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1993/03/09City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9~ 1993 - 5:00 P.M. The City Council of the City of Anaheim met in regular session. PRESENT: ABSENT: PRESENT: COUNCIL MEMBERS: Feldhaus, Hunter, Pickler, Simpson, Daly COUNCIL MEMBERS: None CITY MANAGER: James Ruth CITY ATTORNEY: Jack White CITY CLERK: Leonora N. Sohl UTILITIES GENERAL MANAGER: Edward Aghjayan UTILITIES FIN~NCIAL SERVICES MANAGER: Michael Bell ASST. GENERAL MANAGEMENT WATER SRVS. & WAREHOUSE: Edward Alario EXECUTIVE DIRECTOR OF COMMUNITY DEVELOPMENT: Lisa Stipkovich A complete copy of the agenda for the meeting of the Anaheim City Council was posted at 1:50 p.m. on March 5, 1993 at the Civic Center kiosk, containing all items as shown herein. Mayor Daly called the meeting to order at 3:00 p.m. REQUEST FOR CLOSED SESSION: City Attorney Jack White requested a Closed Session to consider the following items: a. To confer with its attorney regarding pending litigation pursuant to Government Code Section 54956.9(a) to wit: Golden West Baseball Co. vs. City of Anaheim, Orange County Superior Court Case No. 40-92-46; Anaheim Stadium Associates vs. City of Anaheim, et. al., Orange County Superior Court Case No. 44-81-74. Gonzalez vs. Seymanek, et al, Orange County Superior Court Case No. 66-43-93. b. To meet with and give directions to its authorized representative regarding labor relations matters - Government Code Section 54957.6. c. To consider and take possible action upon personnel matters pursuant to Government Code Section 54957. d. To confer with its attorney regarding potential litigation pursuant to Government Code Section 54956.9 (b)(1). e. To consider and take possible action upon such other matters as are orally announced by the City Attorney, City Manager or City Council prior to such recess unless the motion to recess indicates any of the matters will not be considered in closed session. By general Consent, the Council recessed into Closed Session. (3:00 p.m.) AFTER RECESS: The Mayor called the meeting to order, all Council Members being present, and welcomed those in attendance to the Council meeting. (5:08 p.m.). INVOCATION: Mary L. Hibbard, Anaheim United Methodist Church, gave the invocation. FLAG SALUTE: Council Member Fred Hunter led the assembly in the Pledge of Allegiance to the Flag. 160 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5=00 P.M. 119: PROCLAMATIONS: The following proclamations were issued by Mayor Daly and authorized by the City Council: Red Cross Month in Anaheim, March, 1993 Hire the Older Worker Week in Anaheim, March 14-20, 1993 Mr. Steven Chavez accepted the Red Cross Month proclamation and Mel Miller and George MacLaren accepted the Hire the Older Worker proclamation. 119: INTRODUCTION - MISS ANAHEIM, 1993 - STACI LEHMAN: Mrs. Earleen Jones, Director, formally introduced Staci Lehman, Miss Anaheim, 1993 to the Council. Ms. Lehman explained that she was born and raised in Anaheim as was her father. It is an honor for her to represent the City. Her basic platform is enthusiasm for education. She is also a ventriloquist and presently performs in classrooms. She has found that children relate to puppets. She offered her services to the City's schools. Mayor Daly and Council Members greeted and congratulated Ms. Lehman on having won the title of Miss Anaheim. She was presented with roses. Mayor Daly stated it was a great year to be Miss Anaheim with the many events that will be taking place including the opening of the Anaheim Arena in June. FINANCIAL DEMANDS AGAINST THE CITY in the amount of $13,985,454.74 for the period ending March 5, 1993, in accordance with the 1992-93 Budget, were approved. Mayor Daly recessed the City Council meeting until after the Redevelopment Agency and Housing Authority meetings. (5:20 p.m.) Mayor Daly reconvened the City Council meeting. (5:22 p.m.) PUBLIC COMMENTS - AGENDA ITEMS: There were no public comments on City Council Agenda items. ITEMS OF PUBLIC INTEREST: No items of public interest were addressed. MOTION: Council Member Daly moved to waive reading in full of all ordinances and resolutions to be acted upon for the Council meeting of March 9, 1993. Council Member Simpson seconded the motion. MOTION CARRIED. CITY MANAGER/DEPARTMENTAL CONSENT CALENDAR: On motion by Council Member Pickler, seconded by Council Member Daly, the following items were approved in accordance with the reports, certifications and recommendations furnished each Council Member and as listed on the Consent Calendar; Council Member Daly offered Resolution Nos. 93R-41 through 93R-46, both inclusive, for adoption. Council Member Daly offered Ordinance No. 5358 for adoption. Refer to Resolution/Ordinance Book. Al. 118: The following claims were filed against the City and action taken as recommended: Claims rejected and referred to Risk Management: a. Claim submitted by Jesus Garcia for property damage sustained purportedly due to actions of the City on or about December 13, 1992. 161 City Hall~ Anahei~ California - COUNCIL MINUTES - MARCH 9~ 1993 - 5:00 P.M. b. Claim submitted by Phillip Castillo for property damage sustained purportedly due to actions of the City on or about January 15, 1993. c. Claim submitted by Curtis Warner, c/o Jeffrey A. Milman, for bodily injury sustained purportedly due to actions of the City on or about December 23, 1992. d. Claim submitted by Elias Escobar, c/o Roberto A. Bohm, for bodily injury sustained purportedly due to actions of the City on or about November 17, 1992. e. Claim submitted by William Vinovich for property damage sustained purportedly due to actions of the City on or about January 17, 1993. f. Claim submitted by Norwood B. Smith for property damage sustained purportedly due to actions of the City on or about October 24, 1992. g. Claim submitted by Doris Rodriguez, c/o Brian I. Vogel, for bodily injury sustained purportedly due to actions of the City on or about November 14, 1992. h. Claim submitted by Michelle Olson for bodily injury and property damage sustained purportedly due to actions of the City on or about November 6, 1992. i. Claim submitted by Yolanda Rios for property damage sustained purportedly due to actions of the City on or about October 27, 1992. j. Claim submitted by Audrey Cherep for property damage sustained purportedly due to actions of the City on or about December 7, 1992. k. Claim submitted by David A. Currie, c/o Daniel A. Nassie, for indemnity sustained purportedly due to actions of the City on or about March 13, 1992. 1. Claim submitted by Joyce R. Little for bodily injury and property damage sustained purportedly due to actions of the City on or about August 3, 1992. A2. 156: Receiving and filing the Anaheim Police Department Crime and Clearance Analysis for the month of January, 1993. 