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HomeMy WebLinkAboutcc min 1995/09/19 MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, September 19, 1995 Council Chambers 6:10 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Councilmembers Alevy, Moot, Padilla, Rindone, and Mayor Horton ALSO PRESENT: John D. Goss, City Manager; Bruce M. Boogaard, City Attomey; and Vicki C. Soderquist, Deputy City Clerk 2. PLEDGE OF ALLEGIANCE TO THE FLAG, SILENT PRAYER 3. APPROVAL OF MINUTES: September 12, 1995 (Regular Meeting of the City Council) and September 12, 1995 (Special Joint Meeting of the City Council/Redevelopment Agency). MSC (Horton/Rindone) to approve the minutes of September 12, 1995 (Regular Meeting of the City Council) and September 12, 1995 (Special Joint Meeting of the City Council/Redevelopment Agency) as presented, approved 4-0-0-1 with Padilia abstaining. 4. SPECIAL ORDERS OF THE DAY: a. Oath of Office - Board of Ethics: Douglas E. Cochrane, Lionel G. McQuillon and Virgil W. Whitehead. The oath of office was administered by Deputy City Clerk Soderquist to Douglas E. Cochrane. b. Recognition of Mayor Shirley Horton for attending the Educational Summit held on August 19, 1995. An inscribed plaque was presented to Mayor Hotton by Ed Brand, Sweetwater Union High School Superintendent and Bob Griego, President of the Board of Trustees. c. Proclamation Extending a warm Welcome to Vice Mayor Alexander Kolmakov and the Ussuriysk Delegation in the City of Chula Vista, CA. Edwardo Serrano introduced Vice Mayor Alexander Kolmakov. The proclamation was presented by Mayor Pro Tem Rindone to Vice Mayor Kolmakov. CONSENT CALENDAR (Item pulled: 5d, 5e, 8A and 8B) BALANCE OF THE CONSENT CALENDAR OFFERED BY COUNCILMEMBER RINDONE, reading of the text was waived, passed and approved unanimously. 5. WRITTEN COMMUNICATIONS: a. Letter from the City Attorney stating that there were no observed reportable actions taken in Closed Session on 9/12/95. It is recommended that the letter be received and filed. b. Letter of resignation from Archibald Hall - Otay Valley Road Project Area Committee. It is recommended that the resignation be accepted with regret and the City Clerk be directed to post immediately according to the Maddy Act in the Clerk's Office and the Public Library. c. Letter from Richard A. Pena, President Board of Directors, Bonita Historical Society, requesting financial assistance in the amount of $2,500. It is recommended that this request be forwarded to the fiscal year 1996/97 budget process. d. Letter from Veroniea E. Sissons requesting a feasibility study be done by the City on setting up and maintaining a security service for residents. It is staffs belief that the City should refrain from involving itself in a business venture usually reserved for the private sector. It is recommended that staff transmit this information to Ms. Sissons. Pulled from the Consent Calendar. Minutes September 19, 1995 Page 2 · Veronica E. Sissons, 813 Creekwood Way, Chula Vista, CA, stated there had been an expose several years ago on television which stated that when the alarms were activated it was transmitted to another state at which time they phoned your home. During that time the phone line was tied up and the homeowner was not able to call emergency personnel, etc. She felt the City could be creative and tie all the local security systems into a quasi-public service which then could be tied into ambulances, hospitals, etc. and could be a revenue stream for the City. Mr. Goss recommended that Council direct staff to send Mrs. Sissons a letter regarding her options. The police department had a limited number of security panels and they were for commercial use. He felt there were a number of operators that Mrs. Sissons could look at that were not located outside the state. e. Letter from Harry Brattin, President, South County Economic Development Commission, requesting the City's support and involvement in their efforts to relocate the Japan School to South County. It is recommended that this request be referred to staff for review and recommendation. Pulled from the Consent Calendar. · Diane Rose, 614 Imperial Beach Boulevard, Imperial Beach, CA, Director of South County Economic Development Council, stated their mission was to promote and support economic development activities with the general objective of improving the quality of life for South County residents. As part of that they recognized the importance of the Pacific Rim and Tijuana business activity to the area. The TransBorder Business Development Committee had been formed to look for ways to encourage more international business. · Mary Salas, 803 East "J" Street, Chula Vista, CA, representing the California Trade & Commerce Agency, stated the mission of their agency was to attract new bnsinesses to California and assist in expanding existing businesses. She requested Council's support and involvement to locate the Japanese Saturday School in the South County. Having the school in the region would make South County even more appealing as a residential community for locating Japanese families. MSUC (Padilla/A!evy) to direct the Mayor's office to draft a letter of support and encouragement for the Mayor~s signature. f. Claims against the City: Claimant - Ruth Fritsch, c/o Robert Vaage, Esq., 110 West C St., Suite 2105, San Diego, CA 92101-3905. It is recommended by outside retained counsel that the Claim be returned as late, in part, and rejected in part, pursuant to the letters included in the Agenda packet under this item, and that the Personnel Director be directed to execute and post same. 6. ORDINANCE 2641 ESTABLISHING LIMITED-TERM, AD-HOC COUNCIL SUBCOMMITTEE REGARDING THE PROPERTY TAX SHARING AGREEMENT WITH SAN DIEGO COUNTY FOR OTAY RANCH (second readlnl and adontion) - Under state law, a property tax sharing agreement must be reached between the annexing city and the county