MINUTES OF THE CITY COUNCIL

SAN JOSE, CALIFORNIA TUESDAY, OCTOBER 10, 2000

The Council of the City of San José convened in regular session at 9:30 a.m. in City Council Chambers at City Hall.

Present: Council Members - Chavez, Dando, Diaz, Diquisto, Fiscalini, LeZotte, Powers, Shirakawa, Jr., Woody; Gonzales.

Absent: Council Members - None.

Vacant: District 4.

Upon motion unanimously adopted, Council recessed at 9:35 a.m. to a Closed Session in Room 600 to confer with Legal Counsel pursuant to Government Code Section 54956.9; under Subsection (a) to discuss existing litigation in the cases of (1) In re Greenlee; (2) In re Pizzo; to discuss anticipated litigation pursuant to Subsection (b) of Government Code Section 54956.9, in one matter regarding the initiation of litigation; and to confer with Labor Negotiator Pursuant to Government Code 54957.6: (1) City Negotiator: City Manager designee Alex Gurza; Employee Organization: San José Police Officers’ Association; (2) City Negotiator: City Manager designee Alex Gurza; Employee Organization: International Association of Firefighters.

By unanimous consent, Council reconvened from the Closed Session and recessed at 10:50 a.m. and reconvened at 1:35 p.m. in the Council Chambers.

Present: Council Members - Chavez, Dando, Diaz, Diquisto, Fiscalini, LeZotte, Powers, Shirakawa, Jr., Woody; Gonzales.

Absent: Council Members - None.

Vacant: District 4.

INVOCATION

Father Dave Bridgen, San José Police Department Chaplain, delivered the Invocation. (District 9)

PLEDGE OF ALLEGIANCE

Mayor Gonzales led the Pledge of Allegiance.

ORDERS OF THE DAY

Upon motion by Council Member Powers, seconded by Vice Mayor Fiscalini, and unanimously carried, the Orders of the Day and the Amended Agenda were approved. Vote: 10-0-0-0-1. Vacant: District 4.

CEREMONIAL ITEMS

5a Presentation of a commendation acknowledging Ralph A. Qualls, Jr., Director of Public Works, for his 15 years of outstanding service to the City of San José and its citizens. (Mayor)

Mayor Gonzales, joined by City Manager Borgsdorf, called to the podium Public Works Director, Ralph Qualls and his wife, Kathy Lucas. The Mayor read a commendation citing the Director’s accomplishments since joining the City in 1985, first as Director of Project Management in the Redevelopment Agency, then City Engineer and finally as Public Works Director, where he supervised construction of the Children’s Discovery Museum and the McEnery Convention Center, among many others, and commended him for his leadership commitment to public service, his outstanding cooperation with colleagues and other City departments, making San José more efficient and effective, and leading his department toward building an infrastructure in San José that positively affects the lives of residents, businesses and visitors. City Manager Borgsdorf stated one of the pleasures thus far in his tenure in San José was been working with Ralph, and stated the litany of his accomplishments cannot show the style, panaché and successfulness with which he achieved his many accomplishments, and commended him for his excellence and professionalism. Director Qualls thanked the Mayor and Council for their tributes and for the opportunity and challenges which have been afforded him over the years, and wished the best possible success to the Mayor and Council in their administration of the City of San José.

CONSENT CALENDAR

Upon motion by Vice Mayor Fiscalini, seconded by Council Member Powers, and unanimously carried, the Consent Calendar was approved and the below listed items taken as indicated. Vote: 10-0-0-0-1. Vacant: District 4.

Minutes for Approval

6a(1) Regular Meeting of August 8, 2000

Documents filed: Minutes of August 8, 2000.

Discussion/Action: The Minutes were approved. Vote: 10-0-0-0-1. Vacant: District 4.

6a(2) Joint City Council/Redevelopment Agency Meeting of August 8, 2000

Documents filed: Minutes of August 8, 2000.

Discussion/Action: The Minutes were approved. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6a(3) Regular Meeting of August 15, 2000

Documents filed: Minutes of August 15, 2000.

Discussion/Action: The Minutes were approved. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6a(4) Adjourned Regular Meeting of August 19, 2000

Documents filed: Minutes of August 19, 2000.

Discussion/Action: The Minutes were approved. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6a(5) Special Closed Session of August 21, 2000

Documents filed: Minutes of August 21, 2000.

Discussion/Action: The Minutes were approved. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

Ordinances for Final Adoption

6b(1) ORD. NO. 26196 – Adopts the Neighborhood Business Clusters Redevelopment Plan and makes certain findings.

