Memo 2.1D, Sept. 30, 2003

MINUTES OF THE CITY COUNCIL

SAN JOSÉ, CALIFORNIA TUESDAY, MAY 20, 2003

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

Present: Council Members - Campos, Chavez, Chirco, Cortese, Dando, Gregory, LeZotte, Reed, Williams, Yeager; Gonzales.

Absent: Council Members - None.

Upon motion unanimously adopted, the City Council recessed to Closed Session at 9:34 a.m. in Room 600 (A) to confer with Legal Counsel regarding initiation of litigation of a matter where there is anticipated litigation pursuant to Government Code Section 54956.9 Subsection C.

By unanimous consent, Council reconvened from Closed Session and recessed at 10:45 a.m. and reconvened at 1:35 p.m. in Council Chambers, City Hall.

Present: Council Members - Campos, Chavez, Chirco, Cortese, Dando, Gregory, LeZotte, Reed, Williams, Yeager; Gonzales.

Absent: Council Members - None.

Invocation

Council Member Campos introduced the students from the Five Wounds Catholic School Choir ranging in age from Kindergarten to 8^th grade, and their teacher, Mr. Nelson Garza. The Choir sang “God Bless the USA,” and presented a CD of their Christmas songs to Mayor Gonzales, and each of the Council Members. (District 5)

Pledge of Allegiance

Mayor Gonzales led the Pledge of Allegiance.

Orders of the Day

Upon motion by Council Member Williams, seconded by Council Member Chavez, and unanimously carried, Item 1.3 was heard in the Evening Session, Item 4.4 was dropped to return to the Driving a Strong Economy Committee’s 6 month work plan process, and the Orders of the Day, and the Amended Agenda were approved. Vote: 11-0-0-0.

CEREMONIAL ITEMS

1.2 Presentation of plaque to John Walter for 4 years 6 months service on the Senior Citizens Commission. (Mayor)

Documents Filed: None.

Discussion/Action: Mayor Gonzales recognized and commended John Walter with a plaque in appreciation for his outstanding service of 4 years and 6 months on the Senior Citizens Commission. Mr. Walter was unable to attend the ceremony.

1.5 Presentation of a commendation to the American Lung Association (Santa Clara County Chapter) recognizing their hard work in promoting air quality and the conservation of energy resources throughout Santa Clara County during May, Clean Air Month. (LeZotte)

(Rules Committee referral 5/14/03)

Documents Filed: None.

Discussion/Action: Mayor Gonzales, Council Member LeZotte, and the City Council congratulated and commended Margo Sidener, Kim Rogers and David Dias of the American Lung Association, Santa Clara Valley/San Benito Chapter in recognition of their dedicated partnership with local governments to improve air quality in Santa Clara County for the benefit of all residents in the community.

1.6 Presentation of a plaque to the City of San José from the American Lung Association commemorating 5 years of compliance to Assembly Bill 13, “No Smoking in Bar and Restaurant Initiative” and for earning a “Gold Status” level of compliance. (City Manager’s Office) (Orders of the Day)

Documents Filed: None.

Discussion/Action: This item was deferred to May 27, 2003.

1.7 Presentation of a commendation to the California Transplant and Donor Network for their life giving efforts and dedication to organ and tissue donors and their families. (Chavez) (Orders of the Day)

Documents Filed: None.

Discussion/Action: Mayor Gonzales, on behalf of Council Member Chavez, and the City Council, presented a commendation to Salvator Guerrero of the California Transport and Donor Network, in recognition of their dedication to improve and extend lives through organ and tissue donation for transplantation, and by offering support to donor families; and to acknowledge Angelica Willard, who lost her beloved son two years ago, and generously donated his organs for transplant so that others could be saved, and who has been an invaluable volunteer educating the public.

CONSENT CALENDAR

Upon motion by Council Member Cortese, seconded by Council Member Chavez and unanimously carried, the Consent Calendar was approved and the below listed actions were taken as indicated. Vote: 11-0-0-0.

2.1 Approval of City Council Minutes for:

(a) Regular meeting of September 24, 2002

Documents Filed: Minutes of the regular meeting of September 24, 2002.

Discussion/Action: The minutes were approved, and Staff was directed to report back to Council regarding the lighting for the Fallon statue in Pellier Park. Vote: 11-0-0-0.

(b) Joint City Council/San José Financing Authority meeting of September 24, 2002

Documents Filed: Minutes of the Joint City Council/San José Authority meeting of September 24, 2002.

Discussion/Action: The minutes were approved. Vote: 11-0-0-0.

Documents Filed: Minutes of the Joint City Council/Redevelopment Agency Board meeting of September 24, 2002.

Discussion/Action: The minutes were approved. Vote: 11-0-0-0.

2.2 Final adoption of ordinances:

(a) ORD. NO. 26889 – Rezones certain real property situated at the southeast corner of Madden Avenue and South Jackson Avenue. PDC 02-078

Documents Filed: Proof of Publication of the title of Ordinance No. 26889 executed on May 13, 2003, submitted by the City Clerk.

Discussion/Action: Ordinance No. 26889 was adopted. Vote: 11-0-0-0.

(b) ORD. NO. 26890 – Rezones certain real property situated on the easterly side of Monterey Highway, approximately 950 feet northerly of Blossom Hill Road (5350 Monterey Highway). PDC 03-002

Documents Filed: Proof of Publication of the title of Ordinance No. 26890 executed on May 13, 2003, submitted by the City Clerk.

2.2 (b) ORD. NO. 26890 (Cont’d.)

Discussion/Action: Ordinance No. 26890 was adopted. Vote: 11-0-0-0.

2.3 (a) Report on bids and award of contract for the Municipal Rose Garden Renovation Project to the lowest responsive bidder, Robert A. Bothman, Inc., to include the base bid and Add Alternate Nos. 1 and 2 in the amount of $1,511,000, and approval of a contingency in the amount of $151,000.

(b) Adoption of the following appropriation ordinance amendments in the City-Wide Construction and Conveyance Tax Fund:

(1) Establish the Municipal Rose Garden Renovation Project for $210,000.

(2) Decrease the Ending Fund Balance by $210,000.

(1) Increase the Municipal Rose Garden Project by $66,000.

(2) Decrease the Ending Fund Balance by $66,000.

CEQA: Exempt, HP02-020. Council District 6. (Public Works/City Manager's Office) (Deferred from 5/6/03 – Item 2.10)

Documents Filed: (1) Memorandum from Director of Public Works Katy Allen, dated April 16, 2003, recommending appropriate action be taken based on the evaluation of bids for the Municipal Rose Garden Renovation Project. (2) Memorandum from Director of Public Works Katy Allen, and Budget Director Larry Lisenbee, dated May 13, 2003, recommending award of contract, with related contingency, to the lowest bidder, Robert A. Bothman, Inc., for the Municipal Rose Garden Renovation Project, and adoption of said appropriation ordinance amendments.

