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Minutes 2008/10/20 8940 City Of Gilroy City Council Minutes October 20, 2008 I. OPENING Mayor Pinheiro called the meeting to order at 7:00 p.m. and led the Pledge of Allegiance. The invocation was given by Pastor Bill Hawkins of New Hope Community Church. City Clerk Freels announced that the agenda had been posted on October 15, 2008 at 10:00 a.m. ROLL CALL Present: Council Member Peter Arellano, Council Member Dion Bracco, Council Member Bob Dillon, Council Member Craig Gartman, Council Member Cat Tucker and Mayor AI Pinheiro Absent: Council Member Perry Woodward Orders of the Day Mayor Pinheiro announced that Item III.C. Approval of Notice of Acceptance of Completion - Tract No. 9708 Lu Levitt Villas - 7031 Monterey Road, APN 799-11-031 would be pulled from the agenda and Item V.A. Public Hearing to Consider an Increase to the Traffic Development Impact Fees would be tabled. Motion on item B. Motion was made by Council Member Dillon, seconded by Council Member Arellano and carried (Council Member Woodward absent) to Approve I.B. Orders of the Day D. Proclamations, Awards and Presentations Mayor Pinheiro announced the Volunteer of the Month Award for September 2008 to Jerry Brown Mayor Pinheiro presented the Volunteers of the Month Awards for October 2008 to: Neighborhood Watch Program Leaders; Adam Jenkins, Sharon Holloway, Daniel Chavez, John Perales, Christine West, AI Gagliardi, Roger Patereau, Diana Berry, Kelly Laguna, Margie Lawrence, Judy Hess, Ernestina Barrios, Pedro Hernandez, Guadalupe Pineda, Irene Kachel, Kristina Minoza, Cynthia Martinez and Alex Orozco; Wipe Out Watch Anti-Graffiti Program Volunteers: Bob & Sue Baker, Jose Charles and Jose Torres; Gilroy Explorer Program Volunteer Ellie Gracie and Volunteers in Policing Volunteers: Bob Baker, Sue Baker, Carol Mancera, Gay Rush and Pat Moore. Mayor Pinheiro presented Police Chief Turner with a proclamation naming October 2008 as Crime Prevention Month II. PRESENTATIONS TO COUNCIL A. PUBLIC COMMENT BY MEMBERS OF THE PUBLIC ON ITEMS NOT ON THE AGENDA, BUT WITHIN THE SUBJECT MATTER JURISDICTION OF THE CITY COUNCIL There were no public comments. 89tl B. Presentation of a Donation to the City of Gilroy from the James Group of $25,000.00 for the Downtown "Legacy of Gilroy" Sculpture Project Shirley Jensen of the Arts and Culture Commission and the Public Art Committee spoke on the sculpture project and introduced Mr. James Suner of the James Group. Mr. James Suner spoke on the donation to the City and presented a certificate of donation to Mayor Pinheiro. C. Annual Presentation of the Housing Advisory Committee Dennis Lalor of the Housing Advisory Committee presented the report sharing the formation of the committee and their functions throughout the previous year. III. CONSENT CALENDAR A. Approval of Minutes of October 6, 2008 Regular Meeting B. Recommendation to Approve Budget Amendments D. Approval of Notice of Acceptance of Completion - Capital Project No. 08- CDD-158 Synthetic Turf Installation at Christmas Hill park, General Sports Turf, Inc. E. Appointment of (1) one Housing Advisory Board Member to Fulfill Unexpired Term F. Adoption of Resolution Endorsing the City's submittal of a focus to the Association of Bay Area Governments (ABAG) to Designate Downtown Gilroy as a Priority Development Area Motion was made by Council Member Tucker, seconded by Council Member Arellano and carried (Council Member Woodward absent) to approve the consent calendar. IV. BIDS AND PROPOSALS- None V. PUBLIC HEARINGS A. Public Hearing to Consider an Increase to the Traffic Development Impact Fees The item was tabled during orders of the day. VI. UNFINISHED BUSINESS A. Appointment of (8) Eight Members to the Youth Commission with Terms Expiring September 2009 and September 2010 Council Member Arellano thanked all of the applicants for applying. Council Member Gartman abstained from voting on the appointments as he was not present during the interview process. Council Member Arellano stated that he had read the applications and would be voting on the appointments. Roberto Molina, Sandra Cruz, Morgan Triolo, Kimberly Apuzzo. Shaunie Hewell, Sean Monroe, Tim McCown, Connie Kang were appointed to the Youth Commission. 8912 VII. INTRODUCTION OF NEW BUSINESS A. Consideration of the Approval of a Small Project Exemption for Eleven (11) Single-Family Residential Units on a 1.95 Acre Site Zoned R2/PUD located at 9060 and 9070 Kern Avenue, APN's 790-18-015 & 017, Pacific States Development c/o Joe Burch, SPE 08-01 (Continued from 9-15-08 Regular Meeting) The staff report was presented by Planner II Durkin. There were no public comments. Motion on item VII.A. Motion was made by Council Member Bracco, seconded by Council Member Tucker and carried (Council Member Gartman voting no, Council Member Woodward absent) to direct staff to prepare a resolution approving SPE 08-01. B. Downtown Small Project Exemption for '196 For-sale Market-rate Residential Condominiums and Townhouses in Three and Four-story Buildings on a Property Zoned Downtown