before an annexation can be finalized. Once an annexation application has been submitted to the Local Agency Formation Commission and deemed complete, the property tax sharing negotiations between the annexing city and the county must be completed within 30 days or the annexation proposal cannot move forward. In the case of the proposed annexation of the westem parcel of the Otay Ranch, the property tax sharing issue will be unusually complex and significant in terms of fiscal impact. Staff recommends Council place the ordinance on second reading and adoption. (Deputy City Manager Thomson) 7. RESOLUTION 18034 WAIVING THE CITY'S FORMAL BIDDING PROCESS AND AWARDING CONTRACT TO THE R.B. CLARK GROUP TO CONSTRUCT A CLAPPER RAIL EXHIBIT AT THE CHULA VISTA NATURE CENTER - In July 1992, the U.S. Fish and Wildlife Service asked the Nature Center to care for a nonreleasable Light-footed Clapper Rail and to become the only museum in the world to exhibit that species. The puspose of the Clapper Rail exhibit is to provide a home for nonreleasable birds and to educate the public about wetland ecosystems and Clapper Rails. The Three Party Agreement with the Redevelopment Agency and the Bayfront Conservancy Trust (BCT) makes the BCT subject to the City's purchasing procedures. Staff recommends approval of the resolution. (Executive Director, Bayfront Conservancy Trust) Minutes September 19, 1995 Page 3 8.A. RESOLUTION 18035 APPROPRIATING $11,241 FROM PARK ACQUISITION AND DEVELOPMENT FUNDS, REAPPROPRIATING AND ACCEPTING BIDS AND AWARDING CONTRACT FOR "MEMORIAL PARK GYMNASIUM - PLUNGE - PARKWAY CENTER BUILDING RENOVATION IMPROVEMENTS, PHASE I (PR-162)" - On 8/9/95, bids were received for the "Memorial Park Gymnasium - Plunge - Parkway Center Building Renovation Improvements, Phase I (PR-162)." The renovation work includes: remodeling of the gymnasium restrooms and dressing rooms; renovating pool lobby, restrooms, and dressing rooms; modifying the spectator seating, storage and check-in areas, as well as other miscellaneous work. All work is in compliance with ADA and UBC requirements. Staff recommends Council accept bids and award the contract to Woodburn Construction Company of El Cajon; and appropriate and reappropriate the funds. (Director of Parks and Recreation and Director of Public Works) 4/5th's vote required. Pulled from the Consent Calendar. B. RESOLUTION 18036 APPROPRIATING $28,500 FROM PARK ACQUISITION AND DEVELOPMENT FUNDS FOR ADDITIONAL EQUIPMENT FOR THE PARKWAY CENTER BUILDING RENOVATION IMPROVEMENTS, PHASE I (PR-162) - 4/5th's vote required. Pulled from the Consent Calendar. Councilmember Moot questioned why additional funds had to be appropriated for the project. 1ohn Lippitt, Director of Public Works, replied that the original appropriation was $662,000. Approximately $150,000 had been expended for processing and architectural and another $50,000 had been expended for staff costs. The original estimate was approximately $495,000 and the bid was $562,000. Staff also recommended that an additional contingency of $75,000 be included due to the nature of the project, i.e. refurbishing a building. The budget request was done on a preliminary basis and 'the cost estimates were very difficult. Thirteen percent from a very rough estimate was not that far out of line on a project of that nature. Councilmember Moot stated the bids usually came in under the estimate which indicated that staff was extremely good and should be commended for doing an excellent job in estimating projects. He questioned if there was something unusual about that particular project. Mr. Goss stated it was rehab on a building which was something that the City did not do very often. Experience in the past had proven that it was very "iffy". Once the work was started and the building was opened up there were often issues such as asbestos which increased the costs significantly. RESOLUTIONS 18035 AND 18036 OFFERED BY COUNCILMEMBER MOOT, reading of the text was waived, passed and approved unanimously. 9.A. REPORT DEVELOPMENT IMPACT FEE (DIF) FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 1995 - State Govemment Code Section Number 66000 requires local agencies assessing DIF to make available specified financial data to the public each fiscal year. Staff recommends Council accept the report and approve the resolution. (Director of Finance and Director of Public Works) B. RESOLUTION 18037 MAK1NG FINDINGS THAT THE UNEXPENDED FUNDS IN THE VARIOUS DIF FUNDS ARE STILL NEEDED TO PROVIDE CONSTRUCTION OF FACILITIES FOR WHICH THE FEES WERE COLLECTED * * END OF CONSENT CALENDAR * * PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 10. PUBLIC HEARING PROPOSAL TO DEFINE "COMMUNITY PURPOSE FACILITY" IN THE EASTERN AREA DEVELOPMENT IMPACT FEE FOR STREETS AND MODIFY THE FEE RATE SCHEDULE ACCORDINGLY - Currently, the "Eastern Area Development Impact Fee for Streets" (TransDIF) program does not discuss the land use category "Community Purpose Facility" (CPF). Other fee programs, such as the Public Facilities DIF and the SR-125 DIF exclude CPF from the fee programs. Staff proposes to correct the inconsistency by defining the CPF land use and excluding that class from the TransDIF. Staff recommends the public hearing be continued to 10/17/95. (Director of Public Works) Minutes September 19, 1995 Page 4 MSUC (Horton/Alevy) to continue the public hearing to the meeting of 10/17/95. ORAL COMMUNICATIONS · Ruth Chapman, 8 Sierra Way, Chula Vista, CA, Sweetwater Union High School Board of Trustees, requested an update regarding the land swap for the veteran's home. Mr. Goss stated he had planned on updating Council under his comments. There was an article in the Union/Tribune on 9/14/95 which stated the Assembly had killed funding for the veteran's home. In talking with Senator Steve Peace, he felt it was a misleading article and that the process for proceeding with the veteran's home was