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2012/03/06ANAHEIM CITY COUNCIL REGULAR AND REGULAR ADJOURNED MEETING OF MARCH 6, 2012 The March 6, 2012 regular meeting of the Anaheim City Council was called to order at 3:00 P.M. and adjourned to 5:00 P.M. for lack of a quorum. Mayor Tait called the regular adjourned meeting of March 6, 2012 to order at 5:05 P.M. in the Chambers of Anaheim City Hall located at 200 South Anaheim Boulevard. PRESENT: Mayor Tom Tait, Council Members Gail Eastman, Lord Galloway, Kris Murray and Harry Sidhu STAFF PRESENT: Acting City Manager Bob Wingenroth, City Attorney Cristina Talley, and City Clerk Linda Andal INVOCATION: Pastor Rudy Trejo, Calvary Apostolic Church FLAG SALUTE: Council Member Gail Eastman ADDITIONSIDELETIONS TO THE AGENDA Staff requested withdrawal of public hearing item No. 10. ACCEPTANCE OF OTHER RECOGNITIONS (For a later date): Recognizing The Luevano Foundation 2012 honorees Proclaiming March 12 -18, 2012 as MS Awareness Week Recognizing the Themed Entertainment Association on its 20 Anniversary Richard Ferrin, R &R Creative Amusement Design, Anaheim, thanked Council for recognizing Themed Entertainment Association's (TEA) 20" anniversary designing and creating theme parks and entertainment centers around the world. He explained TEA encompassed designers, manufacturers, and consultants whose goal was to provide global quality entertainment for families Recognizing David Carr, Student Team President, FIRST Program, Robotics Team 3309 — Servite Friarbots PUBLIC COMMENTS (all agenda items, except public hearing): Brian Chuchua, resident, remarked voters in Wichita, Kansas had launched a petition drive and voter referendum to soundly defeat development incentives offered to a Wichita hotel developer encouraging Anaheim voters to do the same. William Fitzgerald, Anaheim Home, offered his observations regarding privatization of City services and his views on elected officials. Darren Acevedo, resident, expressed his support for a "Blues Camp" scheduled in Anaheim this spring, explaining how the camp increased his skills, and offering Council a sample of his musical talent. Council Meeting Minutes of March 6, 2012 Page 2 of 12 Chase Walker, 13 years old and an avid supporter of the Blues Kids Camp, remarked he had been playing Blues music non -stop since his participation in a recent camp. Jerry Walker, 16, also spoke in support of the Blues Camp, looking forward to the opportunity to learn and perform America's root music in Anaheim. Cheryl Acevedo explained the Blue's Kid Foundation was established as a non - profit by Fernando Jones to preserve, promote and perform the blues by America's youth free of charge. Camps had been established in Chicago, Austin and Corona and would be coming to Anaheim this summer. She added scholarships were provided for 1,000 to 1,500 youths and any musically talented child could audition by signing up on Blueskids.com. Mr. Nasser, Islamic Institute of Orange County and a member of the poverty task force thanked Council for their support in response to the task force's five year homeless risk initiative, asking that the next step in the process be undertaken by funding money to support the homeless in the next budget. Karen Stoyanoff, Unitarian Universalist Church and poverty task force member, urged a collaborative effort with the City in funding a site for a multi - purpose center to address homeless needs. Larry Larson, resident, urged Council to support an initiative on the ballot for voters to approve or reject the GardenWalk hotel incentive. John Santionni stated LA Live would receive a larger tax subsidy for a longer period of time than Anaheim's developer agreement, however, LA Live had also agreed to hire 70 percent of their staff at living wages, to fund one public park, and create publicly accessible open spaces; benefits not included in Anaheim's agreement. John Leos, resident, urged the GardenWalk hotel subsidy be placed on the ballot to allow the voters to have their voice in this issue. An unidentified individual also urged Council to approve a ballot measure regarding the GardenWalk development agreement. Evelyn Rugara, student, felt funding should be available for afterschool programs to keep school children in a safe environment. Larry Slagle, resident, stated incentives for development was not a new concept pointing out that every full - service hotel built in recent years had some type of support to encourage development, job growth and future revenues. He added Garden Grove had constructed 1,500 new hotel rooms seeking visitor spillover from Anaheim entertainment venues, and urged the GardenWalk project go forward. Charles Ahlers, Orange County Visitors and Convention Bureau, stated the visitor industry in Anaheim was significant with its entertainment and sporting venues attracting millions of visitors