommending the City Manager or designee be authorized to execute the contract with Children's Hospital in a form approved by the City Attorney. /tE -1 ' PAGE 5, ITEM MEETING DATE 10/22/96 7) Provide senior staff to assist CVPD in planning an integrated Family Protection Unit. 8) Provide a s~nior staff person to actively participate in the proposed Family Protection Coordinating Council. 9) Assist with program data analysis and will propose appropriate research projects. 10) Assist in reviewing community services available to domestic violence victims and identify service gaps. 11) Seek additional ways to strengthen the collaboration in service to the community. CVPD REORGANIZATION Attached) Current Structure (Orqanizational Chart Currently, domestic violence related cases are handled by two separate units within the Investigative Division: The Crimes of Violence Unit, which is comprised of: three agents responsible for domestic violence cases, two gang detectives, four violent crimes agents, and an additional two gang officers assigned to the Jurisdictional Unified for Drug and Gang Enforcement (JUDGE) task force and .5 secretary position. There are a total of 11.5 FTE positions assigned to this unit with very diverse and complex assignments supervised by one Sergeant. In addition there is one counselor from South Bay Community Services (SBCS) assigned to this unit as a resource. The Juvenile Unit which is comprised of: four agents assigned to handle sex crimes and child abuse. In addition to three juvenile agents, seven school resource officers and one secretary. There are a total of 15 positions with very diverse and complex assignments supervised by one Sergeant. In addition the.re are four counselors from SBCS assigned to this unit and used as resources. Proposed Re-orqanization (Orqanizational Chart Attached) Based on the complexity and diverse nature of assignments handled by individuals in both existing units, the span of control for the two existing Sergeants is increasingly becoming more difficult to manage. As a resul t , the Pol ice Department proposes to re- organize and create 3 separate units (Family Protection, Crimes of Violence, Juvenile). The units would be composed as follows: Ji-ES PAGE 6, ITEM MEETING DATE 10/22/96 The Family Protection Unit would combine the four agents assigned to sex crimes and child abuse and the three agents assigned to domestic violence and one SBCS Counselor to form one unit. The unit would include the two new positions (Agent upgraded to Sergeant & AOA III) as well as the Children's Hospital Advocate authorized by the grant. In order to accomplish establishment of this unit, the Police Department recommends upgrade of the Agent position authorized by the grant to a Sergeant position. This will enable the unit to handle the increasing domestic violence case load, expedite domestic violence follow up investigations, and develop strategies for dealing with domestic violence issues under the direction of one Sergeant. This Sergeant would also serve as a liaison with the community and Coordinating Council established by this grant. , , The Crimes of Violence Unit would be comprised of one Sergeant, four Crimes of Violence Agents, two Gang Investigators, two JUDGE investigators, and .5 Secretary. The COV unit will focus on the investigation of homicides, unsolved homicides, assaults, missing persons, robberies, and hate crimes. This unit will also continue to investigate and monitor the activities of gangs. The Juvenile Unit would be composed of one Sergeant, 3 Juvenile Agents, 7 School Resource Officers (SRO) , and one secretary. In addition to 4 SBCS Counselors used as resources. This unit's focus will be to continue to work with schools and follow up on juvenile related crimes (excluding domestic issues) . . Reorganization and establishment of these specific units will greatly enhance the Police Department's ability to effectively and efficiently investigate crimes" thus making Chula Vista a safer community. CITIZEN'S ADVERSITY SUPPORT TEAM (CAST) CAST is a city volunteer program that functions under the auspices of the police and fire departments. CAST volunteers provide 24 hour a day trauma coverage for the community. They are trained to provide emotional support, arrange for follow-up services, assist with funeral plans, serve as advocates for rape victims, and assist with the unique needs of individual families in time of trauma. CAST will continue to provide emotional and practical ~upport to victims of traumatic incidents and their families. Their 24 hour coverage will provide immediate support for victims and/or families, to be followed by services from the Children's Hospital Advocate and CVPD Family Protection Unit. /~f-? PAGE 7, ITEM . MEETING DATE 10/22/96 FISCAL IMPACT: This is a three year program. The $150,000 grant is renewable for up to three years. There is no impact to the General Fund until these funds have been exhausted. Additionally, the proposed upgrade of the Agent's position to Sergeant would be paid out of the State appropriation AB 3229 - Citizens Option for Public Safety. In the event the State appropriation AB 3229 is eliminated, the annual cost to the General Fund, during the first three years of this program, is. $8,691. The need for this program will be re-evaluated at the end of the three year grant program to 1) determine the need to continue the project; 2) re-assign staff to another problem area; or 3) eliminate the positions funded by this grant. In the event, this program is continued after the grant expires, the net impact to the General Fund is $148,453. This includes $118,153 associated with the Sergeant and Administrative Office Assistant III positions, $30,000 for contractual services with Children's Hospital and $300 for related travel expenses. Attachment 1 a) Current and Proposed COV Charts b) Current and Proposed Juvenile Charts c) Proposed Family Protection Unit Chart MOU with Children's Hospitai Attachment 2 Attachment 3 Budget Detail (Spreadsheet) J~~-? RESOLUTION NO. )'i(J)7! RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING $150,000 AND APPROPRIATING $109,462 FOR THE ADDITION OF ONE FTE AGENT (TO BE UPGRADED TO SERGEANT), ONE FTE ADMINISTRATIVE OFFICE ASSISTANT III, $30,000 FOR FAMILY PROTECTION CONTRACTUAL SERVICES WITH CHILDREN'S HOSPITAL, $10,238 FOR EQUIPMENT AND $300 FOR TRAVEL RELATED TO DOMESTIC VIOLENCE CASES WHEREAS, in November, 1995, the Chula vista Police Department, in partnership with Children's Hospital, developed a Family Protection Project and applied for a COPS Grant to Combat Domestic violence; and WHEREAS, the city received formal notice of the grant award in mid~September, 1996; and' WHEREAS, the grant provides for reorganization of the existing CVPD Domestic Violence unit and adds one full time Agent, one full time Administrative Assistant III and $30,000 for family protection contractual services with Children's Hospital, $10,238 for equipment procurement and $300 for travel related to domestic violence cases. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula vista does hereby accept $150,000 from the COPS Domestic Violence Grant and appropriate $109,462 for the addition of one FTE Agent, one FTE Administrative Office Assistant III, $30,000 for family protection contractual services with Children's Hospital, $10,238 for equipment and $300 for travel related to domestic violence cases. Presented by Approved as to form by Richard P. Emerson, Chief of Police y '"' /~f~r E-i .