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HomeMy WebLinkAboutcc min 1995/11/14 MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, November 14, 1995 Council Chambers 6:09 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Councilmembers Alevy, Moot, Padilia, Rindone, and Mayor Hogon ALSO PRESENT: John D. Goss, City Manager; Bruce M. Boogaard, City Attorney; and Beverly A. Authelet, City Clerk 2. PLEDGE OF ALLEGIANCE TO THE FLAG, SILENT PRAYER 3. APPROVAL OF MINUTES: None submitted. 4. SPECIAL ORDERS OF THE DAY: a. Presentation of promotional video. Staff will unveil the City's new economic development promotional video which will be used as a business outreach tool at trade shows, conferences and business meetings, as well as distributed to partner economic development agencies and business prospects. Mayor Horton stated the promotional video would be continued to the meeting of 12/5/95. b, Proclamation commending Stephen Rodecker "Outstanding Teucher of the Year." The proclamation was presented by Mayor Pro Tem Rindone to Mr. Rodecker. Mr. Rodecker acknowledged Steve Hogan, Trustee; Dr. Ed Brand, Superintendent; Larry Parande, Principal; and his wife. CONSENT CALENDAR (Item pulled: 10) BALANCE OF THE CONSENT CALENDAR OFFERED BY MAYOR tiORTON, reading of the text was waived, passed and approved unaoimously. 5. WRITTEN COMMUNICATIONS: a. Letter from the City Attorney stating that us a result of deliberations thut occurred in Closed Session on 11/7/95, the City Council authorized the acceptance of the Conciliation Agreement from HUD in the Trinidad De La Rosa Case in the form on file in the office of the City Clerk. Except for the foregoing, there was no other observed reportable actinn taken in Closed Sessiun. It is recommended that the letter be received and filed. 6. ORDINANCE 2642 AMENDING SECTION 19.68.020 T.1, TITLE 19 OF THE MUNICIPAL CODE TO CLARIFY THAT NOISE NORMALLY ASSOCIATED WITH A CONDITIONALLY PERMITTED LAND USE IS TO BE CONSIDERED THE SAME AS NOISE NORMALLY ASSOCIATED WITH A PERMITTED LAND USE (second reudinl~ and adoorion) - The amendment would clarify the distinction between "nuisance noise" as opposed to "environmental noise" as it would relate to conditional uses in general and the operations of the MCA Amphitheater in particular. The Environmental Review Coordinator has concluded that the text amendment is exempt from environmental review pursuant to Section 15061(b)(3) of the Califomia Environmental Quality Act. Staff recommends Council place the ordinance on second reading and adoption. (Director of Planning) 7. RESOLUTION 18102 APPROVING A PURCHASE ORDER AGREEMENT WITH WELLS FARGO SECURITY SERVICES TO PROVIDE SECURITY GUARD PATROL AT CIVIC CENTER/MAIN LIBRARY, SOUTH CHULA VISTA LIBRARY, AND EASTLAKE; LIBRARY FOR FISCAL YEAR 1995/96 - Since 1986, the Chula Vista Public Library has atomally contracted with a private security guard service to provide crowd control as well as a safe, welcoming environment for library users in all its facilities. For fiscal year Minutes November 14, 1995 Page 2 1995/96, a Request for Qualifications was issued tier security services, responses evaluated, and a vendor selected. Staff recommends approval of the resolution. (Library Director) 8. RESOLUTION 18103 APPROVING MEMORANDUI~I OF UNDERSTANDING WITH THE U.S. ENVIRONMENTAL PROTECTION AGENCY TO ESTABLISH A VOLUNTARY AGREEMENT BY WHICH THE CITY JOINS EPA'S GREEN LIGHTS PROGRAM - The City was invited to participate and take advantage of the free teclmical services ofl~red through the U.S. EPA Green Lights Program. Staff recommends approval of the resolution. (Environmental Resource Manager) 9. RESOLUTION 18104 ACCEPTING BIDS AND AWARDING LANDSCAPE MAINTENANCE CONTRACTS FOR OPEN SPACE DISTRICTS - Bids to provide landscape maintenance services for Open Space District 20 SPA I Phase 6 and Bayfront Trolley Station were received on 8/31/95, and bids for Open Space District 20 SPA II and Open Space District 31 were received on 10/i 1/95. These areas were put to bid because of new areas developed in existing District 20 (Rancho del Rey), the formulation of new District 31 (Telegraph Canyon Estates), and the existing contract fi~r Bayfront Trolley coming to term. Staff recommends approval of the resolution. (Director of Parks and Recreation) 10.A. RESOLUTION 18105 APPROVING A CONGESTION MITIGATION AND AIR QUALITY "CMAQ" PROGRAM SUPPLEMENT WITH CALTRANS FOR FEDERAL-AID FUNDING TO DESIGN AN ADAPTIVE TRAFFIC CONTROL SIGNAL SYSTEM - The City has received State approval to utilize Federal funds under the Federal Intermodal Surface Transportation Efficiency Act, Congestion Mitigation Air Quality program to upgrade the City's traffic control system to a state-of-the-art flexible timing "Adaptive Urban Traffic Control" system for the first phase of a three phase prqieet. The program Supplement Agreement with the State will assure State reimbursement fbr all costs associated with the traffic signal design study. Staff recommends approval of the resolutions. (Director of Public Works) B. RESOLUTION 18106 APPROVING AGREEMENT WITH DKS ASSOCIATES FOR A TRAFFIC SIGNAL SYSTEM UPGRADE TECHNICAL DESIGN STUDY (CIP-TF237), AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT, AND APPROPRIATING FUNDS THEREFOR - 4/5th's vote required. Councilmember Rindone questioned if DKS Assoc. or Darnell & Assoc. ever worked for Chula Vista. Clifford Swanson, Deputy Director of Pablic Works/City Engineer, responded that DKS had not worked for the City in the recent past, but Darnell & Assoc. had. Councilmember Rindone stated it was unusual that the negotiated price of the second highest bidder was reaegotiated to be $18 less than the previous low bidder. He wanted to be snre that there were no legal liabilities and requested assurance that there was documentation available that the decision was not made solely on price. Mr. Swanson responded that City staff had reviewed all the proposals and DKS was by far the best and most qualified. Staff would have recormnended the contract with them anyway. RESOLUTIONS 18105 AND 18106 OFFERED BY COUNCILMEMBER RINDONE, reading of the text was waived, passed and approved unanimously. 11. RESOLUTION 18107 APPROVING AGREEMENT WITH NATIONAL CITY AND CANYON-CAHAN PROPERTIES FOR THE PROVISION OF SEWER SERVICE TO AN ECONO LUBE 'N' TUNE, INC. AUTOMOBILE MAINTENANCE FACILITY THROUGH NATIONAL CITY FACILITIES AND AUTHORIZING THE MAYOR OF EXECUTE SAID AGREEMENT ON THE CITY'S BEHALF - Canyon- Cahan Properties submitted a site plan showing the development of an Econo Lube 'N' Tune located at the southwest comer of 30th Street and North Second Avenue for approval by the Design Review Committee. Approval was given on 6/12/95. During the course of the plan review, it was determined that because the property is north of SR-54 and the Sweetwater River, no Chula Vista sewers are available to the site. Staff recommends approval of the resolution. (Director of Public Works) Minutes November 14, 1995 Page 3 12. RESOLUTION 18108 AMENDING CITY COUNCIL POLICY NUMBER 465-01 "PUBLIC SERVICE DIRECTIONAL SIGNS ON PUBLIC STREETS" - During September 1995, a request was received from a local church. During the process of investigating the request, staff uncovered several minor discrepancies between the Policy and the current Master Fee Schedule. Staff recommends approval of the resolution. (Director of Public Works) 13.A. RESOLUTION 18109 APPROVING FINAL MAP OF TRACT 88-3A, EASTLAKE SOUTH GREENS UNIT 6, ACCEPTING ON BEHALF OF THE PUBLIC THE PUBLIC STREETS DEDICATED ON SAID MAP, REJECTING ON BEHALF OF THE CITY THE OPEN SPACE LOTS GRANTED ON SAID MAP, ACCEPTING THE EASEMENTS GRANTED ON SAID MAP WITHIN SAID SUBDIVISION, AND APPROVING SUBDIVISION IMPROVEMENT AGREEMENT FOR THE COMPLETION OF IMPROVEMENTS REQUIRED BY SAID SUBDIVISION, AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT - On 8/16/94, Council approved the amended Tentative Map 88-3A for EastLake South Greens and imposed additional conditions of approval. The amendment to the tentative map covers the area south of Clubhouse Drive which is designated as EastLake South Greens. Staff recommends approval of the resolutions. (Director of Public Works) B. RESOLUTION 18110 APPROVING SUPPLEMENTAL SUBDIVISION IMPROVEMENT AGREEMENT REQUIRING DEVELOPER TO COMPLY WITH CERTAIN UNFULFILLED CONDITIONS OF RESOLUTIONS NUMBER 15200 AND 17618 APPROVING A TENTATIVE SUBDIVISION MAP FOR EASTLAKE GREENS, AND AUTHORIZING THE MAYOR TO EXECUTE SAME Councilmember Padilla questioned if the outstanding conditions for EastLake Greens remained to be fulfilled. Mr. Boogaard responded that was correct. 14. RESOLUTION 18111 ALCOHOL AND BEVERAGE CONTROL (ABC) DETERMINATION APPROVING AN APPLICATION FOR AN ABC LICENSE DUE TO PUBLIC CONVENIENCE AND NECESSITY - Lucky's Store at 690 Third Avenue is moving across the street and under the ABC rules needs a new license application. Resolution Number 17989 reflects the new procedure the Council has adopted requiring that staff report the determination on the consent agenda. Staff recommends approval of the resolution. (Chief of Police) 15. REPORT SUPPORTING CONCEPT OF AMERICAN LEGION BUILDING EXPANSION AND THE PROPOSAL FOR A COST-SHARING AGREEMENT WITIt THE AI~/ERICAN LEGION FOR PARKING LOT RENOVATION - The American Legion Post 434 has requested permission to construct a 2,300 square foot room addition (at their expense) on the north side of their existing building at Eucalyptus Park. The addition will serve as the Legion Women's Auxiliary building. Staff recommends Council: (1) conceptually approve a plan to build the addition; (2) conceptually approve a plan whereby the American Legion would renovate the existing parking lot; (3) direct staff to negotiate a cost-sharing agreement with the Legion for the renovation of the parking lot; and (4) direct staff to negotiate an amended 17 year lease agreement ti.