annually. NAM, one of the largest convention exhibitors gathered 55,000 attendees, many of whom would prefer higher quality hotels. The restaurant trade was also flourishing at GardenWalk because there were enough visitors to support them and he believed the same would be true of the new GardenWalk luxury hotels which would bring in important economic benefits once built. Council Meeting Minutes of March 6, 2012 Page 3 of 12 Al Jabar, resident, urged Council to allow the voters to consider the GardenWalk hotel agreement Jose Vargas, Young Democrats, believed the residents should have the opportunity to vote on the specifics of a $158 million transient occupancy tax (TOT) incentive offered to a GardenWalk hotel developer. Marta Rivera, Ponderosa community, asked that the citizens of Anaheim be given the chance to vote on the GardenWalk hotel development. Maria Rivera, Bonita community, asked for an opportunity to vote on the hotel development feeling the decision to subsidize development would reduce funding from needed neighborhood improvements and education. Jill Kanzler reiterated SOAR's support for the development of Anaheim GardenWalk hotel and the use of public /private partnerships. SOAR's goal was to continue to capture tourist dollars and help grow future revenues. Kate Klimow, Orange County Business Council, remarked the business community depended on certainty, stability and predictability and to be able to rely on Council's decisions in order to work toward enhancing Anaheim's economic viability. She asked that the majority vote on the GardenWalk project be respected and development be allowed to move forward. Patrick Pepper, resident, objected to the ballot initiative, remarking the sooner the GardenWalk hotels were built, the sooner the City would see increased revenues. Carl Ritala, union member /resident, remarked city council members were elected to represent their community and make decisions on behalf of their constituents and majority votes were part of that process. He opposed any ballot initiative. Jim Adams, LA/OC Building & Construction Trade Council, urged Council to stand by their vote on the GardenWalk hotel agreement. He added with the demise of redevelopment by Governor Brown, TOT sharing agreements would become more prevalent for those cities wishing to invest in their future. An unidentified individual remarked he was in the building trade and out of work for over a year and the GardenWalk hotel project would help many in the same dilemma. He thanked Council for taking the steps to create jobs. Ernesto Rodriguez, resident, urged Council to reconsider the GardenWalk developer agreement and reject the contract. Jose Moreno, resident, urged Council to let the voters determine the outcome of the GardenWalk incentive agreement. Ruben Villareno, resident /union member, thanked Council for creating new jobs in the City. An unidentified person concurred with Council's approval of the GardenWalk hotel development. He discussed in detail Garden Grove's recent developer incentives, emphasizing neighboring cities were actively working to take revenues away from Anaheim. Alex Lopez, Trade Show and Exhibit Builders, stated his members had voted to support the City's decision regarding the GardenWalk hotel agreement. Council Meeting Minutes of March 6, 2012 Page 4 of 12 William Grisolia, resident, urged Council to consider its residents when making a decision on the request for a referendum on the hotel incentive agreement, adding he was not against development, but rather looked for good development. Doug Robbins, resident, stated there were many currently unemployed in Anaheim and thanked Council for their courage in going forward with the hotel development. Reed Royalty, Orange County Taxpayers Association, remarked the GardenWalk hotel projects were good for the city and for Orange County. Patrick Kelly, Teamster, supported the development efforts of the city stating there were thousands of union and non -union people out of work and this project would send a message that Anaheim was job friendly. Richard Oakwen supported the ballot initiative and a vote of the people on this issue. John Daly, resident, supported the potential job growth from the GardenWalk development; pointing out over 250 companies had left California for more business friendly environments. Amin David urged Council to support a vote by the people. Eric Altman, OCCORD, remarked that so many community members had expressed their viewpoints on both sides of an issue that had divided the community and allowing the people to vote on this one issue would resolve the division in the community and clearly outline their thinking for any future projects in the City. CONSENT CALENDAR: Mayor Tait removed Item No. 4 from the consent calendar for further discussion and Council Member Sidhu removed Item No. 6. Council Member Eastman then moved to waive reading in full of all ordinances and resolutions and to adopt the balance of the consent calendar in accordance with the reports, certifications and recommendations furnished each council member and as listed on the consent calendar; seconded by Mayor Pro Tem Galloway. Roll Call Vote: Ayes — 5: (Mayor Tait and Council Members: Eastman, Galloway, Murray and Sidhu. Noes — 0. Motion Carried). 