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HomeMy WebLinkAboutcc min 1998/01/20MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, January 20, 1998 6:58 p.m. 1. ROLL CALL: PRESENT: ABSENT: ALSO PRESENT: Council Chambers Public Services Building CALL TO ORDER Councilmembers: Moot, Padilla, Rindone, Salas, and Mayor Horton. Councilmembers: None City Manager, John D. Goss; City Attorney, John M. Kaheny; and City Clerk, Beverly A. Authelet 2. PLEDGE OF ALLEGIANCE TO THE FLAG, MOMENT OF SILENCE 3. APPROVAL OF MINUTES: December 16, 1997 and January 6, 1998. MSUC (Rindone/Padilla) to approved the minutes of December 16, 1997 and January 6, 1998. Councilmember Padilla indicated he would abstain on the January 6, 1998 minutes since he was absent. 4. SPECIAL ORDERS OF THE DAY: Oath Of Office: The City Clerk, Beverly A. Authelet, administered the Oath of Office to the Deputy City Clerk/Records Manager, Charline Long. CONSENT CALENDAR (Items pulled: 17) BALANCE OF THE CONSENT CALENDAR OFFERED BY MAYOR MORTON, headings read, texts waived, passed and approved 5-0. Councilmember Moot indicated an abstention on Item No. 11. 5. WRITTEN COMMUNICATIONS: a. Letter from the City Attorney stating that to the best of his knowledge from Observance of actions taken in Closed session on 1/13/98, that there were no reportable actions which are required under the Brown Act to be reported. Per staff's recommendation, the letter was received and filed. b. Letter from Joshua Pinpin requesting financial assistance to attend the Freedoms Foundation at Valley Forge Youth Leadership Conference. Per staff's recommendation, this request was denied because, although Mr. Pinpin was a resident of Chula Vista, he attended a school outside the Chula Vista School District. 6. RESOLUTION 18863 CALLING AND GIVING NOTICE OF THE HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, JUNE 2, 1998, AND REQUESTING THE SAN DIEGO COUNTY BOARD OF SUPERVISORS TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON TUESDAY, JUNE 2, 1998, FOR THE PURPOSE OF ELECTING A MAYOR AND TWO MEMBERS OF CITY COUNCIL - This resolution will call the 6/2/98 General Municipal Election and will request the County Board of Supervisors and Registrar of Voters to conduct said election and consolidate it with the State-wide election to be held on the same day. Per staff's recom/nendation, the resolution was approved 5-0. (City Clerk) 7. RESOLUTION 18864 AUTHORIZING THE PURCHASE OF A WILDLAND TYPE IlI FIRE APPARATUS FROM HAAKER FIRE EQUIPMENT THROUGH COOPERATIVE BID NUMBER 96297 WITH Minutes January 20, 1998 Page 2 THE COUNTY OF RIVERSIDE - The City's fiscal year 1997/98 Capital Improvement Program (PS-134) adopted in June of 1997 provides for the purchase of a Wildland Type III fire apparatus (brush fire fighting) to provide wildland fire protection for the City. The Municipal Code Section 2.56.270 and Resolution Number 6132 authorize the Purchasing Agent to participate in cooperative bids with other government agencies for the purchase of materials of common usage. The City has been invited to participate in a current County of Riverside bid from Haaker Fire Equipment which provides for substantial savings from 1997 quotes. Per staff's recommendation, the resolution was approved 5-0. (Fire Chief and Director of Finance) 8. RESOLUTION 18865 ACCEPTING FEDERAL LIBRARY SERVICES AND TECHNOLOGY ACT GRANT FUNDS IN THE AMOUNT OF $22,383 FOR THE PURCHASE OF LIBRARY MATERIALS, APPROPRIATING FUNDS AND AMENDING THE FISCAL YEAR 1997/98 BUDGET - The State Library has awarded the Chula Vista Library $22,383 in Major Urban Resource Library (MURL) grant funds. These funds are available to libraries serving cities with a population of 100,000 or more. The Chula Vista Public Library has qualified for and received MURL grant funds for the past eight years. Funds will be used to strengthen the Library's collection in the areas of resources for the undeserved, business and company data, materials to support literature assignments and electronic data bases in the form of CD/ROM products. Per staff's recon~nendation, the resolution was approved 5-0. (Library Director) 4/5th's vote required. 9. RESOLUTION 18866 APPROVING A REALLOCATION OF $8,318 IN COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS TO PROVIDE A MATCHING FUND CONTRIBUTION TO A COLD WEATHER SHELTER VOUCHER PROGRAM ORGANIZED BY THE COUNTY OF SAM DIEGO - On 11/12/97, the City received a request from the County of San Diego to support funding a Cold Weather Shelter Voucher program in the amount of $8,318. Six cities have agreed to participate in the program along with seven cities located in the Urban County. Per staff's recommendation, the resolution was approved 5- 0. (Director of Community Development) 10.A. RESOLUTION 18867 APPROVING THE CLOSURE OF THIRD AVENUE BETWEEN "D" AND "G" STREETS ON SATURDAY, APRIL 25, 1998 FOR THE CHULA VISTA DOWNTOWTN HIGH SCHOOL BAND PAGEANT - The Chula Vista Downtown Business Association (DBA) requests the closure of Third Avenue for three 1988 promotional events: (1) Sweetwater Union High School District band pageant request closure of Third Avenue from "D" Street to "G" Street between 6:00 a.m. and 10:00 a.m. on Saturday, 4/25/98; (2) Chula Vista Third Avenue Lemon Festival scheduled for Sunday, 6/7/98 request closure of Third Avenue between "E" and "G" Streets from 6:00 a.m. to 8:00 p.m.; (3) 36th annual Starlight Yule parade request closure of Third Avenue between "D" and "I" Streets, "H" Street be closed between Second and Fourth Avenues and portions of intersecting streets be closed on Saturday, 12/5/98 from 3:00 p.m. to 9:00 p.m. Per staff's recommendation, the resolutions were approved 5-0. (Director of Community Development) B. RESOLUTION 18868 APPROVING CLOSURE OF THIRD AVENUE FROM "E" TO "G" STREETS FOR TRE CHULA VISTA THIRD AVENUE LEMON FESTIVAL ON JUNE 7, 1998, WAIVING SIDEWALK SALES ORDINANCE, AND WAIVING BUSINESS LICENSE TAXES FOR DOWNTOWN BUSINESS ASSOCIATION AND VENDORS PARTICIPATING IN EVENT C. RESOLUTION 18869 APPROVING THE CLOSURE OF THIRD AVENUE BETWEEN "D" AND "I" STREETS, "H" STREET BETWEEN SECOND AND FOURTH AVENUES AND PORTIONS OF INTERSECTING STREETS ON SATURDAY, DECEMBER 5, 1998 FOR THE 36TH ANNUAL STARLIGHT YULE PARADE 11. RESOLUTION 18870 APPROVING AM AGREEMENT WITH OTAY RANCH COMPANY, MCMILLIN COMPANIES A~D PETER N. ROBERTSON FOR APPRAISAL SERVICES FOR THE OTAY RANCH OPEN SPACE RESOURCE PRESERVE - The appraisal, in the not to exceed amount of $42,000, is necessary to determine an average per acre value for the Otay Ranch Open Space Minutes January 20, 1998 Page 3 Preserve in order to establish the in-lieu fee. Per staff's recommendation, the resolution was approved 4-0-0-1 (Moot abstaining because one of the signatures to the contract is the McMillin Company). (Acting Director of Planning) 12. RESOLUTION 18871 ~a4ENDING THE FISCAL YEAR 1997/98 BUDGET TO ADD 1.00 FULL TIME EQUIVALENT (FTE) BUILDING INSPECTOR II POSITION ~3~D VEHICLE; TOTAL ADDITION~LAPPROPRIATION NOT TO EXCEED $42,400 THEREFORE FROM THE b~NAPPROPRIATED BALANCE OF THE GENERAL FUND RESERVE - During the adoption of the fiscal year 1997/98 budget, the Department of Building and Housing identified the possible need to unfreeze a Building Inspector II position in January 1998 in order to meet the projected workload. Council agreed to review unfreezing the position if the building permit revenues through the month of October projected at least $2,000,000 for the fiscal year. Per staff's recommendation, the resolution was approved 5-0. (Director of Building and Housing) 4/5th's vote required. 