Discussion/Action: The award of contract, with related contingency, to the lowest bidder, Robert A. Bothman, Inc., was approved and execution of the agreement authorized; Ordinance No. 26892, entitled: “An Ordinance of the City of San José Amending Ordinance No. 26674 to Appropriate Monies in the Citywide Construction and Conveyance Tax Fund for the Municipal Rose Garden Renovation Project; and Providing that this Ordinance Shall Become Effective Immediately Upon Adoption; and Ordinance No. 26893, entitled: “An Ordinance of the City of San José Amending Ordinance No. 26674 to Appropriate Monies in the Parks and Recreation Bond Fund for the Municipal Rose Garden Project; and Providing that this Ordinance Shall Become Effective Immediately Upon Adoption”, were adopted. Vote: 11-0-0-0.

2.4 Adoption of a resolution authorizing the reorganization of territory designated as Parker No. 24, which involves the annexation to the City of San José of 0.47 gross acre of land, located at the west side of Union Avenue, approximately 80 feet northerly of Ronda Drive, and the detachment of the same from the appropriate special districts including Santa Clara County Lighting Service Area, Central Fire Protection District, County Service area –1 (County Library Service Area), and West Valley Sanitation. CEQA: Exempt. Council District 9. (Planning, Building and Code Enforcement)

2.4 (Cont’d.)

Documents Filed: Memorandum from Director of Planning, Building and Code Enforcement Stephen M. Haase, dated April 30, 2003, recommending adoption of said resolution.

Discussion/Action: Resolution No. 71555, entitled: “A Resolution of the Council of the City of San José Ordering the Reorganization of Certain Uninhabited Territory Designated as Parker No. 24 Subject to Liability for General Indebtedness of the City”, was adopted. Vote: 11-0-0-0.

2.5 Approval of new lease of Airport premises between the City of San José and Airport Group International, for the period January 1, 2003 to December 31, 2008, with annual revenue to the City of $10,476. CEQA: Resolution No. 67380, PP03-02-039. (Airport)

Documents Filed: Memorandum from Director of Aviation Ralph G. Tonseth, dated April 30, 2003, recommending approval of said lease between the City of San José and Airport Group International.

Discussion/Action: The award of the lease between the City of San José and Airport Group International was approved and execution of the lease executed. Vote: 11-0-0-0.

2.6 Approval of an agreement with Brown and Caldwell to provide professional engineering and environmental consulting services for the design of a pipeline to serve recycled water to the new Civic Center and the Joint Public Library; services will include pipeline design and construction management support from June 2, 2003 through September 3, 2004, at a total cost not to exceed amount of $267,000, including $20,000 for additional services. CEQA: Resolution No. 64667, PP03-04-138. (Environmental Services)

Documents Filed: (1) Memorandum from Director of Environmental Services Carl W. Mosher, dated April 30, 2003, recommending approval of said agreement with Brown and Caldwell for design of a pipeline to serve recycled water to the new Civic Center and the Joint Public Library, for a not to exceed amount of $267,000. (2) Letter from the Treatment Plant Advisory Committee, dated May 8, 2003, stating concurrence with the Staff recommendation.

Discussion/Action: The agreement with Brown and Caldwell was approved for a total cost not to exceed $267,000, including $20,000 for additional services, and execution of the agreement authorized. Vote: 11-0-0-0.

2.7 Approval of award of open purchase orders for supplies, materials, equipment, and services for FY 2002-2003 #32 and authorization for the Director of General Services to execute the purchase orders. CEQA: See memo for various CEQA determinations. (General Services)

Documents Filed: Memorandum from Director of General Services Jose Obregon, dated April 30, 2003, recommending approval of open purchase orders list No. 32 for Fiscal Year 2002-2003 and authorize the Director of General Services to execute the purchase orders.

Discussion/Action: The award of open purchase orders List No. 32 for Fiscal Year 2002-2003 was approved, and the Director of General Services was authorized to execute the purchase orders. Vote: 11-0-0-0

2.8 Adoption of a resolution authorizing the City Manager to take the following actions pertaining to the San José Permits On-line (IDTS) Project agreements:

(a) Execute the fourth amendment to the agreement with Intergraph Corporation for the San José Permits On-line (IDTS) Project at no additional cost to the City and to:

(1) Extend the term of the agreement with Intergraph Corporation from June 30, 2003 to October 31, 2003; and

(2) Add Tele-works as the software provider for the Interactive Voice Response (IVR) System to automate telephone inspection requests and upgrade the IVR hardware specification to reflect the Tele-works proposal.

(b) Execute an Addendum to the Maintenance and Support Agreement between the City and Intergraph Corporation to provide maintenance and support services in the amount of $176,900, for the term of January 1, 2003 to December 31, 2003.

(c) Execute all subsequent annual maintenance & support addenda with Intergraph for the San José Permits On-Line (IDTS) Project without further City Council action other than the appropriation of funding.

CEQA: Not a Project. (Planning, Building and Code Enforcement)

Documents Filed: Memorandum from Director of Planning, Building and Code Enforcement Stephen M. Haase, dated May 8, 2003, recommending adoption of said resolution, execution of an Addendum to the Maintenance and Support Agreement between the City and Intergraph Corporation, and execution of all subsequent annual maintenance and support addenda with Intergraph for San José Permits On-Line project.

Discussion/Action: Resolution No. 71556 adopted, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Execute Amendments and Addenda to the San José Permits On-Line (IDTS) Project Agreements”, was adopted. Vote: 11-0-0-0.

2.9 Adoption of a resolution:

(a) Approving a Freeway Maintenance Agreement between the City and the State of California, acting through the California Department of Transportation for the proposed City’s Guadalupe River Trail, Reach 12 Phase 1 crossing under State Route 85.

(b) Authorizing the City Manager to negotiate and execute all documents relating to the Freeway Maintenance Agreement.

CEQA: Mitigated Negative Declaration, PP03-03-092. (Parks, Recreation and Neighborhood Services)

(Rules Committee referral 5/14/03)

Documents Filed: Memorandum from Director of Parks, Recreation and Neighborhood Services Sara L. Hensley, dated May 13, 2003, recommending adoption of said resolution.

Discussion/Action: Resolution No. 71557, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute a Freeway Maintenance Agreement with the State of California, Department of Transportation for the Guadalupe River Trail, Reach 12, Phase 1 Crossing Under State Route 85”, was adopted. Vote: 11-0-0-0.

2.10 Adoption of the following appropriation ordinance amendments in the Council District 4 Construction and Conveyance Tax Fund:

(a) Establish the Alviso Pool Emergency Repairs Project for $90,000.

(b) Decrease the Ending Fund Balance by $90,000.

CEQA: Exempt, PP03-05-162. Council District 4. (Parks, Recreation and Neighborhood Services/City Manager’s Office)

(Rules Committee referral 5/14/03)

Documents Filed: Memorandum from Director of Parks, Recreation and Neighborhood Services Sara L. Hensley, and Budget Director Larry Lisenbee, recommending adoption of said appropriation ordinance amendments.

