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1995/08/15CITY OF ANAHEIM, CALIFORNIA - COUNCIL MINUTES AUGUST 15, 1995 The City Council of the City of Anaheim met in regular session. PRESENT PRE SENT ABSENT = PRE SENT MAYOR= Daly COUNCIL MEMBERS= Tait, Lopez, Zemel, Feldhaus, Daly COUNCIL MEMBERS: None CITY MANAGER: James Ruth CITY ATTORNEY= Jack White CITY CLERK= Leonora N. Sohl ASSISTANT CITY CLERK= Ann M. Sauvageau DIRECTOR OF PUBLIC WORKS/CITY ENGINEER= Gary Johnson PUBLIC WORKS-DEVELOPMENT SERVICES MANAGER= Natalie Meeks DEPUTY CITY MANAGER= Tom Wood FINANCE/ADMINISTRATION MANAGER= Bill Sweeney CODE ENFORCEMENT MANAGER= John Poole PLANNING DIRECTOR= Joel Fick ZONING DIVISION MANAGER= Greg Hastings FIRE CHIEF= Jeff Bowman SR. CODE ENFORCEMENT OFFICE= Don Yourstone A complete copy of the agenda for the meeting of the Anaheim City Council was posted at 1=20 p.m. on August 11, 1995 at the Civic Center kiosk, containing all items as shown herein. Mayor Daly called the workshop portion of the meeting of August 15, 1995 to order at 3:08 p.m. and welcomed those in attendance. He explained that the Council has a Closed Session scheduled for 3=30 p.m. and to the extent possible, the Council would like to keep to that schedule. While they do not prohibit public input at Council workshops, it is not necessarily encouraged since workshops are for previewing new subject matter to the Council in an informal setting. Regarding today's agenda, he has heard personally from some of the affected parties and staff has indicated that a few people may wish to speak. If so, he suggests that they focus on the high points and if they want to elaborate or discuss legal issues, that those cor~nents be submitted at a later.date. City Manager, James Ruth. This is the appointed time for the workshop on the Street Deterioration Fee. The presentation today will be made by the Public Works Department, Gary Johnson, Public Works Director and City Engineer, and his staff. 000= STREET DETERIORATION FEE= Gary Johnson, Director of Public Works and City Engineer. In recent years, there have been significant studies analyzing the effects of excavations in streets relative to the useful life of the street. This, coupled with multiple telecommunications' companies planning C~TY OF ANAHEim, CAL~FOI~A - COUNCIL H~NUTE8 - AUGUST 15~ 1995 extensive trenching in the City's local and arterial streets, has necessitated an analysis by the department of current City practices and ~olicies related to excavations in City streets. Currently, there are two companies trenching in Anaheim's streets, MFS Network Technologies and Linkotel for a total of 24,000 feet of trenching. Current submittals for these two companies alone are for another 125,000 feet of trenching. Permits are also pending from various telecommunication companies including PacBell. There is an urgency in implementing a plan to make sure the condition of streets are safeguarded from this unprecedented cutting of streets. He then introduced Natalie Meeks to provide a summary of the analysis to date. Natalie Meeks, Public Works, Development Services Manager briefed the document submitted by the Public Works. Department dated August 15, 1995 - Street Deterioration Fee - City Council Workshop, which gave the background leading to the staff's proposal and ultimate recommendation to revise the City's right-of-way permit ordinance and fee structure. Approximately a year ago, it became apparent that Public Works must address the issue of how to protect the City's streets and rights of way while still allowing the City's businesses and residents access to the most up-to-date technology available. While deregulation and competition will provide citizens advanced services at the lowest possible cost, the impact to the City's streets could be devastating. Studies have shown that utility cuts significantly reduce the life of the pavement which propogates beyond the area of the cut costing the City millions of dollars in reduced pavement life. (Ms. Meeks presentation was supplemented by slides, hard copies of some of which were included in the material submitted.) Also submitted were studies conducted for the Department of Public Works, City and County of San Francisco (May, 1995) and one for the City of Phoenix, Arizona (July, 1990), both relating to the adverse effects of utility cuts on city streets. (Also see report dated December 8, 1994 prepared by IMS, Infrastructure Management Services, Inc. -- Estimated Pavement Cut Surcharge Fees for the City of Anaheim, California Arterial Highway and Local Streets, portions of which were also briefed in the presentation). Slides were also shown of deteriorated City streets due to pavement cuts as well as streets in San Diego, a City which is now living through the immediate impacts of disruption and degradation and the realization of what the long-term impacts could mean to their street system. In concluding, Ms. Meeks noted that adoption of the proposed ordinance and fee schedule would ensure that contractors and utility companies take responsibility for the impacts of their facilities and also ensure available funding for the repairs necessary due to the accelerated deterioration of the City's streets. Public Works staff is requesting input from the Council before moving forward with the proposal and are available to meet with Council Members individually to answer questions or provide additional information. Staff will also be extending another invitation to the local utility companies to meet with them to discuss the proposal. The finalized ordinance will then be agendized and recommended to the Council for approval. Following the presentation, questions were posed by Council Members which were answered by Ms. Meeks, Mr. Johnson and City Attorney, Jack White. Mr. Johnson explained for Council Member Zemel that the bulk of street rehabilitation in the City is done by contractors. He believes that the magnitude of costs relating to the trenching is multiple times greater than any efficiency in savings, if there are any. City Attorney White explained for Council Member Tait that franchise fees currently paid by utility companies are for the right to be in the public right of way and not meant to be an all-encompassing charge. 