Expansion District, Located at 200 E. Tenth Street, APN's 841-16-004 & 061, DSPE 08-03, ACS Ventures, c/o Tony Sudol Council Member Bracco recused himself from voting on the item explaining that he owned property within 500 feet of the subject site. He then left the dais. The staff report was presented by Planner II Durkin. Mayor Pinheiro spoke on the request stating that the applicant already had the units. Planner II Durkin stated that they did not have the units and had to go through the process to get approval to receive downtown specific plan exemptions. She then explaining that they had come before the Council previously for a general plan amendment and zone change. Mayor Pinheiro asked if they had not already requested the DSPE. Planner II Durkin explained that they would need approval of the DSPE to go forward with the tentative map and architectural and site plan review explaining that staff was still working out items on the tentative map before it came to Council. Council Member Tucker asked why the staff report stated that the applicant would need a variance or conditional use permit. Planner II Durkin explained that the applicant still needed to comply with the zoning ordinance or could pursue a deviation with a PUD. Council Member Tucker asked if the property had already been re-zoned. Planner II Durkin explained that it had been re-zoned from C-3 as part of the Downtown Expansion District. Mayor Pinheiro asked for clarification explaining that the Council was setting aside 196 units stating that it was convoluted when other aspects of the proposal were being discussed as they were not part of the item before the Council at the time. Planner II Durkin agreed. Council Member Arellano thanked Planner II Durkin for providing the details of the work in progress. 8943 Council Member Dillon spoke on the PUD or variance possibility asking if the Council could make a change the determination in the future. Planner II Durkin stated that they could make changes to allow for flexibility. She then explained that the only application before the Council was the DSPE. Motion on item VII.B. Motion was made by Council Member Arellano, seconded by Council Member Tucker and carried (Council Members Bracco and Woodward absent) to Direct Staff to Prepare a Resolution Approving DSPE 08-03 Council Member Bracco returned to the dais. C. Consideration of the Approval to Purchase and Hold the City's Certificates of Participation 2003 Series City Administrator Haglund presented the item. The staff report was presented by Finance Director Turner. Craig Hill the City's financial advisor spoke on the market drop and the AIG and MBIA financial situation which had affected the Certificates of Participation sharing the Dutch auction process and national index. Finance Director Turner continued on with the presentation of the staff report. City Administrator Haglund spoke on the need to take action on the auction rate securities and request to follow option number 4. He then spoke on the loss of liquidity and the impacts on the impact funds sharing the general fund reserve holding of $17 million due to the deficits in the impact funds. He suggested that the Council hold a special meeting on November 5, 2008 to address the impacts on the budget. He spoke on the three year plan to balance the general fund, sharing the draw on the reserve to accomplish the balance within the three year period suggesting that the Council consider a plan to reduce the general fund reserves including forced personnel reductions. He spoke on the market conditions stating that the City impact funds had been affected significantly which would cause for project deferral and cancellation of projects. He spoke on the review of the budget on a line-item level and the goal to cover the budget with the council at a mid-year review. He asked Council to call a special meeting on November 5, 2008. Mayor Pinheiro spoke on the temporary ability to hold the notes asking if the City would be allowed to go back again if the market conditions did not improve. Finance Director Turner stated that the notice was a tool developed by the Federal Government to help agencies to refinance the securities in the future. Mayor Pinheiro asked if the City would go back to purchase the notes as auction rate notes. Finance Director Turner explained that the City would come back with a refinancing, not as auction rate notes. Mayor Pinheiro spoke on the interest rate asking what the 4.3% was costing the city. Finance Director Turner stated that the city was earning 4.3% and explained that the City would be paying around 6%. Council Member Bracco stated that it sounded as though the City was hoping that the market would come back to enable the City to re-invest. Finance Director Turner explained that when the year expired, the worst case scenario 89~4: would be that the City was not able to reinvest and the bonds would be legally extinguished and the City's would no longer have the debt on the books or the securities. Mayor Pinheiro stated that the City would not get any interest rate during the