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HomeMy WebLinkAboutcc min 1997/12/09MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, December 9, 1997 6:08 p.m. 1. ROLL CALL: PRESENT: ABSENT: ALSO PRESENT: CALL TO ORDER Council Chambers Pnblic Services Building Councilmembers: Moot, Padilia, Rindone, Salas, and Mayor Horton. Councilm~mbers: 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: November 13, 1997 (special mccting/wllrkscssion), November 18. 1997 (regular city council meeting) and November 18, 1997 (at~iourned meeting). MSUC (Padilla/Rindone) to approve the ubove listed minutes. Councilmember Rindnne and Mayor Hortnn abstained nn the November 13 minutes since they were both absent. 4. SPECIAL ORDERS OF THE DAY: Oath nf Oftice: Rickey R. Welch. II - Youth Commission. City Clerk Authelet conducted the Oath of Office. CONSENT CALENDAR (ltemx ludled.· 7 and 15) BALANCE OF THE CONSENT CALENDAR OFFERED BY COUNCILMEMBER RINDONE, headings read, texts waived, passed aod apprnved 5-0. 5. WRITTEN COMMUNICATIONS: a. Letter from the City Attorney stating that Council met in Closed Session on I 1/25/97 and 12/2/97. The City Attorney hereby reports that to the best of his knowledge ti'om observance of actions taken in Closed Session in which the City Attorney participated, that there were no reportable actions which are required under the Brown Act to be reported. The letter was received and filed. 6. ORDINANCE 2716 ESTABLISHING THE POGGI CANYON SEWER BASIN DEVELOPMENT IMPACT FEE TO PAY FOR SEWER IMPROVEMENTS WITHIN THE POGGI CANYON SEWER BASIN AS A CONDITION OF ISSUANCE OF BUILDING PERMITS (s~cond readin:e and adoption) - The Poggi Canyon Basin Gravity Sewer Basin Plan was prepared by Wilson Engineering to recommend sewer improvements necessary to convey sewage flows from the Poggi Canyon Sewer Basin to existing or proposed downstream sewerage facilities. Based on the analysis, a Development Impact Fee of $400 per Equivalent Dwelling Unit should be established to pay tbr these thcilities. Per staff recommendation, the ordinance was placed on second reading and adopted 5-0. (Director of Public Works) Minutes December 9, 1997 Page 2 7. RESOLUTION 18829 APPROVING MEMORANDUM OF UNDERSTANDING CONCERNING WAGES AND OTHER TERMS AND CONDITIONS OF EMPLOYMENT WITH THE CHULA VISTA MIDDLE MANAGERS ASSOCIATION FOR FISCAL YEAR 1997/98, IMPLEMENTING THE SALARY AND BENEFIT INCREASES FOR THE CHULA VISTA EMPLOYEES ASSOCIATION, WESTERN COUNCIL OF ENGINEERS, AND APPROVING THE SALARY AND BENEFIT INCREASES FOR THE UNREPRESENTED GROUPS OF EXECUTIVE MANAGERS, UNREPRESENTED EMPLOYEES AND UNCLASSIFIED PART TIME EMPLOYEES AND APPROPRIATING FUNDS FROM THE UNAPPROPRIATED BALANCE OF THE GENERAL FUND FOR THESE INCREASES AND THE PREVIOUSLY APPROVED INCREASES TO SALARY AND BENEFITS FOR THE CHULA VISTA POLICE OFFICERS ASSOCIATION - Negotiating teams representing the City and Chula Vista Middle Managers Association (CVMMA) have reached agreement on a Memorandum of Understanding (MOU) covering fiscal year 1997/98. The proposed MOU was ratified by the CVMMA membership. The m~:ior changes to the terms and conditions are outlined in the report. In addition. the City has also cl,npleted negotiations with the Chula Vista Employees Association, Western Council of Engineers. went through a meet and confer process with the Chula Vista Police Officers Association, and the City Council provided general directions filr the unrepresented groups of Executive Managers, Unrepresented Employees and Unclassified Part Time Employees on salary and benefit increases. The cost of all recommended increases are proposed to be appropriated from the unappropriated fund balance of the General Fund. Per staff recomn~endation, the resohltion was approved 5-0. (Bridget Manager) 4/Sth's vote required. Councilmember Rindone pulled the item. He wanted to know if the increase in the allowable flex plan contribution to deferred compensation was allowed fi>r all City employees. Dawn Herring, Budget Manager. responded that this percentage was allowed Ii>r the middle managers group for the last two years. The executive managers have stayed at the 25%. This is to bring parity between the two groups. Other bargaining groups do not have the same percentages. CVEA is at 25% as well, but she was not certain what the percentages were lilr the other groups. Councilmember Rindone asked if the total $5,000 t~r the retention pool was the max. John Goss, City Manager. replied that it was the total maximum which was requested. Conncilmember Rindone asked what was the percentage increase fBr the hourly, part-time employees. Ms. Herring stated that their increase was the same as everyone else. 3.36 percent. Councilmember Rindone stated there was a ti>otnote in the staff report indicating that this action was contemplated when Council considered the 97/98 budget and would not prevent the City from continuing to make progress towards meeting the general fund reserves of 8 percent. He knew that we were below that, and he wanted to know if this takes us further below the goal, or would we still be at 6 percent with a goal of 8 percent. Mr. Goss replied that we are moving toward 8 percent. Because of some revenues which came in better toward the end of last fiscal year, we actually have made progress from where we were. What he was trying to say is that this action would not deter us tYom that progress. However, we are still below the 8 percent. Councilmember Moot stated the only group left out of the 3.36 percent increase was the City Council. It has also been about five years since they had an increase. He f~lt it was an interesting that we don't have enough respect fi>r ourselves to give ourselves what we are giving to everyone else. Councilmember Salas stated that we have had discussions about council raises. She t~lt that the public and other bargaining units should ~mw that Council t~lt that in light of our inability to compensate our City staff the way they should be compensated that Cimncil would fi3rego an increase. Minutes December 9, 1997 Page 3 RESOLUTION 18840 OFFERED BY COUNCILMEMBER RINDONE, heading read, text waived, passed and approved unanimously 5-0. 