~ z ~ .~ u Z ~ ~~ ~o <> ~8 ~oo ~~ ~ U E-i Z ~~ ~ ~ u rJ) Z o ATTACHMENT la . /' . . ri = .. . . .. " " 0 . > It .. .. .. .. . ~ ---2 . .. . . . :: ~ .. " ~ .. .:i . , .. 0 :;:;;;;;:::;:;; ......... " . : - I ~ " ~ . " +......... . ~ ; , 0 I 1--" . . '" ~ < Z '" ] , 0 Z E- '" . '" ...; '-' ~ , '" U '" ::> " '" - ~ ~ '" ::; 0; . ... ~ "" - '" = - '" .. . .. " . .. ~ .. 0 ; ----" . . . < 0 .. ;; . .. , .. ;;, .. 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'" 8 8 0 0 0 <:) " .,; '" : - t c .. .. .. .. .. ~ ~ .... ..... <:: L-...;! Z <II .. ~ "" ;;> -< ;:> <:) ...... ..; )!cE-) :2., I , , ATTACHMENT Ie . .. I en U - ~ ... - ~ - .. en 0 ,..: P:::i~ ~ en O::8C en C Z .. ...l c ...: '" ~Oe tJ ;: .. enu .---" p Z;..C ~ <:i en. .. ;:l...:..:: 0 ~ o~= :i - Z u > -- - z . .. ... u ::8 f-<_ 0 .. ;:l 0 0 ...: en - 0 ~ .. .. ~ "',",,,,,,,,,,,,,,,,, , - U I ~ , ~ , I ~ ,'I ~ ., I I ~ ~ 0 I en , ;:l en ~ Z en I ~ ... 0 Zf-< I ...: ~ -Z .. ~Z f-<"" I 0 f-<_ f-<< Z '" I ...l '" << .. - ~ . <Z -< ~ , :I: C c.?f-< c.?~ ~~~ ! " ~ -"" .. -f-< -- - c.? ... U 00 f-<< ~ < ~ gju f-<;:l P:: " I en en~ ~ 0. , ~ 0 ~ . .. ~- en~ , ::8 ~ ~ Z ~...l , - ~ .. Z , P:: - - i .~ ... ... U I ... I >< en. I ~ .~ ..' , en I ~ I I I ~ I [ I ~ 00. ~ 0 ~ ~ ~ u ~ en Z ~ .. ~~ ~ f-<enC ...l '" 0 ...:O~ 0 ~ ;> C u-- " ... > 00 ~ o - ~ u ...: ~enu - O.Z 0 f-< 0 ~ .. ...:~...; en .., ~ 0 ::8 ....l 0 - . /bE-/3 :I: 0 u City of Chula Vista Police Department 276 Fourth Avenue Chula Vista, CA919l0 ATTACHMENT 2 Children's Hospital and Health Center-San Diego 3020 Children's Wayl MC 5016 San Diego, CA 92123-4282 (619) 691-5151 (619) 576-5803 MEMORANDUM OF UNDERSTANDING This memorandum of understanding describes a unique collaborative effort between a leading police department and a distinguished hospital to develop a community response to the increasing threat posed by violence in the family. ~ Whereas The Chula Vista Police Department. hereinafler known as The Deparrment. shares with Children's Hospital and Health Center. hereinafter known as The Hospital. an intense interest in reducing family violence. maintaining strong families. ho.lding perpetrators accountable. and serving victims \vell; whereas The Department serves a diverse community in which incidents of domestic violence are increasing in numbers and seriousness; . whereas The Department \\ishes to panner enforcement efforts with treatment and prevention; whereas The Department seeks to develop close collaborative relationships with other community organizations; and . whereas The Hospital is the primary acute care provider for children-in San Diego County, Imperial County and Baja Mexico; - whereas since 1976 The Hospital has operated the Center for Child Protection, the largest comprehensive child and family protection center in the United States; whereas The Hospital is a not for profit, non governmental community ser,ice organizati~n serving domestic violence victims; whereas The Hospital is a lead agency in a County Public/Private collaboration caUed "The Children's Initiative", and as a part of the initiative is responsible for strategic planning to reduce family violence; /&E-/ij 19 whereas since 1991 the hospital has operated a family violence program which combines domestic violence and child abuse treatment into one unit; recognizing that many families exhibit both forms of violence; whereas The Hospital isthe primary provider of evidentiary examinations and forensic evaluations for child abuse criminal cases for law enforcement agencies throughout the county, The Department and The Hospital will collaborate in the planned Family Protection Project. The Hospital will: I. provide a full time professionally supervised Advocate, who will be co-located at The Department 2. make an Advocate available five days a week through the Domestic Violence Program. The . Advocate will be able to respond on the basis ofan objective measure.oflethaJity . , 3. provide liability insurance, supplies, training, administrativ'e and clinical oversight to the Advocate 4. provide victims with access to professional menta] health treatment as needed 5. provide neces'sary service statistics, and financial records as requested by the Department ~'- "; 6. make relevant Hospital programs available to victims and family members referred by The Department. Such programs include the "Kids in Coun" program which assists children to understand coun process and testifY confidently in coun in domestic violence and child abuse 'f . cases 7. provide senior stan to assist The Department in planning an integrated Family Protection UnIt 8. provide a senior stanperson to actively participate in the proposed Family Protection Coordinating Council . 9. assist with program data analysis and will propose appropriate research projects ] O. assist in reviewing community services available to domestic violence victims and identuy service gaps II. seek additional ways to strengthen the collaboration in service to the community The Department will: I. pay for salary, benefits, professional supervision of the Advocate, in the amount ofS30,000 ~ ------- / ~L /!.-~ 2 20 . . . ~ 2. provide space, :referrals of cases, P3l1icipation in case conferencing 3. provide physical protection for the Advocate when necessary 4. serve as the lead agency on this project and will provide overall grant management 5. make available volunteers to assist with transportation and to serve as case aiges 6. seek additional ways to strengthen the collaboration in service to the community 7. utilize advocates on a regular basis and encourage their utilization by officers 8. educate patrol officers of the availability of the advocate and how the advocate can assist tne victim and strengthen a case 9. provide statistics on COntract performance, and share information regarding trends 10. provide senior staff for the Family Protection Coordinating Council 11. provide program data analysis and assist with possible research projects. The Dep3l1ment and The Hospital agree to work together on the formation of a Family Protection Coordinating Council and a strategic plan to develop community services for victims, and to seek additional funding resources for community based family violence prev~ntion and treatment efforts. Richard Emerson Chief of Police Paul anDolah Senior Vice President, Executive Director Jf; E ~/~ J 21 "'FEDERAL COPS DOMESTIC VIOLE~CE GRANT (100-1088) Object Description ----------------------------------------------------------------------- $7,567 5101 5102 5141 5142 5143 Salary Differential Retirement Flex Plan Medicare 5202 Spec. Contractual Svc (Children's Hospital) 5221 Travel 5560 Computer Equipment ... Agt. to Sgt. AOA III $48,500 3,900 13,139 5,602 o $71,141 $29,158 '0 4,068 5,095 o $38,321 TOTAL FUND CORRESPONDING REVENUE ACCOUNT (FUND 100-3649) LOCAL MATCH REQUIRMENT: $30,000 IN-KIND SERVICE *NOTE: UPGRADE TO BE PAID FROM FUND 100-1086 ... Jtf~/7 ATTACHMENT 3 BUDGET DETAIL Total $77.,658 $3,900 $17,207 $10,697 $0 $109,462 $30,000 $300 $10,238 *Position Upgrade 1,124 $8,691 ---------------------- $150,000 (100-1088) $8,691 (100-1086 RESOLUTION NO. /~77c2.. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING $8,691 FROM AB 3229 CITIZENS OPTION FOR PUBLIC SAFETY FOR UPGRADE OF THE AGENT POSITION TO SERGEANT FUNDED BY THE DOMESTIC VIOLENCE GRANT . WHEREAS, the Police Department proposes to combine the four agents assigned to sex crimes and child abuse and the three agents assigned to domestic violence to form one unit which would include the two new positions created by Resolution No. (Agent upgraded to Sergeant & AOA III) as well as the Children's Hospital Advocate authorized by the grant; and WHEREAS, the new unit would be designed as the Family Protection unit; and WHEREAS, in order to accomplish establishment of such a unit, the Police Department recommends upgrade of the Agent position authorized by the grant to a Sergeant position which will enable the unit to handle the increasing domestic violence case load, expedite domestic violence follow up investigations, and develop strategies for dealing with domestic violence issues; and WHEREAS, additionally, the Sergeant would resolve a span of control issue and serve as a liaison with the community and. Coordinating Council established by the grant; and WHEREAS, based on the complexity and diverse nature of assignments handled by individuals in both existing units, the existing span of control for the two existing Sergeants is increasingly becoming more difficult to manage. NOW, THEREFORE, BE IT RESOLVED the city Council of the city of Chula vista does hereby appropriate $8,691 from AB 3229 - citizens option for Public Safety for upgrade of the Agent position to Sergeant funded by the Domestic Violence Grant. Presented by , Approved as to form by i;y~ "\ ) Richard P. Emerson, Chief of Police c:\RS\VIOLENCE.GRT J~;:: - / RESOLUTION NO. /xrv RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE CITY MANAGER OR' DESIGNEE TO EXECUTE A CONTRACT WITH CHILDREN'S HOSPITAL IN A FORM APPROVED BY THE CITY ATTORNEY WHEREAS, Children's Hospital is a non profit community hospital providing a wide variety of health related services to children and their families; and WHEREAS, in 1978 the hospital developed the inter- nationally recognized Center for Child Protection (CCP) which is the County's source of evidentiary examination, forensic evaluation and treatment in child abuse and neglect cases; and WHEREAS, CCP has recently developed a general community Family Violence Program which focuses on preventing violence in families where there are children, including domestic violence; and WHEREAS, CCP and CVPD work closely together and have negotiated a Memorandum of Understanding. city of designee Hospital implement NOW, THEREFORE, BE IT RESOLVED the City Council of the Chula vista does hereby authorize the City Manager or his to negotiate and execute a contract with: Children's in a form approved by the City Attorney in order to. the existing Memorandum of Understanding. Presented by Approved as to form by ~ \, Richard P. Emerson, Chief of Police n Y. Moore, ~ ~ c:\RS\VIOLENCE,GRT J~c;- / ITEM TITLE: If; --r ~ , r SUBMITTED BY: REVIEWED: COUNCIL AGENDA STATEMENT ITEM jJ;jJ 1'./ -j j Meeting Date: 10/22/96 ) YJ/77 Resolution Amending the FY 1996-97 budget to add $38,165 for I FTE Animal Control Officer, $23,453 for .5 Crime Prevention Specialist, $10,000 for patrol ovehime, $33,000 for contractual grant writing services and $95,783 for equipment. Resolution / rY~AccePting $257,401 from the Local Law Enforcement Block Grant and Appropriating such funds to pay for the additional positions, services and equipment. ' Resolution /8""(?t App~opriating $25,740 (local match) froni Fund 214 Supplemental Law Enforcement Services Fund (SLESF) - AB 3229; Citizens Option for Public Safety for purchase of equipment. Chief of po~ City Manager f! (4/5ths VOTE: Yes...x No--> During the FY 96-97 Budget process Council authorized the Police Department to pursue funding under the Local Law Enforcement Block Grant and form an Advisory Committee to review the use of funds as stipulated by the 'Block Grant. Additionally, Council directed the Police Department to find funding for staffing of the Crime Prevention Program, cut during the FY 96-97 budget process. RECOMMENDATION: That Council Amend the FY 96-97 Budget and: 1) Appropriate $94,618 from the Local Law Enforcement Grant to pay for the addition of 1 FTE Animal Control Officer, .5 Crime Prevention Specialists and Police Grant Writer Services and $lO,OOOfor overtime. 2) Appropriate $95,783 from the Local Law Enforcement Grant and $25,740 from AB 3229 Citizens Option for Public Safety for purchase of equipment. 3) Appropriate $57,000 from the Local Law Enforcement Grant to a minor CIP for enhancing security measures. j6)1~/ Page 2 ITEM_ Meeting Date: 10/22/96 BOARDS/COMMISSION RECOMMENDATION: The Local Law Enforcement Block Grant requires a Local Advisory Board's approval of the use of funds prior to disbursement. As approved by Council, during the FY 96-97 budget process, a Local Advisory Board consisting of the specific composition required by the grant was set up to review the grant application. The Local Advisory Board recommends approval of the Local Law Enforcement Block Grant disbursements as proposed. The Local Advisory Board is comprised of one representative from the following agencies: Local Law Enforcement Agency - Rick Emerson, CVPD Prosecutors Office - Joan Stein Court System - Judge Jesus Rodriguez School System - Lowell Billings Non-profit - Pam Smith BACKGROUND The Omnibus Fisca{ Year 1996 Appropriation Act, Public Law 104-134, provid~s $503 million for the implementation of the Local Law Enforcement Block Grant Program, administered by the Bureau of Justice Assistance (BJA). Of the $503 million appropriation, $18 million is earmarked for drug courts, $1 i million for Boys & Girls Clubs and $15 million for the Washington Metropolit<,1ll Police Department, thus leaving $459 million for local law enforcement. These funds are to be allocated to each city based on the three year average part I Violent Crimes. Part I Violent Crimes are murder and non-negligent manslaughters, forcible rape, robbery, and aggravated assault as reported by the FBI. Using this formula Chula Vista is eligible to receive $257,40 I which is less than surrounding local jurisdictions because our crime rate is lower. Unfortunately, this grant does not allocate the funds on the basis of cases cleared or a job well done. ' GRANT REQillREMENTS The $257,401 grant allocation has a 10% percent ($25,740) local match requir'ement. Funds must supplement and not supplant. The funds must be used to reduce crime and improve public safety through activities such as hiring, training, and employing new law enforcement officers and support staff (includes animal control) as well as procuring equipment an~ technological advances reiated directly to local law enforcement. )~JI/2 Page ~ ITE~ ~eeting Date: 10/22/96 DISCUSSION . The Police Department and Advisory Board recommend use of the funds in the following manner: Local Law Enforcement Support - $94.618 Add .5 FTE Crime Prevention Specialist ($23,453). As you may ,recall, Council approved funding of the Crime Prevention Specialist Position through December 1996 and requested the Police Department to identify other funding opportunities to continue to provide crime prevention services. This grant opportunity would fund the .5 FTE Crime Prevention Specialist through June 30, 1997. Continued full time funding of the position would be subject to Chula Vista FY 97-98 budget deliberations. I Add $33,000 for contractual grant writing services