13. RESOLUTION 18872 APPROVING THE FILING OF TWO APPLICATIONS FOR HAZARD MITIGATION GRANT PROGRAM FUNDS WITH THE GOVERNOR'S OFFICE OF EMERGENCY SERVICES AND DESIGNATING THE CITY ENGINEER AS THE AUTHORIZED REPRESENTATIVE FOR THIS PROGRAM - In December of 1997, the Engineering Division received a letter from the Governor's Office of Emergency Services inviting the City to apply for funding under the Hazard Mitigation Grant Program (HMGP). The Federal Emergency Management Agency has provided a one time opportunity to make uncommitted HMGP funds available. Staff submitted a "notice of interest" in filing an application for the Telegraph Canyon Channel Project to the Office of Emergency Services. The "notice of interest" was positively received and staff decided to submit a full application. Per staff's recommendation, the resolution was approved 5-0. (Director of Public Works) 14. RESOLUTION 18873 ACCEPTING BIDS~a~D AWARDING CONTRACT FOR THE CONSTRUCTION OF "TWIN OAKS AVENUE IMPROVEMENTS, FROM NAPLES STREET TO EMERSON STREET, IN THE CITY" (STL232) - On 4/15/97, Council accepted a petition, signed by 18 Of the 20 property owners on Twin Oaks Avenue, for the formation of an assessment district (96-01) to construct street improvements such as curb, gutter, sidewalk, and pavement on Twin Oaks Avenue between Naples Street and Emerson Street. Council also authorized the appropriation of $180,000 from the unappropriated balance of Gas Tax funds into the Twin Oaks Avenue project account. Per staff's recommendation, the resolution awarding the Contract to ABC Construction Company, Inc., San Diego, was approved 5-0. (Director of Public Works) Councilmember Rindone asked for a clarification, but did not want to Dull the item. Councilmember Rindone stated, under the fiscal impact, it indicates that the funding from the trunk sewer capital reserves is a loan and will be used to fund the full amount of the cost estimated to be repaid to the property owners and the City will be reimbursed about $115,000 over a period of ten years at 7% interest. The report did not say, but it was his understanding that the interest would go to the trunk sewer fund directly. Cliff Swanson, Deputy Public Works Director/City Engineer, responded that he was correct. Councilmember Rindone stated that with that clarification, he was comfortable with the item. 15. RESOLUTION 18874 ACCEPTING BIDS AND AWARDING CONTRACT TO LEKOS ELECTRIC, INCORPORATED, FOR THE TRAFFIC SIGNAL SAFETY UPGRADE PHASE III (TF240) TO MODIFY FOUR TRAFFIC SIGNALIZED INTERSECTIONS (BONITA ROAD/WILLOW STREET, EAST "L" STREET/NACION AVENUE/TELEGRAPH CANYON ROAD, EAST ORANGE AVE/MELROSE AVENUE, AND AT THIRD AVENUE/NAPLES STREET) The work to be done includes the installation of new or relocated traffic signal standards, loop detectors, Emergency Pre-Emption System, and other miscellaneous signal equipment necessary to make the system operational. The project will also include the removal of Minutes January 20, 1998 Page 4 existing left turn indications from the center median at some locations where the signal standards have been repeatedly damaged in the past by traffic accidents. The new left turn indications will be mounted on traffic signal standards with longer mast arms. Per staff's recommendation, the resolution was approved 5-0. (Director of Public Works) 16. RESOLUTION 18875 APPROVING AGREEMENT WITH EASTLAKE DEVELOPMENT COMPANYAND PACIFIC BAY HOMES TO PROVIDE FOR THE JOINT USE AND FUTURE EXPANSION OF THE TEMPORARY OTAY LAKES ROAD SEWAGE PUMP STATION AND FOR THE MAINTENANCE AND OPERATION OF SAID PUMP STATION - On 10/6/92, Council approved the Tentative Map for Tract 92-02, Salt Creek Ranch. It is required that the Otay Lakes Road Sewage Pump Station be upgraded to accommodate sewage flows from Salt Creek Ranch. Public Works staff has negotiated an agreement with Pacific Bay Homes and EastLake Development to provide for the joint use and future expansion of the pump station and for its operation and maintenance on an equitable basis. Per staff's recommendation, the resolution was approved 5-0. (Director of Public Works) 17. RESOLUTION 18876 A/4ENDING THE FISCAL YEAR 1997/98 BUDGET TO PROVIDE FOR RECOMMENDED POSITION RECLASSIFICATION AND SPECIAL SALARY ADJUSTMENTS AND APPROPRIATING FUNDS THEREFORE - During the adoption process for the current year's budget, the issue of several outstanding position reclassifications was addressed. At that time there were several remaining reclassification studies that had not been completed and there were other equity issues which needed to be resolved. Staff informed Council that these issues would be addressed so that a complete package could be presented to Council for consideration. These studies have been completed and it is recommended that the reclassifications be implemented effective the first pay period in February. Staff recommends approval of the resolution. (City Manager) 4/5th's vote required. Item pulled by Councilmember Rindone. Councilmember Rindone stated that on page 17-8 there was a concern about additional adjustments of another $7,141. He could not find the detail review of the Executive Management salaries. John Goss, City Manager, replied that it was not provided. He stated that in December, Council had authorized an additional $5,000 to be able to correct some of the inequities that would occur with the top executives with the return of the Planning Director at the salary level we had negotiated. Upon looking at this, it has been determine that what he asked for was not enough. Councilmember Rindone stated that when there is an additional amount and there is no detail, then he has no idea what he was voting on, and he would not vote for something for which he does not have information on. He wanted a detail review and the recommendation of the City Manager that will come to the sum of $12,141 which he is requesting authorization to expend of public monies. Mayor Horton expressed that this was up to the discretion of the City Manager to allocate those funds as he sees fit. In the past, the Manager has requested "X" amount of funds and has moved forward to allocate those funds as he sees fit. She supported this. Councilmember Salas stated she recalled when we were discussing the original $5,000, there was no detail as to what the City Manager was going to use that money for other than the fact that we knew we had a severe problem with retention of our upper management, because for so long they have gone without salary raises. At that time, they gave the discretion to the City Manager to use that money as he saw fit. She did not see any difference in that original request, than what is currently being presented. Councilmember Padilla stated there was an initial $5,000 allocation, and the City Manager was requesting another $7,141. He assumed the City Manager would provide the information once a decision was made on what he did with it. He did not see Minutes January 20, 1998 Page 5 the need for the conflict on the Council on this issue. Whether or not we hear after the amount has been allocated or we have the information upfront, he did not feel this issue was big enough for conflict. The following people requested to address Council, but chose to pass when they were called: Preston Walther, 1714 Ithaca Street, Chula Vista, 91913, representing Public Works Pump Crew. Larry Smith, 4996 Porterhill Road, La Mesa, representing CVEA and Open Space. · Dave Defacci, 276 Fourth Avenue, Chula Vista, 91910, representing CVEA. · John Hale, 1334 Walbollen, Spring Valley, representing Public Works. John Panther, 229 Elkwood Avenue, Imperial Beach, 91932, representing Public Works Pump Mechanic. Mary Lehr, 276 Fourth Avenue, Chula Vista, 91910, representing CVEA, stated that CVEA was in full support of the reclassifications and fundings. The Reclassification Committee and Human Resources have been working on these for some as long as three to four years. She stated that this only a portion of the problems that exist throughout the City. She urged Council's support. RESOLUTION 18876 OFFERED BY ~YOR MORTON, heading read, text waived. Councilmember Rindone requested that the resolution be bifurcated. The Resolution was bifurcated. RESOLUTION 18876A excluded the executive management, passed and approved unanimously 5-0. RESOLUTION 18876B included only the executive management portion, passed and approved 4-1-0, Rindone voting no. * * * END OF CONSENT CALENDAR , * * OR~kL COMMUNICATIONS · Joe Ruscio, 3711 Via Morina Avenue, Oxnard, 93035, told Council that he thought we had a beautiful City and a courteous, outstanding staff. He liked the Agenda and stated he took some of our ideas back to the City of Oxnard. · Efi Golan, 3535 Route 66, Building 1, Neptune, New Jersey, representing Ricco Latino. They have a chain of twenty-six stores nationwide. One is located at 1214 Broadway, Chula Vista. His question was about the sign. The sign company should have pulled a permit, but they did not do so. The City has told them that the sign was not permitted. They have tried to get a permit, but the sign is larger than allowed in this particular shopping center. They were asking for permission to approve the sign, because it was important for the store. The shopping center is located back from the street, and it is hard to see his store. Mr. Kaheny stated that this has already had a complaint filed on it and is more than a minor code compliance violation. He would be willing to talk to Mr. Golan to see if we could work something out. · George