1. Receive and file minutes of the Community Services Board meeting of January 12, B105 2012; Cultural and Heritage Commission meeting of January 19, 2012; and the Public Utilities Board meeting of January 25, 2012. 2. Waive the sealed bid requirement of Council Policy 4.0 and authorize the Purchasing D128 Agent to issue a purchase order to Aero Computers, Inc., in the amount of $30,551, for extended service warranties for the Police Department. 3. Waive the sealed bid requirement of Council Policy 4.0 and authorize the Purchasing Agent to issue a purchase order to Smiths Detection, Inc., in the amount of $64,650, for D128 upgrades to four Haz Mat ID 360 portable chemical identification systems for the Fire Department. 5. Approve the First Amendment to Agreement with Brandow & Johnston, Inc., increasing the maximum compensation from $60,000 to $150,000, for professional structural AGR- 3008.1 engineering services to the Anaheim Convention Center. Council Meeting Minutes of March 6, 2012 Page 5 of 12 7. ORDINANCE NO. 6236 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM amending the non - exclusive franchise of Yellow Cab Company of Greater F130.2 Orange County, Inc., to extend the term of the franchise. ORDINANCE NO. 6237 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM amending the non - exclusive franchise of Cabco, Inc., dba California Yellow Cab to extend the term of the franchise. ORDINANCE NO. 6238 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM amending the non - exclusive franchise of A White and Yellow Cab, Inc., dba A Taxi Cab to extend the term of the franchise (Introduced at the Council meeting of February 28, 2012, Item No. 23). END OF CONSENT CALENDAR: 4. Support the recommendations of the Police Department to develop and respond to the request for proposal from the City of Yorba Linda for law enforcement services, due D160 March 15, 2012. Police Chief, John Welter reported this was an item asking for authority to respond to a Request for Proposal (RFP) from Yorba Linda to provide law enforcement duties /services in 2013. In January 2012, he explained, Yorba Linda, currently under contract for services with Brea for almost 40 years, issued the RFP and specifically requested the Anaheim Police Department (APD) to respond offering the same level of services currently received at an effective cost that did not increase the crime rate. The contract would begin May, 2013 for a minimum of five years. Chief Welter pointed out the Department had a history of providing law enforcement services to a variety of venues and governmental agencies, although not to a municipality. APD delivered unique and specialized services to the Stadium, Honda Center, Convention Center and Disneyland Resort and was a model for policing large, high - profile events with serious security challenges. Staff felt this was an opportunity to explore benefits from cost sharing of services, dispatching, jail, emergency management and the East Station facility. It would also provide a greater safeguard of Anaheim's northern border potentially reducing crime coming to Anaheim while expanding community oriented policing philosophy and problem oriented policing strategy that focused on crime prevention and community outreach activities. Chief Welter reported department staff was still in the process of reviewing the cost efficiency and service effectiveness without impacting Anaheim's General Fund. He requested Council support the recommendation to respond to the RFP for law enforcement services by March 15, 2012. Mayor Tait remarked he was concerned regarding the costs of providing services. Currently, he pointed out, Yorba Linda was compensating Brea approximately $11 million a year for police services for 70,000 residents, or $161 per year per resident. It was costing the City of Anaheim, with 340,000 residents and a budget of $110 million, $324 per resident per year for police services. He believed those numbers were too far apart for it to make sense to respond to the RFP and would not support the recommendation. Council Meeting Minutes of March 6, 2012 Page 6 of 12 Chief Welter remarked that Deputy Chief, Craig Hunter and other staff had worked through the RFP and cost for services were estimated to be about $10.5 million, which was close to other bids. The Sheriff's Department, he added, publicly disclosed they were within $600,000 of that amount and Brea was at $12 million. He pointed out using the East