[Deferred from 9/19/00 – Item 6b(4) and 10/3/00 – Item 6b(1)]

Documents filed: None.

Discussion/Action: See Item 11a(2) for Council action taken.

6b(2) ORD. NO. 26197 – Amends the Julian-Stockton Redevelopment Plan, the Olinder Redevelopment Plan, the San Antonio Plaza Redevelopment Plan, the Rincon de Los Esteros Redevelopment Plan, the Pueblo Uno Redevelopment Plan, the Edenvale Redevelopment Plan, the Guadalupe-Auzerais Redevelopment Plan, the Market Gateway Redevelopment Plan, the Century Center Redevelopment Plan, the Alum Rock Avenue Redevelopment Plan, the East Santa Clara Street Redevelopment Plan, the Almaden Gateway Redevelopment Plan, the Story Road Redevelopment Plan, The Alameda Redevelopment Plan, the West San Carlos Street Redevelopment Plan, the Japantown Redevelopment Plan, the Monterey Corridor Redevelopment Plan, the Park Center Redevelopment Plan, the Civic Plaza Redevelopment Plan, and the Neighborhood Business Clusters Redevelopment Plan to effect the merger of said Redevelopment Project Areas and making certain findings.

[Deferred from 9/19/00 – Item 6b(5) and 10/3/00 – Item 6b(2)]

Documents filed: None.

Discussion/Action: See Item 11a(3) for Council action taken.

Contracts/Agreements

6e(1) Approval of agreement with the Salvation Army for redirecting reusable and recyclable materials from local landfills, in a total amount not to exceed $198,000. (Environmental Services)

[(Deferred from 9/12/00 – Item 6e(1)]

Documents filed: See Item 6e(1) in the Minutes of September 12, 2000, for documents filed.

Discussion/Action: The agreement with the Salvation Army was approved and its execution authorized. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6e(2) Approval of a fourth amendment and continuation agreement with Corlett, Skaer & DeVoto Architects (CSDA), for consultant services related to Phase 3 and Phase 4 of the Acoustical Treatment Program (ACT), to extend the agreement from June 30, 2000 to December 31, 2000, with no increase in compensation. CEQA: Resolution No. 67380. (Airport)

Documents filed: Memorandum from Aviation Director Ralph G. Tonseth, dated September 20, 2000, recommending approval of said agreement.

Discussion/Action: The fourth amendment and continuation agreement with Corlett, Skaer & DeVoto Architects (CSDA) was approved and its execution authorized. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6e(3) Adoption of a resolution authorizing the City Manager to negotiate and execute an agreement with artist Michael Davis, to fabricate and install a work of art at the Tuers-Capitol Golf Course, in an amount not to exceed $96,000. CEQA: Resolution No. 69623. (Conventions, Arts and Entertainment)

Documents filed: Memorandum from Nancy Johnson, Director, Conventions, Arts and Entertainment, dated September 20, 2000, recommending adoption of said resolution.

Discussion/Action: Resolution No. 69926, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute an Agreement with Michael Davis to Fabricate and Install a Work of Art at the Tuers-Capitol Golf Course in an Amount Not to Exceed $96,000”, was adopted. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6e(4) Approval of award of open purchase orders for supplies, materials, equipment, and services for FY 2000-2001 #14, and authorization for the Director of General Services to execute the purchase orders. (General Services)

Documents filed: Memorandum from Director of General Services, Steve S. Yoshino, dated September 20, 2000, recommending approval of said open purchase orders.

Discussion/Action: The award of open purchase orders List No. 14 was approved and the Director of General Services authorized to execute the purchase orders. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6e(5) Approval of award to Flir Systems, Inc., for a sole source purchase of Flir Ultra 7000 Infrared Camera for the Police Department, for a total cost of $222,540.35, including tax, and authorization for the Director of General Services to execute the purchase order. (General Services)

Documents filed: Memorandum from Director of General Services, Steve S. Yoshino, dated September 20, 2000, recommending Council award said purchase to Flir Systems, Inc. as a sole source purchase in accordance with Subsection 4.12.020.D of the San José Municipal Code, and authorize the Director of General Services to execute the purchase. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

Discussion/Action: William J. Garbett spoke in opposition to the proposal. The award of sole source purchase to Flir Systems, Inc., was approved and execution of the purchase order authorized. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6e(6) Adoption of a resolution authorizing the City Manager to negotiate and execute an agreement with Arthur Andersen, LLP for consultant services for assistance on the implementation of the City of San José’s Information Technology Master Plan, for a total cost not to exceed $235,850. (Information Technology)

Documents filed: Memorandum from Deputy City Manager, Kay Winer, dated September 20, 2000, recommending adoption of said resolution.

