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HomeMy WebLinkAbout12-07-1994 City Council Minutes MINUTES SARATOGA CITY COUNCIL TIME: Wednesday, December 7, 1994 - 6:30 p.m. PLACE: Civic Theater, 13777 Fruitvale Ave. TYPE: Regular Meeting INTERVIEW APPLICANTS FOR FINANCE COMMITTEE - 6:30 p.m. Hahn - 6:30 Krezek - 6:45 Hershkowitz - 7:00 7:15 - CLOSED SESSION FOR THE.PURPOSE OF A CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION Pursuant to Government Code Section 54956.9 (a): Name of case: Saratoga vs. Cocciardi The regular meeting was called to order at 7:35 p.m. Pledge of Allegiance - Led by Councilmember Tucker 1. ROLL CALL Councilmembers Present: Jacobs, Tucker, Moran, Wolfe, Mayor Burger Staff Present: City Manager Peacock, City Attorney Riback, City Engineer Perlin, Public Services Assistance Paula Reeve 2. CEREMONIAL ITEMS - None. 3. Report of City Clerk on Posting of Agenda Pursuant to Government Code 54954.2, the agenda for this meeting was properly posted on December 2. 4. COMMUNICATION8 FROM COMMISSIONS AND THE PUBLIC A. ORAL COMMUNICATION8 - None B. WRITTEN COMMUNICATIONS - None 5. CONSENT CALENDAR A. Previously-Discussed Items - None. B. New Items 1) Planning CommiSsion Actions, 11/22 - Note and file. 4) Approval of Change of Security for Loan for Low Income Rousing at Saratoga court 5) Resolution appointing Small Claims Court Representatives 6) Budget Resolution providing funds for Final cost of Ballscreen at Congress Springs Park as approved 11/16/94 7) Budget Resolution providing funds for preparation of Environmental Impact Report for Odd Fellows Expansion 8) Budget Resolution providing funds for mailing of notice of election date change 9) Resolution abandoning slope easement on Lot 14, Tr. 7761 10) ResolutiOn prohibiting right turns on red from saratoga Avenue onto saratoga-Sunnyvale Road City Council Minutes 2 December 7, 1994 Councilmembers Tucker and Jacobs requested that items 2 and 3 be removed from the consent calendar. TUCKER/MORAN MOVED TO APPROVE THE CONSENT CALENDAR WITH THE EXCEPTION · OF ITEMS 2 AND 3. PASSED 5-0 2) Public Safety Commission Minutes, 11/14 - Note an~ file. Councilmember Tucker addressed the c:omments in the minutes regarding the School Resource Office and requested more specific information as to what he does in his "free time". Mayor Burger stated the officer is making himself available to students on campus during his "free time". Councilmember Jacobs suggested getting a copy of the log kept by the officer. Councilmember Wolfe stated more information would be helpful for educational purposes. Councilmember Moran stated she shares Councilmember Tucker's concerns and the Public Safety Commission should provide a more detailed report. Ms. Karin Dowdy, Public Safety Conunissioner, stated the term "free time" is used because the public safety commission is familiar with this term. She stated in the "free time" period the officer makes himself available to students and also has office hours on campus. Ms. Dowdy pointed out that since this program began the hostility towards the sheriffs has reduced. Mayor Burger stated the council would like to see more detailed reporting on how the School Resource Office spends his time. 3) 1995 Master Calendar of City Council Meetings Councilmember Jacobs stated it was his understanding, regarding council reorganization, that the Mayor's term would be continued for a few extra months and the new term would start December 1996. He stated he would propose this change. City Manager Peacock stated the council will reorganize September 20, 1995. MORAN/TUCKER MOVED APPROVAL OF THE 1995 MASTER CALENDAR WITH THE CHANGE ADDRESSED ABOVE. PASSED 5-0. C. CLAIMS AGAINST THE CITY 1) Claim of Vuko in case of injur7 due to becoming entangled in dog leash at Community Library JACOBS/TUCKER MOVED TO REJECT THE CLAIM. PASSED 5-0. 