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07/01/20081 1 MINUTES SPECIAL MEETING OF THE CITY COUNCIL CITY OF SAN LUIS OBISPO TUESDAY, JULY 1, 2008 — 6:15 P.M. COUNCIL HEARING ROOM 990 PALM STREET SAN LUIS OBISPO, CALIFORNIA ROLL CALL: Council Members Present: Council Members Christine Mulholland, Vice Mayor Paul Brown, and Mayor Dave Romero were present at Roll Call. Council Member Carter participated via a conference call. Council Member Settle was seated at 6:20 p.m. City Staff Present: Ken Hampian, City Administrative Officer; Jonathan Lowell, City Attorney; and Audrey Hooper, City Clerk, were present at Roll Call. Other staff members presented reports or responded to questions as indicated in the minutes. ANNOUNCEMENT OF CLOSED SESSION TOPIC City Attorney Lowell announced the following Closed Session topic: CONFERENCE WITH LABOR NEGOTIATORS Pursuant to Government Code § 54957.6 AGENCY NEGOTIATORS: Rachael Hendricks, Monica Irons EMPLOYEE ORGANIZATIONS: Confidential Employees Management Employees San Luis Obispo City Employees' Association San Luis Obispo City Firefighters, Local 3523 San Luis Obispo Police Officers' Association PUBLIC COMMENT ON CLOSED SESSION ITEM Mayor Romero called for public comments. Dane Sense r, San Luis Obispo, expressed concern regarding the impact of the arbitrator's decision on the use of Measure Y funds. He said he would support and work on behalf of a community effort to initiate a ballot measure that would remove binding arbitration from the City's Charter. City Council Meeting Tuesday, July 1, 2008 Page 2 No other comments were forthcoming and the meeting adjourned to the Closed Session. CLOSED SESSION REPORT City Attorney Lowell reported on the Closed Session at the commencement of the Regular meeting as indicated below. The Special Meeting adjourned at 7:00 p.m. MINUTES REGULAR MEETING OF THE CITY COUNCIL CITY OF SAN LUIS OBISPO TUESDAY, JULY 1, 2008 — 7:00 P.M. COUNCIL CHAMBER, 990 PALM STREET SAN LUIS OBISPO, CALIFORNIA ROLL CALL: Council Members Present: Council Members Christine Mulholland and Allen Settle, Vice Mayor Paul 1 Brown, and Mayor Dave Romero were present at Roll Call. Council Member Carter participated via a conference call. City Staff Present: Ken Hampian, City Administrative Officer; Jonathan Lowell, City Attorney; and Audrey Hooper, City Clerk, were present at Roll Call. Other staff members presented reports or responded to questions as indicated in the minutes. CLOSED SESSION REPORT City Attorney Lowell reported that a Closed Session was held at 6:15 p.m. to discuss matters as indicated on the Closed Session agenda. Council provided direction to its labor negotiators. There was no further reportable action. PRESENTATIONS Finance and Information Technology Director Statler introduced the following new employees: Jennifer Thompson who was promoted to the position of Revenue Supervisor; Lorraine Colleran, Accounting Assistant I; Laurie Lucich, Accounting Assistant I; Kim Youngblood, Accounting Assistant I; Barbara Hage, Accounting Assistant I; and Miguel Guardado in absentia, Network Administrator. I City Council Meeting Tuesday, July 1, 2008 Page 3 Mayor Romero presented Parks and Recreation Director Kiser and Public Information ' Officer Lopez with a proclamation proclaiming July 2008 as Parks and Recreation Month. PUBLIC COMMENTS Gary Fowler, San Luis Obispo, discussed his objection to the proposed increases in sewer rates. Sifu Kelvin- Harrison, San Luis Obispo, discussed his ongoing concerns regarding personal harassment. Dane Sense r, San Luis Obispo, discussed his concerns related to the impact the arbitrator's decision will have on Measure Y funds and supported pursuing a ballot initiative to insure a similar situation doesn't arise in the future. The following people expressed concern regarding the operations of the SLO County Public Access Board. Their concerns included the treatment of producers at SLOCOPA Board meetings, the lack of diversity on the station, discriminatory behavior, failure on the part of Charter Communications to comply with its Franchise Agreement to provide public access, inaccuracies contained in the City Clerk's report to Council, and failure of SLOCOPA to comply with its agreement with the City. Ron Bearce, San Luis Obispo Kim Harris, San Luis Obispo, Board of Sharing the Dream Thomas Abia, Cal Poly Student Patrick Germany In response to Council Member Brown, Mr. Bearce explained that he is asking for further mediation of these concerns at a