Discussion/Action: Resolution No. 69927, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute a Consultant Agreement with Arthur Andersen, LLP”, was adopted. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6e(7) Adoption of a resolution authorizing the City Manager to negotiate and execute a second amendment to the agreement with Turbo Data Systems Inc., to:

(a) Authorize the processing of credit card payments for parking citations.

(b) Authorize the Director of Streets and Traffic to increase the compensation paid for the processing of credit card payments based upon a fixed formula, with no further City Council action other than the appropriation of funding.

(Streets and Traffic)

Documents filed: Memorandum from Director of Streets and Traffic, Wayne K. Tanda, dated September 20, 2000, recommending adoption of said resolution.

Discussion/Action: Resolution No. 69928, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute a Second Amendment to the Agreement with Turbo Data Systems, Inc., for the Processing of Parking Citations by Credit Card and Authorizing the Director of Streets and Traffic to increase the Compensation Paid for the Processing of Credit Card Payments Based Upon a Fixed Formula, with No Further City Council Action Other Than the Appropriation of Funding”, was adopted. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6e(8) Adoption of a resolution authorizing the City Manager to negotiate and execute group dental agreements with Delta Dental and Dental Benefit Providers (DBP) insurance plans for the period January 1, 2001 to December 31, 2004. (Human Resources)

[Deferred from 10/3/00 – Item 6e(4)]

Documents filed: Memorandum from Director of Human Resources, Nona Tobin, dated September 13, 2000, recommending adoption of said resolution.

Discussion/Action: Resolution No. 69929 entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute Group Dental Agreements with Delta Dental and Dental Benefit Providers for the Period of January 1, 2001, Through December 31, 2004”, was adopted. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

6e(9) Adoption of resolutions authorizing the City Attorney to negotiate and execute:

(a) A first amendment to the legal services agreement with Morrison & Foerster LLP for legal services, increasing compensation by $80,000, to a total amount not to exceed $120,000.

(b) A first amendment to the legal services agreement with McCutchen, Doyle, Brown & Enersen, LLP for legal services, increasing compensation by $70,000, to a total amount not to exceed $120,000.

(City Attorney’s Office)

(Rules Committee referral 10/4/00)

Documents filed: Memorandum from City Attorney Richard Doyle, dated October 5, 2000, recommending adoption of said resolution.

Discussion/Action: William J. Garbett spoke in opposition to the proposal. Resolution No. 69930, entitled: “A Resolution of the Council of the City of San José Authorizing the City Attorney to Negotiate and Execute a First Amendment to the Legal Services Agreement with Morrison & Foerster LLP, Increasing Compensation by $80,000, for a Total Not to Exceed $120,000”; and Resolution No. 69931, entitled: “A Resolution of the Council of the City of San José Authorizing the City Attorney to Negotiate and Execute a First Amendment to the Legal Services Agreement with McCutchen, Doyle, Brown & Enersen, LLP, Increasing Compensation by $70,000, for a Total Not to Exceed $120,000”, were adopted. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

Routine Legislation

6f(1) Approval of the appointment of Mayor Ron Gonzales to serve on the San José/Santa Clara Treatment Plant Advisory Committee. (Mayor)

(Rules Committee referral 10/4/00)

Documents filed: Memorandum from Mayor Gonzales, dated October 2, 2000, recommending the City Council appoint Mayor Ron Gonzales to serve on the San José/Santa Clara Treatment Plant Advisory Committee.

Discussion/Action: The appointment of Mayor Gonzales to the San José/Santa Clara Treatment Plan Advisory Committee was approved. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

END OF CONSENT CALENDAR

COMMISSION, COMMITTEE, AND STANDING REPORTS

7a Report of the City Council Study Session – August 8, 2000

Mayor Gonzales, Chair

Documents filed: Study Session report of August 8, 2000.

(1) Strong Neighborhoods Initiative. Attachment: (1) Memorandum from Director of Parks, Recreation and Neighborhood Services, Mark Linder, dated August 2, 2000, outlining the Strong Neighborhoods Initiative. (2) Hard copies of the overhead presentation made by Parks, Recreation and Neighborhood Services Director Linder.