2 CITY OF ANAHEIM, CALIFORNIA - COUNCIL MINUTES - AUGUST 15, 1995 council Member Zemel asked that before the next workshop on this matter, he would like to know what the franchise fee covers if not the deterioration of the Btreet~ City Manager Ruth. The franchise fee is minimal but he will submit a report on how the money is used. Council Member Feldhaus. He would like at some point in time to hear rebuttal arguments from those who have a need to cut into the streets -- the ability to hear both sides of the story at some point before the Council has to make a decision. Gary Johnson. Staff is going to ask all the utility companies to meet with them to discuss some of the issues and hopefully resolve them before bringing this back to the Council. This is to occur shortly. Mayor Daly. He thanked staff for the presentation. Relative to the request of Council Member Feldhaus, perhaps after meeting with the utility companies, staff can provide the Council answers to some of the questions raised today, schedule another workshop and put all the facts on the table perhaps in 30 to 45 days. He does not want to exclude any participation by the public that is desired but there will be other opportunities and they look forward to hearing from them. Adoption of the ordinance will be a scheduled agenda item. REQUEST FOR CLOSED SESSION: City Attorney Jack White requested a Closed Session noting first that there are no additions to Closed Session items. PUBLIC COMMENTS - CLOSED SESSION ITEMS: There were no public comments relative to Closed Session items. The following items are to be considered at the Closed Session: CONFERENCE WITH LEGAL COUNSEL PURSUANT TO GOVERNMENT CODE SECTION 54956.9(a) - EXISTING LITIGATION: Name of case: In re: County of Orange, Debtor, U.S. Bankruptcy Court, Central District Case No. SA 94-22272~ and In re: Orange County Investment Pools, U.S. Bankruptcy Court, Central District No. SA 94-22273. CONFERENCE WITH LEGAL COUNSEL PURSUANT TO GOVERNMENT CODE SECTION 54956.9(a) - EXISTING LITIGATION: Name of case: Anaheim Stadium Associates v.. City of Anaheim, Orange County Superior Court Case No. 44-81-74. CONFERENCE WITH LEGAL COUNSEL PURSUANT TO GOVERNMENT CODE SECTION 54956.9(a) - EXISTING LITIGATION: (a) Name of case: Wayne A. Parkola v. A AAA Yellow Cab, Inc., et al., Orange County Superior Court Case No. 72-71-63. (b) Name of case: Delmonico, et al. v. City of Anaheim, Orange County Superior Court Case No. 70-80-71 (and 16 related actions).l. RECESS: Mayor DalY moved to recess into Closed Session. Council Member Tait seconded the motion. MOTION CARRIED. (3:46 p.m.) CITY OF ANAHEIM, CALIFORNIA.- COUNCIL MINUTES - AUGUST 15, 1995 AFTER RECESS: The Mayor called the meeting to order, all Council Members being present, and welcomed those in attendance to the Council meeting. (5:44 p.m.). INVOCATION: A moment of silence was observed in lieu of the invocation. FLAG SALUTE: Council Member Bob Zemel led the assembly in the Pledge of Allegiance to the Flag. 119: PRESENTATION - ED GARDA - SERVICE ON HOUSING COMMISSION: Mayor Daly and Council Members presented a plaque to Mr. Ed Garda recognizing and commending him for his 12 years of dedicated service on the City's Housing Commission. 119: PRESENTATION - MAGGIE CARRILLO-MEJIA --SERVICE ON PUBLIC UTILITIES BOARD= Mayor Daly and Council Members presented a plaque to Mrs. Maggie Carillo-Mejia recognizing and commending her for almost four years of dedicated service on the City's Public Utilities Board. 119: THE FOLLOWING WERE RECOGNITIONS AUTHORIZED BY THE CITY COUNCIL THIS DATE TO BE MAILED OR PRESENTED AT ANOTHER TIME: PRESENTATION - Honoring Mitch Caldwell for his service on the Planning Commission. FINANCIAL DEMANDS AGAINST THE CITY in the amount of $5,603,711.40 for the period ending August 11, 1995, in accordance with the 1995-96 Budget, were approved. Mayor Daly recessed the City Council meeting until after the Redevelopment Agency and Housing Authority meetings. (5:50 p.m.) Mayor Daly reconvened the City Council meeting. (5:57 p.m.) ADDITIONS TO THE AGENDA: There were no additions to agenda items. ITEMS OF PUBLIC INTEREST: No items of public interest were addressed. PUBLIC COMMENTS - AGENDA ITEMS: There were no public comments on City Council Agenda items. MOTION: Council Member Daly moved to waive reading in full of all ordinances and resolutions to be acted upon for the Council meeting of August 15, 1995 Council Member Feldhaus seconded the motion. MOTION CARRIED. CITY OF AN~HEIMv CALIFORNIA - COUNCIL MINUTES - AUGUST 15v 1995 CITY MANAGER/DEPaRTMENTAL CONSENT CALENDAR: On motion by Mayor Daly, seconded by Council Member Feldhaus, the following items were approved in accordance with the reports, certifications and recommendations furnished each Council Member and as listed on the Consent Calendar~ Mayor Daly offered Resolution Nos. 95R-149 and 95R-150, for adoption. Refer to Resolution Book. Al. 118= The following claims were filed against the City and action taken as recommended= Claims rejected and referred to Risk Management: A2. A3. A4. AS. a. Claim submitted by Maria Cristina A. Dela Cruz for property damage sustained purportedly due to actions of the City on or about March 1, 1995. b. Claim submitted by Sandy Flood c/o Anthony I. Lopez, Esq. for bodily injury sustained purportedly due to actions of the City on or about November 1, 1994. c. Claim submitted by Michael Anthony Blanco for property damage sustained purportedly due to actions of the City on or about January 18 through July 18, 1995. 117: Receiving and filing a Summary of Investment Transactions as submitted by the City Treasurer for the month of June 1995. 173= Receiving and filing an Application before the Public Utilities Commission of the State of California in the matter of Screamline Investments, Inc., dba Tour Coach Transportation for a certificate of public convenience and necessity to operate as a passenger stage corporation between points in Los Angeles County and Los Angeles International Airport. 105: Receiving and filing minutes of the Anaheim Park and Recreation Commission meeting held May 24, 1995. 158: RESOLUTION NO. 95R-149= A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AUTHORIZING THE TRANSFER OF TITLE TO THREE PARCELS AT THE NORTH END OF ANAHEIM BOULEVARD FROM THE CITY TO THE ANAHEIM REDEVELOPMENT AGENCY. Authorizing the Mayor and City Clerk to sign the Grant Deed. 123= Approving Agreements with Anaheim Transportation Network (ATN) to (1) authorize a transfer of $75,000 of state grant funds from the City to the ATN~ (2) to develop, market and implement a direct commuter rail incentive program, Anaheim Commuter Connection~ and (3) to develop and implement a Fixed-Fare Taxi Pool Service between the existing Anaheim rail station and Anaheim Resort Area and Stadium Business Center. 