Discussion/Action: Ordinance No. 26894, entitled: “An Ordinance of the City of San José Amending Ordinance No. 26674 to Appropriate Monies in the Council District 4 Construction and Conveyance Tax Fund for the Alviso Pool Emergency Repairs Project; and Providing that this Ordinance Shall Become Effective Immediately Upon Adoption”, was adopted. Vote: 11-0-0-0.

2.11 (a) Approval of an ordinance of the City of San José amending Section 4.46.050 of Chapter 4.46 and Section 4.47.040 of Chapter 4.47 of Title 4 and repealing Section 24.02.470 of Chapter 24.02 of Title 24 of the San José Municipal Code to make nonsubstantive revisions to the provisions regarding the rate of tax.

(b) Adoption of a resolution initiating an amendment to Title 20 of the San José Municipal Code to add a new Section 20.10.100 to authorize the establishment of cost recovery fees for planning services and processes, setting a public hearing on June 3, 2003 at 1:30 p.m. and referring said ordinance to the Planning Commission.

(c) Approval of an ordinance of the City of San José amending Chapter 20.10 of Title 20 of the San José Municipal Code by adding a new Section 20.10.100 authorizing the establishment of cost recovery fees for planning services and processes.

CEQA: Not a Project. (Planning, Building and Code Enforcement)

(Rules Committee referral 5/14/03)

Documents Filed: Memorandum from Director of Planning, Building and Code Enforcement Stephen M. Haase, dated May 13, 2003, recommending approval of said ordinances, and resolution.

Discussion/Action: Mayor Gonzales called for public testimony. William Garbett spoke on the issue. Vice Mayor Dando asked for clarification of the process, and City Attorney Richard Doyle replied the proposal is to come forward in June as part of the fees and charges of the City, including a cost recovery program for certain Building and Planning fees, and in the past, the way the fees have been calculated is linked to the taxes that are set forth, based on valuation as opposed to cost recovery. He stated this does not change the rate of the tax, as it remains in place based on valuation, and enables Council to adopt by resolution, a cost recovery system based on actual costs the departments involved will incur, and charges that figure to the public. He stated in the ordinance amending Title 20, Section 20.10.100 specifically points out the fees shall not exceed the cost incurred by the City in processing and providing the permit, the combination process or other authorization, and the fees are set by resolution of Council. City Attorney Doyle stated the final hearing on this item would be in June.

Vice Mayor Dando requested information on all the residential fees and taxes that are currently assessed to homes and the impact related to the change. She stated City policies should not be in conflict with one another, for instance, the City and the public would like more parks, trails and affordable housing, yet one way the City is proposing to increase more parks and trails is by adding $5,000 a unit to every house, and that is just the increase on the park fees. She stated the City has to be cognizant of how accomplishing one goal impacts another goal. She stated businesses, and the development community should be encouraged to grow in San José, and suggested suspending collection of the fees for a 6-month period of time to stimulate additional business or building. She requested information on the financial impact the fees and taxes would have on future business and building development. Director of Planning, Building and Code Enforcement Stephen M. Haase stated it is Staff’s intent to return to Council with additional information during the deliberation on the fees and charges report, enabling Council the flexibility to adopt fees that are as close as possible to cost recovery, whether they are valuation or hourly based. Vice Mayor Dando moved approval of the Staff recommendation dated May 13, 2003. Council Member Chavez seconded the motion.

Referring to Item 2.11(c) of the Amended Agenda, Council Member LeZotte stated this item is approving an ordinance authorizing the establishment of cost recovery fees for planning services and processes, and asked is that changing the ordinance in order to move forward, then at a later date establish cost recovery, and City Attorney Richard Doyle replied that is correct, however, the draft ordinance basically states the Director may charge a fee set by Council resolution not to exceed cost recovery, and under Proposition 18, taxes cannot be changed without a public vote. He stated this tax uses valuation, is linked to the building permit in one section of the Code in order to determine the rate of the tax, which remains exactly the same, but allows for a cost recovery system for fees that do not require voter approval. City Attorney Doyle stated Code requires the Planning Commission to review planning fees and make recommendations before being adopted by the City Council, and this item will return on June 3, 2003; building fees do not have a requirement, and will return next week. Director Haase stated the public testimony for the Fees and Charges Report will be conducted this evening, and because Title 20 is being modified, the Planning Commission will make further recommendations. Council Member LeZotte asked why this item is under the Consent Calendar, and not part of the action tonight, and Director Haase replied the process now is to enable legislation that permits Council the flexibility to use systems other than valuation to establish a resolution for fees. He stated it does not set the rate of fees, or commit the Council to any action on the fees and charges proposal by Administration.

On a call for the question, the motion carried unanimously, and Ordinance No. 26895, entitled: “An Ordinance of the City of San José Amending Section 4.46.050 of Chapter 4.46 and Section 4.47.040 of Chapter 4.47 of Title 4 and Repealing Section 24.02.470 of Chapter 24.02 of Title 24 of the San José Municipal Code to Make Nonsubstantive Revisions to the Provisions Regarding the Rate of Tax”, and Ordinance No. 26896, entitled: “An Ordinance of the City of San José Amending Chapter 20.10 of Title 20 of the San José Municipal Code by Adding a New Section 20.10.100 Authorizing the Establishment of Cost Recovery Fees for Planning Services and Processes”, were passed for publication; and Resolution No. 71558, “A Resolution of the Council of the City of San José Initiating Proceedings on its Own Motion to Amend Title 20 of the San José Municipal Code by Adding a New Section 20.10.100 to Authorize the Establishment of Cost Recovery Fees for Planning Services and Processes, Setting a Public Hearing and Referring Said Ordinance to the Planning Commission”, was adopted; Staff was directed to provide to Council, before final hearing, information on all residential fees and taxes currently assessed to homes, the impact of any changes and if any are in conflict; and provide information on the financial impact that these fees and taxes would have on future business and building development. Vote: 11-0-0-0.

2.12 (a) Increase contingency budget authorization by $51,000, from $66,000 to $117,000.

(b) Adoption of the following appropriation ordinance amendments in the Park Yards Fund:

(1) Increase the Kelley Park Service Yard Renovation Project by $107,000.

(2) Decrease the Ending Fund Balance by $107,000.

(c) Adoption of a resolution authorizing the City Manager to negotiate and execute a continuation agreement with Garcia Teague Architecture + Interiors for the Kelley Park Service Yard Project, to expand the scope of services, increase the compensation by an amount not to exceed $26,000, and extend the term of the agreement from April 30, 2003 to November 30, 2003.

CEQA: Mitigated Negative Declaration, PP01-10-186. Council District 7. (Public Works/City Manager's Office)

(Rules Committee referral 5/14/03)

Documents Filed: None.

Discussion/Action: This item was deferred to May 27, 2003.

END OF CONSENT CALENDAR

STRATEGIC SUPPORT SERVICES

3.2 Report of the Rules Committee – May 7, 2003

Vice Mayor Dando, Chair

Documents Filed: Rules Committee Report of May 7, 2003.