~r a lease of the property and building; and (5) return to Council for consideration of the amended lease agreement. (Director of Parks and Recreation) Councilmember Padilia questioned the Legion's position regarding the build-out restriction. Robert McCauley responded that the Legion concurred with the staff recommendation. * * END OF CONSENT CALENDAR * * PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 16. PUBLIC HEARING PROPOSED FORMATION OF OPEN SPACE MAINTENANCE DISTRICT NUMBER 33, BROADWAY BUSINESS HOME VILLAGE - On 10/24/95, Council approved the report on the proposed Open Space District Number 33, Broadway Business Home Village and set 11/14/95 and 11/21/95 as the dates for the proposed formation. This meeting shall afford all interested parties the opportunity to hear and be heard pursuant to Section 22590 of the Streets and Highway Code. After the second public hearing, Council may take action on formation of the Open Space District unless a third public hearing is set for 12/12/95. Staff recommends Council place the ordinance on first reading. (Director of Public Works) Minutes November 14, 1995 Page 4 ORDINANCE 2653 AMENDING SECTION 17.07 OF THE MUNICIPAL CODE ALLOWING USE OF OPEN SPACE DISTRICTS FOR PARKING LOT MAINTENANCE (first reading) John Lippitt, Director of Public Works, stated it was the first of two public hearings to consider the formation of Open Space District No. 33. Staff recommended the adoption of an ordinance which modified the Chula Vista Code to specifically include the maintenance of parking lots in redevelopment areas. This being the time and place as advertised, the public hearing was declared open. There being no public testimony, the public hearing was declared closed. ORDINANCE 2653 PLACED ON FIRST READING BY COUNCILMEMBER MOOT, reading of the text was waived, passed and approved unanimously. 17. PUBLIC HEARING CONSIDERATION OF ABATING THE CALENDAR YEAR 1996 BUSINESS LICENSE TAX RATES TO RETAIN THEM AT THEIR CURRENT CALENDAR YEAR 1995 LEVELS AND POTENTIALLY ABATING THE CALENDAR YEAR 1997 AND CALENDAR YEAR 1998 BUSINESS LICENSE TAX RATES TO RETAIN THEM AT THEIR CALENDAR YEAR 1995 LEVEL ON THE CONDITION THAT THE PROPOSED ORDINANCE ALLOWING MULTI-YEAR ABATEMENTS IS ADOPTED - The Business License Tax ordinance adopted in 1990 was structured so that taxes increase annually unless they are abated by Council. Last year Council requested that the ordinance be changed to eliminate the annual abatement hearings. Staff felt the City's interests would be better preserved by allowing the tax to be abatad for up to three years rather than the one that is currently allowed. Staff recommends Council place the ordinance on first reading and approve the resolution. (Director of Finance) A. ORDINANCE 2652 AI~IENDING SECTION 5.07.020 OF THE MUNICIPAL CODE TO ENABLE THE CITY COUNCIL TO ABATE THE BUSINESS LICENSE TAX RATES IN ONE-YEAR INCREMENTS FOR UP TO THREE CALENDAR YEARS, AND AMENDING SECTION 5.02 OF THE MUNICIPAL CODE TO MAKE ADMINISTRATIVE CHANGES TO MAKE THE MUNICIPAL CODE CONSISTENT WITH EXISTING PROCEDURES FOR PROCESSING BUSINESS LICENSE APPLICATIONS (first reading') - (Related item but not ~art of the public hearin;e.) B. RESOLUTION 18112 ABATING THE BUSINESS LICENSE TAX RATES FOR CALENDAR YEAR 1996 TO RETAIN THE TAX RATES IN CALENDAR YEAR 1996 AT THE CALENDAR YEAR 1995 LEVELS This being the time and place as advertised, the public hearing was declared open. There being no public testimony, the public hearing was declared closed. Councilmember Rindone referred to the staff report and noted that most cities based their rates on the gross receipts and questioned if staff had examined that option. Mr. Goss stated staff had reviewed that option approximately three years ago and there was a lot of opposition to changing to gross receipts. Other cities had established that form decades ago when they did not have as much opposition from the business community. Chula Vista's was also established back in the 50's and it was very hard to switch over to gross receipts. Councilmember Rindone felt there needed to be a balance between supporting the businesses in the community and obtaining the necessary revenues for the City. Mr. Goss stated one of the purposes of the change made several years ago was to try to bring the rate up to date. The rates had been set at a certain level and not adjusted for a lengthy period of time. Therefore, the revenues coming into the City had declined significantly. The intent was once that was done there would be increases on a regular basis to reflect the changes in the community. Due to the economy staff had not reconwaended increases. There could be modification of the existing system. Due to other priorities of staff time in terms of producing revenues he did not feel it would be a top priority for the present year, but could be looked at for subsequent years. Cheryl Fruchter, Revenue Manager, stated staff could return with different options during the budget process. The abatement only affected the current year's budget. ORDINANCE 2652 PLACED ON FIRST READING AND RESOLUTION 18112 OFFERED BY COUNCILMEMBER RINDONE, reading of the text was waived, passed and approved unanimously. · T Minutes November 14, 1995 Page 5 18.A. REPORT RATE SETTING: FINANCIAL INDICATORS FOR SOLID WASTE - Earlier this year in cooperation with Laidlaw, the City entered into a contract with a consultant, Hilton Farnkoph and Hobson, to develop solid waste financial indicators. The objective of the study is an attempt to develop financial benchmarks to assist in the rate setting review of any cost increase proposals made by Laidlaw. Staff recommends Council accept the report and direct staff to continue to monitor and track the indicator changes over time and advise Council as part of any future rate setting hearings. (Deputy City Manager Krempl and Director of Finance) (Related item but not part of the public hearing). B. PUBLIC HEARING CONSIDERATION OF RATE ADJUSTMENT REGARDING THE CONSUMER PRICE INDEX (CPI) FOR COLLECTION AND DISPOSAL OF REFUSE, RESIDENTIAL CURBSIDE AND YARDWASTE RECYCLING - On 6/27/95, Council approved a comprehensive set of changes to the solid waste and recycling rates. The changes amounted to a significant decrease in rates following a successive number of increases in prior years due to the County increasing tipping fees at the landfill. At the June hearing, Laidlaw requested, but was not granted, a 2.5% CPI adjustment to the operational portion of the waste and recycling rates. The request was forwarded back to staff for further review and analysis. Staff recommends approval of the resolution. (Deputy City Manager and Director of Finance) C. RESOLUTION 18113 APPROVING A 2.5% INCREASE IN THE OPERATING COST RATE COMPONENT FOR THE RESIDENTIAL YARDWASTE CONTRACT, EFFECTIVE JULY 1, 1995 George Krempl, Deputy City Manager, stated the financial indicators were an effort on the City's part, in working with Laidlaw, to try to sea if the rate setting process could be made easier and more straight forward in future years. The indicators were not a panacea or an automatic indicator for changing rates up or down. They provided benchmarks and additional information which staff felt when taken into consideration with history, comparisons with other cities, cost analysis, and the indicators as a package helped staff' to get a better picture. Staff felt the cost information would be key for the proposed increase as well as future increases. · Bob Hilton, Principal, Hilton Farnkoph & Hobson, financial consultants, reviewed the rate setting financial indicators, i.e. the objectives, primary/subsidiary ratios, and observations. Mr. Krempl stated in June the rates were readjusted on a comprehensive basis due to a combination of the elimination of the county surcharge, the lowering of the county tip fee, and adjustments to the recycling programs due to success of the programs. At that time Laidlaw requested a 2 1/2 % acrnss the board CPI increase for all their contracts and it was referred back to staff to analyze and review the cost data. During that process Laidlaw amended their request to 6.7% increase on residential and residential recycling and 2 1/2% on yard waste and commercial. Staff recommended a rate adjustment for the residential yardwaste contract but did not recommend an increase on the other three contracts. Robert Powell, Director of Finance, reviewed the analysis and conclusions. Laidlaw also raised the issue of recovering their entire costs of the landfill processing costs (tipping fees). Staff' recommended that they be directed to further study that request with Laidlaw and return to Council with recommendations. Staff considered that totally separate from the operating cost issue. He ~lt that issue wonld take and additional 1-2 months. This being the time and place as advertised, the public hearing was declared open. Councilmember Padilia referred to the residential and residential recycling components and requested clarification on the statement "Categories for which they had received inadequate justification or information...." and the mechanism for combining or "netting" the cost increase against