7. OLD BUSINESS A. Resolution Adopting Model Conflict of Interest code Staff recommends that the city council adopt the resolution. City Manager Peacock presented the staff report dated December 7, 1994 noting this is a requirement of state law and staff has prepared a conflict of interest code as directed by the council. He noted there may be some fiscal impacts as a result of the consultants and this may need to be reviewed. City Attorney Riback stated if the code is not adopted, the state could levy a fine. MORAN/WOLFE MOVED TO ADOPT. THE MODEL CONFLICT OF INTEREST CODE. PASSED Cit~ Council Minutes 3 December 7, 1994 6. PUBLIC HEARINGS - 8:00 pm. A. Comments on Countywide Nondisposal Facillt~ Element (NDFE) B. Adoption of the countywide Nondisposal Facilit~ Element as the Clt~ of Saratoga~s NDFE City Manager Peacock indicated that A & B are one item and will be discussed as so. Ms. Paula Reeve, Public Services Assistant, presented the staff report dated December 7, 1994. She noted the recommendation is to approve the County of Santa Clara Countywide Nondisposal Facility Element. The public hearing was opened at 8:02 p.m, seeing no-one the hearing was closed. MORAN/JACOBS MOVED TO ADOPT ARESOLUTION APPROVING THE COUNTY OF SANTA CLARACOUNTYWIDE NONDISPOSAL FACILITY ELEMENTAS THE CITY OF SARATOGAtS NDFE. PASSED 5-0. City Council Minutes 4 December 7, 1994 C. RUbbiSh Rate Adjustments to go into effect on Februar~ 1, 1995 city Manager Peacock presented the staff report dated December 7, 1994. He reviewed the increase in rates fomc the debris boxes and the hard to serve areas, as outlined in the staff report. In response to councilmembers' questions, Mr. Peacock stated approximately 5% of Saratoga residents live in the hard to serve areas. The public hearing was opened at 8:10 p.m. Mr. Gerard Wen, Green Valley, 573 University Ave., LoS Gatos, passed out cards to the council explaining yard waste as well as other recycling services. He noted this card will be handed out to all residents. He congratulated the council and staff for starting the services early. Mr. Wen stated part of the reason the residential rates remained stable was because during 1993-94 Green Valley diverted the rubbish to a cheaper landfill until it closed down. He noted in the process of doing this the west 'valley cities saved approximately $900,000 in tipping fees. Councilmember Tucker t~anked Mr. Wen for taking the council's and citizens' concerns to heart. Mr. Marvin Becket, 12120 Mellowood, noted that part of the garbage rate is recycling and if recycling was cut down, maybe costs could be kept low. He suggested residents use mulching machines for grassycuttings and reuse it on their lawns. He added the city should look into someway of offering this as an option. The public hearing was closed at 8:20 p.m. Councilmember Moran thanked Mr. Becker for his suggestion. Councilmember Tucker stated Mr. Becker's suggestion is good, but the city is also trying to meet a requirement of state law. MORAN/JACOBS MOVED TO APPROVE THE RECOMMENDATION TO INCREASE DROP BOX RATES BY 15.5%ANDDIRECT THE PREPARATION OF ARESOLUTION SETTING RATES TO BE ACTED UPON BY THE CITY COUNCIL AT THE JANUARY 4, 1995 MEETING. Councilmember Jacobs noted the majority of residents in Saratoga are not receiving a rate increase, but are receiving an increase in services. City Manager Peacock stated that Saratoga is continually reducing waste and eventually most residents will be able to drop to one can because of the recycling services. Councilmember Tucker stated the residents of Saratoga should be commended. Mayor Tucker concurred. D. Hearing to Order Abatement of Weeds city Manager Peacock presented the staff report dated December 7, 1994. The public hearing was opened at 8:26 p.m. seeing no-onethe hearing was closed. TUCKER/MORANMOVED TOAD OpT ARESOLUTION ORDERINGABATEMENT OF A PUBLIC NUISANCE BY REMOVAL OF HAZARDOUS WEEDS. PASSED 5-0 8. MEW BUSINESS A. Oral Communications (continued) and instructions to staff regarding actions on current oral communications - None B. Green Valley Disposal company Performance Audit prepared by Hilton, Farnkopf and Hobson Staff recommends that the, city council accept the audit as presented and authorize final payment for the work through the West Valley Cities City council Minutes 5' December 7, lg94 Integrated Solid Waste Management Consortium. City Manager Peacock presented the staff report dated December 7, 1994 noting the preformance audit was a requirement of the franchise agreement. Mr. Peacock reviewed the findings and recommendations by Hilton, Farnkopf and Hobson, as outlined in the staff report. Mr. Gerard Wen, Green Valley DiSposal, stated the methodology for calculating the profit and the consulting fees needs to be discussed. He noted because of issues raised regarding these two items Green Valley hired consultants to help them work this out. 