public forum. A brief discussion followed during which Council Member Mulholland expressed concern regarding the continuing charges related to discrimination. Council directed this matter to the Human Relations Commission for the purpose of considering the charges of discrimination on the part of Charter Communications and the SLOCOPA Board. Council Member Carter reminded Council that the City does not have control of this independent organization, and that the only decision Council can ultimately make is related to its contract with SLOCOPA. Tent/ Mohan, San Luis Obispo, spoke in support of the results of binding arbitration and opposed an initiative removing binding arbitration from the City's Charter. Arnold Ruiz, San Luis Obispo, discussed his concems regarding the condition of Laguna Lake. City Council Meeting Tuesday, July 1, 2008 Page 4 APPOINTMENTS Al. APPOINTMENTS TO ADVISORY BODIES. ' Council Member Brown reported on the Architectural Review Committee and Bicycle Advisory Committee interviews and recommendations. Mayor Romero reported on the recommendation for the appointment to the SLOCOG Citizens' Transportation Advisory Committee. ACTION: Moved by Settle /Mulholland to: 1. As recommended by Council Subcommittee members Paul Brown and Allen Settle, appoint Christopher Weber to the Architectural Review Committee for an unexpired term ending on March 31, 2011. 2. As recommended by Council Subcommittee members Paul Brown and Christine Mulholland, appoint Matt Colonell to the Bicycle Advisory Committee for an unexpired term ending on March 31, 2009. 3. As recommended by Mayor Romero, appoint John Schutz to serve as the City's representative on the San Luis Obispo Council of Governments ( SLOCOG) Citizens' Transportation Advisory Committee (CTAC) for an unexpired term ending on March 31, 2012; motion carried by a roll call vote of 5:0. CONSENT AGENDA Council Member Mulholland asked that item C3 be pulled from the Consent Agenda for 1 discussion. She referred to item C10 and said that she will not oppose the recommendation because of its value to the City's open space program. However, she had concerns that if the Irish Hills property is annexed to the City, the Filipponi -Den Bow property will become contiguous, which could lead to its future annexation and development on the edge of the city, which she opposes. ACTION: Moved by Settle /Brown to approve, with the exception of item C3, the Consent Agenda as indicated below. Cl. MINUTES OF JUNE 3 AND 11, 2008. ACTION: Moved by Settle /Brown to waive the oral reading and approve, with revisions recommended in a red file memo, the June 3, 2008, minutes; motion carried by a roll call vote of 5:0. C2. FBI ACTION: Moved by Settle /Brown to adopt Resolution No. 10001 (2008 Series) authorizing the San Luis Obispo County Assessor to assess the amounts due to San Luis Garbage Company on delinquent accounts for provision of solid waste collection and disposal services as described within Municipal Code Section 8.04.070 as liens against the properties involved; motion carried by a roll call vote of 5:0. City Council Meeting Page 5 Tuesday, July 1, 2008 1 C3. RESPONSE TO GRAND JURY REPORT ON NACIMIENTO PROJECT Terry Mohan, San Luis Obispo, suggested there is enough water in the City's plan to last until build out and objected to approval of this project without a vote by the citizens. Council Member Mulholland stated her disagreement with the Agenda Report, particularly with item B in the response to the Grand Jury. She suggested it should not be difficult to include information in customers' utility bills that would indicate what amount is attributable to the Nacimiento project.. ACTION: Moved by Brown /Settle to authorize the Mayor to send a letter responding to questions raised by the San Luis Obispo Grand Jury relative to the Nacimiento Water Project; motion carried by a roll call vote of 4:1 (Mulholland opposed). C4. PREFUMO CREEK BICYCLE AND PEDESTRIAN BRIDGE, SPECIFICATION NO 90806. ACTION: Moved by SettleBrown to: 1. Authorize the Finance Director to approve a purchase order in the amount of $72,239 with Wallace Group for design services of "Prefumo Creek Bicycle and Pedestrian Bridge, Specification No. 90806." 2. Approve the transfer of $39,239 from the construction phase to the design phase of this project to support these services; motion carried by a roll call vote of 5:0. C5. PARK RESTROOM REPLACEMENTS PROJECT= LAGUNA LAKE. AND SANTA ROSA PARK RESTROOMS. ACTION: Moved by Settle /Brown to: 1. Appropriate $58,057 in approved State grant revenue to the project budget. 