the cost decrease in both categories in arriving at the final conclusion. Mr. Powell responded the cost categories and Support Services (overhead) justification provided under residential recycling showed a $1 increase, but the written justification and data for the $1 increase justified that they had decreased costs in the area. Staff' did not receive any justification fera $1 increase. Councilmember Padilia questioned what specifically was missing. Mr. Powell responded that staff was looking for an explanation of what costs had increased in that category. All information received indicated decreased costs in that category. Under the residential contract Laidlaw showed an operating cost decrease of $67,000 and residential recycling operating costs increase of $74,000. Since the amounts were so close staff felt they should be looked at together and considered a "wash" at the present time. Councilmember Moot stated staff' had determined that the contract permitted a CPI increase only if Laidlaw demonstrated their costs had gone up. He questioned if that was based on actual language in the contract. Minutes November 14, 1995 Page 6 Mr. Powell responded that Section 8.23.090 of the Municipal Code dealt with the Rate Modification Procedure. Two sections later also stated "The proportion of modification to the other rate component shall be limited by the proportion of change since the grantees last increase in the San Diego area CPI for all urban consumers for the latest twelve month period .... ". The first section indicated that they had to have satisfactory justification for the rate increase and the second limited it to the CPI increase in the area. Mr. Krempl stated staffs interpretation was that the CPI increase set a cap that could not be exceeded but the CPI adjustment could be from zero up to the cap based upon the information provided. Prior Council direction was to have staff analyze the information provided by Laidlaw rather than an automatic pass-through or increase. Councilmember Moot clarified that it was really past Council direction that superimposed a criteria to demonstrate an actual increase in operating costs. Mr. Krempl stated that was correct along with the language read by Mr. PoweH. Councilmember Alevy questioned if it was the assumption that either the billing rates were too low or that the company was less than effective in managing their operating expenses. Mr. Krempl responded that was correct. Mr. Alevy referred to the survey of other cities in the county and noted Chula Vista was paying $2.01 less than the next highest rate. Mr. Krempl stated the survey information was helpfill but noted that some cities had higher residential rates but lower commercial rates. He felt they needed to be looked at in combination. In terms of the ordinance and the CPI increase, the focus was on the operating cost cmnponent and the change in that component. It was staffs conclusion that the operating costs were the same or had been reduced and there was no justification for the CPI increase. There could be other reasons for increases which had been illuded to with the land fill equity issue and pass thruughs. In terms of the operating component and CPI it stated staff shall look at the operating cost change. Staff had done that and only recommended the component that changed and increased. The City's rates should be lower than some of the other cities in the county due to the location of a landfill within the City limits which resulted in a shorter haul distance. Those speaking in support of the increase for Laidlaw due to the community services provided, commitment by Jim Weaver and all Laidlaw emponyees to the City, and trash services provided were: · W. Scott Mosher, 909 Loma View, Chnla Vista, CA, Execntive Director, Boys and Girls Club of Chula Vista. · Tina Williams read a letter of support from Pam Smith, Director, Chula Vista Social Security Office. · Tina Williams, 50 Fourth Avenue, Chula Vista, CA, Executive Director, YMCA. · Rod Davis, 46 Center Street, Chula Vista, CA. · Emerald Randolph, P.O. Box 17, JamuL CA, Citizens Adversity Support Team (CAST). · Brad Wilson, 249 "E" Street, Chula Vista, CA. · Jim Weaver, 881 Energy Way, Chula Vista, CA, representing Laidlaw Waste Systems, hoped that after three years of research utilizing internal and external resources that Laidlaw would receive Council support of their CPI adjustment for 1992, 1993, and 1994. The CPI request was reasonable. In comparing their financial indicators it showed that Laidlaw was far below industry standards and below levels of reasonableness. He referred to the section of "Findings and Descriptions" which stated the expense ratio if high meant that either the management of expenses was ineffective or the price levels were too low. It also stated that a high operating ratio could mean either ineffective management of operating expenses or that rates were too low. The evidence clarified that the latter was true, the rates were too low. Laidlaw had controlled expenses and decreased operational costs year over year. He hoped the City realized that was a positive signal that they were trying to do everything possible to provide the lowest costs possible to the citizens and businesses. Chula Vista had the lowest residential rate in the county and the seventh lowest commercial rate. Even by supporting their request Chula Vista would continue to retain the lowest residential rates. A reason given to not support the request was that Laidlaw had not demonstrated that their costs had not increased year over year but had decreased. As the service provider he was disappointed in the message. A CPI should not be based on demonstrating that they had made their costs go up. They felt their role was to control their expenses and drive them down. While costs had been controlled they had experienced real increases in their role of providing services. Fuel prices had increased by 13 % since 1992, tire prices increased 40%, containers increased 20%, container lids had increased 5.7%, postage stamp rates increased 10%, SDG&E rates increased 24%, etc. Mayor Horton questioned what costs had gone down tbr the company. Minutes November 14, 1995 Page 7 Mr. Weaver responded that they had gained savings through operational improvements, i.e. downsizing from two to one driver on specific routes, reduction of service days for commercial accounts which resulted in frequency, consolidation of stops on routes which allowed them to park tnacks, etc. They looked for opportunities daily in order to keep their costs down. It had been a long and extensive process over the last three years. He requested Council consideration to the detail of the information, their commitment to the community, and assurance that the City would continue to receive some of the lowest commercial and residential rates in the cotmty. They had the ability to control their business costs but did not have the ability to control their revenue. He requested Council support of their CPI request. In their communication to staff they requested reimbursement of landfill rates paid on behalf of commercial and residential customers, i.e. $450,679 in 1995 alone. It was an ongoing issue and had been reviewed and documented with staff for over a four year period. Staff's request for further review was unfair and unnecessary. Laidlaw was asking to be reimbursed for dollars they had already spent. The contract was providing an adjustment equal to the percentage change in the gate rate. That did not allow for reimbursement of all expenses and in some cases could even allow Laidlaw to be over compensated. Laidlaw believed that it was Council's intent that the landfill portion of the rate be a pass-through as it was a rate imposed by a third party which neither Laidlaw or the City controlled. A landfill adjustment should be revenue neutral, they were merely revenue collectors for the county. Laidlaw should not benefit or lose from the investment. The problem was that the weight based formula was from 1991, but the average rate per household and per yard had gone up since 1991 and as a result Laidlaw had not recovered the fees they had paid to the county. Councilmember Moot questioned how Laidlaw proposed being reimbursed the $450,000 pass-through. Mr. Weaver presented a chart which included rate increase for 6 months, 12 months, and 18 months. · Dan Higgins, 881 Energy Way, Chula Vista, CA., representing Laidlaw Waste Systems, stated they had identified the variances for unreimbursed landfill costs, i.e. residential $2,300; residential yardwaste $67,000; and commercial $381,000. They had identified a number of different scenarios per unit or per commercial yard based on the total amount not reimbursed to Laidlaw over the last 12 months over billing cycles of 2 to 18 months. Councilmember Moot questioned if the material had been provided to staff for input. Mr. Powell responded that staff had seen the dollar amounts but had not seen the breakdown and options presented. Under the yard waste component, as of July 1, there was a 32C increase per month for processing costs. He was unsure as to how that related to what was being presented. Mr. Higgins stated the processing cost rate was changed effective July 1 but that only meant that they did not expect a deficiency in 1996. The residential and commercial contracts land fill costs had not been adjusted for landfill rates. Therefore, Laidlaw could realize the same deficiencies in the landfill cost components if no action was taken. There being no further