'Ms. Cindy Klien, Barakat & Chamberlin Inc., noted their firm specializes in regulated industries. She noted she is at the meeting, representing Green Valley to express their objections to the two issues raised by Mr. Wen. She noted there was a draft audit report issued in January 1994, and they have worked with Green Valley to establish what they believe are reasonable and consistent recommendations. She stated they have been successful in restoring approximately 90% of the original recommended disallowed costs. Ms. Klien stated as part of the review the jurisdictions requested that HF&H review the reasonableness of the 5% after tax guidelines. She noted there are general steps to follow when determining "reasonableness" and noted these steps have been approved by a court system and have been used by other consultants. Ms. Klien reviewed the steps: Step 1 - look to the contract, Ms. Klien noted the contract did not provide sufficient clarity. Step 2 - look to some prior common understanding between the parties, so they looked to past practices. She noted in the past the allowable profit was 5% after tax. She noted the cities' consultants focused their review on step 3. Step 3 - look to other jurisdictions and apply that. She stated in the audit report, HF&H included a review of the operating ratios earned or allowed by approximately 292 other companies. She added the report concludes that the range of profit allowed was between 87 and 95 percent. Ms. Klien stated the report then recommends, for Green Valley, an operating ratio of 91% applied to the expense base that excludes both disposal and franchise fees. She noted this was the recommendation despite the fact that 290 of the 293 surveyed, include all or a portion of the disposal fees. She stated if this formula were to be used HF&H would need to adjust the comparable operating ratios. She stated at the meeting in Monte Sereno, Mr. Hobson did recognize that it would be necessary to adjust the operating ratios if the jurisdictions were going to exclude the disposal fees from their expenses. Ms. Klien noted that Mr. Hobson pointed out that his recommendations are not intended to be statistically accurate, but based upon judgement. She noted legal counsel has met with Green Valley and hopes this matter can be resolved. Ms. Klien addressed the consulting fees noting they have been disallowed based on a portion of the contract which says Green Valley will not be allowed costs incurred for the preparation of the rate application. She stated none of Barakat & Chamberlin, Inc. services were involved in the preparation of the rate application and this was filed over a year ago. Ms. Klien stated due to the nature of the recommendations from HF&H, the consulting fees are a reasonable and necessary cost incurred. Ms. Klien addressed the 1992/93 balancing account, noting Green Valley does object to the recalculation as addressed in the HF&H report. She addressed the savings Green Valley obtained for the jurisdictions as addressed, and noted Green Valley also cut their profits with this savings. Mr. Peacock questioned the balancing account and asked if this issue relates to the marginal versus the effective tax rate. Ms. Klien stated the original draft report used the 5% after tax to calculate the profit for 92/93, but a letter issued on December 5th used the 13.6% which was used by the rate review committee during that year which results in a different profit. City Council Minutes 6 December 7, 1994 Mr. Peacock addressed the consultant fees and stated rates were raised in 93/94, so if the work had anything to do with Saratoga it could only be for this years' rates. He noted there was no rate application pending after Barakat & Chamberlin were hired. Mr. Eisenhardt stated the affect of the changes proposed in the auditors report, in terms of the profit methodology, would result in a 50% reduction in the profits allowed Green Valley, compared