Kost, 3609 Belle Bonnie Brae Road, Bonita, 91902, stated there was a serious problem at Rohr Park. The restrooms are closed on the eastern end. He could not understand why some port-a-potties couldn't be placed there until the new building was built. Minutes January 20, 1998 Page 6 PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 18. PUBLIC HEARING PCA-98-O1; CONSIDERATION OF A SERIES OF AMENDMENTS TO TBE MUNICIPAL CODE TO ALLOW THE ADOPTION AND ADMINISTRATION OF AN ENHANCED CODE ENFORCEMENT PROGRAM - In response to Council referrals regarding the need for more effective code enforcement, staff is recommending the Municipal Code be revised. The proposed revisions are intended to expand the number of enforcement methods available to City departments responsible for enforcing the Municipal Code, and to create a standardized appeal procedure utilizing a hearing examiner in lieu of hearings before Council. Numerous existing sections of the Municipal Code are proposed for modification to reference these new enforcement methods and appeal procedures. Staff recommends Council place the Ordinance on first reading. (Director of Building and Housing) Continued from the meeting of 12/16/97. ORDINANCE 2718 AMENDING, ADDING~ND REPEALING VARIOUS CHAPTERS OF THE MUNICIPAL CODE RELATING TO IMPROVING CITY-WIDE CODE ENFORCEMENT EFFECTIVENESS (first readinq) City Attorney, John Kaheny, introduced Hal Valderhog, former chief deputy city attorney for the City of San Diego, who has been working On this project for the last several months and has put together the revisions of the Code. He also introduced Deputy City Attorney, Ellen Gross, who has recently joined the City Attorney's Office and is in charge of Code Compliance for the City. Ken Larsen, Director of Building and Housing, stated that during the process of the Code revision, input was received not only from staff, but also from various other groups such as the Chamber, Planning Commission, Board of Appeals and Advisors, and Economic Development Commission. He made a brief visual presentation showing the changes to be made to the Municipal Code. He stated that there were three issues that the staff report did not touch upon. 1. The Handbook of Policies and Procedures: Staff would not implement such a program without a well established policy and procedures manual. There will be an opportunity for citizen input to the Policy and Procedures as it relates to the administrative citations as well as the civil penalties. 2. Code Enforcement Effectiveness Program: This should not be a funding mechanism for future staff. Staff's objective is to seek compliance. There will be a financial component, but staff's objective is to not generate revenue from the issuance of citations. 3. Due Process: There was a significant concern voiced by several parties about the due process portion. What appellate means do we have if a Code Enforcement Officer should issue us citation. We are building in a two visit minimum, a ten- day correction period as necessary before any citation is issued. Then the appellate process, there is the administrative review internally and from there it would go before a hearing officer who then has a trained arbitrator would be able to pass judgement on whether the citation was or was not lawfully issued and/or there was a violation of the Municipal Code. It was staff's direction to build in as many appellate processes to insure due process. This being the time and place as advertised, the public hearing was opened. Addressing Council was: · Rod Davis, 233 Fourth Avenue, representing the Chamber of Commerce, stated he was supporting this on behalf of the Chamber. We have been operating the Code Enforcement on a complaint only basis. This gives us an opportunity to get the compliance and have some tools to do it with. The Chamber expressed five areas of concern: three of them have been previously explained. They were also concerned about: (1) the tenant could be performing something in violation totally in ignorance to the landlord who doesn't find out about it until he receives a citation. This will be covered in the Handbook; and (2) the only issue left is to make sure that the hearing officer is not a part of the staff. The Department Head or Assistant Department Head would have the review authority Minutes January 20, 1998 Page 7 and could dismiss a citation. But if they felt the citation was correct, and someone wanted to appeal it, it would go to a hearing officer. The Chamber's request is to ask that the language be changed to mandate that the hearing officer or appeals officer not be a part of staff. Other than that, they felt this was a good step to keep our quality of life as it is. There being no one else indicating a desire to address the Council, the public hearing was closed. Councilmember Rindone asked what safeguards were there under due process that provides protection for potential violators? Mr. Larsen responded that it was staff's intent that the hearing officer would be a trained officer of the court. This will be an arbitrator similar to the traffic pardon citation. Staff believes that once staff has concluded there is a violation, issued a citation, and received department review, then the next level of appellant process would be a hearing officer. From the hearing officer, the next level would be to the magistrate. A person could still appeal to the magistrate beyond the hearing officer point. It does take the City Council out of the hearing body to the appellate process regarding an administrative citation. Councilmember Rindone stated there has also been some concern for code enforcement that only occur on weekends. What is staff's proposal to insure that there is a consistency for those types of violations. For example, a person who has twenty-seven garage sales that are always held on Saturdays. Mr. Larsen responded that staff has restructured one code enforcement officer's time so he will be working every other weekend. Councilmember Salas stated she was glad that staff would be working in cooperation with the Police and Fire Prevention officers. But, how can we insure that in bringing them along and working with them that we don't put a extra burden on what they already have to do. Brad Remp, Assistant Director of Building and Housing, replied that for the last six months, staff has reached out not only with Building Department and Fire Department which traditionally we have worked closely together, but we have worked with the Police Department. What we have found during that process is that a lot of the other departments don't understand the basic functions of other departments. One of the recent things that they have done is to develop a matrix which essentially lists all of the types of complaints that they receive and includes which department is responsible for it with some contact numbers. This will be distributed to every department. What we have found is there are repetition of certain types of violations. The Police Department has internally the ability to create a COPPS project and that opens up the opportunity for all of the other departments to look at it, review it, and determine how the other departments can best assist in resolving it. That should immediately unload burdens from the Police Department. Councilmember Moot stated that he understood that currently all code violations go through the court system. The fundamental change is that is now shifted to an internal administrative proceeding. City Attorney, John Kaheny, replied that currently the only enforcement mechanism is to file a complaint in the municipal court. Under this ordinance change, we will be able to do an administrative civil process; but also if it becomes necessary to file a complaint, it gives us the option to go to court. His experience is that when the individual responsible for the property knows that you have the criminal "hammer", they are more likely to cooperate with a civil order of compliance. Councilmember Moot stated it was his understanding that the only misdemeanor citation would be for violations that occur in the presence of the enforcement officer. How would this work. Minutes January 20, 1998 Page 8 Mr. Kaheny stated we have mixed up some things. One is for a public officer to issue a citation for an infraction. The infraction must occur in their presence; they must actually see it. When you issue them a citation, they are, in fact, being arrested, but are being released upon their signed promise to appear. There are other ways you can give them a "citation" much like a parking citation for which they are not really arrested, but if you want to enforce it, you have to file a separate action in court to get a warrant to bring that person in. The provisions before Council is the situation where when that person signs that citation, they are signing a promise to appear in court which can be the basis for a bench warrant to be issued automatically if they fail to appear. Councilmember Moot asked if the decision of the hearing officer, was appealable to municipal court. Mr. Vanderhaugh replied that is the last appeal there is. It would have to be based upon a proposal by the person that was fined that there were not facts to support the findings. There is that appeal, but if there are facts to support the findings and the decision that is made by the administrative officer, then the person probably is not going to win if they go to court. MAYOR HORTON PLACED ORDINANCE 2718 ON FIRST READING, heading read, text waived, passed and approved 5-0. 