still underway even though the funding would be more incremental. The initial funding on the govemor's desk would permit the beginning steps until full funding was approved early next year. Chris Salomone, Director of Community Development, stated that rather than taking action on the revenue bond issue which would have funded $32 million (the next two veteran's homes in California) they amended the bill to fund $1.6 million for architectural and site development costs in order to get the process going on the two sites, i.e. Chula Vista and Lancaster. In January it would go before the Senate and Assembly for full funding. The current action was before the Governor and should be signed within 30 days. Staff would then proceed with the site preparation work. The agreement the School District approved would be before the Agency on 9/26/95. BOARD AND COMMISSION RECOMMENDATIONS None submitted. ACTION ITEMS 11. RESOLUTION 18038 AMENDING THE FISCAL YEAR 1995/96 BUDGET TO "Y-RATE" THE EXISTING SEASONAL GARDENERS AT THEIR PRIOR SALARY LEVELS AND APPROPRIATE $2,851 FOR THIS PURPOSE FROM THE GENERAL FUND RESERVE - Included in the 9/5/95 Council packet was an information item seeking clarification on Seasonal Gardener salaries. The salary range for Seasonal Gardeners was reduced as part of the fiscal year 1995/96 budget adopted by Council. It has come to staff's attention that this classification may not have been intended to be reduced, and staff is recommending that the hourly rate be reinstated. Staff recommends approval of the resolution. (Budget Manager) 4/Sth's vote required. Councilmember Rindone stated staff's recommendation was the "Y-rate" which was option #2, but in the fiscal impact it stated an additional $2,851 which was not copacetic with the recommendation. Dawn Herring, Budget Manager, replied that originally the higher rate was placed there because it was thought that the position might be brought back in at the second half of the year, be rehired, and be at the "Y-rate" level. However, staff subsequently found out that the positions were terminated at the end of September and would be rehired from a new list for the spring session and, therefore, the "Y-rate" would not be appropriate. The original amount referred to, i.e. $1,425 was the appropriate amount. Councilmember Rindone stated he would support the staff recommendation as it was appropriate that the lowest paid and seasonal workers should not have a disproportional rate or hardship due to budget action. It was consistent with what Council had done with the Park & Recreation workers. He thanked staff for bringing the item to the Council's attention. RESOLUTION 18038 OFFERED BY COUNCILMEMBER RINDONE, reading of the text was waived, passed and approved unanimously. 12, RESOLUTION 18039 APPROVING THE AGREEMENT WITH CREDO, WOLFE AND ASSOCIATES FOR U.S. HOUSING AND URBAN DEVELOPMENT (HUD) SECTION 108 CONSULTATION SERVICES - To approve a consuRant contract with Credo, Wolfe and Associates to assess the potential benefits and risks Minutes September 19, 1995 Page 5 associated with the City utilizing HUD Section 108 Loan/Loan Guarantee Program. Staff recommends approval of the resolution. (Director of Community Development) Councilmember Moot questioned if them would be CDBG funds available for the program. Cheryl Dye, Economic Development Manager, replied that it was expected to continue for the foreseeable future. If loans were made with CDBG entitlements as collateral, those would be grandfathered in even if the program was discontinued, i.e. the liability would be with HUD to make those entitlement funds available to meet the loan payments. Councilmember Moot stated there had been discussion that congress would not be forthcoming with CDBG funds in the future and questioned if the money was not going to be available why the city should move ahead with the program. Chris Salomone, Director of Community Development, responded that during the budget process at the federal level there was discussion of budget cuts to the CDBG program. As a result there were minor cuts in the program but it was kept intact. The federal government had stated that on the loan programs, they would guarantee for five years the funding source of any loans they approved, even if the CDBG program on an annual basis was cut. Staff was acting on that basis. Mayor Horton stated the candidates were interviewed in late 1994 and questioned why it had taken so long to get to Council as she felt the time element was impo'rtant. Ms. Dye responded that it had been longer than staff had hoped but it was a workload and priority issue. Staff felt it was still a viable project. The City of San Diego had submitted an application and received a "generic~ authorization, but had not utilized the program. Staff would also seek the "generic" authorizations, but at the same time they were hoping to develop a specific loan program. Mayor Horton felt $16,000 was high for Phase I. Ms. Dye stated it was a feasibility analysis and most of the time went into the initial stage. It was a dynamic process that was continually changing. Mayor Horton questioned if the proposals submitted were lump sum or itemized for specific tasks. Ms. Dye stated they were submitted by tasks so staff would have the ability to return to Council for approval before entering into the second phase. Mayor Horton stated she had been involved with another program where a consultant was hired and there was no follow-up from staff nor was the project brought to fruition. She expressed her concerns with that happening to the proposed project. Ms. Dye stated the Mayor was referring to CRA. It was a project that had been delayed due to workload and priorities. Staff had continued in looking at Community Reinvestment Act and a community development staff member was actively involved in a county-wide reinvestment task force. A report would be brought to Council in the near