to seek new funding sources to enhance community policing efforts and minimize the cost of police services on the General Fund. Recognizing that adding additional staff requires a potential commitment from the General Fund for recurring costs, the department proposes to use contractual grant writing services, The alternative to this proposal would be to hire a grant writer. The pros and cons of both proposals will be ev'aluated evaluated after the department has had some experience with contractu'!l grant writing services. Staff believes this investment will pay for itself from new monies brought in from grants. Funding for this program will be subject:to City budget deliberations. Add 1.0 FTE Animal Control Officer ($38,165) to do community outreach and provide service for Chula Vista. Community outreach activities would include greater involvement with the community and establishment of animal adoption. opportunities as well as distribution of educational information on the care of animals and CV Shelter at Harbor Days, Bonitafest etc. This position would also service Chula Vista and provide relief service to contract cities on an as 'needed basis. Some of the cost of this position would be passed through in upcoming animal services contract renegotiations. i Equipment Procurement - $95.783 + $25.740 (AB 3229 Local ~atch = $1:21.523 Purchase oue Animal Control Truck ($25,631) for the new ACO position. Jbfl-3 Page 4 ITEM Meeting Date: 10/22/96 Purchase one Undercover Vehicle ($15,000) needed for investigations. Due to changes in Federal law, the ability to get asset seizure vehicles has greatly diminished. Additionally, there is no replacement program established for asset seizure vehicles. As a result, the current fleet of asset seizure vehicles used for undercover investigations are old and contributing to high maintenance costs. Moreover, three of the undercover vehicles, beyond economical repair, were recently sold at auction for a total of $5,000. These funds have been deposited in the asset seizure fund (218). Staff will return to Council with a recommendation on the use of these funds and purchase of additional undercover vehicles at a later date. In the interim, staff recommends purchase 'of one undercover vehicle from this block grant. Purchase a Photo Imaging Booking Camera & Related Equipment ($52,523). This equipment would provide for instant line-ups; eliminate the need for hard files and save staff time as well as promote interagency coordination. The photo image camera will take photographs of suspects, store the image in a computer until it is needed. The image can then be recalled later by CVPD and any other agency in the County with the same system. CVPD will also be able to access other agency's photo files on an as needed for immediate suspect identification or for photo line-ups. This technology essentially replaces the booking 35 mm camera, film and the need for hard files to store the images of the suspects. Staff time will also be saved by reducing the amount of time required in handling film, transportation to and from processing vendors, filing processed film, and tnaking prints of the negatives. The equipment has a useful life of 5 to 7 years. The department anticipates it may last longer. There is no need for additional personnel to operate the equipment. The equipment will be operated by the booking person. Additionally, to limit the future liability of the General Fund, this is proposed to be a one-time purchase with no replacement. This proposal includes the Photo Imaging Booking Camera and related equipment. Thyre will be some monetary savings related to elimination of some 35mm film, Polaroid film and processing fees paid for photos and negatives. The amount of savings is unknown at this time and may be derived at after this system has been in , operation. Additionally, there may be some revenue generated from neighboring cities willing to purchase instant photo line-ups from CVPD. i I Purchase a Voice Stress Analyzer ($11,000) to replace future use of p6lygraphs. This is an instrument that has proven itself valid and extremely accurate (98 '!p) and can be utilized in live interviews, taped interviews, or to analyze telephone conversations. This proposal would result in future savings to the general fund. The PoliceiDepartment currently pays for polygraphs at'a rate of $105 each. We average abou~ 35 polygraphs Jb/l~Y I , Page 5, ITEM I - Meeting Date: 10/22/96 a year. If the Voice Stress Analyzer proves to be as effective as the polygraphs, the funds' ($3,500) earmarked for polygraphs would be reduced from our budget. Most police agencies throughout the State have disbanded their polygraph units' as there is no longer a need for the older, more expensive and less efficient technology. These agencies are successfully using the Voice Stress Analyzer in criminal cases, internal interrogations, and pre-employments. This new technology has proven to be an effective method of getting a truthful confession and an invaluable investigative tool. Confessions obtained from the use of a Voice Analyzer are admissible in Courts. The departmertt believes thai having a Voice Analyzer on-site will be a cost effective critical part of the over-all formula for the success in solving cases by obtaining confessions. . Purchase Ergonomic Work Stations and Equipment ($17,369) throughout the Police Department. Based on input from the Risk Manager and advise from Sharp Hospital the department has evaluated ergonomic needs and recommends purchase of the following equipment. Purchase of this equipment will reduce injuries and defray future workers compensation costs. These funds would be used to purchase as much of the following equipment in critical need order: 23 Office Chairs 5 Office Desks 11 Wrist Rests 2 Copy Holders 4 Screen Filters I Keyboard Drawers 3 Back Rests 4 Foot Rests 4 VDT Riser/Stacker for Monitors 6 Fluorescent Light Fixtures MINOR CIP - $57,000 , Staff recommends a minor CIP be established for the purpose of enhancing security measures at the Civic Center, City Jail, and remote locations throughout the City. Enhancement of security measures at the Civic Center would include installation of cameras :throughout the Complex, command post, and securing the jail area. Remote locations to be targeted include areas of special risk of incidents of crime such as the trolley area and the Chula V ista Center. Additionally, staff will explore acquisition of a keycard system for the Civic C~nter. /t/I~ FISCAL IMPACT Page 6 ITEM Meeting Date: 10/22196' I I I Personnel cost - This is a one year Block Grant allocation. As a result there are ~ecurring costs of ($38,165) associated with the Animal Control position to be partially passed through the animal service contract renegotiations. The Crime Prevention Specialist ($23,453) will be funded through June 1996 and subject to Chula Vista budget deliberations. The $33,000.for grant writer contractual services would pay for them self from new grant program funding opportunities and would be subject to budget deliberations. The on-going annual:cost would be $71,165 (for ACO & grant writing services) minus reimbursements from the renegotiated animal service contracts and grant funding. Additionally, the Police Department will continue to explore other avenues to minimize the impact to the General Fund. : I Equipment cost - The equipment