The Study Session, consisting of presentations by Parks, Recreation and Neighborhood Services Director Mark Linder and Redevelopment Executive Director Susan Shick, on the Strong Neighborhoods Initiative plan and the proposed implementation schedule and timeline, was followed by Council discussion and concluded with comments by Mayor Gonzales and City Manager Del Borgsdorf.

Discussion/Action: Upon motion by Vice Mayor Fiscalini, seconded by Council Member Powers, and unanimously carried, the City Council Study Session report and recommendations of August 8, 2000, were accepted. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

7b Report of the Rules Committee - Meeting of September 27, 2000

Vice Mayor Fiscalini, Chair

Documents filed: Rules Committee report of September 27, 2000.

(1) Review October 10, 2000 Draft Agenda

The Committee approved the October 10, 2000 City Council agenda.

(2) Add New Items to October 3, 2000 Amended Agenda

The Committee recommended five additions to the October 3, 2000 City Council Agenda.

(3) Meeting Schedules. Attachment: Memorandum from Assistant to the City Manager Deanna J. Santana, dated September 22, 2000, requesting an evening Council meeting.

The Committee recommended approval of an evening Council meeting to be held on Tuesday, November 28, 2000 at 7:00 p.m. in the Council Chambers.

(4) The Public Record. Attachment: Memorandum from City Clerk Patricia L. O’Hearn, dated September 21, 2000, listing the items transmitted to the Administration and those items filed for the Public Record for the period September 13-19, 2000.

The Committee noted and filed the Public Record.

(5) Council Referrals for Assignment to Appropriate Committee, Administration, or Council Appointee

There were none.

(6) Oral communications

None presented.

(7) Adjournment

The meeting was adjourned at 2:04 p.m.

Discussion/Action: Upon motion by Council Member Fiscalini, seconded by Council Member Diaz, and unanimously carried, the Rules Committee report and actions of September 27, 2000, were accepted. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

7b Report of the Rules Committee - Meeting of October 4, 2000 (Partial)

Vice Mayor Fiscalini, Chair

Documents filed: Partial Rules Committee report of October 4, 2000.

(5) Approve City positions on November 2000 Ballot Propositions. Attachment: Memoranda from Intergovernmental Relations Director Betsy Shotwell, dated September 27 and October 10, 2000, recommending City positions for each of the statewide ballot propositions set for the November 2000 General Election.

The Committee directed the Administration to request Parks, Recreation and Neighborhood Services Department to submit a review of Proposition 36 at the October 10, 2000 Council meeting; the Committee directed Administration, in the future, to include the sponsor of each proposition. With Council Member Diaz taking “No Position” on Propositions 35, 36 and 37, the Committee approved the following positions on the statewide ballot propositions, set for the November 2000 General Election:

Proposition Recommended Position

32 Veteran’s Bond Act of 2000 Support

33 Legislature: Retirement Change to Support

34 Campaign Contributions and Defer Recommendation

Expenditures

35 Public Works Projects. Use of Private Support

Contractors for Engineering and

Architectural Services

36 Drug Treatment Diversion Program Oppose

37 Fees, Taxes, New Definitions, Oppose

Vote Requirements

38 School Vouchers Oppose

39 School Facilities Support

(6) 2000 National League of Cities Voting Delegate and Alternates at the Annual Business Meeting. Attachment: Memoranda from Intergovernmental Relations Director Betsy Shotwell, dated October 3, 2000, recommending the designation of Council Member Woody as the voting delegate at the December 9, 2000 Annual Business Meeting for the National League of Cities.

The Committee approved the proposed designation of Council Member Alice Woody as the voting delegate, and Council Members Powers and Dando, as alternates, at the December 9, 2000 Annual Business Meeting for the National League of Cities.

(7) Direct the City Auditor to conduct a Financial Audit of the State and Local Transportation Partnership Program. Attachment: City Auditor Gerald A. Silva, dated September 11, 2000, recommending the Rules Committee direct the City Auditor to conduct a Financial Audit of the State and Local Transportation Partnership Program.

(7) Direct the City Auditor to conduct a Financial Audit of the State and Local Transportation Partnership Program

The Committee referred the City Auditor’s request to conduct a financial audit of the State and Local Transportation Partnership Program to the next-scheduled Finance and Technology meeting.

Discussion/Action: Upon motion by Council Member Fiscalini, seconded by Council Member Diaz, and unanimously carried, the Partial Rules Committee report and actions of October 4, 2000, were accepted, with Council Member Chavez registering a position of “Oppose” on Proposition No. 35. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

7c Report of the Finance and Technology Committee – September 27, 2000

Council Member Woody, Chair

Documents filed: Finance and Technology Committee minutes of September 27, 2000.