123: Approving an Agreement with Waldron & Associates, Inc., in an amount not to exceed $100,000 annually to provide appraisal services to the Public Works Department. C~TY OF ANAHE~ CALiFORNiA - COUNCIL ~NUTE8 - AUGUST ~5, ~995 A6. 113: RESOLUTION NO. 95R-150: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AUTHORIZING THE DESTRUCTION OF CERTAIN CITY RECORDS MORE THAN TWO YEARS OLD. (PUBLIC WORKS DEPARTMENT.) A7. 160: Accepting the low bid of Parisi Tower Rebuild, Inc., in the amount of $27,016.66 for repair/refurbishment of two Baltimore aircore cooling towers, in accordance with Bid #5421. AS. 160: Accepting the low bid of Norco Mail Delivery Service, in the amount of $33,924 with two one-year options to renew, for delivery service as required for the period of September 1, 1995, through August 31, 1996, in accordance with Bid $5424. Ag. 160: Accepting the bid of Nationwide Papers, in an amount not to exceed $41,561 and accepting the bid of Spicers Paper, Inc., in an amount not to exceed $18,439 for stock paper as required for the period September 1, 1995 through August 31, 1996, in accordance with Bid $5419. Al0. 160: Waiving Council Policy 306, and authorizing the Purchasing Agent to issue a Purchase Order to Southwest Power, Inc., in the amount of $36,800 for 20 KPF switches for warehouse inventory stock to be used for the City's electrical distribution system. All. 160: Authorizing the Purchasing Agent to issue a Change Order to Cameron Webster Construction, for an additional amount not to exceed $15,400 for additional boring time and material as required to complete the job at La Palma Avenue and Baxter Street bringing the revised total to an amount not to exceed $61,108. A12. 150: Allowing the Assistance League of Anaheim, per City Code, to serve wine and beer at a private preconcert reception at Pearson Park Amphitheater on Saturday, August 26, 1995. A13. 123: Approving an Agreement with the Digital Equipment corporation for service on computer equipment, in the amount of $816 per month for the period of August 1, 1995 through July 31, 1996; and authorizing the Library Director to execute said Agreement on behalf of the City. A14. 123: Approving an Agreement with Anaheim Disposal, Inc., to allow the implementation of the Neighborhood Clean-up Campaign and Tool Rental Programs for trash bin rental and hauling services in designated neighborhood areas. City Manager Ruth. There are a couple of minor changes included in the agreement which the City Attorney has approved. One was a name change to Taormina Industries and the second is the fee schedule percentage increase. copy of the minor changes was included in the agenda packet. A A15. 123: Approving an Agreement with Psychologist Eric W. Gruver, Ph.D. to conduct psychological evaluations for Police Officer, Police Reserve Officer and Detention Officer Applicants. A16 · 114: Approving minutes of the City Council meeting held August 1, 1995. CITY OF ~NAHEIMt CALIFORNIA - COUNCIL MINUTES - AUGUST 15, 1995 Roll Call Vote on Resolution Nos. 95R-149 and 95R-150, for adoption: AYES: NOES: ABSENT: MAYOR/COUNCIL MEMBERS: MAYOR/COUNCIL MEMBERS: MAYOR/COUNCIL MEMBERS: Tait, Lopez, Zemel, Feldhaus, Daly None None The Mayor declared Resolution Nos. 95R-149 and 95R-150, duly passed and adopted. END OF CONSENT CALENDAR. MOTIONS CARRIED. A17. 108: Request by Frank Elfend, Elfend and Associates to discuss time share requirements and related Transient Occupancy Tax (TOT) provisions. (Continued from the meeting of August 1, 1995, Item A15.) After extensive discussion and input, this item was continued from the meeting of August 1, 1995 (see minutes that date) to the meeting of August 15, 1995. Since the meeting of August 1, 1995, additional reports/memorandums were submitted as follows and made a part of the record: Letter dated August 11, 1995 from Elfend and Associates - re: TOT Collection Procedures~ Memorandum dated August 14, 1995 from Tom Wood, Deputy City Manager to the City Manager/City Council - Subject: Time Share Survey Tabulation~ Staff Report dated August 15, 1995 from the Deputy City Manager and Finance Director to the City Manager/City Council -- Further Information and Recommendations Regarding the Request to Discuss Timeshare Requirements and Related TOT Provisions. (Letter dated August 15, 1995 was also received at 3:30 P.M. today after the start of the Council Meeting from Ross & Scott, Attorneys representing Tarsadia, Inc., regarding the applicability of TOT to an owner of a time share estate in a time share project. Tom Wood, Deputy City Manager. A comprehensive staff report was prepared responsive to the questions posed at the meeting of August 1, 1995 along with additional information derived during the interim. Staff is seeking policy guidance on whether or not staff should be pursuing a program that guarantees the existing program or adopting a flat fee. Staff has provided a report from the City's consultants as to what the flat fee amount would be if.the Council chose that direction. He then summarized the staff recommendation (see joint 6-page staff report with attachments dated August 15, 1995). In concluding his presentation, he stated there are risks in adopting a new program because it iS an unknown. That is part of the concern staff felt obliged to point out, that there are potential problems. Notwithstanding that fact, however, the flat fee amount calculated in the EPS report says that at $35 per week per timeshare with appropriate adjustment factors for CPI, changes in State law and changes in the TOT rent, it would substantially make the City whole if that program was adopted. Mayor Daly. Staff's recommendation is in two parts -- the first would be guaranteeing the City's collection of the bed tax (TOT) for all timeshare units as if they were hotel rooms or providing a per timeshare unit fee calculated based upon a formula that recovered the bed tax. In either case, the City's traditional bed tax revenues would be protected. The City has also received letters from the Anaheim Area Hotel-Motel Association and the Anaheim/Orange County Visitor and Convention Bureau wherein they do not take a CITY OF ANAHEIM, CALIFORNIA - COUNCIL MINUTES - AUGUST 15, 1995 formal ~osition on the question except to say that the City should be careful to consider the effect of not capturing the equivalent of a bed tax revenue. Frank Elfend, Elfend and Associates, 610 Newport Center Drive, Newport Beach. He first submitted a sheet entitled, $27 Per Unit Fee + an Annual CPI Increase with 4% Maximum Cap in Any Year. Within approximately 7 years, is when the timeshare would be fully occupied. It showed figures calculated over a 30- year period at a 2%, 3% and 