2. Authorize the transfer of $58,000 from the project construction account to the project design account to provide for Laguna Lake and Santa Rosa restroom design fees. 3. Award a Purchase Order to BFGC Architecture in the amount of $34,620 for restroom design services for Laguna Lake Park. 4. Authorize the Finance Manager to execute the Purchase Order; motion carried by a roll call vote of 5:0. C6. EMERGENCY SERVICES CONTRACT WITH CALIFORNIA POLYTECHNIC STATE UNIVERSITY (UNIVERSITY). ACTION: Moved by Settle /Brown to approve a five year contract (July 1, 2008 until June 30, 2013) with California Polytechnic State University (University) for emergency response services to the University and authorize the Mayor to execute the contract; motion carried by a roll call vote of 5:0. C7. REALLOCATION OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM FUNDS. City Council Meeting Page 6 Tuesday, July 1, 2008 ACTION: Moved by Settle /Brown to, as recommended by the Human Relations Commission: 1. Authorize the re- allocation of a total of $25,000 in CDBG funds from t the 2005, 2006, and 2007 program years from the Economic Opportunity Commission (EOC) to HomeBase in order to continue consultant services for development of a 10- Year -Plan to End the Chronic Homelessness. 2. Forward the Council's funding recommendations for amending the 2005, 2006, and 2007 Action Plans to the County Board of Supervisors; motion carried by a roll call vote of 5:0. C8. RESOLUTION AND AGREEMENT TO APPROVE A LOT LINE ADJUSTMENT TRANSFERRING A PORTION OF CITY OWNED PROPERTY TO DEPOT SQUARE, LP. ACTION: Moved by Settle /Brown to adopt Resolution No. 10002 (2008 Series) authorizing the transfer of approximately 8,184 square feet of City owned property to Depot Square, LP. 2. Authorize the Mayor to execute the Real Property Exchange Agreement setting forth the terms of the property transfer and a separate hold harmless and indemnification agreement, to be drafted at the direction of and subject to the approval of the City Attorney, relating to possible site contamination; motion carried by a roll call vote of 5:0. C9. LEASE OF REAL PROPERTY — 45 PRADO ROAD. ACTION: Moved by Settle /Brown to adopt Resolution No.. 10003 (2008 Series) authorizing the Mayor to execute an agreement for the lease of unimproved City -owned property at 45 Prado Road to Mountain Cascade, Inc. at a rate of $500 per month for ten months; motion carried by a roll call vote of 5:0. C10. AUTHORIZATION TO ENTER OPTION AGREEMENT FOR PURCHASE OF PROPERTY FROM IRISH HILLS PLAZA EAST, LLC. ACTION: Moved by Settle /Brown to: 1. Approve an Option Agreement with Irish Hills Plaza East, LLC (Phyllis Madonna, owner), for the purchase within the next two years of approximately 310 acres adjacent to the Irish Hills Nature Reserve and authorize the Mayor to execute the Option Agreement. 2. Direct Staff to pursue grant funding and local donations to meet a substantial portion of the purchase price; motion carried by a roll call vote of 5:0. BUSINESS ITEMS 1. 2008 -2009 HUMAN RELATIONS COMMISSION (HRC) GRANTS -IN -AID (GIL FUNDING RECOMMENDATIONS. Human Resources Director Irons and Human Relations Commission Chair Lamb made the staff presentation. City Council Meeting Tuesday, July 1, 2008 Public Comments 1 No comments were forthcoming. ---end of public comments— Page 7 Council Members expressed appreciation to the HRC for its work on this project and indicated their support of the funding recommendations. ACTION: It was moved by Brown /Mulholland to, as recommended by the HRC, approve the 2008 -2009 GIA allocations and authorize the City Administrative Officer to execute agreements with each grant recipient; motion carried by a roll call vote 5:0. 2. SECOND MODIFICATION TO OPTION AGREEMENT FOR THE PURCHASE CHINATOWN PROJECT. CAO Hampian, Economic Development Manager Clark, Community Development Director Mandeville, Consultant Allan Kotin, and City Attorney Lowell made the staff presentation. Consultant Kotin responded to Council's questions. Council recessed at 9:02 p.m. and the meeting reconvened at 9:15 p.m. with all members present (Council Member Carter via teleconference). Public Comments Mark Rawson, Project Architect, representing the Copelands, spoke on behalf of and urged Council to support the project. David Brodie, representing Save Our Downtown Association, said that the Association members think the sale of the property