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HomeMy WebLinkAbout11/03/1981M I N U T E S REGULAR MEETING OF THE CITY COUNCIL CITY OF SAN LUIS OBISPO TUESDAY, NOVEMBER 3, 1981 - 7:00 P.M. COUNCIL CHAMBERS, CITY HALL, 990 PALM STREET SAN LUIS.OBISPO; CALIFORNIA PLEDGE OF ALLEGIANCE ROLL CALL Councilmembers Present: GlennaDeane Dovey, Ron Dunin, Robert Griffin, Allen Settle and Mayor Melanie C. Billig Absent: None City Staff Present: Bill Hanley, Interim Administrative Officer; George Thacher, City Attorney; Pam Voges, City Clerk; Rudy Muravez, Finance Director; Geoff Grote, Legal Assistant; Ann McKibbin, Personnel Director; Roger Neuman, Police Chief; Dave Romero, Public Services Director; Jim Stockton, Recreation Director; Ken Bruce, Senior Planner and Terry Sanville, Senior Planner ------------------------------------------------- C O N S E N T I T E M S C -1 CLAIMS AGAINST THE CITY On motion of Councilman Settle, seconded by Councilman Dunin, claims against the City for the month of November be approved and ordered paid subject to the approval of the CAO. Motion carried, all ayes. C -2 COUNCIL MINUTES On motion of Councilman Settle, seconded by Councilman Dunin, the following minutes be approved: October 6, 1981 - 7:00 p.m. and October 12, 1981, - 12:10 p.m. Motion carried, all ayes. C -3 CONTRACT PAY ESTIMATES On motion of Councilman Settle, seconded by Councilman Dunin, contract pay estimates and change orders be approved and ordered paid. Motion carried, all ayes. C -4 CLAIM AGAINST THE CITY - FELICITY TAGIABUE On motion.of. Councilman Settle, seconded by Councilman Dunin, the claim against the City by Felicity Tagiabue in the am6unt of $57.75 for damages caused by an alleged city sewer backup in the claimant's front and back yard be denied. Motion carried, all ayes. C -5 FINAL ACCEPTANCE OF TRACT 710 On motion of Councilman Settle, seconded by Councilman Dunin, the following resolution was introduced: Resolution No. 4659 (1981 Series), a resolution of the Council of the City of San Luis Obispo granting final acceptance of public improvements in Tract No 710, Timberline Condominiums, located at 750 Chorro Street; R. Bunnell, subdivider. City Council Minutes November 3, 1981 - 7:00 p.m. Page 2 Passed and adopted on the following roll call vote: AYES: Councilmembers Settle, Dunin, Dovey, Griffin and Mayor Billig NOES: None ABSENT: None C -6 MISSION -STYLE SIDEWALK After brief discussion it was moved by Councilman Griffin, seconded by Councilwoman Dovey, that consideration of the report and resolution by the Public Services Director on cost - sharing for Mission -style sidewalks be deferred until the Beautification Program could be completed. Motion carried, all ayes. C -7 CONSULTANT SELECTION METHODS Council considered the report from the Public Services Director on Resolution No. 2986, establishing the method,.of selecting consultants for City architectural services. Councilman Settle stated that he did not support hiring firms "on"a rotating basis but that the city policy should state that work not be confined to a single firm. ' Bill Hanley suggested additional wording to' "read, "It is "the further policy of the City that.such individual or firm shall be given preference consid- eration in,the.selection process." After brief discussion Council directed that this item be referred to the CAO for additional report. C -8 CULTURAL HERITAGE COMMITTEE Council reconsidered a resolution establishing the responsibilities of the Cultural Heritage Committee (continued from 8/18/81). Councilwoman Dovey stated she could support the proposed resolution with amendment as follows: Section 3, to delete the second paragraph and insert the following sentence as the next to last sentence of the.first- paragraph of the section, "The Committee shall specifically include at least one person trained and experienced in structural rehabilitation." Councilman Griffin stated that he could also go along with "the resolution, although he would like to see the first whereas read, "Whereas, preser- vation of the-Cultural Heritage..of San.Luis Obispo represents significant economic, aesthetic and educational benefits to the community;..." `He would also add the word in the last sentence of that page, remove the word "immediately" and insert "promptly ". On motion of Councilman Settle, seconded by.Councilman Dunin, the "follow - ing resolution was introduced: Resolution No. 4660 (1981 Series), a'resol- ution of the Council of the City of San Luis Obispo establishing the the Cultural Heritage Committee with amendments as suggested. Passed and adopted on the following roll call vote: AYES: Councilmembers Settle, Dunin, Dovey, Griffin and Mayor,Billig NOES: None ABSENT: None Ll 1 City Council Minutes November 3, 1981 - 7:00 p.m. Page 3 C -9 ARCHITECTURAL SERVICES - CORPORATION YARD On motion of Councilman Settle, seconded