MINUTES OF THE
CITY COUNCIL
SAN JOSE, CALIFORNIA TUESDAY,
MAY 21, 2002
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 - Campos, Chavez, Cortese, Dando, Diquisto, LeZotte, Reed, Shirakawa, Jr., Williams, Yeager; Gonzales.
Absent: Council Members - None.
Upon motion unanimously adopted, Council recessed at 9:35 a.m. to Closed Session in Room 600 to (A) confer with Legal Counsel pursuant to Government Code Section 54956.9; under Subsection (a) to discuss existing litigation in the cases of (1) Pacific Gas & Electric Company v. City of San José, et al.; (2) San José Dance Theatre, Inc. v. City of San José, et al; (B) discuss anticipated litigation pursuant to Subsection (b) of Government Code Section 54956.9, in four matters where there is significant exposure to litigation and one matter regarding the initiation of litigation.
By unanimous consent, Council reconvened from Closed Session and recessed at 10:20 a.m. and reconvened at 1:35 p.m. in Council Chambers.
Present: Council Members - Campos, Chavez, Cortese, Dando, Diquisto, LeZotte, Reed, Shirakawa, Jr., Williams, Yeager; Gonzales.
Absent: Council Members - None.
INVOCATION
Heng Re Shr; Heng Hwang Shr; Chin Ruy Shr, Gold Sage
Buddhist Monastery, delivered the invocation. (District 5)
PLEDGE OF ALLEGIANCE
Mercedes Devencenzi and the 3rd Grade graduates of Meadow School led in the Pledge of Allegiance.
Joining Vice Mayor Shirakawa, Jr., the City Council welcomed Ms.
Kuleska’s 3rd Grade Graduates of May 21, 2002, who delivered a
message to the Mayor and City Council: “Go Raiders”. The guests were
asked to stand to be recognized.
ORDERS OF THE DAY
Upon motion by Vice Mayor Shirakawa, Jr., seconded by Council Member Chavez and unanimously carried, the Orders of the Day and the Amended Agenda were approved, with one addition: Item 6.1 was deferred to May 28, 2002. Vote: 10-1-0-0. Noes: LeZotte.
CEREMONIAL ITEMS
1.1 Presentation of the 2002 Trash Cutter's Award from California Integrated Waste Management Board for a successful Recycle @ Work campaign, which diverted 645 tons of material from the landfill by promoting recycling at City of San José facilities. (Environmental Services)
Documents Filed: None.
Discussion/Action: Director of Environmental Services Carl W. Mosher joined Mayor Gonzales at the Podium to honor the City’s achievements in promoting recycling at its facilities. On behalf of the City Council, Mayor Gonzales accepted the 2002 Trash Cutter’s Award presented by the California Integrated Waste Management Board, recognizing the diversion of 645 tons of material from the landfills by promoting recycling at City of San José facilities.
1.2 Presentation of a proclamation declaring the week of May 19-25, 2002 as Public Works Week. (Public Works)
Documents Filed: None.
Discussion/Action: Joining Mayor Gonzales at the Podium were Director of Planning, Building and Code Enforcement Stephen M. Haase, Director of General Services José Obregon, Director of Environmental Services Carl W. Mosher, and Director of Public Works Katy Allen, who accepted the proclamation and acknowledged the contributions of all City Staff responsible for the displays in the lobbies of City Hall and the Martin Luther King Jr. Library.
CONSENT CALENDAR
Upon motion by Vice Mayor Shirakawa, Jr., seconded by Council Member Chavez and unanimously carried, the Consent Calendar was approved and the below listed actions taken as indicated. Vote: 11-0-0-0.
2.1 Approval of City Council Minutes for:
(a) Regular meeting of November 6, 2001
(b) General Plan Hearing of November 6, 2001
Documents Filed: Minutes of the Regular Meeting and the General Plan Hearing of November 6, 2001.
Discussion/Action: Council Member Reed stated the “Discussion/Action” recorded in Item 5.3 of the minutes of the Regular Session of November 6, 2001 does not capture the motion, which was to reduce the fees to zero for six months and Staff to return to Council in six months with a report on how to make the fee reduction permanent. He stated Staff has not issued the report and the fee reductions have not been reflected in the budget documents. He asked that the minutes be amended to correctly reflect the motion and that Staff implement the fee reduction. The Minutes were approved, with the Regular Meeting Minutes amended to clarify direction to Staff in Item 5.3 regarding the fees charged at regional parks. Vote: 11-0-0-0.
2.2 (a) Final adoption of Ordinance No. 26625 – Amends Chapter 9.10 of Title 9 and amends Section 13.20.070 of Chapter 13.20 of Title 13 of the San José Municipal Code to revise certain solid waste regulations effective July 1, 2002.
Documents Filed: Proof of publication of title of Ordinance No. 26625 executed on May 14, 2002, submitted by the City Clerk.
Discussion/Action: Ordinance No. 26625 was adopted. Vote: 11-0-0-0.
(b) Final adoption of Ordinance No. 26626 – Amends Section 11.96.070 of Chapter 11.96 of Title 11 of the San José Municipal Code to repeal the prohibition of commercial vehicles in excess of 5 tons on Newhall Street between the Alameda and Campbell Avenue.
Documents Filed: Proof of publication of title of Ordinance No. 26626 executed on May 14, 2002, submitted by the City Clerk.
Discussion/Action: Ordinance No. 26626 was adopted. Vote: 11-0-0-0.
(c) Final adoption of Ordinance No. 26627 – Rezones certain real property situated at the east side of South 3rd Street, 200 feet northerly of Keyes Street (1050 South 3rd Street).
PDC 00-10-104
Documents Filed: Proof of publication of title of Ordinance No. 26627 executed on May 14, 2002, submitted by the City Clerk.
Discussion/Action: Ordinance 26627 was adopted. Vote: 11-0-0-0.
(d) Final adoption of Ordinance No. 26628 – Rezones certain real property situated on the east side of Narvaez Avenue, approximately 220 feet northerly of Amanda Drive.
PDC 01-06-066
Documents Filed: Proof of publication of title of Ordinance No. 26628 executed on May 14, 2002, submitted by the City Clerk.
Discussion/Action: Ordinance No. 26678 was adopted. Vote: 11-0-0-0.
(e) Final adoption of Ordinance No. 26629 - Rezones certain real property situated on the south side of Madden Avenue.
PDC 00-08-084
Documents Filed: Proof of publication of title of Ordinance No. 26629 executed on May 14, 2002, submitted by the City Clerk.
Discussion/Action: Ordinance No. 26629 was adopted. Vote: 11-0-0-0.
(f) Final adoption of Ordinance No. 26630 - Rezones certain real property situated on the southwest corner of Coleman and W. Hedding Streets.