purchases are proposed to be one-time purchas~s. There are no recurring costs proposed for procurement of equipment (except vehicles) and the minor CIP to enhance security measures. The annual maintenance cost for the animal contro'l truck and the undercover vehicle is estimated to be $1,800 per vehicle. Local Match Requirement - The matching fund requirement of 10% ($25,740) is proposed to be appropriated from funds received under AB 3229 - Citizens Option for Public Safety (FUND 214). AB 3229 is the legislation which allocated $356,408 to the City for purposes stipulated by the Citizens Option for Public Safety Program. Council held the public hearing accepting these funds for police personnel and related equipment on October 1, 1996. As stipulated by the legislation, fund 214 Supplemental Law Enforcement Services Fund was ~stablished for disbursement of these funds. Attachment 1 - Budget Detail (Spreadsheet) /;/;// ~i RESOLUTION NO. /3'1/ /' '/ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE FY 1996-97 BUDGET TO ADD $38,165 FOR 1.FTE ANIMAL CONTROL OFFICER; $23,453 FOR .5 CRIME PREVENTION SPECIALIST $10,000 FOR PATROL OVERTIME, $33,000 FOR CONTRACTUAL GRANT WRITING SERVICES AND $95,783 FOR EQUIPMENT . WHEREAS, during the FY 1996-97 Budget process, Council authorized the Police Department to pursue funding under the Local Law Enforcement Block Grant and form an Advisory Committee to review the use of funds as stipulated by the Block Grant; and , WHEREAS, the Omnibus Fiscal Year 1996 Appropriation Act, Public Law 104-134, provides $503 million for the implementation of the Local Law Enforcement Block Grant Program, administered by the Bureau of Justice Assistance; and WHEREAS, Chula vista is eligible to receive $257,401 of such funds; and i WHEREAS, funds must supplement and not supplant and must be used to reduce crime and improve public safety through activities such as hiring, training, and employing new law enforcement officers and support staff (includes animal control) as well as procuring equipment and technological advances related directly to local law enforcement; and WHEREAS, Council directed the Police Department to find funding for staffing of the Crime Prevention Program, :cut during the FY 96-97 budget process. NOW, THEREFORE, BE IT RESOLVED the city Council of the city of Chula vista does hereby amend the FY. 96-97 budget to add $38,165. for 1 FTE Animal Control Officer, $23,453 fo'r .5 Crime Prevention Specialist, $10,000 for patrol overtime, $33,000 for contractual grant writing services and $95,783 for equipment. Presented by Approved as to; form by Richard P. Emerson, Chief of Police - ~ )&>/1- ? . . . ATTACHMENT 1 BUDGET DETAIL FED. LOCAL LAW ENFORCEMENT BLOCK GRANT (FUND #100-1087) Salaries.& Benefits for positions: (Animal Control Officer & .5 Crime Prevo Specialist) Object Description ACO 5101 5141 5142 5143 Salary Retirement Flex plan Medicare $28,046 4,653 5,059 407 $38,165 5103 Overtime for Patrol CPS $17,868 2,796 2,530 259 $23,453 5298 Other Contractual Svc (Grant Writer) 5565 Automotive Equipment (ACO Truck & Undercover Vehicle) 5566 Office Equipment 5567 Minor CIP (Security Measures) 5568 Other Equipment (Voice Analyzer & Photo Imaging Equip) Total Corresponding Revenue Account (FUND 100-3649) LOCAL MATCH REQUIREMENT (FUND 100-1086) 5568 Other Equipment (Photo Imaging) JjJl~6 Total $45,914 $7,449 $7,589 $666 $61,618 $?-O,OOO $33,000 $40,631 $17,369 $57,000 $37,783 $257,401 $25,740 RESOLUTION NO. /$"L}:;5 I RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING $257,401 FROM THE LOCAL LAW ENFORCEMENT BLOCK GRANT AND APPROPRIATING SUCH FUNDS TO PAY FOR THE ADDITIONAL POSITIONS, SERVICES AND EQUIPMENT WHEREAS, during the FY 1996-97 Budget proceis, Council authorized the Police Department to pursue funding under the Local Law Enforcement Block Grant and form an Advisory Co'mmittee to review the use of funds as stipulated by the Block Grant; and WHEREAS, the Omnibus Fiscal Year 1996 Appropriation Act, Public Law 104-134, provides $503 million for the implementation of the Local Law Enforcement Block Grant Program, administered by the Bureau of Justice Assistance; and I WHEREAS, Chula Vista is eligible to receive $257,401 of such funds; and , , I WHEREAS, the Police Department and Advisory Board recommend use of the funds in the following manner: Local Law Enforcement Support Overtime Equipment Procurement Security Measures $94,618 $10,000 $95,783 $57,000 WHEREAS, funds must supplement and not supplant and must be used to reduce crime and improve public safety through activities such as hiring, training, and employing new law enforcement officers and support staff (includes animal control) as well as procuring equipment and technological advandes related directly to local law enforcement. I , , NOW, THEREFORE, BE IT RESOLVED the City Council of the city of Chula vista does hereby accept $257,401 from th~ Local Law Enforcement Block Grant. , BE IT FURTHER RESOLVED that the City Council does hereby: 1. I Appropriate $94,618 from the Local Law Enforcement Grant to pay for the addition of 1 !FTE Animal Control Officer., .5 Crime Prevention Specialists and Police Grant writer Services. 2. Appropriate $10,000 for officer patrol pvertime. /~.~ ~I , /?f-r V , , , I I 3. Appropriate $95,783 from the Local Law Enforcement Grant. 4. Appropriate $57,606 from Grant to a minor CIP measures. the Local Law Enforcement for enhancing security , Presented by I Approved as to;form by c2 (~~~~;~MOO ~y Richard P. Emerson, Chief of Police /~f- c:z RESOLUTION NO. /!?.y?~ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING $25,740 (LOCAL MATCH) FROM FUND 214 SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (SLESF) - AB 3229; CITIZENS OPTION FOR PUBLIC SAFETY FOR PURCHASE OF EQUIPMENT WHEREAS, during the FY 1996-97 Budget process, Council authorized the Police Department to pursue funding under the Local Law Enforcement Block Grant and form an Advisory Committee to review the use of funds as stipulated by the Block Graht; and WHEREAS, the Omnibus Fiscal Year 1996 Appropriation Act, Public Law 104-134, provides $503 million for the implementation of the Local Law Enforcement Block Grant Program, administered by the Bureau of Justice Assistance; and I I WHEREAS, Chula vista is eligible to receive $257,401 of , . such funds; and I WHEREAS, the Police Department and Advibory Board recommend use of the funds in the following manner: I , $94,618 $10,000 $95,:783 $57,000 I WHEREAS, funds must supplement and not supplant and must be used to reduce crime and improve pUblic safe'ty through activities such as hiring, training, and employirtg new law enforcement officers and support staff (includes animal control) as well as procuring equipment and technological advan~es related directly to local law enforcement; and I Local Law Enforcement support Overtime Equipment Procurement Security Measures ($25,740) WHEREAS, the $257,401 grant local match requirements. allocation I :has a 10% I NOW, THEREFORE, BE IT RESOLVED the City Couhcil of the city of Chula Vista does hereby appropriate $25,740 (local match) from Fund 214 Supplemental Law Enforcement Services Fund (SLESF) AB 3229 - citizens Options for Public Safety for purchase of equipment. ! Approved as Presented by form by Richard P. Emerson, Chief of Police c:\rs\lawgrant.pd n Y. -Moore, Attorney "j ~ /&:f- / , I i COUNCIL AGENDA STATEMENT