8. RESOLUTION 18841 ACCEPTING AND AMENDING THE SALARY AND BENEFITS INCREASES FOR THE EXECUTIVE DIRECTOR AND DEPUTY DIRECTOR OF THE CALIFORNIA BORDER ALLIANCE GROUP (CBAG), AND APPROPRIATION OF FUNDS FROM UNANTICIPATED GRANT REVENUE - On 9/5/95, Council approved the City to act as the "fiscal agent" Ibr the CBAG and act as conduit to obtain civilian support personnel and to acquire related supplies t6r three employees. On 7/16/96, Council approved adding two additional CBAG support personnel. This action provides for both Executive Director and Deputy Director level positions tied to the Federal pay schedule to receive a step increase within the prescribed Federal General Schedule pay to be elI~ctive January, 1998. Per staff recommendation, the resolution was approved 5-0. (Chief of Police) 4/5th's w}te required. 9. RESOLUTION 18842 ACCEPTING $14,583 FROM SOUTH BAY COMMUNITY SERVICES (SBCS} AND APPROPRIATING SUCH FUNDS FOR OVERTIME NECESSARY TO IMPLEMENT THE DOMESTIC VIOLENCE COMPONENT OF THE COMMUNITY ASSESSMENT GRANT - SBCS, in partnership with the Police Department, was awarded a grant to ti~rm a Family Violence Response Team. This grant provides a creative program fi~r gaining early access to families with children in which domestic violence is present. The grant reimburses the Police Department lilr overtime expenses associated with domestic violence cases. Per staff recommendatilm, the resnlution was approved. (Chief of Police) 4/Sth's vote required. 10. RESOLUTION 18828 AUTHORIZING THE TRANSFER (REPROGRAMMING) OF 1996 AB 3229 SUPPLEMENTAL LOCAL LAW ENFORCEMENT FUNDS IN THE AMOUNT OF $33,569 FOR PURCHASE OF A CAD DISPATCH COMPONENT TO SERVICE ANIMAL CONTROL ($18,569) AND DEVELOPMENT OF MAP BOOKS ($15,000) FOR PUBLIC SAFETY - During fiscal year 1996/97, Council accepted and appropriated 1996 AB 3229 Supplemental Local Law Enforcement funds in the amnunt of $356,408 liar payment nf personnel, overtime, and purchase of equipment. Staff is recmnmending that the filnds set aside liar purchase of the firewall and auto ticket writers, which have not been purchased, be r~progrannned tier purposes of purchasing a cumputer aided dispatching component and map books ti~r public safety. Per staff recommendation, the resolution was approved 5-0. (Chief tff Police) 11. ITEM HAD BEEN DELETED FROM THE AGENDA BEFORE DISTRIBUTION. 12. RESOLUTION 18830 APPROVING A VISION STATEMENT AND A SPENDING ALLOCATION PLAN FOR THE PROPOSED QUARTER OF A CENT SALES TAX FOR LIBRARIES - The County Board of Supervisors has r~-established the Regional Library Authority fi~r the puq~ose of placing a quarter of a cent sales tax on the ballot. At their first meeting, the Authnrity asked that each library jurisdiction bring a "vision statement" and a spending plan to the Authority's 12/11/97 meeting. Per staff recommendation, the resolutiun was approved 5-0. (Library Director) 13. RESOLUTION 18831 ACCEPTING CALIFORNIA STATE LIBRARY MATCHING FUNDS AWARDED TO THE CHULA VISTA LITERACY TEAM, APPROPRIATING FUNDS, AND AMENDING FISCAL YEAR 1997/98 BUDGET - The Chula Vista Literacy Team has applied fbr and been awarded $32,359 in California State Library matching funds. Grant awards are based on a match of $1 for every $4.68 raised and spent locally. The Library received a five-year California State Library grant in 1987 to establish the Chula Vista Literacy Team. A series ot one-year extensions of the California Library Services Act have confinued l~nding this prograln. Funds must bc used to support the library's adult literacy program. Per staff recommendation, the resohltion was approved. (Library Director) 4/Sth's vnte required. Minutes December 9, 1997 Page 4 14. RESOLUTION 18832 ACCEPTING CALIFORNIA DEPARTMENT OF EDUCATION ADULT BASIC EDUCATION SECTION 321 GRANT FUNDS AWARDED TO THE CHULA VISTA LITERACY TEAM, APPROPRIATING FUNDS, AND AMENDING FISCAL YEAR 1997/98 BUDGET TO INCLUDE A .14 FULL TIME EQUIVALENT POSITION - The Chain Vista Literacy Team has applied tier and been awarded $5,970 in California Department of Education, Adult Basic Education, Section 321 grant funds. The Literacy Team has applied fi~r and received these limds since fiscal year 1991/92. The base grant of $3,500 must be used fnr supplemental staff devehlpment, assessmenL and/or networking. Remaining funds are calcnlated on the number of learner attendance hnnrs and may be used filr staff development and/or other enhancements to program quality. Per staff recommendation, the resolution was approved 5-0. (Library Director) 4/Sth's w~te required. 15. RESOLUTION 18833 APPROVING THE PARK MASTER PLAN FOR ROLLING HILLS RANCH NEIGHBORHOOD PARK - The neighborhood park at Rolling Hills Ranch is a 7.0 acre site located at Mt. Miguel Road and MacKenzie Creek Road. Rolling Hills Ranch (titanally Salt Creek Ranch) is in the eastern territories of the City and is a planned residential cmnmnnity with a fbcus on open space, trails, and a park system. Per staff recnmmendation, the resolution was approved 5-0. (Director of Parks, Recreation and Open Space) Councilmember Rindone pulled the item and noted that the Park Master Plan contained only twenty parking spaces in this proposal. He asked what was the City's standard minimare nnmber of parking spaces per acre since this was a seven acre proposal. Jess Valenzuela, Parks and Recreation Director, responded that we don't have a neighborhood park standard. This particular facility will not have organized games occurring, so based upon the consultant's advise, it was I~lt that the 20 parking spaces would be sufficient fi~r the type of park and programs being offered. There would be on- street parking available Ibr the neighborhood park. He stated that we have a very strict standard for the larger parks where there are