by Councilman Dunin, the following resolution was introduced: Resolution No. 4661 (1981 Series), a resolution of the Council of the City of San Luis Obispo approving an agreement between the City and Ross Levin & Maclntyre Architects to conduct architectural services for the City Corporation Yard. Passed and adopted on the following roll call vote: AYES: Councilmembers Settle, Dunin, Dovey, Griffin, and Mayor Billig NOES: None ABSENT: None C -10 WATERLINE IMPROVEMENT PROJECTS Council considered plans and specifications for "WATERLINE IMPROVEMENT PROJECT: BEACH STREET WATERLINE, PACIFIC TO PISMO, BOND STREET WATERLINE, KENTUCKY TO LONGVIEW, AND LINCOLN STREET WATERLINE, BROAD TO CHORRO ", City Plan Nos. F -07, F -08 & F -09, bid estimates $14,848, $18,357, and $17,365 respectively, without contingencies. On motion of Councilman Settle, seconded by Councilman Dunin, the plans and specifications be approved and staff be authorized to call for bids. Motion carried, all ayes. C -11 HYDROELECTRIC PLANT NO. 1 Council considered plans and specifications for "TURBINE GENERATOR FOR HYDROELECTRIC PLANT NO. 1 ", City Plan No. F -25, bid estimate $360,000 without contingencies. On motion of Councilman Settle, seconded by Councilman Dunin, to approve the plans and specifications and authorize staff to call for bids. Motion carried, all ayes. 1. APPEAL OF PLANNING COMMISSION - V. MONTGOMERY Council held a public hearing to consider an appeal by Vic Montgomery of a denial by the Planning Commission to uphold staff interpretation that utility company offices are not an allowed use in the C -N zone (neighborhood /Commercial); Vic Montgomery, appellant. Ken Bruce, Senior Planner, stated that the Planning Commission on a 3 -0 vote upheld the Community Development Director's determination that utility company offices were not an allowed use in the C -N zoning district: He stated that Mr. Montgomery had proposed a utility office as a part of the Maymont Plaza project located at 2238 Broad Street, but he wished the Council to understand that the basic issue was whether the C -N zoning district permits "utility company offices" or could be interpreted to permit the same under the general plan or ordinance language. The Planning Commission concurred with the staff's determination that the said use was specifically eliminated as a permitted use when the Council reviewed and approved the final text of the Zoning Ordinance. The intent of the C -N zone was to meet the retail sales and personal service needs of surrounding neighborhoods. He stated that although the Commission acted to deny the appeal, their motion encouraged support of the project at this location through such other form of action as could be devised, including a planned development, rezoning, or other means. Mayor Billig declared the public hearing open. City Council Minutes November 3, 1981 - 7:00 p.m. Page 4 Vic Montgomery spoke on behalf of his appeal and pointed out that in the last paragraph of the staff report, the Planning Commission did encourage support of the project at Maymont Plaza, even though they had acted to uphold the appeal. He would, therefore, ask the Council, should they decide that utility company offices were not an allowed use in C -N zones, to give some direction towards this project. Upon question by Councilman Griffin, he stated that the convenience for - paying- P.G.&E.'- utility -bills downtown would remain in-the form of.a- downtown paystafion.for=P.G &E utility bills: - - - Mayor Billig declared the public hearing closed. Councilman Settle stated that he did not feel that the C -N zone was appro- priate for utility company offices, and would, therefore, support the Planning Commission recommendation denying Mr. Vic Montgomery's appeal but would support a planned development for PG &E at the Broad Street location. Councilman Griffin agreed with Councilman Settle's comments as did Council- woman Dovey. Councilman.Dunin stated he did not feel the City had any choice but..to deny the appeal because of the present zoning regulations, but he'agreed with other statements made by Councilmembers; and he would support a meeting to review the feasibility of taking another form of action to either include planned development or some other means for this project. It was general consensus that Council would be supportive of a possible planned development rezoning for the appellant's project located at 2238 Broad Street. On motion of Councilman Settle, seconded by Councilwoman Dovey, the follow- ing resolution,was introduced: Resolution No. 4662 (1981 Series).,.a resol- ution of the Council of the City of San Luis Obispo denying an appeal.of the Planning Commission's determination that utility company offices are not an allowed use in the C -N zone. Passed and adopted on the following roll call vote: AYES: Councilmembers Settle, Dovey, Dunin, Griffin