period. Finance Director Turner explained that the City would spend the $42.7 million and no additional money would need to be spent. Council Member Tucker asked if there was a option to refinance asking what happened to the overall picture. City Administrator Haglund explained that the bonds would be defeased and the City would have spent the $42.7 million on the bonds. Council Member Tucker asked what the next step was asking what the November 5th meeting would entail. City Administrator Haglund explained that the remaining $17 million would be spread throughout all of the City funds. He then spoke on the loss of revenue in the general fund and how the city would respond to the loss of money in the general fund. He then explained that if $1.8 million of revenue was lost in Community Development then the draw would be a even larger draw on the general fund. Mayor Pinheiro stated that the issue of liquidity was separate from the loss of revenue to the general fund. He shared the 3-year plan to balance the general plan explaining that the Council needed to separate the two issues suggesting that the Council look at the two separate issues on November 5th.He spoke on the deficit mode the Council had been dealing with during each budget process explaining that the two issues would need to be dealt with. City Administrator Haglund explained that the water and sewer funds would need to be refunded if the bonds were defeased. Council Member Arellano spoke on the urgent need to address the issue as the impact on the City explaining that the variable rate was too high. He then suggested that option 4 gave the Council some breathing room. Motion on item VII.C. Motion was made by Council Member Arellano, seconded by Council Member Bracco (Council Member Woodward absent) and failed to adopt Resolution 2008- 45 of the City Council of the City of Gilroy Authorizing the Purchase of Outstanding 2003 Auction Rate Certificates of participation and approving related documents and actions. Second Motion on item VII.C. Motion was made by Council Member Arellano, seconded by Council Member Dillon and carried (Council Member Woodward absent) to Adopt Resolution 2008- 46 of the Board of Directors of the Gilroy Public Facilities Financing Authority Approving Amendment to the Trust Agreement Relating to 2003 Auction Rate Certificates of Participation Third Motion on item VII. C. Motion was made by Council Member Arellano, seconded by Council Member Dillon and carried (Council Member Woodward absent) to Execute the First Amendment to the Trust Agreement The Council agreed to hold the meeting on t(Qvember 5, 2008 at 6:00 p.m. City Administrator Haglund stated that he would provide ttteCity Council with a large 8945 amount of materials that were to be reviewed by Council asking that the Council consider subsequent meetings due to the amount of items to be considered. Mayor Pinheiro asked if the meeting would be a study session or a special meeting stating that he had held meetings with all of the bargaining units on the budget and the deficit mode the City was in. He then explained that there were members of the employee groups at the meeting and he wanted to assure the public and employees that the Council was not taking the issue lightly as the Council was responsible to protect the City in the best way possible. He then stated that the City wanted the bargaining groups to come to the table in an effort of team work to address the City's solutions to the financial condition of the City explaining that tough decisions would need to be made. Council Member Arellano stated that the Council had to deal with the issue of the City's financial situation explaining that he expected a lot of information and input from the community and employees would be taken into consideration. He explained that the City had always done well financially but had gotten caught up in the difficulties with the banking system. Council Member Gartman stated that when the certificates had been purchased it had been explained that the money would always be in the fund and if the City was at the point that it didn't make financial sense to continue to participate, then the City would be able to get out of the situation. He then stated that it didn't look like the City could do so as the money was not there. City Administrator Haglund explained that he understood that in 2003 the City had collateralized the issuance internally by cash the City held in reserve but the money was identified in the water and sewer funds, and the money from those funds would payoff the bonds with an inter-fund loan set up for re-payment. Council Member Gartman asked if money from the general fund was to be used. City Administrator Haglund explained that $2.9 million of the general fund would be used. Council Member Gartman explained that he didn't understand how the money from the general fund would be used as it wasn't part of the initial plan. He then spoke on the November 5th meeting suggesting that the City employees not be lead along stating that he wanted to see a few plans or options for the Council to