organized games and activities, but fi~r a small, passive neighborhood park. althongh it does have some active elements, the parking will be sufficient with both the off:street and on-street parking. Councifinember Rindone stated that this park was similar to Sunridge with basketball courts which has significant usage. Only because there is adequate on-street parking and there is no development across the street is there sufficient parking. He felt we should have the Park and Recreation Commission look at some kind of standard for this type of park because this is the second mediun~-sized park where there is both passive and active usages and will have a very significant need lbr parking. There is nothing more debilitating tbr a residential community than have a public park with someone parking in front of your honse. Councilmember Salas t~lt that when we can, we should nse as l~w parking areas as possible, especially in a park area, because we need to encourage people to walk instead of using their cars. She felt that as long as we accommodate these huge parking lots lbr cars, we will never accnmplish that. RESOLUTION 18833 OFFERED BY COUNCILMEMBER RINDONE. heading read. text waived, passed and appraved ummimnusly 5-0. * * * END OF CONSENT CALENI)AR * * * ORAL COMMUNICATIONS There were node. PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 16. PUBLIC HEARING CONSIDERING RETAINING THE CALENDAR YEAR 1998 BUSINESS LICENSE TAX RATES AT THE CURRENT CALENDAR YEAR 1997 LEVELS - The Business License Tax Minutes December 9, 1997 Page 5 ordinance is structured so that the business license tax rates increase annually unless Council takes action to abate them each year. Since 1991, tax rates have remained the same due to annual abatements. Since the tax rates have not been increased as scheduled since 1991, the taxes would more than double f~r the vast majority of businesses on 1/I/98 if Conncil did not pass a resolution to abate them to a lower level than that allowed by ordinance. Since revenue estimates in the current budget were based on cnrrent tax rates, abating the Calendar Year 1998 tax rates to retain them at the current level would not require an ac~iustment to this year's budgeted revenue. Per staff recommendation, the resohltion was approved. (Director of Finance) RESOLUTION 18834 ABATING THE BUSINESS LICENSE TAX RATES FOR CALENDAR YEAR 1998, HOLDING CALENDAR YEAR 1998 TAX RATES AT TttE CURRENT CALENDAR YEAR 1997 LEVELS Robert Powell, Finance Director, stated that in 1990 in response to an indepth study showing Chula Vista had some of the lowest business license tax rates in the State, Council adopted a business license tax increase of 300 percent to be phased in over three years fi~llowed by 6 percent annual increases thereafter. This was with support of the local business community at the time. In 1991, the first phase of this increase amounting to 100 percent increase over the base rates went into eft~ct. During the years 1992 through 1997, recession hit Southern Calilbmia and schednled increases have been abated each of those five years. The public hearing is to consider the 1998 rates. Staff is again recommending at least one more year of abatement. Staff intends to work with the business community and return during Calendar Year 1998 with possible recommendations file an upward ac~justment. This being the time and place as advertised, the public hearing was opened. Addressing Council was: · Rod Davis, 233 Fuurth Avenue, representing the Chamber of Commerce, stated they were concerned because the City of San Diego reduced their bnsiness license tax by 55 percent two years ago. Although we have to finance the City, in order to do that successfully, we mnst remain competitive with those that are around us or the businesses won't come here. They strongly supported the recommendation to abate. There being no one else indicating a desire to address the Council, the pnblic hearing was closed. Conncihnember Salas stated she was keenly aware iff what the recession did to businesses. Now that we are in a recovery, we can't implenient taxes or burdens on businesses too quickly. However, when she looks at our business license tax structure and the examples given by stall to increase an annual business license of $78.50 to $86.35 which is an increase of $7.85 a year, it did not seem like that nluch of a bnrden to place on a business. She asked Mr. Davis if an increase of $7.85 really wlmld place that nmch of a burden on a business7 Mr. Davis responded absolutely not if you take away all of the other increases. Seven dollars and eighty five cents by itself armually is an insignificant amount, but when the sewer rates go up, you have to file your taxes electronically, you have to pay more employee withholdingwhen the State disability rate goes up, it becomes a point where every penhey added to the cost of doing business drives a business out iff business. If we are at $86.00 and the same business in San Diego is at $15 or $25, then when it is a decision of where to locate, we lose. He Iblt the best l~'e is the one paid through the sales tax. You can get more from one successful business than in all the bnsiness license fees combined. Councihnember Salas stated she understllod the cnnmlative efl~ct and that it can be burdensome. She was looking at the benefit that the bnsiness has being located in Chula Vista and that while we do have to be careful to remain competitive, the reality of Chula Vista being the location of choice alsu comes into play. Knowing what we fitcc in the fi~tnre in terms of our obligations to our community, it was her pret~rence to go with Option 2. Councilmember Rindone stated he never liked this particular nrdinance, because the change in the cost to do bnsiness does increase in all aspects, but this Council or tilture Councils would never increase the business license tax 100 percent. He would like to see this provision scrapped. He would snpport staff's recommendation