105: Receiving and filing minutes of the Anaheim Public Library Board meeting held January 27, 1993. 105: Receiving and filing minutes of the Anaheim Park and Recreation Commission meeting held January 27, 1993. 105: Receiving and filing minutes of the Golf Advisory Commission meeting held January 27, 1993. A3. 123: Approving an Agreement with Blash Momeny for Tentative Tract Map No. 14130 and authorizing the Mayor and City Clerk to execute same. A4. 160: Accepting the bid of Heli-Turbine, Iht'l, in the amount of $38,000 for one 250-C20B Mini-Turbine for Police Helicopter Nl1082 in accordance with Bid ~5132. 162 City Hall, Anaheim, C&liforni& - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. A5. 113: RESOLUTION NO. 93R-41: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AUTHORIZING THE DESTRUCTION OF CERTAIN CITY RECORDS MORE THAN 100 DAYS OLD. (Erasure of Voice Recording Tapes #262 through #353 - Public Utilities Department, Systems Operations Division.) A6. 155: Approving a Mitigated Negative Declaration pursuant to CEQA guidelines for the construction of the Lenain Filtration Plant Modifications project. Mrs. Law, 6587 E. Circulo Dali, Anaheim. She has received a letter from the project engineer of the Lenain Plant. She is concerned about noise emissions. The Oak Canyon Nature Center is a natural amphitheater between the dam where the filtration plant will be located and the surrounding homes and there is nothing to impede the sound. The residents are all exposed to a great deal more noise than what the construction people might be aware of. The existing noise in the canyon is not just from construction equipment but also from noise that people make. Anaheim does not have a strong noise abatement program. She feels they need to get stronger noise abatement laws including strict start and stop times for construction. The Council needs to direct both the maintenance yard and the site supervisor for the Lenain Plant to work with his employees to control human noise and early starts. She heard noise starting at 5:50 this morning. She hopes part of the Lenain Plant would include a sign regarding start and stop times and noise before and after working hours and that the noise abatement officer for the City monitor the noise they create. It would make it much more pleasant to live with for a year and a half. Mayor Daly. He asked the City Manager to explore what kind of contractual conditions they can place on whoever is going to do the work at the Lenain Plant. A7. 153: RESOLUTION NO. 93R-42: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RESOLUTION NO. 91R-125 WHICH ESTABLISHED RATES OF COMPENSATION FOR UNREPRESENTED PART-TIME CLASSIFICATIONS. (To expand the salary range for the Unrepresented Part-time classification of Administration Intern from two steps to six steps, and to create four new part-time classifications of Engineering Intern I, Engineering Intern II, Engineering Intern III and Stadium Grounds Worker in the Unrepresented Part-time Unit.) 153: RESOLUTION NO. 93R-43: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RESOLUTION NO. 91R-49 WHICH ESTABLISHED RATES OF COMPENSATION FOR CLASSES ASSIGNED TO THE GENERAL UNIT REPRESENTED BY THE ANAHEIM MUNICIPAL EMPLOYEES ASSOCIATION. (To create the two new classifications of Lead Stadium Groundskeeper and Stadium Groundskeeper.) 153: RESOLUTION NO. 93R-44: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RESOLUTION NO. 92R-21 WHICH ESTABLISHED RATES OF COMPENSATION FOR CLASSES DESIGNATED AS MIDDLE MANAGEMENT. (To create the one new classification of Neighborhood Development Coordinator.) Council Member Feldhaus. He asked if there is another middle management position being replaced by the establishment of this new position. City Manager Ruth. The position has been vacant almost a year due to long-term disability. There is no indication when that person will return. It has been a major impact on the work load. Should that person return to work, there will be some reorganization and downgrading of the position in the future. The work load is horrendous and he reiterated they have been doing 163 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. without that position for almost a year. There will be some cost savings in downgrading the position and they will try to generate other savings in the organization during that period of time to fund it. A8. 123: Authorizing the Data Processing Director to extend agreements for contract programming and/or consulting services through June 30, 1993 with John Cappelletti Associates, Harte Enterprises, International Management Systems Corp., and Sizemore Computer Services; and amending the "not-to-exceed $500,000" wording to read "not-to-exceed $750,000" for each of the contracts. A9. 107: ORDINANCE NO. 5358 - ADOPTION: AN ORDINANCE OF THE CITY OF ANAHEIM AMENDING SECTION 7.44.010 BY ADDING SECTION 7.44.015, 7.44.030, 7.44.040, 7.44.050 AND 7.44.060, INCLUSIVE, TO CHAPTER 7.44 OF TITLE 7 OF THE ANAHEIM MUNICIPAL CODE RELATING TO GRAFFITI. (Introduced at the meeting of March 2, 1993, Item A19.) Council Member Pickler. He is going to ask that this be made an emergency ordinance and is taking the initiative to do so. He thereupon moved that there be a separate vote by the Council to make the subject ordinance an urgency ordinance. Council Member Daly seconded the motion. Before further action was taken, the City Attorney stated he does not have an urgency ordinance for the Council to consider tonight. He clarified for Council Member Pickler that he can have it prepared for next week. He suggested that the Council act on the ordinance on the agenda and if Council wants to direct him by motion to prepare an urgency ordinance for next week he can do so. It was determined by General Consensus that the City Attorney be directed to prepare an urgency ordinance to be submitted at the Council meeting of March 16, 1993 for Council consideration and action; City Attorney White noted for the Council that it will also require a 4/5ths vote for adoption. Al0. 184: Reviewing the need for continuing the Proclamation of the Existence of a Local Emergency issued by the Director of Emergency Services on January 19, 1993, and ratified by the City Council on January 26, 1993, concerning the Santiago Landslide and Pegasus Landslide in the City of Anaheim; and taking no action to terminate the local emergency at this time. All. 175: Certifying that the adoption of the Electric Rates, Rules, and Regulations, and Water Rates, Rules, and Regulations are statutorily exempt, under the California Environmental Quality Act. Adopting a resolution amending rates, rules and regulations for the sale and distribution of electricity. RESOLUTION NO. 93R-46: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RATES, RULES AND REGULATIONS FOR THE SALE AND DISTRIBUTION OF ELECTRICITY AS ADOPTED BY RESOLUTION NO. 71R-478 AND MOST RECENTLY AMENDED BY RESOLUTION NO. 92R-25. RESOLUTION NO. 93R-45: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RATES, RULES AND REGULATIONS FOR THE SALE AND DISTRIBUTION OF WATER AS ADOPTED BY RESOLUTION NO. 72R-600 AND MOST RECENTLY AMENDED BY RESOLUTION NO. 91R-337. 