Item_~} Meeting Date 10/22/96 ITEM TITLE: ) 15Y 77 Resolution Accepting bids and awarding contract for the purchase of twelve police patrol sedans. Director Of Public Works~ ~ Director of Finance ~ REVIEWED BY: City Manage~ "ovA ~~\ (4/5ths Vote: Yes_No~) The FY96-97 equipment replacement ~dg;;;provides for the purchase of nine (9) replacement Police patrol vehicles. Staff's proposed use of the State of California's COPS funds will require the purchase of three additional (for a total of 12) vehicles to be purchased from grant funds. Council Resolution No. 6132 authorizes the City to participate in a cooperative bid with other governmental agencies. The City is able to obtain the vehicles via a City of San Diego Bid. SUBMITTED BY: RECOMMENDATION: That Council adopt the resolution authorizing the purchase of twelve Police patrol vehicles from Dixon Ford via the City of San Diego Bid. BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable DISCUSSION: The Equipment Replacement Fund provides for the replacement of nine vehicles. For each vehicle purchased, one vehicle will be removed from service and sold at auction. Funds from the auction will be placed in the Equipment Replacement Fund. In addition, at tonight's Council meeting, staff is requesting approval from Council to hire additional officers via the State COPS grant. These additional officers will require the purchase of three additional vehicles, for a total of twelve vehicles. As was done for FY95-96, the City of San Diego contacted local agencies to ascertain their interest in joining a cooperative bid for purchase of police patrol vehicles. Our Purchasing Division notified the City of San Diego that Chula Vista was interested in being part of the cooperative bid. The bids were sent to 25 auto dealers (including the Ford dealer in Chula Vista), with a bid opening date of September 24, 1996. As indicated on the attached memo, only three bidders responded (Dixon Ford, Bob Baker Ford, and Downtown Ford) The successful bidder on the City of San Diego bid was Dixon Ford. The Ford dealer in Chula Vista was mailed bid documents but did not respond to the San Diego bid. Other agencies purchasing patrol vehicles from the City of San Diego's bid are the County of San Diego, the Port District, MTDB and the city of La Mesa. The San Diego bid meets all specifications. The purchase cost per vehicle is $21,258 including sales tax, while $22,764 was budgeted per vehicle. )7- / Page 2, Item_!_ 7 Meeting Date 10/22/96 FISCAL IMPACT: The FY96-97 Equipment Replacement budget has $204,876 for the purchase of nine replacement Police Patrol vehicles. Under the City of San Diego bid, the actual cost for the nine vehicles will be $191,322. The COPS grant has another $63,774 for the purchase of three additional vehicles. Maintenance costs for the vehicles are included in the Police Department's operating budget. Rental rates for patrol vehicles will not be affected by the replacement of the nine older vehicles or the additional three, since the rates are calculated as the average maintenance cost for the en tire class of vehicles. Attachments: . Memo dated October 4, 1996 in regards to Police Patrol Vehicles. . Agenda Statement for item 9 of the City Council meeting of 9/26/95 authorizing the purchase of Police Patrol vehicles for FY95-96. C:\WINWORD\BUDGET\PTLVH97 A.DOC 'I ], i! " ) 7- ,;L RESOLUTION NO. ) f{ 17 '} RESOLUTION OF CHULA VISTA CONTRACT FOR PATROL SEDANS THE CITY COUNCIL ACCEPTING BIDS THE PURCHASE OF OF THE CITY OF AND AWARDING TWELVE POLICE WHEREAS, the FY 96-97 provides for the purchase of nine vehicles; and equipment replacement budget (9) replacement Police patrol WHEREAS, staff's proposed use California's COPS funds will require the additional (for a total of 12) vehicles to be funds; and of the purchase purchased State of of three from grant WHEREAS, Chula vista Municipal Code section 2.56.270 and Council Resolution No. 6132 authorizes the City to participate in a cooperative bid with other governmental agencies; and WHEREAS, the following bids were received via the city of San Diego bid: Bidder '97 Crown Sales Tax Net Total victoria Dixon Ford $177,560.82 $13,760.96 $191,321. 78 Bob Baker Ford $177,768.00 $13,777.02 $191,545.02 Downtown Ford $186,039.00 $14,418.02 $200,457.02 NOW, THEREFORE, BE IT RESOLVED the city Council of the City of Chu1a vista does hereby accept said bids and authorize the purchase of twelve Police patrol vehicles from Dixon Ford via the City of San Diego bid for a total amount of $191,321.78. BE IT FURTHER RESOLVED that the Purchasing Agent is hereby authorized and directed to execute the contract with Dixon Ford for the purchase of said vehicles. Presented by Approved as to form by John P. Lippitt, Director of Public Works ity C:\rs\vehicle.bid /7_1 Memorandum RECtVED OCT 8 199B CityolChlJldVISfa Public Works Operations Date: October 4, 1996 , " To: Dave Byers, Deputy Director of Public Works/Operations From: John P. Coggins, Purchasing Agent ~ Police Patrol Vehicles Subject: Bids for the purchase of nine (9) ea, Police Patrol Vehicles opened on September 24, 1996. This was a cooperative purchasing arrangement with the City of San Diego, which acted as the lead agency. Other public agencies included in the bid were the County of San Diego, San Diego Unified Port District, Metropolitan Development Transit Board, and the City of La Mesa. Twenty-five (25) bid packages were sent out, three (3) bidders responded as follows: Bidder '97 Crown Victoria Sales Tax Net Total Dixon Ford $177,560.82 $13,760.96 $191,321.78 Bob Baker Ford $177,768.00 $13,777.02 $191,545.02 Downtown Ford $186,039.00 $14,418.02 $200,457.02 Dixon Ford is the overall, low bidder. The unit cost for each vehicle is $19,728.98, plus tax ($21,257.98). The FY 96-97 budgeted unit cost is $22,764.00. Terms are net 30 days, delivery is estimated at 90 days after receipt of order. Shipment to our yard is included as a requirement of the bid. City of Chula Vista Municipal Code section 2.56.270 and Council Resolution 6132 authorizes the Purchasing Agent to participate in cooperative purchasing ventures. Please prepare the A -113 for Council and provide me with a copy. A purchase order will be processed once Council approval has been obtained. cc: Bob Powell Jack Dickens J7-l-! . . COUNCIL AGENDA STATEMENT Item q Meeting Date 09/26/95 ITEM TITLE: Resolution I ~Di4 Authorizing the purchase of Police patrol vehicles on cooperative bid. Director of Public Works @ ~ SUBMITTED BY: REVIEWED BY: City Manager (4/5THS vote: Yes_NoX) The FY95-96 equipment replacement budget provides for the purchase of five (5) Police patrol vehicles. Council Resolution No. 6132 authorizes the City to participate in a cooperative bid with other governmental agencies. The City is able to obtain the vehicles via the City of San Diego Bid No. C4863/96. RECOMMENDATION: That Council adopt the resolution authorizing the purchase of 5 Police patrol vehicles from Bob Baker Ford via the City of San Diego Bid No. C4863/96. BOARDS & COMMISSION RECOMMENDATION: Not applicable. DISCUSSION: The Equipment Replacement Fund provides for the replacement of five (5) vehicles. For each vehicle purchased, one vehicle will be removed from service and sold at auction. Monies from the auction will be placed in the Equipment Replacement Fund. In June 1995, the City of San Diego contacted local agencies to ascertain their