Station, there would be no need for another facility and existing personnel could be used while getting reimbursed for their time spent on Yorba Linda issues. He added the benefit would be for both sides of the borders by having community policing philosophy and stronger support for crime prevention activities. In addition, services provided under mutual aide such as canine, helicopter, shared field patrol, and response on borders would be reimbursable. Council Member Eastman confirmed that the response to the RFP would not lock Anaheim into a contract and would open the door for a more detailed, thorough financial analysis of the proposal. Council Member Murray was interested in future details and would support moving forward at this juncture. Council Member Sidhu was supportive of exploring the financial details of the proposal and to determine how it would best serve Anaheim. Council Member Galloway stressed that any plan would have to ensure that no Anaheim resident would receive less quality of service if the proposal were to go forward. Council Member Sidhu moved to approve Item No. 4, seconded by Council Member Eastman. Roll Call Vote: Ayes — 4 Council Members: Eastman, Galloway, Murray and Sidhu. Noes — 1: Mayor Tait. Motion Carried. 6. Approve and authorize the Public Utilities Department do the following relating to AB32, statewide reduction in Green House Gas emissions, and the rules set by California Air Resources Board (GARB): authorize participation in the CARB Cap- and -Trade Program, auction markets and secondary Carbon Offsets and Carbon Allowances markets; authorize the General Manager (GM) to purchase, trade, and /or sale carbon D182 offsets and allowances on an as needed basis, including prepare, execute, attest, register or submit documentation with designated agencies; authorize the GM to negotiate and execute related purchase and sales agreements and any supplemental transactions with CARB, brokers, other utilities, exchanges, and carbon traders consistent with the Department's Wholesale Energy Risk Management Program, including any additional agreements or documents necessary to implement, participate and administer the City's participation in the secondary markets and CARBs Program; authorize the Risk Manager to modify insurance and indemnification provisions to agreements; and authorize the GM to designate a primary and alternate Authorized Account Representative for CARBs Program or other mandatory reporting requirements and execute and deliver attestations relating to AB32. Marcie Edwards, Public Utilities General Manager, announced Item No. 6 was the cap and trade report which requested Council's authorization to participate in the California Resources Board (CARB) Cap and Trade Program and in the secondary carbon offset and allowance markets. In 2006, AB 32 passed with the intention of lowering statewide greenhouse gas emissions to 1990 levels by year 2020 with CARB developing the cap and trade program as one tool to meet this mandate. This tool, she added, could help manage significant costs in penalties the state established and could not be avoided. It was designed to use market signals to encourage the management and reduction of greenhouse gas emissions through carbon auctions and tradable secondary markets. She pointed out that most of Anaheim electricity was generated from carbon related resources or fossil fuel and those resources did have emissions. She added that while previous emissions had no cost, the California legislature now determined that emissions Council Meeting Minutes of March 6, 2012 Page 7 of 12 should have a cost. She further provided that those costs would be the lever to cause agencies such as Anaheim Utility to choose to reduce emission - related costs or to pay a price to continue to emit. In Anaheim's case, under the Cap and Trade program, each year the Utility would be given a set number of free emissions allowances or free permits to emit carbon dioxide from Anaheim's generating resources. However, she explained, the amount of allowances allotted would be slightly less than what was actually needed, so if more were needed, they must be purchased through the carbon auction or in the secondary market. Over time, CARIB would then gradually reduce the number of free allowances given, increasing the gap between free allowances and the amount needed to cover emissions. At that time, there would be two options, Anaheim could reduce emissions by moving to lower emitting resources and pay the cost associated with that strategy or pay for the privilege of emitting above permitted levels, or some combination of the two strategies. To understand what this cost would be, she explained, there were two pieces of legislation impacting the cost of electricity; AB 32 which required reduction in greenhouse gases and SIB 1X2, a California bill approved in April, 