public testimony, the public hearing was declared closed. Councilmember Rindone stated it was a difficult decision. He felt the City had made considerable progress which benefited the rate payers. He was proud the City was the lowest in residential rates for the county. He stated Laidlaw was the outstanding corporate citizen for Chula Vista and they would continue to be whether or not the increase was passed. Laidlaw had been given a franchise, i.e. a regulated monopoly until 2001 and for that the Council had the responsibility to ensure that the rate payers received the best rates. The key was, "was there a reasonable rate of return" not whether they were a good corporate citizen, whether they reduced operating costs, or whether it was reasonable to raise the CPI. He was disappointed in that he had not seen the question answered anywhere in the report. Council needed an answer to that specific policy issue as Council had the responsibility to protect the rate payers. He supported the staff recommendation to provide a full pass-through of landfill costs when the final figure had been determined. Councilmember Moot stated it was his understanding that the unreimbursed landfill processing costs were a result of an increase in the tipping fee. Mr. Powell responded that was incorrect. It was caused by a factor of the weight of per unit pick-ups being higher than estimated and what the rate had been based on. It was not based on increases in the actual tipping fees, those had been passed through. Councilmember Alevy stated the CPI had increased a cumulative a 6.7% over the past three years and questioned if there was verbiage in the agreement with Laidlaw that tied their rate to the CPI. Mr. Krempl responded that it was through the ordinance. The ordinance allowed for an annual increase up to the CPI to be approved as an increase, it did not reqnire it. Minutes November 14, 1995 Page 8 Councilmember Alevy stated no matter where anyone went within the City for a public event Laidlaw was always there as a sponsor. If Laidlaw added up the actual costs of employees, time, goods and services he felt their philanthropic budget would be well into six figures. He felt it was a shame that a strong contributor to the community was put into a position where they would have to say "no" once in awhile. Council was to protect the interest of the rate payers but they were also to look at all the facts and to consider the business. If the City told one of the top corporate citizens that they appreciated them and then refused to help them he did not feel Council was doing their duty. National City and Imperial Beach were both close to the landfill and their rates were several dollars higher than Chula Vista per month. He felt the City was questioning some things that should be granted. He supported granting their request as the rate would still be about $1.40 less than the next highest residential rate and well under the average for commercial rates. He supported Laidlaw's request and a 12 months repayment of the pass-throughs. Councilmember Padilla requested a response to the staff commentary regarding lack of justification and "netting". Mr. Higgins responded that data had been supplied to City staff and it was the first time they had heard that the data regarding support services had been inadequate. They had identified a number of items that had been increased that were proportioned to the residential contract, i.e. property cost increased, receipt of payments at their facility and as a result bank armory service, thefts and vandalism on the property in Otay Valley and as a result security service, property utility increase, direct cost of invoicing, postal rates, and wages for support personnel. Councilmember Padilia questioned if Laidlaw was disputing the conclusion of staff regarding residential recycling, but did not dispute straight residential support service costs. Mr. Higgins responded that they disputed it in terms of support provided because they identified cost increases. In terms of "netting" between the two contracts, several years ago Laidlaw had been unable to identify what their financial indicators were fur all contract operations. Conncil had requested that they supply those numbers, so two years ago they set out to identify specifically all of their costs and revenues for each of their contracts. They had done that for 24-28 months. In terms of spreading the two or mixing them it had been very hard to separate the costs and they really did not relate. Councilmember Padilia questioned what the time Iine would be to provide the information requested to the satisfaction of staff and clearing up any conununication problems as to what was satisfactory and what was not. In reviewing the staff report it showed, especially as regard to residential yard waste, the operating cost rate component for that particular piece that showed there was an increase and Council was ready to move forward on that. He was under the assumption that the landfill pass-through costs were related to the increase in the tipping fee. The staff report indicated that Laidlaw did incur costs in excess of what had been collected by the rate payers for the rate component even though the tipping tee had not been increased. He questioned if it was reasonable to ask a private operator whether those changing factors shonld be accounted for by the operator. He further questioned if those should not be factored into the cost of doing business in private enterprise. Mr. Higgins responded in 1991 when the landfilI rate components were set they were set by looking at what the actual landfill tons per unit. Their history had not been reviewed over the past three years. With the increase in landfill costs being so significant commercial customers condensed their trash making it heavier which increased their landfill costs. Therefore, the weight per unit had increased. Councilmember Padilla stated it was not an issue of whether Laidlaw was a good corporate neighbor. He felt those things did factor into how the City did business with Laidlaw and how effective communications were between the City and Laidlaw. There were parameters that were clear as to what Council should look at prior to a rate increase. In a competitive market place, when costs were reduced and the product price was increased to the consumer, he did not feel they could stay competitive. Laidlaw did have an exclusive agreement, i.e. monopoly, and for those reasons Council had oversight for the rate payers. The mechanisms to gauge the request were in place and where an increase could be justified, under the existing system, there would be recommendations to increase those rates. Where that was not demonstrated it was reasonable to expect that the increases would not be granted. He did not have a problem in examining the land fill pass-through but did have concerns on what that was based on and whether the rate payera should be responsible for all or part of that. In the case of the 2.5% increase on the yard waste contract that it had been demonstrated. He also f~lt it was clear that the other requests were not demonstrated. Mayor Horton questioned how much revenue would be generated with a 1% CPI increase. Councilmember Moot questioned when the last CPI increase was granted. Mr. Weaver responded that it was in July 1992. $50,000 would be the revenues generated with a 1% CPI increase on the non-landfill portion of the rate. I T Minutes November 14, 1995 Page 9 Councilmember Moot stated it was the second hearing on the issue he had participated in and his position was the same as it was at the last hearing. He was not part of the Council when the directlye was given to staff that tied a demonstration in increase in actual costs to be granted a CPI increase. He respected prior Councils but he disagreed with the policy. He did not feel in every instance to get a CPI increase they should have to establish that their costs had gone up. He felt that provided a disincentive to cut costs and provide better services. He was impressed as a rate payer with the services provided by Laidlaw. In reducing costs they had been able to provide better services. The policy did not make any sense to him. A CPI increase should not be should not be automatic every year but, they should not have to increase their costs in order to receive a CPI increase. Therefore, he supported Laidlaw's CPI request. Councilmember Rindone stated the direction of Council when the initial request came from Laidlaw was not that they could not have the CPI increase unless they demonstrated an increase in costs. The direction was to have staff provide reasonable assurance that Laidlaw did not have an unreasonable rate of return. No member of the Council was advocating that there be a punitive effort on Laidlaw because they were improving efficiency of services or because they decreased operational costs. The reassurance by staff had not been received. It was a regulated monopoly and it was the Council's charge to protect the rate payers. MS (Rindone/Padilla) to approve the staff recommendation, page 18B-I, approving Resolution 18113, direct staff, if necessary, to process aod ordinance so full processing costs could be passed through if appropriate. Mayor Horton stated the motion denied the request tbr the reimbursement for the unrecovered landfill costs at the present time. Council could approve reimbursing the landfill costs and direct staff to return with a mechanism to move forward. Mr. Powell responded that Council could do