future. Councilmember Alevy questioned how much of the work being done in Phase I could be done by existing state/federal agencies that would offr~r those services free. Ms. Dye replied that it was a very specialized program. The number of cormmunities that had participated were limited due to the stringent regulations. Staff felt it was important to have a consultant that had worked with 108 programs to guide staff through the process. Their relationship with HUD was also important both at the regional and national level. Staff planned to work closely with the local cormnunity and had already worked with the Chamber, local certified development corporations, the small business development center, and others in the preparation of the RFP. A loan committee would be formed with members from the local lending community. Mr. Goss questioned if it would compete with the normal allocation of block grant funds. Minutes September 19, 1995 Page 6 Ms. Dye silted that the $30,000 that had already been approved did compete. In the future it would not, it would use entitlements as collateral but would not require additional appropriations of CDBG funds. RESOLUTION 18039 OFFERED BY MAYOR HORTON, reading of the text was waived, passed and approved unanimously. 13. RESOLUTION 17986 APPROVING AN AGREEMENT WITH EASTLAKE DEVELOPMENT COMPANY REQUIRING EASTLAKE TO TRANSFER ECONOMIC INCENTIVES TO NYPRO SAN DIEGO, A HIGH TECH COMPANY WISHING TO RELOCATE AND EXPAND WITHIN THE CITY'S HIGH TECH/BIOTECH ZONE, IN EXCHANGE FOR THE CITY PROVIDING CERTAIN CONCESSIONS TO EASTLAKE - On 4/18/95, Council approved in concept an agreement with the EastLake Development Company providing for EastLake to pay for NYPRO development related fees as an economic development incentive, in exchange for the City providing EastLake with certain concessions. Council directed staff to prepare the necessary agreement. Related item under Closed Session. Staff recommends approval of the resolution. (Director of Community Development) Continued from the meeting of 8/1/95. Cheryl Dye, Economic Development Manager, stated NYPRO had been considering a site in Chula Vista and a site outside the City. Staff undertook an analysis of both sites and identified that there were significant additional costs to NYPRO to locate at the Chula Vista due to higher fees and assessment fees. The assessment Council authorized was to underwrite those fees which had been done through the innovative approach with EastLake paying NYPRO to pay the City fees in exchange for two identified concessions from the City. The package would not cost the City General Fund monies and the final executed agreement was on the dais. Language had been inserted on page 13-32, first paragraph, second half of the paragraph, which did not significantly change the contract. Councilmember Padilia referred to the element in the agreement where the City would pursue the option through the correct procedure of including the segment of Orange Avenue in the DIF and questioned if it was an existing obligation for EastLake Development Company. Ms. Dye responded that it was and was not currently included in the TransDIF. Councilmember Padilia questioned in the absence of that particular element coming to pass when that segment would become a regional benefit on its own. Clifford Swanson, Deputy Director of Public Works/City Engineer, responded that with the development of the OTC they currently had access via Wueste Road. They were in the process of constructing the visitor's center so all traffic would be of a regional nature going to the visitor's center using that section of road so it would immediately become of regional significance. Some of that would be relieved later when Orange Avenue was put in to the west, but at that point it would continue to be of regional significance tbr traffic going to the lake for recreational activities. Councilmember Padilia questioned what the specific economic benefit would be to the City for that particular element of the agreement if it should come to pass. Ms. Dye raplied that them would be no impact to the City. The value was what the City was asking EastLake to transfer to NYPRO. Staff understood that the value to them would be in excess of $274,1300 and that $274,000 would go to benefit NYPRO in writing down their fees. At the end of the construction of the road the City Engineer would determine the DIF eligible costs and the precise benefits to EastLake. The difti~rence between that would be an excess credit which would go back to the City which could be utilized for incentives for future businesses. Councilmember Padilla silted in the bottom line analysis for that particular element of the agreement, if the City should independently determine at a public hearing that that element should be included in the DIF and EastLake was allowed to distribute the costs away from existing obligations for that particular segment of road, it would allow them the economic ability to pay the cost of doing the incentives the City wanted them to do. It was an indirect subsidy by the City to include that in the TransDIF. Ms. Dye silted that was correct with the stipulation that it was a City incentive, as opposed to the City paying $324,000 from the General Fund to NYPRO. The City was providing a value to EastLake that the City in turn was requiring that they pass it on to NYPRO. Minutes September 19, 1995 Page 7 Councilmember Padilia stated that if it was not included in the TransDIF, the City would still have an obligation of that understood value in credit towards EastLake. Ms. Dye stated that was correct. The agreement stipulated that the City would have the duty to meet and confer to develop another concession of equal value, i.e. $274,000. Councilmember Padilla questioned the level of discussion that had been undertaken between the City, EastLake, or both, with McMillin and Baldwin as they would have an element