consider. He the stated that the financial problems had been coming for some time and he wanted to see something come before the Council on the 5th so that the process was not dragged out. City Administrator Haglund stated that the Council would need to discuss how they wanted to handle the range of options that could fit where the Council wanted to go. He explained that there would be a range of options for the Council to decide the direction they chose to go in. Council Member Bracco asked that a "fast facts" piece be created for the City staff. City Administrator Haglund stated that he would create the piece and also post it on the City website. Council Member Arellano explained that unlike private industry, the meetings that the Council conducted had to be open and prior discussions could not take place behind closed doors and the process would take some time. Mayor Pinheiro spoke on the request for fact sheets explaining that the City needed to recognize that the City Administrator had to put the work out that didn't surprise anyone. City Administrator Haglund explained that the information provided to the City employees would be a simulation of what had been discussed at the evenings meeting. 8946 Mayor Pinheiro stated that the information provided may give the Council enough to make some decisions. He then spoke on the general fund impacts and the $1.8 million draw in the Community Services department explaining that the problem did need to be addressed in a very timely manner. Council Member Tucker asked if the union representatives would be involved in the different scenarios provided. City Administrator Haglund shared his work with the executive boards of the bargaining units and the all employee meetings explaining that the approach was to include all of the City employees. VIII. CITY ADMINISTRATOR'S REPORTS A. Consideration of Marketing Open Space at Gilroy Gardens City Administrator Haglund spoke on the open space sale and spoke on the research done on the value of the land. He spoke on the recent receipt of the possible purchase of the property and then suggested that the item be discussed after the October 27th special meeting on the future of Gilroy Gardens. Mayor Pinheiro spoke on waiting until the October 27th meeting stating that the Council could look at the Task Force option or the meeting on the 27th. Motion on item VIII.A. Motion was made by Council Member Tucker, seconded by Council Member Gartman and carried (Council Member Woodward absent) to address the item on October 27, 2008. IX. CITY ATTORNEY'S REPORTS There was no report provided. X. REPORTS OF COUNCIL MEMBERS Council Member Tucker A. Discussion of Responsibilities of Board and Commission Members Council Member Tucker spoke on the responsibilities of the various boards and commissions on setting agenda asking if all of the Council looked at the responsibilities the same way. Council Member Gartman asked if the language in the Charter needed to be looked at suggesting that the boards and commissions follow Roberts Rules of Order. Council Member Tucker suggested that all boards and commissions followed the same rules explaining that the Chair position needed to be clear. Council Member Gartman stated that the Charter addressed staff's position explaining that some of the boards didn't feel they were active participants. He then suggested that a policy be put in place to address the issue. Council Member Bracco stated that Parks and Recreation Commission members had expressed their concerns that a meeting had been cancelled without the Commissions input. Council Member Gartman stated that the Buil~ Board of Appeals had expressed their concerns that th~~ never met. 8947 Council Member Arellano stated that the City Administrator could address the issue stating that the citizens that volunteered needed to be heard. He explained that the agenda needed to be driven by the members. City Administrator Haglund explained that he would review the board and commission by-laws and individual procedures explaining that the Planning Commission was a quasi-judicial commission that was driven by the submitted applications. He then spoke on the Parks and Recreation Commission responsibilities explaining that they were more of a recommendation body and the Physically Challenged Board of Appeals was specifically assigned to particular duties. He then stated that he was concerned with the commissions were setting the work flow of staff as they could re-direct staff from the Council priorities. Mayor Pinheiro stated that the commission members followed the plans of the Council and staff would provide those items down from the Council. He further explained that any other items that the boards wanted to address would be brought to the Council to decide. He explained that their agenda's were set by the Council via the staff person assigned to the board and any short term items could be brought to the Council for approval. Council Member Arellano asked if the Parks and Recreation Commission should have previously addressed the Gilroy Gardens park. Mayor Pinheiro explained