2011 that mandated Anaheim obtain 33 percent of the energy supplied to customers from renewable or green resources by the year 2020. Currently, the Department believed the electric rate impacts associated with SIB 1X2 and to a much lesser extent, AB 32, would result in approximate rate increases to electric rate payers in the 12 to 17 percent range across the next eight years. This, she pointed out, would just address the State's currently legislated levels of environmental mitigation and did not include other cost increases typically associated with the normal course of doing business. The anticipated rate impacts were driven by timing as last year's legislation required Anaheim to reach 33 percent power share in its portfolio of renewable in a fairly short time frame. The cap and trade program as stated a number of years ago when the projected price tag was over $100 million annually, would be less as rules were defined and cost estimates dropped into more reasonable ranges from no impact to $5 million a year initially. In approving tonight's request to participate in the cap and trade program, she stated, the Utility would have limited authority to participate in the auctions and markets associated with emissions credits. Since CARB, in the beginning program years, would give Anaheim about 90 percent of needed emission credits for free, only the remaining 10 percent would have to be addressed. Those credits, she explained, could be purchased at auction, the secondary market, or if the bottom line impact to customers was better, the Department could choose to reduce the use of current greenhouse gas producing resources and pay the cost of replacement renewable energy. Participation in the cap and trade was an option staff would like to be able to pursue, especially when the cost of that strategy was cheaper than alternatives. She pointed out current regulations that required the Department to take part in the cap and trade, but permission to participate in the auction and secondary markets was not granted. If Anaheim did not participate, CARIB could recall the allotment of free emissions credit and then require payment in full for the cost of those credits which could exceed $800 million in the next eight years. She added the law also granted CARIB the ability to penalize Anaheim should emissions not be reduced accordingly and discussions of the penalties for failure to comply were in the $11 million to $22 million per year range. Ms. Edwards stated the Department was seeking authority to participate now as the first auction would begin in August, 2012 and the mechanism and reporting tools must be finalized and strategies for managing the free credits as well as bidding and procurement strategies to access the remaining 10 percent be developed. She understood Council and the community were Council Meeting Minutes of March 6, 2012 Page 8 of 12 interested in how renewable power and emissions management were being handled, and wanted the Utility to consider all economic impacts not just environmental impacts. Public outreach to explain the estimated costs involved in these programs were outlined in the Utility website and presentations were being scheduled to the community that outlined legislative requirements relating to emissions and renewable power and the potential costs. Council Member Sidhu remarked he was fully supportive of the cap and trade program and encouraged the best trading to bring costs down; pointing out Anaheim still had the lowest utility costs in the region at this point. Council Member Murray remarked that with Canyon Power Plant opening, Anaheim continued to be a leader in green energy in the county and in the state. With regard to the cap and trade program, she asked if the increase in rates over the next few years would accommodate that program. Ms. Edwards responded the 12 to 17 percent increase predicted over the next eight years was not just to reduce emissions, but also took into account SIB 1X2 the requirement for 33 percent renewable power as well. She complemented staff for developing a portfolio taking the least cost approach and understood the portfolio included some coal production which was why the City had to offset with carbon tax credits. Ms. Edwards added the tax credits the City would be purchasing was not to reduce emissions in Anaheim, but was to pay for the imports from coal producing facilities in Utah and New Mexico. Council Member Murray asked if investor -owned utilities had the same type of burdens with Ms. Edwards replying these regulations impacted every single utility in California. Mayor Pro Tern Galloway moved to approve Item No. 5, seconded by Council Member Sidhu. Roll Call Vote: Ayes — 5: (Mayor Tait and Council Members: Eastman, Galloway, Murray and Sidhu.) Noes — 0. Motion Carried. D150 8. Update on the Ponderosa Library services. Terry Lowe, Director