SANTA ROSA CITY COUNCIL MEETING MINUTES
TUESDAY, JANUARY 21, 2003
COUNCIL CHAMBER, CITY HALL, 100 SANTA ROSA AVENUE
REGULAR MEETING


3:00 P.M. (MAYOR'S CONFERENCE ROOM - ROOM 10)

1. CALL TO ORDER AND ROLL CALL OF JOINT STUDY SESSION

Vice Mayor Bender called the meeting to order at 2:30 p.m. in the Mayor's Conference Room. Present: Councilmembers Martini, Rabinowitsh, Evans, Condron and Blanchard. Board of Public Utilities members present: Dick Dowd, Mike Downey and Ross Liscum.

2. STUDY SESSION

2.1 CITIZEN PUBLIC APPEARANCES (PUBLIC COMMENTS WILL BE LIMITED TO JOINT STUDY SESSION TOPIC(S)

2.2 JOINT STUDY SESSION WITH THE BOARD OF PUBLIC UTILITIES - MASTER PLAN AND REGULATORY CONSTRAINTS FOR INCREMENTAL RECYCLED WATER PROGRAM (IRWP)

City staff and consultants provided the City Council and Board of Public Utilities with information on the master planning approach which will take place concurrently with the preparation of the EIR for the IRWP, as well as regulatory constraints that will be addressed in the study program.

2.3 ADJOURN JOINT STUDY SESSION

3. ANNOUNCEMENT OF CLOSED SESSION ITEM(S) AND ADJOURNMENT TO CLOSED SESSION(S) (MAYOR'S CONFERENCE ROOM - ROOM 10)

3.1 CONFERENCE WITH REAL PROPERTY NEGOTIATOR

Properties: 0 Finley Avenue (A.P.N. 035-141-013)
Agency Negotiator: Josh Maresca, Right-of-Way Agent
Negotiating Parties: United States of America
Under Negotiation: Price and terms of payment

3.2 CONFERENCE WITH REAL PROPERTY NEGOTIATOR

Property: AP Nos: 010-680-003 (93 Stony Circle)
Agency Negotiator: Josh Maresca, Right of Way Agent
Negotiating Parties: Evans Lumber Company LLC
Under Negotiation: Price and terms of payment

3.3 CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION

Initiation of litigation pursuant to subdivision (c) of Section 54956.9

One potential case.

3.4 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION

(Subdivision (a) of Government Code section 54956.9)

Name of case: Sonoma County Housing Advocacy Group, et al. vs. City of Santa Rosa, et al.

3.5 ADJOURN CLOSED SESSIONS AND RECONVENE TO OPEN SESSION IN CITY COUNCIL CHAMBERS

4:02 P.M. (CITY COUNCIL CHAMBERS)

4. ANNOUNCEMENT OF ROLL CALL

Councilmembers were present as noted above, with Mayor Wright and Councilmember Rabinowitsh being absent.

5. REPORT ON STUDY SESSION(S) AND CLOSED SESSION(S)

City Attorney Brien Farrell stated that the City Council had met in Closed Session regarding Item 3.3 and reported the details of a settlement and release agreement with Empire Waste Management that Council had authorized. There were no other announcements to be made at this time.

6. PROCLAMATIONS/PRESENTATIONS - None.

7. CITIZEN PUBLIC APPEARANCES

Jack Osborne, 5636 Del Monte Court, stated his objection to deeming certain manufacturers unacceptable, suggesting that the best pricing cannot be obtained by the City when that is done. He recommended wastewater treatment strategies and referred to the posting of requests for proposals on the City's website.

Anthony Severa, spoke regarding the rights of Americans and problems caused by immigration.

Ken Hart, Dignity of Man, introduced a singer he had brought with him and spoke of the travails of homelessness.

Mark Robinson sang "Leaving on a Jet Plane."

Nancy Wang, 3550 Ridgeview Drive, speaking as the President of the Redwood Empire Chinese Association, encouraged the Council and others to support the Association's efforts in the celebration of Chinese New Year. She described plans for the event, stated how the funds raised would be spent and distributed a brochure.

Esteve Andre, 2419 Vallejo Street, referred to a previous Council action regarding a sculpture in his front yard, deeming it to be artwork and not a structure. He said he was now being required to get a building permit, listed other sculptures throughout the City that are not required to be permitted and stated his objection to being singled out.

Marshall Bankert stated he would wait and speak under Item 11.2 regarding the refuse franchise.