(a) Redevelopment Agency items reported out at Redevelopment Agency meeting

(b) City Council

(1) Review May 20, 2003 Draft Agenda

The Committee recommended approval of the May 20, 2003 City Council agenda with three additions.

(2) Add New Items to May 13, 2003 Amended Agenda

The Committee recommended four additions to the May 13, 2003 City Council agenda.

(3) List of Reports Outstanding. Attachment: Report from City Manager dated May 6, 2003, transmitting reports outstanding for May 13, 2003.

The Committee noted and filed the City Manager’s report listing two staff reports outstanding for the May 13, 2003 Council meeting.

3.2 Report of the Rules Committee – May 7, 2003 (Cont’d.)

Vice Mayor Dando, Chair

(1) State

AB 910 (Diaz) Relating to Hospital Community Responsibility

Heard by Council on May 13, 2003.

(a) Accept State Legislative Bill Matrix. Attachment: Memorandum from Intergovernmental Relations Director Betsy Shotwell, dated May 2, 2003, recommending acceptance of the May 2 State Legislation Bill Matrix.

The Committee accepted the May 2^nd State Legislative Bill Matrix.

(b) Voting Delegate for a Special Meeting of the League of California Cities General Assembly on May 15th

Heard by Council on May 13, 2003.

(2) Federal

(a) Federal Lobbyist monthly report. Attachment: Memorandum from Intergovernmental Relations Director Betsy Shotwell, dated May 2, 2003, recommending acceptance of attached monthly report for March 2003 from the City’s Federal lobbyist firm of Patton Boggs, LLP, in Washington, D.C.

The Committee accepted the March 2003 report from the City’s Federal Lobbyist firm of Patton Boggs, LLP.

(d) Meeting Schedules

There were none.

(e) The Public Record. Attachment: Memorandum from City Clerk Patricia L. O’Hearn, dated May 1, 2003, transmitting the items for the Public Record for the period April 23-29, 2003.

The Committee noted and filed the Public Record.

(f) Boards, Commissions and Committees

(1) Police and Fire Retirement Board

Request from Police and Fire Retirement Board to consider revising the definition of “surviving child” to include children born to retirees, or who were adopted after the person retired.

The Committee deferred this item to next week’s meeting.

(g) Council Referrals for Assignment to Administration or Council Appointee

There were none.

(h) Administrative Reviews and Approval

(1) Accept report on workload assessment to implement a Street Tree Mapping System and establish an advisory City Tree Commission and refer item to 2003-04 budget process as a Manager’s Budget Addendum. Attachment: Memorandum from Director of Transportation James R. Helmer, dated April 30, 2003, recommending acceptance of said report.

The Committee referred this item to the Department of Transportation City Service Area (CSA) Budget Study Session.

(i) Oral communications

None were presented.

(j) Adjournment

The meeting adjourned at 2:20 p.m.

Discussion/Action: Upon motion by Council Member Cortese, seconded by Council Member Chavez, and unanimously carried, the Rules Committee Report and actions of May 7, 2003, were accepted. Vote: 11-0-0-0.

3.4 (a) Approval of Council Salary Setting Commission Report for the period July 1, 2003 through June 30, 2005. (City Clerk)

(b) Approval of an ordinance setting Mayor and Council Member salaries. (City Attorney’s Office)

Documents Filed: (1) Memorandum from Mayor Gonzales, Vice Mayor Dando, and Council Members Chavez and Cortese, dated May 19, 2003, recommending approval of the Salary Setting Commission’s recommendations, defer the salary increase for the Mayor and Council Members, and request the Commission to consider methods to regularly review and, if appropriate, increase the car allowance. (2) Memorandum from City Attorney Richard Doyle, dated May 12, 2003, setting forth the options available to the Council with regard to the Salary Setting Commission’s recommended actions. (3) Memorandum from City Clerk Patricia L. O’Hearn, dated May 8, 2003, transmitting the Report from the Council Salary Setting Commission, dated April 16, 2003.

Discussion/Action: Mayor Gonzales called for public testimony. Mollie McLeod spoke on the issue. Council Member Chavez moved approval of the memorandum from Mayor Gonzales, and cosigners, dated May 19, 2003, and to accept the Report from the Salary Setting Commission, dated April 16, 2003. Vice Mayor Dando seconded the motion. Vice Mayor Dando stated Council is accepting the Commission’s recommendation, not necessarily approving a 12% raise over the next two years. Council Member Reed stated Council should defer raises to May 2004 to be consistent with Senior Staff. City Manager Del Borgsdorf clarified Senior Staff raises have been deferred for the entire fiscal year. Council Member Williams stated he is in support of freezing raises for a specific period of time. On a call for the question, the motion carried unanimously, the memorandum from Mayor Gonzales and cosigners, dated May 19, 2003 was approved, the Report of the Salary Setting Commission, dated April 16, 2003 was accepted, and Ordinance No. 26897, entitled: “An Ordinance of the City of San José Adopting Salaries for the Mayor and Council Members Recommended by the Council Salary Setting Commission Pursuant to City Charter Section 407 and Deferring Implementation of the Salary Increase”, was passed for publication, and consideration of the salary increase for the Mayor and Council Members was deferred to May 2004. Vote: 11-0-0-0. Note: Prior to adjournment Council reconsidered Item 3.4; see Item 3.4 on Page 32.

ECONOMIC & NEIGHBORHOOD DEVELOPMENT

4.3 Adoption of a resolution:

(a) Authorizing the issuance of a single series of tax-exempt multifamily housing revenue bonds in a principal amount not to exceed $15,290,000.

(b) Approving a loan of the bond proceeds to a limited partnership created by Fairfield Affordable Housing LLC, for financing the acquisition and rehabilitation of the Turnleaf Apartments Project.

(c) Approving, in substantially final form, the Bonds, Trust Indenture, Financing Agreement, Regulatory Agreement and Declaration of Restrictive Covenants, Intercreditor Agreement, Official Statement and the Bond Purchase Contract; authorizing the Director of Finance and the Director of Housing to execute and, as appropriate, to negotiate, execute, and deliver these documents and other related documents as necessary.

CEQA: Exempt, PP02-11-331. Council District 1. (Finance/Housing)

Documents Filed: (1) Memorandum from Director of Finance Scott P. Johnson, and Director of Housing Leslye Corsiglia, dated April 30, 2003, recommending adoption of said resolution. (2) Supplemental memorandum from Director of Finance Scott P. Johnson, dated May 14, 2003, transmitting Preliminary Official Statement and updated status on financing.

Discussion/Action: Upon motion by Council Member LeZotte, seconded by Council Member Chavez and unanimously carried, Resolution No. 71559, entitled: “A Resolution of the Council of the City of San José Authorizing the Issuance of Multifamily Housing Revenue Bonds and the Loan of the Proceeds Thereof for the Financing of the Turnleaf Apartments and Approving Other Related Documents and Actions”, was adopted. Vote: 11-0-0-0.