to abate this, bnt would also plead that this provisinn be buried and liar staff to come back with some realistic options. Minutes December 9, 1997 Page 6 Mr. Powell stated that there are legal reasnns why the ordinance was structured with escalators. At the time, there were f~ars that Proposition 62 would tie imr hands and then we would not be able to raise taxes at all. Now under the specter of Proposition 218, it is even more of a concern. Councilmember Moot didn't see any reason to our rates except ours are lower than other jorisdictions. They are also a lesser percentage of our general fitnd revenue. He would like to see us sit d~wn with the Chamber to see what they might be willing to recommend to the Council t{I assist us in onr obligations, so next year we cnuld implement something. Mr. Powell added that the rationale fbr the 300 percent increase in 1990 was that the study c~mcluded that most cities in the State were on a percentage of gross receipts fbr their business license tax. Therefbre, there was no need to raise their rates every year; as gross receipts gn up, the taxes go tip. The business community was opposed to a gross receipts tax, so the ctm~promise was that we will stay with the flat tax, but agree to raise the rates and agree to these inflators as a way It) increase the taxes without going to a percentage of gross receipts. When the recession hit, the system broke down. Councilmember Padilia didn't have a problem with the way the nrdinance was structured, because it was dealing with an unusual set of circumstances in trying tn apply an artificial framework and allow filr change to occor within that fi'amewnrk within the constraints of the initiatives that were passed at the time it was drafted. In dealing with the rates which had remained flat tier a sustained period of time while the ccomm~y had gone in annther direction, we were realizing a decline and lack iff growth that was consistent with the economy at that tm~e. Trying to reconcile these things is very difficult to do. The way this is structured is unusual, but he f~lt it fi~nctinned until we have another analysis of how we can fbrmulate the business license tax. He had some concenls about the flat rate. although he understl~od why the business community preferred it. He t~lt we needed to work closely with the business cormmunity. He would also like to see a reexamination not only of the process, but also how we fi~rmulate our assessments and examination of the gross receipt versus the flat rate methnds. For the time being, he could support the recommendation to abate. COUNCILMEMBER PADILLA OFFERED RESOLUTION 18834, heading read, and text waived. Councilmember Rindone requested that when staff returns, they would include an analysis for the purpnse nf the ordinance, because there will be a change with councilmembers and city staff. As it is drafted, without some historical background, it would look ridicuhms to deal with. Councilmember Salas commented that she believed the gross receipt way was the most fidr way to assess a business license tax, because as a business realizes profits and gains, then that determines the taxes that they are going pay fbr that year. Mayor Hotton felt that it would be beneficial if we could include this in the next budget process, go through the teevaluation of the whole process, put together the infbrmation, collaborate with the Chamber of Commerce, review our current policy, and amend it if need be. John Kaheny, City Attorney, stated that Proposition 218 relates primarily to the assessments to real property. He did not f~el that Proposition 62 applied tn Charter cities, but he would have to dnuble check this to be certain. Mayor Horton l~lt that this is a part of what needed to be evaluated. She hoped that staff wotdd come back with some type of report prior tn nur decision fi)r the next fiscal year budget. VOTE ON RESOLUTION: Approved 4-1 (Salas w>ting no). 17. PUBLIC HEARING TO NOTICE USE OF FISCAL YEAR 1997/98 COPS FUNDING PER CITIZENS' OPTION FOR PUBLIC SAFETY FOR LOCAL LAW ENFORCEMENT SERVICES - The Minutes December 9, 1997 Page 7 1997/98 State budget was adopted appropriating $359,028.58 to the City's Police Department as a result of Assembly Bill 3229, Brulte. This Bill allocates State money to police departments liar purposes stipulated by the Citizens Option for Public Salary (COPS) Program. Per staff recommendatilm, the resolntions were approved. (Chief of Police) A. RESOLUTION 18835 ACCEPTING $359,028.58 FOR LOCAL LAW ENFORCEMENT FROM THE STATE BUDGET TO PAY FOR POLICE PERSONNEL ($108,000) AND RELATED EQUIPMENT ($251,028.58) B. RESOLUTION 18836 AUTHORIZING THE CHIEF OF POLICE TO UTILIZE (REPROGRAM) SAVINGS RESULTING FROM THE COMPETITIVE PROCUREMENT PROCESS FOR ADDITIONAL UNSPECIFIED SAFETY EQUIPMENT AND SUPPLIES This being the time and place as advertised. the public hearing was opened. There being no one indicating a desire to speak, the public hearing was closed. Councihnember Padilia commented that grant filnds like these have a litture fiscal impact on the City's operating budget, because many times these costs have to be absorbed at some future point as well as many times these funds require matching fund expenditures on the part of the City. Councilmember Salas stated that afler they voted on the police raises, the weapons was brought up as an issue. The POA was saying that the City did not provide police weapons to its police officers. It was her understranding that we did have the weapons available, but it was the individual choice of the officers whether or not to use those weapons. Richard Emerson, Police Chief, replied that the POA polled their members and I~lt it was the City's responsibility to provide weapons rather than the officer's personal choice to arm themselves like they have. This purchase allows us to have a systematic approach. It will mean that every police officer while on duty will have to carry this one weapon, because we arc spending a significant amount of money to do this. This will actually be supplementing an inventory that we have. Several years ago, we switched to the 40 calibre biretta, semi-automatic pistol. The Police Officers Association asked that this be done on a standardized basis. RESOLUTION NOS. 18835 AND 18836 OFFERED BY COUNCILMEMBER PADILLA, headings read, texts waived, passed und upprnved unanimnusly 5-0. 