should be conditioned on: 1) preservation and restoration of the master list of historical properties on the site; 2) restricting the height of buildings to not exceed 50 feet overall; and 3) increasing the mix of affordable housing to exceed the City's minimim requirement. Elizabeth Thyne, San Luis Obispo, opposed the sale of the property at the proposed price and expressed concern that there is no guarantee the height of the proposed buildings won't increase or the Copeland's will not sell to another developer. Dorothy Graves expressed concern about public perception if Council agrees to the sale at the proposed price. She questioned whether there will be enough parking spaces for the condominiums that will be built as part of the project. Denise Kangas objected to proceeding with the Chinatown project because she thought it would result in the City losing its uniqueness. City Council Meeting Page 8 Tuesday, July 1, 2008 Dan Carpenter, San Luis Obispo, expressed confidence in the City's negotiation process, and raised a few issues that he thought should be considered as the City proposes to move forward with the project. Linda Groover, San Luis Obispo, objected to the sale price. Boz Schrage, San Luis Obispo, also objected to the sale as proposed. Sean Beachamp, Grover Beach, said he owns a business in the City and spoke in support of the project. Jim Duenow objected to selling the property for less than the appraised value and offered to buy it for $4 million with no contingencies. In response to Council Member Settle, he said that he had no plans for the property. John Dunn, San Luis Obispo, spoke in support of the sale and discussed the need to maintain a vital downtown. He also spoke about the need to revitalize Monterey Street. He referenced the merits of the project and pointed out that it will help to accomplish a long -term City goal. Teresa Smith, San Luis Obispo, wanted assurance that the project would not exceed 50 feet and wanted the project to reflect the character of Chinatown and the cultural heritage. Lori Miller, Muzio's Grocery, said she fully supported supported the Chinatown project. Careleta Ellerson, San Luis Obispo, also fully supported the project. Lindsay Beeson, San Luis Obispo, said she also supported the project. Karen Kile, San Luis Obispo, said the vitality of the downtown is critical to the City's future, spoke in support of the Copelands investment in the community and expressed her hope that Council would support the project. Randy Adler, San Luis Obispo, talked about the need to revitalize Monterey Street. He explained why he did not think the parking lot should be an issue. He also explained why he did not object to the purchase price. Carolyn Dickey, San Luis Obispo, expressed concern about the changes to the downtown and small shops going out of business. She also thought that the proposed sale price would allow the City to justify acquiring other property for less than market value. Brett Cross, San Luis Obispo, concurred with Mark Rawson and John Dunn regarding the merits of the project. He suggested that the sale price should be somewhere between the appraised value and what's being offered and that the additional funds could be used to enhance the community. City Council Meeting Page 9 Tuesday, July 1, 2008 Tent/ Mohan, San Luis Obispo, objected to the sale price, questioned the meaning of a ' residential component referenced in the agenda documents, objected to delaying the project if the sale occurs, and objected to the 50 -foot height. Dane Sense r, San Luis Obispo, spoke in support of the research that went into the proposal, of the Copelands' contributions to the community, and of the Council's approval of the project. Deborah Cash, Executive Director of the Downtown Association, discussed the Association's long- standing support of this project and the long -term benefits that will result. She urged Council to approve the recommendation. Gary Fowler, San Luis Obispo, said he did not think the project makes fiscal sense for the City, and questioned why the project needs to proceed so rapidly. He also suggested the Council should wait to act on this matter until the residence issue of one of the Council Members is clarified by the Attorney General. Tom Creel, San Luis Obispo, discussed the history of the downtown when it was struggling, noted projects that failed and the difference the Copelands have made in the downtown, and spoke of the need to move forward with the project. —end of public