interest in joining a cooperative bid for purchase of police patrol vehicles. On July 31, 1995, our Purchasing Division notified the City of San Diego that Chula Vista was interested in being part of the cooperative bid with any purchase from the bid subject to City Council approval. The bids were sent to auto dealers, including the Ford and Chevrolet dealers in Chula Vista, with a bid opening date of August 25, 1995. Subsequently, bid tabulations were sent by San Diego to the participating agencies on September 5,1995 with instructions to have orders in by November 8,1995. The successful bidder on the City of San Diego bid was Bob Baker Ford. The Ford and Chevrolet dealers in Chula Vista were mailed bid documents but did not respond to the San Diego bid. Other agencies purchasing patrol vehicles from the City of San Diego's bids are the County of San Diego, the Port District, San Diego Trolley and the cities of Carlsbad, and La Mesa. In previous years, Chula Vista participated in the State of California bid and was able to purchase Ford Crown Victoria patrol vehicles. Beginning with FY93-94, the state bid received the lowest price on patrol vehicles from Chevrolet for the Caprice. At t1tat point, staff reco=ended and Council approved standardizing on Ford Crown Victorias for Police pursuit vehicles. This standardization provided benefits to both the Police officers driving the vehicles and mechanics maintaining them. The state bid was also more expensive than the Crown Victorias on the San J'i .~ / ~ ~S // '( ~12, ltem~ Meeting Date 09/26/95 j,;,:.-'; :i""~ Diego ~.di4eDia:~;; _ ... ._)'l:sIl1b for this year's purchases will not be available until sometime in January 1996. ..~ u"nogo;;antee that the Ford Crown Victoria will be available and therefore, staff reromm""i1. purchase of the five (5) vehicles by cooperative bid. The San Diego bid meets all specifications. The purchase cost per vehicle is $20,865 including sales tax and a $400 discount per car for orders placed before November 1, 1995. A total of $20,511 was budgeted per vehicle. Staff recommends the difference be paid from savings from other purchases made this year in the Equipment Replacement Budget. Council has requested that staff look at other alternatives for disposing of vehicles in addition to selling them at the San Diego County auction. Safety vehicles are not required to meet California emission standards. Thus, there is no local market for used police patrol vehicles. Typically, these are purchased at auction by out of state dealers. Though not feasible for the police patrol vehicles, staff is further investigating other alternatives for disposal of other City vehicles. FISCAL IMPACT: The FY95-96 budget provides $102,555 for the purchase of five (5) patrol vehicles. The purchase cost will be $104,325. Staffrecommends the additional cost of $1,770 be taken from savings in the FY95-96 equipment replacement budget. Attachments: Equipment Replacement Supplemental Council Resolution No. 6132 . (RPDPTRLV.CAG) ) 7/& COUNCIL AGENDA STATEMENT Item Meeting Date October 22. 1996 J~ ITEM TITLE: Annual Fiscal Status Report for Fiscal Year 1995-96 and Quarterly Fiscal Status Report for the First Quarter of Fiscal Year 1996-97 SUBMITTED BY: Director of Financ~ City Manage~" In accordance with Charter Section 504(f), attached for your consideration is a report covering the final results of Fiscal Year 1995-96 and the first quarter of Fiscal Year 1996-97. (4/5ths Vote: Yes No X ) - - REVIEWED BY: RECOMMENDATION: That Council accept the report as submitted. DISCUSSION: Section 504(f) of the City Charter requires quarterly and annual fiscal status reports to be filed by the Director of Finance through the City Manager. In addition, the annual report is to be published in the local newspaper. Attached for your consideration is a report covering both the annual results for Fiscal Year 1995-96 and the first quarter status for Fiscal Year 1996-97. The final results for Fiscal Year 1995-96 were much as projected in the May 9, 1996 third quarter status report, with Available Fund Balance for the General Fund at approximately $3.7 million. This figure reflects a decrease from the $6.3 million balance at the beginning of the fiscal year, based on expenditures and transfers out of $58.7 million supported by revenues and transfers in of $56.1 million. The first quarter status for Fiscal Year 1996-97 reflects that although economic indicators appear generally positive, nothing has come to our attention that would cause us to project any significant variances from the adopted budget at this time. FISCAL IMPACT: There is no fiscal impact relative to accepting or rejecting the report, since it is for information purposes only. The City General Fund began Fiscal Year 1996-97 with an Available Fund Balance of $3.7 million and based on the limited information available this early in the fiscal year, there does not appear to be a continuing deterioration of that balance. )6-/ COUNCIL INFORMATION DATE: October 22, 1996 TO: Honorable Mayor and City Council FROM: John D. GOSS, city Manager Robert W. Powell, Director of Financ~ VIA: SUBJECT: FY 1995-96 ANNUAL FISCAL STATUS REPORT FY 1996-97 FIRST QUARTER FISCAL STATUS REPORT Fiscal Year 1995-96 Annual Fiscal Status Report Available Fund Balance is generally defined as the balance of resources currently available for appropriation and therefore, does not include legally required reserves, reserves for encumbrances (commitments), etc. The City General Fund began Fiscal Year 1995-96 with an Available Fund Balance of $6.3 million and ended the year as of June 30, 1996 with an Available Fund Balance of $3.7 million. Expenditures and Transfers Out for the year amounted to $58.7 million, supported by Revenues and Transfers In of $56.1 mi 11 ion, resulting in the decrease of $2.6 million in Available Fund Balance from Fiscal Year 1995-96 operations. Total Fund Balance for all Funds (excluding Trust Funds, the Redevelopment Agency, and the Bayfront Conservatory Trust), including legally required reserves and other reservations of Fund Balance, decreased by $4.1 million during Fiscal Year 1995-96 to $87.3 million at June 30, 1996. Attached Schedule I is an unaudited Summary Report of Revenues, Expenditures, and Changes in Fund Equity - All Funds for the fiscal year ended June 30,1996. Please note that the column titled "General Funds" includes not only the General Fund, but other Funds such as self insurance reserves, which are combined with the General Fund for financial reporting purposes. As required by Charter section 504(f), this statement will soon be published in the local newspaper. The detailed data supporting this information is quite voluminous, but is available at your request. The Annual Financial Statements including the opinion of the independent auditors will also be available in December or January. /Y-2 2 Per Council direction, a list of any budget adjustments between summary accounts approved by the City Manager during the quarter is also to be provided. Please be advised that no such transfers were processed during the fourth quarter. Fiscal Year 1996-97 First Quarter status Report The General Fund Budget adopted for Fiscal Year 1996-97 included Appropriations for Expenditures and Transfers Out of $60.1 million, supported by Estimated Revenues and Transfers In of $60.1 million. Since adoption of the