19. PUBLIC HEARING PCM-98-14; CONSIDERATION OF AMENDMENTS TO THE EASTLAKE GREENS SECTIONAL pLANNING AREA (SPA) PLAN AND EASTLAKE II PL~3qNED COMMLrNITY DISTRICT REGULATIONS AND LAND USE DISTRICT PLAN -The EastLake Company has requested the following amendments to the EastLake Greens Sectional Planning Area (SPA) plan and EastLake II Planned Community District Regulations: (1) Change EastLake Greens Parcel R-10 Land Use District designation from RRP-8, Residential Planned Concept, to RC-10, Residential Condominium (no increase in the permitted number of dwelling units and density is proposed as part of this request); and (2) Establish a Guest House Land Use District Overlay (GH) and corresponding development standards (to allow guest houses as a permitted accessory use) for lots 01, 36-40, Tract 88-03 located within the EastLake Greens Parcel R-2. Per staff's recommendation, Council placed the ordinance on first reading and approved the resolution. (Acting Director of Planning) ORDINANCE 2719 AMENDING SECTION II, RESIDENTIAL DISTRICTS, AND LAND USE DISTRICTS MAP OF THE EASTLAKE II PLANNED COMMUNITY DISTRICT REGULATIONS (first readinq) RESOLUTION 18877 APPROVINGAMENDMENTS TO THE EASTLAKE GREENS SECTIONAL PLA~rNING AREA (SPA) PLAN AND EASTLAKE II pLANNED CO~R4UNITY DISTRICT REGULATIONS AND LAND USE DISTRICT PLAM This being the time and place as advertised, the public hearing was opened. There being no one indicating a desire to address the Council, the public hearing was closed. COUNCIId~EMBER RINDONE PLACED ORDINANCE 2719 ON FIRST READING AND OFFERED RESOLUTION 18877, headings read, texts waived, passed and approved 5-0. 20. PUBLIC HEARING PCS-98-01; CONSIDERATION OF A TENTATIVE SUBDIVISION MAP KNOWN AS SALT CREEK RANCH NEIGHBORHOOD 5A, TRACT 98-01, INVOLVING 61 SINGLE F~d4ILY AND 3 OPEN SPACE LOTS ON 9.42 ACRES LOCATED ON THE EAST SIDE OF LANE AVENUE JUST NORTH OF THE EASTLAKE BUSINESS CENTER - The applicant has submitted a tentative subdivision map known as Salt Creek Ranch Neighborhood 5A, Tract 98- 01, in order to subdivide 9.42 acres into 61 single family and 3 open space lots. The residential lots minimum dimensions are 48' x 68' with an average lot size of 3,936 square feet. Staff recommends approval Of the resolution. (Acting Director of Planning) Minutes January 20, 1998 Page 9 RESOLUTION 18878 APPROVINGAND IMPOSING CONDITIONS OF THE TENTATIVE SUBDIVISION MAP FOR SALT CREEK RANCH, NEIGHBORHOOD 5A, TRACT 98-01 This being the time and place as advertised, the public hearing was opened. There being no one indicating a desire to address the Council, the public hearing was closed. Councilmember Rindone noticed the Zoning District Map talked about providing for zero lot lines. He asked what percentage of the planned units were zero lot lines and will it have any negative impact as far as density was concerned. Ken Lee, Acting Planning Director, replied that he was not aware of any request for the zero lot line in this development. We have used zero lot lines in the past with easements. It does not affect the density; it allows the house to shift over where there would be a useable side yard in that instance. Councilmember Rindone asked for those proposed to have zero lot lines, what was the distance between the lot line and the structure on the adjacent lot. He stated he was responding to the last paragraph on page 20-3 where it describes provision for the zero lot lines. Mr. Lee stated that this was referring to the standards that are in these particular planned community districts which are common to all other planned comrnunity districts where the opportunity exists. In the last few years, we have not had any requests for them. COUNCII~4EMBER RINDONE OFFERED RESOLUTION 18878, heading read, text waived, passed and approved 5-0. 21. PUBLIC HEARING ACQUISITION OF CERTAIN RIGHTS-OF-WAY ON 2451 FAIVRE STREET, 1725 BROADWAY, 1689-1695 BROADWAY, AND 2681 MAIN STREET FOR CONSTRUCTION OF THE "MAIN STREET WIDENING FROM INDUSTRIAL BOULEVARD TO BROADWAY" PROJECT (ST-961) - Portions of Main Street have been widened as development for redevelopment for parcels has occurred. This project will widen and reconstruct a segment of Main Street from Industrial Boulevard to Broadway to their ultimate width. The right- of-way acquisition consultant has made proper offers to the affected property owners of record. Negotiations to purchase the needed rights-of-way will continue. It is hoped that settlement will be reached with the owners without having to obtain a final order of condemnation from the court. Council is requested to initiate eminent domain proceedings now, in the event that negotiations with the property owners prove fruitless. Staff recommends approval of the resolution. (Director of Public Works) RESOLUTION 18879 ADOPTING MITIGATED NEGATIVE DECLARATION, IS96-03, DETERMINING AND DECLARING THE PUBLIC NECESSITY TO ACQUIRE CERTAIN RIGHTS-OF-WAY ON 2451 FAIVRE STREET, 1725 BROADWAY, 1689-1695 BROADWAY, AND 2681 MAIN STREET FOR THE CONSTRUCTION OF THE "MAIN STREET WIDENING FROM INDUSTRIAL BOULEVARD TO BROADWAY" PROJECT (ST-961) AND AUTHORIZING THE COMMENCEMENT OF CONDEMNATION PROCEEDINGS BY OUTSIDE COUNSEL TO ACQUIRE SAID RIGHTS-OF-WAY Councilmember Moot asked if it was possible to separate Site No. 3 from the rest of the items. The staff report mentions an Allen Jones with respect to the Faivre Street site. He is the husband of one of his law partners. Even though the matter is less than $10,000, it probably would not be appropriate for him to vote on Site No. 3. The City Attorney informed his this would not be a problem, so if we could take Sites 1, 2, and 4 and then he will step off the dais on Site No. 3. John Kaheny, City Attorney, stated that was correct. All the Mayor would have to do is to open up another public hearing and close it, and then proceed with another vote. Councilmember Moot stepped down from the dais. Minutes January 20, 1998 Page 10 Cliff Swanson, Deputy Director of Public Works/City Engineer, stated that the purpose of the item was to hold a public hearing on the necessity to acquire through eminent domain four parcels of property for the construction of the Main Street CIP project between Industrial Boulevard and Broadway. Staff is proposing to acquire the four parcels through eminent domain. However, negotiations are on-going with each of the property owners. After holding the hearing and taking testimony, the Council should adopt the mitigated negative declaration and approve the resolution of necessity to commence the eminent domain process. At the public hearing, the City Council must make three findings: (1) the public interest and necessity require the project; (2) the project is planned or located in a manner that will be the most compatible with the greatest public good and least private injury; and (3) the property sought to be acquired is necessary for the project. This being the time and place as advertised, the public hearing was opened regarding Sites 1,2, and 4. Addressing Council were: · Heriberto Gutierrez, 3440 Vista Lane, San Ysidro, representing Eddie's Tires and Auto Center, 2681 Main Street, stated he has been in business for almost twenty years. This project will eliminate his parking. He stated that Mr. Ryles mentioned to him that he was working on an agreement with him. He would reserve further comment until he sees what the agreement is. · Irene DeLeon, 2681 Main Street, 91910, representing the Baja Parts and Machine Shop, stated that since the Otay Ranch was annexed to the City, they have been affected by the zoning changes. They were trying