to this 5% after tax. He noted this might help the council understand the severity of the impact on the company and why the company felt obligated to take the measures and incur the cost to rectify this situation. In response to Mayor Burger's questions, Ms. Klien stated instead of being 5% on all expenses the audit report results in about 2.5%. Mr. Wen went on to explain the reasons why Green Valley hired the consultants, noting it was a direct result of the performance audit. Councilmember Jacobs asked why the city should pay for Green valley's help on the performance audit. He stated he does not see where this fits into their obligations. Ms. Klien stated due to the recommendations made by. HF&H, Green Valley needed additional assistance in order to respond to what they felt were unreasonable recommendations. Mr. Eisenhardt noted HF&H utilized a score on an operating ratio of 91% which they contend is justified based on the surveys. He added they then very inappropriately applied that score of 91%, to a decided sub- set of the costs that the 91% is being applied upon in actual practice. Councilmember Tucker asked if'this is another s~tuation where the same stockholders own the garbage disposal Company and operate the landfills. Ms. Klien stated some of the companies could be involved. Councilmember Wolfe commented on the scenario addressed by Mr. Eisenhardt regarding the profit and asked if this is accurate. Mr. Peacock: I'm sure it is from their perspective Councilmember Wolfe, but there are a lot of variables here that come into. play. There is the debate over the use of effective versus marginal tax rates for example, which would change the picture dramatically, depending upon which one you used and the consultants said that the effective tax rates are what are allowed to be used on marginal tax rates, and then there is the issue of whether or not the taxes ought to be used at all because ... state income taxes...because all the money is passed through to the stockholders and they're the one~ who actually pay the taxes, so if you were to make the argument that 5% net profit is what they ought to be making, the argument could be that is essentially the same as the first profit. So there are a lot of perspectives on what the profit ratio ought to be and I think what we tried'to do here, at least the rates review committee in looking at this, we asked the consultant to come up with a ratio that would get us out of this issue of net versus gross profit and his recommendation has been using the 91% operating ratio with the exclusion of the franchise fees and tipping fees, and we go back to the history of this agreement, which is now 11 years old, it is true that during the first seven or eight years that was the way it was done, but that wasn't...but the company that started it wasn't the chapter S corporation in 1983 when the franchise agreement was entered into and the rubbishrates...tipping, at that point in time was probably around $13 a ton, which is less than the taxes that are on there now, so there were a lot ofthinge to be changed in the ensuing 11 years and those changes were starting to be recognized by the four jurisdictions in 1990 when we started changing the method of calculating profit and that has been something that has been somewhat disconcerting to the company, but we have been making these recommendations to our city council now for three or four years in terms of changing this and the city council has accepted those changes, so I would say. that there can be an equally persuasive argument made that there isn't a uniform track record as to past City Council Minutes 7 December 7, 1994 practice, and in fact, the nature of the corporation changed significantly and the world it operates in changed significantly since 1983. So there are a lot of reasons why we might say it can be justified that there should be changes made and that those changes are not necessarily unreasonable or arbitrary... However, having said that, as indicated Mr. Riback and the counsel for Green Valley evidently are meeting to try to see if they can work these things out in a mutually agreeable fashion. I would say however, that so far I have not heard anything from Green