(1) Monthly Financial Statement for July 2000

(2) Capital Cost Report for July 2000

(3) Cash Flow Projection

Items 1-3 were heard by the Redevelopment Agency.

(4) August Monthly Report. Attachment: Memorandum from City Auditor Gerald A. Silva, dated September 21, 2000, transmitting report entitled: August 2000 City Auditor’s Activity Report.

The Committee accepted the Staff report with the direction that a brief update on the San José Municipal Water System RFP be presented at the next meeting.

(5) Semi-annual Recommendation Follow-up for Six Months Ending June 30, 2000

The Committee approved the Staff report with the requests that updates be presented at future Committee meetings on the Public Works/PRNS Park projects system and on the HAZMAT cost recovery issue. Attachment: Memorandum from City Auditor Gerald A. Silva, dated September 20, 2000, transmitting report entitled: Semi-Annual Follow-Up Report on All Outstanding Audit Recommendations for the Six-Months Ending June 30, 2000.

(6) An Audit of the Watershed Protection Division’s Industrial and Commercial Inspection Program. Attachment: Report entitled: An Audit of the Watershed protection Division’s Industrial and Commercial Inspection Program, dated September 2000, submitted by the City Auditor’s Office.

The Committee accepted the Staff report with the direction that the Environmental Services Department present a status report summarizing accomplishments and progress, before the end of the calendar year.

(7) Oral petitions

None presented.

(8) Adjournment

The meeting was adjourned at 10:15 a.m.

Discussion/Action: Upon motion by Council Member Woody, seconded by Council Member Fiscalini, and unanimously carried, the Finance and Technology Committee report and actions of September 27, 2000, were accepted. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

7f Report of the Education, Neighborhoods, Youth, and Seniors Committee – September 25, 2000 - Council Member Shirakawa, Jr., Chair

Documents filed: None.

(1) Strong Neighborhood Initiative Monthly Report

(2) Youth Commission Monthly Report

(3) Fire Recruitment Annual Report

(4) Oral Petitions

Discussion/Action:. The meeting was canceled and all items were continued to the October 16, 2000 Education, Neighborhoods, Youth and Seniors Committee meeting. Vote: 9-0-1-0-1. Absent: Diaz. Vacant: District 4.

GENERAL GOVERNMENT

9a (1) Approval of the award of the Single Family Garbage and Recycling Collection and Processing contracts by district as follows:

(a) District A: Norcal Waste Systems, Inc.

(b) District B: GreenTeam of San José.

(c) District C: Norcal Waste Systems, Inc.

(2) Approval of the award of the citywide Multifamily Dwelling Garbage and Recycling Collection and Processing contract to GreenTeam of San José.

(3) Approval of the award of the Yard Trimmings Collection and Processing and Residential Street Sweeping contracts by district as follows:

(a) District A: GreenWaste Recovery Inc.

(b) District B: GreenWaste Recovery Inc.

(c) District C: Norcal Waste Systems, Inc.

(4) Direction to the Administration to negotiate the final agreements for the services identified above.

CEQA: Negative Declaration.

(Environmental Services)

Documents filed: (1) Memorandum from Mayor Gonzales, Vice Mayor Fiscalini, and Council Members Chavez, Dando and Powers, dated October 8, 2000, recommending approval of the Staff recommendation for Staff to process the award of Recycle Plus! contracts as recommended in the Staff Reports dated September 22 and October 4, 2000, and directing the Administration to negotiate final agreements and return to Council within 60 days; to report to Council in three weeks on the economic feasibility of achieving rate reductions and/or improved service for residents from the projected savings, to submit quarterly status reports to Council on customer outreach and education and on the costs for monitoring, marketing and community outreach for the transition period; to evaluate the maximum feasible performance bond to be provided by each hauler and to include in the contracts appropriate penalty language to guarantee performance and to prohibit requests for rate increases beyond those stipulated in the final agreement, to clarify the City’s prevailing wage, employee retention, and labor peace policies applicable to the RFP and ensure their inclusion in the negotiated contract; and directing the City Auditor to perform a review audit of all recommended haulers to determine the operational adequacy of their proposals and their financial capability to perform; all as stipulated in the above-mentioned October 8, 2000 memorandum. (2) Memoranda from Environmental Services Director Mosher and City Manager Borgsdorf, dated September 22 and October 4, 2000, recommending approval of the Award of the Single Family Garbage and Recycling Collection and Processing contracts for Districts A and C to Norcal Waste Systems, Inc.; award of the citywide Multifamily Dwelling Garbage and Recycling Collection and Processing contract to GreenTeam of San José; and award of the Yard Trimmings Collection and Processing and Residential Street Sweeping contracts for Districts A and B to GreenWaste Recovery, Inc., and for District C to Norcal Waste Systems, Inc.; and direction for the Administration to negotiate the final agreements for the services identified therein. (4) Informational memoranda from Environmental Services Director Mosher, dated October 2, 6 and 10, 2000, providing additional information relative to the Staff recommendations for award of Recycle Plus contracts. (5) Correspondence from Norcal Waste Systems, Inc., dated October 4, 000, clarifying their position with respect to worker retention in San José and their commitment to recyclables processing in the City. (6) Hard copies of Director Mosher’s slides on the Staff presentation.