4.4 Adoption of a resolution approving an updated Council Policy for Wireless Communications Facilities. Director of Planning, Building and Code Enforcement recommends approval. CEQA: Resolution No. 65459, PP03-05-149. (Planning, Building and Code Enforcement)

Documents Filed: (1) Memorandum from Council Member Reed, dated May 19, 2003, recommending revising the Policy for Wireless Communications Facilities with four statements. (2) Memorandum from Director of Planning, Building and Code Enforcement Stephen M. Haase, dated April 30, 2003, recommending approval of the proposed update to the City Council Land Use Policy for Wireless Communications Facilities (3) Supplemental memorandum from Director of Planning, Building and Code Enforcement Stephen M. Haase, dated May 14, 2003, recommending approval of the proposed update to the City Council Land Use Policy for Wireless Communications Facilities with text modifications. (4) Letter from Christopher Eldridge, Vice President, Crown Castle USA, dated April 29, 2003, providing comments to the proposed revisions to the San José Council Land Use Policy for Wireless Communications Facilities.

Discussion/Action: Item 4.4 was dropped, to return to the Driving a Strong Economy Committee’s 6 month work plan process.

4.5 PUBLIC HEARING ON PETITION FOR FINAL CANCELLATION OF LAND CONSERVATION CONTRACT (Williamson Act), for property consisting of 3.5 acres located on the northeast corner of Fleming Avenue and Warner Drive and authorization for the City Clerk to execute a Certificate of Final Partial Cancellation and directing the City Clerk to record the certificate with the County Recorder. (Rolando Loera, Owner). CEQA: Negative Declaration, PDC00-126. (Planning, Building and Code Enforcement)

Contract No. 71-234 - District 5

(Continued from 5/13/03 – Item 4.3)

Documents Filed: (1) Memorandum from Director of Planning, Building and Code Enforcement Stephen M. Haase, dated April 23, 2003, recommending that the findings of the condition and contingency of the tentative partial contract cancellation were met, and authorize the Mayor to execute a Certificate of Partial Cancellation of Contract to be recorded with the County Recorder. (2) Proof of Publication of Notice of Public Hearing, executed on April 29, 2003, submitted by the City Clerk.

Discussion/Action: Mayor Gonzales opened the public hearing, and there was no discussion from the floor. Upon motion by Council Member Campos, seconded by Council Member Williams, and unanimously carried, the public hearing was closed, the Staff recommendation dated April 23, 2003, was approved, and the City Clerk was authorized to execute and record with the County Recorder, the Certificate of Final Partial Cancellation. Vote: 11-0-0-0.

4.6 Discussion of and approval of an ordinance amending Title 23, the Sign Code, of the San José Municipal Code as it pertains to signage on residential parcels in all residential, agriculture, and open space zoning districts. CEQA: Exempt, PP02-09-260. (Planning, Building and Code Enforcement)

[Driving a Strong Economy Committee referral 4/28/03 – Item 4.2(a)]

(Deferred from 5/13/03 – Item 4.4)

Documents Filed: None.

Discussion/Action: Item 4.6 was deferred to August 19, 2003.

RECREATION & CULTURAL SERVICES

5.1 Report of the All Children Achieve Committee – May 8, 2003

Council Member Yeager, Chair

Documents Filed: The All Children Achieve Committee Report of May 8, 2003.

(a) Youth Commission Report. Attachment: Bi-Monthly Report of the Youth Commission, dated March 2003.

The Committee accepted the report.

5.1 Report of the All Children Achieve Committee – May 8, 2003 (Cont’d.)

Council Member Yeager, Chair

(b) Report on City/San José State University Joint Library. Attachment: Status report of the New Dr. Martin Luther King, Jr. Library Report, from Library Director Jane Light, dated April 24, 2003.

The Committee accepted the report.

(c) Family Camp Annual Report. Attachment: Annual Family Camp Report, from Director of Parks, Recreation and Neighborhood Services Sara L. Hensley, dated April 25, 2003.

The Committee accepted the report.

(d) Update on Parent Institute for Quality Education. Attachment: Status Report for the Parent Institute for Quality Education, from Director of Parks, Recreation and Neighborhood Services Sara L. Hensley, dated April 24, 2003.

The Committee accepted the report.

(e) Update on Joint-Use Agreements with School Districts, including City/School Collaborative

The Committee accepted the report, with Staff directed to return to the June 12, 2003 meeting with the following:

(a) Final count of the survey sent to principals and supervisors.

(b) Timeline of new San José After School structure.

(d) Evaluation/assessment of the City/Schools Collaborative.

(f) Oral petitions

There were none.

(g) Adjournment

The meeting adjourned at 3:30 p.m.

Discussion/Action: Upon motion by Council Member Yeager, seconded by Council Member Chavez, and unanimously carried, the All Children Achieve Committee Report and actions of May 8, 2003, were accepted. Vote: 11-0-0-0.

5.2 Report on bids and take appropriate action based on the evaluation of bids for the Tully Branch Library Project. CEQA: Negative Declaration, PP02-04-080. Council District 7. (Public Works)

Documents Filed: None.

Discussion/Action: Item 5.2 was deferred to May 27, 2003.

TRANSPORTATION SERVICES

6.1 Report of the Building Better Transportation Committee – May 5, 2003

Council Member Cortese, Chair

Documents Filed: The Building Better Transportation Committee Report of May 5, 2003.

(a) Expansion and Improvement of Transit and Transportation Systems

(1) Report and Recommendations on County Expressway Master Plan. Attachment: Memorandum from Director of Transportation James R. Helmer, dated April 21, 2003, recommending acceptance of the County of Santa Clara’s Countywide Expressway Study and County’s Draft Implementation Plan.

The Committee accepted the report, with Staff directed to include an overall general budgeting strategy to come back, and a mechanism to discuss opportunities for joint funding and the impact that it will have over all the programs.

(b) Traffic Relief/Safe Streets

(1) Report and review of Traffic Calming Program. Attachment: Traffic Calming Report from Director of Transportation James R. Helmer, dated April 24, 2003.

The Committee accepted the report.

(2) Pavement Management Program

The Committee accepted the report.

(3) City’s Annual Transportation Report

The Committee accepted the report.

(1) Level of Service (LOS) policy revision. Attachment: Report of the Transportation Level of Service Policy from Director of Transportation James R. Helmer, dated April 28, 2003.

The Committee accepted the report.

(d) Regional Relationships/Funding/Policy

(1) State, Federal, and Local Legislative Update

The Committee received the written status report.

(e) Oral petitions

There were none.

(f) Adjournment

The meeting adjourned at 3:40 p.m.