that. He hoped Council would not approve the amount presents but direct staff to verify the amounts. Councilmember Rindone stated he would accept that as a friendly amendment if the Mayor would agree to a report to Council for information. Mayor Hotton requested that Councilmember Moot clarify his comments. Councilmember Moot stated he was talking about a 2.5% across the board which was what Laidlaw had asked for at the previous hearing. The resolution proposed a 2.5 % increase on only one of the contracts. He did not support the resolution. Market forces drove a business like Laidlaw. For Council to try to determine their reasonable rate of return and make adjustments accordingly was a calculation more suited to other economies and not the one that operated in our country. VOTE ON MOTION: motien failed 2-3 with Horton, Alevy, and Moot opposed. MOTION: (Alevy) to approve at 2.5% increase for the operating cost component for residential, residential recycling, and commercial; approve at 2.5% increase for operating cost component for residential yard waste contract; and approve Laidlaw's request, pending verification of the figures, and subsequent report back to Council on the unreimbursed landfill processing costs. Mayor Horton stated it was difficult to put into the eqnation the contributions that Laidlaw had provided the community, but she knew without a donbt that they ranked at the top of being a good corporate citizen and that somewhere down the line the taxpayers would have to pay liar some of the services Laidlaw provided. She did not feel Laidlaw was a monopoly as they provided the best service tier the lowest price. With the motion they would still be providing the best service for the lowest price. Therefore, she supported the motion. Councilmember Rindone felt all of the Council supported Laidlaw and that had never been the issue. The motion was a change in the policy direction of the Council in trying to adhere to the best public interest for all rate payers the Council represented. It was in effect a pass-through of 2.5 % and allowed a corporation to be a benevolent monopoly. It was a pass-through of a new tax and Council had not done due diligence to ensure that it was in the best public interest. Laidlaw needed to be responsive to the direction of the Council. He would not support the pass-through of a new tax that would raise the rates. Councilmember Moot stated it was not a tax. There was a contract provision in an arms length negotiated contract with a business the City did business with. The contract provision provided for a CPI increase which was part of a contractual term. The City held the upper hand on the contractual term but it was not a tax but a contract provision. Laidlaw had been denied the increase for the last three years and during that time Laidlaw had cut their costs, improved their services, and had been a good corporate citizen. At a certain point the City needed to reward Minutes November 14, 1995 Page 10 the people they did business with. To refer to it as a tax was being unfair to Laidlaw and to Council. Council was looking at a contractual term and stating that they felt it appropriate to grant it, nothing more or less. Councilmember Padilia felt people had dift~rent perspectives on what was appropriate. Everyone should be allowed to have opinions and have them be equally valid whether or not others agreed with them. The question was not the structure of the agreement but whether or not they had met the criteria that Council had set. Not everyone would agree as to whether or not that was met. When there were increased costs to business those were passed through to the consumer, but it appeared that when there was a decrease in costs the Council did not want to pass those through to the consumer. In the free market place open competition would force that to be the case. They did not have that with Laidlaw because there was not open competition between providers. In that case the Council was notdoing theirjob because thatwas their charge. Therefore, he would not support the motion. Mr. Boogaard stated staff needed to know the amortization period the costs would be recovered over and staff assumed the motion was an amendment to the resolution. Councilmember Alevy stated he had not included an amortization period as part of the motion but he was comfortable with 12 months unless Council preferred to include as part of the verification process that staff make a recommendation regarding the amortization perind. CLARIFICATION OF MOTION: (Alevy) Council would allow the request for the landfill processing costs upon staff verification of the figures as well as recommending an amortization period. Mr. Pewell stated it was his understanding that the motion approved a 2.5% increase in the operating cost component for the basic residentiaI, residential recycling. and the yard waste component. Councilmember Moot stated it was his onderstanding that staff would analyze the unreimbursed landfill processing costs and bring that back to Council with no preconceived indication by the Council as to what they would do at that time. His intent was to pass the resolution expanded to include a 2.5 % increase across the board and have staff bring back the issue of the unreimbursed landfill processing costs for Council review. Mr. Booguard stated there were three components to the fee. He clarified that the motion would grant a 2.5% increase to all four contracts in the operating component of the fee. The actual unreimbursed landfill costs were subject to verification with staff returning with a proposal for rate increase along with the necessary ordinance modification to amortize the unreimbursed landfill cost over a 12 month period to allow it's recovery in all four contracts. Mr. Pewell stated there was not a landtill rate component in all four contracts. The recycling contract did not have that so it would not apply. Mayor Herton stated it would cover commercial and residential rates. Mr. Krempl stated it was his understanding that the amortization period was left open. VOTE ON MOTION: approved 3-2 with Padilia and Rindone opposed. * * * Council recessed at 8:47 p.m. and rec0nvened at 9:00 p.m. * * * 19. PUBLIC HEARING PCC-90-25M; REQUEST FOR FIVE YEAR EXTENSION TO AN EXISTING CONDITIONAL USE PERMIT FOR AN RV STORAGE YARD AT 1375 BROADWAY, WITHIN THE S-94 ZONE - BROADWAY PALOMAR RV STORAGE - The request is for a five year extension of an existing Conditional Use Permit which authorizes a recreational vehicle storage yard at 1375 Broadway. Additionally, the applicant is requesting the deletion of a condition to the original permit which requires payment of a parks in-lieu fee to the City. Staff recommends the nublic heurinll be continued to 11/21/95. (Director of Planning) MSUC (Horton/Alevy) to continue the public hearing to the meeting of 11/21/95. ORAL COMMUNICATIONS None Minutes November 14, 1995 Page 11 BOARD AND COI~!MISSION RECOMMENDATIONS None submitted. ACTION ITEMS 20. RESOLUTION 18074 APPROVING CASH ADVANCES FROM THE TRUNK SEWER CAPITAL RESERVE FUND TO VARIOUS REDEVELOPMENT AGENCY FUNDS AND FROM THE EQUIPMENT REPLACEMENT FUND TO THE CENTRAL GARAGE FUND - Over the last few years, the available cash in various city/agency funds has been depleted beyond a zero balance. This, in eft~:t, is an unrecorded loan against all other city/agency funds. In addition, funds with positive cash balances are earning less interest revenue than warranted due to this practice. It is recommended that the City move towards returning all funds to a positive cash balance as soon as possible and implementing strict controls to not allow any transaction against any cash account which would reduce it below zero. Staff recommends approval of the resolution. (Director of Finance) Continued from the meeting of 10117/95. Mr. Goss gave a brief overview of the issue. The Finance Director was offering a proposal for Council approval to address a symptom of another problem, i.e. the deficit of the Redevelopment Agency. The City had a significant amount of money in a variety of accounts, i.e. over 200 dift~rent accounts and reserves of over $90 million. On 9/25 the Finance Director brought to his attention that 22 accounts were in the red which varied widely during the fiscal year. The majority were grant funds where contractually the City was obligated to spend money and then get reimbursed later by the state or federal government. The real problem was the three Redevelopment Agency funds and staff had been undertaking steps to eliminate that situation. In 1993/94 there was over a $3 million gap between expenditures and revenues. Staff estimated that the gap was $2.5 million for 1994/95. There was the operating gap and then the overall collective fund deficits for Redevelopment which was approximately $3.4 million. Again that was caused by state take-aways and the Rohr reassessment. Staff estimated that for the operating budget for the RDA and not taking into account the housing fund, they were within $300,000-$500,000 of balancing that out as an operating expense on an annual basis. Yet to be taken into account was the redistribution of economic development expense between the RDA and General Fund. In his judgement it would reduce it further. He felt there was a good chance that the RDA deficit would be wiped out during the present fiscal year, and, if not, next fiscal year. Technically that could require one RDA account lending to another RDA account because of where the properties were. He was referring to