4% CPI. Mr. Elfend's extensive presentation covered the advantages and benefits of timeBhares to the City, comments relating to some of the material provided in the staff report which he felt were inaccuracies, things he felt were omitted, remarks relating to the survey done by staff, concern that staff's formula would result in the payment of $84 per timeshare unit as opposed to the $35 fee suggested by the City's consultant, EPS, the study prepared by CGMS which he felt had nothing to. do with the Hotel Circle Project and their proposal, etc. In concluding his presentation, he reported that today he spoke to Cox, Castle & Nicholson, experts in both municipal finance matters and structuring timeshare and vacation ownership projects. He will have Mr. Spaulding of the firm qualify what he considers misstatements by CGMS. Mayor Daly. One of the conditions of approval in the Hotel Circle Specific Plan approved by the City in 1994 stated that no vacation ownership resort shall be established as a timeshare either as a permitted or conditional use unless the developer establishes and implements a method of ownership acceptable to the City which guarantees the City's collection of TOT for all vacation ownership units as if they were hotel rooms. Having agreed to that language and the City approving the project predicated on that language, regardless which consultant supports or disagrees with which number, that issue has to be dealt with. If commitments and the Council's time is worth anything at all, when a developer commits to an agreement with the City including conditions and nine months later asks for something that is in conflict with that, it is a problem for the City. If that is not a "bait and switch" approach, he does not know what is. He questioned the value of the language. Mr. Elfend stated that when that condition was initiated, there was some confusion in terms of dealing with the issue. He does not believe it was their intent to create a situation whereby the City would gain a windfall profit of additional revenue created by applying this as if it were a hotel room. He feels they are consistent with the intent of the condition. Mayor Daly. City staff needs to confirm its recommendation on the matter that the City will be left whole and not lose revenue or potential income. City manager Ruth. The developer is proposing $27 with an escalator, 4% cap and ramping up over 7 years, staff is recommending a flat $35 with the CPI and no ramp up. Bill Sweeney, Finance Director. The difference between the $27 and $35 is something in excess of $50,000 per year. He later confirmed that what the City is looking for is for the proposal to remain revenue neutral so there is no economic basis to ramp anything up. The $35 number is based on a certain amount of rentals, property tax, sales tax, all of those things in combination. The shortfall equals a certain amount of money and $35 will solve that problem. Utilizing a ramping concept, they would have to look at guaranteeing the base of $450,000. He confirmed for Council Member Zemel that $35 without the ramp makes it revenue neutral but with the CPI. CITY OF AN/~HEIM, CALIFORNIA - COUNCIL MINUTES - AUGUST 15, 1995 Mr. Art Spaulding, Partner, Cox, Castle & Nicholson, Lawyers, 19800 Macarthur Blvd., Irvine. After opening remarks relating to the experience of his firm, Mr. Spaulding stated they do not believe the approach which is proposed on a flat fee basis constitutes a significant different risk from those associated with TOT revenues as an income stream to support the repayment of bonded indebtedness. The memorandum prepared by City staff insofar as it embraces. comments from the consultant, CGMS, is overstated. He then explained why. (See his letter submitted dated and received August 15, 1995 which he briefed). Phil Knypstra, 2520 Gelid, Anaheim. He reiterated his concern expressed at the meeting of August 1, 1995 that the Council do what is best for the taxpayers of Anaheim. He has done his own calculations and assumes 50%, 60% and 70% occupancy and other assumptions. The numbers he "crunched', in his opinion, with 50% occupancy, the City would net $28 a week, at 60%, $35/week and at 70%, $42/week. The Council now has three alternatives to choose from. If they want a timeshare in the City, he suggested that they take the best estimate that benefits the taxpayers. Miriam Kaywood, Anaheim resident/former Council Member. There are 140 suites in the Peacock Suites Hotel. With timeshares, there must be at least one parking space assigned to every owner. These are large suites and some can accommodate a lot of people~ therefore, not just one vehicle will be involved. She questioned if that situation had been looked into. She is also concerned that a new hotel was built and then turned around quickly asking for a conversion. She would be interested in knowing the reason why. Mr. Elfend explained the reason is, the market place has created a need. Anaheim is a destination resort area and it is very desirable. Council Member Zemel. Staff has indicated in order to make the proposal revenue neutral, it takes $35 without a ramp up to do so. He feels that is the direction they should take in order to move the matter forward. He recommended that they approve staff's recommendation of $35 per unit without the ramp up but with the CPI. Council Member Lopez suggested that considering all the information that has been submitted, it should go back to staff to have them figure out something between $27 and $35. Frank Elfend. The one thing that is important to them is to have the matter resolved tonight. Their presentation tonight was for the $27. If Council decided to impose a $35 fee with the CPI as suggested by staff, they would have to accept it mainly because their time schedule on this effort is extremely limited. The only thing they would ask is to come back with an agreement which they have already discussed and submitted to the City Attorney -- the $35 with the CPI, and come back next week. City Attorney White. He has looked at the draft of the document submitted to his office but has not spent a lot of time on it without knowing there would be some reason to finalize an agreement. He can say, having looked at it, he has a considerable amount of concern with the language. He does not know if he can bring back a document where everyone will be in agreement on the language. MOTION. Council Member Zemel moved to approve staff's recommendation of $35 per unit per week with the CPI and no ramp up in an effort to make the City CITY OF ANAHEIM, CALIFORNIA - COUNCIL MINUTES - AUGUST 15, 1995 whole with a revenue neutral position. Council Member Lopez seconded the motion. Before a vote was taken, Mayor Daly asked if this would meet with staff's criteria for keeping the City whole on this property. City Manager Ruth. There is always some risk but staff feels the $35 will probably keep the City revenue neutral. City Attorney White. Mr. Elfend alluded to a conversation when he and Mr. Morinello met with a member of his staff. One of the items he would propose to bring back would be an amendment to the TOT ordinance which would provide for the implementation of the tax through an agreement rather than the normal 15% room rate. The Council could move forward with the agreement even though the ordinance technically would not be in effect. The agreement would be contingent upon the ordinance taking effect. It would replace the language in Section 2.12 which he has discussed with Mr. Elfend. The City would have the discretion to allow future projects to be considered on a similar case-by-case basis but does not obligate the City to deviate from the standard 15% of some number. Tom Wood. They would also encourage the Council to include in the motion an opener for any changes in State law if the distribution of sales tax or property tax is changed. Because the project is assuming an increase in property and sales tax, if those formulas change, it would be appropriate to reopen/recalculate the flat fee amount even if it decreased. Bill Sweeney then confirmed for Council Member Feldhaus they do not have that kind of agreement with any other hoteliers. In the event they lose a portion of the base that comprises the entire deal and it is no longer $35 to maintain rent revenue at neutrality, that is the issue. A component of that total iB based on Bales tax, property tax, etc. Discussion followed on the recommended addition to the motion by staff wherein Mr. Wood explained more in depth why the language should be included. At the conclusion of discussion, Mr. Elfend stated that in his explanation, Mr. Wood is correct that it could work both ways, that the TOT could also actually go down from 15% to 13%. What they want to have is a certainty in the market place. If it went from 15% to 13%, they would still want the $35 fee. The point is, looking at it both ways, they will take the risk just to have the certainty in the fee. Mayor Daly. With the statement from the applicant relative to the amount of bed tax, he believes that is satisfactory to everybody. A vote was then taken on the foregoing motion as offered. MOTION CARRIED. ITEMS BI - B7 FROM THE PLANNING CO~9~ISSION MEETING OF JULY 24. 1995 INFORMATION ONLY - APPEAL PERIOD ENDS AUGUST 15. 1995 B1. 179: VARIANCE NO. 4269r AND NEOATIVE DECLARATION: OWNER: RUDOLPH M. BRACHO, ROSEMARIE BRACHO, STEPHEN C. WILLIAMS, and MONICA HORMAZA WILLIAMS, 18997 Villa Terrace, Yorba Linda, CA 92686 10 C~TY OF AN/%HE~H, CAL~FORNI~ - COUNCIL ~NUTE8 - AUGUST LS~ ~995 LOCATION= 122 South Walnut. Property is approximately 5,750 square feet located on the east side of Walnut Street and approximately 300 feet south of the centerline of Center Street. Waiver of maximum number of bachelor units and minimum structural setback to retain a 590-square foot bachelor unit above a detached 3- car garage. ACTION TAKEN BY THE PLANNING COMMISSION: Variance No. 4269 GRANTED with the conditions that parking shall take place in the designated parking areas, and that the owner/developer shall pay for the cost of monthly Code Enforcement inspections if deemed necessary by the Code Enforcement Division (PC95-85) (3 yes votes, I no vote, 2 absent, and i vacancy). Negative Declaration previously approved. B2. 179: VARIANCE NO. 4276 AND NEGATIVE DECLARATION: OWNER= WILLIAM C. and VINCENT C. TAORMINA, P.O. BOX 309, Anaheim, CA 92815-0309 AGENT= RICHARD B. WINN, P.O. Box 309, Anaheim, CA 92815-0309 LOCATION= 2820 E. White Star Avenue. Property is approximately 1.3 acres located at the northeast corner of La Palma Avenue and Blue Gum Street. Waiver of required parking lot landscaping and permitted encroachment into required yards to construct a private employee parking lot for regional material recovery facility. ACTION TAKEN BY THE PLANNING COMMISSION= Variance No. 4276 GRANTED (PC95-86) (4yes votes, 2 absent, and 1 vacancy). Approved Negative Declaration. Mayor Daly. In this case, it appears that the land owner agreed to provide some additional landscaping in exchange for the small waiver to the landscape requirement. He asked for an explanation. Joel Fick. It is a technical waiver in that the landscaping and parking area cannot be seen where the waiver was requested. As a tradeoff, there is to be additional landscaping on the perimeter whichis actually an enhancement and beneficial to the community. B3. 179: CONDITIONAL USE PERMIT NO. 2090 AND NEGATIVE DECLARATION: OWNER= HARVEY S. OWEN, P.O. BOX 1034, TUSTIN, CA 92681 AGENT= BOBBY S. OWEN, 1788 S. Euclid Street, Anaheim, CA 92806 LOCATION: 1160 North Kraemer Boulevard. Property £s approximately 0.9 acre located on the east side of Kraemer Boulevard and approximately 242 feet south of the centerline of Coronado Street. Petitioner requests modification of a condition of approval pertaining to the limitation of time of a previously-approved public dance hall in conjunction with a restaurant. ACTION TAKEN BY THE PLANNING COMMISSION= CUP NO. 2090 APPROVED to expire 8/26/97 (PC95-87) (4 yes votes, 2 absent, and i vacancy). Negative Declaration previously approved. REPORT AND RECOMMENDATION ITEMS: 11 CITY OF AN~tHEIM, CALIFORNIA - COUNCIL MINUTES - AUGUST 15, 1995 B4. 179: CONDITIONAL USE PERMIT NO. 1234 - REQUEST FOR SUBSTANTIAL CONFORMANCE DETERMINATION TO PERMIT A TECHNICAL TRAINING CENTER (INCLUDING AUTOMOTIVE REPAIR INSTRUCTION}: LOCATION: 100 S. Claudina Place. California Career Schools, Attn: Chuck Emanuelle, 392 W. Cerritos Avenue, Bldg. 7, Anaheim, CA 92805 requests substantial conformance determination to permit a technical training center (including automotive repair instruction). ACTION TAKEN BY THE PLANNING COMMISSION: Determined that the proposed use is not in substantial conformance. 179: CONDITIONAL USE PERMIT NO. 103 - REQUEST FOR INITIATION OF REVOCATION OR MODIFICATION PROCEEDINGS~ Initiated by the City of Anaheim, Code Enforcement Division, 200 S. Anaheim Blvd., Anaheim, CA 92805 LOCATION: 500 S. Beach Boulevard. Request for initiation of revocation or modification proceedings for Conditional Use Permit No. 103 (to permit an 18-unit motel). ACTION TAKEN BY THE PLANNING COMMISSION: Initiated revocation and/or modification proceedings on CUP NO. 103. B6. 