Valley that would tell me what operating ratio they would like to see based upon the exclusion scenario. I think what Green Valley has done, I've told Gerard this, I'm somewhat disappointed in the company which expects us to negotiate amongst ourselves and I don't intend to let that happen. I recommend the city council not let it happen. I'm still waiting for a counter proposal that I think is realistic. So far all I've gotten is, "give us what we want and, by the way, extend the franchise another seven years," and I don't think that is something I would want to bring to the city council as a recommendation. So those are my responses. Mr. Eisenhardt stated the original HF&H report identified over $1 million non-allowable cost expe%ses. He noted upon review, that figure is now reduced to $12,000. He added dialogue is needed amongst the parties, and would welcome the opportunity. In response to guestions, Mr. Peacock stated he does not believe holding the audit over will achieve anything the parties want to achieve. He noted although the issues are important he does not believe discussing this more with the consultants at this point will resolve anything. Mr. Wen stated he has no objection to the council accepting the performance audit at this time and will work on resolving the other issues. Councilmember Tucker addressed the standardized container recommendation relating to automated pickup and noted the citizens should have the option to purchase these. Mr. Wen stated this will be up to the rate review committee. Mayor Burger stated the representative should carry Councilmember Tucker's request forward. MORAN/TUCKER MOVED TO ACCEPT AND FILE THE FINAL AUDIT REPORT AND AUTHORIZE FINAL PAYMENT. PASSED 5-0. C. TeleeommUnlcations (Information Superhighway) Pollcles City Manager Peacock stated that staff reconunends that this be discussed with staff and the public and continue discussions to January 4, 1994, and at that time adopt the policies. He stated staff would like some policy direction from the city council because Pacific Bell will be approaching the city in the next few months with proposals for flberoptics. Mayor Burger stated this issue was discussed at the National League'of Cities conference and noted it was of great interest to the delegates present. She noted this was listed as priority and they urged cities to take a pro-active stand on this. Councilmember Tucker stated she would like to see a work/study session on this issue. The council discussed the advantages of advanced technology, including the Satellite Dish. The council also discussed the possibility of holding a workshop on this. It was a consensus of the council to review the tape from the City of Milpitas regarding this issue and revisit this on January 4, 1994. D. Congestion Management Agency/Transit District Merger Joint Powers Agreement Councilmember Wolfe stated he sat in on several of the hearings and City council Minutes 8 December 7, 1994 noted this is population driven and the City of San Jose has the entire say. He stated he would like to see a rail system down route 85 expedited. Mayor Burger stated the board consists of 12 members and there is one representative for the five west valley cities. WOLFE/MORAN MOltED TO APPROVE THE AG~REEMENT AND AUTHORIZE EXECUTION. PASSED 5-0. E. Alternative Fuel Demonstration Project in cooperation with west Valley College City Engineer Perlin presented the staff report dated December 7, 1994. He noted the project benefits would be as follows: 1. Promotes clean air, clean environment. 2. Demonstrates new technology, and Saratoga's commitment as a clean city. 3. Joint project with West Valley College. 4. Sets the city up to receive future clean air funds. 5. Allows the city to receive AB134 funds. 6. Potential revenue source. 7. Decreased vehicle maintenance and operation costs. 