Vice Mayor Bender responded to Mr. Osborne, stating that the City's purchasing department was very scrupulous in its activities and directed Mr. Farrell to respond to his questions. She expressed her sympathy to Mr. Severa for his situation and thanked Ms. Wang for announcing her event and for the after-school program.

Mr. Kolin, in response to Mr. Andre, announced that the City was in the process of issuing permits for all of the City's public art pieces.

8. APPROVAL OF MINUTES - December 3, 2002 and January 7, 2003 Regular City Council Meetings

Councilmember Evans noted the minutes incorrectly state She was absent from the January 7, 2003 meeting and requested the minutes be corrected to reflect her attendance.

MOVED by Councilmember Condron, seconded by Councilmember Martini, carried 4-1-2 (Mayor Wright and Councilmember Rabinowitsh absent, Councilmember Blanchard abstaining) to approve the minutes of the December 3, 2002 City Council Meeting as submitted.

MOVED by Councilmember Martini, seconded by Councilmember Evans, carried 4-1-2 (Mayor Wright and Councilmember Rabinowitsh absent, Councilmember Condron abstaining) to approve the minutes of the January 7, 2003 City Council Meeting as corrected.

9. STATEMENTS OF ABSTENTION BY COUNCILMEMBERS

Councilmember Martini stated that he would be taking part in the consideration of the item listed under 11.5 because adoption of the proposed fee would not impact his winery business.

10. CONSENT ITEMS

Jack Osborne, 5636 Del Monte Court, regarding Item 10.2, objected to the Public Works Director authorizing acquisition of real property without public review.

MOVED by Councilmember Condron, seconded by Councilmember Martini, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent) to adopt and waive the reading of the text of the resolutions in Items 10.1 through 10.2 as follows:

10.1 RESOLUTION - APPROVAL OF THE MASTER AGREEMENT FOR STATE FUNDED PROJECTS

RESOLUTION NO. 25531 ENTITLED: RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA APPROVING THE MASTER AGREEMENT ADMINISTERING AGENCY-STATE AGREEMENT FOR STATE FUNDED PROJECTS, NO. 000028

10.2 RESOLUTIONS - PUBLIC WORKS DIRECTOR AND CITY ENGINEER DESIGNATIONS

RESOLUTION NO. 25532 ENTITLED: RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA AMENDING CITY COUNCIL POLICY 100-07, "AUTHORIZATION OF CONTRACT CHANGE ORDERS ON PUBLIC WORKS CONTRACTS"

RESOLUTION NO. 25533 ENTITLED: RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA AUTHORIZING ACQUISITION OF PROPERTY BY NEGOTIATION FOR THE CONSTRUCTION OF PROJECTS APPROVED FOR THE CAPITAL IMPROVEMENT PROGRAM, WASTEWATER UTILITY, SEWER UTILITY, WATER UTILITY, TRANSIT AND PARKING, ASSESSMENT DISTRICTS, PARKS AND OTHER PROJECTS REQUIRING ACQUISITION OF REAL PROPERTY

11. SCHEDULED ITEMS

MOVED by Councilmember Martini, seconded by Councilmember Condron, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to adopt and waive the reading of the text of the resolution in Item 11.1 as follows:

11.1 REPORT - CHANGE FOR KIDS PROGRAM

Ellen Bailey, Youth Advocate, gave the staff presentation, stating that authorization was being sought for the use of the utility billing process to promote the "Change for Kids" program. She said that several other cities had implemented such programs, wherein customers round up their billing amount to the nearest dollar, and that the Board of Public Utilities had approved it. She reported that the change would be deposited into a special trust account for the express purpose of funding after school programs operated by the City's Recreation and Parks Department.

RESOLUTION NO. 25534 ENTITLED: RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA SUPPORTING THE USE OF UTILITY BILLING PROCESS TO PROMOTE THE "CHANGE FOR KIDS PROGRAM"

11.2 REPORT - TRANSFER OF REFUSE FRANCHISE FROM WASTE MANAGEMENT TO NORTH BAY CORPORATION

Marc Richardson, Assistant City Manager, gave the staff report, stating that consent was being sought to transfer the refuse franchise from Waste Management to North Bay Corporation, enter into a new franchise agreement with North Bay Corporation and establish new refuse rates. He reminded Council of preliminary actions that had been taken and the activities of the Refuse Ad-Hoc Committee.