PDC 02-01-004
Documents Filed: Proof of publication of title of Ordinance No. 26630 executed on May 14, 2002, submitted by the City Clerk.
Discussion/Action: Ordinance No. 26630 was adopted. Vote: 11-0-0-0.
(g) Final adoption of Ordinance No. 26632 - Rezones certain real property situated on the block bounded by North First, Taylor, Miller, and Asbury Streets.
PDC 00-09-086
Documents Filed: Proof of publication of title of Ordinance No. 26632 executed on May 14, 2002, submitted by the City Clerk.
Discussion/Action: Ordinance No. 26632 was adopted. Vote: 11-0-0-0.
2.3 Consideration of the Parks and Recreation Commission recommendation to name:
(a) A park to be developed by the City at the corner of Bird and Fisk Avenues “Hummingbird Park.” Council District 6.
(b) The tot lot at Parma Park, located at 6445 Camden Avenue, “Jake’s Play Lot.” Council District 10.
(City
Clerk/Parks and Recreation Commission)
Documents Filed: Memoranda from City Clerk, Patricia L. O’Hearn, both dated May 21, 2002, recommending Council consider the recommendation of the Parks and Recreation Commission to name the proposed park “Hummingbird Park”, and the tot lot at Parma Park “Jake’s Play Lot” in memory of Jake Thomas Eby, a two and a half year old child whose life ended on January 27, 2000 in a tragic accident.
Discussion/Action: The recommendation of the Parks and Recreation Commission to name the pocket park “Hummingbird Park”, was approved in addition to the naming of the tot lot at Parma Park “Jake’s Play Lot”, with an invitation from Council Member Dando to all City Council Members to attend the Dedication Ceremonies at 1:00 p.m. on June 16, 2002. Vote: 11-0-0-0.
2.4 Report on bids and award of contract for the North First Street Parallel Main Project to the low bidder, Preston Pipelines, Inc., in the amount of $702,602, and approval of a contingency in the amount of $35,000. CEQA: Exempt, PP01-03-041. Council District 4.
Environmental Services)
Documents Filed: Memorandum from Director of Environmental Services, Carl W. Mosher, dated May 1, 2002, recommending the award of said contract, with related contingency.
Discussion/Action: The award of the contract, with related contingency, to Preston Pipelines, Inc., the low bidder, was approved and execution of the contract authorized. Vote: 11-0-0-0.
2.5 Approval of an ordinance amending Sections 15.16.1380, 15.16.1390, and 15.16.1500 of Chapter 15.16 of Title 15 of the San José Municipal Code and adding a new Section 15.16.1395 of Chapter 15.16 of Title 15 to revise provisions related to categorization of premises and determination of charges for use of the storm sewer system and to correct a clerical error.
(Environmental Services)
Documents Filed: Memorandum from Director of Environmental Services, Carl W. Mosher, dated May 1, 2002, recommending approval of said ordinance amending the San Jose Municipal Code and adding a new section.
Discussion/Action: Recommending approval of the contract award, Council Member Reed suggested Staff consider a different way of evaluating the variable rate, as the City implements the storm water requirements being imposed by the Regional Water Board. William J. Garbett spoke in opposition to the proposal. Ordinance No. 26634 entitled: “An Ordinance of the City of San José Amending Sections 15.16.1380, 15.16.1390 and 15.16.1500 of Chapter 15.16 of title 15 of the San Jose Municipal Code and Adding a New Section 15.16.1395 to Revise Provisions Related to Categorization of Premises and Determination of Charges for use of the Storm Sewer System and to Correct a Clerical Error”, was passed for publication with Staff directed to explore different ways of incorporating and adjusting the variable rates as the Storm Water Permitting Requirements are implemented as imposed by the Regional Quality Water Board. Vote: 11-0-0-0.
2.6 Acceptance of the Status Report for South Bay Water Recycling for the period July 2001 through March 2002. (Environmental Services)
Documents Filed: (1) Memorandum from Director of Environmental Services, Carl W. Mosher, dated May 1, 2002, transmitting said Status Report. (2) Letter from the Treatment Plant Advisory Committee dated May 9, 2002, concurring with the Staff recommendation.
Discussion/Action: The Status Report for South Bay Water Recycling was accepted. Vote: 11-0-0-0.
2.7 Approval of award of open purchase orders for supplies, materials, equipment, and services for FY 2001-2002 #34, and authorization for the Director of General Services to execute the purchase orders. (General Services)
Documents Filed: (1) Memorandum from Director of General Services, Jose Obregon, dated May 1, 2002, recommending Council approve said open purchase orders list, and authorize the Director of General Services to execute the purchase orders. (2) Letter from the Treatment Plant Advisory Committee, dated May 9, 2002, concurring with the Staff recommendation.
Discussion/Action: The award of open purchase orders List #34 for Fiscal Year 2001-2002 was approved and execution of the purchase orders authorized. Vote: 11-0-0-0.
2.8 Approval of rejection of all proposals for a technology equipment management system.
General Services/Information Technology)
Documents Filed: None.
Discussion/Action: This item was deferred to May 28, 2002.
2.9 Adoption of a resolution approving an increase in the number of very low-income units from 46 to 88 in the El Paseo Studios development, located at the easterly corner of Hamilton and Campbell Avenues. Council District 1.
(Housing)
Documents Filed: Memorandum from Director of Housing, Leslye Corsiglia, dated May 1, 2002, recommending Council adopt said resolution.
Discussion/Action: Resolution No. 70974 entitled: “A Resolution of the Council of the City of San José to Allow First Community Housing or its Designated Partnership to Change the Affordability Mix in the El Paseo Studios Apartment Complex and Authorizing the Director of Housing to Negotiate and Execute all Necessary Documents Necessary to Carry Out the Purposes of this Resolution on Behalf of the City”, was adopted. Vote: 11-0-0-0.
2.10 Report on bids and award of contract for the Sanitary Sewer Junction Structure Rehabilitation Phase I Project (MRP 97-4) to the sole bidder, Bugler Construction, Inc., in the amount of $163,890, and approval of a contingency in the amount of $16,500. CEQA: Exempt, PP96-10-163, PP96-10-165, PP96-10-166. Council District 3. (Public Works)
Documents Filed: Memorandum from Director of Public Works, Katy Allen, dated May 1, 2002, recommending Council award said contract to the sole bidder, Bugler Construction, Inc.
Discussion/Action: The award of contract to Bugler Construction, Inc., the sole bidder, and related contingency, were approved and execution of the contract authorized. Vote: 11-0-0-0.
2.11 Approval of two lease agreements with Cornerstone Properties, LLC, for office space at 4 North Second Street for a combined monthly rent of $57,361.90 during the first year of the leases, with annual increases of approximately three percent to a maximum rate of $62,556.94 per month during the fourth and final year of the leases. (Public Works)
Documents Filed: None.