comments- ' Mr. Kotin and staff responded to questions raised during the public comment period. Council Member Brown discussed the financial benefits to the City that will result from building this project and the synergy it will create in the downtown, thereby further increasing sales tax. He said that the project is an investment in the City and in the downtown, the developer has a history of being good partners with the City, and that he would support the recommendation. Council Member Mulholland noted that a number of mixed use projects are in process and suggested that revitalization in the downtown is occurring, particularly with the retrofitting projects that are underway. She objected to the sale price and said that the community has the right to demand clear benefits in the form of conditions such as assurance of preservation of buildings on the Master List of Historic Buildings and more affordable housing. She suggested projects need to pay for their own impacts and costs. She noted that other properties are being redeveloped, remodeled, upgraded and retrofitted without a City subsidy. Council Member Carter explained that while he supported the project, he objected to the price. He explained why he did not believe the City was a getting fair value for its property. He also expressed concern regarding the negotiation process and that additional research wasn't done before the CAO recommendation was made. 1 City Council Meeting Page 10 Tuesday, July 1, 2008 Council Member Settle discussed the history of the downtown from the Mission Plaza to the Court Street project and the Downtown Center. He said he understood the , concerns raised, but pointed out that the Copelands must meet all conditions and standards for the sale to occur. He pointed out the synergy that will occur in the downtown with this project and discussed the economics of urban land use planning. He supported revitalizing the downtown rather than encouraging urban sprawl. Mayor Romero also discussed the history of the downtown and the positive changes that have resulted from the Copelands' projects. He discussed the deterioration of Chinatown and that area of Monterey Street, and noted the urgent need to continue downtown revitalization. He explained why he thought the $8.8 million appraisal was fallacious and based on impossible assumptions. He suggested that if Council does not proceed with the recommendation, there will not be another project forthcoming in the near future. He noted the revenue the City will receive with this project. In response to a comment made by Mayor Romero regarding the price increase, Council Member Carter stated for the record that the price of the project has actually gone down because the public parking mitigation measure is part of the purchase price resulting in a decrease in price from $5.6 to $3.7 million. Finance & IT Director Statler explained why this is a question of how the baseline situation is defined. He pointed out that developers pay for the impact of their projects, not the loss of the prior use. In a typical transaction, the mitigation for the prior use would reduce the price. Council Member Mulholland disagreed that it was not known that there would be environmental mitigations. In response to comments raised by Council Member Mulholland regarding in -lieu fees for parking, Economic Development Manager Clark explained that the parking provided for this project will meet the same standards that are required of any developer in the Downtown. Discussion followed regarding parking requirements and staff noted that the project must be fully designed before it is known what the parking requirements will actually be. Mr. Kotin and Finance & IT Director Statler clarified the impacts of mitigations resulting from the prior use of a property on the market value of the price of the property. ACTION: It was moved by Settle /Brown to approve a Second Modification to Option to Purchase Real Property Agreement (hereinafter Amended or Modified Option Agreement) with SLO Chinatown, LLC, successor in interest to San Luis Obispo Court Street, LLC (hereinafter Copeland or Copelands) related to the Chinatown project and authorize the Mayor to execute the Modified Option Agreement; motion carried by a roll call vote 3:2 (Carter /Mulholland opposed). 