and Mayor Billig NOES: None ABSENT: None 2. SEWER SERVICE CHARGES Council held a public hearing to consider a resolution to revise.the sewer service charges. Gerald W. Peasley, CPA, the City's Utility Service Fee Consultant, again reviewed for the Council (first presented his report on October 12,.1981) the more notable proposed changes to the City sewer rates._ He stated the City has applied for a combined Federal and State grant for required modifications to the sewer treatment plant. The total cost of the modifications were estimated at 6.million.dollars. The changes.to the treatment plant were needed in order to meet the requirements of the State Water Resources Control Board. Before the City may receive the grant, it would also have to comply with several other requirements. One of these requirements was that charges for sewer service must be developed in accordance with methods established by the Water Resources Control Board. The objectives of this rating plan were: 1) to recover through user . charges, the full cost of operating and maintaining the City sewer system and 2) to apportion these charges fairly among various classes of users, based upon the characteristics of their wastewater and their use of the system. The determine the apportionment of user charges, the rating plan employed three factors provided by the Water Resources Board Guideline. 1) The identification of users in the standard classification groups; 2) the measurement of flow through the treatment plant user group; and 3) the strength of the wastewater to be treated from each user group. Although 1 1 1 City Council Minutes November 3, 1981 - 7:00 P.M. Page 5 there were some 20 possible user groups, the establishment of a user class within the rating plan had been limited to those which have a significant impact on the treatment facilities. Several of the standard user classes had been consolidated into a single class whenever the combined flow and characteristics of their wastewater were insignificant to the total system. He had two tables available showing proposed wastewater rates and comparison of present and proposed service rates. Upon question by Councilman Dunin, Gerald Peasley stated that you can ' differentiate between any class of groups and subgroups you wish, but it would probably not be cost - effective to try to break it down into too many groups. Rudy Muravez, Finance Director, addressed the question of whether hospitals should also be separated out. He stated that hospitals proved to have an insignificant adverse effect on the wastewater facilities. He added that there had also been a concern about whether or not to add bakeries to the restaurant groups. He said that this could be done, but he did not feel that "it would be cost effective as there were so few bakeries in town they would not have a significant effect as far as lowering the rates for the restaurants by being added into this group. He felt that this was also true for laundromats and car washes. He felt that if these numbers were larger, if might be worthwhile; but he stated that our city was primarily a residential and tourist one. In fact, he said that 68 restaurants had been listed at the time of survey and there were already three additional. The question had been raised about fast -food and take -out restaurants; and he said that although they do not wash their dishes as they are mostly take -out, they do add the same strengths to the system. He felt it was equitable, because if.they use less water it would also cost them less. Upon question by Councilman Griffin, Mr.-Muravez added that the grant requires the City to stay within ten percent of their guideline . . conditions. Mr. Muravez pointed out that the proposed increases would be to cover the operating expenses of the wastewater treatment plant and to start building funds for replacement or future capital improvements. ' Councilman Griffin suggested that possibly the City could we extend the transition period on raising these rates to fund the actual capital costs in order to be more fair to the user. Mayor Billig declared the public hearing open. Mel Hahn, owner of a fast -food restaurant for 13 years, stated that although they do not have.that many dishes to wash; they do use:probably as much water as the regular restaurants as they serve more drinks; and they utilize a cooling system, which requires additional water. He also felt that studies cited by staff were -for metropolitan areas which would not be a fair comparison with the city of San Luis Obispo.. Mike Maino stated he was concerned about flow rates in relation to.charges, as he was concerned with the 11� acres of his property that he must landscape. Jerry Borges, representing Madonna Plaza, stated that he was concerned with the application of rates, as all of the stores in Madonna Plaza are on one meter; .and