all the funds together except for the restricted funds. It appeared that it was common practice among other cities to use inter-fund transfers dnring the course of the fiscal year. To do it for a prolonged period of time and not charge interest was not commun. The Finance Director discussed the negative cash balances in a memo dated 5/31 at which time he had directed him to address the issue which was the report before Council. The Finance Director recommended utilizing funds from the Trunk Sewer Fund to provide cash advances to the RDA during the interim period where the fund balance was in red. It was their collective judgement that there was sufficient time to repay the Sewer Fund back beti~re the money was needed to be used for future improvements. A related issue was dealing with past practice of internal loans where interest was not charged. It was a practice that in very minimal amounts, for a short period of time, may have been occurring back into the 70's and possibly the 60's. The ability to go back an correct that had some merit and if Council believed that it did direction should be given to staff to look at that issue and report back. The question was if they did go back how far back should they go and, just as the RDA funds were in the red at the present time, not too many years back those funds were in the black. He surmised that due to the practice followed by past finance directors it may have well been the source of some unrecorded loans to other funds. It was a complicated issue. It appeared that in terms of the cash flow issues the only choice was to keep on doing things the way they had been done or using the Trunk Sewer Fund on an interim basis. Robert Powell, Finance Director, summarized the staff recommendation. It was important for Council to note that the recommendation was for maximum amounts because the Finance Department would monitor the cash needs in the funds and transfer only the amount of cash necessary to keep the funds at a zero or slightly positive balance to minimize the interest cost to the funds. The cash advance was not to provide resources to the funds but only a means to reallocate the interest properly. Hopefully, the maximum amonnts would never be reached. The problem with retroactivity regarding interest, the City had over 200 funds and approximately 180 funds had a positive cash balance. The past practice would have proportionally impacted all 180 of the funds to a degree regarding their interest earnings. Those cash balances fluctuated and were recorded on a weekly basis and the weekly cash balances were used to allocate interest on a monthly basis. It would be a monumental task to do such a reallocation. Councilmember Rindone stated after the meeting of 10/17 it was reported in the San Diego Union that Mr. Goss indicated that he had no knowledge or awareness of any negative cash balances. He questioned if that was an accurate reporting. Minutes November 14, 1995 Page 12 Mr. Goss stated that was not correct. What was meant was that he was aware that there were negative balances but he was unaware of the practice of the past finance directors not charging interest from one account to another. Councilmember Rindone clarified that Mr. Goss was aware that there were negative balances but he was trying to indicate that he was not aware that there was no interest charged. Mr. Goss stated he was unaware that there were negative balances years and years back as that was never called to his attention. What had been called to his attention was that there were negative balances in 1994 when there was a request to get more intbrmation on how to balance those out internally. It then became clear when he received the memo from Mr. Powell in May which led to the item before Council. Councilmember Rindone questioned how long Mr. Goss knew there were negative balances. Mr. Goss responded that the focus of the negative balances in the RDA was as a result of Mr. Powell's memo in May. When staff was looking at the mid-year budget review of the RDA it was clearer to everyone at that time that it was occurring. He had received a copy of a memorandnm in late fiscal year 1993/94 and he viewed that more as a request as guidance from staff as to how they would make adjustments in terms of certain grants and capital improvement projects. He did not believe that had anything to do with the issues of the RDA. In terms of what was being looked at, that came to his attention when addressing the RDA mid-year budget review. Councilmember Rindone questioned if it was correct to say that he was fnlly aware of the negative balances and the accounts without interest payments by May of last year. Mr. Goss stated what he became aware of was that there were negative balances in the RDA budget and at that time it was being addressed as it related to putting together the proposed budget for the coming fiscal year and also dealing with the budget for last fiscal year. It was a matter of dealing with the budget issue. In terms of how that implied the cash management issues that Mr. Powell brought up, that came up in May when he asked for direction. Mayor Horton questioned where Councihnember Rindone was leading with his questions. Councilmember Rindone responded that he was trying to get an answer to how long Mr. Goss knew there were negative balances in accounts and no interest payments. Mr. Goss stated during the mid-year budget review it was reviewed as a budget issue and not a matter of a cash balance issue. That was not really raised until the 5/31 memo. Councilmember Rindone questioned if Mr. Goss was unaware until the 5/31 memo and not prior to that time. Mr. Goss responded that was correct regarding the types of issues raised by Mr. Powell. In terms of other issues in past years, i.e. where the City was consciously loaning money from the General Fund to the RDA, that was booked as a loan. He thought that had also been done in connection with DIF funds in the past. The cash balance issue where it was not booked as a loan was brought forth by Mr. Powell on 5/31/95. Councilmember Rindone stated the long term debt for the RDA had been at least three years. Council received approximately 5-6 weeks ago the close out of FY 1993/94 which indicated that the last year the Agency had been fully audited that the aggregate shortfall of the RDA budget was $3,803,880. Obviously, that was not the first year of that large debt. He questioned how long staff estimated that had occurred prior to 1993/94. Mr. Powell stated he would have to review the financial statements to in order to ascertain when they started to have an annual operating deficit. Since the funds had very significant reserves in the late 80's and early 90's he felt the annual operating deficits had been occurring for the last 4-5 years. He stated that was only a guess. Mr. Goss stated that was only a guess because the main reason the City started with the deficits was due to the state take aways of the property tax revenues which went to the RDA and also due to the reassessment of Rohr. Councilmember Rindone stated he had contacted the City Manager and Director of Finance because he had wanted to ask questions from the City auditors, i.e. DeIoitte Touche, in order to obtain their thoughts as to whether it was a common practice and if it was reported to staff. Mr. Goss had informed him that they had not returned the call. He felt it important to find out why the auditors had not called that to the City's attention or deemed it a problem or concern. The problem did not happen overnight. Any large deficit spending left unchecked for a period of time was an issue that required immediate attention. He requested that the item be trailed for one week so staff could request that Deloitte Touche be present to address his concerns. Minutes November 14, 1995 Page 13 Mr. Powell responded that typically an audit firm was required to comment on deficit fund balances and make some type of statement if they felt the entity was not a going concern. They made comments in the financial statements regarding the Agency funds indicating that the City was taking measures to alleviate that deficit. They typically did not comment on negative cash balances which was the item Council was addressing because it was unallowable on the fmancial statement to show a negative cash balance. They reclassified a negative cash balance as a short term payable. Therefore, a negative cash balance was reflected on a financial statement as a cash advance payable or typically lumped in with the other accounts payable. The auditors did not typically comment on the cash issues, they were more interested in the bottom line which was the fund balance. If they saw a fund balance going deeper and deeper into the hole they would have raised that issue. Councilmember Rindone questioned why they did not notice that the City had fund balances that were below zero at the end of the year. Mr. Powell responded that they did notice it and did comment on it. They were apparently satisfied with the responses received from staff. If they had been around for 2-3 more years and the deficit continued to grow with no action taken to address the deficit they would have then raised red flags. Councilmember Rindone stated there was a significant shortfall for at least the last three years and he was concerned that was not brought to the attention of management and the Cormell. He questioned if the auditors actually saw negative balances or if it was zeroed out at the end of the year. Mr. Powell guessed that