1 City Council Meeting Page 11 Tuesday, July 1, 2008 ' 3. REVIEW OF SEWER CONSUMPTION AND REVENUES. Utilities Director Moss, Senior Administrative Analyst Bishop and Consultant Sean Koom, HDR Engineering, made the staff presentation. They and Finance & IT Director Statler responded to questions... Public Comments Tent Mohan, San Luis Obispo, suggested that Cal Poly students and landlords should be charged the commercial rate. He objected to the Proposition 218 notification process as well as to the proposed increase since he thought most of it would to go to new development. —end of public comments— Council Members Brown and Carter, and Mayor Romero commented in support of the recommendation, noting that the increase is what the fee should have been at the time the analysis was originally done. Council Member Mulholland expressed unhappiness with the report, but acknowledged that users should pay for the system and that there is a need to increase the fees 1 slightly at this time. ACTION: It was moved by Mulholland /Brown to: 1. Review and accept the sewer consumption and revenue analysis. 2. Direct staff to provide notice to all sewer rate customers, of the proposed $0.50 increase to the sewer volume charge from $5.56 /CCF to $6.06 /CCF to be effective September 3, 2008, pending completion of the Proposition 218 notification and protest period and final rate adoption at a public hearing to be held on September 2, 2008; motion carried by a roll call vote of 5:0. 4. SENATE BI City Attorney Lowell made the staff presentation. Council Member Mulholland spoke in support of SB 1420. Council Member Settle stated his opposition because SB 1420 will result in another unfunded mandate. He said he would, however, support Assembly Bill (AB) 2572, which would allow restaurant owners to provide nutritional information in another manner. Council Member Brown also opposed SB 1420, citing its negative impact on existing businesses. Council Member Carter spoke in support of SB 2572. City Council Meeting Page 12 Tuesday, July 1, 2008 Public Comments None were forthcoming. —end of public comments— ACTION: It was moved by Settle /Brown to take no action on this matter; motion carried by a roll call vote of 3:2 (Carter /Mulholland opposed). 5. APPEAL OF TREE COMMITTEE'S DECISION TO UPHOLD THE FINE ASSESSED AGAINST MARK.ALONZO & HANA NOVAK FOR ILLEGALLY REMOVING A TREE WITHOUT A PERMIT AT 1740 SAN LUIS DRIVE. Public Works Director Walter introduced this item, following which Parks Maintenance Supervisor Pellemeier made the staff presentation. Parks Maintenance Supervisor Pellemeier and City Arborist Combs responded to questions. Public Comments Appellants Hang Novak and Mark Alonzo spoke in support of their appeal and responded to questions. —end of public comments— ' Council Members spoke in support of staffs recommendation to deny the appeal, expressing concern particularly regarding the appellants' non - responsiveness to the City's notification as well as their disregard of the City's regulations. City Attorney Lowell asked Council to modify the resolution to include Section 3, which would require the appellants to plant a tree in their front yard following consultation with the City Arborist, and Section 4, which would require the appella..nts to immediately comport with City property development and maintenance standards, and to modify the new brick paver area accordingly so as not to allow vehicular parking in that location. ACTION: It was moved by Mulholland /Brown to: adopt Resolution No. 10004 (2008 Series): 1) denying the appeal from the Tree Committee's decision to uphold a fine assessed against property owners Mark Alonzo and Hava Novak for illegally removing a tree without a permit at 1740 San Luis Drive, thereby affirming imposition of the previously levied fine, 2) requiring appellants to plant, following consultation with the City Arborist, a replacement tree in the front yard in place of the second dead tree there, and 3) requiring appellants to immediately comport with City Property Development Standards (Section 17.16.020 A 1) and Property Maintenance Standards (Section 17.17.050) and modify new brick paver area accordingly so as to not allow vehicular parking there; motion carried by a roll call vote of 5:0. ' City Council Meeting Tuesday, July 1, 2008 Page 13 COUNCIL LIAISON REPORTS Because of the lateness of the hour, Council Liaison Reports were continued to the meeting of July 15, 2008. COMMUNICATIONS Communications items were continued to the meeting of July 15, 2008. There being no further business to come before the City Council, Mayor Romero adjourned the meeting at 12:20 a.m. Audrey Ho er City Clerk APPROVED BY COUNCIL: 08/19/08 1 1