he didn't feel this formula allowed for a fair distribution of charges to each store and.restaurant. Rudy :Muravez responded that the:proposed resolution:does meet the needs for probably 90 percent of the community, but there is always a percentage of users and this is one example where cases need:to be :looked at on an individual basis, and they would be doing this. Michael - Frucht, owner of Michaels's Delicatessen -and member of the:down- town B.I.A., stated that he felt that markets, automobile repair places, laundromats, photo finishing, manufacturing, bakeries, hospitals, taverns, furniture refinishing, and other businesses were overlooked and should be considered or separated out as the restaurants were. Quality Control City Council Minutes November 3, 1981 - 7:00 p.m. Page 6 listed 20 possible groups, and the city only elected to adopt eight of them. He concluded by stating that between the increase in sewer rates and now probable water rate increase and parking, it is just too much for the small businessman downtown. Joe Rizzo also felt that hospitals-should be made a part of the group like the restaurants were. Gerald Peasley responded that the strength in hospitals was not that high and that was why they were not separated out. Richard Clayton, manager of Maya Restaurant, stated that he was also con- cerned with the proposed rates, that they were not being properly propor- tioned. Pieter DeGroot, representing Model Linen, stated that their company paid approximately one percent of the sewer rate bill for this city. This is one of the highest increases that they have ever been hit with. He did add that hospitals were probably lessened because his firm did all of +their laundry for them. He felt that with these high increases, they can -no longer compete with outside industry as their rates were higher. This was not fair to them. He continued that he did not feel that business can grow with a two percent growth -rate factor. He would like the Council to reassure him that ongoing businesses will not continue to be hit.with these types of rate increases. Mayor Billig declared the public hearing closed. On motion of Councilwoman Dovey, seconded by Councilman Griffin, to adopt the resolution establishing wastewater service charges and rescinding res- olution No. 3966 with the amendment to section 2.1.d to add "bakeries." Councilman Dunin agreed that the Council must do something to help existing businesses and encourage them to stay in town. Maybe the city should look to lowering their rents, longer amoratization period, etc. At this time he did not feel the resolution was an equitable one. Councilman Settle stated that San Luis Obispo was a full - service city, and we could not afford to have the sewer system fail and a grant was contin- gent upon this resolution being adopted using Quality Control guidelines. His main concern was that the city does not have the money necessary for major replacement costs. He would, therefore, support the rate increase. He stated that the State is in real financial straits, and he does not want to see the city of San Luis Obispo in the same position. Councilman Griffin stated he shared Councilman Dunin's concerns regarding the classification survey, and he would be interested in staff looking at ways to bring some sort of equalization to it, possibly using a phase -in approach. Bill Hanley, Interim CAO, explained that it would take many years to gener- ate the funds necessary to replace capital costs. He felt the city would be shirking their responsibility if they did not start getting funds now. He said that the increase is for 12.8 percent, this is over a two -year period which represents only 6.4 percent per year which he does not feel even kept up with the inflationary commodities. Rudy Muravez again reminded the Council that there was no catchup provision in this rate structure for replacement of capital costs, but rather we would be starting from scratch. Gerald Peasley added that the city had actually been undercharging the restaurants for a long period of time and that this formula would actually be making it more equitable for other types of users. 1 1 1 City Council Minutes November 3, 1981 - 7:00 p.m. Page 7 Councilwoman Dovey commented that the city used to be able to put fund raising bond issues on the ballot and let the voters decide to tax themselves, but now the-city must find other ways to fund these same costs. She felt we were using the sewer system now and "wearing it out ", and we should be paying now to replace parts required later. Mayor Billig stated that if we are to accept the grant, we have to make some of these changes. She felt that the Council must address the problems that have been created by prior councils. She felt the program should be paying for itself - -to do otherwise would irresponsible. She added that there were many problems already in existence and, in order to provide help for those problems, the rates must be raised. On motion of Councilwoman Dovey, seconded by Councilman Griffin, the following resolution was introduced: Resolution No. 4663 (1981 Series), a resolution of the Council of the City of San Luis Obispo establishing new sewer service charges to be effective December 1, 1981, as amended to add bakeries and additional wording changes by Councilman Griffin. Passed and adopted on the following roll call vote: AYES: Councilmembers Dovey; Griffin, Dunin, Settle and Mayor Billig NOES: None ABSENT: None 8:50 p.m. Mayor Billig declared a recess. 