that the Task Force would include members from the Parks and Recreation Commission. Council Member Tucker stated that she wanted the input from the commissions asking if the process at the Council level to gain input from commissions, such as the tree policy review would need to be requested of the Council. City Administrator Haglund explained that the Parks and Recreation Commission had not had the tree policy forwarded to them yet stating that the existing policy did spell out their involvement. He explained that specific things that Council wanted a board to address that were not already articulated in the City Charter then the Council would bring those items forward. Council Member Garman A. Discussion of Extending the City Records Retention Guidelines for Council Agenda and Packets Council Member Gartman spoke on the City records retention guidelines stating that packets were only retained for 3 years. City Clerk Freels explained that packets were retained for the current year plus 2 as spelled out in the City records retention guidelines, which had been gleaned from the Secretary of State's records retention guidelines. Council Member Gartman suggested that the packets be retained indefinitely. Council Member Arellano suggested that the costs to retain the information be looked into as it could have a financial affect on the City. Council Member Gartman suggested that the costs to retain the information be researched. City Administrator Haglund explained that the costs to maintain the information could be researched. Mayor Pinheiro asked if the costs and impacts of maintaining the records was addressed in the Sunshine Ordinance. 8948 City Clerk Freels stated that the ordinance addressed the retention of tape recording and webstreaming of records, but did not address agenda and packet retention. She then asked Council Member Gartman if he was suggesting the indefinite retention of electronic Council packets and not the physical hard copy. Council Member Gartman agreed. Council Member Arellano asked if staff was being asked to calculate the impacts suggesting that more important things needed to be addressed. Mayor Pinheiro explained that the process was that Council could bring items up during their report to see if there was a majority in agreement to move forward. Council Member Tucker stated that she relied on data stating that past records were beneficial. The Council agreed to have staff look into the costs associated with retaining electronic Council packet materials permanently (Council Member Arellano and Dillon voting no and Council Member Woodward absent). XI. MAYOR'S REPORT A. Discussion of Gilroy Art's and Cultural Center Mayor Pinheiro suggested that a meeting take place to give the stake holders a chance to meet with the City Council. He spoke on the monies given to the project and suggested that a meeting date be set in January. Council Member Tucker asked if the monies planned for 2010 were real monies available for the Arts and Culture Center. City Administrator Haglund stated that the funds were an expenditure item and could have nothing to do with a real revenue source. Council Member Tucker stated that it was a top ten priority and the Council should put effort into addressing it. Council Member Arellano stated that it was on the top ten items. Mayor Pinheiro stated that he was suggesting that the item be looked at for a future meeting. City Administrator Haglund spoke on the possibility of private/public partnerships for the project. Mayor Pinheiro stated that there had been a three-fold approach such as the Gilroy Gardens refinancing, and there was a lot to explain to the stake holders and members of the community. The Council Members agreed to hold a meeting on the item. XII. FUTURE COUNCIL INITIATED AGENDA ITEMS Council Member Arellano spoke on the detail of the budget materials that would be provided on November 5th and extending the records retention guidelines asking if the costs for the additional amount of time taken. Council Member Gartman asked when the funding options for sidewalks would return to the Council. 8949 City Administrator Haglund explained that it would be an issue addressed at the November 5th meeting. Mayor Pinheiro suggested that the Council look at what staff had on their plate stating that the focus was on the issue of the City financial condition asking that the Council support him in the fact that staff not be distracted by other non-priority items. The Council adjourned to closed session at 9:34 p.m. XIII. CLOSED SESSION A. CONFERENCE WITH LEGAL COUNSEL--ANTICIPATED LITIGATION Significant Exposure to Litigation Pursuant to Government Code Section 54956.9(b)(3)(C): Claim of Golden Bay Construction, Inc. Against the City of Gilroy filed January 31,2008 B. CONFERENCE WITH LABOR NEGOTIATORS Pursuant to Government Code Section 54957.6 Agency Negotiators: Tom Haglund, LeeAnn McPhillips, Charles Sakai Employee Organizations: Gilroy Management Association (GMA) and AFSCME, Local 101 There were no closed session announcements. XIV. ADJOURNMENT TO MEETING OF NOVEMBER 3,2008 / I *