164 City Hall, Anaheimr California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. 175: Authorizing and directing the Public Utilities General Manager to prepare, promulgate, publish and implement changes to Electric and Water Rates, Rules, and Regulations, effective March 24, 1993, with the exception of the changes to the electric industrial GS-2 customers which would be effective April 1, 1993. This item was removed from the Consent Calendar and discussed separately upon motion by Council Member Daly seconded by Council Member Simpson. MOTION CARRIED. See discussion and action taken on this item after the Consent Calendar. A12. 174: Amending the 1992/93 FY Budget to reflect the CDBG final statement amounts by increasing revenues and expenditures in 235-102 by $500; increasing revenues and expenditures in 235-208 by $5,000; increasing revenues and expenditures in 235-213 by $257,125; increasing revenues and expenditures in 235-309 by $5,418; increasing revenues and expenditures in 235-411 by $2,152,290; increasing revenues and expenditures in 235-412 by $80,653; increasing revenues and expenditures in 235-418 by $15,204; and reducing revenues and expenditures in 235-521 by $500,000. Al3. 114: Approving minutes of the Anaheim City Council meeting held January 26, 1993. Roll Call Vote on Resolution Nos. 93R-41 throuqh 93R-44, both inclusive, for adoption~ AYES: NOES: ABSENT: COUNCIL MEMBERS: COUNCIL MEMBERS: COUNCIL MEMBERS: Feldhaus, Hunter, Pickler, Simpson, Daly None None The Mayor declared Resolution Nos. 93R-41 through 93R-44, both inclusive, duly passed and adopted. Roll Call Vote on Ordinance No. 5358 for adoption= AYES: NOES: ABSENT: COUNCIL MEMBERS: COUNCIL MEMBERS: COUNCIL MEMBERS: Feldhaus, Hunter, Pickler, Simpson, Daly None None The Mayor declared Ordinance No. 5358 duly passed and adopted. ~ OF CONSENT CALENDAR. MOTIONS CARRIED. 175: AMENDMENT TO ELECTRIC AND WATER RATES, RULES AND REGULATIONS: Submitted was report dated March 9, 1993 from Edward K. Aghjayan, Secretary Public Utilities Board (and Public Utilities General Manager) recommending the following: (1) That the City Council, by Resolution, amend the Rates, Rules and Regulations for the sale and distribution of electricity as adopted by Resolution No. 71R-478 and most recently amended by Resolution No. 92R-25. Although staff continues to recommend the original proposal, the next best option, in staff's opinion, is Alternative #3. 165 City Hall~ Anahei~ California - ¢OtTNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. (2) That the City Council, by Resolution, amend the Rates, Rules and Regulations for the sale and distribution of water as adopted by Resolution No. 72R-600 and most recently amended by Resolution No. 91R-337. Although staff continues to recommend the original proposal, the next best option, in staff's opinion, is Alternative ~3. Also recommended are additional actions, (1) certifying that the adoption of the Electric Rates, Rules and Regulations and adoption of the Water Rates, Rules and Regulations are statutorily exempt, under the California Environmental Quality Act, (2) authorizing and directing the Public Utilities General Manager to prepare, promulgate, publish and implement changes to Electric and Water Rates, Rules and Regulations to be effective March 24, 1993, with the exception of the changes to the electric industrial GS-2 customers which would be effective April l, 1993. Changes shall be consistent with the direction of the Council and shall be filed with the City Clerk prior to the effective date for inclusion in the records. The following people spoke to the subject: Roland Krueger, 561 Peralta Hills Drive, Anaheim. (Also see minutes of February 2 and February 9, 1993 where Mr. Krueger gave input regarding utility rates.) Relative to water rates, he is concerned that even though the Council asked staff to come back with a fairer proposal, he sees only that there are several alternative plans for the rate schedule mostly shifting percentages between different classes of users. No consideration at all has been given to the two tier proposal in the residential rate structure which, as he has stated previously, he feels is unfair and discriminatory. He again reviewed his concerns with the present structure and recommended the following regarding water rates: That the two-tier charges in the residential rates structure be eliminated and that the conservation rebate and "give away" programs that the City has presently also be eliminated since he feels they are unnecessary at this time. The latter would permit a drop in the overall increase of revenues needed from 4.95% to 3.1%. If the Council chooses not to use any of the cost cuts talked about at previous meetings, he is suggesting the adoption of Alternative $4 in the staff proposal. This would apply to the 3.1% rate increase instead of the current plan of 4.95% and it would be an across-the-board increase for all classes of customers. It will be the fairest and distribute the pain amongst everybody instead of only a small group. Jeff Kirsch, 2661 W. Palais, Anaheim. (Also see minutes of February 9, 1993 where Mr. Kirsch gave input on utility rates). Relative to water, he agrees with taking another look at the rebate program if it would save a significant rate increase. The data states it would be funded with debt if it were continued but did not say what kind of debt. If it is just pushing an unpleasant problem into the future, he would like to see the program eliminated. He prefers Alternative $3 which has some moderation in all classes but makes up for the existing severe imbalance in residential water rates. 