of Community Services, provided an update on Ponderosa Library services. In 2004, he reported, the Anaheim City School District was planning for the construction of Ponderosa Elementary School adjacent to Ponderosa Park and at that time, City staff worked closely with the District to get the greatest amount of benefit from this facility, netting more open space at the end of the project than anticipated at the beginning. Another opportunity resulting from those negotiations, he pointed out, was for the District and the City to develop a joint -use library serving students in the day and to eventually function as a branch library after school and on weekends. Mr. Lowe added that while the school was under construction, both the school district and City staff recognized they were facing economic challenges, and hoped the economy would catch up in the future and services could be provided. Currently, the Ponderosa Library was serving 1,155 students every day, a computer lab was used regularly for adult bilingual classes in the evenings, including child care services, and the Department was able to provide resources from its library collection to enhance the Library's books and materials. Mr. Lowe added that staff was in the process of preparing the budget for the next fiscal year, working closely with the Finance Department to identify a funding source to provide some level of public service hours. He added staff was aware the Ponderosa community eagerly anticipated the opening of the library and the goal was to initiate service this July. Council Meeting Minutes of March 6, 2012 Page 9 of 12 Council Member Eastman had asked for this staff report specifically to inform the Ponderosa community that the City was intent on staffing the facility as soon as finances allowed. Council Member Murray remarked that to date, about 200 adults had participated in the bilingual computer classes and 100 children had benefited from childcare services provided during those classes. She added that hopefully by July 1 St, the City would have identified resources to continue that service as well. No action by Council was taken. D116 g. Discussion of a possible initiative measure relating to the use of Transient Occupancy Tax as an incentive for hotel development. Acting City Manager Bob Wingenroth explained that at the February 28, 2012 council meeting, Mayor Pro Tern Galloway had requested this discussion be placed on the next agenda and staff was available to answer questions as Council discussed the possible initiative measure or to receive direction. Mayor Tait remarked that on January 24 a discussion for the GardenWalk hotel $158 million subsidy had taken place with much public testimony in favor of the incentive agreement. The next day, after a report appeared in newspapers, many of the public expressed concern over the agreement and a special meeting was called for January 31 He added that meeting was canceled due to lack of a quorum and at the following regularly scheduled council meeting, the public asked for a discussion of this item and an opportunity for public comment. It was now on the agenda for discussion and while he respected his colleague's positions in supporting the incentive, he stated he would like to put forward an initiative to rescind the GardenWalk hotel development agreement. City Attorney Cristina Talley offered information on such an initiative. Her department believed Council's ability to place an initiative measure on the ballot to rescind the January 24 approval of the economic assistance agreement for GardenWalk hotel project, was subject to legal challenges for a number of reasons. One of the issues that would be faced was whether or not the agreements could be considered a "legislative" versus an "administrative" act. In order for a matter to be on an initiative measure, it had to be considered a legislative act and she added, the law was not entirely clear on that issue. Additionally, this measure to rescind the approval, could be construed as an indirect attempt to directly put something on the ballot that would otherwise be a referendum matter, commenting there were strict rules with respect to a referendum and the courts have held that an initiative measure that was an attempt to indirectly put on the ballot something that could not be put on with a referendum had been held to be an invalid initiative measure. Mayor Tait remarked the broader issue was one of policy relative to developer incentives. While he recognized Anaheim had used certain monetary incentives in the past, he believed a policy addressing private developer incentives should be formed and motioned for the City Attorney bring back to Council a legally defensive initiative measure that would place a charter amendment on the ballot prohibiting the use or transfer of TOT as an incentive for private development in Anaheim, and