Discussion/Action: Council Member Cortese moved approval of the Building Better Transportation Committee Report. Vice Mayor Dando seconded the motion. Referring to the NASCOP analysis in the Staff report, Council Member Reed stated NASCOP is issuing 50 tickets per hour in the non-peak hours, however traffic speed is not decreasing on the 35 MPH streets, and asked Staff how the test on the 35 MPH streets compared to the 25 MPH streets, and Director of Transportation James R. Helmer replied the test was conducted on two separate occasions with the Police units and the NASCOP vans for approximately 2 hours each. He stated on a higher posted speed roadway, there are more citations because the roadways serve a greater population than the quiet residential streets, the NASCOP vans are unmarked, and the motorists were generally exceeding the speed limit by a certain threshold amount which will generate many citations. He stated this program is unique in that it is focuses on schools, parks and neighborhoods within the 25 MPH streets. Council Member Reed stated he understands the allocation of scarce resources but felt the only alternative for 35 MPH streets would be to have police officers present, and Director Helmer replied Staff has spoken with Chief of Police William M. Lansdowne and his Department continuously about the fact the three NASCOP vans should provide more time on the higher speed roadways where the injury crashes are higher in number. On a call for the question, the motion carried unanimously, the Building Better Transportation Committee Report, and the actions of May 5, 2003, were accepted. Vote: 11-0-0-0.

6.2 (a) Adoption of a resolution authorizing the Director of Public Works to execute an agreement with Caltrans for reimbursement to the City from the State Grade Separation Fund for the Bailey Avenue Extension over Union Pacific Railroad in an amount not to exceed $5,000,000.

(b) Adoption of the following appropriation ordinance amendments in the Building and Structure Construction Tax Fund to:

(1) Establish an appropriation to the Department of Transportation for the Bailey Avenue Above-Grade Crossing at UPRR in the amount of $950,000.

(2) Reduce the Reserve for the VTA: Bailey/101 Improvement Project by $950,000.

(c) Adoption of a resolution authorizing the City Manager to negotiate and execute any amendments to existing agreements and new agreements as needed to implement the Bailey Avenue Above-Grade Crossing.

CEQA: Resolution No. 68705. Council District 2. (Public Works/City Manager's Office)

Documents Filed: Memorandum from Director of Public Works Katy Allen, and Budget Director Larry Lisenbee, dated April 30, 2003, recommending adoption of said resolutions, and said appropriation ordinance amendments.

Discussion/Action: Mayor asked whether Council approval of the Staff recommendation will expedite work on the overpass, and Director of Public Works Katy Allen replied approval enables Staff the ability to pursue the funding for the Grade Separation element of the State’s budget, and proceed forward in order to obtain approximately $5 million of State grant funding. Mayor Gonzales asked how much time would be saved as the result of Council approval, and Deputy Director Public Works Tim Borden stated the Grade Separator element was to be built with the next phase, coinciding with development beginning in North Coyote Valley, and Staff plans to start scheduling this part of the work in April 2004. Mayor Gonzales stated the City is experiencing a savings in terms of bids given the current recession, and Director Borden stated it is enabling Staff to proceed forward and leverage this money. Mayor Gonzales stated concern that the City does not have reserve money for unanticipated costs on this project, and Director Borden stated there is a contingency reserve in the budget the Valley Transportation Agency is administering for approximately $1.6 million, and in addition because of the good bids, there is an additional $690,000 Caltrans funding available. He stated what the City is relinquishing is an additional contingency of approximately $950,000, which Staff will be applying to this element of the project. Mayor Gonzales stated the 101 widening project was under budget about $10 million, and asked if there is updated news on the City’s ability to use those funds for this project, and Director Borden replied Staff is still negotiating with Caltrans regarding that issue. Council Member Williams stated in regard to the Los Alamitos trail connection recommendations, and the connection at the Coyote Creek Trail, the trail should begin at the point crossing over Coyote Creek with this project, proceed from Santa Teresa Boulevard to Bailey Avenue, over the Grade Separation to connect the creek trail, and Director Borden replied that connection has been incorporated into the design of this project.

Upon motion by Council Member Williams, seconded by Vice Mayor Dando, and unanimously carried, Ordinance No. 26898, entitled: “An Ordinance of the City of San José Amending Ordinance No. 26674 to Appropriate Monies in the Building and Structure Construction Tax Fund for the Bailey Avenue Above-Grade Crossing at Union Pacific Railroad Project; and Providing that this Ordinance Shall Become Effective Immediately Upon Adoption”; Resolution No. 71560, entitled: “A Resolution of the Council of the City of San José Approving a Funding Agreement with Caltrans for Reimbursement from the State Grade Separation Fund for the Bailey Avenue Extension over Union Pacific Railroad in an Amount Not To Exceed $5,000,000 and Authorizing the Director of Public Works to Execute the Funding Agreement”; and Resolution No. 71561, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute any Agreements or Amendments to Agreements as Necessary to Implement the Bailey Avenue Above-Grade Crossing at Union Pacific Railroad, Consistent with the Attached City Council Memorandum”, were adopted. Vote: 11-0-0-0.

6.3 Adoption of a resolution to amend the Master Parking Rate Schedule to add the Second/St. James (Oasis) Parking Lot to the Downtown Free Parking Program after 6:00 p.m. CEQA: Not a Project. Council District 3. (Transportation)

Documents Filed: Memorandum from Director of Transportation James R. Helmer, dated April 30, 2003, recommending adoption of said resolution.

Discussion/Action: Council Member Chavez moved approval of the Staff recommendation. Vice Mayor Dando seconded the motion. Mayor Gonzales called for public testimony. William Garbett spoke on the issue. Council Member Williams asked if Staff evaluated the results of the free parking program, and Director of Transportation James R. Helmer replied Staff regularly monitors parking and capacity counts on street meters, and off street parking facilities. Director Helmer stated Staff reports these figures to the Parking Advisory Board, and formulates recommendations as to adjustments to the Master Parking Rate Resolution. He stated the program has been beneficial at the downtown parking facilities after 6:00 pm during the weekdays, and on weekends to encourage additional attendees to frequent downtown establishments and special events. He stated feedback is positive and the program is reviewed with the Parking Advisory Board regularly, and Staff is making every effort to stimulate the economy and bring people to downtown establishments. On a call for the question, the motion carried unanimously, and Resolution No. 71562, entitled: “A Resolution of the Council of the City of San José Adopting a Master Parking Rate Schedule for Municipal On and Off Street Parking Facilities, to Allow the Extension of the Free Parking Program to the Second/St. James (Oasis) Lot After 6:00 p.m. Weekday and All Day on Weekends and Holidays, and Repealing Resolution No. 71535, dated May 20, 2003”, was adopted. Vote: 11-0-0-0.

ENVIRONMENTAL & UTILITY SERVICES

7.1 (a) Acceptance of the Quarterly Status Report for the cooperative efforts between the City of San José (City) and the Santa Clara Valley Water District (District).

(b) Adoption of a resolution authorizing the City Manager to negotiate and execute a continuation agreement to extend the initial term of the agreement between the City of San José and the Santa Clara Valley Water District entitled, “South Bay Water Recycling Reimbursement Agreement for Development and Utilization of Nonpotable Recycled Water” to cover a continuous period of eight years, from July 1, 1997 through June 30, 2005.