Discussion/Action: Council Member Campos asked the Administration to renegotiate the lease agreements to reduce or eliminate the penalty for early termination. This item was deferred to May 28, 2002 with the City Manager directed to negotiate with the current property owner a lease agreement that would provide the City with a seven-month notice of termination, resulting in a four-month notification provision and a three-month penalty amount for early termination.
2.12 Report on bids and award of contract for the Alum Rock Ave./King Rd. Streetscape Improvement Project (N. 34th St/Jackson Ave.) to the low bidder, Bamer Construction Co., in the amount of $167,800, and approval of a contingency in the amount of $13,000. CEQA: Exempt, PP01-01-004. Council District 5.
(Public Works)
Documents Filed: Memorandum from Director of Public Works, Katy Allen, dated May 1, 2002, recommending award of said contract to the low bidder, Bamer Construction Co.
Discussion/Action: The award of said contract, with related contingency, to the low bidder, Bamer Construction Co., was approved and its execution authorized. Vote: 11-0-0-0.
2.13 Report on bids and award of contract for the Ryland Park Play Area and Restroom Renovation Project to the low bidder, HRB Construction, Inc., in the amount of $392,531, and approval of a contingency in the amount of $39,000. CEQA: Resolution No. 64273. Council District 3. (Public Works)
Documents Filed: Memoranda from Director of Public Works, Katy Allen, dated May 1, and May 16, 2002, recommending award of said contract to the low bidder, HRB Construction, Inc.
Discussion/Action: The award of contract, with related contingency, to HRB Construction, Inc., the low bidder, was approved and execution of the contract authorized. Vote: 11-0-0-0.
2.14 Report on bids and award of contract for the construction of the New Blossom Hill Branch Library Project to the low bidder, Dennis J. Amoroso, Inc., for the base bid and Add Alternates Nos. 1, 2, and 3 in the amount of $6,791,000, and approval of a contingency in the amount of $350,000. CEQA: Exempt, H01-12-081. Council District 10. (Public Works)
Documents Filed: Memoranda from Director of Public Works, Katy Allen, dated May 1, and May 14, 2002, recommending award of said contract, with related contingency, to the low bidder, Dennis J. Amoroso, Inc.
Discussion/Action: The award of the contract, with related contingency, to Dennis J. Amoroso, Inc., the low bidder, was approved and execution of the contract authorized. Vote: 11-0-0-0.
2.15 Take the following actions to implement the settlement agreement with the Morgan Hill Unified School District and the City of Morgan Hill:
(a) Accept conveyance from the Morgan Hill Unified School District (MHUSD) of fee title to approximately 75 acres of land located between Monterey Road and U.S. Highway 101 North of Burnett Avenue and Tilton Avenue and South of Kirby Avenue.
(b) Approve the grant of an easement to MHUSD to construct and maintain stormwater facilities, a water service connection and other public utility connections over approximately 50 acres of the land conveyed to the City.
(c) Approve an Agreement to allow MHUSD to temporarily use portions of the land conveyed to the City to construct the stormwater facilities and as a construction staging area for the new MHUSD high school to be constructed on adjacent property.
(d) Approve a Memorandum of Understanding between MHUSD, the City of Morgan Hill and the City of San Jose consenting to the provision by the City of Morgan Hill of water, sewer, police and fire services to the portion of the new MHUSD high school site located within the City of San Jose.
CEQA: Morgan Hill Unified School District Board Resolutions Nos. 00/01/021, 01/02/033, and additional CEQA Resolution No. 70975 adopted.
(City Attorney’s Office)
Documents Filed: Memorandum from City Attorney Richard Doyle, dated May 14, 2002, recommending Council take certain actions to implement the Settlement Agreement with the Morgan Hill Unified School District and the City of Morgan Hill.
Discussion/Action: Council Member Williams stated the Final Environmental Impact Report is required prior to implementation of the Plan or execution of the settlement agreement, including approval of overriding considerations that were identified by the EIR. He stated the EIR and Final SEIR identified significant environmental impacts resulting from a project that cannot be reduced to a non-significant level; therefore, the City Council may approve certain actions intended to implement the settlement agreement in connection with the project only if the Statement of Overriding Considerations is adopted. He recommended Council approve the following language, which sets forth how the benefits of the City’s actions outweigh the unavoidable adverse environmental impacts identified: “The EIR and Final Supplemental EIR for this project prepared by the Morgan Hill Unified School District identified project and cumulative impacts to loss of agricultural lands as significant and unavoidable.
“This project
has eliminated or substantially lessened all significant environmental effects
where feasible, and significant unavoidable
impact on the loss of agricultural lands is acceptable in light of other
social, economic, and environmental considerations:
·
‘Morgan
Hill Unified School District's facilities currently are overcrowded and student
enrollment projections indicate that a new high school is needed;
·
‘The
project, as redesigned, furthers our General Plan Growth Management and Major
Strategy by continuing to prudently direct new development to areas within our
Greenline/Urban Growth Boundary in order to achieve the most efficient and
cost-effective use of urban services and facilities; and
·
‘The
redesigned Project also furthers the General Plan, Greenline/Urban Growth
Boundary strategy by helping to maintain a definition of where our City begins
and furthers both the Greenline/Urban Growth Boundary and Coyote Valley Urban
Reserve policies by preserving and furthering the vision of valuable open space
resources in this area’.
All of these benefits outweigh the
significant unavoidable environmental risks and impacts of the Project
identified in the District's EIR and the Final SEIR”.
Upon motion by Council Member Williams, seconded by Council Member Chavez and unanimously carried, the Statement of Overriding Considerations that the benefits outweigh the unavoidable adverse environmental impacts of the project were approved; the actions to implement the settlement agreement with the Morgan Hill Unified School District and the City of Morgan Hill were approved; and Resolution No. 70975 entitled:
“A Resolution of the Council of the City of San José Making Certain Findings in Accordance with the California Environmental Quality Act Concerning Significant Effects, Mitigation Measures, and Alternatives for the Second Comprehensive High School Project of the Morgan Hill Unified School District for Which an Environmental Impact Report and Supplemental Environmental Impact Report were Prepared”, was adopted. Vote: 11-0-0-0.
2.16 Approval of an agreement with David Gates and Associates, Inc. for consultant services for the development of construction documents for the Tully Road Multi-Use Facility, from the date of execution of the agreement to June 30, 2003, in the amount of $270,270, and additional services in the amount of $40,000, for a total agreement amount of $310,270. Council District 7. (Public Works)
(Rules in lieu referral 5/15/02)
Documents Filed: Memorandum from Director of Public Works, Katy Allen, dated May 14, 2002, recommending Council approve said agreement.