of cost shifted to them. Ms. Dye responded that at the present time there had been no discussion with them. There would be a public heating and they would then be notified. It was felt that it was not appropriate to impact the integrity of that process, but move forward with the process before Council and if staff was directed to proceed they would then proceed with the TransDIF public hearing process, at which time the developers would be notified. Councilmember Padilia stated consideration at a public hearing was supposed to be free and clear and there was to be independent judgement of the Council. He understood what staff was trying to do and he supported the goal, but he was not comfortable with the process. He questioned if Council could say if it was included in the DIF after a public hearing that it was a free and independent judgement of the Council, absent any other considerations. Chris Salomone, Director of Community Development, stated staff understood the quandary and it was one that had been discussed by staff. Council had not been seen all the evidence that would be presented in the public hearing which would be the basis of the decision by Council. Staff felt Council would have unfettered discretion in that heating because Council did not have the weight of all that evidence at the present time. Staff was asking Council to take action on a creative proposal and staff was leaving open that option to approve that in the future. If that was not approved there were other ways on the menu that could make up for that participation by EastLake. Staff felt options were available to Council and that they would have unfettered discretion to make that choice at the public hearing. Councilmember Padilia questioned why the hearing was not held first with the other items being discussed later. Then if it was included in the DIF and it had an impact the Council would have a strong case for obtaining that value at the table with EastLake. Ms. Dye stated it had been reviewed, but because things moved rapidly when dealing with companies that were moving it was necessary to encourage and facilitate their decision. Staff therefore felt by holding the public hearing first it would slow the process down and encumber the incentive package with such complications that it would not be well received and could jeopardize the project. NYPRO was negotiating with EastLake for the purchase and sale agreement which needed to move forward so staff hoped that Council would take the proposed action and not impede the conclusion of the agreement. Council had approved several agreements in the past that had contingencies that required unfettered discretion at a later date. A clause had been included in the agreement that provided for another way to meet the incentive if the public hearing proved to be unsuccessful. Mayor Horton stated Council had options, action would not be approving changes in the TransDIF, but moving forward. It was not a final decision by Council but would allow the public hearing process to move forward. It was time to move forward with promises and commitments that had been made to the prqject. Councilmember Alevy felt the City would be left with a number of options and that action taken by Council was not final. There was a chance to retain a major employer in the City, tax value, and the opportunity to "kick start" the high tech/biotech zone. It was positive for economic development and the community without funding from the General Fund. It would send a strong message to the business community that Chula Vista was wiling to be creative and he was proud of that. He felt it was an excellent move. CouncilmemberRindonefeltstaffwasputtingthe"cartbeforethehorse". He questioned why staff perceived that the resolution had to be passed at the present time and not after the public hearing. Ms. Dye responded that the purchase and sale agreement had been negotiated by EastLake with NYPRO based upon the direction by Council in April, i.e. approving the specific concessions, the $324,000 incentives in concept, and directing staff to prepare an agreement. Staff had moved forward and the agreement had been sent to EastLake and negotiations had been based upon that. For that reason timing had been of the essence because the purchase and sale agreement was either about to be signed or had .already been signed. Councilmember Rindone stated the conceptual approval by Council was a lot different than what was being presented to Council. The conceptual approval was to work with EastLake and try to find negotiated items that would provide Minutes September 19, 1995 Page 8 fiscal benefit to allow EastLake to be proactive in retaining NYPRO. He did not feel that any member of Council had changed regarding that objective, but the item brought forward had some real problems. It was clearly indicated by staff that East Orange Street was and still is an obligation that was previously committed by EastLake in the obtaining of the OTC. For Council to add that to the TransDIF at a later public hearing would have an astronomical impact on the other two developers. The City would be benefitting one developer at the potential expense of the other two that had not even been contacted. He did not want staff to misread that, it was the intent of Council to find an alternative to effectuate the retention of NYPRO which was a difli~rent issue. The term unfettered discretion meant that there were no preconunitments made. He felt there was regional benefit and that there would be some support, but he was concerned regarding the precommitment of someone elses funds to provide a City benefit to a third company. If Council made that decision at the present time it would not be unfettered discretion. He referred to the resolution, last Whereas, and did not understand why it had been included as he did not feel it was logical. There was a definite fiscal advantage to the Council