to comply with the modifications to their building, signs, lights, etc. Having to move to another location, they will be losing part of their good will because their customers are repeated customers and are accustomed to the location. Their greatest difficulty is finding a suitable location where the City permits the combination of services that they perform. They felt compensation was due to them. · Ramon Sandoval, 2764 Terrace Pine Drive, representing the Baja Parts and Machine Shop, stated that in 1996, he went to the Planning Department to look at the plans for widening of the street. He was told that the project would be starting during the summer of 1997. There were no options, so they had to relocate. They found a place about a block away, but their sales went down about 50%, because their customers have not followed them to the new location. They could not move the machine shop to their new location, because the City did not allow that use in that location. They currently have a lease until the year 2000, therefore, they have to remain there until then. They have no place to relocate the machine shop. There being no one else indicating a desire to address the Council, the public hearing was closed. Councilmember Salas stated she did not see any mention of Baja Parts and Machine Shop in the staff report. Are we not considering this with this item, or have they already accepted the acquisition price. Glen Googins, Deputy City Attorney, replied that Baja Parts is a tenant on the property as opposed to the owner. An offer that is made to acquire the property is made to the fee owner. Discussions with tenants at this stage usually revolve around the potential need for any relocation if the acquisition proposed by the City or Agency would cause them to relocate. There may be discussions going on regarding relocation, but the current hearing deals with the right of the City actually taking the underlying fee interest. Mr. Ryles, the consultant, has been in negotiations with all four property owners for some time. We are still hopeful that agreements can be reached with all four. Nonetheless, even if there is a settlement in one or more cases, staff asks that the resolution of necessity commencing the eminent domain proceedings be adopted by Council. In addition, there are two other minor findings included in the action; that is: (1) Council needs to identify and find that required offers were made to the property owners in accordance with the appraisals; and (2) any portion of the property being acquired as previously dedicated to public use, the City needs to find and Minutes January 20, 1998 Page 11 determine that the City's use is either compatible with those alternative public uses or more necessary public use. RESOLUTION 18879A OFFERED BY MAYOR HORTON, heading read, text waived, passed and approved 5-0 (for sites 1, 2, and 4). This being the time and place as advertised, the public hearing was opened to consider Site 3. There being no one indicating a desire to address Council, the public hearing was closed. RESOLUTION 18879B OFFERED BY MAYOR MORTON, heading read, text waived, passed and approved 4-0-0-1 (Moot abstaining). 22. PUBLIC HEARING TO CONSIDER ADOPTION OF SEVEN MAJOR AREAS OF IMPROVEMENT - Council previously had work sessions to discuss and develop City-wide priorities. On 9/11/97, Council completed a final review of the priorities and identified the seven major areas of improvement. Council received public comment and input on the proposed seven issues at a public hearing on 10/21/97 and determined that additional public comment was necessary prior to final adoption. Prior to this meeting, Councilmembers have made 13 talks to community groups and reached out to the community in general for input via phone, mail, fax, and the Internet. In addition, articles have appeared in the local paper and the Quarterly. Staff reconunends Council accept public testimony on the seven major areas of improvement and approve the resolution. (Budget Manager and Public Information Coordinator) Continued from the meeting of 1/13/98. RESOLUTION 18880 ADOPTING THE SEVEN MAJOR AREAS OF IMPROVEMENT The public hearing was opened and continued from the last meeting. Addressing Council were: · George Kost, 3609 Belle Bonnie Brae Road, Bonita, 91902, stated he was in favor of SR-125 and urged the Council to continue to fight for the CAC alignment, because that is the one that is the furthest away from people. · John Willitt, 97 Montebello Street, Chula Vista, 91910, stated that developing the toll road means maintaining California's transportation system without increasing State taxes. The SR-125 South Citizens Advisory Committee, formed by Caltrans, dedicated over 1100 hours in analyzing 19 different alignment during the period of 1991 through 1996. He urged Council to continue their support in order to keep this vital transportation project for South San Diego County on track. · Rod Davis, 233 Fourth Avenue, Chula Vista, 91910, representing the Chamber of Commerce, stated that even if we did not build another house, we would soon see a limit of I-5 and 1-805 reached because of the growth in the area, mostly from our children growing up. He felt the most important of the seven priorities that must happen in order for the other six to have a chance was SR-125. He also felt that there be an establishment of a more formatted, more institutionalized omnibudsman procedure. He felt that too often we were losing businesses from Chula Vista because they did not know they have an omnibudsman who will open doors and assist them. He urged Council to add this as an implementing feature to the seven priorities so that when a project comes to the City, they are assigned an omnibudsman. · Gustavo Perez, 361Montcalm Street, Chula Vista, 91911, Assistant Director of South County Economic Development Council, stated that the Board of Directors of the Transportation and Infrastructure Committee supported SR-125, because they know it is a vital link between interstate 8, eastern Chula Vista, and the Otay Mesa border crossing. · Kent Olsen, 1230 Columbia Street, San Diego, 92101, President of California Transportation Ventures. He had a problem with SR-125; he was concerned with a Minutes January 20, 1998 Page 12 delay in the environmental permitting so that we might not be able to get it built and opened in time to prevent serious traffic congestion. · Bob McAlister, 2497 Golfcrest Loop, Chula Vista, 91910, representing the EastLake Greens homeowners. They were in support of the SR-125 development. There being no one else indicating a desire to address the Council, the public hearing was closed. RESOLUTION 18880 OFFERED BY COUNCILMEMBER RINDONE, heading read, text waived, passed and approved 5-0. 23. PUBLIC HEARING REGARDING EXISTING AND PROPOSED RATES ~ND CHARGES FOR COX COMMUNICATIONS' BASIC SERVICE TIER ~ND ASSOCIATED EQUIPMENTAND CABLE PROGRAMMING SERVICES TIER, AS SUBMITTED BY COX COMMUNICATIONS TO THE CITY VIA FEDERAL COMMUNICATIONS COMMISSION (FCC) FORMS 1235, 1240 AND 1205 - In December, Council considered four items from Cox Communications dealing with their Maximum Permitted Rates. One of these, reducing the Maximum Permitted Rates for certain installations or equipment rentals, was approved by Council. The others were not approved, and the public hearing was continued. Staff recommends Council conduct the public hearing and take no further action to either endorse or deny Cox's proposed Maximum Permitted Rates, but rather preserve the opportunities to file complaints or rate orders in coming months as allowed by Federal law. (Principal Management Assistant Young) Continued from the meeting of 12/9/97. Councilmember Rindone stated that when this item was before Council last time, a presentation was made of the rate that Cox Cable had charged. It has since come to his attention that there isn't a single rate. The rate that was quoted did not include multiple dwelling units; there can be different rates. Is that correct. He asked if there was a way that the City monitors this to insure compliance and consistency. Gerald Young, Principal Management Assistant, stated that Cox typically comes to the City for regulation is the maximum permitted rates they may charge. When dealing with multiple dwelling units, cable companies have the ability under FCC regulations to charge discounted rates based on the fact that in serving a larger complex, there are some economies of scale that they are able to achieve. When there is a contract like that which is entered into, there is