Discussion/Action: The consultant services agreement with David Gates and Associates, Inc., was approved and execution of the agreement authorized. Vote: 11-0-0-0.
2.17 Approval of review of the use of Parks and Recreation Bonds for an additional site, San José City College Campus, to serve as a Multi-Service Community Center. Council District 6. (Parks, Recreation and Neighborhood Services)
(Rules in lieu referral 5/15/02)
Documents Filed: Memorandum from Acting Director of Parks, Recreation and Neighborhood Services, Albert Balagso, dated May 15, 2002, recommending approval of the use of Parks and Recreation Bonds for said project.
Discussion/Action: The review of the use of Parks and Recreation Bonds for an additional site to serve as a Multi-Service Community Center was approved. Vote: 11-0-0-0.
END OF CONSENT CALENDAR
STRATEGIC SUPPORT SERVICES
3.2 Report of the Rules Committee – May 8, 2002
Documents Filed: Rules Committee Report of May 8, 2002.
(a) Redevelopment Agency items reported out
at Redevelopment Agency meeting
The Redevelopment Agency items to be reported
out at Redevelopment Agency Board meeting
(b) City Council
(1) Review May 21, 2002 Draft Agenda
The Committee recommended
approval of the May 21, 2002 City Council Agenda with one addition.
(2) Add New Items to May 14, 2002 Amended
Agenda
The Committee recommended
five additions to the May 14, 2002 City Council Agenda.
(c) City Council Committees
(1) Amendments
to Council Committee Agendas
(a) Finance and Infrastructure Committee. Attachment: Draft agenda for May 22, 2002 meeting of the Finance and Infrastructure Committee.
The Committee recommended
adding two items to the May 22, 2002 Finance and Infrastructure Committee:
Investment Agree-ment Pilot Program Evaluation (Finance); and Review
Multifamily Housing Revenue Bond Financing Policy (Housing/Finance).
(b) Economic Development and
Environment Committee -
None Filed.
(c) Education,
Neighborhoods, Youth, and Seniors Committee
None Filed.
(d) Meeting Schedules
(1) Approval of City Council meeting
schedule for period August 2002-January 2003, and Board and Commission
Recognition event. Attachment: Memorandum from Assistant to the City Manager,
Deanna Santana, dated May 2, 2002 recommending approval of: the City Council
Meeting Schedule for the period August 2002-January 2003; and a Board and
Commission Recognition event.
The Committee recommended
approval of (a) the City Council Meeting Schedule for the period August 2002
through January 2003; and (b) a Board and Commission Recognition event on
Tuesday, October 15, 2002 at 5:30 p.m.
(e) The Public Record. Attachment:
Memorandum from City Clerk Patricia O’Hearn dated May 2, 2002 transmitting
items filed for the Public Record for the period April 24-30, 2002.
The Committee noted and filed the Public
Record for the period of April 24-30, 2002.
(f) Boards, Commissions and Committees
None Filed.
(g) Council Referrals for Assignment to Appropriate
Committee, Administration, or Council Appointee
None Filed.
(h) Administrative Reviews and Approval
None Presented.
(i) Oral Communications
Pete Campbell requested a copy of the staff
report on alternate City Hall sites. He also stated the ultimate decision
regarding the location of City Hall should be made by the residents of San
José.
(j) Adjournment
The
meeting was adjourned at 2:15 p.m.
Discussion/Action: Upon motion by Vice Mayor Shirakawa, Jr., seconded by Council Member Chavez and unanimously carried, the Rules Committee report and actions of May 8, 2002, were accepted. Vote: 11-0-0-0.
Report of the Rules in Lieu Committee – May 15, 2002
Documents Filed: In-Lieu Rules Committee Report of May 15, 2002.
(f) Boards, Commissions and Committees
(1) Deferred Compensation Advisory Committee. Attachment: Memorandum from Acting Director of Human Resources Kay Winer, dated May 2, 2002, recommending an appointment to the Deferred Compensation Advisory Committee.
The In-Lieu Committee recommended appointment of Jay
Castellano to the Deferred Compensation Advisory Committee as one of the two
general employee representatives, for a term ending March 1, 2006, and
forwarded the item to Council for final disposition.
Discussion/Action: Upon motion by Vice Mayor Shirakawa, Jr., seconded by Council Member Chavez and unanimously carried, the Rules In-Lieu Committee Report and actions of May 15, 2002 were accepted. Vote: 11-0-0-0.
3.3 Report of the Finance and Infrastructure Committee – May 8, 2002
Documents Filed: Finance and Infrastructure Committee report of May 8, 2002.
(a) Consent Items:
(1) Monthly Investment Report for March 2002. Attachment: Memorandum from Scott P. Johnson, Director of Finance, dated March 22, 2002, transmitting the Monthly Investment Report for March 2002.
The Committee approved the
Consent Items.
(b) Monthly Financial Report for March 2002.
Attachment: Memorandum from Budget Director Larry Lisenbee, dated April 25,
2002, transmitting said report.
The Committee accepted the
staff report.
(c) Review of Investment Policy. Attachment:
Memorandum from Director of Finance, Scott Johnson, dated April 30, 2002,
recommending approval of the proposed investment policy revisions and enhancements
attached thereto.
The Committee accepted the
staff report.
Discussion/Action: See Item 3.4 for Council
action taken.
(d) Review of City Debt Management Policy.
Attachment: Memorandum from Director of Finance, Scott Johnson, dated April 30,
2002, recommending Council review and approve the Debt Management policy as
proposed by the Finance Department, and recommend that the City Council
formally adopt this policy by resolution.
The Committee accepted the
staff report.
Discussion/Action: See Item 3.5 for Council
action taken.
(e) An Audit of the Property Management
Operations of the City of San José’s Department of Public Works/Real Estate
Division. Attachment: Report entitled, “An Audit of the Property Management
Operations of the City of San José’s Department of Public Works/Real Estate
Division” dated April 2002.
The Committee [1] accepted the staff report
with the direction that a report of all City-owned properties be added to the
Auditor’s Workplan, and [2] recommended Staff [a] find out what the intent of
the non-profit organization is, [b] inspect the buildings to make sure they are
safe; and [c] review all City-funded improvements to determine whether the City
or the non-profit organization should be responsible (for up-keep and maintenance)
as specified in the lease document.
(f) Housing Set-Aside Tax Allocation Bonds
Sale. Attachment: Memorandum from Director of Finance Scott P. Johnson, and
Redevelopment Agency Director of Finance & Administration David Baum, dated
April 29, 2002, recommending approval of the Plan of Finance for the issuance
of $70 million par amount of taxable variable-rate housing set-aside revenue
bonds in May 2002 to continue funding the Housing Department’s affordable
housing finance program and direct City staff to work with the financing team
to develop the necessary bond documents for City Council and Agency Board
approval on May 21, 2002.