to vote that into the TransDIF to save General Fund monies at the hearing. MS (Rindone/Padilla) to table the item, instruct staff to return to Council with other items from the menu for their review that would consummate the deal with NYPRO. Councilmember Padilia wanted it clear that by opposing a particular mechanism it did not mean that he was opposed to the goal. The particular mechanism may be appropriate, but the manner in which it was approached and the order in which it was approached gave EastLake an economic ability to subsidize the incentives to NYPRO. By passing a resolution which included the direction to staff to hold a public hearing including the inclusion of Orange Avenue would not allow Council unfettered discretion. There was a legitimate question about the exposure to the City. It was already part of an existing obligation to EastLake and when included in the TransDIF it would spread EastLake's costs to the other major landowners and developers in the area. There was an existing agreement and obligation and staff was getting the "cart before the horse". He did not feel Council should take unnecessary risks. Councilmember Moot questioned what NYPRO had decided at their board of directors meeting regarding relocation to the EastLake Business Park. Ms. Dye stated the incentive package by the City was included in NYPRO's consideration at the meeting. Timing was an issue involved and it had been indicated to them that it would go forward to Council. She felt it would be a 60-90 day process if Council waited for a public hearing. · Jim Moxham, EastLake Development, stated Curt Stephenson had discussed the issue with both Baldwin and McMillin regarding the potential of the item being in the TransDIF. Baldwin did not necessarily oppose it, but did not take a position. McMillin indicated that they would probably oppose it. The contract with NYPRO was fully executed and did have a contingency for the Council to act and approve the incentive package within the next 2-3 weeks. NYPRO had executed the contracts for their architects and engineers to start work and the close of escrow had been scheduled for 60 days. Councilmember Moot questioned if EastLake had received any indication that NYPRO would back-out of the deal if the City went forward with the public hearing first and address the agreement after that date. Mr. Moxham responded that NYPRO was looking to see assurance that the concession that was represented to them was available as it was a key part of their decision in choosing to locate in EastLake versus outside of the City. Councilmember Padilia stated the draft agreement contained a contingency mechanism in the event that it was not included in the DIF, so he was assuming that if there was a contingency to deal on the value if it was not included in the DIF it would be easier to have a contingency to just focus on the value without having to consider the DIF as a mechanism. He questioned if it would be possible to separate that one particular component out and continue to arrive at an agreement at that value so that those concessions could be presented to NYPRO and move forward. Mr. Moxham stated if Council gave direction to staff to return within two weeks for a second concession item to go along with the Orange Avenue renaming to Olympic Boulevard, which was not a TransDIF item, he felt EastLake would be in agreement with that. Their goal was to come up with the items as quickly as possible, ratify approval through Council, and confirm that to NYPRO and remove that contingency from the transaction. Conncilmember Rindone stated the motion would table the current item, but did not break or negate the commitment by Council to provide assistance to EastLake. It simply stated that the precommitment for the TransDIF, which would be at the expense of the other developers, was not a precommitment being made by Council. Staff would return with other items on the menu for Council consideration. He was pleased that EastLake was moving forward in retaining NYPRO. 'l Minutes September 19, 1995 Page 9 Mr. Moxham requested that staff be directed to return within two weeks. SUBSTITUTE MOTION: (Moot) Continue the item for two weeks to obtain further information, i.e. Baldwin and McMillin's concerns; length of time the public hearing procedure would take, etc. Motion died for lack of second. Mr. Goss stated it would take 60-90 days for a public hearing on the TransDIF. Council could make the commitment on the $274,000 which would allow unfettered discretion on the TransDIF. It was his understanding that was the intent of the resolution. Sid Morris, Assistant City Manager, stated the intent of the proposed item was to present the staff suggestions and notify Council that staff would return with the DIF proposal. Staff had a preliminary conceptual agreement from Council on $324,000 and staff was asking for Council's continued endorsement on that amount. If Council did not want to pursue the DIF item it would be staff's intent that Council direct staff to return with the DIF item as well as other alternative items for Council consideration. That would allow the NYPRO agreement to go forward. Councilmember Padilia stated by spreading the costs of their existing obligation it was a defacto subsidy to allow EastLake to take that savings and spread it towards an incentive for NYPRO. Ms. Dye stated that it was not so much a subsidy in that the value the City was giving to EastLake would be transferred to NYPRO. It was a win/win situation as it clearly benefited EastLake and met the City's intent to provide an incentive. Councilmember Padilia stated he understood that EastLake would not directly gaining and would be transferring it as an incentive to NYPRO, but they did benefit by getting NYPRO in EastLake, everyone benefitted. It provided a mechanism by which they could afford incentives. It was not that the Council did not want to have a mechanism