9:.10_p.m. City Council reconvened, all Councilmembers present. 3. TENTATIVE MAP FOR TRACT 993 City Council held a public hearing to consider a Planning Commission recommendation to approve the tentative map for Tract 993 to create a 8 -unit residential air -space condominium located at 415 Dana Street, R -3 zone; Jonathan Lindenthaler, subdivider. Ken Bruce, Senior Planner, stated that the Planning Commission on a 4 -0 vote recommended the Council grant the approval of the tentative map subject to the variance, findings, and conditions listed in the resolution. He stated that the staff had recommended different wording for condition 6, 8, and..22, although they would have no problem with 8 and 22 as recommended by the.Planning Commission but would like to see condition 6 read as follows, "Subdivider shall widen Stenner and San Luis Creeks within the tract and grant drainage easements in accordance with the approved creek setback and improvement standards to be established by the City Council with 1:1 slope bank and gabions for slope bank stabilization to the approval. of the City Engineer. The present condition does allow for drainage easements, but does not require the developer to contribute towards the widening of San Luis Creek. Dave Romero, Public Services Director, agreed that creek improvements should be required but that a formula has not yet been devised or adopted by the City Council. He did feel substantial benefits would be gained by the future tenants. He stated that he had talked with the developer earlier that day and tried to get some voluntary participation from him but was unable to reach a satisfactory agreement. George Thacher, City Attorney, explained the legalities involved in trying to impose this condition at this late date. He did not feel that the city would be in a strong position if the developer should take exception to the condition. Mayor Billig declared the public hearing open. City Council Minutes November 3, 1981 - 7:00 p.m. Page 8 Jonathan Lindenthaler, representing the developer, stated he did not feel it was fair to require creek requirements at this time as the project was too far along at this point to turn around and add an additional $50,000 to $100,000 worth of improvements for only 8 units. He felt that if this' condition had been required at the time the development was first initiated, he could support it. He did agree with staff criteria for setback lines, and he would agree that some sort of creek improvements should be required of future developments. He felt that this development had already taken steps to flood -proof the buildings and any future buyer or tenant would be made well aware that this would not be 100 years flood - proofed. He felt that the dedication of the property they had already made was a sufficient contribution. Dennis Wheeler, developer of the property, stated that past councils encouraged developers to build within the city; and when he first thought of developing this property, he researched all necesssary requirements and on that basis decided to developthere. He was now being told by his consultant that this might cost him an additional $100,000; and he did not feel it would now be a saleable project if the Council should impose this requirement. Steven Puglisi, representative of an adjacent property owner, stated he was also very concerned for these same reasons. He said that he had received tentative approval in October of 1980 on his project adjacent to this one and had received an extension to his use permit last month and now he is afraid that this requirement will be imposed upon him, which he feels:will be extremely detrimental to the project. Mayor Billig declared the public hearing closed. Councilwoman Dovey said she sympathized with the developer's concerns felt the city had an obligation to require creek improvements in the future. Councilman Griffin stated that he would like to see additional conditions 1 for creek development, but he wants to see the policy come before the Council and be adopted first. Councilman Settle felt this Council could not legally impose this condition at this point in time. Councilman Dunin agreed with comments made by the other councilmembers. Mayor