The Committee accepted the
staff report.
(g) Oral Petitions
The following individuals spoke on various
topics of interest: Dale Warner, Diane Kruger, Yolanda Reynolds, and Long Do.
(h) Adjournment.
The Committee adjourned at 4:35 p.m.
Discussion/Action: Upon motion by Council Member Dando, seconded by Vice Mayor Shirakawa, Jr. and unanimously carried, the Finance and Infrastructure Committee Report and actions were accepted with Council action on Item 3.3(c) taken at 3.4, and Item 3.3(d) acted upon at Item 3.5. Vote: 11-0-0-0.
Council Member Yeager left
Chambers at this point in the meeting.
Items 3.4 and 3.5 were heard together.
3.4 Adoption of a resolution approving proposed changes to the City's Investment Policy.
[Finance and Infrastructure Committee referral 5/8/02 – Item 3.3(c)]
Documents Filed: (1) Supplemental Memorandum from Assistant to the City Manager, Deanna Santana, dated May 15, 2002, reporting that the Finance and Infrastructure Committee accepted the staff report dated April 30, 2002 and recommending adoption of a resolution to accept the revised Investment Policy for the City of San José. (2) Supple-mental memorandum from Assistant to the City Manager, Deanna Santana, dated May 15, 2002, reporting that the Finance and Infrastructure Committee accepted the staff report dated April 30, 2002 and recommending Council adopt by resolution the proposed Debt Management Policy as City Council Policy.
Discussion/Action: William J. Garbett spoke in opposition to the proposed actions. Upon motion by Council Member Williams, seconded by Council Member Chavez and unanimously carried, Resolution No. 70976, entitled: “A Resolution of the Council of the City of San José Approving the City’s Investment Policy Including Certain Revisions Thereto”; and Resolution No. 70977, entitled: “A Resolution of the Council of the City of San José Adopting a Debt Management Policy”, were adopted. Vote: 10-0-1-0. Absent: Yeager.
Council Member Yeager returned
during discussion of Item 4.1.
ECONOMIC & NEIGHBORHOOD DEVELOPMENT
4.1 Report of the Economic Development & Environment Committee – May 6, 2002
Documents Filed: Economic Development & Environment Committee Report of May 6, 2002.
(a) Habitat Conservation Plan. Attachment:
Memorandum from Planning, Building and Code Enforcement Director, Stephen M.
Haase, dated April 30, 2002, recommending acceptance of the status report
attached thereto.
The Committee heard Staff’s report on
“Habitat Conservation Plan” and forwarded it to Council.
(b) Discussion and Review of Section 13.28.130
of the San José Municipal Code entitled, “Tree Trimming Removal”. Attachment:
Memorandum from Senior Deputy City Manager Darrell Dearborn, dated April 22,
2002, transmitting the existing Tree Removal Ordinance for review as directed
by the Rules Committee at the April 17, 2002 meeting.
The Committee heard Staff’s report on
“Tree-Trimming-Removal Ordinance Section 13.28.130” and forwarded it to
Council.
(c) Interim Report on Implementation efforts
of Green Building Policies. Attachment: Memorandum from Director of
Environmental Services, Carl W. Mosher, dated April 25, 2002, transmitting said
interim report.
The Committee deferred
this item to June 3, 2002.
(d) Workforce Investment Act Program Third
Quarter Report. Attachment: Memorandum from Director of Economic Development,
Paul Krutko, dated April 19, 2002, transmitting said report.
The Committee heard Staff’s report on
“Workforce Investment Act Program Third Quarter Report” and forwarded it to
Council.
(e) Parkland Ordinances Fee Adjustment
Report. Attachment: Memorandum from Acting Director of Parks, Recreation and
Neighborhood Services, Albert Balagso, dated April 30, 2002, recommending
Council: [1] Accept the report regarding revisions to the in-lieu fee schedule
associated with the Parkland Dedication and the Park Impact Ordinances; [2]
Approve a two-year phase in of adjustments to the in-lieu fee schedule
associated with the Parkland Dedication and Park Impact Ordinance where the
first year will reflect seventy percent (70%) of the land values indicated in
the 2001 residential land value study prepared by Diaz, Diaz & Boyd, Inc.,
and the second year will be based on one hundred percent (100%) of the land
values in the 2002 Residential Land Study Commission by the City. Any adjustments
to the in-lieu fees will become effective sixty (60) days after Council action;
[3] Set June 11, 2002 for a public hearing to consider inclusion of single
residential occupant units as a housing type under the Park Impact Ordinance;
and [4] Set June 25, 2002 for a public hearing to consider changes to the
in-lieu fees as provided for in the Parkland Dedication and the Park Impact
Ordinances, Chapters 19.38 and 14.25 of the San Jose Municipal Code
respectively, in order to align in-lieu fees with current land values.
The Committee heard Staff’s report on
“Parkland Ordinances Fee Adjustment Report” and forwarded it to Council.
Discussion/Action:
See Item 4.2 for Council action taken.
(f) Quarterly Downtown Housing Report.
Attachment: Memorandum from Susan F. Shick, Executive Director, Redevelopment
Agency, dated April 19, 2002, transmitting said report.
(g) Monthly Status Report on Housing
Production Team Action Items. Attachment: Memorandum from Director of Housing,
Leslye Corsiglia, and Director of Planning, Building and Code Enforcement,
Stephen M. Haase, dated April 18, 2002, transmitting said report for the month
of April 2002.
·
Status Report
on Housing Production Team Recommendation No. 18 – Initiate State Legislation
to revise CEQA Rules
(h) Monthly Report on Affordable Housing
Production. Attachment: Memorandum from Director of Housing, Leslye Corsiglia,
dated April 19, 2002, transmitting said report.
(i) Quarterly Report on the Project
Development Program. Attachment: Memo-randum from Director of Housing, Leslye
Corsiglia, dated April 19, 2002, transmitting said report for the third quarter
of the 2001-02 Fiscal Year.
(j) Quarterly Report on the Housing
Rehabilitation Program. Attachment: Memo-randum from Director of Housing,
Leslye Corsiglia, dated April 19, 2002, transmitting said report for the third
quarter of the 2001-02 Fiscal Year.
(k) Third Quarter Report on the Housing and
Homeless Fund. Attachment: Memo-randum from Director of Housing, Leslye
Corsiglia, dated April 19, 2002, transmitting said report.
Due to lack of a quorum,
no further Committee discussion occurred, and the remaining reports for the
items on the Agenda were forwarded to the City Council for consideration.
(l) Further Discussion of the Group Home Ordinance
and Reasonable Accommodation
The Committee deferred this item to June 3,
2002.