Bobbi Hoff, Committee member, reported on the three main negotiation points which were that North Bay wanted to include the remaining three years of Waste Management's contract under the new contract, to add new services by July 1, 2003, and to reduce the current Waste Management's collection rates. She displayed a slide detailing the proposal and rate changes and stated that the Committee recommended approval.

Mr. Richardson stated that Council had authorized the settlement agreement with Waste Management and reviewed its content. He reported that the triennial audit which is used to determine base rates had been postponed during the RFP process, and that, as a result, rate increase requests totaling 13.2% had been delayed, resulting in a contingent liability to the City. He said another discovery of the audit was a Waste Management accounting practice wherein permanent debris box collection, which would be subject to fees under the franchise agreement, were being categorized as temporary, which are not subject to fees. He detailed the process by which it was estimated that $340,000 in revenue had been lost to the City. He said that, under the terms of the settlement agreement, all pending requests for increases were withdrawn by Waste Management therefore removing any contingent liability to the City to provide a retroactive rate increase. He explained that the City also consented to the assignment of the remaining years of the solid waste collection and recycling franchise to North Bay and that Waste Management will reimburse the City for the underpayment of franchise fees associated with the collection of permanent debris boxes that had been classified as temporary. He stated that approving the settlement agreement would be preferable to litigating the matter due to time and financial constraints.

In response to a question from Councilmember Martini, Mr. Richardson explained the process by which the rates would be set under the new agreement and recommended an option whereby current and future rates would be blended, resulting in a $1.1 million aggregate savings to ratepayers. In response to a question from Councilmember Blanchard, Mr. Richardson stated that the City would cooperate with North Bay on a public information campaign.

PUBLIC COMMENT

Marshall Bankert, 1645 Slater Street, referred to a June 11, 2002 statement made by Rick Powell of North Bay Corporation, and inquired whether the employees of Waste Management were going to be offered employment by North Bay as promised.

Mr. Powell responded that it was North Bay's intent to offer employment to any displaced Waste Management employees. He read aloud a letter he had distributed to Council regarding the offer of employment and detailing salary and benefits.

MOVED by Councilmember Evans, seconded by Councilmember Martini, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to adopt and waive the reading of the text of the resolution in Item 11.2 as follows:

RESOLUTION NO. 25535 ENTITLED: RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA AUTHORIZING THE EXECUTION OF A SOLID WASTE COLLECTION AND RECYCLING FRANCHISE AGREEMENT WITH NORTH BAY CORPORATION

MOVED by Councilmember Evans, seconded by Councilmember Martini, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to adopt and waive the reading of the text of the resolution in Item 11.2 as follows:

RESOLUTION NO. 25536 ENTITLED: RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA APPROVING ASSIGNMENTS OF, AND AN AMENDMENT TO THE CITY'S REFUSE COLLECTION FRANCHISE AGREEMENT

MOVED by Councilmember Evans, seconded by Councilmember Martini, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to adopt and waive the reading of the text of the resolution in Item 11.2 as follows:

RESOLUTION NO. 25537 ENTITLED: RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA ESTABLISHING SOLID WASTE COLLECTION AND RECYCLING RATES IN THE CITY OF SANTA ROSA

MOVED by Councilmember Evans, seconded by Councilmember Martini, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to introduce and waive the reading of the text of the ordinance in Item 11.2 as follows:

ORDINANCE ENTITLED: ORDINANCE OF THE COUNCIL OF THE CITY OF SANTA ROSA AMENDING SECTION 9-12.260 OF THE SANTA ROSA CITY CODE TO PROVIDE THAT RATE SCHEDULES FOR COLLECTIONS UNDER CHAPTER 9-12 SHALL BE ESTABLISHED BY RESOLUTION OF THE CITY COUNCIL

11.3 REPORT - PENSION OBLIGATION REFUNDING BONDS

Bruce McConnell, Accounting Officer, gave the staff presentation, stating that approval to issue Pension Obligation Refunding Bonds was being sought. He provided background, stating that their purpose was to refund the unfunded liability with the CalPERS retirement plan. He said the sale of bonds would result in an annual cost savings over the twenty-year amortization period of the unfunded liability.

Sohail Bengali, Stone and Youngberg, discussed the financing structure and displayed explanatory slides. He said the unfunded liability is determined through an actuarial model and further described how a cost savings would be achieved. He said the next step would be to enter into a validation process and that, over the next few months, the market would be monitored. He stated that if it remains the same or improves, the financing will be conducted but if conditions change, the financing would be put on hold.