179: CONDXTXONAL USE PERMXT NO. 3566 - SUESTANTIAL CONFORMANCE: REQUESTED BY: Donahue Schriber, Attn: Ernie Weber, 3501 Jamboree Road, Ste. 300, Newport Beach, CA 92660 LOCATION: 500-600 N. Euclid Avenue. Petitioner requests substantial conformance review of the design and layout of the multi-tenant food court sign in conjunction with Conditional Use Permit No. 3566 (to permit the phased construction of a regional shopping center). ACTION TAKEN BY THE PLANNING COMMISSION: CUP NO. 3566 determined to be in substantial conformance. B7. ITEM B7 FROM THE PLANNING COMMISSION MEETXNG OF AUGUST ?f 1995 XNFORMATION ONLY - APPEAL PERXOD ENDS AUGUST 17~ 1995 134: GENERAL PLAN CONFORMITY FOR THE EXCHANGE OF COUNTY OWNED LAND WITHIN THE SANTA ANA RIVER RIGHT-OF-WAY: REQUESTED BY: ROBERT LIVINGSTON, COUNTY OF ORANGE, ENVIRONMENTAL MANAGEMENT AGENCY, P.O. BOX 4048, Santa Ana, CA 92702-4048. LOCATION: Property is generally located on a portion of the Santa Aha River right-of-way abutting the existing Atchison Topeka and Santa Fe Railroad (AT&SF) line to the north, Santa Ana River to the east, and 280 feet southeast of the southerly terminus of South Douglass Road. Request to determine conformance with the Anaheim General Plan for the exchange of county owned land within the Santa Ana River right- of-way. ACTION TAKEN BY THE PLANNING COMMISSION: Approved. END OF THE PLANNING COMMISSION ITEMS. 12 CITY OF AN]tHEIMv CALIFORNIA - COUNCIL MINUTES - AUGUST 15v 1995 BB. 179: ORDINANCE NO. 5511 (INTRODUCTION): Amending Title 18 to rezone property under Reclassification No. 90-91-04 located at the southerly terminus of Londerry Lane from the RS-A-43,000(SC) zone to the RS-HS- 10,O00(SC) zone. Mayor Pro Tem Feldhaus offered Ordinance No. 5511 for first reading ORDINANCE NO. 5511: AN ORDINANCE OF THE CITY OF ANAHEIM AMENDING TITLE 18 TO REZONE PROPERTY UNDER RECLASSIFICATION NO. 90-91-04 LOCATED AT THE SOUTHERLY TERMINUS OF LONDERRY LANE FROM THE RS-A- 43,000(SC) ZONE TO THE RS-HS-10,000(SC) ZONE. D1. 129: CONTIN~D PUBLIC HEARING - DESIGNATION OF VERY-NIGH FIRE-HAZARD SEVERITY ZONEs To consider an ordinance designating a very-high fire-hazard severity zone as recommended by the California Division of Forestry. At the meeting of April 25, 1995, Item D1, the public hearing was opened by the City Council, and continued to the meetings of May 16, 1995, Item D1, July 11, 1995, Item D1, and again continued to this date to consider the following ordinance= ORDINANCE NO. (INTRODUCTION) AN ORDINANCE OF THE CITY OF ANAHEIM ADDING NEW CHAPTER 16.40, SECTIONS 16.40.010 THROUGH 16.40.020, INCLUSIVE, TO TITLE 16 OF THE ANAHEIM MUNICIPAL CODE, RELATING TO DESIGNATION OF VERY HIGH FIRE HAZARD SEVERITY ZONES. This Item was continued from the Meeting of July 11, 1995 to this date (see minutes of July 11, 1995) Fire Chief Bowman. They are currently evaluating options to bring back to the Council as a result of some changes in legislative counsel analysis in Sacramento about the impact of the bill and how it is interpreted. He will be bringing back a couple of options on September 19, 1995 for Council consideration. Council Member Tait. He received some calls from people concerned this might require them to sprinkler their home on new construction. Chief Bowman. It will have no impact on fire sprinklers in new homes. Ail the impacts discussed in prior workshops remain the same. Motion. Council Member Zemel moved to continue the subject Public Hearing to September 19, 1995 at the request of staff. Council Member Lopez seconded the motion. MOTION CARRIED. D2. 129~ p~RLIC N~&RING - CONDITIONAL USE PERMIT NO. 2685r ~ATEGORICA?3~ EXEMPT CLASS 21: Initiated by the City of Anaheim, Planning Commission, 200 S. Anaheim Boulevard, Anaheim, CA 92805 LOCATION: 1074 N. Tustin Avenue. Property is approximately 1.67 acres located on the east side of Tustin Avenue and approximately 350 feet south of the centerline of La Palma Avenue. 13 CITY OF ANAHE~H~ CAL~FORN~ - COUNCIL ~NUTES - AUGUST ~5~ ~995 Request to consider the termination or modification of Conditional Use Permit No. 2685 (to permit the expansion of a restaurant and cocktail lounge with waiver of minimum number of parking spaces) pursuant to Sections 18.03.091 and 18.03.092 of the Anaheim Municipal Code~ and review of revised exhibits for substantial conformance determination. ACTION TAKEN BY THE PLANNING COMMISSION= CUP NO. 2685 Modified by adding seven new conditions of approval - to expire June 26, 1996 (PC95-71) (6 yes votes, i absent). Informational item at the Council meeting of July 18, 1995, Item B1. HEARING SET oN= a letter of appeal of the Planning Commission's decision was submitted by Mohammad Jobar, Mr. J's Restaurant & Bar and Public Hearing' scheduled this date. PUBLIC NOTICE REOUIREMENTS MET BY= Publication in Anaheim Bulletin - August 3, 1995 Mailing to property owners within 300 feet - August ~, 1995 Posting of property - August 4, 1995 STAFF INPUT= See staff report to the Planning Commission dated June 26, 1995 City Attorney White. Because this involves potential termination or modification, it is necessary for the City Clerk to swear in those persons who will be testifying. Those testifying were requested to stand by the City Clerk and asked to raise their right hand. The oath was then given. Greg Hastings, Zoning Division Manager. He gave a brief history of the property starting in 1974 when the Bessie Wall's Restaurant (restaurant/cocktail lounge serving lunch and dinner) was opened and what has occurred on the property up to this time. (See staff report to the Planning Commission dated June 26, 1995). The property is under new ownership since April, 1994. In May of 1995, the Planning Commission considered the applicant's request to relocate the bar area from the 'rear of the restaurant to a location at the building entrance. The Commission requested the item to be set for a Public Hearing and further directed staff to advertise consideration of revocation or modification of the existing CUP on the basis that the business was being conducted as a nightclub and dance hall rather than as a restaurant and cocktail lounge, the use granted by the CUP although the applicant subsequently withdrew his request to relocate the bar area. The Commission modified conditions of approval to insure the facility would operate under the original intent of the CUP. The applicant has appealed the seven new conditions and this is the issue before the Council tonight. Mayor Daly opened the Public Hearing and asked to hear from the appellant to summarize the request. Jeff