(m) Oral Petitions
The following individuals spoke on various
issues: Mike Licata, Tom Armstrong of HMH Engineering, and Bob Hines of
Tri-County Apartment Association.
(n) Adjournment
The meeting was adjourned at 3:32 p.m.
Discussion/Action: Upon motion by Council Member Williams, seconded by Council Member Chavez and unanimously carried, the Economic Development & Environment Committee report and actions of May 6, 2002, were accepted, with Item 4.1(e) heard at Item 4.2. Vote: 11-0-0-0.
4.2 (a) Accept the supplemental report regarding revisions to the in-lieu fee schedule associated with the Parkland Dedication and the Park Impact Ordinances;
(b) Consider
a two-year phase-in adjustment to the in-lieu fee schedule associated with the
Parkland Dedication and Impact Ordinances where the first year will reflect 70%
of the land values indicated in the 2001 Residential
Land Value Study prepared by Diaz, Diaz & Boyd, Incorporated, and
the second year may be based on 100% of the land values in the 2002 Residential
Land Study Commission by the City;
(c) Set June 11, 2002 at 1:30 p.m. as the date and time for a public hearing to consider an amendment to the Parkland Dedication and Park Impact Ordinances, Chapters 19.38 and 14.25 of the San José Municipal Code, to add that any housing types that are not included in the most recent Federal Census may be specified by resolution of the Council;
(d) Set June 25, 2002 at 1:30 p.m. as the date and time for a public hearing to amend Resolution No. 68207 to adjust the in-lieu fees charged and credits issued pursuant to the Parkland Dedication and the Park Impact Ordinances, Chapters 19.38 and 14.25 of the San José Municipal Code respectively from 100% to the 70% level. Any adjustments to the in-lieu fees will become effective sixty (60) days after Council action;
(e) Consider a change to private recreation improvement credits on June 25, 2002, to allow as non-active elements, swimming pools and recreation buildings to be credited against land dedicated to the City for public parks purposes, up to 50% cap set forth in Chapter 14.25 or 19.38 of the San José Municipal Code; and
(f) Direct staff to report back to the Economic Development and Environmental Committee in November on its assessment of available lands for possible acquisition to meet the City goal of 3.5 acres per 1,000 population of neighborhood/community serving parkland by the year 2020.
(Parks, Recreation and Neighborhood Services)
[Economic Development and Environment Committee referral 5/6/02 – Item 4.1(e)]
Documents Filed: (1) Supplemental memorandum from Assistant to the City Manager, Deanna J. Santana, dated May 16, 2002, stating the Economic Development and Environment Committee heard the Staff report at their May 6, 2002 meeting and forwarded the issue to the full Council for consideration. (2) Supplemental memorandum from Acting Director of Parks, Recreation and Neighborhood Services, Albert Balagso, dated May 15, 2002, augmenting the information provided to the Economic Development and Environment Committee on May 6, 2002.
Discussion/Action: Pointing out recent discrepancies in the application of increased fees for the dedication of parkland by housing developers, Mayor Gonzales queried Staff on the effective date of the PDO or PIO fees and in-lieu fee adjustments, applicability of the definition of “pipeline” projects as it relates to the particular fee, and the phase in the application process during which the fees would be required. With the application of different definitions predicated on the project type, he suggested Staff resolve the discrepancies prior to the second reading or final adoption of the proposed ordinance, and return to Council with a report which also addresses the goal of adjusting fees annually to keep the in-lieu fees reflective of the actual costs for raw-residential land.
Council Member Dando expressed concern regarding the exorbitant fee increases for developments in Council District 10, and asked Staff to provide justification for the 350% fee increase and the land value numbers used to calculate that increase. She asked that Staff review fee incentives for developers who build mid- to high-rise apartment structures, especially in the Downtown area, and to document the radius and use of the funds collected. She queried Staff on the use of park land fees or the interest of the funds for maintenance facilities, and whether the Parkland Dedication Ordinance allows such uses. She expressed concern about the cost of land in addition to the high-cost of developing the land, and affirmed her interest in continuing to work with developers who plan to build mid- to high-rise structures in the Core area. In addition to the comments presented for the record, Council Member Chavez stated she would reluctantly support the proposed action, and suggested that Staff should develop some mechanism for “freezing” the collection of fees at some level, as an incentive to encourage developers to continue building high-density in the Downtown, and to ascertain the restrictions of both the Ordinance and the State law. Julia Blessing, a resident of Council District 6, urged Council to take immediate action to preserve the Union Pacific Railroad Right-of-Way between the Los Gatos and Kelly Park areas, so that the City can implement the trails as described in the San José Strategic Plan Greenprint for San José parks. Mayor Gonzales recommended Staff investigate the provisions for preservation of the right-of-way described by the speaker.
Upon motion by Vice Mayor Shirakawa, Jr., seconded by Council Member Chavez and unanimously carried, the Staff recommendations and augmentations as contained in the April 30, 2002 and May 15, 2002 memoranda were approved (a) regarding revisions to the in-lieu fee schedule associated with the Parkland Dedication and the Park Impact Ordinances; (b) consider the two-year phase-in adjustment period – where the first year to reflect 70% of the land values indicated in the 2001 Residential Land Value Study, and the second year based on 100% of the land values in the 2002 Residential Land Study commissioned by the City; (c) setting June 11, 2002 public hearing for the purpose of amending the Parkland Dedication and Park Impact Ordinances to add that any housing types that are not included in the most recent Federal Census may be specified by resolution of the Council; (d) setting June 25, 2002 for public hearing to amend Resolution No. 68207 to adjust the in-lieu fees charged and credits issued pursuant to the Parkland Dedication and the Park Impact Ordinances, which adjustments to the in-lieu fees to become effective sixty (60) days after Council action; (e) consider a change to private recreation improvement credits on June 25. 2002, to allow specified non-active elements to be credited against land dedicated to the City for public parks purposes, up to 50% cap; and (f) to direct Staff to return to Council via Economic Development and Environmental Committee in November on assessment of available lands for possible acquisition to meet the City goal of 3.5 acres per 1,000 population of neighborhood/com-munity serving parkland by the year 2020; and (g) with additional direction to Staff to include in the report responses to Council Members’ comments regarding [1] definitive description and clarification of “pipeline” to be submitted at the second reading/final adoption of the ordinance; [2] to “grandfather in” those projects that have the PD zoning at the time the fees become applicable; [3] fees forgiven for construction of mid- to high-rise developments and the disposition of the funds collected; identify a system for providing park maintenance on a consistent basis; and request to resume annual reporting of adjustments of construction-related fees. Vote: 11-0-0-0.
Council Member Yeager left Chambers at this point in
the meeting.