typically a lower rate available to the residents of that complex and also typically a longer term that may be involved in the contract. As an individual cable customer, you may be able to drop your cable on a month-to-month basis with a multiple dwelling unit complex, because they may have signed a long-term agreement. In terms of the rates that are charged to those complexes, they are usually below the rates charged in other areas of the City. This being the time and place as advertised, the public hearing was Opened. There being no one indicating a desire to address Council, the public hearing was closed. MSUC (Padilia/Moot) to accept staff's recommendation to take no further action to either endorse or deny Cox's proposed Maximum Permitted Rates, but rather preserve the opportunities to file complaints or rate orders in coming months as allowed by Federal law. BOARD AND COMMISSION RECOMMENDATIONS None submitted. ACTION ITEMS 24. REPORT USE OF THE MELLO-ROOS CON~4UNITY FACILITIES ACT OF 1982 TO FINANCE INFRASTRUCTURE Recently, McMillin Otay Ranch and Otay Ranch Development requested the City to initiate proceedings for the establishment of Community Minutes January 20, 1998 Page 13 Facilities Districts (CFDS), also known as Mello-Roos Districts, pursuant to the "Mello-Roos Community Facilities Act of 1982," to finance specific public improvements serving their proposed developments. Staff retained a consultant, Brown, Diven& Hentschke, based on their expertise and experience in working with the City and other agencies as bond counsel to prepare the report on the use of CFDS as a public financing mechanism with the City. The "Mello-Roos Act" requires that as a prerequisite for the use of CFDS, the City shall adopt a "statement of local goals and policies" concerning the use of the Act. Staff recommends Council accept the report and approve the resolution. (Director of Public Works) Continued from the meeting of 1/13/98. RESOLUTION 18860 ADOPTING THE CITY'S STATEMENT OF GOALS ~3~D POLICIES REGARDING THE ESTABLISHMENT OF COMMI[NITY FACILITIES DISTRICTS Councilmember Moot stated that he did not feel comfortable voting on the matter since this would create a potential economic impact to a client of his law firm, therefore, he would be abstaining. Warren Diven, bond counsel with the law firm of Brown, Diven and Hentschke, stated they have been retained by the City to act as special counsel to the City to assist in the preparation of the proposed policies. They also prepared the report that is part of the agenda packet on the use of community facilities districts. He stated that major areas of concern with the use of Mello Roos Districts, particularly in the late 1980s are the following: (1) Concern of adequate notice to the residential homeowners who are purchasing from the developers. As a result of complaints regarding this, the Mello Roos law has been changed. When the Mello Roos law was first enacted, there was no requirement for the establishment of a special tax lien on the property that was being taxed. There was a requirement for the recordation of what was known as the notice of special tax, but the title companies didn't regard this as a current and existing lien, and in many cases, it didn't show up on preliminary title reports. This created some problems. As a result, the law has been changed and notice of special tax lien is now required to be recorded with the property which does show up on preliminary title reports. In addition, the Mello Roos law specifically requires the developer to provide a form of notice to any perspective purchaser that specifies the maximum amount of special tax to be paid and the purpose for which it would be paid. In addition to that, there is a requirement for that residential homeowner to provide a similar notice to any person who purchases from that residential homeowner. (2) Concern that the aggregate tax and assessment burden on the homes is simply too high. What is being proposed to the City in the policy is to continue to conform to the City's requirements for assessment districts, and that is the 2% tax burden be calculated at the time the house is actually sold rather than at the time the district is formed. (3} Concern that there was no specific term or limit on the time within which the special tax could be levied for the facilities. The Mello ROOS Act has been amended to now require that if you are going to levy a special tax to pay for facilities, there has to be a definite term on that tax. That now makes the use Of a Mello Roos District for that purpose equivalent to an assessment district. (4) Concern that the escalation of the maximum of the special tax. The Mello Roos Act has been amended to limit escalation of special taxes on residential homes to 2% per year after a building permit is pulled. They were recommending for the City's policy that there be no escalation whatsoever on special taxes levied on residential homes after a building permit is pulled. That places a community facilities district more pursuant to these policies on an equivalent plane with an assessment district. (5) Concern of paying a disproportionate amount of the special tax. In our policies, they were requiring that both developed and undeveloped property owners pay their proportionate share of the special taxes. Minutes January 20, 1998 Page 14 Councilmember Salas asked for clarification on the comparison of the assessment district versus the community facilities district. The assessment district was a set rate that was never raised and the Mello Roos did have provisions that you could raise the fee. Mr. Diven stated that was correct. When you establish an assessment district, you put a fixed lien on the property which is amortized over the life of the bonds much like a home loan would be. In the end, the property owner has approximately equal annual payments. The Mello Roos law would allow that amount to escalate up to 2% per year on residential homes. What they were proposing was that there should be no escalation even though it might be authorized under state law. There should be no escalators whatsoever on special taxes levied to pay for facilities. Included in the policies is the opportunity to form a community facilities district to pay for services. We do not limit the ability to include an escalator for services because services over time will increase in cost. The purpose of establishing these maintenance districts whether they are assessment districts or community facilities districts that are paying for services or maintenance is to insure that the general fund is not on the hook for those services that are originated because of new development. Councilmember Rindone stated he was concerned that there are some other areas that we need to focus on, some potential down side of Mello Roos Districts. They are not consumer friendly. As a result, they tend to be misunderstood. Once people get involved in them and there are changes, it can have an impact on a family budget years down the road. Mello Roos Districts are an option, but not a very good one. Currently, this Council has restricted Mello Roos Districts to school districts. He did not feel it was a good option to school districts either. He was apprehensive about expanding our policy to include Mello Roos Districts for financing the infrastructure of future developments. But in fairness to developers, they are looking at alternative ways of trying to cover those expenses and those options are becoming more limited. He asked if it was true that another down side of the Mello Roos Districts was the potential increased liability on the part of the City and the general fund such as a default by a developer on financing or a future vote from those within the Mello Roos Districts. Mr. Diven responded that when bonds are issued for either a community facilities district or for an assessment district, they're really limited obligation bonds of the issuing entity. That is, they are secured solely by assessments or special tax revenues unless for some reason the City should want to pledge some other source of revenue to help pay for those bonds. A general fund is not on the hook for delinquencies and the payment of either special taxes or assessments if property owners fail to pay those. There is a reserve fund that is established in both bond issues which is funded out of bond proceeds that is drawn upon to make up for deficiencies in the payment of special taxes or assessments. When that reserve fund is extinguished, there is no obligation on the part of the City to