budget, the Council has approved $68,242 in additional Appropriations supported by additional Estimated Revenues of $26,200. Attached as Schedule II are Summary Statements of Revenues totaling $5.6 million and Expenditures totaling $14.4 million for the first quarter of fiscal year 1996-97. These amounts are consistent with normal trends for the first quarter of the fiscal year. Due to the limited amount of data available at this early stage of the year, these reports are somewhat less informative than they will be at the end of the second and third quarters. Although most local economic indicators are being reported as indicative of an improving trend, nothing has come to our attention that would cause us to anticipate any significant variances, either positive or negative, from budgeted figures. Per Council direction, a list of any budget adjustments between summary accounts approved by the city Manager during the quarter is also to be provided. Please be advised that no such transfers were processed during the first quarter. Should you have any questions, please feel free to contact me. )6'~ SCHEDULE 1 Combined Summary Statement of Revenues, Expenditures and Changes in Fund Equity - All Funds Year Ended June 30,1996 - Unaudited Total General Special Debt Service Capital Enterprise Internal All Funds Funds Revenue Funds Funds Project Funds Funds Service Funds Total Fund Equity July 1,1995 191,400,386 115,392,393 135,602,225 1126,675 131,666,619 17,384,365 $1,228,109 Revenues 1995-96 Taxes 32,667,024 27,860,579 4,462,795 343,650 Licenses and Permits 1,909,319 1,662,946 246,373 Intergovernmental 26,330,841 16,641,088 6,787,923 1,018,912 1,882,918 Charges for Services 21,145,084 4,220,614 12,855,961 86,610 1,501,423 2,480,476 Fines & Forfeitures 798,879 570,217 228,662 Revenue from Use of Money & Property 5,398,169 1,285,976 2,144,719 7,523 1,618,515 293,754 47,682 Development Fees 4,466,394 4,466,394 Other 926,750 310,549 126,576 489,625 Total Revenues 93,642,460 52,551,969 26,853,009 7,523 8,023,706 3,678,095 2,528,158 Interfund Transfers In 12,232,642 6,185,613 1,176,514 1,484,099 3,386,416 Total Revenues and Transfers In 105,875,102 58,737,582 28,029,523 1,491,622 11,410,122 3,678,095 2,528,158 Expenditures 1995-96 General Government 27,367,370 12,427,105 12,334,382 2,605,883 Public Safety 25,690,502 24,817,345 873,157 Public Works 17,273,294 10,558,145 6,715,149 Parks and Recreation 5,170,201 5,088,327 81,874 Library 3,821,903 3,713,058 108,845 Public Transit 3,872.577 3,872,577 Debt Service 1,807,506 27,675 1,615,077 164,754 Capital Outlay 12,576,681 . 12,576,681 Total Expenditures 97,580,034 56,603,980 20,141,082 1,615,077 12,741,435 3,872,577 2,605,883 Interfund Transfers Out 12,398,570 3,183,012 7,444,403 951 1,756,704 13,500 Total Expenditures and Transfers Out 109,978,604 59,786,992 27,585,485 1,616,028 14,498,139 3,872.577 2,619,383 Fund Equity Contributed Capital 2,850,695 2,762,071 88,624 Retained Earnings-unreserved 5,476,072 4,427,812 1,048,260 Fund Balances Reserved 15,827,182 9,239,880 5,677,072 910,230 Unreserved Designated 32,325,151 4,144,364 512,415 27,668,372 Undesignated 30,817,783 958,738 29,856,776 2,269 Total Fund Equity June 30,1996 $87,296,883 114,342,982 $36,046,263 12,269 $28,578,602 $7,189,883 $1,136,884 The Finance Department of the City of Chula Vista has compiled the above Statement of Revenues, Expenditures and Changes in Fund Equity-All Funds for the year ended June 30,1996. Such amounts are subject to adjustment through the annual audit process which is being performed by an independent public accounting firm. Audited financial statements will be available upon request. ~OFFINANCE ) !5~1 SCHEDULE 1 Schedule lIa GENERAL FUND REVENUES Summary by Revenue Category Fiscal Year 1996-97 as of September 30, 1996 AMENDED ACTUAL PERCENT BUDGET TO DATE REALIZED Property Taxes 8,447,960 239,129 2.8% other Local Taxes Sales 12,721,000 865,945 6.8% Franchise Tax 2,360,790 243,993 10.3% Transient Lodging Tax 1,500,000 57,225 3.8% Utility Users Tax 2,757,000 471,698 17.1% Business License Tax 740,000 49,722 6.7% Other 297,980 39,254 13.2% Total other Local Taxes 20,376,770 1,727,837 8.5% Licenses and Permits Building, Plumbing, Electrical, Housing 1,716,590 405,403 23.6% Other 273,500 45,685 16.7% Total Licenses and Permits 1,990,090 451,088 22.7% Fines, Forfeitures & Penalties 603,500 166,439 27.6% Revenue from Use of Money & Property 536,109 53,287 9.9% Revenue from Other Agencies State Motor Vehicle Licence Fee 5,871,000 1,044,482 17.8% Other 2,126,887 6,037 0.3% Total Revenue from other Agencies 7,997,887 1,050,519 13.1% Charges for Current Services Development Related Services 2,171,299 362,323 16.7% Other Police, P&R & Misc Charges 885,808 198,050 22.4% Total Charges for Current Services 3,057,107 560,372 18.3% other Revenues Reimbursement from Large Development proj 688,560 28,399 4.1% Reimbursement - Redevelopment Agency 1,905,740 0 0.0% Other Reimbursements 6,824,482 197,438 2.9% BECA Revenues 1,046,319 4,813 0.5% Other 1 ,003,120 149,830 14.9% Total Other Revenues 11,468,221 380,480 3.3% TOTAL REVENUES 54,477,644 4,629,150 8.5% TOTAL TRANSFERS IN 5,679,309 967,929 17.0% TOTAL REVENUES AND TRANSFERS IN 60,156,953 5,597,079 9.3% J6~,~ Schedule lib GENERAL FUND EXPENDITURES Summary by Department Fiscal Year 1996-97 as of September 30, 1996 Amended Expenditures Outstanding Available Percent Department Budget To Date Encumbrances Balance Available 105 City Council 406,805 83,131 2,315 321,358 79.0% 110 Boards and Commissions 33,308 4,659 115 28,534 85.7% 129 Community Promotions 233,237 107,588 52,363 73,286 31.4% 150 City Attorney 915,798 223,872 51,248 640,678 70.0% 160 City Clerk 252,807 49,948 5,601 197,258 78.0% 210 Administration 743,824 203,713 11,425 528,686 71.1% 211 Mgmt & Informations Services 885,652 190,765 66,289 628,598 71.0% 260 Community Development 2,431,547 336,262 496,506 1,598,779 65.8% 245 Human Resources 757,640 199,784 4,118 553,738 73.1% 400 Finance 1,435,845 342,615 28,496 1,064,734 74.2% 600 Planning 1,738,433 447,713 535 1,290,185 74.2% 700 Insurance 737,960 326,519 0 411,442 55.8% 730 Non-Departmental 2,257,571 836,191 39,642 1,381,739 61.2% 1000 Police 18,654,181 4,485,732 342,987 13,825,462 74.1% 1200 Fire 7,466,251 1,734,600 14,257 5,717,394 76.6% 1300 Building & Housing 1,080,701 224,089 14,439 842,173 77.9% 1400 Public Works 11,121,528 2,359,005 462,029 8,300,493 74.6% 1500 Parks & Recreation 5,273,314 1,396,701 133,508 3,743,106 71.0% 1700 Library 3,785,946 830,418 152,524 2,803,004 74.0% TOTAL EXPEND. & TRANSFERS OUT 60,212,348 14,383,305 1 ,878,397 43,950,646 73.0% )6~~ ~ October 17, 1996 TO: The Honorable Mayor and City Council John D. Goss, City Manageff City Council Meeting of o~er 22, 1996 FROM: SUBJECT: This will transmit the agenda and related materials for the regular City Council meeting of Tuesday, October 22, 1996. Comments regarding the Written Communications are as follows: Sa. This is a letter from the Deputy City Attorney reporting that there were no reportable actions taken by the City Council in Closed Session on October 15, 1996. IT IS RECOMMENDED THAT THIS LETTER BE RECEIVED AND FILED. 5b. This is a letter from the Tiffany School PTA requesting waiver of license requirements for their November 2, 1996 Craft Fair. AS IS CONSISTENT WITH PAST PRACTICE BY THE CITY COUNCIL, IT IS RECOMMENDED THAT THIS WAIVER BE GRANTED. JDG:mab