4.3 (1) The Mayor’s recommendations regarding the Rental Housing Task Force Report; and
(2) An ordinance amending Chapter 17.23 of Title 17 of the San José Municipal Code by adding requirements that owners or managers of units covered by the Rental Dispute Ordinance provide the City with information related to the tenancy, adding requirements that upon a finding by the Director that vacancy rates are less than 3%, a landlord must prove specific reasons to evict tenants on less than a 90 day notice to quit; limiting the ability of a property owner to pass through the cost of an equity refinance into rent; increasing civil penalties for owners who violate the Rental Dispute Ordinance; creating a civil cause of action for illegally evicted tenants under the Rental Dispute Ordinance; and, a right for the recovery of attorneys fees by any prevailing party in a civil action brought under the Rental dispute ordinance.
(Mayor)
Documents Filed: Letters and electronic correspondence from approximately 165 residents commenting on the proposed amendment to the City’s Rental Dispute Ordinance.
Discussion/Action: This item was dropped from the agenda.
4.4 (a) Adoption of a resolution authorizing the City Manager to negotiate and execute an Amended and Restated Agreement with artists Anna Valentina Murch and Doug Hollis to design a work of art for a water feature to be located in the New Civic Center to modify the scope of services and increase the contract amount by $150,000, from $100,000 to a total agreement amount not to exceed $250,000. (Conventions, Arts and Entertainment)
(b) Adoption of a resolution setting a public hearing to consider the vacation on a 0.743 acre segment on Fifth Street between Santa Clara and San Fernando Streets on June 18, 2002 at 1:30 p.m. CEQA: Resolution No. 68905. Council District 3. (Public Works)
(c) Adoption of a resolution authorizing the City Manager to negotiate and execute a second amendment to the continuation agreement with Turner Construction Company in an amount not to exceed $963,000, for a total agreement amount of $2,513,000, to support construction management services through completion of construction documents for the New San José Civic Center Project. CEQA: Resolution No. 68905. Council District 3. (Public Works)
(Rules in lieu referral 5/15/02)
Documents Filed: Memorandum from Director of Conventions, Arts and Entertainment, Nancy Johnson, dated May 15, 2002, recommending Council adopt said resolutions.
Discussion/Action: Upon motion by Vice Mayor Shirakawa, Jr., seconded by Council Member Chavez and unanimously carried, Resolution No. 70978 entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute an Amended and Restated Agreement with Anna Valentina Murch and Doug Hollis to Design a Work of Art for a Water Feature at the New Civic Center in an Amount not to Exceed $250,000”; Resolution No. 70979 entitled: “A Resolution of the Council of the City of San José Setting a Public Hearing to Consider Whether to Vacate a Portion of Fifth Street, Between Santa Clara and San Fernando Streets”; and Resolution No. 70980 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 Continuation Agreement with Turner Construction Company in an Amount Not to Exceed $963,000 for Construction Management Services Through Completion of Construction Documents for the New San Jose Civic Center Project”, were adopted. Vote: 10-0-1-0. Absent: Yeager.
RECREATION & CULTURAL SERVICES
5.3 Approval of the Bird/Fisk Pocket Park Master Plan. CEQA: Exempt, PP02-04-083. Council District 6. SNI: Gardner/Atlanta. (Public Works)
Documents Filed: Memorandum from Director of Public Works, Katy Allen, dated May 1, 2002, recommending approval of the Bird/Fisk Pocket Park Master Plan.
Discussion/Action: Upon motion by Council Member Cortese, seconded by Council Member Chavez and unanimously carried, the Bird/Fisk Pocket Park Master Plan was approved. Vote: 10-0-1-0. Absent: Yeager.
TRANSPORTATION SERVICES
6.1 Approval of staff’s report on the implementation date of the Horace Mann and South University Residential Parking Permit Program. (Transportation)
(Referred from 4/16/02 – Item 6.1)
Documents Filed: None.
Discussion/Action: This item was deferred to May 28, 2002.
ENVIRONMENTAL & UTILITY SERVICES
7.1 Acceptance of the status report on the transition of the Recycle Plus! Program. (Environmental Services)
(Referred from 4/23/02 – Item 7.2)
Documents Filed: None.
Discussion/Action: This item was deferred to May 28, 2002.
Council Member Yeager returned to
Chambers at this point in the meeting.
7.2 (a) Approval of an ordinance amending and restating Chapter 15.28 establishing regulations pertaining to cable systems and open video systems.
(b) City Council direction on one of the following options for Council consideration and action:
(1) Direct Administration to return on June
4, 2002 with the completed ascertainment of the City’s cable-related needs and
interests and an amended Request For Renewal Proposal, originally dated
November 13, 2001, for operation of a cable system to provide cable service in
the City that would meet and service those identified cable-related needs and
interests.
(2) Approval of an ordinance and other actions necessary to grant a cable franchise for the operation of a cable system to provide in the City that would meet and service the cable-related needs and interests of this community.
(City Manager’s Office)
(Referred from 4/23/02 – Item 7.5)
Documents Filed: Correspondence from Communications Workers of America, President Louie H. Rocha, Local 9423-AFL-CIO, dated May 20, 2002, transmitting a letter from AT&T Broadband & Internet Service Director, Silicon Valley, David Walton, dated September 21, 1999.
Discussion/Action:
In the absence of a written staff report, Assistant City Manager Mark Linder
presented an overview of the negotiations with AT&T for cable services in
San José, and reviewed resolved key issues regarding non-cable services, such
as the cash flow element and retention of the framework. He stated the final
agreement has not been completed; however, to maintain momentum of
negotiations, Staff recommended that Council approve the direction to the
Administration as proposed in Item 7.2(b)(1) with the date changed from June 4,
2002 to June 11, 2002 for Staff to return to Council with the completed
ascertainment of the City’s cable-related needs and interests and an amended
Request For Renewal Proposal. The following individuals addressed Council on
the proposal: Vernon Granneman, Pacific Bell; Hilbert Morales, El Obsenador;
Leonard Antuna; Louie Rocha, CWA Local 9423; Phardra Ellis-Lamkins, South Bay
Labor Council; Ross Signorino; Allen Hammond, Broadband Institute of
California.
During Council
deliberation of the options, Mayor Gonzales noted the absence of an AT&T
representative in attendance at the Council meeting, and asked the
Administration to convey to AT&T the difficulty of the negotiations; and as
Council considers one of the options, which basically is the first step in the
formal process, it is with the understanding that the action does not preempt
continuing negotiations between the contract principals. He stated the
direction to the Administration, by today’s action of the City Council, is to
return on June 11, 2002 with some contract that has been negotiated. Upon
motion by Council Member Dando, seconded by Council Member Reed and unanimously
carried, there was no approval of an ordinance establishing regulations
pertaining to cable systems and open video systems (Item 7.2(a); the direction
to the Administration in Item 7.2(b)(1) to return with the completed
ascertainment of the City’s cable-related needs and interests and an amended
Request For Renewal Proposal for operation of a cable system to provide cable
service in the City that would meet and service those identified cable-related
needs and interests, was approved with the date changed from June 4, 2002 to
June 11, 2002; and for Item 7.2(b)(2), there was no approval of an ordinance
granting a cable franchise for the operation of a cable system. Vote: 11-0-0-0.