18. PUBLIC HEARING TO NOTICE ACCEPTANCE AND APPROPRIATING OF LOCAL LAW ENFORCEMENT BLOCK GRANT FUNDS - The Police Department has recently received notice of a 1997 Local Law Enforcement Block Grant (LLEBG) Award in the amount of $269,518 ti'om the Bureau of Justice Assistance. These tBnds were allocated to the Police Department based tin a three-year average Part I Violent Crimes. Part I Violent Crimes are murder and non-negligent manslanghters, forcible rape, robbery, and aggravated assault as reported by the FBI. Acceptance and apprnpriation of these funds requires a public hearing per stipulations of the LLEBG. Per staff recommendation, the resolutions were approved. (Chief of Police) A. RESOLUTION 18837 ACCEPTING $269,518 FROM THE 1997 LOCAL LAW ENFORCEMENT BLOCK GRANT AND APPROPRIATING SUCH FUNDS FOR THE FOLLOWING PURPOSES: $10,000 DRUG COURT, $149,518 IN OVERTIME, AND $110,000 FOR EQUIPMENT PROCUREMENT - 4/5th's w~te required. B. RESOLUTION 18838 AUTHORIZING THE CHIEF OF POLICE TO UTILIZE (REPROGRAM) SAVINGS RESULTING FROM THE COMPETITIVE PROCUREMENT PROCESS FOR ADDITIONAL UNSPECIFIED SAFETY EQUIPMENT AND SUPPLIES Minutes December 9, 1997 Page 8 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 chased. Councilmember Rindone asked if staff clmld provide an explanation on the drug courts and how that will be beneficial. Richard Emerson, Police Chief, stated there has been a drug court in the North Cuunty that has been running fi~r about two years. This would be one in the South Bay. It would allow individuals who have been arrested tbr a drug violation, and that is all that it is, who have pied guilty, to get into a treatment program which has people visiting and contacting them three times a day from the Probation Department. It is very labor intensive, but the surveys have proven that this is much mitre successful than actually going behind bars. Councilmeinber Rindone requested that once this is set tip that infi~rmation be provided to the local schools so that this would be understood. MAYOR HORTON OFFERED RESOLUTION NOS. 18837 AND 18838, headinlls read, texts waived, passed and approved unanimously 5-0. 19. 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 COMMUNICATIONS COMMISSION (FCC) FORMS 1235, 1240 AND 1205 - Part 1, 2, and 3 of the resolution represent Cox Comnmnications' annual cost-based reqnests fi~r increases in their maximum permitted rates. Such increases are allowed by the FCC as long as they cl~nfi~rm to a ii~rmnla of in~ationary and progranuning expenses. Chula Vista's consultant reviewed these calculations and fi>und them to be appropriately justified. Part 4 of the resolution is based on an FCC decision r~iecting Chula Vista's 1996 cmnplaint regarding upgrade-related increases in expanded basic services and Cox's request to allow increases in the maximum permitted basic rates accordingly, as both rates were computed on the same upgrade-based fi>rmtda. Staff recommends approval of the resolution. (Principal Management Assistant Young) RESOLUTION 18839 (1) APPROVING VARIOUS PROPOSED COST-BASED DECREASES FOR INSTALLATIONS AND ASSOCIATED EQUIPMENT; AND (2) APPROVING PROPOSED COST-BASED INCREASES IN TIlE MAXIMUM PERMITTED RATES FOR THE BASIC SERVICE TIER ($2.86); AND (3) APPROV1NG PROPOSED COST-BASED INCREASES IN THE MAXIMUM PERMITTED RATES FOR THE CABLE PROGRAMMING SERVICES TIER ($0.46); AND (4) APPROVING PROPOSED UPGRADE- RELATED INCREASES IN THE MAXIMUM PERMITTED RATES FOR THE BASIC SERVICE TIER ($1.57) Gerald Young, Principal Management Assistant, presented the staff report. Mayor Hotton asked fi~r an explanation as to why staff was recommending that we move flc, rward and make a decision now prior to the resnlts of the court case. Mr. Young stated that the rates proposed by Cox Cable t;:~r both their basic and expanded tiers of service were based upon a formula that was approved by the FCC tbr calcnlating how to pass along the costs of an upgrade. The question that came up at Council last year was, what is the appropriate way to use that ti>rmula to pass that cost along to existing channels. That very issue was at the heart of the two issttes that went to the FCC last year. One was the City's complaint which dealt with the additional tier of services that Cox offers, and the second was Cox's appeal of the City's denial of their basic rate increases. Both dealt with the same fi~rmula; both went to the FCC; and the decision on the expanded rates has come back. In reviewing that, the FCC determined that Cox*s methodology was reasonable and aside from one accounting correction t~3r income tax expenses, their numbers were appropriate. The consultanCs primary position is that the City wait until the FCC has made a final decision. It is Minutes December 9, 1997 Page 9 possible that the decision could ctnne hack being different from what the initial decision was. Staff's recommendation is based on the ihct that the FCC was the body we were waiting to hear from last year. We had a question that was raised by the consultant last year which was what share of the upgrade is appropriate to pass ahmg. The FCC ruled on that in the expanded case to say that they limit the fi~rmtda was appropriately interpreted by Cox and not by the City. If we think that we might get a more fitvorable ruling out of the second issue, the basic rate appeal, then it would be appropriate to wait tier that appeal. Items I through 3 in the resolution deal with Cox's annual cost-baseil prqjections fi~r what the maximum permitted rates should be. Those are not related to the appeal that is currently pending at the FCC. Item 4 is the item, if Council were interested in approving that now, that would be in consideration of the first decision which was handed down by the FCC in December. If the City Council were to say no to those rates, the process would be similar to the process that the Council went through last year. On basic rate increase requests, the City Council can deny a request fbr a basic rate increase for expanded tier or CPS level requests. (The basic rate would be Item No. 2; the expanded programming services requests would be Item No. 3). The City Council can file a complaint with the FCC after the City Council has received a minimum number of complaints from the public about an actual rate increase that has gone into affect. Councilmember Moot commented that the b,.