Farano, Attorney, Farano and Kieviet, 2100 S. State College Blvd., Anaheim representing the appellant explained the detailed basis of the appeal is set forth in his letter dated August 14, 1995 (see 8-page letter date August 14, 1995 - made a part of the record). In his presentation, Mr. Farano briefed portions of the letter summarizing the issues involved. The basis of the modification was that the most recent interior modification to the 14 CITY OF ANAHEIMv CALIFORNIA - COUNCIL MINUTES - AUGUST 15v 1995 building appeared to have changed the characteristics of the use from a restaurant to a cocktail lounge. In 1994 Mr. J's (Johars) applied for a building permit and got substantial conformance approval by the Planning Commission and City Council. He then explained how the business evolved and the changes made since that time because the business was not "making it." The $20 meals became $8 meals and bikini dancers hired as entertainment. The kitchen remained in place and still provided meals. That was still not making it so they decided they needed to separate the dining from the entertainment portion. They submitted building plans separating the dining area in the back and providing a cover charge for entertainment in the front. When they submitted the application, it was determined the Planning Commission wanted to review the process and that is when the investigation started and subsequently determined that it was no longer a restaurant based on the modifications made. He then briefed the results of the investigation made by Mr. Bruce Freeman, Code Enforcement Officer on June 12, 1995, another officer on June 17, 1995 (see page 4 of letter dated 8/14/95) and Sgt. Steve Walker's report documenting activities at Mr. J's on various dates. (See page 6 of letter dated 8/14/95. Also see Mr. Freeman'B report dated June 20, 1995 and Sgt. Walker's report of June 21, 1995 previously made a part of the record). Relative to Sgt. Walker's report, there are several indications of inappropriate activities in his mind but no charges were brought at the time and the report did not indicate any conclusive evidence capable of charging Mr. J's with anything. What Mr. J's is doing now is conducting service of food with entertainment and the entertainment provided are bikini dancers pursuant to an entertainment permit. They also obtained a permit for a dance hall or dinner dancing. He feels it is not a complex situation. Because Mr. J's is unable to have the adequate dining it wants, the request was to separate the dining from the dancing and do entertainment and eventually be able to provide cover charges. He believes those plans have been resubmitted to the Planning Commission for reconsideration. If the City does not want topless dancing, the proper thing to do is to restrict the business from topless dancing. If the City feels the entertainment is illegal, they should be cited for illegal activities. However, he does not believe, based on the evidence, revocation of the restaurant is warranted but whether it satisfies the definition of a restaurant under the CUP. He then addressed the conditions imposed which they are objecting to primarily that the permit is to expire in one year based on the definition that it is not a restaurant (see page 7 of the 8-14-95 letter under Vested Rights). He also spoke to the six other conditions imposed which he feels are not supported by adequate evidence and, therefore, is asking the Council not to adopt the conditions imposed by the Planning Commission. Sam Jobar, owner, Mr. J's, 18772 Deep Well Road, Santa Aha. He is present on behalf of his father and himself to seek a change in the recommendation of the Planning Commission of the business known as Mr. J's acquired in 1994. After attempts to operate it as an upscale restaurant unsuccessfully along with all kinds of entertainment, it has become apparent that bikini dancing was the only type of entertainment that was going to work for them. They had proper entertainment and dance permits when they approached Planning for a simple modification to relocate their bar. Ail "hell broke lose" and they were not allowed to relocate the bar and were told their CUP would be terminated in one year. He asked that the Council be fair and open minded. Their business has not caused any problems to anyone and there have been no complaints from their neighbors. They have a very clean and good operation. At their Public 15 CITY OF ~NAHEIM, CALIFORNIA - COUNCIL MINUTES - AUGUST 15, 1995 Hearing before the Planning Commission, no one spoke in opposition. It is his opinion that the proposed action is nothing but retaliation by staff based on their personal agendas. It is biased and they do not intend to sit quietly and let their life savings go up in smoke. They request that the City Council delete the recommendations of the ~lanning Commission regarding their CUP. City Attorney White. Since the City initiated the proceedings, he suggested that staff be given an opportunity to respond to the evidence presented and then to allow Mr. Farano or one other representative to have the last word in rebuttal. Joel Fick, Planning Director. Some of the testimony received addressed the on-site observation witnessed by staff. As staff indicated, the business at this location had been operated for many years as a restaurant. He then introduced Mr. Don Yourstone, Senior Code Enforcement Officer to provide first-hand testimony. Don Yourstone, Senior Code Enforcement Officer. On Friday, March 10, 1995 at approximately 9=00 P.M., a joint inspection of the premises was conducted with ABC and the Police Department to check some alcohol control violations. He then explained what occurred and what they found during the inspection. In the main dining room, they did not see any type of silverware or table cloths on any of the tables. There were people in attendance drinking and watching bikini dancers performing on a raised stage. In a walk-through of the kitchen area, they observed that no food was being prepared. At no time did they see any waitresses carrying food in or out of the kitchen area, dirty dishes or a dishwasher being operated. Joel FIck, Planning Director. Officer Tom Engle is present this evening since he was also involved with the on-site investigation and could provide input as well. Mayor Daly asked the City Attorney if there was any additional information he believes is necessary that has not already been mentioned~ City Attorney White. Staff has nothing further in the way of testimony at this time. Questions were then posed to Mr. Yourstone by Council Members Lopez