advance further funds to make that service payment on the bonds. If, in the case of either an assessment district or a community facilities district, you have a district that gets into a financial trouble, there may be some obligation on the part of the City to at least indirectly mention that in other financial offerings that the City may make. Councilmember Rindone asked what did it mean that a 2% vote can rescind the payments into the Mello Roos Districts? Mr. Divert stated there was a provision in Proposition 218 which states that residents within a community facilities district or assessment district can circulate an initiative petition and ask that either the special tax or the assessment be either rescinded or reduced. We have to look at two different types of special taxes on assessments when we talk about the effectiveness of this initiative provision. It was his opinion that if you have issued bonds secured either by special taxes or assessments that provision in Proposition 218 is unconstitutional; it violates the impairment of contract clause. However, in the case of assessments or special taxes levied to pay for ongoing services, that is a potential threat in either case. That homeowners within a community Minutes January 20, 1998 Page 15 facilities or an assessment district could circulate an initiative petition and ask that the repeal or rescission of that tax or assessment and be placed on a ballot for vote. Ironically, a community facilities district is a more secure method of financing services because of a reduction or repeal of a special tax request requires a 2/3rds vote whereas a reduction or repeal of an assessment requires only a majority vote. Councilmember Rindone asked if we would do this and there are other Mello ROOS Districts that would overlay the same residents or homeowners, what restrictions would that have under the other public agencies such as schools to be able to address those issues where there was expansion of facilities and we have reached the maximum cap of 2%. Mr. Diven stated that the City's cap is the City's cap. In theory, the school district could levy a tax that would be higher than that. The safeguard that this City Council has imposed is that at the time of the sale of that house from the developer to the initial purchaser, you take a look at the aggregate tax and assessment burden on that home from all sources. If that exceeds 2% of the sales price of the home, then the developer is required to pay down the City's special tax or assessment so that it doesn't exceed the 2% of that sales price. So if another agency should overlay a special tax or assessment, there would be a requirement that the tax be brought down to that 2%. If it is five or ten years later, there probably are more than 12 registered voters in that District, then it would require a registered vote to impose a new special tax or the vote of the property owners to impose a new assessment district. Councilmember Padilla asked what was the basis for the consideration charge of 1% and was it his view that the particular policy can totally guarantee that the cost to the developer of the consideration charge is not some fashion passed on to the owner/purchaser of the property. Mr. Diven responded that what the perspective bond buyers are going to look to the security for the bond issue. If we implement these policies, and we have 4:1 lien to value ratio, we have a very strong developer with the ability to financially carry the project through development, it was his belief that the fact there is an origination compensation paid will have no impact on the price of the bond. Councilmember Padilia stated that generally the Council insists that new development pay its fair share. His concern was that he did not see a philosophical underpinning in this particular application of saying to the developer that we are going to allow you to use this type of financing, but the home buyer will ultimately bear the burden of the cost including the origination charge. He was having a problem with that particular element of the policies. Mr. Lippitt responded that this is a policy issue. There is a lot of staff time and cost that the City goes through in preparing for this, and it is not something that we charge to an individual district but is something that comes out of the basic salaries of the City, so it is a general fund cost. In talking about the homeowner, certainly they can get better financing through an assessment district than they could in financing on their own. The developer has to give money to build these facilities also. If he doesn't get paid back, he may have to pay higher points actually than what we are charging. Even though the City is financially protected on any district should something go wrong, the City is also sticking its neck out. It is a policy issue, but we can certainly argue that there is a justification for it. Councilmember Padilla stated he disagreed. The degree of risk to the City whether you are talking about an assessment district or CFD, a reserve established from the bond proceeds which if that is exhausted, there is no further obligation from the City for bail out. Days are gone where you are going to charge 100% of the new costs of basic public infrastructure to the developers. He did not see there was a great amount of risk in light of the other policies that are in place that would justify having this origination fee other than it might be a revenue source and that we can. He did not feel it was a wise policy Minutes January 20, 1998 Page 16 for the city. He further stated he was generally supportive of approving to expand our authority to utilize CFDs. There are some good policies in place that can provide the best potential situation. If he had to pick something that he ultimately could not agree with as a matter of policy, it is the origination fee. Councilmember Salas asked if other agencies charged the origination fee. Mr. Diven responded that it was not unique to Chula Vista, but it is unusual. Councilmember Salas stated that as she read about the tangible benefit that the developer gets from being able to use our public financing, it does seem like its a benefit to the developer. It enables the developer to save thousands of dollars in interest costs. She asked if the savings would be substantial so they were able to recoup the 1% origination fee. Mr. Diven responded that it may be. Additionally, there has been a dwindling list of alternatives in terms of options for developers in obtaining financing. By allowing the financing through the use of either an assessment district or a CFD, the developer may avoid a situation where they have to give up some of the equity in their project, where they have a very short term loan that has to be paid off in a bullet payment, etc. It is not necessarily just reduced interest cost, but it provides a much more viable means of financing. Councilmember Rindone asked what other alternatives were available for developers for financing that infrastructure, because while he was opposed to the Mello Roos Districts, he wanted to know what other viable options were available. Mr. Kaheny stated that in regards to Council's concerns about the validity of the origination charge, we have received a letter from the law firm of Hewlett and McGuire dated October 22, 1997, which indicates their displeasure with it, and they do threaten a law suit in that letter. If you wish legal advise, Council may adjourn into a closed session pursuant to GC 954956.9 because of the threat of possible litigation. Mr. Lippitt responded to Councilmember Rindone stating that the developers had a better understanding of other options that might not include City involvement. It all gets down to the credit that the developer has if you don't use the City mechanism. As they build things, they use up their credit. They use this in their business plans on how to get projects built. It is the only way you can get major facilities built that serve more than one development and the rest of the community. The only thing that he was aware of were these two methods: the assessment districts and the Mello Roos special tax. Ann Moore, Assistant City Attorney, added that because of the restrictions of Proposition 218, CFDS are an important tool for the City to use with respect to maintaining Open Space areas, especially when considering the Otay Ranch project and the vast areas of open space areas that are to be maintained through this development project. Council adjourned to a Closed Session at 9:58 p.m. 10:09 