~ttom line with respect to Items 2-3 regardless of what we said, Cox could raise the rates anyway. He understo,.~d that they couldn't raise them the way they would like to in order to reach uniformity around the County, bnt they c,3uld raise them. Mr. Young replied that Cox does have maximran pamitted rates, and they have the actual rates that they charge the customers. They are currently not at their maximum rates. Within the flexibility that they have, they could raise their rates. If the City were to deny the basic rate increase that they have requested, they would be somewhat hampered by that. The current maximum permitted rates that Cox has within Chtda Vista are $9.74 tbr basic and $30.40 fi~r the combination iff basic plus expanded. Conncihnember Rindone expressed that the cable rates were too high. The anth{>rization that Cox already has, the maximnn~ hasn't been reached. What we are being asked to do is to raise that ceiling even higher, even though they have not reached the maximum. Beti~re we get final resoluti,3n t?om the FCC, clearly the consultant has indicated tbr us to wait tbr the second FCC ruling, giving the City a benefit of a definitive answer. Council has the responsibility to help keep the lid c~n those potential maximum rates. He did not t~el the need at this time to raise the maximum rates when they haven't been achieved and we are being advised by our paid consultant to wait a definitive answer. Councilmember Salas expressed that there was a cushion lbr Cox Cable to raise without the approval of the City Council to the maximnm rate that wonld bring them tip to $30.40. If we vote no im this, it doesn't matter, they can reach that level. Whether t~r not we take action, that is going to happen. She t~lt that we were being asked to approve the upgraded related expenses litera No. 4). because this is the one that would save Cox any additional legal expense in the present case related to an appeal Councihnember Padilia tblt that there is connected t,3 this particular approwd an impact t,.> the City based upon franchise fees. He lblt staff should comment on this. He litrther stated that onr consultant has advised us that their reqnest to increase their maximum permitted rate that they can charge is in their ,3pinion justifiable. However, they have not charged those rates. The questi,.m is, why request an increase in your maximum ceiling if you don't intend to utilize it to the maximum at some point. He also wanted to examine cl,,~ser the consultant's comments regarding Item 4 which is the upgraded-related increases on the basic service tier that the FCC is yet to make a final ruling on. Mr. Young responded that Cox d,,~es have certain flexibility currently with their maximum permitted rates. It might be assumed that they would attempt to pass along s{nne increase in those rates the next time they make a rate filing in Chain Vista. It conld als.~ be assumed that if there was an increase in their maximum permitted rate, that at some point they would decide to increase their rates lilrther within those maximnm permitted caps. if Cox were interested in increasing their rates in Chula Vista to the level that they are cnrrently at throughout the rest of the County as of November 15. 1997, the level of $30.95 is something they conld not reach with their cnrrent maximum permitted rates; they could only get to the level of $30.40. If the other n~aximum permitted rate increases that the consultant Minutes December 9, 1997 Page 10 reviewed and fonnd to he appropriately iusti~ed were approved, they could get to that level of $30.95. Regardless of whether it is with the existing maximum permitted rate authnrity that Cox has or with somewhat increased authority that they might get via those filings, the City receives franchise fee revenues that are based upon the overall gross revenues to Cox. If they receive $30.95 via a $30 expanded basic rate and a $I .00 basic rate or visa versa, the revenue to the City would be the same. The current rates elsewhere in the County are $13.00 ti>r basic service and $17.95 fi~r the expanded portion of that service fi/r a total of $30.95. The maximum permitted rates in Chula Vista are $9.74 fi~r basic and $21.20 flir the expanded portion fi~r a total of $30.94. L.ooking at what Cnx's current maximum permitted rates are, they can get their i~verall rate to a level of $30.95. Looking at what their maximum permitted rates would be if the cost-based or appropriately justified rate increases were approved, they could get to a level ill $33.72 pcl nmnth on the combined service, but their basic service would still be at a maximum level of $12.60 which wonld be below their curr~nt level of $13 elsewhere in the County. This being the time and place as advertised, the public hearing was npened. Addressing Council was: · Mary Ball, Cox Communications, 5159 Federal Boulevard~ San Diego, 92105, clarified some issues. She stated they were in support of stat't~s recommendation. What is befi,lre Council is a FCC ti:>rm. Item No. I deals with FCC Form 1205 which has tn dn with setting the maximum permitted rate on equipment and installation rates. None of these itenls have