applicable to any project in which construction had not yet commenced for the November election, seconded by Mayor Pro Tern Galloway. Council Member Galloway stated she had seconded Mayor Tait's motion because the community wanted to exercise their right to vote on this issue and did not understand how the agreement could have been approved so quickly without their ability to provide public input. She had supported the special meeting called for January 31S was appreciative the room was Council Meeting Minutes of March 6, 2012 Page 10 of 12 open to the public even though the meeting had been canceled and she was able to hear the public's comments. She emphasized she was not opposed to development nor opposed to the two GardenWalk hotels, but could not support the subsidy agreement and concurred with the Acting City Manager's initial recommendation to reject the agreement. Council Member Murray asked for clarification on the referendum and initiative process available to Anaheim residents. City Clerk Linda Andal responded the referendum process relating to the January 24 approval could no longer be submitted to the City Clerk's office as the timeline of 30 days from the date the City Clerk attested the legislative body's action expired March 1, 2012. The initiative process, she explained, contained many steps with the first step, she explained, required the proponents of any initiative measure to file with the City Clerk a Notice of Intent before any signatures could be gathered. An impartial analysis would then be developed by the City Attorney's Office and returned to the proponent, followed by publishing that analysis and the gathering of signatures. She added the last date Council could approve any measure on the November ballot would be August 10, 2012, 88 days before the election. She advised the Council meeting before the August 10 state deadline was July 24 and Council would have to consider any measure whether it was drafted by this city council or by the people at or before the July 24 council meeting in order for it to be placed on the November 2012 ballot. Council Member Murray presented a PowerPoint presentation and discussed in detail the specifics of the GardenWalk hotel agreement, the terms of the original agreement, and the terms of the amended agreement. She discussed the long -term revenues to come from this project, assets that would grow revenues and last for many years as proven by existing Disney hotels. She pointed out no funds for this project were taken from libraries, in fact, the City, to balance its FY 2011/12 budget, voted in June 2011 to decrease library and other city services. She discussed the peripheral benefits to be received, with a revitalized GardenWalk center, the ability to attract larger business conventions looking for high end hotels, and additional revenues keeping the resort district healthy. Council Member Murray also discussed the various TOT sharing agreements already in place and how they kept Anaheim competitive in a visitor - serving industry that had many options for venues elsewhere. Council Member Eastman discussed the canceled special meeting called for on January 31sand also asked about possible ramifications as to liability and damages regarding a possible initiative measure generated by Council. Ms. Talley responded that even if the legal hurdles could be overcome, there could be a potential claim against the City for exposure of liability for damages for a breach of contract by the developer because the City executed an agreement with the developer that offered the TOT incentive. Council Member Eastman asked for more detail on the financial liability with Mr. Wingenroth replying staff had some internal discussions on the financial impact of rescinding the developer agreement and that actual damages incurred could be up to the amount of taxes given as an incentive in this agreement as well as further discussion on losses of business that could have occurred over the life of the project which could be a significant amount. Council Member Sidhu inquired whether the City Council had followed all procedures on the hotel subsidy agreement and had it been announced properly. Ms. Talley remarked there were no violations, to her knowledge, as well as no Brown Act violations regarding the January 24 decision. Council Member Sidhu wished to counter with an alternate motion, and after further discussion, indicated he would withdraw any substitute motion. Council Meeting Minutes of March 6, 2012 Page 11 of 12 Council Member Murray asked if Council were to agree with Mayor Tait's motion, it was her understanding there would be legal challenges to be overcome but that there was still an initiative process available to the community opposing the development subsidy. Ms. Talley responded the motion offered was to direct her office to bring back to Council an initiative