Billig stated that the city has imposed these conditions for hill- side-developers, and she feels it's only fair to also impose creek improve - merits upon the developer but in this case it would be unfair as no policy has yet been adopted. On motion of Councilman Griffin, seconded by Councilman Settle, the follow- ing resolution was introduced.:. Resolution No. 4664 (1981 Series),'a reso- lution of the Council of the City of San Luis Obispo granting approval of tentative map for Tract 993 located at 415 Dana Street. Passed and adopted on the following roll call vote: AYES: Councilmembers Griffin,.Settle., Dovey, Dunin and Mayor Billig NOES: None ABSENT: None 1 4. DOWNTOWN PARKING PROGRAM Council held a public hearing to consider public comment on the draft environment impact report for critique to the proposed Downtown Parking Program. City Council Minutes November 3, 1981 - 7:00 p.m. Page 9 Mayor Billig stated that the environmental impact report would be the only item to be addressed at tonight's meeting and that public testimony would be taken on the adequacy of the EIR but a final decision would not be made until December 8, and she would request that the public limit their comments to this one item. Terry Sanville, Senior Planner, stated that the purpose of the hearing was to allow the City Council and interested people an opportunity to talk about the draft EIR for the Downtown Parking Program. He stated the Council should take public testimony on the EIR and Councilmembers might also comment on the accuracy or completeness of the draft report. The consultant would then prepare written responses to all pertinent comments made at the meeting, on or before November 6. He said a meeting had been tentatively scheduled for Tuesday, December 8, at which time the Council would consider certifying the final EIR and review and consider the proposed Downtown Parking Program. Kay Ransom; representing project director and consultant with Earth Metrics, gave a thorough presentation outlining the project description, location, objectives, and project characteristics. She then went into the environmental effects of the proposed package project and highlighted several key.areas, the most important being the land used in planning, circulation and parking, aesthetics and urban design, and the cultural resources. She also highlighted alternatives to the.proposed project, such as no projects, alternative locations, alternative parking structure design, alternative parking strategies, and alternative transportation strategies, including small lights and satellite parking lots. Mayor Billig declared the public hearing open. John French, 1160 Marsh Street, stated his only concern was of page 2 of the report, paragraph 2, which read, "The parking district would also receive parking meter revenues from all public meters within its ' boundaries." After brief discussion Council agreed that it should probably be reworded to read, "The parking district could consider receiving parking meter revenues" or it "may consider receiving parking meter revenues." Mike Maino, 1424 Mill Street, was concerned with the satellite spaces and wished to know how many of them would be used by county or city employees and what effect, if any, the county's new structure would have on this pro- posed parking structure. Mayor Billig declared the public hearing closed. Councilman Settle stated that he found the EIR to be adequate. He would like to-see the county parking question addressed more fully and would also like to see the economic financing question addressed. . Councilman Dunin agreed with concerns by Mr. Settle and would also like to see -a report on the economic impact. He agreed it was not a function of the EIR but would like to see various alternatives. He felt the EIR was professional and could support it. Councilman Griffin agreed the draft EIR was adequate. He would like to see further clarification on the words "project" and "program" used throughout the document. ' Councilwoman Dovey agreed that the report was well done. It clearly stated that economics and demographics had not been addressed per the worksheet outlined by City staff. Mayor Billig agreed with all the comments made by the Council and would ask the consultants to put together some sort of analyses on the economics and financing possibilities prior to the December 8 Council meeting. City Council Minutes November 3, 1981 - 7:00 p.m. Page 10 After brief discussion there was consensus that Councilmembers submit a_ny additional concerns regarding economics to the Mayor, within the next- couple of days, and she would meet with the CAO and staff on alternative financing and economic options so that a program could be developed before the December 8 meeting. 