anything t{I do with actual rates. These are only maximnm permitted rates that establish a rate ceiling that can't be exceeded. Any mention in the staff rep,3rt in terms of conclusions about what actual rates would be are conclusinns that staff has reached. Cox has nnt m~ti~ed the City about any actual rate changes. Item Nos. 2 and 3 deal with FCC fi~rln 1240 which has to dn with setting the maxmmm permitted rate or the ceiling tier the basic service tier and the expanded service tier. These are tierins which Cnx file annually with the FCC. Essentially the role of the local franchising authority in this FCC determined process is tn essentially insure that Cox Communications is ti>llowing the FCC rules, regnlations, and methodl~logy in calculating the maxinmm permitted rates. The City's consultant has reviewed the tierins and has come to the conclusion that Cox has appropriately flailowed the FCC's rules, regnlations, and methodology in calculating the maximum permitted rates. Item No. 4 has to do with FCC form 1235 f<~r upgraded related costs. Cox was beti~re Cormoil a year ago after they had filed the Form 1235 and spending about $29 millinn on their upgrade. Under the FCC rnles, the fibrin was completed. There is a methodology to have your maximum permitted rate impacted by the cost that y,3u have expended. The City's consultant at that time didn't agree with the methodol{~gy Cox used in the Form 1235, so an inquiry went to the FCC. They have ruled tin the CPS section of that and Ii~und their methodology essentially to be accurate. This is the reason Cox has asked tilt action on the remaining complaint since the FCC has essentially validated the methodology that they used. Cox t~lt it would be unlikely that when the FCC issues a final ruling on the other complaint that it will he any different fi'onl the first ruling on the CPS. A lengthy discussion i'bllowed between the Council and Ms. Ball. Their being no one else indicating a desire to address the Council. the public hearing was closed. Mayor Horton stated that after the lengthy discussion, she would not vote on this isstte. The staff report states that no action was required by the Council, and she had not heard any compelling reason why we should vote for this. Mr. Young stated that there were no required actions to be taken by the Council. tte recommended that on Item I which relates to decreases in the rates that Cnuncil approve that. On the basic service tier, the system is that the Council has the authority to disapprove a basic rate, and if Cox was interested in having that ruling overturned, they would file an appeal with the FCC. Council does not have to disapprove that tonight. On Item 3 if Council was not interested in taking acti,,in, those maxinmm permitted rates could p,,/tentially be considered to be in et'fi:.ct; however, Council would still have the opportunity to file a complaint with the FCC about those rates at any time afier an actual rate increase goes intn efli~-ct and Council receives complaints from local customers about those rates. If this was Council's pleasure~ then action would be required at this time. On Item 4, if it is Council's desire to wait until the FCC action is fi~rthcoming, then no action at this time is required. Minutes December 9, 1997 Page 11 Councilmember Moot suggested that we take "no action" on this item. If and when Cox files any request tbr rate increases and lets us know what rate increases are propnsed tbr Chula Vista, then we can reconsider this item at that time. Mayor Horton suggested that the item be bifi~rcated and vote on statics recommendation approving the various proposed cost based decreases far the installation and associated equipment. MOTION: M (Muot) tu approve Item 1 of Resolution 18339 and take "no action" on Items 2, 3, and 4 until such time us Cox Cable advises us what proposed rate increases are anticipated fnr Chula Vista. Councilmember Rindone stated h~ would prel~r supporting Item l of Resolution 18839 and not approving the others. Councilmember Moot stated he was trying to send a message that when ytm file tbr maximum permitted rate increases, tell tls at that time what ylm are going to increase those rates to. He l~lt we were playing a "cat and mouse game." Cox is asking ti>r a maximum permitted rate, but they are not telling us whether they are going to increase the rate and if so, by how much. He did not want to play the game. He f~lt we should find out what they propose the rate strncture to be. By linking the approval of the maximum permitted rates to what the rates are actually going to be, we may be able to in effect control local rates. SECOND ON MOTION: S (Itortun) Mr. Young stated that if Council was interested in thrther infl~rmation regarding Item No. 2 and potentially relating to what Cox's actual rate increase r~quests may be, it lnay be appropriate to continue the public hearing as part of the motion to a day when that rate increase request may be ti~rthcoming. Based on the calendar that Cox has used in the past, he recommended the pnblic hearing be continued to the third week of Jannary 1998. Ms. Ball stated it was important flu' Council to know that they have flied these forms with the City back in July 1997. In terms of price ac~iustments, they were anticipating ac!iusting the prices in February and since they do give a 30 day notice, that infl>rmation should he available towards the later part of January. Councilmember Padilia stated he would be w~ting no. He t~lt the real "cat and mouse game" was in trying to get a rate guarantee or a plan out of Cox which they know and we know they are not under any obligation to provide to the City. He did not buy the argument that we are entirely powerless to in~pact in the short term the basic tier rate to the local rate payers, because we can. RESTATED MOTION AND VOTE: To approve Item I of Re~olution 18839. Motion passed unanimmtsly 5-0. MSC (Ht}rton/Moot) tu not clmsider Items 2, 3, and 4 nf