Discussion/Action: Environmental Services Director Carl Mosher made the Staff presentation, using Power Point video slides. Mayor Gonzales stated the providers recommended by Staff would reduce costs by $60 million, improve services in areas which have experienced customer complaints, and the program as designed in the RFP, would maximize recycling and decrease diversions to the landfill up to the 50% level required by State law and, with the addition of alternative fuel vehicles, would improve air quality. He stated the action before Council today is to approve a process for Staff to move forward with specific direction as to what Council expects in terms of a contract, i.e., better service, reduced costs and greater efficiencies. He stated if Council moves forward and ultimately approves a finalized contract with the companies recommended by Staff, over $60 million in costs will be saved and services improved, with the potential to maximize recycling, increase the diversion from the landfill, and to improve air quality. He stated some of the most important items to come back in the contracts are those related to labor peace because it is the workers who will determine the level of service actually performed and stressed that those elements must receive the necessary emphasis in the contracts in order to achieve successful implementation. He stated he authored a memorandum with Vice Mayor Fiscalini, Council Members Chavez, Dando and Powers, dated October 8, 2000, recommending approval of the Staff recommendation and directing Staff to move to the next step, with specific direction on the policy issues that need to be addressed, and to bring back in 60 days a specific contract that addresses the issues pointed out in that memorandum. Council Member Shirakawa, Jr. expressed concerns about the size of the projected savings, particularly from District A. Referencing informational memoranda to Council dated October 6 and 10, 2000, Environmental Services Director Mosher responded that Staff is confident in the recommendation and in the analysis conducted by the City’s consultant on the RFP process, R. W. Beck, Inc. He stated Norcal and GreenTeam proposed using a different method to provide service by collecting both recycling and garbage in a divided truck, that both are professional companies that desire to provide the service and have reviewed their costs, overhead, profit margin, vehicle costs and long term recovery facility in a completely independent way than providers who are currently providing service, and have submitted lower bids. He stated a lower bid does not mean it is below the band of reasonableness associated with the cost of the service and that Staff has confidence in the bid and in the companies being recommended. Council Member LeZotte stated she is not comfortable with proceeding prior to the audit being conducted by the City Auditor and questioned the proposed increase in street sweeping since new yard waste containers would decrease that need. She requested the audit include any recent loss of business by the two recommended companies that could impact their financial assessments, any pending litigation or liability exposure that could impact their ability to perform during the contract period, and a review of their capacity to acquire the capital equipment necessary to perform the work. She questioned how Norcal Waste Systems could perform the single family recycling that two recyclers are now providing, with a facility that is yet to be built, and noted that in 1992, the Council specifically split an area representing 78% of the City because of concerns that one provider could not reliably service such a large area. Because Staff is now proposing over 80% of the area be serviced by a single company, she requested Staff ensure a fallback position should they be unable to perform. Council Member Dando stated she appreciates the concept of competition but is hesitant to change a program that is currently working well and is leery that the projected cost savings can be realized. While she is concerned about repeating past difficulties experienced in the recycling program, she stated she will support the direction in the October 8, 2000, memorandum in the hope that the process will provide the community with more services at lower costs. Council Member Powers stressed the necessity of having adequate equipment operational on the first day of service and requested the capital equipment issue be addressed in the audit, as well as the litigation exposure risk. She stated there should be a process for rate review, including language that prohibits the haulers from requesting rate increases beyond those stipulated, and expressed concerns about the adequacy of the performance bond. Council Member Diaz stated he is satisfied with the service currently being provided and is concerned about the significant differences being proposed, stressed the necessity of maintaining the same or better level of service and of dealing with the issues of labor peace and worker retention, and requested the audit come back in less than sixty days if possible. The following individuals spoke on various aspects of the proposed Recycle Plus contracts: Robert Morales; Ken Absolon; Ken Etherington, GreenTeam of San José; William J. Garbett; Paul Nelson, GreenWaste Recovery; Mike Howell, Waste Management; Amy B. Dean; Ross Signorino; Todd Storti, BFI; Van Le; Michael Sangiacomo and Bill Jones, Norcal Waste Systems; Roberto Flotte, I.L.W.O. Local No. 6. Vice Mayor Fiscalini moved approval of the recommendations contained in the memorandum dated October 8, 2000, and referred to Staff the various comments made by Council Members on the subject proposal. Council Member Powers seconded the motion. Council Member Chavez stated for street sweeping to be effective, a process for automobile removal is needed to allow the entire street to be swept and recommended