measure that she believed would be legally defensible and not subject Council to potential challenge for breach of contract or any other legal theory. She added that she could not at this time confirm whether some language could be crafted to make the measure applicable in a manner that did not constitute a breach of contract. Council Member Murray responded this discussion did not give her a level of comfort to support this motion. Mayor Tait then read a letter received from Ken Buksa, General Manager of the Sheraton Anaheim Hotel dated March 6, 2012, essentially stating that the two 4 -star hotels proposed for GardenWalk would not be competitive with the rest of Anaheim hotels offering much lower rates as compared to other major tourist destinations in the nation and would ultimately not be successful. He added, otherwise a Ritz Carlton, Four Seasons, or St. Regis would already have been built in the resort area, emphasizing the only high end hotel succeeding in Anaheim were Disney properties. Mayor Tait reiterated his motion to direct the City Attorney to bring back a legally defensible initiative measure that would place a charter amendment on the November ballot prohibiting the use or transfer of TOT as an incentive for private development and to make this amendment applicable to any project in which construction had not yet commenced, seconded by Mayor Pro Tem Galloway. Roll Call Vote: Ayes — 2: (Mayor Tait and Council Member Galloway). Noes - 3: (Council Members Sidhu, Murray and Eastman). Motion Failed. PUBLIC HEARING: (This public hearing was withdrawn by staff.) 10. This is a public hearing to consider a resolution approving the Mitigated Negative Declaration and Mitigation Monitoring Plan and determining their adequacy to serve as the required environmental documentation for the Ball Road and Sunkist Street intersection improvement project. RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving the Mitigated Negative Declaration and Mitigation Monitoring Plan and determining their adequacy to serve as the required environmental documentation for the Ball Road and Sunkist Street Intersection Improvement Project. Council Communications: Council Member Murray thanked all members of the public for their attendance and interest in the GardenWalk project. She commended staff for their work on the dedication of the Canyon Power Plant bringing it in under budget and ahead of schedule, a sustainable facility using solar power and recycled water in partnership with Orange County Water District. She congratulated the USA Women's Volleyball team for qualifying for the Olympics and announced the USA Men's Volleyball qualifying event to be held at the Long Beach Pyramid. Mayor Pro Tern Galloway thanked community members for their comments both for and against the hotel subsidy agreement. In response to comments received by members of the Poverty Taskforce, she requested staff place a discussion item on a future agenda to address homelessness in the City and possible budgetary support. She further requested staff to work with Anaheim Performing Arts in their efforts in purchasing the Heritage building and in Council Meeting Minutes of March 6, 2012 Page 12 of 12 negotiating a parking agreement as City Hall parking was the building's sole source of parking. She also recognized Acting City Manager, Bob Wingenroth. Council Member Sidhu addressed the debate of the hotel subsidy and said it was time as a community to move forward and begin the healing process. He congratulated the Anaheim Utility Department on dedication of the Canyon Power Plant and recognized David Carr, Student Team President, Robotics Team 3309 for Servite High School. Council Member Eastman stated the Canyon Power Plant was an incredible resource to the residents of Anaheim, saving over $7 million in fees previously paid because power was not generated in the City and was one of the only plants approved for construction in California in some time. She also reported that she and Council Member Murray had joined forces with the county to address homelessness in the region to reduce duplicated services and take a step forward in providing service to the homeless on a regular basis in a centralized location. Mayor Tait spoke of the homelessness in the City and commended Mayor Pro Tern Galloway and Council Members Eastman and Murray for their efforts on this issue. He spoke of and expressed his condolences to the family of Thornton E. Piersall, former Public Works Executive Director, and adjourned the meeting in his memory. Adjournment: At 8:35 P.M., Mayor Tait adjourned the meeting in memory of Thornton E. Piersall to March 20, 2012 at the East Anaheim Gymnasium, 8165 E. Santa Ana Canyon Road, Anaheim, beginning at 4:30 P.M. for closed session and 5:00 P.M. its regular meeting session. Res ectfully submitted, Linda N. Andal, CIVIC City Clerk