Bill Madison, Jones Hall, explained that the primary document before Council was an Indenture of Trust under which both the variable and fixed rate bond series would be issued, as well as ancillary documents required for the process. He said the resolution also authorized the commencement of the validation procedure, a process that would begin within the next few weeks. He stated that the maximum amount of the combined fixed rate and variable rate bonds would be $55 million.

MOVED by Councilmember Evans, seconded by Councilmember Blanchard, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to adopt and waive the reading of the text of the resolution in Item 11.3 as follows:

RESOLUTION NO. 25538 ENTITLED: RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA AUTHORIZING THE ISSUANCE OF BONDS TO REFUND CERTAIN PENSION OBLIGATIONS OF THE CITY, APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF AN INDENTURE OF TRUST, REIMBURSEMENT AGREEMENT, REMARKETING AGREEMENT, OFFICIAL STATEMENT, AND AUTHORIZING JUDICIAL VALIDATION PROCEEDINGS RELATING TO THE ISSUANCE OF SUCH BONDS

MOVED by Councilmember Condron, seconded by Councilmember Blanchard, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to add Item 11.4 to the agenda.

*11.4 REPORT - VEHICLE LICENSE FEE REVENUES

City Manager Jeff Kolin made the staff presentation, reporting that he and Mayor Wright had met with Assembly Member Wiggins and Senator Chesbro regarding the restoration of the Vehicle License Fee (VLF) to its former level. He said the VLF was an important revenue source to the City which represents a significant portion of the General Fund. He recommended approval of a resolution urging the California Legislature to reject the Governor's proposed shift of local VLF revenues and honor the 1998 commitment to restore the VLF.

Councilmember Evans pointed out an omission in the resolution language and recommended adding a sentence strongly urging the Governor not to abandon the VLF backfill.

MOVED by Councilmember Condron, seconded by Councilmember Martini, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to adopt and waive the reading of the text of the resolution in Item 11.4 as amended:

RESOLUTION NO. 25539 ENTITLED: A RESOLUTION URGING THE CALIFORNIA LEGISLATURE TO REJECT THE GOVERNOR'S PROPOSED SHIFT OF LOCAL VEHICLE LICENSE FEE REVENUES AND TO HONOR THE 1998 COMMITMENT TO RESTORE THE VEHICLE LICENSE FEE

5:00 P.M.

11.5 PUBLIC HEARING - PROPOSED ALCOHOL SALES PERMIT FEE

Police Chief Mike Dunbaugh gave the staff report, stating that approval was being sought for the passage of an ordinance assessing a fee to Alcohol Beverage Control (ABC) licensed establishments for the purpose of funding alcohol regulation compliance, enforcement and education programs, which in the past had been funded through state grants which are no longer available. He explained that this item had previously come before Council and had been revised to reflect Council direction. He said that a community committee comprised of license holders had met over the intervening months and designed the proposed fee structure. He detailed the annual costs of alcohol-related enforcement and spoke about the programs which make up the Department's Alcohol Education and Compliance Program.

PUBLIC HEARING (5:47 P.M.)

Evelyn Smith, owner of Wine Stars, 3451 Airway Drive, stated her objection to the proposed fees and said that She had not been informed of previous meetings. She said that alcohol abusers should be held accountable for their own actions, rather than sellers being puniShed. She concluded by stating that the bulk of her sales is outside the City limits and therefore, She and businesses like hers should be exempt from the proposed fee.

Ann Hall, 7-11 Stores, 2339 Gold Meadow Way, Gold River, stated She is an independent operator with six stores in Santa Rosa and said She opposes the fee. She inquired whether officers would be added as a result of the fee.

Lance Hastings, California Grocers Association, Government Relations, 555 Capitol Mall, #235, Sacramento, referred to a letter to Council stating opposition to the proposed fee and detailed the objections. He said that all licensees already pay a fee to the ABC and that with the City's proposed fee, the cost of selling alcoholic beverages would increase as much as four times. He suggested more focus be placed on the violators than on the retailers and said that the fee should never exceed what is paid to the State.

Joe Romano, 4016 Quartz Drive, owner of Organic Groceries, stated opposition to the fee, citing the many fees that an alcohol retailer is already subject to. He said that departments should not be allowed to assess fees to pay for programs.