by which to provide those incentives, his objection was the particular method. Even talking about inclusion of the DIF prior to having a public hearing was a bad idea. He could support the action before Council if the language regarding the inclusion of the DIF fee could be removed. He would not support at the present time, or in two weeks, something that would name the DIF as an option or incentive to NYPRO before a public hearing was held. Councilmember Moot stated he had read the item difti~rently, it was his understanding that the City was obligating itself to $274,000 for the program regardless of what decision was made at a DIF hearing. Mr. Morris responded that was correct. Councilmember Rindone stated the City obligated itself to EastLake for $324,000, not including any discussion of the TransDIF fee or any portion of that. The motion did not change that commitment, but took off the agenda the precommjtment or TransDIF issue. Council was still committed to keep NYPRO and assist EastLake. He would amend the motion to direct staff to bring back the report in two ~veeks with other alternatives, one of which would not be the TransDIF. Mr. Boogaard stated the risk was the language on page 4 and 5, paragraphs a and b, regarding what would happen if inclusion was successful or unsuccessful. The agreement without that language would avoid the risk which had been referred to by Councilmembers Padilia and Rindone. Paragraph 2, page 3, would direct staff to hold the hearing as soon as possible and retain all unfettered discretion, but not create the economic incentive. Staff would then bring back at the DIF hearing an amendment to the agreement to re-include that language so that the consequences were the same. At the time of the DIF hearing the agreement could be amended simultaneously and there would be no precommitment based on economic pressure to include it in the DIF. Mr. Goss stated it was his belief that in the April conceptual approval, the TransDIF was included as an alternative. Mr. Morris responded that was correct. Mr. Goss stated only Council could determine unfettered discretion but, staff limit if that was the only option available it would be subject to a tainted view. However, there were other options to look at if it did not proceed and there would not be a fiscal impact to the City. He believed that tabling the item could have a negative message, a positive action by cormintting the dollar amount might be necessary to keep it moving. Mr. Salomone informed Council that what the City Attorney was recommending would be in the spirit of the agreement and would retain the Council's discretion. Minutes September 19, 1995 Page 10 Mr. Boogaard stated EastLake had signed an agreement that was difti~rent than the proposal, therefore, staff would have to return with an amendment with their approval which would show Council's good faith in intending to hold the public hearing but not necessarily having the economic pressure to include or not include it until the public hearing had been held. Councilmember Padilia felt it would further complicate the matter by trying to exclude language at the present time and then simultaneously re-including it at the same time as the DIF hearing. If it was not needed, he questioned why was it referred to in the resolution. He preferred to have it come back in a couple of weeks with options to arrive at the same goal, excluding that particular mechanism. Staff had stated that there were other contingencies available. His only objection was the mechanism. Councilmember Moot stated that had been the City Attorney's recommendation, i.e. taking it out of the resolution and agreement so it would not be an issue when it came up for public hearing. The Council would be committing $274,000 to the deal, but not stating where it would come from. He would be prepared to take it out of the General Fund if necessary because it was important to the City as economic development and jobs were critical. The Council was dealing with a company that had donated the site for the OTC which had a huge regional benefit. Council needed to send a signal that they were committed to the high tech/biotech zone. Mr. Goss requested that EastLake address the proposal on the agreement and impacts on their discussions. He felt the key was whether or not Council would have choices after the public hearing and, thereti~re, it would be an objective discussion. Mr. Moxham stated he could not speak tier EastLake, but limit they would be uncomfortable not knowing what the corresponding incentive was to EastLake going out 60-90 days past the date of close of escrow, unless the fall back position was to have it come from the General Fund. They wanted to identify the concession as quickly as possible regardless of what was chosen and be able to confirm to NYPRO that the matter was fully resolved and acted upon by Council. He would have to take the issue to EastLake for confirmation. Mayor Horton questioned if Council approved the agreement, excluding the language recommended by the City Attorney, if EastLake would accept that knowing Council would proceed with the public hearing on the DIF. Mr. Moxham replied that he could not respond. Mr. Boogaard stated EastLake was protected by the language on page 2, paragraph B, which provided that the City would bear the full $324,000 of the inducement costs. They could be protected further with the addition of language which would state "by granting concessions which are estimated to be of approximate or equal value to EastLake, such as the following ..... "The City would then agree to have the public hearing on the name change and the DIF, but remove the consequences so that the bias that might exist at the hearing would be eliminated and the Council would be free of any concerns raised by Baldwin or McMillin. He t~lt that would get around any significant legal risk and would protect and assure