CEQA: Not a Project. (Environmental Services/Parks, Recreation & Neighborhood Services/Planning, Building and Code Enforcement/Public Works/Transportation)

(Deferred from 5/6/03 – Item 7.2)

Documents Filed: (1) Memorandum from Director of Environmental Services Carl W. Mosher, Director of Parks, Recreation and Neighborhood Services Sara L. Hensley, Director of Planning, Building and Code Enforcement Stephen M. Haase, Director of Public Works Katy Allen, and Director of Transportation James R. Helmer, dated April 16, 2003, recommending acceptance of Quarterly Status Report on the Cooperative Efforts Between the City of San José and the Santa Clara Valley Water District, and adoption of said resolution. (2) Letter from the Treatment Plant Advisory Committee, dated April 10, 2003, stating concurrence with the Staff recommendation.

Discussion/Action: Council Member Yeager requested an updated listing of the trails prioritization, and detailed information about the work that should be accomplished, and Assistant Director Parks, Recreation and Neighborhood Services Albert Balagso replied the work is ongoing, and Staff is currently collaborating with the Santa Clara Valley Water District (SCVWD) to determine which projects can move forward, and will return with detailed information on those projects. Council Member Yeager noted it states in the report, Staff will be working with City departments and Real Estate offices to investigate the right of way issues in regard to Guadalupe River, and asked for a report back on the potential trail segments, and Assistant Director Balagso stated the trails report will come forward in June. Council Member Yeager requested Staff to include extra information and enhance the graphics of the trails maps for the Community Meetings.

Referring to Page 7 of the Staff report, Vice Mayor Dando stated the contract for the Guadalupe River, Reach 12 project will be awarded June 3, and asked for an update of the Joint Use Agreement, and Assistant Director Balagso stated Staff is coordinating with the SCVWD to meet the deadline. Referring to Page 7, Council Member Cortese stated, the Thompson Creek is listed as 1.6 miles from Tully to Aborn, and technically Tully extends to Lake Cunningham, and he understood there is a dredging project that will extend to Tully, and asked if it could be extended into Cunningham Park, and Assistant Director Balagso replied he would include that change in the project. Council Member LeZotte stated in regard to the Service Road segment on the Saratoga/San Tomas, Bollinger to Prospect, asked if the construction start date will be in April 2004, and Assistant Director Balagso replied he would confirm that date. Referring to Page 11, the last paragraph relating to the March 27, Collaborative meeting, Council Member LeZotte stated, it states, “the stakeholders have also been able to identify deal points that may ultimately be part of an agreement or product of the Collaborative”, and she requested information on what the deal points are, and summaries of the meetings, and City Manager Del Borgsdorf replied Staff will provide that information.

Council Member Williams asked about the quality aspect of recycled water, and Director of Environmental Services Carl W. Mosher replied the SCVWD is working on an Integrated Water Resources Plan which will determine the resources for both recycled and potable water, and where the appropriate use for recycling water could occur. He stated the next step is to determine where to apply recycled water, and currently proposed is the Metcalf Energy Facility, and plumbing in the buildings of the North Coyote Valley area. In response to Council Member Williams’ question, Director Mosher stated Staff produces water based upon the standards of the State of California and is proactive by being involved in studies related to inductive disrupters, and contributing to the study of how the quality of human health is impacted. Upon motion by Council Member Yeager, seconded by Council Member Chavez, and unanimously carried, the Quarterly Status Report on the Cooperative Efforts Between the City of San José and the Santa Clara Valley Water District Resolution, was accepted, Resolution No. 71563, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute a Continuation Agreement to Extend the Initial Term of the South Bay Water Recycling Reimbursement Agreement for Development and Utilization of Non-potable Recycled Water with the Santa Clara Valley Water District”, was adopted, with Staff directed to: (1) Return to Council with a detailed listing of trails, and information on the projects that can move forward; (2) Report back in June regarding the right-of-way issues and to define the tasks required to move forward; (3) For Community meeting presentations, add more detailed information and enhance the graphics of the trails; (4) Confirm construction start date of 4/04 for the service road segment on Saratoga/San Tomas (Bollinger to Prospect); (5) Provide summaries of the Collaborative meetings with the stakeholders identifying “deal points”. Vote: 11-0-0-0.

7.2 Approval of a ten-year agreement for miscellaneous consulting services with San José Water Company from June 1, 2003 through May 31, 2013, in a total amount not to exceed $50,000 per year and contingent upon the annual appropriation of funds. CEQA: Not a Project. Council Districts 2, 4, 7, and 8.

(Environmental Services)

[Deferred from 5/6/03 - Item 7.4(b)]

Documents Filed: (1) Memorandum from Director of Environmental Services Carl W. Mosher, dated May 1, 2003, recommending approval of a ten-year system wide repairs agreement with San José Water Company, in a total amount not to exceed $250,000 per year with a guaranteed cost of savings of at least 10% over the existing FY 2002-2003 contract, and contingent upon annual appropriation of funds. (2) Memorandum from Director of Environmental Services Carl W. Mosher, dated May 2, 2003, recommending approval of a ten year agreement for technical consulting services with San José Water Company, from June 1, 2003 through May 31, 2013, in a total amount not to exceed $50,000 per year and contingent upon the annual appropriation of funds. (3) Letter from the Treatment Plant Advisory Committee, dated April 10, 2003, stating concurrence with the Staff recommendations.

Discussion/Action: Council Member LeZotte stated she understands the consulting contract is to pay San José Water Company for the information and the help they have been providing to the City over the years, basically be the City’s consultant for issues that require their expertise, and Director of Environmental Services Carl W. Mosher replied that this contract institutionalizes that arrangement, instead of a work order or purchase order basis. Council Member LeZotte stated the contract provides that the Director of Environmental Services will identify work valued at $10,000 on an annual basis, and asked what happens if Staff does not refer work to San José Water Company on an annual basis, and Director Mosher replied that was an item of great discussion between the City and San José Water Company. He stated the amount of work Staff has identified this year was based upon certain items the City would be able to accomplish at the rate of $10,000, and Staff is confident there will be $10,000 worth of work each year. Council Member LeZotte asked whether Staff should include a guarantee payment in the contract, and City Attorney Richard Doyle replied the contract can’t include guaranteed payment; the idea is the Director of Environmental Services will identify work to that amount but to avoid the public funds issue, Staff can only pay for the work provided, and it is anticipated the amount will be at least $10,000 a year. Upon motion by Council Member LeZotte, seconded by Council Member Cortese, and unanimously carried, the ten-year agreement for miscellaneous consulting services with San José Water Company, for a total amount not to exceed $50,000 per year, and contingent upon the annual appropriation of funds, was approved and its execution authorized. Vote: 11-0-0-0.

7.3 Report on bids and recommendation to:

(a) Reject all bids for the Scheduled/Emergency Repairs and Installation of Non-Potable Water (SBWR) Services and Mains 2003-2004 Contract, and

(b) Award of ten-year contract to San José Water Company for Scheduled/ Emergency Repairs of Municipal Water System and SBWR facilities located in the City of San José, in an amount not to exceed $500,000 in the first year, and subject to CPI adjustment and appropriation of funds in subsequent years. CEQA: Exempt, PP85-8-183, PP91-07-173, and PP03-05-155.