the contracts include a solution to that problem. She stated more bins for neighborhood clean-ups is essential, requested savings be projected for the first 5-years of the proposed 11-year contract, that the Auditor review the effectiveness of the split trucks, i.e., whether trips would be saved if one section fills up before the other. She requested labor costs be separated out of the proposals to determine whether savings are at the expense of the workers or from operational improvements, and that financial assessments already conducted on each of the companies be provided for Council review prior to the audit report. In stressing the importance of labor peace, worker retention and prevailing wage issues, she stated labor retention protects the goals of Council by retaining area standards and urged all parties to judicially pursue a neutrality position relative to worker representation. Council Member Shirakawa, Jr., stated he is skeptical the projected savings can be achieved, and stated that providing yard waste containers free to all residents on request is critical for his support and, if not included when the issue comes back, he will not support the contracts. Council Member Woody expressed concern about maintaining customer levels of service during the transition period, enhanced marketing efforts, and having a fallback position for non-performance. Council Member LeZotte suggested that as part of a fallback position, the audit should cover the contractors that are not recommended as well as the Staff-recommended providers in the event Council is not satisfied with the proposed haulers. Mayor Gonzales explained the sixty-day timeline is intended to allow time to review the second level bidders if Council wishes, and asked the City Auditor to clarify the time required to complete the audit. City Auditor Gerald Silva stated he can produce the audit of the two contractors within sixty days, possibly in 45 days, and while unable to commit to auditing the remaining contractors, if time permits, he would include them. Vice Mayor Fiscalini stated in light of the magnitude of the task, he is reluctant to formalize the additional audit actions requested by Council Member LeZotte. Council Member Diaz expressed concern about potential reductions in levels of service and stated he could support the motion if Staff could report back in 45 days. Council Member Dando stated her district is more concerned about having adequate bins for neighborhood clean-ups than about street sweeping, that she supports yard waste containers for every family, and looks forward to ultimately providing greatly improved services with a potential reduction in service fees. Mayor Gonzales thanked the companies who bid on the proposal and stressed this is the next step and not the conclusion of the process. He stated the skepticism expressed by Council deals with the importance of these services and with the fact that it is unusual to issue an RFP and have bids come back with a $60 million savings. He stated he is delighted with the prospects of providing enhanced services while achieving a tremendous cost savings and hopes the information requested from the City Administration and City Auditor comes back with documentation that these responses to the RFP are in fact valid. On a call for the question, the motion carried and Council approved recommendations in the memorandum dated October 8, 2000, by Mayor Gonzales, Vice Mayor Fiscalini, and Council Members Chavez, Dando and Powers to (1) Direct the Administration to process the award of Recycle Plus! contracts as recommended by Staff; (2) Direct the Administration to negotiate final agreements and return to Council within 60 days; (3) Direct the Administration to report to Council in three weeks on the economic feasibility of achieving rate reduction and/or improved service for residents from the savings expected from the Staff recommendation; (4) Direct the Administration to report to Council quarterly on progress to assure a smooth transition, including customer outreach and education and costs for monitoring, marketing, and community outreach for the transition period; (5) Direct the City Auditor to perform a review audit of all recommended haulers to determine the operational adequacy of their proposals and their financial capability to perform; (6) Direct the Administration to evaluate the maximum feasible performance bond to be provided by each hauler and appropriate penalty language in the contracts to guarantee performance and prohibit requests for rate increases beyond those stipulated in the final agreement; and (7) Direct the Administration to clarify the City’s prevailing wage, employee retention and labor peace policies as they relate to the RFP for Recycle Plus, and ensure their inclusion in the negotiated contract; as stipulated in the above-referenced memorandum. Council directed the City Attorney to review the recommended haulers for pending litigation or liability exposure; directed the City Auditor to review the financial capability of the recommended contractors to acquire essential capital equipment, to assess the effectiveness of the split-content trucks and whether contracts have recently been lost which could negatively impact the financial assessments; and directed the Administration to review the provision of free yard waste containers to all residents on request, to provide the financial assessments already conducted for Council review prior to the audit report; and to report back on the savings expected from the first 5-year contract, i.e., on operational cost figures with labor costs separated out; on comparisons of other areas as large as that proposed which have had a single provider; on fallback positions in the event of non-performance; and directed the Administration to take into consideration the concerns expressed by Council Members. Vote: 9-1-0-0-1. Noes: Diaz. Vacant: District 4.