journal entries were processed to reclassit~ those balances and they noticed them when they reviewed the year end journal entries. An annual operating deficit was nothing that was alarming to the auditors as long as there were reserves that could be drawn down for valid expenditures. They would be looking at the trend affecting the reserves. It was a conmaon practice at year end to transfer cash from a related fund on a one day basis so not to affect any interest allocations and immediately reverse the entry on the next day so the negative cash was reflected. Councilmember Rindone questioned if it was an acceptable practice for an audit firm reviewing accounts. Mr. Powell responded that the auditors were fully aware of that practice and had never taken exception to it during his 19 years at the County and two years he had reviewed the City's financial statements. Councilmember Rindone t;elt it was disturbing particularly if it was not brought to light after a significant period of time. It was not that the monies were lost but it was evident that when there was a large deficit and the reserves were gone there was a trend toward deficit spending. Those monies had to be paid back. He questioned if the garage account and two RDA accounts would have debts extending beyond one fiscal year. Mr. Goss responded the Central Garage was an internal service fund and was an expenditure approved by the Council and charges against individual departments that supported it. As an accounting practice it should be balanced every year and a deficit should not have occurred. It was curious that the two accounts that related to the maintenance and acquisition of vehicles, one was over $500,000 and the other was under $500,000 so between them they were pretty well balanced. The Finance Director had not ascertained why that did not happen on an accounting balance over the years. He noted that Mr. Powell was the first finance director that was a CPA. There were a lot of systems in place in various departments that had been put into eft~ct when the City was 20,000 and not everything was upgraded to a more sophisticated level until someone else was brought in. He looked to the existing finance staff to develop recommendations to ensnre that the City's accounting and anditing systems worked better than they had in the past. Councilmember Rindone agreed and stated he was pleased with the candor and efforts of Mr. Powell in addressing the fiscal issues. On 11/2 he had requested answers to several questions, one of which was what the one year interest cost for the 22 funds and the response was $320,000 but the staff repnrt stated $280,000. Mr. Powell stated the staff report was lbr fiscal year 1994/95 covering actual data that occurred that year, month by month and recomputing the interest. The initial information provided to Councilmember Rindone was based on the existing negative cash balances of 9/25/95 of $5.7 million asstiming that the negative balance would stay at $5.7 million for a 12 month period and using the City's current weighted average earnings rate of 5.62%. It indicated that the negative cash balances for the last fiscal year were not at the level of $5.7 million and, therefore, the interest was less for last fiscal year. The present time of the year was the lowest cash balance because the City would not receive property taxes until December. Mayor Horton stated if the item was going to be continued she pret~rred to look at it all one time. M i n u tes November 14, 1995 Page 14 Councilmember Rindone stated he was not asking to have the item brought back. MS (Padilla/Horton) to continue the item fur one week. Councilmember Padilia stated he was relieved with Mr. Goss' response regarding the timing of his knowledge of the information and the apparent mis-quote attributed to him in the San Diego Union. He requested clarification as to his mis-understanding during his conservation with Mr. Goss two weeks ago, after the issue was first brought up to the Council, at which time Mr. Goss had advised him that he was not previously aware of the situation or over drafts and that if he was wondering as to why it had not been brought forward to the Council earlier that perhaps he should ask Mr. Powell. He t~lt that was very different than what was reflected in the memorandums and wanted clarification as to what he mis-understood. He clearly recalled the comments Mr. Goss made to him two weeks ago. He was entitled to know what the issue was and what he was not understanding. Mr. Goss stated it was his recollection that the issue of the cash balances, i.e. the interest not being charged was what he was not aware of. As to the issue of why it was not brought forward sooner, he did not recall mentioning Mr. Powell, but if he did his point was that Mr. Powell had requested to follow through with the issue and he had given him verbal direction to go 'ahead and proceed. He brought it up in the time frame that he did which was between May and when it went to Council 2-3 weeks ago. If he had referred to Mr. Powell it was because he was working on the issue and had more in/brmation. VOTE ON MOTION: apprnved unanimously. Councilmember Rindone requested that during the week before the item was brought back that staff submit those questions to Deloitte Touche for written responses. If that was not possible, he requested that a representative from Deloitte Touche be present to address CounciI's concerns. 21. RESOLUTION 18114 AUTHORIZING THE MAYOR TO EXECUTE A POWER TO SAVE INCENTIVE AGREEMENT WITH SDG&E FOR THE IMPLEMENTATION OF PHASE II OF A COMPREHENSIVE ENERGY RETROFIT PROGRAM; ADDING CIP-GG149 ENERGY RETROFIT PHASE II TO THE FISCAL YEAR 1995/96 CAPITAL IMPROVEMENTS PROGRAM AND APPROPRIATING $75,000 FROM THE GENERAL FUND AVAILABLE FUND BALANCE THEREFOR - The City has implemented an ongoing retrofit program to save money and conserve energy. This is Phase II of the retrofit program which will annually save $35,000 in utility costs and will retrofit exterior and interior lighting at 22 municipal buildings and provide $25,000 in incentives from SDG&E. Staff recommends the resolution be continued to 11/21/95. (Environmental Resource Manager) Councilmember Alevy stated he would abstain from participation due to a potential conflict of interest. MSC (Horton/Padilla) to continue the item to the meting of 11/21/95. Approved 4-0-0-1 with Alevy abstaining. 22.A. RESOLUTION 18115 APPROVING THE MEMORANDUM OF UNDERSTANDING WITH THE SAN DIEGO ECONOMIC DEVELOPMENT CORPORATION IN SUPPORT OF MUTUALLY BENEFICIAL SOUTHBAY ECONOMIC DEVELOPMENT EFFORTS - Each Memorandum of Understanding outlines how the respective agencies' activities will benefit the City and the manner in which it will be reported each quarter. Staff recommends approval of the resolutions. (Director of Corrtrnunity Development) B. RESOLUTION 18116 APPROVING THE MEMORANDUM OF UNDERSTANDING WITH THE SOUTH COUNTY ECONOMIC DEVELOPMENT COUNCIL IN SUPPORT OF MUTUALLY BENEFICIAL SOUTHBAY ECONOMIC DEVELOPMENT EFFORTS Cheryl Dye, Economic Development Manager, stated Council previously authorized funding for each of the two economic development agencies and directed staff to return with MOU's that provided for City representation on the respective boards as well as a reporting process. Councilmember Moot questioned if the nominating committee nominated the person recommended. · Jane Signaigno-Cox, representing San Diego EDC, responded that the nomination was usually accepted, it was not a guarantee. · T Minutes November 14, 1995 Page 15 Councilmember Moot questioned what criteria was applied if they did not nominate the person nominated by the agency. Ms. Signaigno-Cox stated she was not familiar with a case where the nominee was not nominated. It was a corporate member that was a member of EDC in good standing. RESOLUTIONS 18115 AND 18116 OFFERED BY COUNCILMEMBER MOOT, reading of the text was waived, passed and approved unanimously. ITEMS PULLED FROM THE CONSENT CALENDAR Item pulled: 10. The minutes will reflect the published agenda order. OTIIER BUSINESS 23. CITY MANAGER'S REPORT{S) a. Scheduling of meetings. Mr. Goss informed Council that a workshop had been scheduled on 11/18/95 from 9:00 a.m. to 12:00 noon for the Otay Ranch SPA I. Councilmembers Rindone, Padilia, and Moot stated they had not been notified regarding that date. Councilmember Rindone stated he would not be available on that date. 24. MAYOR'S REPORT(S) a. University of California - Chula Vista, discussion on impact of Multiple Species Conservation Program National Wildlife Refuge. Mayor Horton stated it had come to her attention that there could be a problem with the General Development Plan. In 1993 the City of Chula Vista designated 400 acres to be donated by Baldwin, including Salt Creek Canyon and the uplands, as a potential University of California site. In addition, the City approved a university overlay in Villages 9 and 10 thereby reserving approximately 1,200 acres for possible university uses. As a result of the MSCP efforts and the federal governments wildlife refuge efforts the 400 acre site could be preempted as a university site and be preserved tbr sensitive habitat only. Because the 400 acre site included unique landforms and view sites it was critical to the future of the development of a university site that could also include Villages 9 and 10. As a result of those events she felt Council needed to make a decision as to whether they should continue their efforts to designate it as a university site. She recommended