and Tait. Jeff Farano. There is no dispute that Mr. Yourstone is qualified to do an investigation, but they do dispute the conclusions that what Mr. Yourstone saw during his investigation means the establishment is not a restaurant. There has not been an overall investigation as to how much food was sold in that time and the food receipts. There is no clear record that the business is not serving food that would disqualify it under the definition of a restaurant. There is not a clear understanding of what a restaurant is and what it is not but a one-year restriction is in a sense a revocation of the permit because they will be losing their license which is a revocation of a right that has been in place for over 20 years at that location. Sufficient evidence has not been presented to justify revocation. Mayor Daly closed the Public Hearing. City Attorney White. Relative to the legal points, even though they have heard from the operator primarily concerning the entertainment that is being provided, tonight's hearing does not relate to whether they provide entertainment or the type. If it is entertainment, they are expected to abide by the applicable requirements of the municipal code and State law. The issue is whether it is being operated as a restaurant or not. The conditions 16 C~TY OF ~%N~%HE~H~ C~LIFORNI~ - COUNCIL ~INUTES - &U~UST LS~ ~995 recommended and proposed by the Planning Commission relate to assuring the City that this property will be operated as a restaurant. With regard to pool tables, the ABC license prohibits pool tables on the premises. If at such time in the future there is no such ABC restriction, the applicant always has the right to come to the Council and ask for the condition to be modified. The only issue before the Council is whether or not the property has been operated as a restaurant, how to assure it will be operated as a restaurant and whether to put a time limitation on the permit. He spoke to Mr. Farano briefly about the time limitation and wants to know if there is any response. Jeff Farano. He has spoken to his client who would be in agreement with the suggestion of Mr. White that the other conditions be maintained but that the one year time limitation be removed. City Attorney White. Because the City's concern is that this be a legitimate restaurant and operated as such, he would recommend if Mr. Johar either personally or through Mr. Farano will stipulate to the other conditions being imposed, that they delete the condition requiring termination of the permit in one year. Jeff Farano. The only thing he would add is that it not be a stipulation forever. He does not want to restrict his client from the opportunity to come back in the future. City Attorney White. The City is not asking that the owner give up the right to apply for future modifications. The City is giving up the one-year expiration in exchange for putting this issue to rest and allowing the owner to move forward with the restaurant. He understands that Mr. Farano is so stipulating. Jeff Farano. They will stipulate to the other conditions set forth as approved by the Planning Commission on the condition they are not restricted from coming back for possible future modifications under a land use process and with the understanding that the one year restriction is removed. For the record, he has spoken to Mr. J's about that, explained the situation, and he has agreed. City Attorney White. Based upon that, he recommends that Council proceed by deleting the condition on the one-year limitation. He also explained for the Mayor why he believes that condition should be deleted. Council Member Lopez also posed additional questions and was desirous of hearing from Officer Engle~ City Attorney White. Although he is present representing the Police Department, he does not have first-hand knowledge. Based on the fact that his testimony would constitute hearsay, he made the decision that it not be a part of the hearing. John Poole, Code Enforcement Manager. He reported that Bruce Freeman visited the restaurant several months ago, but at 3200 in the afternoon. He (Pools) went there a few months ago on a Saturday night. However, there was a private party going on not open to the public. ENVIRONMENTAL IMPACT REPORT - CATEGORICAL EXEMPTION: On motion by Mayor Daly, seconded by Council Member Zemel, the City Council determined that the proposed activity falls within the definition of Section 3.01 Class 21, of the City of Anaheim guidelines to the requirements for an Environmental Impact Report and is, therefore, categorically exempt from the requirement to file an EIR. MOTION CARRIED. 17 CITY OF ANAHEIM, CALIFORNIA - COUNCIL MINUTES - AUGUST 15, 1995 Mayor Daly offered Resolution No. 95R-151 for adoption amending conditions of approval of Conditional Use Permit 2685 originally approved under Planning Commission Resolution No. PC85-125 and adding new conditions imposed by the City Planning Commission under Resolution No. PC95-71, conditions 14 through 20, but deleting condition No. 16 relating to expiration of the permit in one year. RESOLUTION NO. 95R-151~ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING CONDITIONAL USE PERMIT NO. 2685. Roll Call Vote on Resolution No. 95R-151 for sdoption: AYES: MAYOR/COUNCIL MEMBERS: Tait, Zemel, Feldhaus, Daly NOES= MAYOR/COUNCIL MEMBERS= Lopez ABSENT: MAYOR/COUNCIL MEMBERS: None The Mayor declared Resolution No. 95R-151 duly passed and adopted. C1. 114~ COUNCIL COMMENTS~ Mayor Daly. He asked the City Manager to report back on a matter relative to the widening of Harbor Boulevard near LaPalma. A large valve assembly was installed at that location on the outside perimeter of LaPalma Park which he hopes eventually will be covered up by landscaping or some other means. City Manager Ruth. He recently saw the installation and considers it an eyesore and will be looking at ways to minimize or eliminate the visual impact. C2. REPORT ON CLOSED SESSION ACTIONS: City Attorney Jack White stated that there are no actions to report. ADJOURNMENTs By General Council consent, the City Council meeting of August 15, 1995 was adjourned to Thursday, August 17, 1995 at 1:30 P.M. for a Closed Session to continue consideration of the items on the Closed Session agenda of August 15, 1995. Following the Closed Session, the adjourned meeting will continue with the public portion of the meeting at 3:00 P.M. in the seventh floor Conference Room of City Hall to meet with Assemblyman Pringle regarding legislative matters concerning the Orange County bankruptcy. ADJOURNED - 7=55 P.M. LEONORA N. SOHL CITY CLERK 18