[7.3(b) deferred in part from 5/6/03 - Item 7.4(a)]

(Environmental Services)

7.3 (Cont’d.)

Documents Filed: (1) Memorandum from Director of Environmental Services Carl W. Mosher, dated May 16, 2003, recommending rejection of all bids and award ten-year contract to San José Water Company, in an amount not to exceed $500,000 in the first year, and subject to Consumer Price Index adjustment and appropriation of funds in subsequent years, for Scheduled/Emergency Repairs of Muni Water and SBWR facilities in San José. (2) Letter from the Treatment Plant Advisory Committee, dated May 8, 2003, stating concurrence with the Staff recommendation.

Discussion/Action: Council Member LeZotte stated in the original memorandum a portion of this project had been out to bid, and she understood the bid was for emergency repairs and installation, and asked how San José Water Company was deemed non-responsive, and City Attorney Richard Doyle stated there were a number of technical problems in terms of providing bonds, and San José Water Company did not comply with the specifications. Council Member LeZotte stated San José Water Company’s bid is 14% below the engineer’s estimate but stated the replacement memorandum indicated this contract is being awarded because they are a regulated utility, and asked if the City expects the same savings if there had not been a rejection of the bid, and Director Mosher replied based on the contract Staff has negotiated with San José Water Company over the past week, the unit prices in their contract vary from 4% to 12% below the unit prices of the present contract in force, and based upon the general nature of work, Staff anticipates a 10% savings. Council Member LeZotte stated she does not have a problem with San José Water Company’s ability to meet their obligations, but asked is the City duplicating an item out to bid, and Director Mosher replied what Staff is proposing are maintenance and repairs, and according to the City Charter, new work installations must be competitively bid, therefore Staff has put this item out to bid with a separate contract for installation work for recycled and potable water. He stated the proposed contract with San José Water Company is to accomplish repair and maintenance work for the recycled and potable water systems, with a separate contract to do new installation work. He stated whatever the competitive market is when this contract is bid, Staff anticipates a 10% savings on the maintenance and repair contract. Upon motion by Council Member Cortese, seconded by Council Member Chavez, and unanimously carried, the ten year contract was awarded to San José Water Company for scheduled/ Emergency Repairs of Municipal Water System and SBWR facilities located in the City of San José, in an amount not to exceed $500,000 in the first year, and subject to CPI adjustment and appropriation of funds in subsequent years, and its execution authorized. Vote: 10-0-1-0. Absent: Yeager.

7.4 Report on bids and award of contract for the “San José/Santa Clara Water Pollution Control Plant: Transmission Pump Station Variable Frequency Drive Cooling Project,” to the low bidder, ICOM Mechanical Inc., in the amount of $314,033, and approval of a contingency in the amount of $31,403, for a total amount not to exceed of $345,436. CEQA: Exempt, PP02-11-346. (Environmental Services)

Documents Filed: (1) Memorandum from Director of Environmental Services Carl W. Mosher, dated April 30, 2003, recommending award of said contract, with related contingency, to the lowest responsive bidder, ICOM Mechanical, Inc. (2) Letter from the Treatment Plant Advisory Committee, dated May 8, 2003, stating concurrence with the Staff recommendation.

Discussion/Action: Upon motion by Vice Mayor Dando, seconded by Council Member Yeager, and unanimously carried, the award of contract, with related contingency, to the lowest responsive bidder, ICOM Mechanical, Inc., was approved and execution of the agreement authorized. 10-0-1-0. Absent: Yeager.

7.5 Adoption of a resolution authorizing the City Manager:

(a) To negotiate and execute an agreement with the City of Santa Clara for the conveyance of an easement and temporary construction license across Water Pollution Control Plant (WPCP) lands; and

(b) To execute documents necessary for the conveyance of a non-exclusive easement for electrical transmission lines across Water Pollution Control Plant lands (WPCP).

Council District 4. (Environmental Services)

Documents Filed: (1) Memorandum from Director of Environmental Services Carl W. Mosher, dated May 1, 2003, recommending adoption of said resolution. (2) Letter from the Treatment Plant Advisory Committee, dated May 8, 2003, stating concurrence with the Staff recommendation.

Discussion/Action: Mayor Gonzales called for public testimony. William Garbett spoke on the issue. Upon motion by Council Member Reed, seconded by Council Member Cortese, and unanimously carried, Resolution No. 71564, entitled: “A Resolution of the Council of the City of San José Authorizing the City Manager to Negotiate and Execute Documents with the City of Santa Clara for the Conveyance of a Transmission Line Easement and Temporary Construction License Across Water Pollution Control Plant Lands”, was adopted. Vote: 11-0-0-0.

7.6 (a) An agreement with Cargill, Inc. for the purchase of approximately 856 acres of property bounded by Coyote Creek, Mallard/Artesian Slough, the San José/Santa Clara Water Pollution Control Plant (Plant), and Zanker Road Landfill (“Pond A-18”), for the purchase price of $13,500,000, plus an amount not to exceed $15,000 for the City’s share of closing costs, and an amount not to exceed $25,000, for preparation of an updated environmental assessment; and

(b) Such other documents that may be necessary to complete the purchase transaction, including a quit claim deed, rather than grant deed, as to less than 1 acre of the land as shown in supplemental Council memo.

CEQA: Exempt, PP02-11-351. (Environmental Services)

Documents Filed: (1) Memorandum from Director of Environmental Services Carl W. Mosher, dated May 7, 2003, recommending adoption of said resolution. (2) Supplemental memorandum from Director of Environmental Services Carl W. Mosher, dated May 20, 2003, advising Council that during the process of finalizing the proposed purchase agreement a discrepancy was discovered between a survey performed for the purchase of Pond A18 from Cargill, Inc., and a survey performed previously by Zanker Road landfill, and the discrepancy affects the title that the City will receive for less than one acre of the land covered by the proposed purchase agreement. (3) Letter from the Treatment Plant Advisory Committee, dated May 8, 2003, stating concurrence with the Staff recommendation.

Discussion/Action: Mayor Gonzales called for public testimony. Eileen McLaughlin spoke on the issue. Mayor Gonzales stated the facts in the May 20, 2003, San José Mercury News were inaccurate regarding the appraisal reports, the amount the City was paying for the land, and requested Staff to set the record straight as to the process of appraising this land, and how was it adjusted, and Director of Environmental Services Carl W. Mosher stated the article mentioned an appraisal, and it was not the appraisal Staff used for this proposed transaction. He stated there were two key elements related to appraisals that are very important, the basis for the appraisal, and the appraisal must be current. He stated Staff performed an appraisal in December 2001, and updated it in December 2002, then commissioned an appraiser to review the final appraisal. He stated the appraisal is based upon comparable sales, not on income approach or a speculative formula related to what the land might be used for in the future. He stated there are nine comparable sales in the review appraisal, and this appraisal for Pond A18 was based upon the appraisal for comparable sales on land in the Bay Area, one of which was the transaction for the Santa Clara Valley Water District (SCVWD) known as Pond A4. He stated that pond was pu