7.3 (a) Report on the status of the Municipal Water Request for Proposals process and recommendation to select Option No. 4, the Environmental Services Management Plan.
(b) Adoption of a resolution authorizing the City Manager to negotiate and execute a continuation agreement for technical services with HDR Engineering, Inc., extending the term from March 31, 2002 to June 30, 2002, and increasing compensation by $30,000, to a total amount not to exceed $320,000.
(City Manager’s Office)
(Deferred from 4/30/02 – Item 7.2)
Documents Filed: (1) Memorandum from Council Members Cortese, Reed, Dando, Diquisto and Mayor Gonzales, dated May 20, 2002, recommending approval of the direction regarding the future operation of the San José Municipal Water System. (2) Memorandum from Council Member Reed, dated May 21, 2002, providing supplemental information pertaining to the proposed Request for Proposals process and raising questions to be addressed during the negotiation process. (3) Memorandum from Senior Deputy City Manager Darrell Dearborn, dated May 10, 2002, transmitting report presenting the results of an RFP process that solicited proposals to (a) lease, operate and maintain the Municipal Water System, or (b) to operate and maintain the Municipal Water System, and recommending approval of Option No. 4. (4) Correspondence from San Jose Water Company dated May 15, 2002, regarding the Company’s proposals to lease or operate the Municipal Water System. (5) Memorandum from Senior Deputy City Manager, Darrell Dearborn, dated May 17, 2002, providing information in response to the correspondence from San Jose Water Company dated May 15, 2002. (6) Correspondence from San Jose Water Company dated May 20, 2002, regarding further consideration of the Company’s proposals and the ESD proposal. (7) Memo-randum from Senior Deputy City Manager, Darrell Dearborn, dated May 21, 2002, providing information in response to letter from San Jose Water Company dated May 20, 2002 regarding further consideration of the Company’s proposals and the ESD Management Plan. (8) Document titled, “Statement of Great Oaks Water Company in Opposition to the Lease of Muni to SJWC”, dated May 20, 2002. (9) Memorandum from Senior Deputy City Manager, Darrell Dearborn, dated May 16, 2002, recommending adoption of a resolution authorizing the City Manager to negotiate and execute a continuation agreement for technical services with HDR Engineering, Inc., extending the term from March 31, 2002 to June 30, 2002, and increasing compensation by $30,000 to a total amount not to exceed $320,000. (10) Hard copies of overhead presentation made to the Council by City Administration.
Discussion/Action: Senior Deputy City Manager Darrell Dearborn, introduced Richard Roth, President and Chief Executive Officer of the San José Water Company, Drew Gibson, Chairman of the Board of the San José Water Company, and Attorneys Eric Peterson and Owen Wood of Hawkins Delafield and Wood. With the use of PowerPoint, he presented a comprehensive summary of the history of the Water System dating back to 1960 when the City annexed 2900 acres of the Evergreen area, and in 1961 the Municipal Water System was created when the City of San José purchased the Company. Displaying a map of the Water System boundaries, he delineated the various areas served by Municipal Water System, San José Water Company, and Great Oaks Water Company, and discussed the water system profile based on 2000-2001 annual operating revenues derived from the customers served. He elaborated on a very different profile between the customer base of the MuniSystem and that of San José Water Company, in that 25% of the water sources come from the San Francisco Public Utilities Commission through the Hetch-Hetchy System, and the remaining 75% is derived from Santa Clara Valley Water District.
Beginning with San José Water Company’s 1962 offer to purchase the Municipal Water System, he pointed out the milestones that lead to the decision to consider privatizing the system with the City Council directing the City Auditor to conduct a study of the lease and sale of the system, which Pro Forma study compared the projected net operating income that could be derived from a public operation of the System to a projected net operating income derived from a private investor-owned utility. He stated the City Council set Policy Priorities for the lease/operating RFP in April 2000 – which incorporated provisions for maximum financial benefits to the City and the customers, continued employment for City employees, a plan to ensure Environmental Services Department/Municipal Water System water staff operation is efficient and competitive, and the results of the process should continue inclined rates to encourage conservation and that future water rates remain at or below the median of South Bay providers – and considered the results of the RFP in May of 2002 which did not meet the test of the Council Priority Policies. He stated the conclusion of the Evaluation Committee was that the Environmental Services Department Management Plan does measure up to the Council Policy Priorities. He continued with the summary of the comparative analysis of the lease proposals received from SJWC and Environmental Services Department, and the contract principles as requested in the RFP, discussed the operation and maintenance responsibilities of the water distribution system for capital maintenance, and elaborated on the comparison of service standards and the City’s major objectives of the lease request to obtain an up-front payment or an accelerated financial benefit through a competitive process. Pointing out the available options, he stated the City Council could (a) reject all proposals and solicit new 20-year and 30-year lease proposals, with specific mandatory business terms; (b) reject all proposals and direct Staff to negotiate a lease agreement with San José Water Company for up to 30 years on terms consistent with the RFP, or other terms established by the City Council; (c) select the Company’s contract proposal subject to mutual agreement on terms not consistent with the RFP; or select the ESD Management Plan.
Drew Gibson, Chairman of the Board, and Richard Roth, President and Chief Executive Officer of the San José Water Company, presented summaries of the Company’s proposal, consenting to the recommendations proposed by Mayor Gonzales and Council Members Cortesé, Dando, Diquisto and Reed to begin good-faith negotiations for the 30-year water agreement. The following individuals addressed Council on various aspects of the issue: Jim Cunneen, Chamber of Commerce; Bob Wilson, Association of Engineers and Architects; Drucilla Redwine and Bernardo R. Garcia, Utility Workers Union of America, Local 259; Alan Gardner, Chief Operating Officer, Great Oaks Water Company; Amy B. Dean; William J. Garbett; Deborah Powell, President, Confidential Employees Organization, AFSCME Local 101; Tom Brim, City of San José Inspectors’ Union; and Ross Signorino.
For purposes of Council discussion, Council Member Cortesé recommended, and Council Member Dando concurred, approval of the direction as contained in the May 20, 2002 memorandum co-authored by Council Members Reed, Dando, Diquisto, and Mayor Gonzales, regarding the future operation of the San José Municipal Water System (SJMWC). Articulating their opposition to the proposed re