EastLake of a subsequent amendment that would explain the consequences after the DIF hearing was held. Council would agree in writing to bear 100% of the inducement costs by at least the name change and some other concession, which did not have to be the DIF and would not be General Fund cash. Mr. Moxham stated if another concession was not identified' there would be an open ended item with no time stipulated for resolution. Mr. Boogaard stated open endedness already existed if the public hearing did not reach that conclusion. The City had two years after the DIF hearing to find some other concession. Mayor Hotton stated it was still open ended if Council went forward with the agreement because nothing would be approved until the public heating. Mr. Moxham stated he understood that but EastLake would feel more comfortable knowing the concession items. Councilmember Moot questioned if the motion meant that Council would not consider in two weeks the City Attorney's alternative. Councilmember Rindone stated the motion did not speak to the TransDIF coming back. Mr. Boogaard stated it would not speak to the consequences, but would obligate the Council to at least hold a hearing. The consequences were what created a potential for bias. Minutes September 19, 1995 Page 11 Councilmember Rindone felt the other step of moving forward to have a TransDIF hearing and removing the item from the agenda needed to move forward. It did not mean that the recommendation of including that section in the TransDIF would not be recommended, but it would be at a hearing unrelated to whatever was done in the negotiations with EastLake. Councilmember Moot stated as long as Council could consider the City Attorney's proposal in two weeks and EastLake had an opportunity to reflect on that proposal then he could support the motion. He did not want to tie Council's hands, he wanted to be able to revisit the issue with all options open. Mayor Horton stated she could not support the motion on the floor, but could support the City Attorney's recommendation as it was one way to let NYPRO know that the Council was standing behind their previous commitments. She felt that was very important and that there was no need to table the item for two weeks. VOTE ON MOTION, AS AI~IENDED: approved 4-1 with Horton opposed. ITEMS PULLED FROM THE CONSENT CALENDAR Items pulled: 5d, 5e, 8A and 8B. The minutes will reflect the published agenda order. OTHER BUSINESS 14. CITY MANAGER'S REPORT(S) a. Scheduling of meetings. Mr. Goss stated the County Board of Supervisors was considering their position on the Otay Ranch Sphere of Influence and he would be attending the meeting. On 9/23/95 there would be a Chamber of Commerce tour of amphitheater sites. 15. MAYOR'S REPORT(S) a. Ratification of appointment to the International Friendship Commission - Ricardo Marentez. MSC (HortonfRindone) ratify the appointment of Ricardo Marentez to the International Friendship Commission. approved 4-0-1 with Padilia absent. b. Mayor Horton announced that the Chula Vista Senior Volunteer Program was accepting new applications for volunteers. The next class was scheduled for 9/25/95. c. Mayor Horton announced that the ARCO Olympic Training Center was looking for volunteers. 16. COUNCIL COMMENTS Councilmember Alevv · Councilmember Alevy stated he attended the County Board of Supervisors presentation in observance of Pollution Prevention Week 1995 and the only city honored was the City of Chula Vista. He presented Mayor Horton with the Certificate of Appreciation that was presented to the City. Councilmember Moot a. Olympic Village Theme for Third Avenue. Councilmember Moot had been inlbrmed that the Mayor was very active in working with a committee on revitalizing the downtown area on Third Avenue. He felt an olympic theme should be incorporated with the businesses on Third Avenue to tie in with the OTC and encourage those visiting the Center to visit the downtown area. An olympic village theme could be promoted along with sales of olympic and sports memorabilia. He hoped Council would support the concept and encourage the committee to look into the concept. Mayor Horton responded that the main thrust of the group that she had been working with felt the olympic theme was a viable concept and they hoped to bring something back to Council within 30-60 days. Minutes September 19, 1995 Page 12 Councilmember Moot stated he would lend his full support to the concept and was pleased with the actions taken by the Mayor. ADJOURNMENT ADJOURNMENT AT 8:26 P.M.to the Regular City Council Meeting on September 26, 1995 at 6:00 p.m. in the City Council Chambers. CLOSED SESSION Mayor Horton announced that Council would only be discussing labor negotiations. Council met in Closed Session at 8:29 p.m., reconvened at 9:18 p.m., and ad. joumed at 9:18 p.m. 17. CONFERENCE WITH LEGAL COUNSEL REGARDING: 1. Existing litigation pursuant to Government Code Section 54956.9 · Chammas vs. the City of Chula Vista. 2. Anticipated litigation pursuant to Government Code Section 54956.9 · Litigation/risks relating to agreement with EastLake Development Company facilitating the transfer of economic incentives to NYPRO San Diego, a hightech company locating in the HighTech BioTech Zone in exchange for certain concessions to EastLake. CONFERENCE VVITH LABOR NEGOTIATOR - Pursuant to Government Code Section 54957.6 · Agency negotiator: John Goss or designee for CVEA, WCE, POA, IAFF, Executive Management, Mid-Management, and Unrepresented. Employee organization: Chula Vista Employees Association (CVEA) and Western Council of Engineers (WCE), Police Officers Association (POA) and International Association of Fire Fighters (IAFF). Unrepresented employee: Executive Management, Mid-Management, and Unrepresented. 18. REPORT OF ACTIONS TAKEN IN CLOSED SESSION- No reportable actions were taken in Closed Session. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk \