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1977/09/27
77-1058 City Hall~ Anaheim, California - COUNCIL MINUTES - September 27, 1977~ 1:30 P.M. The City Council of the City of Anaheim met in regular session. PRESENT: ABSENT: PRESENT: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom COUNCIL MEMBERS: Roth ASSISTANT CITY MANAGER: William T. Hopkins ASSISTANT CITY ATTORNEY: Frank Lowry DEPUTY CITY CLERK: Leonora N. Sohl STADIUM-CONVENTION CENTER-GOLF DIRECTOR: Tom Liegler SENIOR STAFF ASSISTANT FOR RECREATION: Lloyd Trapp ASSISTANT UTILITIES DIRECTOR: Ed Alario ASSISTANT DIRECTOR FOR ZONING: Annika Santalahti Mayor Thom called the meeting to order and welcomed those in attendance to the Council meeting. INVOCATION: Reverend Greg Yates of the Melodyland Hotline Center gave the Invocation. FLAG SALUTE: Councilwoman Miriam Kaywood led the assembly in the Pledge of Allegiance to the Flag. PROCLAMATIONS: The following proclamations were issued by Mayor Thom and approved by the City Council: "Do-It-Yourself Week in Anaheim" - October 3 - 9, 1977. "United Way Month" - October 1977. MINUTES: Approval of minutes was deferred for one week. WAIVER OF READING - ORDINANCES AND RESOLUTIONS: Councilwoman Kaywood moved to waive the reading, in full, of all ordinances and resolutions and that consent to the waiver of reading is hereby given by all Council Members unless, after reading of the title, specific request is made by a Council Member for the read- ing of such ordinance or resolution. Councilman Thom seconded the motion. Council- man Roth was absent. MOTION CARRIED. FINANCIAL DEMANDS AGAINST THE CITY in the amount of $1,058,229.62, in accordance with the 1977-78 Budget, were approved. 140: ACCEPTANCE OF GIFT FOR ESTABLISHMENT OF MICHAEL L. ROSTON MEMORIAL FUND: Councilwoman Kaywood offered Resolution No. 77R-634 for adoption, as recommended in memorandum dated September 27, 1977, from William Griffith Library Director. Refer to Resolution Book. ' RESOLUTION NO. 77R-634: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM ACCEPTING A GIFT OF $10,000 TO THE CITY OF ANAHEIM FROM DR. AND MRS. MAXWELL L. ROSTON TO BE USED FOR THE PURPOSE OF ESTABLISHING THE MICHAEL L. ROSTON MEMORIAL FUND UPON THE TERMS AND CONDITIONS HEREINAFTER SET FORTH. 77-1059 City Hall, Anaheim~ California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MFJiBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution No. 77R-634 duly passed and adopted. RESOLUTION OF APPRECIATION: A Resolution of Appreciation was adopted by the City Council and presented to Dr. and Mrs. Maxwell L. Roston for their gift of $10,000. for the purpose of establishing a Michael L. Roston Memorial Fund for literary awards, in memory of their son. The Mayor also presented the Rostons with a symbolic replica of the Big "A" as an additional expression of thanks. 155: LAND AVAILABILITY STUDY: Recommendation that the City Council authorize a request to conduct a study to identify "Residentially Potential Available Land" was submitted. In answer to Mayor Thom, Assistant Director for Zoning Annika Santalahti explained that Phil Schwartze, Assistant Director for Planning, based on his conversation with two consultants having expertise in the subject matter, determined that it would take approximately 300 hours of staff time to conduct a study of the magnitude involved. The Mayor was of the opinion that such an estimate was excessive, but did not have any material to refute it. Thus, he reluctantly accepted the recon~nendation; however, he would vote against the motion. On motion by Councilman Kott, seconded by Councilman Seymour, request for proposals to conduct a residentially potential land availability study to identify sites for multiple-family development, including low and moderate income housing was authorized as outlined in memorandum dated September 27, 1977, from the Executive Director of Community Development, Norm Priest. Councilman Thom voted "No". Councilman Roth was absent. MOTION CARRIED. 123: JOINT FUNDING AGREEMENT FOR THE STUDY OF BURRIS SAND PIT AND FIVE COVES PROJECT AREA: Councilwoman Kaywood offered Resolution No. 77R-635 for adoption, as recommended in memorandum dated September 20, 1977, from James Ruth, Director of Parks, Recreation and the Arts Department. Refer to Resolution Book. RESOLUTION NO. 77R-635: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING THE TERMS AND CONDITIONS OF A JOINT FUNDING AGREEMENT WITH THE ORANGE COUNTY FLOOD CONTROL DISTRICT AND THE ORANGE COUNTY HARBORS, BEACHES AND PARKS DISTRICT, ORANGE COUNTY WATER DISTRICT AND THE COUNTY OF ORANGE IN CONNECTION WITH A STUDY OF BURRIS SAND PIT AND FIVE COVES PROJECT AREA, AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY OF ANAHEIM AND RESCINDING RESOLUTION NO. 76R-625. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution No. 77R-635 duly passed and adopted. 77-1060 City Hall, Anaheim, California - COUNCIL MINUTES - September 27~ 1977, 1:30 P.M. 174: TITLE V, OLDER AMERICANS ACT FUNDING APPLICATION: Assistant City Manager William T. Hopkins clarified for Councilman Kott that the 25 percent matching funds were an in-kind contribution in terms of the Community Development Program representing the City's share of participation in the project. Councilwoman Kaywood offered Resolution No. 77R-636 for adoption, as recommended in memorandum dated September 20, 1977, from James Ruth. Refer to Resolution Book. RESOLUTION NO. 77R-636: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING THE APPLICATION FOR FUNDS UNDER TITLE V OF THE OLDER AMERICANS ACT OF 1965 FOR REMODELING AND IMPROVEMENT OF THE CITY'S EXISTING SENIOR CITIZENS' CENTER AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE NECESSARY APPLICATION DOCUMENTS ON BEHALF OF THE CITY. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution No. 77R-636 duly passed and adopted. 174.123: AGREEMENTS PERTAINING TO PUBLIC SERVICE EMPLOYMENT AND TRAINING UNDER FEDERAL CETA PROGRAM: Councilwoman Kaywood offered Resolution Nos. 77R-637 through 77R-643, both inclusive, for adoption, as recommended in memorandum dated September 19, 1977, from Personnel Director Garry McRae. Refer to Reso- lution Book. RESOLUTION NO. 77R-637: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING COMPREHENSIVE MANPOWER PROGRAM AND AUTHORIZING DISBURSEMENT OF FUNDS FOR APPROVED ACTIVITIES. RESOLUTION NO. 77R-638: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF ANAHEIM AND THE NORTH ORANGE COUNTY COMMUNITY COLLEGE DISTRICT RELATING TO VOCATIONAL GUIDANCE AND COUNSELING SERVICES. RESOLUTION NO. 77R-639: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF ANAHEIM AND THE NORTH ORANGE COUNTY COMMUNITY COLLEGE DISTRICT RELATING TO THE ESTABLISHMENT OF A HOUSING REPAIR TRAINING AND WORK EXPERIENCE PROGRAM. RESOLUTION NO. 77R-640: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF ANAHEIM AND THE ORANGE COUNTY COMMUNITY DEVELOPMENT COUNCIL, INC., RELATING TO A YOUTH DEVELOPMENT PROGRAM. RESOLUTION NO. 77R-641: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF ANAHEIM AND THE NORTH ORANGE COUNTY COMMUNITY COLLEGE DISTRICT RELATING TO COMMUNITY BASED INDIVIDUALIZED INSTRUCTION IN BASIC EDUCATION STUDIES. 77-1061 City Hall, Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. RESOLUTION NO. 77R-642: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF ANAHEIM AND THE ORANGE COUNTY COMMUNITY DEVELOPMENT COUNCIL, INC., RELATING TO COMMUNITY BASED INDIVIDUALIZED INSTRUCTION AND VOCATIONAL SKILLS TRAINING. RESOLUTION NO. 77R-643: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF ANAHEIM AND THE NORTH ORANGE COUNTY REGIONAL OCCUPATIONAL PROGRAM RELATING TO A PRESCHOOL PROGRAM. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution Nos. 77R-637 through 77R-643, both inclusive, duly passed and adopted. 132: ROBIN, WREN~ BLUE JAY, CHEVY CHASE, APARTMENT AREA - STATUS OF ENFORCEMENT OF SANITATION CODES: Referring to memorandum dated September 26, 1977, Assistant City Manager Hopkins indicated that because of the concerted effort put forth in trying to alleviate some of the problems in the subject area, progress had been fairly substantial. While the Mayor did not disagree, he was of the opinion that not enough progress was being made and continuous pressure would have to be applied to keep the land- lords in the subject apartment area from further oppressing the tenants who resided therein. Along with receiving and filing the report, he recommended that staff be directed to continue enforcement to prevent untoward effects on the residents as a result of unsanitary conditions. He pointed out that relative'to the complaints on the trash storage bins, the majority of the owners simply cancelled their lease agreements and now trash was being stored in the streets in inadequate containers and paper bags causing more of a health hazard than the bins. Thus, the Sanitation Department would have to pursue the program in trying to find locations for the trash bins. Councilman Seymour was totally supportive of enforcing the sanitation aspect, but emphasized the problem went much deeper necessitating a structured, well-laid-out, planned approach, enforcement of the trash problem being Phase I as intended, followed by aggressive Building Code enforcement with an ultimate solution to the totally unsanitary and unhealthful conditions existing in the neighborhood. The quality of life in that neighborhood had to be changed permanently, in his opinion. The Mayor agreed with Councilman Seymour's view and plan but emphasized that the only matter before the Council today was the enforcement of Sanitation Codes. On motion by Councilman Thom, seconded by Councilman Seymour, staff was instructed to continue heavy enforcement of Sanitation Codes for the subject area and submit recommendations in three weeks on other Code enforcement procedures to assist in upgrading the neighborhood. Councilman Roth was absent. MOTION CARRIED. 77-1062 City Hall~ Anaheim~ California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. 123: FEASIBILITY STUDY AND DESIGN ENGINEERING PROJECT: (Carbon Creek Channel Bikeway) Councilman Seymour offered Resolution No. 77R-644 for adoption, as recommended in memorandum dated September 12, 1977, from James Maddox, City Engineer (not to exceed $21,000). Refer to Resolution Book. RESOLUTION NO. 77R-644: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING THE TERMS AND CONDITIONS OF AN AGREEMENT FOR ENGINEERING SERVICES WITH MOHLE, PERRY AND ASSOCIATES IN CONNECTION WITH THE CARBON CREEK CHANNEL BIKEWAY PROJECT, AND AUTHORIZING AND DIRECTING THE MAYOR AND CITY CLERK TO EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY OF ANAHEIM. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution No. 77R-644 duly passed and adopted. 123: MODIFICATION OF AGREEMENT WITH ORANGE COUNTY FLOOD CONTROL DISTRICT: After Tom Liegler, Stadium-Convention Center-Golf Director, briefed the Council on his memorandum dated September 27, 1977, Councilwoman Ka~ood offered Resolution No. 77R-645 for adoption, extending the subject lease agreement for 25 years, effective September 20, 1977. Refer to Resolution Book. RESOLUTION NO. 77R-645: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING THE TERMS AND CONDITIONS OF A MODIFICATION OF AGREEMENT WITH THE ORANGE COUNTY FLOOD CONTROL DISTRICT, AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE SAID AGREEMENT. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution No. 77R-645 duly passed and adopted. 124: SZABO FOODS - CONTRACT EXTENSION: Mr. Liegler explained that the food and beverage contract with Szabo Foods, originally entered for five years, was extended another five years with termination date of September 30, 1977. Although administra- tively he had the ability to extend the contract for another five years, be asked for the Council's guidance and concurrence to allow him to negotiate with Szabo to obtain a better agreement than at present. Since the original contract was signed, another agreement was awarded to Szabo to provide food and beverage service at Anaheim Stadium. He explained that his objective is to combine both agreements, thus enabling negotiation of more favorable terms for the City. On motion by Councilman Thom, seconded by Councilman Kott, Mr. Liegler and staff were authorized to negotiate with Szabo Foods on a contract extension for more favorable terms for the City than at present by combining the agreements for food and beverage service, both at Anaheim Stadium and the Convention Center. Council- man Roth was absent. MOTION CARRIED. 77-1063 C_jty Hall~ Anaheim~ California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. 123 & 170: SPECIAL FEES FOR SECONDARY WATER IMPROVEMENTS - TRACT NO. 8404: (Southport Development) Councilman Seymour offered Resolution No. 77R-646 for adoption, as recommended in memorandum dated September 20, 1977, from the Utilities Director. Refer to Resolution Book. RESOLUTION NO. 77R-646: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING THE TERMS AND CONDITIONS OF AN AGREEMENT WITH SOUTHPORT DEVELOPMENT CORPORATION TO REIMBURSE SAID DEVELOPER FOR INSTALLING 376 FEET OF WATER MAIN AS PART OF THE SECONDARY DISTRIBUTION SYSTEM IN THE AREA OF TRACT 8404, SOUTH OF SANTA ANA CANYON ROAD AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE SAID AGREEMENT. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL M~MBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution No. 77R-646 duly passed and adopted. 175: AD HOC COMMITTEE TO STUDY CITY'S ELECTRICAL UTILITY: On motion by Councilman Seymour, seconded by Councilman Thom, appointments to the special 7-member ad hoc committee to study the City's electrical utility was continued one week. Councilman Roth was absent. MOTION CARRIED. 175: ORDER AUTHORIZING EDISON TO SELL ITS INTEREST IN SAN ONOFRE NUCLEAR GENERATINC STATION UNITS 2 AND 3 TO THE CITY: The Mayor explained that relative to memorandum dated September 23, 1977, from the Utilities Director, recommending approval of the subject application, the Public Utilities Board (PUB) raised the question regarding ramifications of the IRS ruling on the $200 million tax credit that Southern Cali- fornia Edison (SCE) would lose if they sold any portion of their utility to another agency. He noted the question was not addressed in the recommendation and contended it would be a problem to move forward with that matter unresolved. Mr. Ed Alario, Assistant Utilities Director, stated that particular issue was not under the jurisdiction of the Public Utilties Commission and the application was merely requesting authorization for Edison to enter into negotiations which were now in process, a large portion of which would be a discussion of the $200 million tax increment. If that was going to be a factor, he could not envision the Council acting favorably when the time came to actually approve the agreement. The proposed action was only a procedural step wherein the PUB recommended authorization be granted for the Utilities Department to negotiate. If the IRS ruling indicated that the cities involved in the application had to make up the $200 million difference even after an agreement was signed, it would become null and void. He reiterated that the approval was merely procedural, the deadline being November 1, 1977, wherein all transactions had to be finalized. They wanted approval by October 4, 1977, in order to provide enough time for the matter to be resubmitted to the Council in final form. The Mayor was reluctant to give approval to move ahead or authorize any movement at all even though the PUB recommended initiation of the application. 77-1064 City Hall~ Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. Councilman Seymour felt there was no problem in acting favorably subject to the $200 million question being resolved, thus the Council would be on record as recognizing the potential of the financial question but at the same time indicating they wanted to go forward. If positive action was not taken, it would preclude the question ever being answered. Further discussion followed between Councilman Seymour and the Mayor wherein it was ascertained that the Mayor was in favor of placing a moratorium on everything connected with generation until after the ad hoc committee was appointed to study the Electrical Utility and their work completed. Both Councilman Seymour and Councilwoman Kaywood took issue with the Mayor's stand on the matter. Councilman Seymour maintained that the Utility business had to be conducted on a day-to-day basis until the citizens, by a vote, indicated that, in fact, the Utility should be sold. He stressed that if the Council was to follow the negative leadership on the matter demonstrated by the Mayor and Councilman Kott, it would result in the financial bankruptcy of the City's Utilities. He stressed, as he had in the past, that both should separate their philosophical views from their opposition to generation, especially since the voters previously authorized the Utilities to seek new methods of generation. MOTION: Councilman Seymour thereupon moved that the matter be continued until Wednesday, September 28, 1977, for full Council action. Councilwoman Kaywood seconded the motion for purposes of discussion. Councilwoman Kaywood emphasized that action was necessary no later than the meeting today to meet the timetable of October 4, 1977. She pointed out on page 1 of Mr. Hoyt's report that the City would not be committed to buy San Onofre by authoriz- ing the application, nor would Edison be committed to sell. However, if the City did not make the deadline, it would be out of the picture entirely and it had been a long and difficult battle to get Edison to agree to allow the City to buy into San Onofre in the first place. Councilman Kott stated it had come to his attention that San Onofre had been closed for six of the last twelve months and ten of the past thirty days. He thus did not consider the type of investment proposed to be a responsible one and was unwilling to "gamble" with taxpayers money, but he would be willing to do what he could in their behalf if a proposal was tangible and profitable. In his opinion, his stand was a positive one and he did not wish to be classed in terms of negativity. A vote was taken on the foregoing motion to table the matter until the meeting of Wednesday, September 28, 1977, and carried by the following vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour and Thom NOES: COUNCIL MEMBERS: Kott ABSENT: COUNCIL MEMBERS: Roth MOTION CARRIED. 108: APPLICATION FOR SOLICITATION OF CHARITY FUNDS: Submitted by Reverend John Finger, Last Chance Mission, for door-to-door solicitation for support of the mission, October 31 to December 30, 1977. 77-1065 ~ity Hall~ Anahei~ California - COUNCIL MINUTES - September 27, 1977~ 1:30 P.M. On motion by Councilman Thom, seconded by Councilwoman Kaywood, Application for Solicitation Permit for the Last Chance Mission for door-to-door solicitation was denied with the understanding that anyone who wished to go door-to-door for religious purposes could do so and no permit was required since the prerogative was theirs as a citizen of the United States. Councilman Roth was absent. MOTION CARRIED. 170: TENTATIVE TRACT NOS 9212 AND 9215 - EXTENSION OF TIME: Request by Robert Vatcher, The Baldwin Company, for an extension of time to Tract Nos. 9212 and 9215 to establish a 49 and 48-1ot RS-5000 zoned subdivision on property located on the south and west sides of Nohl Ranch Road, east of Anaheim Hills Road. On motion by Councilman Kott, seconded by Councilman Seymour, request for an exten- sion of time to Tract Nos. 9212 and 9215 was approved to expire October 27, 1978, as recommended in memorandum dated September 14, 1977, from the Assistant Director for Zoning. Councilman Roth was absent. MOTION CARRIED. 170: TENTATIVE TRACT NOS. 8116~ 8117~ 9602 AND 9864 - GRADING: Request by Horst J. Schor, Anaheim Hills, Inc., to start grading prior to the installation of down- stream drainage facilities for Tentative Tract Nos. 8116, 8117, 9602 and 9864, for a 171-lot subdivision on property located on the south side of Nohl Ranch Road, west of Royal Oak Road. On motion by Councilwoman Kaywood, seconded by Councilman Seymour, request to start grading prior to the installation of downstream drainage facilities on the subject tentative tracts was approved as recommended in memorandum dated September 19, 1977, from the City Engineer, subject to the two conditions imposed as outlined therein. Councilman Roth was absent. MOTION CARRIED. 134: GENERAL PLAN AMENDMENT NO. 144 - REQUEST TO CONTINUE UNTIL OCTOBER 4, 1977: The Mayor referred to letter dated September 19, 1977, from Mr. Nicholas Netty requesting a continuance of General Plan Amendment No. 144, specifically regarding the north side of Simmons Avenue, east of Haster Street and generally west of Vern Street, until October 4, 1977, because a homeowners meeting was scheduled September 28, 1977 to discuss the matter. Council discussion indicated that the letter had been submitted for consideration at the meeting of September 20, 1977, and no action was taken although receipt of the letter was noted at that time. A recommendation resulting from further discussion between Council and staff was to continue the matter one week since action on the Reclassifications pertaining to this property would be before the Council at that meeting and could be set for a public hearing. If set for a public hearing, Councilman Seymour wanted the two actions, GPA No. 144 and Reclassification Nos. 76-77-54 and 76-77-55, to coincide. On motion by Councilman Thom, seconded by Councilman Kott, the request of Mr. Nicholas Netty to continue General Plan Amendment No. 144 until October 4, 1977, regarding the area as outlined above was approved with the provision that if the Reclassifica- tions were set for a public hearing at that time, there would be scheduled to coincide with the General Plan Amendment hearing. Councilman Roth was absent. MOTION CARRIED. 77-1066 City Hall, Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. CONSENT CALENDAR ITEMS: On motion by Councilman Seymour, seconded by Councilman Thom, the following actions were authorized in accordance with the reports and recommendations furnished each Council Member and as listed on the Consent Calendar Agenda: 1. 118: CLAIMS AGAINST THE CITY: The following claims were denied and referred to the City's insurance carrier or the self-insurance administrator: a. Claim submitted by Tom Calvert for personal injuries purportedly sustained as a result of a street disrepair on Santa Ana Street between Philadelphia and Claudina, on or about July 18, 1977. b. Claim submitted by David Keith Rogers for personal injuries purportedly sustained as a result of false imprisonment on or about June 6, 1977. c. Claim submitted by Gloria Gonzalez Hernandez for personal injuries purportedly sustained as a result of a traffic accident on Anna Drive near La Palma on or about August 2, 1977. d. Claim submitted by Cornell Cartage for property damages purportedly sustained as a result of a collision with tree branches at 618 Claudina on or about August 13 1977. ' e. Claim submitted by State Farm Mutual Automobile Insurance Company for damages purportedly caused by a City-owned vehicle to property of Deborah Tillmanns, on or about June 23, 1977. 2. CORRESPONDENCE: The following correspondence was ordered received and filed: a. 140 & 117: Monthly Reports, August 1977 - Library and City Treasurer. b. 114: City of E1 Cajon Resolution No. 559-77 supporting reform of state laws which impede or prevent the timely licensing of essential power projects. c. 144 & 174: Orange County Department of Social Services and the Senior Citizens Program Office communication regarding forthcoming public meetings to plan for service needs for 1978-1979. d. 105: Community Redevelopment Commission - Minutes of August 17, 1977. e. 105: Library Board - Minutes of August 15, 1977. 3. 108: ENTERTAINMENT AND AMUSEMENT DEVICES PERMITS: The following permits were approved in accordance with the recommendations of the Chief of Police: a. Entertainment Permit to allow entertainment Monday through Sunday, 6:00 P.M. to 2:00 A.M. at the Stables, 121 South Anaheim Boulevard. (Willie Campbell, applicant) b. Amusement Devices Permit to allow one Old Chicago and one Formula K pinball machines at th the Tacki Tiki Bar, 910 North Anaheim Boulevard. (Dale S. Menke, applicant) Councilman Roth was absent. MOTION CARRIED. 77-1067 City Hal!, Anaheim~ California - COUNCIL MINUTES - September 27~ 1977, 1:30 P.M. CONSENT CALENDAR ITEMS: Councilman Thom offered Resolution Nos. 77R-647 through 77R-649, both inclusive, for adoption in accordance with the reports, recommendations and certifications furnished each Council Member and as listed on the Consent Calendar Agenda. Refer to Resolution Book. 158: RESOLUTION NO. 77R-647: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM ACCEPTING CERTAIN DEEDS AND ORDERING THEIR RECORDATION. (Raymond G. Spehar, et al.; Raymond G. Spehar, et al.; Shaw & Talbot; Shaw & Talbot; Oltmans Construction Company; Bryan Industrial Properties, et al.; Keystone Savings & Loan Association; T. Ohara Farm; Dolores A. Grillon; Kenneth A. Woods, et al.; Arthur C. Jensen, et ux.; Robert Brkich, et ux.) 169: RESOLUTION NO. 77R-648: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM FINALLY ACCEPTING THE COMPLETION AND THE FURNISHING OF ALL PLANT, LABOR, SERVICES, MATERIALS AND EQUIPMENT AND ALL UTILITIES AND TRANSPORTATION INCLUDING POWER, FUEL AND WATER, AND THE PERFORMANCE OF ALL WORK NECESSARY TO CONSTRUCT AND COMPLETE THE FOLLOWING PUBLIC IMPROVEMENT, TO WIT: KATELLA AVENUE STREET IMPROVEMENT, W/O NINTH STREET, IN THE CITY OF ANAHEIM, WORK ORDER NO. 807-B. (Silveri-Ruiz) RESOLUTION NO. 77R-649: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING THE TERMS AND CONDITIONS OF AN ENCROACHMENT PERMIT AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE SAID ENCROACHMENT PERMIT WITH JAMES J. KING AND SHARON K. KING. (77-2E, 8177 Woodsboro Avenue) Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution Nos. 77R-647 through 77R-649, both inclusive, duly passed and adopted. 113: DESTRUCTION OF CERTAIN CITY RECORDS MORE THAN TWO YEARS OLD: Councilwoman Kaywood requested that relative to Item No. 3 on Page 2 of the proposed resolution, she wanted the 1972 request for Grand Jury investigation and reply thereto to be retained and not destroyed. The Deputy City Clerk explained that she believed the documentation referred to was a copy and the original would be retained. If this was not the case, the resolution would be amended accordingly. Councilwoman Kaywood offered Resolution No. 77R-650 for adoption with the stipulation that if the Grand Jury investigation documentation as outlined in No. 3, Page 2, was the original that it be retained. Refer to Resolution Book. RESOLUTION NO. 77R-650: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AUTHORIZING THE DESTRUCTION OF CERTAIN CITY RECORDS, DOCUMENTS, INSTRUMENTS, BOOKS AND PAPERS MORE THAN TWO YEARS OLD. 77-1068 City Hall, Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution No. 77R-650 duly passed and adopted. 174: ORDINANCE NO. 3771: Councilwoman Kaywood offered Ordinance No. 3771 for adoption. Refer to Ordinance Book. ORDINANCE NO. 3771: AN ORDINANCE OF THE CITY OF ANAUEIM REPEALING CHAPTER 6.04 OF TITLE 6 OF THE ANAHEIM MUNICIPAL CODE AND ADDING NEW CHAPTER 6.04 TO TITLE 6 IN ITS PLACE AND STEAD RELATING TO EMERGENCY SERVICES. Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Ordinance No. 3771 duly passed and adopted. 142: ORDINANCE NO. 3761: <amended) Councilman Thom offered Ordinance 3761 for amended first reading. ORDINANCE NO. 3761: AN ORDINANCE OF THE CITY OF ANAHEIM REPEALING CHAPTER 7.34 OF TITLE 7 OF THE ANAHEIM MUNICIPAL CODE AND ADDING NEW CHAPTER 7.34 IN ITS PLACE AND STEAD RELATING TO BINGO GAMES. RECLASSIFICATION NO. 76-77-35: Councilman Thom offered Resolution No. 77R-651 for adoption, to correct the zoning designation of the subject property from CL to RM-1200. Refer to Resolution Book. RESOLUTION NO. 77R-651: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RESOLUTION NO. 77R-95, NUNC PRO TUNC, BY CORRECTING AN ERRONEOUS ZONING RECLASSIFICATION OF THE PROPERTY INVOLVED. (76-77-35, RM-1200) Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The blayor declared Resolution No. 77R-651 duly passed and adopted. ORDINANCE NO. 3772: Councilman Seymour offered Ordinance No. 3772 for first reading. ORDINANCE NO. 3772: AN ORDINANCE OF THE CITY OF ANAHEIM AMENDING TITLE 18 OF THE ANAHEIM MUNICIPAL CODE RELATING TO ZONING. (76-77-35, RM-1200) 155: ORDINANCE NO. 3773: Councilwoman Kaywood offered Ordinance No. 3773 for first reading. 77-1069 City Hall, Anaheim~ California - COUNCIL MINUTES - September 27~ 1977, 1:30 P.M. ORDINANCE NO. 3773: AN ORDINANCE OF THE CITY OF ANAHEIM REPEALING SUBSECTION 18.84.042.012 OF TITLE 18, CHAPTER 18.84 OF THE ANAHEIM MUNICIPAL CODE AND ADDING A NEW SUBSECTION IN ITS PLACE AND STEAD RELATING TO ZONING. (roof-mounted solar collector panels in the Scenic Corridor Overlay Zone) RECESS: By general consent, the City Council recessed until public hearing time at 3:00 P.M. Councilman Roth was absent. (2:35 P.M.) AFTER RECESS: Mayor Thom called the meeting to order, all Council Members being present with the exception of Councilman Roth. (3:00 P.M.) PUBLIC HEARING - RECLASSIFICATION NO. 77-78-13: Application by James D. and Loneal A. Horton, for a change in zone from RS-A-43,000 to CL on Portion "A" and from RS-A-43,000 to RS-7200 on Portion "B", on property located at the southeast corner of McKinnon Drive and Lakeview Avenue. The recommendation of the Planning Commission was appealed by Hugh F. Vanasek, Agent for the Applicant, and public hearing scheduled this date. A letter dated September 20, 1977, was received from Mr. Floyd Farano, Attorney for the Applicant, requesting that the matter be continued until Tuesday, October 25, 1977. On motion by Councilman Thom, seconded by Councilman Kott, request for continuance on consideration of Reclassification No. 77-78-13 was denied. Councilman Roth was absent. MOTION CARRIED. The City Planning Commission, pursuant to Resolution No. PC77-176 recommended that the subject property be declared exempt from the requirement to prepare an environ- mental impact report pursuant to the provisions of the California Environmental Quality Act and further, recommended that Reclassification No. 77-78-13 be granted, in part, subject to the following conditions: 1. That the owner(s) of subject property shall deed to the City of Anaheim a strip of land thirty-two (32) feet in width from the certerline of the street along McKinnon Drive for street widening purposes. 2. That all engineering requirements of the City of Anaheim along McKinnon Drive, including preparation of improvement plans and installation of all improvements such as curbs and gutters, sidewalks, street grading and paving, drainage facilities or other appurtenent work, shall be complied with as required by the City Engineer and in accordance with standard plans and specifications on file in the Office of the City Engineer; that street lighting facilities along McKinnon Drive shall be installed as required by the Director of Public Utilities; and/or that a bond, certificate of deposit, letter of credit, or cash, in an amount and form satisfactory to the City of Anaheim shall be posted with the City to guarantee the installation of the above-mentioned requirements. 3. That the owner(s) of subject property shall pay to the City of Anaheim the sum of sixty cents (60¢) per front foot along McKinnon Drive for tree planting purposes. 4. That trash storage areas shall be provided in accordance with approved plans on file with the Office of the Director of Public Works. 77-1070 City Hall~ Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. 5. That fire hydrants shall be installed and charged as required and determined to be necessary by the Chief of the Fire Department prior to commencement of structural framing. 6. That subject property shall be served by underground utilities. 7. That drainage of subject property shall be disposed of in a manner satisfactory to the City Engineer. 8. In the event that subject property is to be divided for the purpose of sale, lease or financing, a parcel map, to record the approved division of subject property, shall be submitted to and approved by the City of Anaheim and then be recorded in the Office of the Orange County Recorder. 9. That the owner(s) of subject property shall pay to the City of Anaheim the appropriate park and recreation in-lieu fees, as determined to be appropriate by the City Council, said fees to be paid at the time the building permit is issued. 10. That appropriate water assessment fees, as determined by the Director of Public Utilities, shall be paid to the City of Anaheim prior to the issuance of a building permit. 11. Prior to the introduction of an ordinance rezoning subject property, Condition Nos. 1, 2 and 3, above-mentioned, shall be completed. The provisions or rights granted by this resolution shall become null and void by action of the City Council unless said conditions are complied with within one year from the date hereof, or such further time as the Planning Commission may grant. 12. That Condition Nos. 4, 6 and 7, above-mentioned, shall be complied with prior to final building and zoning inspections. Miss Santalahti described the location and surrounding land uses. She outlined the findings given in the staff report which was submitted to and considered by the City Planning Commission. The Mayor asked if the Applicant or Applicant's Agent was present and desirous of' being heard. Mr. Floyd Farano, 2555 East Chapman Avenue, Fullerton, Attorney representing the petitioner, first indicated that he planned to present to the Council a more descriptive and appropriate plan of the development. Whatever they had seen thus far was not necessarily what the final outcome of the project was going to be relative to plans. He also stated that he had spoken to residents of the tract who would be most closely impacted by the proposed project, basically those on McKinnon Drive and specifically Mrs. Shepard, Mrs. Kirshman and Mr. Brown. They broached the usual problem connected with convenience markets, which was the pro- posed use; those being trash and traffic as well as a discussion of general land use. He contended that the proposed use was most appropriate because Lakeview is a primary arterial highway with the latest traffic count registering 15,300 cars a day including vehicles coming from the freeway off-ramp westbound, immediately behind the subject property. He maintained that single-family residences would be inappropriate in that location and inconsistent with surrounding land uses. There 77-1071 Cit~ Hall, Anaheim, California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. were two residential properties on the west side of Lakeview, but not on the north side. After elaborating further, he concluded that the convenience market, not single-family residences, were compatible with the City's General Plan since it denoted that area for a small shopping center. Mr. Farano then outlined some of the changes proposed by the applicant including a reorientation of the structure toward Lakeview. The entire building would be redesigned using Spanish style architecture, and a 20 foot landscaped buffer strip would be installed on the east side of the property abutting the proposed single- family residences. The driveway would of necessity have to come off McKinnon and would be moved as far to the west as possible. As well, they would investigate the possibility of constructing at least a low wall along the north side of the property so the only opening would be the driveway itself. Although the store was proposed to operate on a 24-hour basis, his clients pledged it would be a company-owned and operated store and they would do everything possible to be cooper- ative and good neighbors in order to make the impact in the area less obvious and objectionable. They would also post the property with no tresspassing signs and discourage loitering by not allowing anyone to stay on the property to consume food or beverages on bicycles or in automobiles. Cars would only be allowed to park while purchases were being made in the store itself. The parking lot would be kept clean of trash, although he could not guarantee control of residual trash which may occur away from the store. They would work as closely as possible with the residents to make the proposed place of business a desirable one. Finally, Mr. Farano stated that if Lot "A" was denied for the proposed use his client requested denial of the entire proposal because he would not put single- family residences on Lot"B". Councilwoman Kaywood questioned the fact that Mr. Farano emphasized his client was interested in being a good neighbor but at the same time was adamant in wanting a 24-hour operation even though everyone was opposed. Mr. Farano stated it was important to have the 24-hour operation not from the standpoint of sales, but in order to utilize the hours after 12 midnight or 1:00 a.m. for inventory replenishing. If the Council desired, he would be willing to stipulate to shorter hours, closing approximately 1:00 or 2:00 a.m. until 6:00 a.m., but with the provision to allow someone to work in the store during that time. He also suggested that his client be put on probation for a year or more to evaluate actual performance with the possibility of a 24-hour operation after that time. In answer to questions posed by Councilman Seymour, Mr. Farano stated the reason for the request for continuance was to enable the presentation of the new plans which were presently in process. He then reiterated some of his previous remarks relative to reorientation of the structure as well as ingress and egress to the property. The Mayor asked if anyone wished to speak either in favor or in opposition. Mr. David Brown, 4731 McKinnon Drive, submitted a petition containing 152 signatures out of a possible 155, from the surrounding area opposing Reclassification No. 77-78-13 which would allow the proposed 7-11 market. The petition included their major reasons for opposing the project. Additionally, Mr. Brown and Mrs. Cathy Shephard, 4717 McKinnon Drive, Mrs. Rose Ann Kirschman, 4710 McKinnon Drive, and 77-1072 City Hall~ Anaheim~ California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. Mrs. Jan Hall, 545 Tumbleweed, member of HACMAC, then spoke in opposition for the below listed reasons and related comments: 1. The proposed project location at McKinnon Drive and Lakeview was the only entrance and exit for 155 homes with approximately 150 children between early childhood and high school age using that corner to proceed to one of the three schools in the area. 2. School children would have to walk past the store and would thus spend their lunch money or other spending money there, as well as spending a good deal of time there. 3. Trash problems would be created and consequently this trash would end up at the first four or five houses on McKinnon. 4. Convenience type markets were notorious for bringing in crime and the proposed location being near freeway ramps would facilitate fast exit. 5. Truckers would be using the store to buy sandwiches and coffee in the middle of the night and they were usually unwilling to turn off their engines; the tract would also possibly be used as a truck turn-around. 6. The walkway and crosswalk for school children was located on the side of the street (south side of McKinnon) where the development was proposed. 7. There was no posted speed limit between Santa Ana Canyon Road and Orangethorpe when traveling north on Lakeview and the speed of traffic was excessive. 8. The undesirable possibility of having high school kids consuming beer in cars parked in front of residences. 9. When the project was considered by HACMAC, not one member had a positive feeling about the proposed 7-11 market on the subject corner. It was thus rejected by a 13-0 vote basically for the same foregoing reasons. 10. Parents of various youth sports leagues were concerned about the impact the market would have on their children since these children had to cross at the corner to get to their playing field. In answer to Councilman Seymour, Mr. Brown, cognizant of the fact that the property did not offer the best environment for single-family homes, indicated that what he and the other residents would prefer as an alternative at that location was something that tied in with the hospital, such as single-story doctors' offices with hours of 8 a.m. to 5 p.m. In summation, Mr. Farano did not know how the idea of selling coffee and food to consume on the premesis was conceived, and stipulated that no food would be s01d for consumption thereon. Concerning the suggestion of a hospital-oriented type office, he was of the opinion that the lot was not big enough for such development and that it would not produce the kind of return that it should, especially since they would be competing with the commercial center across the street. He maintained there was no better use for the property than that proposed by the applicant. Rela- tive to Mrs. Shephard's comments, he confirmed that there would be three houses between her house and the proposed store~ 77-1073 City Hall, Anaheim, California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. As a side issue, Mr. Farano confirmed that the comments relative to traffic made by Mrs. Shephard and Mrs. Kirschmann were correct. He had personally walked the property at various times and noted that the speed of traffic was excessive coming down Lakeview, over the freeway from Santa Ana Canyon Road, and a vehicle making a long turn from the off-ramp at high speed could bound right into any single-family residences there. He also stated that Lakeview was a dangerQus place for children to cross, even at present, and the traffic light at the crossing, in his opinion, provides no assurance as it is often disregarded. He recommended to the Council that a crossing guard be utilized at that location to assist the children in making that crossing. He added, however, that he did not consider the proposed 7-11 store would contribute to the traffic problem. There being no further persons who wished to speak, the Mayor closed the public hearing. ENVIRONMENTAL IMPACT REPORT - NEGATIVE DECLARATION: On motion by Councilwoman Kaywood, seconded by Councilman Thom, the City Council finds that this project will have no significant effect on the environment since the Anaheim General Plan designates the subject property for general, commercial land uses commensurate with the proposal and is, therefore, exempt from the requirement to prepare an EIR. Councilman Roth was absent. MOTION CARRIED. Councilwoman Kaywood offered Resolution No. 77R-652 for adoption, denying Reclassi- fication No. 77-78-13 in its entirety, portion "A" and portion "B". Before a vote was taken, the Mayor stated that he was going to vote in favor of the proposed resolution for denial and offered the explanation to Mr. Farano that if he (Farano), in fact, was the property owner there would be no doubt that he would do everything possible to make the use acceptable in every way because he had the greatest respect for Mr. Farano's personal integrity. However, when a national chain was involved, there were certain things that could not be controlled. Councilman Seymour first stated that in retrospect, he would like to have seen the continuance granted in order to ascertain what measures could be taken to mitigate the real and justified concerns of the citizens. However, he did not know how the intended use could be made acceptable. He would thus support the resolution of. denial for two reasons: (1) in consideration of the testimony provided and Mr. Farano's presentation on behalf of the applicant being incomplete and, (2) he was not convinced that an acceptable alternative could not be accomplished possibly by building one single-family residence asa buffer, thereby leaving enough property to build a low-scale residentially oriented professional-type building. Action was taken on the foregoing resolution. Refer to Resolution Book. RESOLUTION NO. 77R-652: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM FINDING AND DETERMINING THAT A CHANGE OF ZONE SHOULD NOT BE GRANTED IN A CERTAIN AREA OF THE CITY HEREINAFTER DESCRIBED. (77-78-13, CL on portion "A" and RS-7200 on portion "B") Roll Call Vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth The Mayor declared Resolution No. 77R-652 duly passed and adopted. 77-1074 _C. ity Hall~ Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. PUBLIC HEARING - WAIVER OF HILLSIDE GRADING ORDINANCE, TENTATIVE TRACT NOS. 8116, 8117, 9602 AND 9864: Request by Texaco-Anaheim Hills, Inc., for waiver of the lot line requirement of the Hillside Grading Ordinance for Tentative Tract Nos. 8116, 8117, 9602 and 9864, for a 171-lot subdivision on property located on the south side of Nohl Ranch Road, west of Royal Oak Road, was submitted together with City Planning Commission recommendation of approval. The Mayor asked if anyone wished to be heard either in favor or in opposition; there being no response, he closed the public hearing. On motion by Councilman Seymour, seconded by Councilwoman Kaywood, waiver of the lot line requirement of the Hillside Grading Ordinance for Tentative Tract Nos. 8116, 8117, 9602 and 9864, was approved. Counci]m~n Roth was absent. MOTION CARRIED. RESPONSE TIME BY FIRE DEPARTMENT - ROBIN~ WREN, BLUE JAY AREA: Councilwoman Kaywood referred to memorandum from Fire Chief James Riley relative to a citizens' petition from the subject area concerning fire alarm boxes and his (Riley's) response to it. She wanted to point out for the people in that area, that his reply clarified that the response time was not the factor involved. ~Fhe use of gasoline in the kitchen ignited with a pilot light caused an immediate explosion, and there was no way a faster response by the fire trucks could have prevented the tragedy. Fire alarm boxes would not serve any useful purpose considering the number of phones in the area and, in fact, the Fire Department was inundated with calls notifying them of that fire. She emphasized the subject area was receiving treatment equal to that of the whole City. 163: SCHOOL CROSSING - MC KINNON AND LAKEVIEW: Councilman Seymour moved that the Traffic Engineer be directed to submit to the Council in two weeks a report with recommendations relative to posting and assuring that the school crossing at McKinnon and Lakeview, discussed at the prior public bearing, be made a more secure situation. Councilman Thom seconded the motion. Councilman Roth was absent. MOTION CARRIED. RECESS: Councilwoman Kaywood moved to recess to 6:30 P.M. for a continued public hearing on an Order to Show Cause why a Gaming Premise Permit at 2232 West Sequoia Avenue, should not be terminated. Councilman Kott seconded the motion. Councilman Roth was absent. MOTION CARRIED. (3:55 P.M.) AFTER RECESS: Mayor Thom called the meeting to order, all Council Members being present with the exception of Councilman Roth (6:30 P.M.). PRESENT: ABSENT: PRESENT: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom COUNCIL MEMBERS: Roth ASSISTANT CITY MANAGER: William T. Hopkins ASSISTANT CITY ATTORNEY: Frank A. Lowry, Jr. DEPUTY CITY ATTORNEY: Howard Brody DEPUTY CITY CLERK: Leonora Sohl ANAHEIM POLICE DETECTIVES: Lon Erickson and Jim Flammini Attorneys for the Camelot Anaheim Card Parlor: Odra Chandler, Chandler, Chandler and Goodman, 608 South Harbor Boulevard, Anaheim, California, 92805; Ira Riskin and Robert Tourtelot, of Magaram, Riskin, Wayne and Minikes, 1880 Century Park East, Suite 1418, Century City, Los Angeles, California q0067. 77-1075 City .Hall, Anaheim~ California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. 108: PUBLIC HEARING - ORDER TO SHOW CAUSE - GAMING PREMISES PERMIT, CAMELOT ANAHEIM: Notice of Order to Show Cause why a Gaming Premises Permit issued to Joseph G. London for the Camelot Anaheim, 2232 West Sequoia Avenue should not be terminated for fail- ure to comply with conditions imposed by City of Anaheim Ordinance No. 3552, con- tinued to this date from September 13, 1977 at the request of Chandler, Chandler and Goodman, Attorneys for the permittee. The Deputy City Clerk advised that copies of two petitions containing approximately 155 and 26 signatures in support of the continuance of the permit had been submitted and copied for the City Council. Mayor Thom reviewed the procedure to be used during the hearing, noting that all formal witnesses would be sworn in individually by the Deputy City Clerk; that these witnesses will then be examined by Deputy City Attorney Howard Brody, Assistant City Attorney Frank A. Lowry, Jr. will represent the City Attorney's Office; Cross- examination will be permitted by the Attorney for Mr. London and redirect examination and recross-examination would be permitted. Upon completion of the testimony by the witnesses for the City of Anaheim, the Attorney for Mr. London will then be given an opportunity to call witnesses and these particular witnesses will be cross- examined and redirect and recross-examination will be permitted. At the completion of the testimony of all formal witnesses, any others who wish to speak at the public hearing will be given an opportunity to do so and will be sworn in individually and called in the order that those who wish to speak against the continuance will speak first, and then those who favor the continuance of the permit. No examination or cross-examination by either of the attorneys will be allowed with these individuals, however, the City Council may ask questions of them. At the con- clusion of the comments from the public, the permittee or his attorney may make rebuttal statement or closing argument, if desired by the City Council. Mayor Thom reminded the attorneys present that this hearing would be conducted as an administrative proceeding and strict rules of evidence, as used in court, would not be enforced. Mr. Chandler indicated he wished to raise an objection to the procedure, which Mayor Thom suggested he submit in writing to Mr. Lowry, who will review same and make recommendation to the Mayor as to allowing or overruling same. The following exhibits were submitted for Council consideration by the Anaheim City Attorney's Office: Exhibit "A", letter from Mr. William P. Hopkins dated August 17, 1977 to Mr. Joseph G. London advising that he is ordered to appear before the City Council of the City of Anaheim at 3:00 P.M. on Tuesday, September 13, 1977 to show cause why the permit for gaming premises located at 2232 West Sequoia Avenue, Anaheim, should not be revoked for £ailure to comply with conditions imposed by the City of Anaheim; Exhibit "B", Chapter 4.20 of the Anaheim Municipal Code relating to Amusement and Entertainment Premises - Gaming Premises; Exhibit "C", Ordinance No. 3552 adopted by the Anaheim City Council on the 22nd day of June, 1976; Exhibit "D", application for Gmning Premises Permit signed by Joseph G. London, dated January 14, 1976; Exhibit "E", Anaheim Police Department form relating to Gaming Premises Establishment completed by Joseph G London dated August 14, 1976; Exhibit "F", Deposition of Joseph G. London dated Tuesday, April 26, 1977, prepared by McCauley and Manning, Case No. C187823; Exhibit "G", Agreement dated July 27, 1976 signed by Joseph G. London; Exhibit "H", Amended Judgment and Co~m~itment, 77-1076 _Ci. ty Hall, Anaheim~ California - COUNCIL MINUTES - September 27~ 1917.~' ~:3© P.M. James Mason Grover, dated September 22, 1950; Exhibit "I", Contract for Distribu- tion of Profits, dated April 11, 1977 and signed by Joseph G. London "Seller", Jim Grover "Buyer"; Exhibit "J", Felony Complaint - Criminal, dated March 11, 1977 for violations of Section 518-520 of the Penal Code - Dennis Cohen; Exhibit "K", Gardena Police Department Report Case No. 77-4254. Detective Lon Erickson of the Anaheim Police Department was sworn in and testified under questioning by Deputy City Attorney Howard Brody that he is a police officer for the City of Anaheim assigned to the Organized Crime Bureau as an investigator; that he did participate in investigation of the Camelot Anaheim Card Parlor; that he had reviewed two application forms submitted by Mr. London dated January 14, 1976 (Exhibit "D") and August 14, 1976 (Exhibit "E") and that review of these two appli- cation forms reveals no financial interest in the card parlor was indicated thereon to belong to anyone aside from Joseph and Lynn London; that the Deposition given under oath by Mr. Joseph London on April 26, 1977 as part of a court proceeding (Exhibit "F") did indicate on page 34 a breakdown in financial interest of the Camelot Anaheim Card Parlor as follows: Herbert Cohen, 20%; Harry Goldner, 20%; Donald Coleman, 20%; Frank Colbert, 20%; Joseph and Lynn London, 40%; that the Repositio~ therefore, indicates on page 26 that 60% financial interest of the club was disbursed prior to opening of the club, which occurred on July 22, 1976; whereas, the application form (Exhibit "E") showing Joseph and Lynn London as the only holders of any financial interest in the club was signed August 14, 1976. Detective Erickson further testified that two other issuances of financial interest were conveyed by Mr. London other than the 60% already mentioned; these beinR 10% to Mr. Arthur Gottlieb and 20% to Mr. Seymour Baylos, according to pages 40 and 30 of the same deposition, respectively; that Exhibit "G" is an agreement dated July 27, 1976 signed by Mr. London conveying 15% to a Mr. David Allen, not previously mentioned; that he had, therefore, conveyed a total of 105% of the financial interest in the card parlor enterprise; that Mr. London was, in fact, a salaried employee according to page 27 of the same deposition, and that Mr. Don Coleman had indicated to him (Detective Erickson) that Mr. London was chosen to apply for the gaming room license because he had a good financial standing and no criminal record. During the above testimony, Mr. Tourtelot indicated an objection to Deputy City Attorney Brody's questions regarding financial breakdown of the club or any ques- tions along that line, on the grounds that the Deposition document speaks for itself and indicated this would be a continuing objection. On cross-examination of Detective Erickson, Mr. Chandler questioned whether he had read the entire reply given by Mr. London in the Deposition (page 30, line 16 of Exhibit "F") which indicates that "for putting money in Camelot they would receive 20% of the net profits if and when they were distributed". He asked whether Detective Erickson construed this to mean a transfer of interest in ownership. Mr. Brody objected to the question on the basis that Mr. Chandler was ~alling for a legal conclusion on the part of the witness and the objection was sustained. Mr. Chandler further questioned whether Detective Erickson recalled any mention in Exhibit "F" of a transfer of any interest in Camelot Anaheim to which Detective Erickson replied that the Deposition indicated a transfer of net profits. 77-1077 City Hall, Anaheim, California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. Mr. Chandler read for the record lines 17 through 22 of page 27 from the Deposition relating to Mr. London's receipt of a salary, and questioned whether Detective Erickson knew whether Mr. London was an employee of a partnership or if he had any knowledge of the business background of the company, as it is currently or as it then existed, and in particular, whether he knew what the makeup of the company was on April 26, 1977 when the deposition was given. Detective Erickson replied that the only information he has on the ownership of the company comes from this deposition (Exhibit "F") and that he has no further informa- tion. Mr. Chandler used the terminology "front man" and objection to it was made by Mr. Brody, sustained by the Mayor, on the basis that this terminology was not used in previous testimony. In response to Mr. Chandler, Detective Erickson testified that he believed Mr. Joseph London is running the Camelot-Anaheim club at the present time; that as far as he knows, Mr. Donald Coleman was indicated on some of the original permit applications as the manager. Mr. Chandler had no further questions. On redirecg conducted by Mr. Brody, Detective Erickson testified that he believes Joseph~London is running the club on the basis of the fact that a permit is issued in his name and that he, in fact, has no other knowledge except as is laid out in the deposition and agreement submitted as Exhibits "F" and "G". Mr. Brody had no further questions. Detective Jim Flammini of the Anaheim Police Department was sworn in and testified under questioning by Mr. Brody, as follows: that he is a police officer of the City of Anaheim serving in the Organized Crime Division; that he participated in the investigation of the Camelot Anaheim Card Parlor and discovered that Mr. London had conveyed an interest in the card parlor of 10% to a Mr. Jim Grover, also known as Mason James Grover, Jim Williams, "Bad Boy Williams" and "The Las Vegas Bad Boy", pursuant to contractual document (Exhibit "I"); that Mr. Grover does have a felony record, as attested to by Exhibit "H", a federal indictment for interstate trans- portation of stolen property, to which he ple~ "guilty"; that this additional 10% interest in the card parlor was conveyed by Mr. London in addition to the 105% pre- viou~ly m~ntion~d: that the conveyance is set forth in a document entitled "Contract for Distribution of Profits" which indicates, commencing that date James Grover was to receive 10% of all of the net profits derived quarterly from the Camelot-Anaheim Pan Club for past services to the Club, and that this document is signed by James Grover and Joseph London with indications of "Buyer" and "Seller" shown thereon. In further response to Mr. Brody's questions, Detective Flammini related and testified to the following criminal activities surrounding the Camelot-Anaheim Card Parlor: 77-1078 ~ity Hall, Anaheim~ California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. Case No. 1: Conspiracy and conspiracy to commit extortion, the intended victim being Mr. Joseph London and his associates; during the month of February, 1977, Mr. London reported that he was being deprived of the right to operate his business by persons employed by him; additionally, he reported being threatened and funds embezzled from the card parlor; during the course of the investigation, certain threats of violence were directed to Mr. London's authority to bring a new employee, a Mr. Paul Bloomfield, into the operation of the business. It was reported that a Mr. Herb Cohen stated that he would utilize a 12-gauge shotgun to "blow him in two pieces if he was allowed in the joint"; that Mr. Cohen was the person named in Mr. London's Deposition as an interest holder; that a Mr. Charles Berman alluded to being acquainted with the "Italian Mafia,! and the "Black Mafia" and "if anyone is seriously going to get hurt, it is up to him." On March 11, 1977, four persons were taken into custody by the Anaheim Police Department; felony criminal complaint (Exhibit "J" names Seymour Paul Baylos, Herbert David Cohen, Charles Berman and Dennis Cohen) for conspiracy and conspiracy to commit extortion; at the time of this arrest, which took place at the Camelot-Anaheim Card Parlor, a 12-gauge shot- gun was removed from the cashier's cage and a 38-caliber revolver was removed from the person of one of the defendants; there were upwards of 100 persons in the card parlor at the time of the arrest, and the presence of the 12-gauge shotgun was a serious threat to the safety of the citizens; since that time, statements have been received regarding various alleged "hit men" being imported from Las Vegas to settle the control situation of the card parlor. Mr. Tourtelot objected to the latter portion of this testimony as being hearsay. Case No. 2: Detective Flammini testified that this case resulted in the arrest on April 24, 1977 of a 63-year old male subject named Samuel Lang for solicitation to commit murder; that threats were directed toward Mr. Joseph London and those associated with Camelot Anaheim Card Parlor; that a co-conspirator indicated he was offered $2,500 for the murder of Joseph London and $2,500 for the murder of Herb Cohen and, further, that the subjects soliciting for the act showed the co-conspirator three handguns offering him his choice with which gun he could con- summate the murder;that Mr. London received several telephone threats at his place of business; that during interview with former employees of the Camelot Anaheim Card Parlor, it was indicated that one card cheat had been excluded from playing at the club; two bookmakers identified and one excluded for acceptinR bets over the telephone; that there were numerous instances of bad checks being accepted at the club and held as "markers"; that two different former employees have indicated approximately $20,000 worth of these checks were being held; that as la t-e as July 25, 1977, Mr. and Mrs. Seymour Baylos reported being threatened in person by James Grover while in the lobby of a Gardena card parlor; that this Mr. Grover is the same person who was previously indicated to have a 10% interest in the Camelot-Anaheim Card Parlor and that he threatened to kill Mr. and Mrs. Bayl~ if they tried to eliminate his interest in the Camelot Anaheim club; that this is reported in a copy of the Gardena Police Report marked as Exhibit "K". At the conclusion of Detective Flammini~s testimony, Mayor Thom ruled that it was necessary and that it assists the City Council in making a determination as to whether the card room activities might be detrimental to the welfare and safety of the citizens of Anaheim and for that reason the testimony was allowed. 77-1079 .City Hall~ Anaheim~ California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. On cross-examination, Detective Flamminitestified that the Federal felony indict- ment for Mr. Grover was handed down in 1950 and that he had no indication of any further convictions since that time; that Mr. Joe London was one of the victims of the conspiracy he had referred to; and that he had no knowledge of any further conspiracy efforts which relate to the Camelot Card Club other than those about which he has testified. Mr. Tourtelot requested permission to ask questions of the witness, whereupon the Mayor reminded him that Messrs. Chandler, Riskin and himself had agreed Mr. Chandler would handle the examination and cross-examination of the witnesses on behalf of Mr. London. On further cross-examination Detective Flammini testified that Mr. London himself made the first contact with the Anaheim Police Department to report threats he had received; that there was no witness to the threat received by Mr. and Mrs. Baylos from Mr. Grover as the Gardena Police Report indicates only those three people present; that he (Detective Flammini) had not heard that threat; that one of the Baylos' pled nolo contendre to a lesser charge on the conspiracy complaint; that he did not know who the card cheat was who was excluded from the club, but that a former employee had told him of that incident; that he had seen a partial lot of checks which were supposed to be "markers", these were brought to be shown to him by Mr. Dean Fremont, who was trying to collect on them, but that he could not tell from their general appearance whether or not these were "bad checks" or whether they were used as "markers", that he had not noted whether or not they were processed through the bank at all. Mr. Chandler had no further questions. Mr. Brody had no redirect examination, but requested that the City Council accept the exhibits introduced (A through K), and upon request of Mr. London's attorneys, agreed to supply them with a copy of these. Councilman Seymour asked Detective Flammini if he had knowledge from his investigation of any other felony charge or conviction against Mr. Grover than that which he had described, and Detective Flammini replied that there were, but that the information is of a confidential nature. He also indicated that there was a misdemeanor record and Mr. Lowry advised that a misdemeanor record is beyond the scope of this particular administrative proceeding. There were no further questions from the City Council. Mr. Joseph G. London, 2232 West Sequoia Avenue, was sworn in and testified under questioning by Mr. Chandler to the following; that he had been in the graphic arts industry some 47 years; that there is not now and never was any owner other than himself for the Camelot Card Club; that he had entered into certain agreements tO obtain loans when he required more money than originally anticipated because of certain situations; that he had entered into a contract of employment with James Grover which was entered as evidence (Exhibit I) but did not recall the terms "Buyer" and "Seller" being indicated thereon and furthermore could not recall the terms of the agreement, however, it was a contract of employment and Mr. Grover was never listed on the Camelot-Anaheim business license; that he had obtained a statement from Mr. Grover to the fact that he was not a part owner of Camelot which was entered into evidence also. 77- 1080 City Hall~ ~aheim, California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. This last item was reviewed by Mr. Brody who noted it to be an affidavit signed by James Grover and he suggested it be taken under advisement by the City Council, giving it the weight and credit it deserves since it would not be subject to cross- examination. Mr. London further testified that Mr. Grover is no longer employed at his establish- ment and that he does not anticipate him working there at any time in the future. Mayor Thom questioned whether Exhibit "I" entitled "contract for distribution of profits", and referred to as a contract of employment by Mr. London, would cause Mr. Grover's wife and children, pursuant to the language indicating they would acquire his interest on his death, to indicate they would acquire his job. Mr. London replied that it meant if there was a distribution of profits, they would receive 10 percent of the net profits and nothing else; that they would be unable or unqualified to carry on the job. In response to Mr. Chandler, Mr. London further explained that in connection with the same reference on Exhibit "G", to Mr. David Allen and Mr. Donald Coleman, neither of these persons were transferred an interest either, only a percentage of the net profits. Mayor Thom pointed out that the first line of that agreement (Exhibit "G") indicates the net profits were to be returned "based on prior investments" to which Mr. London explained that he always considered these sums to be loans. He stated that these gentlemen received an opportunity to share in the net profits based on whatever loan they made to him for completion of the Camelot Club. Councilman Kott questioned whether there was a cut-off date or were the gentlemen to receive a distribution of the net profits in perpetuity, to which Mr. London replied that once the loans were repaid that would be all. On further questions from Mr. Chandler, Mr. London stated that he first made application for Gaming Premises Permit in October or November of 1975 and that he did attempt to form a corporation, but once certain rulings were changed by the City of Anaheim, they were not able to utilize that corporation. Mayor Thom interjected that the date on the application of the Gaming Premises Permit as shown in Exhibit "D" was January 14, 1976. Mr. London stated that the original members of the corporation were to be Herbert Cohen, Donald Coleman, Mrs. London and himself; that a corporation was set up by Mr. Magaram named Jo-Linn which is no longer active. Mr. London testified that he continued to try to go into the card parlor with a corporation up until the Council changed the ordinance regulating card parlors; and then that he had to proceed by himself to finish the parlor and open under the deadline. Mr. Brody objected to the method of questioning used by Mr. Chandler, indicating that he was leading the witness, and Mr. Tourtelot responded that he felt it unfair for Mr. Brody to raise the leading question objection at this point. 77-1081 C__ity Hall~ Anaheim~ California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M.. Mayor Thom questioned the validity of continuing this line of questioning in that the corporation being referred to is not a part of the current Order to Show Cause and Mr. Chandler explained that he is trying to give the business background of Mr. London's organization and establish the reason for his borrowing money. Mr. Riskin explained that under the original Anaheim Municipal Code SeCtion 4.20, there would not have been and was not any restriction against assignment or changing of the license. Mr. London, after applying for a license in his own name, later asked to be able to put it into a corporation, which is not an unusual trans- action. However, unfortunately during the interim, the City Council adopted Ordi- nance No. 3552, which precluded assignment of the license to the corporation as originally planned. This resulted in Mr. London not being able to raise the financing necessary to complete the club by the deadline and consequently he had to borrow money elsewhere. In addition, Mr. Riskin summarized that the application for the Gaming Premises Permit is dated January 14, 1976 and the corporation to which they are now referring was filed on February 13, 1976, with the intent of asking the City Council for permission to transfer the license to same. Mr. London further testified that because of the deadline imposed by the new ordi- nance, he had only ten to twelve days to put the club together, as he was told the doors had to be opened on July 22, 1976, and when he applied to the Council for a 30-day extension, this was denied. Therefore, he had to borrow funds because it was necessary to hire plumbing, electrical and building contractors to work 24-hours per day at double and triple time, seven days per week to complete the job. Mr. ~ London stated that he had originally contracted for some $26,000 to complete the plumbing, building and electrical work, whereas he actually spent more in the order of $78,000 because of the additional overtime rates; that he had to raise this money as he could not afford that much himself and therefore he went into these agreements to borrow money and in return he would pay a certain percentage of net profits but that no one was promised or given any ownership of the club. .He recalled that originally, in order to open the club, he borrowed $19,500 from Donald Coleman and Harry Goldner; $21,500 from David Allen and Frank Colbert; that these loans were made during the month of July 1976. Mr. London further testified that some six weeks later, towards the end of September 1976, because of a conflict with one of the earlier lenders, in order to pay him, he borrowed $31,500 from Mr. and Mrs. Seymour Baylos, which enabled him to pay off one of these contracts. Mayor Thom pointed out that while the club was opened on July 22, 1976, Exhibit "G" one of the agreements to obtain money is dated July 20, 1976. ' Mr. London stated that this was one of the conflicts he had; that he was pressured into signing that particular contract; that he did not write this out, Mr. Donald Coleman wrote it; that he himself, Mrs. London and Dr. Goldner were present in addition to Mr. Coleman at the time it was written. Mr. London testified that these individuals he has named were the only ones from whom he had borrowed money; that these contractual agreements called for them to receive a percentage of the net profits, but no net profits were yet distributed; that he has invested, including commitments, personal monies, monies he is obli- gated to repay, contracts to fulfill, approximately $340,000 in the club; and that this figure includes the total amount to be paid out on the lease. 77-1082 City Hall~ Anaheim, California - COUNCIL MINUTES - September 27, 1977~ 1:30 P.M. Mr. Chandler produced a copy of the lease on the premises at 2232 West Sequoia AVenue,, which indicated a termination date of May 3], 1981, and Mr. London testified that there are no other parties signatory to it except the property owner, Vernon Monroe and his mortgagee, the Bank of America; that there has not been any assignment by himself of any portion of this lease to any other person, a copy of the lease was submitted as evidence by Mr. Chandler. In conclusion, Mr. London testified that he owns 100 percent of the Camelot Anaheim Club and everything in it. On cross-examination, Mr. Brody asked whether Mr. London's testimony is that the deposition referred to by Detective Erickson is basically correct with the exception of Mr. London's references to these "loans" as n~t profit" to which Mr. London replied that the 115, 120 or 130 percent of the net profits supposed to be divided up was an exaggeration on someone's part. Mr. London further indicated that he had not signed the deposition in question and had not had an opportunity to see it; that he was aware Mr. Herbert Cohen gave out percentages of net profits over his head, i.e., without his authorization; that the only percentages he (Mr. London) had agreed to were the original 20 percent to Cohen and Coleman, 20 percent to Allen and Goldner and 40 percent to Mrs. London and himself; that Mr. Herbert Cohen gave out percentages he had no right to give out, as he had no ownership interest, but was entitled to a percentage of the net profits only; that Mr. Coleman and Mr. Goldner, together, were to receive 20 percent of the net profits, and Mr. Allen and Mrs. Colbert also were to receive 20 percent of the net profits, but these percentages could not be broken up, as these individuals were each together as a team; that a contract dated July 27, 1976, giving Mr. Allen an additional 15 percent was not completed by himself, but that was one of Mr. Cohen's issuances of percentages; that the percentages given out according to Exhibit "G" were correct at that time; that Mr. and Mrs. Baylos were to receive 20 percent of the net profits, but no one was ever to receive any percentage of ownership. In further response to Mr. Brody, Mr. London explained that there were different figures speculated regarding Mr. Gottlieb, but as far as he personally was concerned, Mr. Gottlieb would receive nothing, although Mr. Gottlieb claimed he had 10 percent. Mr. Brody pointed out that on page 40, l~nes 9 through 11 of his own deposition, Mr. London had indicated to the question "Gottlieb also got 10 percent?" that this was correct. Mr. London indicated that this did not mean he personally had given it to him. In response to Mr. Brody's question as to whether or not he had control over the club, Mr. London replied that he thought he had, only "verbal guns" were put to his head. · Mr. Brody noted that Mr. London testified he had invested $340,000 in the club and questioned why for the mere investment of $19,500, he had conveyed 20 percent of the interest in the club. Mr. Tourtelot objected to the question on the basis that Mr. Brody was assuming facts not in evidence, that Mr. London had not testified using the term "mere". Mayor 2"hom overruled the objection and Mr. Brody continued, indicating that according to testimony given, Mr. Goldman and Mr. Cohen, for an investment of $19,500 were to receive 25 percent of the net profit interest in the company. Mr. London replied 77-1083 CitM Hall, ~naheim~ California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. that at that particular time he was not committed to $340,000, that it was his estimation at that time an expenditure of $70,000 would open the club, however, because of events and factors which occurred, he went over this amount. Mr. London testified that he is able, currently, to meet his commitments; that he sold his graphic arts business and borrowed money from City National and Bank of America; and that a portion of this investment money also came from those indi- viduals to whom he had given a net profit interest. In return for this net profit interest, Mr. London explained only Goldner, Coleman, Allen and Colbert had invested monies. Mr. Herbert Cohen had not invested money, but was acting as a manager of the club and, further, that he received 20 percent based on the fact that he did the original research work on preparing to get the club started and he brought his ex- perience, as he had worked for 15 years at the Fremont Hotel in Las Vegas. Inasmuch as he (Mr. London) could not pay a tremendous salary, he had to give Mr. Cohen something else. In answer to Mr. Brody's question as to why on August 14, 1976, when Mr. London completed a Gaming Premises Estabishment Questionnaire for the Anaheim Police Department (Exhibit "E") he had indicated thereon that there were no other persons having a financial interest in the business other than himself and his wife, Mr. London indicated that no one else had an interest, that these people had made a loan to him. Mr. London testified that his company used a Certified Public Account- ing firm and a statement is issued each month, but because of the numerous obligations they have not yet had available profits to distribute, however the club is earning money and they expect that within the next six months, they will have paid off everybody and excess profits would be distributed. He explained that as the Chief Executive Officer of the Club, he felt it his obligation to determine when there is net profit, but his first need and desire is to pay every bill when it is due and he will not distribute any profits until all bills are paid. At the request of Mr. Brody, Mr. London reviewed that as of August 14, 1976, those who would receive a net profit share would be Allen and Colbert, 20 percent; Cohen and Goldner, 20 percent; and Mrs. London and himself, 40 percent; Mr. and Mrs. Baylos were not in the picture on August 14, 1976; that the share to be received by the Baylos' would be that of Allen and Colbert, as these two had been bought out; that he personally, using the $31,500 put into the club by the Baylos' and with some additional money, bought out Allen and Colbert, approximately during the last week of September or first week of October 1976. Mr. Brody questioned, going back to the date of August 14, 1976, whether Mr. Grover had any share in the net profits, to which Mr. London replied that he had not met Mr. Grover until approximately February of 1977 and that he did not get a share of the club; and further that Mr. Don Berman received a net profit share of the club in the amount of 10 percent, but he received this from Mr. Herbert Cohen. In response to Mr. Brody's comment that these net profit shares were freely assign- able and one person could sell to another, Mr. London explained that this was not intended in the original verbal agreement, however, the agreement was broken, to which Mr. Brody questioned whether Mr. London had any control and he responded that he did not at that time. Mr. Brody had no further questions. 77-1084 City Hall, ~aheim, California - COUNCIL MINUTES - September 2..7~ 1977~ 1:30 P.M. In response to Councilman Kott, Mr. London explained that Mr. Gottlieb was employed at the club as a floorman; that he received a salary and that was all; however, he was supposedly promised a percentage to be negotiated with Mr. Cohen. Mayor Thom raised a question about the copy of the lease agreement submitted in evidence, indicating that it was a copy of an unsigned agreement and therefore, not indicative of anything, whereupon the attorneys for Mr. London supplied a signed lease from which a copy would be made by the City Clerk's Office and that copy submitted in evidence. Councilman Seymour questioned the fact that Mr. London indicated he had borrowed $21,500 from Allen and Colbert on July 22, 1976 and then in late September or early October 1976, utilized $31,500 obtained as a loan from Mr. and Mrs. Baylos plus some additional monies to pay off this loan. Mr. London replied that the total amount he paid back at that time was $45,000 and admitted that it was poor business, but that there was a certain amount of pressure, and he gave in rather than face a heart attack. Councilman Seymour calculated that taking into account the lease agreement calling for payments of $1,300 per month on the Camelot Card Club premises, which would total approximately $40,000 to $50,000, there would be an investment owed by Mr. London amounting to $290,000 and he questioned where this money is owed. Mr. London replied that he has a contract with United States Playing Card Company in the amount of $25,000; that there are various sums for carpeting and redecorating in the amounts of $6,000 and $8,000, approximately, as well as $8,000 to redesign the air conditioning system. In addition, he owes $20,000 to City National Bank and $70,000 to Bank of America. Mr. London submitted a list of expenditures in evidence and indicated that these and what he has reported are the only amounts he owes. In reply to Councilman Seymour, Mr. London reaffirmed that the owns 100 percent of the club today and Councilman Seymour then questioned when and with what money he paid off the other investors. Mr. London explained that there is a lawsuit between himself and Mr. Donald Coleman contesting the amount of money owed Mr. Coleman, and the $31,500 owed to Mr. and Mrs. Baylos will also be tested by the courts. Councilman Seymour expressed disbelief that Mr. London could have operated a graphics business for some 30 years which necessitated t~e purchase of equipment and inventory and borrowing of money at intervals with appropriate documentation, and then, having all that experience, not carry it over into this new business by signing some evidence that he owed money. In further response to Councilman Seymour, Mr. London related that he was evicted from the card club premises on Sequoia Street by the four individuals who were later incarcerated at the Anaheim Police Department. Councilman Seymour asked what steps Mr. London would take to insure that the type of activities described at this hearing would not recur at the club and Mr. London stated that he had already taken steps and that there have been no police problems since he took over on March 11, 1977. 77-1085 ~ity Hall, Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. In response to Councilman Seymour's question as to who Mr. Don Freeman was, Mr. London explained that he was employed at the club, mostly prior to March 11, 1977, and whoever was handling the cashier's cage at that time had him do some of the collecting of checks, but there was no credit system established and no way to verify personal checks. He also explained that some checks were placed in personal bank accounts and some did get into the Camelot account. He related the check handling system which was supposed to have been followed but indicated he was aware some of the money which was supposed to be deposited in the Camelot account did not, in fact, get there. When questioned further about money handling procedures, Mr. London stated that he was not knowledgeable of what went on except for the last six months. Councilman Seymour had no further questions. RECESS: By general consent, the City Council recessed for five minutes. (9:00 P.M.) AFTER RECESS: Mayor Thom called the meeting to order, all Council Members being present with the exception of Councilman Roth. (9:05 P.M.) Mr. Chandler had no further witnesses. Petitions in favor of permitting the gaming premises license to continue, referred to earlier in the meeting by the Deputy City Clerk, with original signatures, were submitted in evidence by Mr. Chandler. Mr. Lowry advised that the attorneys for Mr. London had filed an objection to the Order to Show Cause and he read the objection into the record. Said objection is on file in the office of the City Clerk and lists the following as the bases for same: (1) the notice dated August 17, 1977, refers to conditions imposed by City of Anaheim Ordinance No. 3552, in connection with said permit, whereas the license issued to Mr. London was issued pursuant to Chapter 4.20 of the Anaheim Municipal Code, Ordinance No. 3552 having been enacted on June 22, 1976, and bechuse Mr. London had theretofore acquired a vested interest in the license issued in February of 1976, Ordinance No. 3552 cannot be retroactively applied to Mr. London's license; (2) the notice to Mr. London dated August 17, 1977, did not afford him reasonable notice on the grounds and/or the basis therefor upon which the City Council re- quested Mr. London to show cause, if any, why the permit should not be revoked; (3) the Mmyor's pronouncement at the outset of the hearing that counsel would not be permitted cross-examination with respect to members of the public who might speak in favor of the revocation as this restriction represents a denial of due process and Mr. London's right to fairly and reasonably defend himself and/or his license in connection with the Order to Show Cause hearing. There being no further witnesses, the Mayor invited interested members of the public to address the Council; he indicated that those who wished to speak in favor of revocation of the Gaming Premises Permit would be heard first and then those opposed to revocation. Mr. Seymour Baylos, 5062 La Luna, La Palma, was sworn in by the Deputy City Clerk and related that he and his wife were former partners, having invested $31,500 in the Camelot-Anaheim Card Club which was not a personal loan to Mr. London. Mr. Baylos explained that he was previously in the towing-service station-rental equipment business and that the original-amount given Mr. London by him and his wife amounted to $26,383; that they were told for the sun of $50,000 they would 77-1086 ~ity Hall, Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. receive 20 percent of the club. However, Mr. Baylos countered that if he sold his business he could accumulate only $30,000 to $35,000 total and he was told he could then pay off the balance of the $50,000 investment by allowing the net profits, to which he would be entitled, to accumulate until the total sum of $50,000 was paid. Mr. Baylos related that although both he and his wife attempted on many occasions to obtain a written contract stating the terms of this agreement, Mr. London stalled and evaded the contract issue and refused to sign a contract prepared by Mr. Baylos' attorney, (Mr. Katzman). During this time Mr. Baylos stated they were never told that they could not become partners in the club, only that there could be one name on the license. Mr. Baylos further explained that he was one of the four arrested on conspiracy charges and that his arrest was based on Mr. London's testimony. In conclusion, Mr. Bay]os expressed his opinion that the manner in which the club was operated is detrimental to the people in Anaheim and also to those immediately around Mr. London, and for these reasons he feels the Gaming Premises Permit should be revoked. Mayor Thom asked Mr. Baylos whether he is maintaining that he did, in fact, purchase an interest in the Camelot Club and that it was transferred to him verbally, if not on paper, to which Mr. Baylos replied affirmatively, that 20 percent was trans- ferred to himself and his wife. Mr. Tourtelot requested permission to cross-examine the witness which was denied. Mr. Lowry advised Council that the same limiting instructions would pertain to this witness as to the affidavit submitted earlier (see page 77-1080 of these minutes), that Council should consider it with that same weight as cross-examination is not permitted. In response to Councilman Seymour, Mr. Baylos explained that he was threatened while at a card club in the city of Gardena by Mr. Williams, who told him that if he produced any papers, evidence or testimony, or appeared before the City Council, or Police Department he (Mr. Baylos) would be killed. There was no witness to that threat but when Mrs. Baylos joined him, Mr. Williams repeated the same threat. Additionally, Mr. Baylos explained that himself and Mrs. Baylos' did work at the club, that he worked at nights after his other job, and he did various odd jobs as necessary in order to gain experience in the business. Mr. Baylos also related, in answer to Councilman Seymour, that he had overheard Mr. London refer to "cutting off 5 percent for the Italians" and that despite the fact that Mr. London had borrowed $50,000 from the Bank of America to pay off one of his partners and, in addition, supposedly had placed Mr. Baylos investment in the account, two or three weeks later checks for sums as low as $24 were being returned for insufficient funds. Mrs. Joan Baylos, 5062 La Luna Drive, La Palma, was sworn in by the Deputy City Clerk and corroborated her husband's statements and added that originally Mr. London had asked for $100,000 in return for 40 percent of the business and that Mr. London approached them with the proposal. In response to Councilman Kott's question as to whether she had observed any of the skimming, Mrs. Baylos replied there was none of which she was aware, but that $20,000 had mysteriously disappeared from a previous month's receipts while she was at the club. 77- 1087 City Hall~ Anaheim, California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. Mr. Tourtelot made the same request for permission to cross-examine which was denied and Mr. Lowry gave the Council the same limiting instruction regarding the appropriate weight of testimony due to lack of cross-examination. Ms. Stella Novack, 32928 Avenue Del Rosal, San Juan Capistrano, was sworn in by the Deputy City Clerk and testified that she is Mrs. Baylos' sister and was approached by her sister for money to give Mr. London. She indicated that she could witness that there has never been a contract issued to the Baylos' by Mr. London. In addition, she stated that she has heard, contrary to what Mr. London stated, that Mr. Grover is still working at the Camelot Club. At the conclusion of Mrs. Novack's testimony, Mr. Tourtelot made the same request for permission to cross-examine which was denied and Mr. Lowry gave the Council the same limiting instruction regarding the weight of the testimony. Mr. Edward Hagan, 4200 Shepherd Drive, Las Vegas, Nevada, was sworn in by the Deputy City Clerk and explained that he was speaking in favor of revocation of the permit and that when he came into the club, which had been open for only five weeks, it was losing $2,000 a week. At that time Mr. London, Mr. Coleman and Frank Colbert offered him 15 percent of the business for $30,000. They also made him complete boss of the club because of his expertise in the gambling business. Mr. Hagan explained that the figures given him at that time indicated $83,000 had been invested, there were $7,000 in assets and $27,000 in liabilities. Mr. Hagan related that he finally compromised and agreed to purchase 25 percent and had his attorney prepare an agreement which Mr. London refused to sign. At this time the club was showing as much as $2,600 profit per night. Whereupon Mr. Hagan explained that he demanded his $600 in expenses as he wished no further part in the operation. Subsequent to this, Mr. Hagan bought out Mr. Colbert's share for $25,000 cash. Upon his return to Camelot-Anaheim from Las Vegas, by which time Mr. Hagan figured the club should have been making $5,000 a week profit, he was not permitted, on orders from Mr. London, to see the figures. At that time he received $45,000 from Mr. London for his entire interest in the business. In addition, Mr. Hagan explained that he has, in his possession, Mr. Don Coleman's Power of Attorney, which he submitted to Council review and was returned to him, and that he has requested Mr. London to do the right thing as Mr. Coleman had put in one-quarter of the investment in the business, but to this date Mr. London has paid Mr. Coleman only $700 or $800. In answer to Councilman Seymour, Mr. Hagan explained that he paid $25,000 to Mr. Colbert whereas he would not with Mr. London because he believed at that time that Mr. Colbert had a signed agreement. In further response to Councilman Seymour, Mr. Hagan related the methods he used to turn the business around from a losing status to profit making -- which generally were to encourage more attendance at the club by obtaining motel rooms, paying for dinners, etc., for the card players. He explained that most of the new clientele was the result of Mr. Gottlieb's sister and that they arrived by automobile from the San Fernando Valley. 77-1088 City Hall~ Anaheim~ California - COUNCIL MINUTES - September 27~ 1977, 1:30 P.M. In answer to Councilman Seymour, Mr. Hagan also related that sometimes chips were given patrons on their own word but that when he left there was not over $1,800 outstanding, and that he did observe "markers" being used. Mr. Tourtelot made the same request for permission to cross-examine, which was denied and Mr. Lowry gave the Council the same limiting instruction regarding the proper weight of testimony due to lack of cross-examination. Mr. Arthur Gottlieb, 9331 Chapman Avenue, Garden Grove, was sworn in by the Deputy City Clerk and stated he wished the license for the Camelot Card Club to be revoked inasmuch as his opinion of Mr. London is that he is deceitful and dishonest. The Camelot Card Club, Mr. Gotlieb explained, pays only $125 a year to the City of Anaheim for its license whereas it is capable of conducting a million dollar per year business. He indicated that he did not see how this benefits the City. In the City of Gardena, he explained, the license fee runs to $1,700 per table plus one percent of the gross and this enables that City to control skimming. From what he has heard, monies have been missing from Camelot-Anaheim since its inception. Mr. Gottlieb continued that when Mr. Hagan decided against continuing in the business with Mr. London, and was bought out, then the Baylos' came into the picture and were promised 20 percent of the business, not the net profits. Mr. Baylos' invest- ment was deposited in the Camelot-Anaheim bank account. The gross business at that time was in the area of $12,000 per week and should have been sufficient to pay all of the bills but many were not paid and money was disappearing. Within a five week period, the Baylos' money disappeared. Mr. Gottlieb stated that the business was not conducted properly, that animosities were created. It was his opinion that the type of people being brought in by Mr. London did not benefit the City or the community. In response to Councilman Seymour, Mr. Gottlieb explained that he and Mr. Hagan wanted to install a system of money controls but Mr. London would not consent. In response to Councilman Seymour's inquiry as to whether or not the types of verbal agreements mentioned by Mr. London were commonplace in a gambling environ- ment, Mr. Gottlieb explained the point and corporate systems under which individuals can be licensed to run a gambling operation. Mr. Gottlieb also responded that Mr. Grover Williams is not a card expert and, in his own opinion, the purpose in bringing him to Anaheim was to intimidate certain people. Mr. Tourtelot made the same request for permission to cross-examine which was denied and Mr. Lowry reminded Council of the limiting instruction regarding the proper weight of testimony. There were no further persons who wished to address the Council in favor of revocation of the permit. Mayor Thom called for those who wished to speak in opposition to revocation of the Gaming Premises Permit for the Camelot-Anaheim Card Club and there was no response. Mr. Ira Riskin was selected of Mr. London's attorneys to give the closing argument. He stated that the evidence given this evening indicates a situation in which there was initially going to be a corporation formed at a time when there was no problem with a corporation, however, following the issuance of a license and certain 77-1089 City Hall, Anaheim~ California - COUNCIL MINUTES - September 27, 1977~ 1:30 P.M. expenditures by Mr. London, including the signing of a lease, he and others who might have become shareholders in the planned corporation learned that the City Council would not allow the license to be assigned to a corporation. Anytime this occurs in business, the potential investors would be considered lenders. Addition- ally, Mr. Riskin stated it appeared to be clear to Mr. London that these investors had to be converted to lendors and that the loans, while outstanding, would bear interest, which is not an unusual transaction. There are many cases which would indicate that such a transaction is not a partnership. Mr. Riskin further commented that from all the evidence presented, it is clear that Mr. London considered him- self to be in control of the club throughout its operation, with the only time he was not in control being the four to six weeks prior to March 11, 1977. After being ousted from control, Mr. London went to the Anaheim Police Department and, after thorough investigation of the matter, Mr. London was reinstalled in a sole position of running the club. Mr. Riskin summarized that the real issue before the Council and the only issue of which Mr. London and his attorneys received notice, was the question of whether or not Mr. Grover was transferred an interest in the Club. Mr. Riskin indicated he considered the instrument introduced in evidence of this fact, to be so poorly written as to be inarticulate, and further that instrument does not amount to a partnership since there is no mention of any authority in the club for Mr. Grover. Mr. Riskin felt there should have been procedures under Section 4.20, by which key personnel at a card club could be checked by the Police Department and the operator informed as to those which are unacceptable so that they could be rejected as employees~.~ He pointed out that once an objection had been raised, Mr. Grover revoked any interest ' he had in the club, and despite the City Attorney's statement about the declaration submitted by Mr. Grover because of the lack of ability for cross-examination, Mr. Riskin noted that it does constitute a rescission agreement, and as an agreement it is admissible evidence by identifying the signature. Mr. Riskin further commented that the unifying element throughout the testimony from the witnesses this evening, was that of a desire for revenge, as these were the people who were charged with conspiring together to take over the Club. Upon notification of the Police, they have been removed from the Club. In the existing lawsuit withColeman and Goldner, these individuals are not asking for money to be returned as this has been offered to them; they are asking for some kind of profit, some greater amount. Mr. Riskin stated that under Section 4.20 of the Anaheim Municipal Code as it existed, transfer of interest is in~naterial, and even under Ordinance No. 3552 there has been no transfer of the entire interest of the club, which is what that Ordinance requires before revocation. He noted that any problem which may have existed was cured and all interests have been pulled back to Mr. London who now remains the sole owner of the club. In connection with the general health and welfare of the community, Mr. Riskin stated that he has heard nothing this evening except hearsay evidence that there has been any detriment to the community. Mr. Riskin urgently pressed upon the Council for consideration the fact that in reliance on the permit requested and obtained in good faith, Mr. London has expended a considerable amount of money to improve and to lease the premises, and revoking his license, if Council were to do so, would be unfair in light of the fact that Mr. London has taken all the steps he can in the last six months to correct the problems. If Council feels 77- 1090 City Hall~ Anaheim, California - COUNCIL MINUTES - September 27, 1977, 1:30 P.M. there is any way the Club is a nuisance or a continuing problem, he would request that they state what the problem is and give Mr. London an opportunity to correct it. In conclusion, Mr. Riskin requested that if the City Council has any inclination at all to revoke the license, he would request that this action be stayed tempor- arily or some time period be granted within which Mr. London might put his affairs in order. Before the public hearing was closed, at Councilman Seymour's request, a discussion as to the propriety of placing Mr. Riskin under oath to answer some questions was held as he has been apparently involved with the Camelot Card Club from its inception. Mr. Lowry counseled that there are attorney-client privileges involved and that this would have to be at the discretion of Mr. Riskin. Mr. Riskin indicated he would be willing to testify, but since an attorney is not supposed to be both a witness and to also argue a matter affected by his testimony, he would defer any further argu- ments this evening on this matter to his colleagues. Mr. Riskin was sworn in by the Deputy City Clerk. Councilman Seymour asked Mr. Riskin several questions, as to the commencement of his involvement with the Camelot-Anaheim Card Club which disclosed that it was Mr. Magaram of Magaram, Riskin, Wayne and Minikes who had initially been contacted in connection with the Camelot-Anaheim Card Club and Mr. Riskin had not become involved until the point of litigation and, there- fore, had no additional such information to offer. He did respond that his office advised Mr. London, following the adoption of Ordinance No. 3552, against the selling of any interest in the Club and that all transactions should be in the form of loans with percentage interest. He added that at the same time they considered that Ordi- nance No. 3552 could not take away a vested right. In response to Councilman Kott, Mr. Riskin explained that a corporation was formed, with articles of incorporation being filed with the Secretary of State on February 13, 1976. In connection with Councilman Kott's question, on the form of the loans and collateral for same, Mr. Riskin stated that since this is a sole proprietorship, a loan to the Club or to Mr. London is one and the same thing, that it is a matter of public record that a fictitious business name statement was filed showing Mr. London's operation as a sole proprietorship. With regards to documentation, Mr. Riskin answered that his office prepared some releases when Mr. London was considering repaying Mr. Coleman and getting out of the matter. In response to Councilwoman Kaywood, Mr. Riskin advised that his firms' legal fees are paid up to date by Mr. London. Mayor Thom closed the public hearing. MOTION: Mayor Thom stated that there is no doubt in his mind but that the intent of the hearing to show cause why the Gaming Premises Permit for the Camelot-Anaheim Card Club should not be revoked for failure to comply with conditions of the Ordinance has been met and thereupon moved that the City Council terminate the Gaming Premises Permit at 2232 West Sequoia, incorporating the following findings into said motion: (1) that Council did grant a permit to Joseph London for Gaming Premises Permit; (2) that Mr. London operated a gaming premise pursuant to said permit; (3) that one 77-1091 City, Hall~ Anaheim~ California - COUNCIL MINUTES - September 27~ 1977~ 1:30 P.M. of the conditions of said permit was that the use of same was not to be transferred to another person; (4) that testimony was offered this evening that said permit was transferred, sold or conveyed to another person or persons; (5) that one of the conditions of the permit was that if this did happen (transfer sale or conveyance to another person) that the permit be immediately forfeited together with all rights granted pursuant to it; (6) that such occurrence, transfer or conveyance required immediate forfeiture of all rights granted; (7) that in the Mayor's.opinion the operation of Camelot-Anaheim Card Parlor under the permittee, Mr. Joseph London, was obviously operated in a manner so as to be detrimental to the general welfare of the citizens of Anaheim; and that a reasonable amount of time be granted to close it down, that being 30 days. Councilman Kott seconded the motion. The aforegoing motion carried by the following roll call vote: AYES: COUNCIL MEMBERS: Kaywood, Seymour, Kott and Thom NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth MOTION CARRIED. ADJOURNMENT: On motion by Councilman Kott, seconded by Councilwoman Kaywood, the Anaheim City Council adjourned to Wednesday, September 28, 1977, 3:00 P.M., Central Library, Multi-Purpose Room, for a joint meeting with the Redevelopment Agency, Library Board and Community Redevelopment Commission. Councilman Roth was absent. MOTION CARRIED. Adjourned: 10:50 P.M. LINDA D. ROBERTS, CITY CLERK BY f~Y?'}~t~ ~.. / DEPUTY CITY CLERK