that Council indicate: 1) that the 400 acres to be dedicated by Baldwin was still a top priority for development; 2) direct staff to hire a consultant to assist with the monitoring of other MSCP refuge programs; and 3) hire a consultant to assist with the lobbying efforts regarding the designation of the approved site for university uses. ® George Kost, 3609 Belle Bormie Brae Road, Bonita, CA, felt the OTC and university should be thought of as one project. There was not another place in the United States that had a major university next to an olympic training center. If the project went through it would be the most important thing that Chula Vista had ever done as it would bring people from all over the world. He hoped Council would cultivate the new leadership at the university and fight the environmental constraints in order to hold on to the 400 acres. Councilmember Moot stated he was on the Planning Commission when the issue was reviewed and it was one of the few decisions at that level that he disagreed with and t~It it was short sighted to pass on 400 acres of land donated for a university site. He felt there was very good cause to go back and revisit the issue. Councilmember Rindone felt the university would be the catalyst ti~r the entire Otay Ranch area. The approval of the MCA amphitheater was probably the most significant action taken by Council since the OTC was approved and the university would be more significant than all of those. MS (Horton/Rindone) Council was sending staff a message that it wus a priority for the City and Council, that the City try to make sure that the site was developable ~r a university and core uses, direct staff to hire a consultant to assist with the monitoring of other MSCP refuge prugrams and direct staff to hire a consultant to assist with lobbying efforts regarding designation of the apprnved site hlr university uses. Consideration Minutes November 14, 1995 Page 16 should also be given to reviving the University subcommittee. Staff to return to Council with a report next week explaining the hurdles the City may encountee. Mr. Goss stated the General Development Plan showed a university site but it also had alternate land uses for Villages 8 and 9. It was clearly an issue where there could be a change in land ownership so the comment that there would be 400 acres for free could be incorrect. Salt Creek was one of the most sensitive habitats. He questioned if staff could have an additional week due to the complex issues. Mayor Horton stated the report could be delivered later than Thursday because the item was time sensitive as the City was in the process of finalizing the MSCP process. VOTE ON MOTION: appruved umrnirnously. b. Application of furlough to City Councilmembers. Mayor Horton felt Cooncil should participate in the furlough in order to be consistent with action take by Council tbr employees. MSUC (Horton/Alevy) to apply the furluugh to the Council retroactive to the date it became effective for employees. c. Reviewing the City's Affordable Housing Policy in reference to AB1715. Mayor Hotton requested that the item be continued to the meeting of 11/21/95. * * * Mayor Hurton left the meeting at 10:30 p.m. * * * 25. COUNCIL COMMENTS Councilmember Alevv a. Discussion of City's public hearing notification policy. Councilmember Alevy stated he had discussed the item with the Director of Platmine and staff was moving liarward with a report addressing his concerns. For certain issues notification should go to all those that would be affected. He also felt residents within a certain area should be notified as well as property owners. Staff would be returning with a report for Council review. Councilmember Rindone b. Demolition of Fuller Ford. Item was discussed under the Redevelopment Agency agenda. Councilmember Moot c. Implementation of Performance-Based Budgets. Councilmember Moot stated he had provided Council with a six page report which was the end process going back to the budget process. Councilmember Moot stated under current Council policy he felt he had exhausted as much staff time as appropriate without specific direction from Council. He suggested that Council direct the issue to staff and have staff return with a resolution and report for implementation of the process. He anticipated that it would be brought back as soon as staff could complete the fiscal analysis and report. He wanted to move forward so something could be in place by the first of the year if Council was to implement the change in policy. He then reviewed the background of his proposal. The problem with the current process was that Council was involved at the end and only reviewed a line item proposal. The process was from top down and not from the bottom up with clear guidance from Council as to what the goals and ob. iectives were and how Council proposed to measure them. Councilmember Padilia felt Councilmember Moot was moving in some positive areas and commended him on his examination of the issue. There would be a lot of work involved in addressing the specifics in terms of what the impacts would be, the transition, and developing the mechanisms to measure performance against objectives and scheduling how, when, and where Council would be involved. It was not as simple as requesting that staff return with a resolution. While being supportive he felt there was still a lot to be done. If it was a signal to staff that Council wanted to begin to move in that direction he would be very supportive of that. He was uncertain as t~ whether the present meeting was the appropriate time to go into the related issues. He offered his support. Minutes November 14, 1995 Page 17 Councilmember Alevy felt all the Council wanted to move in that direction. Council could indicate to staff that it was all fight to spend additional time on the item and have staff return in several weeks with a report for Council review. He felt it was a wonderful idea. Councilmember Moot stated that Councilmember Padilia was correct, all that Council could do at the present time was begin implementation. The nuts and bolts of a performance based budget was the process that would begin in January, i.e. setting the goals and objectives and criteria. It would be at a workshop following the department presentations that the Council would be in the position to determine whether the goals were valid and reasonable. He suggested that if Council agreed they direct staff to bring back a report and/or resolution to begin the implementation. Councilmember Rindone stated he supported the proposal as nothing was more important that the budget process. He suggested that a preliminary list of key issues or projects be assembled, even prior to the statement of purpose, so staff would not be shooting in the dark regarding what Council felt were key issues. That did not mean that staff was limited to that only. He felt that the first or last meeting of every month be designated so that the agenda could be kept light to allow for Council budget issues. Mr. Goss felt it was a positive step. If it was to be done tier the upcoming budget he would have the departments start working on goals and program statistics for evaluation. The notion of having a meeting early on to look at the raw budget had a strong point in that it would help to establish priorities which was helpful when there had to be budget cuts. The weak part was that the expenditure and particularly the revenue numbers were very preliminary in February. Work program statistics was useful but there were limits because all City functions did not fit work program statistics and statistical measurements. Overall it was an exciting idea. MSC (Moot/Padilla) to refer to staff to bring back a formal repurt and implementing documents to begin the implementation of performance based budgets for Chula Vista. Appruved 4-0-1 with Horton absent. ADJOURNMENT ADJOURNMENT AT 12:15 A.M. to the Regular City Council Meeting on November 21, 1995 at 6:00 p.m. in the City Council Chambers. A Special Meeting of the Redevelopment Agency convened at 10:54 p.m. and ac~iourned at 11:20 p.m. CLOSED SESSION Council met in Closed Session at 11:20 p.m. and reconvened at 12:15 p.m. MSC (Padilia/Moot) to transfer and reappropriate the salary savings experienced in the City Attorney's department to the professional services account in the amotmt of approximutely $50,000. Approved 4-0-1 with Horton absent. 26. CONFERENCE WITH LEGAL COUNSEL REGARDING: 1. Existing litigation pursuant to Government Code Section 54956.9 · Legal strategies affecting Chammas, Fritsch and Christopher. (Folh>wing this item, there may be public action taken to appropriate funds for litigation) CONFERENCE WITH LABOR NEGOTIATOR - Pursuant to Government Code Section 54957.6 · Agency negotiator: John Goss or designee for CVEA, WCE, POA, IAFF, Executive Management, Mid-Management, and Unrepresented. Employee organization: Chula Vista Employees Association (CVEA) and Western Council of Engineers (WCE), Police Officers Association (POA) and International Association of Fire Fighters (IAFF). Unrepresented employee: Executive Mana.gement, Mid~Management, and Unrepresented. SALE AND DISPOSITION OF REAL PROPERTY - Pursuant tu Govermnent Code Section 54956.8 · Franchise for Otay Water District for Streets and Right-of-Way Minutes November 14, 1995 Page 18 27. REPORT OF ACTIONS TAKEN 1N CLOSED SESSION - No reportable actions taken in Closed Session. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk by: Vicki C. Soderquist, C~C~y City Clerk