Resolutiuu 18839. Motiun approved 4-1 (hdilla w~tin~ no). Glen Googins. Deputy City Attorney, stated that staff would recommend that the public hearing be continued because it is somewhat unclear whether or not a negative decision is necessary hy the City Council with respect to Item 2 on the basic service tier including findings in order to make that a decision: one which then needs to be appealed by Cox and then go through the entire FCC process. Continuing the public hearing to a date certain, would allow staff time to analyze whether or not an actual negative decision on that plus findings would be necessary. In addition, it inay give Cox the opportunity to respond to Councihnember Muot's request that any proposal by Cox to increase rates be tendered to the Cormoil. If findings are not necessary and/or Council doesn't Minutes December 9, 1997 Page 12 want to change its action regardless of what the proposed rate increase is that can be a real short public hearing, but he recommended that the public hearing be reupened and continued. MSC (Hnrton/Mou0 tn reopen the pnblic hearing and continue said public hearing tn January 20, 1998. Motion passed 4-1 with Rindnne vuting nu. 20. PUBLIC HEARING CONSIDERATION OF A PROPOSED AGREEMENT TO GRANT A MODIFIED FRANCHISE AGREEMENT TO COX COMMUNICATIONS (COXCOM) INC. - One of the economic development sub-goals outlined by Connell in the past year's priority setting workshops was the review of all City franchise agreements. This report presents a proposed amendment to the City's franchise with Cox Communications. Amung the terms iff this proposal, the City would be able to implement an additional phase of the SmartCommunity program as developed in a series of 1996 public workshops. Other recommendations include an increase in the franchise fee to the industry standard level of 5 % of gross revenues, extending the agreement fi~r an additional ten years and making related changes in the Municipal Code. (Principal Management Assistant Young) At the request of the applicant, the item was continued to the meeting of 12/16/97. 21. PUBLIC HEARING ON ASSESSMENT DISTRICT NUMBER 93-01 FOR ALLEY IMPROVEMENTS EAST OF SECOND AVENUE AND SOUTH OF "J" STREET - Council accepted a petition signed by a m~iority of the property owners adiac~nt to the alley east of Second Avenue between "J" and Keamey Streets to fbrm a special assessment district fi~r the construction of improvements to the alley, Council snhsequently awarded the contract to Fox Construction Company which completed the alley improvement projcct on 10/30/95. (Director of Public Works) Cuntinued from the meeting uf 11/25/97. Item was continued to the meeting of 1/6/98. BOARD AND COMMISSION RECOMMENDATIONS None snbmittcd. ACTION ITEMS 22. RESOLUTION 18840 AMENDING THE FISCAL YEAR 1997/98 BUDGET TO INCLUDE 1.00 FULL TIME EQUIVALENT POLICE AGENT POSITION AND VEHICLE; ACCEPTING AND APPROPRIATING UNANTICIPATED GRANT REVENUES IN THE AMOUNT OF $155,804 FROM HIGH INTENSITY DRUG TRAFFICKING AREA (HIDTA) GRANT FUNDS - The Police Department has two Agents working with the United States Custom Service (USCS), one Agent at Operation Alliance, the other Agent at the Air/Marine Narcotics Interdiction Group. Both positkms are ti~nded thrlmgh HIDTA grants. The Police Department is now seeking to expand and enhance its investigative etl~>rts hy participating in anl~ther HIDTA position lead by the FBI investigating "Narcotic Traffickers." Staff recommends approval of the resolution. (Chief of Police) 4/Sth's w~te required. COUNCILMEMBER RINDONE OFFERED RESOLUTION 18840, heading read, text waived, passed and approved unanimously 5-0. ITEMS PULLED FROM THE CONSENT CALENDAR (Items 7 and 15 were pulled, but the minutes retlect th~ published agenda order) Minutes December 9, 1997 Page 13 OTHER BUSINESS 23. CITY MANAGER'S REPORT(S) · Scheduling of Meetings: December 9, 1997 in the morning, the Chnla Vista Christmas Trio Plus will be caroling around city hall. December i i. 1997, all the libraries will be closed fi>r a Staff Training Day. December 13, 1997, there will be the Assessment Center for the new city manager. December 16 and 17, 1997, staff will be trying to schedule Council interviews with the consultants regarding the library facilities master plan that is being developed. January 27, 1998 Council meeting is cancelled in order to attend the State of the County address by the incoming Chair of the Board of Supervisors, Greg Cox. Need to find time with the Council to meet with the consultants regarding the baseball park issue. Council concurred in scheduling something tilr 5:30 p.m. prior tt) the December 16th meeting. 24. MAYOR'S REPORT{S} · ' Consideratinn of vote regarding the change in language in the Draft Comprehensive Management Plan to specifically support the creation of the South San Diego Bay National Wildlife Refuge, Item was considered in cl~r~junction with their last meeting on December *, 1997. The vote was to take a neutral positilm in regard to the draft Comprehensive Management Plan flit the South San Diego Bay National Wildlife Refuge untiI ti~rther inti~rmation is available sl> staff and Council can analyze. 25. COUNCIL COMMENTS Councihnember Rindone congratulated the library staff tier hosting the 1997 Holiday Fiesta and Design Awards f~aturing a galleria of landscapes. Councilmember Salas stated she had iust returned f'rl~m a trip to Nagoya, Japan, as a representative of the City of Chula Vista for the lnternational Council of Local Envirnonmental Initiatives. They were Ionking at the affects of global warming. She expressed that the citizens of Chula Vista have reasnn to be proud because we are a progressive city and are one ill a v~ry f~w municipalities in the United States that actually has a CO2 reduction plan. Chula Vista received an award at the cont~rence tier mcctin.~! our five milestones lilt' implementation of the CO2 reduction plan. ADJOURNMENT The meeting ac~jlmrned at 9:00 p.m. City Clerk