Gerard Giudice, president of Restaurant Association of the Redwood Empire, gave history on the Association's response to the proposed fee and his participation in the Committee meetings. He said that while the fin al fee structure is a compromise, he had misgivings regarding notification, ordinance language and misrepresentation of Committee findings. He concluded by stating that the Association would not endorse assessment of the fee.

Bill Katsaros, 2306 Warwick Drive, operator of the Trophy Room, said his business was one of eight licensees who do not provide food service. He stated his objection to the method of fee collection being proposed and inquired why the sale of alcoholic beverages is exempted from City business tax.

Hearing no further testimony, the Vice Mayor closed the public hearing at 6:07 p.m.

In response to Mr. Katsaros' question, Ron Bosworth stated that the business license is a tax and is thereby restricted by the State from including gross receipts. Regarding the use of the funds for specific purposes, he stated that a nexus had been developed linking the fee to the cost of providing services.

In response to Councilmember Martini's inquiry regarding the disparity between the loss of $100,000 in grant funds and the $175,000 estimated to be raised by the new fee, Chief Dunbaugh stated that the actual estimate of costs incurred from alcohol-based offenses is closer to $250,000.

Through another question from Councilmember Martini, Mike Mann, District Administrator with Alcoholic Beverage Control, stated that ABC fines for retail offenses range from $750 to $3000 per violation for first offenses and between $1500 to $6000 for second offenses occurring within three years. He said that collected monies go into the State General Fund and estimated that in a one-year period, approximately $2000 per month in fines might be imposed.

Councilmember discussion ensued with support for the ordinance being stated, with language added to exempt those businesses which derive most of their revenue from sales outside the City. Councilmember Martini stated he would not support the ordinance on the grounds that he disagreed with the practice of relying on fees to provide services and that a monetary burden should not be placed on those who follow the rules.

Mr. Kolin suggested that, if it was Council's desire to incorporate language exempting businesses whose sales are exclusively outside the local jurisdiction, and to earmark the funds for enforcement programs, the item should be returned on a future agenda.

MOVED by Councilmember Blanchard, seconded by Councilmember Condron, carried 4-1-0-2 (Mayor Wright and Councilmember Rabinowitsh absent, Councilmember Martini voting NO), to approve the ordinance in concept, amend it to exempt businesses whose sales are exclusively outside the local jurisdiction and to return the item to the Consent calendar at the Council meeting of February 4, 2003.

12. [IF NEEDED] - FURTHER ANNOUNCEMENT OF CLOSED SESSION ITEM(S) AND ADJOURNMENT TO CLOSED SESSION(S) - None.

13. MAYOR'S/COUNCILMEMBERS' REPORTS

Councilmember Martini reported that the SMART II Commission had been seated and that plans for a rail corridor are being considered by other cities.

Vice Mayor Bender reported on the recent Green Buildings kick-off meeting. She also announced the receipt of two letters of resignation: James Hinton, Luther Burbank Home and Gardens Board and Dave Johnson, Planning Commission. She extended the entire Council's appreciation for their hard work.

MOVED by Councilmember Condron, seconded by Councilmember Martini, carried 5-0-2 (Mayor Wright and Councilmember Rabinowitsh absent), to accept the letters of resignation from Mr. Hinton and Mr. Johnson.

14. CITY MANAGER'S REPORTS

City Manager Kolin extended his thanks to the Council for their participation in the Council Goals session. He also reported that five Councilmembers had expressed interest in attending the National League of Cities Congressional meeting in Washington, D.C. and that they should submit their travel requests soon.

15. WRITTEN COMMUNICATIONS (AND POSSIBLE COUNCIL ACTION)

*15.1 Letter from James B. Hinton, Luther Burbank Home and Gardens Board Member, tendering his resignation from the Board upon appointment of a successor

*15.2 E-Mail to Mayor Wright from David G. Johnson, Planning Commissioner, tendering his resignation from the Commission, effective January 12, 2003

*15.3 Letter from F. Kent Leacock, AT&T Broadband, announcing an increase in franchise fees collected from Santa Rosa customers

*15.4 Letter and Annual Report for Fiscal Year ending June 30, 2002, from Laurie Cirivello, Community Media Center

16. ADJOURNMENT OF MEETING

Hearing no further business, Vice Mayor Bender adjourned the meeting at 6:45 p.m. in honor of Councilmember Martini's upcoming marathon race. The next regularly scheduled meeting will take place on January 28, 2003, at a time to be set by the Mayor.

1/21/2003