8. Decreased fuel costs. Mr. Perlin stated if the council wants to proceed they must adopt the resolution authorizing participation with West Valley College. JACOBS/MORAN MOltED TO ADOPT THE RE8OLUTION AUTHORIZING CITY P~.RTICIPATION IN THE JOINT PROJECT WITH WEST VALLEY COLLEGE; MOVE TO DIRECT STAFF TO ENTER INTO WECES~|ARY AGREEMENTS TO COMPLETE THE PROJECT. Councilmember Jacobs stated this is a worthwhile project. With regards to the costs for site preparation, Mr. Perlin stated it could be as low as $5,000 or as high as $15,000, but the co'sts may be eligible for reimbursement. City Manager Peacock stated it is his belief that this will pay itself' back in a relatively short time. He noted compressed natural gas vehicles are being manufactured at no additional cost in the purchase. Mr. Perlin stated the initial vehicle would be a light pick-up truck to be usedby building and maintenance personnel. He briefly reviewed the rebate from PG&E if a vehicle is purchased within a certain time period. The above motion was passed 5-0. F. Award of Contract, Cox E~enue Landscaping at Route 85, CIP 9401 city Engineer Perlin presented the staff report dated December 7, 1994. Councilmember Tucker stated a former councilmember told her that money had been set aside to repaint the wall in this area. Mr. Perlin stated he is not aware of the council making a decision to repaint the wall. He added he is aware that the neighbors are not happy with the wall. Councilmember Jacobs stated the council should go ahead and approve the bid and perhaps staff can research the issue of any formal action by the council to repaint the wall. Mayor Burger concurred. Mr. Art Brookman, Green~iar Homeowners Association, stated if this wall is to be repainted it should be done before the landscaping is installed. City Council Minutes 9 December 7, 1994 Mayor Burger stated the landscaping will be put in early January and this will give staff sufficient time to review the repainting issue. city Manager Peacock stated the neighbors had choices of the design and color of the wall and the neighbors did pick the color. WOLFE/JACOBS MOVED TO DECLARE B&BLANDSCAPE CONTRACTORSt INC. TO-BE THE LOWESTRESPONSIBLE BIDDER ON THEPROJECT~ AWARD A CONSTRUCTION CONTRACT TO B&B LANDSCAPE CONTRACTORS, INC. IN THE AMOUNT OF $44,427~ MOVE TO AUTHORIZE STAFF TO EXECUTE CHANGE ORDERS TO THE CONTRACT UP TO $6,000. /--~ PASSED 5-0. Mr. Perlin stated he will report back the first meeting in January regarding the repainting issue.; G. Pollcies regarding Recovery of cost of Water Provided to E1 Quito Park Community Gardeners and Use Priority for Available Garden Plots City Manager Peacock presented the staff report dated December 7, 1994. Mr. Don Rubio, 14681 Fieldstone Dr., stated he gardens one of the 16 plots at E1 Quito gardens. He noted that gardeners should be encouraged to turn off water when not in attendance. He added he recommends that the council reject the proposed water fee formula. He noted of the 12 gardeners, 11 are retired. He added that non- Saratogans should be charged an additional fee. He stated the proposed fee structure will quadruple the fee. Councilmember Jacobs suggested varying the rent from year to year based upon the water usage, this may discourage people from using too much water. Mayor Burger stated the council did adopt a policy to receive total cost recovery. She suggested that gardeners remind each other about water usage. Councilmember Tucker concurred with Councilmember Jacobs' suggestion. Mr. Rubio also pointed out that the reason for the heavy water use was because of a water leak in one of the underground lines which ran for approximately two months. JACOBS/MORAN MOVED TO ADOPT THE POLICIES A8 RECOMMENDED AND ADD SUFFICIENT WORDING REGARDING WATER USAGE. PASSED 5-0. N. Memo Authorizing Publicity for Upcoming Hearings WOLFE/TUCKER MOVED TO APPROVE PUBLICITY AS RECOMMENDED. PASSED 5-0. 9. ROUTINE MATTERS A. Approval of Minutes - 11/16~ 11/29 The above minutes were approved as submitted B. Approval of Warrant List TUCKER/JAC0ES MOVED TO APPROVE THE WARRANT LIST. PASSED 5-0. 10. CITY COUNCIL ITEMS /~\ A. Agency Assignment Reports city Manager Peacock stated he will put Saratoga Business Development Council on the agency assignment list. Councilmember Wolfe reported on Saratoga Business and noted they discussed more acceptable business in the town for local residents. He stated he was asked what stimulated this action, he stated it was the leadership of the city council, started by the Mayor who encouraged the City Manager and Councilmember Wolfe to facilitate the effort.