166 City Hall, Anaheim, California - COUNCIL MINtF~ES - MARCH 9, 1993 - 5:00 P.M. Relative to electrical, he would like to see the lowest residential rates but he would be more comfortable with just a better explanation of how the numbers came to be. Also funding the undergrounding program with short-term debt is not explained. He prefers assessment districts for undergrounding instead of spreading those costs across all rate payers. Also, if there is a greater understanding about marginal cost, perhaps that could be shared with the public before the Council votes. Before concluding, he referred to the notice received by the Metropolitan Water District (MWD) regarding a rate hearing to be held soon where the district is proposing a standby charge. He recommends that City staff attend that meeting in the interest of the citizens. Mayor Daly. The proposed MWD rate increase is an item he is going to ask be addressed by staff. It is a proposed MWD parcel charge which he believes is scheduled for adoption July 1, 1993. Notice was given via a small postcard sent to property owners which explained the process and proposed rates. Robert Knapp, 1025 S. Lemon, Anaheim. He took issue with the claims that the City's electric rates are 15 to 20 percent below Southern California Edison. He referred to a report by the United State Census Bureau showing the average bill in Anaheim is 23~ percent higher based on 750 kw hours per month. For commercial users, it is even worse. Relative to water rates, he agrees with what has been said - that the two-tier system is unfair. Asking for an increase of any kind particularly in electric is not well-founded. Doctor William Kott. (Also see minutes of February 2 and February 9, 1993, where Dr. Kott gave input regarding Utility rates.) He first questioned why the proposed alternatives were not first brought before the Public Utilities Board and also if the proposal would require another hearing since rates are different than what was previously proposed. City Attorney White answered that an additional public hearing was not required; Mayor Daly noted that of the alternatives presented, none proposed were higher than those proposed previously. Doctor Kott. An increase is still being proposed and the Utilities General Manager is merely presenting different ways of getting to that end. The effort should be made toward not having an increase at all. He feels if the current General Manager cannot do that, then the City should get one who can. Bob Kazarian, 1463 Westmount Drive, Anaheim, Chairman of the Public Utilities Board. He has heard a lot of information and misinformation. Many cost increases are beyond their control or the control of anybody in the City. An example relates to Federal Regulations which require more in-depth testing of water causing the extensive remodeling of the Lenain Filtration Plant because the rules have been drastically tightened on water quality. Further, they may be asked to spend 25 million dollars to rectify a problem that is nonexistent in California (he explained the details). Relative to undergrounding, it was looked at 8 or 9 years ago but at the time it was felt the cost was too high. If done at that time, they would have been a long way into the undergrounding process. The undergrounding program was embraced by the Council and the City and nobody objected to it when it was approved. Also, they approved a purchase of a 10 percent interest in a power plant in the Four Corners area (San Juan 4) and although it will cost money today, over the life of the plant, it will save many millions of dollars for the City. Although it is a very difficult time for the City's residents and businesses, they cannot look just at today only. Another component of the cost increase is the utilities bonding capacity and their bond ratings. The Anaheim Utilities Department has an excellent bond rating. It is necessary to put more money in the reserve 167 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. fund because they bought a power plant in order to maintain the bond rating. They could let the bond rating slip, but later on it will cost many millions of dollars. The Public Utilities Board did approve the higher rate increase because they were not looking only at today but at the future as well. No one likes rate increases or higher taxes, but they are necessary. It is a very moderate rate increase, and not as great as some people who have spoken would lead them to believe. william Halus, 5075 E. Crescent Drive, Anaheim. He lives in Peralta Hills where they used to get their water from a water company until some years ago when they started receiving water from the City. His water bill in 1991 was $792.54. Water is very expensive, however, the earth is a water planet and water can be recycled. He then submitted letters with his suggestions/recommendations on how he believes water problems in the Southern California area could be solved forever (letter submitted and made a part of the record). Phil Knypstra. (Also see minutes of February 2, 1993 where Mr. Knypstra gave input on utility rates.) Having done his homework and analysis relative to water rates, he believes there is no justification based on fact for an increase in the water rates for residential but has every bit of evidence to support an increase in the industrial and commercial rates since those rates are the lowest in the Orange County Water District and probably the entire Metropolitan Water District service area. He questioned how they could be satisfied with any one of the proposals presented unless they know the individual rates for fixed charges and variable charges. He believes they are never going to reconcile the differences between the different rate structures until they go to what he calls a level pricing system where everybody pays the same amount of money for a gallon of water. For some reason, the Public Utilities Board cannot accept that concept because they are so hung up on cost-of-service which is no longer valid. He would select an alternative that would not raise residential water rates, but would on commercial. Alternative #3 is a moderation but leaves a very regressive schedule. It is, however, moving in the right direction but does not get to the level pricing system. Ultimately they are going to go progressive. Fares Batarseh, 3005 Via Sienna, Anaheim. He has no problem with rate hikes. Three percent is not that much money. One of the Utilities Board Member was quoted as saying there is so much money in reserves they do not know what to do with it. He would like an answer to that from staff. Also, two Council Members were elected on the promise of repealing the Utility Users' Tax. The Utility Tax should be repealed before any new rate increases. Nancy Vanderpol, 119 Peralta Hills Drive, Anaheim. She is disputing the water rate increase because it discriminates against homeowners who have slopes and trees and those who want to protect their property during fire season. Those alone should preclude the residential split being proposed with two-tier rates. She agrees with the increase, but they should all be sharing it. She does not see how they can discriminate with one resident over another over a life sustaining substance such as water. Water conservation cannot be an issue because conservation was achieved by 30% without any rebates. What Mr. Krueger said about eliminating rebates is a good one. Fredrick Palmieri, 110 S. Strada, Anaheim. (Also see minutes of February 2, 1993 where Mr. Palmieri gave input on Utility rates.) He referred to his letter of March 5, 1993 already sent to the Council. Before raising any taxes, it is necessary to balance the budget and make cuts just as with the Federal Government. Relative to undergrounding, this is a time when everyone 168 City Ball, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. is hurting. It is a time to conserve spending and perhaps delay undergrounding. The water rate increase is a de facto tax on large properties who it is surmised can afford to pay the increase. On behalf of himself, his family and many other people who live in Peralta Hills, they cannot afford a tax increase anymore than anyone else. It is a time to conserve and delay public improvements. If a tax increase has to occur, it should be an across-the-board increase. Mayor Daly. This is an appropriate time to hear from staff. He requested first that in the future years when such proposals are considered, that water and electric rates be heard as separate items. They can be on the same agenda but considered separately. Ed Alario, Assistant General Manager Water Services. He first addressed the proposed standby charge by MWD. Last year a $5 per parcel charge was adopted or if larger than an acre $5 an acre. This year they are proposing an additional $3.55 for Anaheim residents. The maximum is $8.55. It is a tax imposed by the MWD and is beyond the control of the City. The monies are to be used for capital projects. Ed Aghjayan. The MWD has the power and ability to recover revenue from two sources unlike the City's Utilities Department which recover revenues from rates. MWD can do it by rates or assessments. Some years they have done it both ways. It has been more of a trend lately to recover from their rates. Mike Bell, Financial Services Manager, Public Utilities Department. He first addressed some of the comments and questions raised. Relative to the two-tier water rate structure, which in the opinion of some is a discriminatory rate structure toward large users, the issue was explored thoroughly when the package was reviewed with the Public Utilities Board. What they see, and this was part of the testimony of Mr. Knypstra, the large users are getting quite a bargain compared to smaller users who pay a fixed charge. Staff suggested a two tier package that sets the second tier at 37 units of consumption. That will have a negative effect on less than 10 percent of the residential rate payers. There are many ways to deal with the issue and this was staff's suggestion. He then addressed the Utility's rate structure compared to Edison's, the undergrounding program and the rate increases needed to fund the program. He subsequently showed slides (hard copies of the majority of the slide shown were submitted to the Council and made a part of the record). The slides showed the department's electric proposal, department's water proposal, electric rate alternatives listing alternatives 1 through 5, original funding and alternate funding, electric rate alternatives compared to Edison, water rate alternatives, adoption of electric/water rates. Mr. Bell briefed the data contained in each of the sheets shown in the slide presentation. Alternatives 3 through 5 under electric rate alternatives provide for continuing undergrounding; however, funding that program through the issuance of short-term debt rather than increasing rates by 1 percent. In the future, rates will need to be adjusted in order to pay for the program plus pay for the debt incurred to keep that program going. Under those alternatives (Alternative $3) they were able to lower the rate request amongst each of the classes. The reason why from staff's standpoint Alternate $3 is preferable, comparing the alternatives with Edison rates, Anaheim's industrial rates are now slightly higher than those of Edison and a major concern of staff. To the extent that they increase or provide for any increases to that class, there is going to be less of a competitive relationship between Anaheim and Edison which makes it more difficult in their business retention efforts and efforts to attract new business to Anaheim. Depending on how much of an increase is allocated to the industrial class, that problem potentially becomes worse. 169 City Hall, Anaheim~ California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. Relative to the water proposals, five alternates have also been provided. The first to call for the initial funding proposed and the 4.95 percent rate change. Alternatives 3 through 5 provide for a lower rate increase or 3.1 percent. They have removed the one-half million dollar cost of the ultra-low flush toilet program and will bring that program back independently to the Council for review and consideration outside of the whole process. They are confident they can sell that program which is one of the best in terms of avoiding high cost water proposals from MWD. They have varied the amount distributed between the residential class and the commercial-industrial classes anywhere from 3.1 percent across the board to a 2.6 percent decrease. Given the two tier structure when looking at the alternatives, residential rate payers would actually see from a 7 percent decrease in rates to about a l0 percent increase. The increase is less than l0 percent of the customers that fall above that break point. In concluding, he stated that any of the proposals will fund the adopted budget. If modified and adopted with alternatives that are lower, it will modify the budget so that those costs are removed. Any of the proposals will meet that criteria. It will keep the department in compliance with all bond covenants and financial obligations. They do have several covenants which require them to maintain rates and charges that provide for adequate debt service coverage on existing bonds and provide for their ability to maintain their timely payments of all debts. Any of the proposals they believe will maintain their good credit ratings. He cannot stress strongly enough how important those strong debt ratings are. Council Member Simpson asked Mr. Bell why there is a two-tier system in water - is it for purposes of conservation to discourage the use of water by high end users as opposed to low end. Mike Bell. They do not presently have a two-tier system. They are proposing lowering their fixed customer charge and then creating a tier out beyond 37 units that is slightly higher to make up for those differences. The main reason is the small users on the system compared to rates in many other cities in Orange County or Southern California that pay proportionally a much greater share than those in other cities. If it is a discriminatory rate structure, it is discriminatory toward the small user who can do very little with those fixed charges. Conservation is a secondary reason for this type of rate structure. The primary reason is to try and move more of what they are collecting from the small user on an average cost basis to the large user. The question becomes how fast and how much. What they are proposing for that last block is not a major change in rates. The very highest users, a very small number on the system, would see about a 10 percent increase at the most with this type of structure. He confirmed that relative to electrical, there is no two-tier system. council Member Simpson. He noted that Mr. Knapp used 750 kw hours as a base comparison and when comparing Anaheim's system on this usage, that Anaheim was higher than most cities in Orange County; Mr. Bell answered that is not correct. Staff can get together with Mr. Knapp and go over all the figures but that is not the case. Roland Krueger. He took issue with the statement made by Mr. Bell that the water rates structure is not primarily for water conservation and quoted from the document submitted wherein it states, "it sends a price signal to these consumers to conserve water". 170 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. Ed Aghjayan. Conservation is still very important. The primary reason for recommending the two-tier structure, it is currently unfair to the small user and average user and even those that use more than average. Their rates are among the highest in the County, whereas the large residential users are much fairer. The point Mr. Bell is making, they are being accused of discriminatory rates now to the small users and the two-tier structure is a way of addressing that. Ninety percent of their current customers under Alternative $3 as proposed would actually experience a decrease in their water bill and not an increase. MOTION: Council Member Simpson moved to certify that the adoption of the electric rates, rules and regulations and water rates, rules and regulations are statutorily exempt under the California Environmental Quality Act. Council Member Pickler seconded the motion. MOTION CARRIED. Council Member Daly offered Resolution No. 93R-45 for adoption, amending rates, rules and regulations for the sale and distribution of water as adopted by Resolution No. 72R-600 and most recently amended by Resolution No. 91R-337 - Alternative $3 which calls for zero percent average increase in residential rates, 3.6 percent increase in multi-family residential and a 7.3 percent increase in commercial and industrial for system wide increase of 3.1 percent. Refer to Resolution Book. RESOLUTION NO. 93R-45: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RATES, RULES AND REGULATIONS FOR THE SALE AND DISTRIBUTION OF WATER AS ADOPTED BY RESOLUTION NO. 72R-600 AND MOST RECENTLY AMENDED BY RESOLUTION NO. 91R-337. Before action was taken, Mayor Daly explained he offered the resolution for purposes of discussion. Alternative $3 reflects rates which are 1.85 percent lower than the proposal brought to the Council 5 weeks ago. It deletes from the budget at this time the rebate program for low-flush toilets which will be handled as a separate future item to be funded from revenues outside of this rate increase. They have not had the results of the program nor a full discussion on how it is working. Ed Aghjayan. They feel the program needs a full hearing. They made a full hour presentation before the Public Utilities Board. If at the time the Council hears it they do not like it, they can eliminate the program. If they like it, there will be a funding alternative which will not be in the proposed rate increase. Mayor Daly. It is fair to say that Alternative $3 which for the coming year proposes a zero percent increase for single-family residential begins moving toward a more level playing field in water rates. Staff has heard loud and clear that Council wants to continue to move in that direction because they are sensitive and concerned. He is concerned that single-family water users in Anaheim pay slightly higher water prices than some surrounding cities. Anaheim's is a great system and he believes they invest more in their water system than surrounding cities. A vote was then taken on the foregoing resolution as offered by Council Member Daly. Roll Call Vote on Resolution No. 93R-45 for adoption: AYES: NOES: ABSENT: COUNCIL MEMBERS: COUNCIL MEMBERS: COUNCIL MEMBERS: Feldhaus, Pickler, Simpson, Daly Hunter None 171 C£t¥ Hallr Anahe£mr Cal£forn£a - COUNCIL MINUTES - 14ARCH 9, 1993 - 5:00 P.M. The Mayor declared Resolution No. 93R-45 duly passed and adopted. Council Member Hunter. His no vote is for any increases across the board. Council Member Feldhaus. Offered a resolution adopting Alternative #4 on electric rates giving all classes a proportionate share, a one percent increase across all classes. He would prefer zero percent for residential but it is not one of the alternatives. Before further action was taken, Council Member Pickler spoke against Alternative #4. The Council in 1982 established a process whereby a citizens group was formed working with the Public Utilities Department to come back to the Council with a plan that would accomplish undergrounding. He feels it is imperative that they maintain their undergrounding program. He prefers Alternative #2 (2.0 percent increase in residential, 3.5 percent in commercial, 1.0 percent in industrial) as opposed to Alternative #4 because 94 eliminates revenues for undergrounding, something the City has been waiting for for a long time. Ed Aghjayan. He confirmed for the Mayor that relative to undergrounding, if the 1.0 percent increase for that program is not approved that they are prepared to go out on the short-term money market to get 5 or 6 million dollars. They could put in another 2 million and fund this years program to keep the program alive at the current level. The negative part is that eventually it is necessary to pay for the borrowing and also it means that next year in January when they present the new 5 year program, they would be going from 1 percent to 3 percent. Every year they will bring the Council up to date on the undergrounding program. The current 5 year program totals 45 million dollars. MOTION: Council Member Hunter moved that relative to electric rates that Alternative #4 be adopted but amended so that there is a zero percent increase in residential rates (zero percent residential, 1.0 percent commercial, 1.0 percent industrial). Council Member Feldhaus seconded the motion. Before a vote was taken, Council Member Hunter explained as Mr. Palmieri stated, he feels they should hold the line for a while and reactivate the undergrounding program later. Residential customers were hit hard last summer with big utility rates because of the hot weather. He reiterated it is time to hold the line on residential rates. Many of the people who fall under commercial and industrial do not live in the City. Council Member Pickler stated that they also had to pay for the San Juan 4 Power Plant that would keep electric