p.m. with all members of the Council present. The meeting reconvened at Addressing Council were: · Kim Kilkenny, 11975 E1 Camino Real, San Diego, representing the otay Ranch Company, expressed their support of the staff recommendation. The one issue he wanted to address that was not covered in the staff report was an issue of using the CFDs to finance neighborhood parks. The current policy says that CFDs can be used to finance any facilities consistent with state law. State law would allow the financing of local parks through the CFD. They came upon this when they were looking at the first neighborhood park they were financing in Otay Ranch. They were excited about that park and wanted to build it very soon. It is a very expensive park because it is a very large park. That is not a facility Minutes January 20, 1998 Page 17 which can easily be financed on the first five hundred homes because of its expense. Therefore, they would like to spread the cost out over the whole benefitting area. To do that you need some kind of public facility financing mechanism; they felt this was a good mechanism. They were bringing it to Council's attention because staff had some reluctance in using this mechanism. There were some advantages: you can get larger parks sooner, it remedies some of the problems associated with funding of conununity parks, and they have one park in Otay Ranch that is jointly owned by the McMillin and by them. Using the CFD to finance its construction could take care of the dual ownership problems. They hoped the Council would move forward with the policy. · Craig Fukuyama, 2727 Hoover Avenue, National City, 91950, representing McMillin - American Otay Ranch LLC, they were in support of the CFD policy. They felt it was an extremely important tool which was available to them to finance public infrastructure. They believed it was necessary in order to fulfill the objectives of the City's general plan and also the vision to see the orderly development of the eastern territories and the provisions of infrastructure prior to development. · Kim Elliot, representing McMillin da America Otay Ranch LLC, stated they have worked closely with staff to resolve a number of issues. They supported staff's recommendation to approve the policy as proposed with the exception of three issues which were: 1. The 4:1 value to lien ratio: They believed the 4:1 was overly restrictive and could severely limit the amount of improvements which could be financed. Bonds are typically sold very early on in the development process and the land value adds up very quickly as grading and other significant infrastructure improvements are made. The CFD Act was amended in 1993 to require a minimum of 3:1 value to lien ratio. There have been no further amendments to require a higher value to lien, and the bond market still finds 3:1 very acceptable. They believed it was more appropriate to have a policy which requires 3:1 as a minimum threshold and allows a higher lien value ration when determined to be prudent by the Council. 2. The 2% maximum tax rate: They believed that the 2% was a prudent guideline and what is typical in most agencies is to perform the 2% tax prior to the bond sale then reducing the amount of bonds sold at that time as necessary. There are numerous problems associated with making this tax at the close of escrow, and they believed that the public was protected without this extraordinary measure. 3. The origination fee: They believed this was an improper charge and should not be imposed. All the City administrative costs are reimbursed by the district through the sale of bonds. Only public and not private improvements are being financed. This charge becomes an additional burden on the homebuyers because it is passed on and makes housing more costly. Their attorney, Mr. Yaeger provided a legal opinion to them. McMillin's issue with the origination charge was not a question, its legality as to whether it is a good policy or not. They were not interested in suing the City on this issue. They believed a workable CFD policy is a critical financing tool to construct needed public facilities, and they supported staff's recommendation to approve the policy. · Liz Jackson, Division Manager of Pacific Bay Homes, 2300 Boswell Road, Suite 209, 91914, spoke in support Of the staff's recommendation. As a community developer to utilize various sources of financing was important to them. With the advent of Proposition 218, landscape and lighting maintenance districts are no longer an option to finance both landscape maintenance, and facilities financing becomes more difficult. They have worked with Mello Roos financing on other projects with positive outcomes. She felt that Mello Roos was more flexible than assessment district financing. She encouraged Council to give the issue thorough analysis. Minutes January 20, 1998 Page 18 Councilmember Padilla expressed he would support the policy and the expansion to allow the use of these districts under Mello Roos for financing of a public infrastructure. He reiterated that he did have some concerns about some of the specific points in the policy and procedures that are set forth, in particular the origination fee. Councilmember Salas stated that if we set the ratio at a 3:1 does that preclude us from using our own best judgement on a developer that we think is weak financially on imposing the higher standard. Mr. Diven responded that it really didn't. If you establish a 3:1 as the minimum threshold that is where you're applications are going to come in and that is what developers are going to push to finance. The bench mark that we wanted to look at was 4:1. With an exceptional development, we would be willing to reduce it to 3:1. He felt the City would retain a greater control over that. RESOLUTION 18860 OFFERED BY COUNCILMEMBER SALAS, heading read, text waived, passed and approved 3-1-0-1 (Rindone no; Moot abstain). ITEMS PULLED FROM THE CONSENT CALENDAR Item 17 was pulled. However, the minutes will reflect the published agenda order. OTHER BUSINESS 25. CITY b~NAGER'S REPORT(S) A Workshop has been scheduled for Thursday, January 22, 1998 on the Otay Valley area. Notices have been sent; staff expects a large turnout of about thirty or forty people. Councilmembers Moot, Padilla, and Salas stated they could not make the meeting. Council directed staff to reschedule the meeting for the February workshop. · A joint meeting with the Chula Vista Elementary School District has been scheduled for Wednesday, February 18, at 6:00 p.m. · Staff has indicated that both February 21 and 28 are satisfactory for all five councilmembers for the next Council tour. Items to be included are: proposed site for new animal shelter, proposed regional park parcel to be purchased by our Capital Improvement money for the Otay River Valley community park, the Otay gym site, some of the redevelopment areas and issues for Third Avenue, "G" Street, and the areas affected by previous flooding. 26. MAYOR'S REPORT(S) · Ratification of appointment to the Cultural Arts Commission, A1 Gore (to fill vacancy created by Commissioner Pelayo, whose term expires June 30, 2001). MSUC (Horton/Salas) to ratify A1 Gore. · Mayor announced the Global Junior Football Championship II at Southwestern College will be held on Friday, January 23, at 7:00 p.m. This is a NFL sanctioned event. Mayor stated the Board of Supervisors approved an ordinance last Tuesday to phase out oil company-owned serviced stations in the unincorporated areas of the County. Item is referred to as "Oil Company Divorcement". Although our City Attorney has been working with the County on this issue, she requested that this matter come to Council for consideration when deemed appropriate. Minutes January 20, 1998 Page 19 John Kaheny, City Attorney, responded that they have been working with the County on this matter and with other members of the County/City Attorney's Association. They do have an ordinance, and it will be on the next docket. · Mayor requested that Council reconsider at the February 10th meeting the all-way Stop at the intersection of Hidden Vista Drive and Woodhouse Avenue. She felt we did not have to rescind the vote, but before the all-way stop is installed at the additional intersection, she felt it would be appropriate for staff analyze that site to study it for the speed of the traffic and then come back to Council to see if we still want to move forward with that sign. 27. COUNCIL CO~4ENTS - None. ADJOURNMENT The meeting adjourned at 11:12 p.m. Respectful~ s~ ~. Adthelet, CMC/AAE City Clerk