5. JACK HOUSE GARDEN REHABILITATION A. Presentation by.SEDES of proposed plans for Jack House Gardens, and B. Council considereration to approve plans and adopt resolution to 1 appropriate $11,800 for Segment II. Councilman Dunin stepped down. Jim Stockton, Director of Parks and Recreation, urged Council approval of the proposed resolution. Jerry Emery, representing SEDES, presented the plans of the Jack House Garden explaining indepth the overall plans and plans for Segment II. On motion of Councilman Griffin, seconded by Councilman Settle, to approve plans and introduce the following resolution: Resolution No. 4665 (1981 Series), a resolution of the Council of the City of San Luis Obispo appro- priating $11,800 for Segment II of the .Jack House Gardens. Passed and adopted on the following roll call vote: AYES: Councilmembers Griffin, Settle, Dovey, and Mayor Billig NOES: None ABSENT: Councilman Dunin Councilman Griffin stated he would be interested in getting additional , information on the dollars that are being matched and if it was staying at a reasonable level. He added that he felt that the Jack House Committee has done a tremendous job thus far. Councilman Dunin returned to his seat. 6. WATER RATE REPORT Gerald Peasley, rate consultant who prepared the water revenue "requirement study, then outlined step -by -step his report showing the purpose, design of rates, rate philosophy, types of water rates, development and design" and rate schedules, etc. His presentation used the basic assumption underlining his analysis that each user of the service should pay in accordance with its demands on the system. A measure of demand was determined by the size of the customer's meter and the amount of water consumed during the billing period. The cost of operating this system were determined from the recorded costs of 1980/1981, the budgeted costs for the current fiscal year and the projections for the next two .years. He stated there were several factors which significantly effected the proposed rates, the largest item affecting the revenue requirement was the change in determining capital costs. As with the sewer system, he was recommending that the city adopt a capital replacement reserve method with funding of capital costs, rather than the cash flow method previously used._ Other factors which affected the rate were the loss of fire hydrant revenue from the city's general fund (approximately $50,000 per year) and a reduction in ' interest earnings during the next three years. The reduction in interest was projected as the water fund cash reserves were used to pay for the installation of the hydroelectric plant. While a single rate option was being proposed as the most appropriate for the city, an alternate rate had been provided for "lifeline" service. Although the city was under no obligation to provide a lifeline rate, it was a requirement for utilities operating under the State's Public Utility Commission. He was not in City Council Minutes November 3, 1981 - 7:00 p.m. Page 11 agreement with staff who was recommending that the lifeline charge be adopted. Under the proposed rates, the city would realize an approximate 26 percent increase in revenue during the middle year 1982/83. That increase would be spread across the various classes of customer, ranging from 21 to 42 percent. Upon question from Councilman Griffin, he also explained the special rate problems related to Cal Poly. This was a rather complex formula, taking into account contribution towards the system's initial capital costs paid by Cal Poly. ' After brief discussion the City Council, upon general consensus, agreed upon using the lifeline approach as recommended by staff. Councilman Dunin questioned the inequity of also charging a utility tax in addition to trying to have the water rates pay for themselves. Gerald Peasley explained that he did not feel that it was that inequitable because the system is based upon the "what if's" if we contracted with a private utility company. Upon general consensus staff was directed to set a public hearing on the proposed water rate. E -1 AGREEMENT FOR EMPLOYER /EMPLOYEE NEGOTIATIONS After brief discussion it was moved by Councilman Dunin, seconded by Councilman Griffin, that the following resolution be introduced: Resolution No. 4666 (1981 Series), a resolution of the Council of the City of San Luis Obispo approving an agreement between the City and Becker & Bell for employer /employee negotiations through April 30, 1982, and rescinding Resolution No. 4644. Passed and adopted on the following roll call vote: 1 AYES: Councilmembers Dunin, Griffin, Dovey, Settle and Mayor Billig NOES: None ABSENT: None 11:50 p.m. City Council adjourned to Closed Session. 2:15 a.m. City Council reconvened in Regular Session. There being no further business to come before the City Council, Mayor Billig adjourned the meeting to Monday, November 9, 1981, at 12:10 p.m. APPROVED BY COUNCIL: 11/17/81 F�J amela Voges, C' y.Cle' rk