rates low in the future. Mayor Daly asked staff to speak to the proposal by Council Member Hunter, that of adopting Alternative #4 for a 1.0 percent system wide increase with the exception that residential rates would be at zero percent. Ed Aghjayan. The problem with the proposed alternative, they would lose that much revenue for the residential class and unless it was spread to the other classes to absorb that amount of revenue, they would lose the total amount of the increase. It would not solve the problem unless industrial is increased to 1.4 or 1.5 percent or an increase in commercial. Somewhere the 1 percent from residential would have to be spread to the other classes in order to make up for the lost revenue. They are willing to live with Alternative #4 as amended if that is where the Council wants to go. One option is, when they come back with the targeted savings, that they may want to credit some of it 172 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. to residential as well as industrial and go ahead with one of these alternatives. The loss in revenue is $500,000. They will somehow have to make it up somewhere. They need to put closure to the matter. They are preparing to refinance and they want to go back to New York and tell the rating agencies that the increase has been approved by the Council. Nothing is served by continuing the proposed increases any longer. Council Member Simpson. He would suggest that the 1 percent (taken from residential) be spread equally between commercial and industrial if the Council agrees. He also would very much like to move on. City Attorney White. The motion on the floor is to amend the resolution which is Alternate #4 to provide for a zero percent increase in residential and to spread the necessary increase to commercial and industrial equally to get to a total of 1 percent overall. Council Member Hunter amended his motion, amending the resolution to provide for a zero percent increase in residential and spreading the necessary increase to commercial and industrial equally to get to a total of 1.0 percent overall. Council Member Feldhaus agreed in his second. MOTION CARRIED UNANIMOUSLY. Council Member Hunter offered Resolution No. 93R-46 for adoption, amending rates, rules and regulations for the sale and distribution of electricity as adopted by Resolution No. 71R-478 and most recently amended by Resolution No. 92R-25 - amended as Alternative #4A for a zero percent increase in residential rates and spreading the one percent to commercial and industrial equally. Refer to Resolution Book. RESOLUTION NO. 93R-46: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RATES, RULES AND REGULATIONS FOR THE SALE AND DISTRIBUTION OF ELECTRICITY AS ADOPTED BY RESOLUTION NO. 71R-478 AND MOST RECENTLY AMENDED BY RESOLUTION NO. 92R-25. Before a vote was taken, Council Member Pickler wanted to be sure that undergrounding will not be eliminated. Ed Aghjayan. He answered it would not be eliminated and it will continue until they bring it back to the Council in September or October and at that time the Council will need to make a decision on funding of the program and at what level for the next five years. Because they are going to be doing short-term borrowing for the two million dollars needed at this time, it will allow for the current program to move forward. Council Member Simpson. 'If two of his colleagues will agree, he is requesting of Mr. Aghjayan, (1) that they move away from a two-tier system in water for residential in particular and, (2) that they not bring rate increases for water and electrical to the Council at the same time. By General Consensus of a majority of the Council, the Council agreed with Council Member Simpson's recommendations. A vote was then taken on the resolution offered by Council Member Hunter amending the rates, rules and regulations for the sale and distribution of electricity including Alternative #4 as amended, now 4A - 0.0 percent increase for residential with the 1.0 percent as proposed to be spread between commercial and industrial. 173 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. Roll Call Vote on Resolution No. 93R-46 for adoption: AYES: NOES: ABSENT: COUNCIL MEMBERS: COUNCIL MEMBERS: COUNCIL MEMBERS: Feldhaus, Hunter, Pickler, Simpson, Daly None None The Mayor declared Resolution No. 93R-46 duly passed and adopted. MOTION: Council Member Pickler moved to authorize and direct the Public Utilities General Manager to prepare, promulgate, publish and implement changes to Electric and Water Rates, Rules, and Regulations, effective March 24, 1993, with the exception of the changes to the electric industrial GS-2 customers which would be effective April 1, 1993. Council Member Simpson seconded the motion. MOTION CARRIED. Mayor Daly. Before concluding, he would ask that the public participate as the Council considers the City budget since they will again be considering the water and electrical budgets in June and at least once each year will be considering the 5 year plan for undergrounding. There will be many future opportunities to look at the rates and the equity issues that have been raised. Further, if citizens have strong feelings about the Metropolitan Water District increases scheduled for July 1, he urged that those be communicated directly to MWD. One additional request of staff, he does not feel that electric or water rate increases should be on the Consent Calendar in the future, but that there should be separate hearings on those items. D1. 174: PUBLIC HEARING - NINETEENTH YEAR (1993-1994) COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM AND BUDGET: Approving the fiscal year 1993-1994 CDBG Program and Budget, in the amount of $3,455,000 as recommended by the Communitywide CDBG Citizen Participation Committee. This matter was continued from the meeting of February 23, 1993 to this date. Submitted was report dated February 17, 1993, asking for a continuance of the subject public hearing from February 23, 1993 to this date since the U.S. Department of Housing and Urban Development notified staff that the entitlement amount for Fiscal Year 1993/94 represents a significant increase of $855,000 thus necessitating reconvening the Communitywide CDB Citizen Participation Committee to develop allocation recommendations for the additional monies. City Manager James Ruth announced that staff is requesting an additional continuance of the subject public hearing to Tuesday, April 6, 1993. MOTION: Council Member Simpson moved to continue the public hearing on the Nineteenth Year CDBG Program and Budget to Tuesday, April 6, 1993. Council Member Pickler seconded the motion. MOTION CARRIED. D2. 