9b Adoption of a resolution authorizing the City Manager to negotiate and execute an agreement with Mel Chin, to fabricate and install a collection of public artwork for the City of San José/San José State University Library, in an amount not to exceed $675,000. CEQA: Exempt. (Conventions, Arts and Entertainment)

Documents filed: Memorandum from Nancy Johnson, Director, Conventions, Arts and Entertainment, dated September 20, 2000, recommending approval of said agreement with Mel Chin.

Discussion/Action: Upon motion by Vice Mayor Fiscalini, seconded by Council Member Powers and unanimously carried, Resolution No. 69932, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute an Agreement with Mel Chin to Fabricate and Install a Collection of Public Artwork for the City of San José/San José State University Library in an Amount Not to Exceed $675,000”, was adopted. Vote: 10-0-0-0-1. Vacant: District 4.

JOINT CITY COUNCIL/REDEVELOPMENT AGENCY ITEMS

The Council of the City of San José convened the Redevelopment Agency Board at 3:32 p.m. to consider Item 11a in a Joint Session.

11a (1) Adoption by the City Council of a response to written objections from property owners and taxing entities to the adoption of the Neighborhood Business Clusters Redevelopment Plan and the merger of the Neighborhood Business Clusters Redevelopment Plan into the San Jose Merged Area Redevelopment Plan.

(2) Final adoption of ORDINANCE NO. 26196 – Adopts the Neighborhood Business Clusters Redevelopment Plan and makes certain findings.

(3) Final adoption of ORDINANCE NO. 26197 – Amends the Julian-Stockton Redevelopment Plan, the Olinder Redevelopment Plan, the San Antonio Plaza Redevelopment Plan, the Rincon de Los Esteros Redevelopment Plan, the Pueblo Uno Redevelopment Plan, the Edenvale Redevelopment Plan, the Guadalupe-Auzerais Redevelopment Plan, the Market Gateway Redevelopment Plan, the Century Center Redevelopment Plan, the Alum Rock Avenue Redevelopment Plan, the East Santa Clara Street Redevelopment Plan, the Almaden Gateway Redevelopment Plan, the Story Road Redevelopment Plan, The Alameda Redevelopment Plan, the West San Carlos Street Redevelopment Plan, the Japantown Redevelopment Plan, the Monterey Corridor Redevelopment Plan, the Park Center Redevelopment Plan, the Civic Plaza Redevelopment Plan, and the Neighborhood Business Clusters Redevelopment Plan to effect the merger of said Redevelopment Project Areas and making certain findings.

(Deferred from 9/19/00 – Item 11a and 10/3/00 – Item 11a)

Documents filed: None.

Discussion/Action: This item was deferred to October 24, 2000.

The Redevelopment Agency Board was adjourned at 3:33 p.m.

CLOSED SESSION REPORT

City Attorney Richard Doyle disclosed the following Closed Session actions of October 10, 2000:

A. Authority to Enter a Litigation Case as Amicus Curiae:

1. Case Name: A.G.G. enterprises, Inc. v. Washington County, Oregon and City of Beaverton, Oregon.

Adverse party or parties: A.G.G. Enterprises, Inc.

Substance of litigation: The Lawsuit challenged the validity of ordinances regulating the collection of refuse and recyclables.

Council Vote: Ayes: Dando, Diquisto, Fiscalini, LeZotte, Powers, Woody; Gonzales.

Noes: None.

Absent: Chavez, Diaz, Shirakawa, Jr.

Abstain: None.

Vacant: District 4.

ORAL COMMUNICATIONS

Donna Sanchez spoke about issues affecting the disabled; Danny Garza about land use issues, and Ross Signorino commented on the departure of Director Qualls.

ADJOURNMENT

The Council of the City of San José adjourned at 3:37 p.m.

RON GONZALES, MAYOR

ATTEST:

PATRICIA L. O’HEARN

CITY CLERK