179: PUBLIC HEARING - WAIVER OF CODE REQUIREMENT, CONDITIONAL USE PERMIT NO. 3563 AND MITIGATED NEGATIVE DECLARATION: OWNER: M.E. Johnson, 1214 W. Katella, Anaheim, CA 92802 AGENT: Robert W. Kent, 16315 Oaktree Circle, Chino Hills, CA 91709 LOCATION/REQUEST: The property is located at 511-520 South Manchester Avenue and 500-520 South Walnut Street and is approximately 2.1 acres located at the southwest corner of Manchester Avenue and Santa Ana Street. The request is to retain an auto repair, towing and dismantling facility (including the storage and retail sale of used auto parts) and a proposed 768-square foot office building and a shop canopy with waiver 174 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. of required improvement of parking and outdoor storage area, maximum structural height adjacent to residential zones, minimum structural setback, improvement of required setback areas and permitted encroachments into required yards. ACTION TAKEN BY THE PLANNING COMMISSION: CUP NO. 3563 DENIED (PC93-11) (6 yes votes, 1 vacancy). Waiver of code requirement DENIED. Denied Mitigated Negative Declaration. HEARING SBT ON: A letter of appeal was submitted by the Agent, Robert W. Kent and public hearing scheduled this date. PUBLIC NOTICE REQUIREMENTS MET BY: Publication in Anaheim Bulletin - February 25, 1993 Mailing to property owners within 300 feet - February 25, 1993 Posting of property - February 26, 1993 Letter dated February 24, 1993 was received from the applicant Robert W. Kent requesting a continuance of the hearing to April 6, 1993. Mayor Daly asked if anyone was present regarding the subject public hearing; no one was present. Council Member Simpson moved to continue the public hearing on Conditional Use Permit No. 3563 to Tuesday, April 6, 1993 as requested. Council Member Pickler seconded the motion. MOTION CARRIED. ITEMS B1 - B4 FROM THE ZONING ADMINISTRATOR MEETING OF FEBRUARY 18, 1993~ DECISION DATEs FEBRUARY 25, 1993 INFORMATION ONLY - APPEAL PERIOD ENDS MARCH 12, 1993: B1. 179: CONDITIONAL USE PERMIT NO. 3578 AND NEGATIVE DECLARATION: OWNER: Vipin Goel, 24992 Largo Drive, Laguna Hills, CA 92652 AGENT: Rene F. Gonzalez, 895 S. Euclid Street, Anaheim, CA 92802 LOCATION: 895 South Euclid Street. Property is approximately .37 acre located at the northwest corner of Euclid Street and Beacon Avenue. To permit on-sale beer and wine in an existing restaurant with waiver of minimum number of parking spaces. ACTION TAKEN BY THE ZONING ADMINISTRATOR: CUP NO. 3578 APPROVED with modified conditions (Decision No. ZA93-14). Approved Negative Declaration. B2. 179: CONDITIONAL USE PERMIT NO. 3577 AND NEGATIVE DECLARATION: OWNER: Alpine Development, 13702 Holt Avenue, Santa ana, CA 92705 AGENT: Robert Hicks, 4331 Nestle Street, Cypress, Ca 90630 LOCATION: 404 North State College Boulevard. Property is approximately 0.51 acre, having frontage of approximately 117 feet on the east side of state College Boulevard, with a maximum depth of approximately 190 feet and being located approximately 380 feet south of the centerline of Sycamore Street (Poor Bob's). To retain a 2,550 square foot cocktail lounge with on-premise sale and consumption of alcohol with waiver of minimum number of parking spaces (59 parking spaces required; and 28 spaces existing). 175 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. ACTION TAKEN BY THE ZONING ADMINISTRATOR: CUP NO. 3577 DENIED, business located in high crime area as described by Alcoholic Beverage Control; existing use has adversely impacted neighborhood; testimony by officer indicated no food was noted in establishment and existing use is for restaurant and on-sale alcohol (Decision No. ZA93-15). Approved Negative Declaration. The decision of the Zoning Administrator was appealed by the applicant and, therefore, a public hearing is scheduled for April 6, 1993. B3. 179: CONDITIONAL USE PERMIT NO. 3587 AND NEGATIVE DECLARATION: OWNER: Euclid Shopping Center/General Partnership, 2293 West Ball Road, Anaheim, CA 92804 AGENT: Art Rodriguez, 211 West Almeda Avenue, Suite 101, Burbank, CA 91502 LOCATION: 1612 West Katella Avenue (Euclid Shopping Center). Property is approximately 18.6 acre located at the southeast corner of Katella Avenue and Euclid Street, having approximate frontages of 1,350 feet on the south side of Katella Avenue and 600 feet of the east side of Katella Avenue. To permit on-premise sales and consumption of beer and wine in conjunction with a restaurant. ACTION TA/~EN BY THE ZONING ADMINISTRATOR: CUP NO. 3587 APPROVED, with added Conditions (Decision No. ZA93-16). Approving Negative Declaration. B4. 179: VARIANCE NO. 4219, CATEGORICALLY EXEMPT, CLASS 5: OWNER: Michael Langford, 1255 North Piedmont Drive, Anaheim, CA 92807 LOCATION: 1255 North Piedmont Drive. Property is approximately 0.11 acre, with frontage of approximately 50 feet on the west side of Piedmont Drive and having maximum depth of approximately 100 feet and being located approximately 170 feet east of the centerline of Northfield Avenue. Waiver of maximum lot coverage (1,750 square feet permitted and 1,945 square feet proposed) to construct a 245 square foot family room addition. ACTION TAKEN BY THE ZONING ADMINISTRATOR: Variance No. 4219 APPROVED (Decision No. ZA 93-17). END OF THE ZONING ADMINISTRATOR. B5. 179: ORDINANCE NO. 5359 - ADOPTION: Amending Title 18 to rezone property under Reclassification No. 66-67-61(107) located at northwest corner of Katella Avenue and Harbor Boulevard from the CL zone to the C-R zone. (Introduced at the meeting of March 2, 1993.) Council Member Daly offered Ordinance No. 5359 for adoption. Refer to Ordinance Book. ORDINANCE NO. 5359: AN ORDINANCE OF THE CITY OF ANAHEIM AMENDING THE ZONING MAP REFERRED TO IN TITLE 18 OF THE ANAHEIM MUNICIPAL CODE RELATING TO ZONING. (Reclassification No. 66-67-61(107) located at northwest corner of Katella Avenue and Harbor Boulevard from the CL zone to the C-R zone.) 176 City Hall, Anaheim, California - COUNCIL MINUTES - MARCH 9, 1993 - 5:00 P.M. Roll Call Vote on Ordinance No. 5359 for adoptions AYES= NOES= ABSENT= COUNCIL MEMBERS: COUNCIL MEMBERS: COUNCIL MEMBERS: Feldhaus, Hunter, Pickler, Simpson, Daly None None The Mayor declared Ordinance No. 5359 duly passed and adopted. Cl. 114: COUNCIL COMMENTS - SISTER CITY COMMITTEE - TRIP TO MITO, JAPAN - MAY, 1993: Council Member Feldhaus. On May 12, 1993, the Sister City contingent is going to Anaheim's Sister City - Mito, Japan. He would hope that members of the Council will be able to go as well. He and his wife are going and it has been suggested that if no one else is going that the Council consider making him Mayor Pro Tem temporarily in order to represent the City while there because of Japanese protocol. Mayor Daly. He suggested that Council Member Feldhaus work with the City Attorney on some appropriate title change for the purposes of the trip. ADJOURNMENT: By General Consent the Council adjourned. (7:30 p.m.) LEONORA N. SOHL, CITY CLERK 177