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2004/05/11 ANAHEIM, CALIFORNIA - CITY COUNCIL REGULAR MEETING May 11, 2004 The City Council of the City of Anaheim met in regular session. PRESENT: Mayor Curt Pringle, Council Members: Shirley McCracken, Bob Hernandez, and Richard Chavez and Thomas Tail. STAFF PRESENT: City Manager David Morgan, City Attorney Jack White, and City Clerk Sheryll Schroeder. A copy of the agenda for the meeting of the Anaheim City Council was posted on May 7, 2004 at the City Hall outside bulletin board. Mayor Pringle called the regular meeting to order at 3: 14 P.M. in the Council Chambers of the Anaheim City Hall, 200 South Anaheim Boulevard WORKSHOP: ~d TRANSPORTATION CORRIDOR SYSTEM Mayor Pringle stated he had been discussing over a number of months whether there was a potential conflict of interest related to his participation in the Transportation Corridor System subject due to a business relationship with a banking firm he had from 1999 to 2003. The Mayor and the City Attorney did not feel there was any conflict of interest, however to err on the side of caution, the Fair Political Practices Commission had been contacted for their opinion. The oral advice given was this was a close call and the recommendation was for the Mayor not to participate. Mayor Pringle recused himself from the workshop and requested Mayor Pro Tem Chavez to proceed in his absence. Wally Kreutzen, Chief Executive Officer of the Transportation Corridor Agencies (TCA) indicated there would be three other presenters providing information to Council. Colleen Clark, Chief Financial Officer of TCA, Mark Young, an independent financial advisor with Gardner Underwood & Bacon and Agency Counsel, Rob Thornton of Nossman Gunther& Elliott. Mr. Kreutzen provided historical perspective explaining revenue growth for the San Joaquin Hills toll road had not been keeping pace with projected revenue and scheduled debt payments and was expected to go into technical default in 2006. For the past two years, he indicated, the TCA board members from Foothill/Eastern and San Joaquin Hills, together with TCA staff, a working group of financial experts and the boards' independent financial advisors had been studying all options available to improve the San Joaquin Hills finances. Mr. Kreutzen stated the goals established by both boards was for long-term financial stability, to retain local control over toll rates, to enhance the ability to finance the Foothill/South project and to continue to pay debt service due under the San Joaquin Hills Indenture and to maintain Foothill/Eastern toll rates at or below stand alone level. He noted the plan the Board tasked staff with developing was for new toll revenue bonds under a newly established Transportation Corridor System (TCS) to purchase current outstanding T ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 2 bonds. Under this plan, all bonds, including future bonds issued for Foothill South, would be paid off by 2044 when roads would revert back to freeways. The plan would avoid default on San Joaquin Hills bonds, retain local control of tolls, fees and fines and strengthen the ability to finance the Foothill/South project. In February of 2004, Mr. Kreutzen reported, San Joaquin Hills and Foothill/Eastern approved sale of their assets to TCS. Following these two votes, the TCS board voted to delay a decision on whether to acquire the agencies and developed an ad hoc committee to discuss options. Since that time, he indicated, seven proposals were submitted to Supervisor Campbell and discussed at length during ad hoc committee meetings over the course of the last two months. However, nearly all of the proposals were not new ideas but versions of the options that had already been thoroughly analyzed and vetted by TCA staff, the finance working group, the board's independent financial advisors, and bond and legal counsel over the past two years. The fact that staff didn't recommend any of these options was because they did not meet all of boards established goals Mr. Kreutzen indicated there were now three options on the table; the synthetic/fixed rate plan, which was staff's recommendation, an alternative provided by staff which was an all fixed rate structure and the Foothill/Eastern Settlement Payment & Loan or modified Campbell plan. Chief Financial Officer Colleen Clark said in the proposed synthetic fixed rate plan or staff recommended plan, TCS would issue both fixed and variable rate debt. The plan would issue $3.8 billion to purchase or defease all $1.9 billion of the outstanding San Joaquin Hills bonds and all $2 billion of the outstanding Foothill/Eastern bonds. She remarked there was also an alternative proposal by staff for an all fixed rate, rated investment grade at the senior lien level but not rated investment grade at the junior lien level as coverage tests could not be met. While both plans were rated and both had an insurance commitment, Ms. Clark explained the synthetic fixed rate was the plan recommended by staff as it provided for higher overall coverage and greater future flexibility. Mark Young, Gardner, Underwood and Bacon, provided an overview of his firm's analysis of the modified Campbell proposal. He stated Director Bill Campbell had provided an initial proposal to the board and both independent financial advisors were asked to comment on it. The financial advisors attempted to be proactive in addressing issues and coming up with solutions and tried to make the Campbell proposal viable so it could be presented on a stand-alone basis in a fair comparison to the finance working group model. He indicated the Campbell proposal contemplated litigation and settlement payment of $120 million to be paid to San Joaquin Hills to mitigate the negative effects that Foothill South would have on San Joaquin when, and if, that project was constructed. The traffic and revenue study that had been prepared demonstrated there would be negative revenue impacts to San Joaquin. In addition to that, he stated loans would be made from Foothill/Eastern to San Joaquin on an annual basis to allow them to maintain their rate covenant requirement of 1.3x debt service coverage An enhancement to the original Campbell proposal that both advisory firms came up with was the concept of recycling stating if Foothill/Eastern made a loan to San Joaquin in a particular year that would provide the 1.3 x debt coverage. If coverage was met, there would be cash available at the end of the year and that cash would be used to meet the following year's debt service coverage and Foothill/Eastern would only grant an additional loan for that amount that would be necessary on top of the cash that would already be in there. This, he reported, would minimize the amount of dollars that would be coming out of Foothill/Eastern and still meet the indenture requirements of San Joaquin. .... ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 3 The other goal of the modified Campbell plan, noted Mr. Young, was to attempt to deliver remaining projects for Foothill Eastern at or as close to the scheduled completion of those projects under either of the finance working group scenarios. Mr Young explained an exhibit detailing a summary in comparison of the modified Campbell to the finance working groups was presented. The Foothill South Financing referred to the first possible date by which the financing that was contemplated would have room to be able to finance Foothill South. In the two staff options, a 2005 start was built in for the Foothill South financing. Under the modified Campbell proposal, the cash that had to be diverted in order to make payments to San Joaquin to keep them in compliance was cash that otherwise would be building up at Foothill Eastern and could be used as a down payment or cash contribution for the Foothill South financing and both firms concluded it would have a December, 2008 or 2009 start date Under the modified Campbell that would push the completion date for Foothill South to 2011 with all the other projects coming in from 5-10 years later than recommended synthetic fixed rate acquisition proposal. Under this comparison, remarked Mr. Young, the final maturity of debt or the date when the roads became toll free was identified. Under the two finance working group plans the date was 2044 and under the modified Campbell plan, the Foothill South financing was pushed out four years later and was reflected in a final date of 2050. Future capital projects were also delineated by Mr. Young. He indicated approximately $160 million of projects were scheduled for Foothill South with the SR 91 Direct Connectors prioritized as the second group at $66 million and the Completion of the Ultimate Project Configuration at $784 million. A side-by-side comparison of the pros and cons for each plan was provided. Mr. Young stated the synthetic fixed rate plan required the issuance of $3.9 billion of bonds to replace the outstanding $3.9 billion debt; the two entities would be combined into one; Foothill South could be financed in 2005 but would be limited to $550 million amount and the sunset date could be as soon as 2041 with the total debt service at $14 to $15 billion. Under the modified Campbell alternative, Mr. Young noted there would not be separate financing with the exception of future financing for Foothill South; there would be separate entities and separate governing bodies; and according to the finance advisors' analyses, Foothill South could not be financed until 2009 and the remaining Foothill East project would be delayed. He commented there would be higher debt service and longer life tolls and a longer sunset date under the modified Campbell proposal. Robert Thorton spoke on legal issues related to the modified Campbell proposal. As had been described, he explained there would be an upfront payment of $120 million from Foothill Eastern to San Joaquin and then the proposal reflected a loan which was the size of about $1 billion. Mr. Thorton indicated there were legal issues associated with the loan because State law imposed limitations on a TCA that required one agency loaning funds to the other to make certain findings of benefit and the economic analysis revealed no such benefits. Council Member Tait confirmed that State legislation specifically addressed this issue for loans between the corridor agencies. Supervisor Christopher Norby provided a presentation on the modified Campbell plan stating it was a plan where Foothill Eastern, the health entity, loaned money to San Joaquin Hills to get through difficult periods. He indicated the TCA staff proposal would extend debt by four years, 1r ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 4 contained about $1.25 billion of additional fees and $2 billion of additional tolls that would have to be paid by Foothill/Eastern toll payers. Mr. Norby commented that Council Member Bob Hernandez had represented the City of Anaheim on the Foothill/Eastern Corridor board for months and had heard the numerous discussions and presentations involving the proposed acquisition and recommended he be allowed to exercise his best judgment on behalf of the citizens of Anaheim. Eric Norby explained the details in the Modified Campbell plan which proposed to pay the $120 million mitigation payment to San Joaquin and then loan money to the agency in amounts equal to their debt shortfall, if any. He indicated there would probably be debt shortfalls but it may not be as big as projected. This proposal, he stated, did not deal with building all the future projects but showed what would happen if the debt was paid first. Mr. Norby also pointed out the fees and risky swaps used in the TCA staff recommended plan. In answer to Council Member Tait's question, Mr. Kreutzen stated the Agency was under direction to complete Foothill South with approximately $1 billion of direct capital projects. The debt would be extended under the modified Campbell plan because Foothill South could not be financed until 2009. Eric Norby stated Supervisor Campbell showed completion of Foothill South in 2007 for the modified Campbell proposal. Mayor Pro Tem Chavez asked Mr. Young to address the swap risk discussed in the presentation. Mr. Young stated what had been proposed was not a derivative in comparison to Mr. Citron's swap during the Orange County bankruptcy. The interest rate swap was taking 25% of recapitalization and issuing those bonds in the form of variable rate bonds. Because there was a limited revenue stream, the bond markets and the rate agencies did not want that credit structure to have a variable rate interest rate exposure because the revenue stream could not be controlled to match. The concept was by taking 25% of the debt to the variable rate market, instead of having a $4 billion package hitting the fixed rate market, there would be a $3 billion package. The $1 billion would be put it in the variable rate market and swap it through a contract with highly-rated counter parties whereby those parties would agree to make variable rate payments to the agency, and for that, the agency would make fixed rate payments to the counter parties. Mr. Young pointed out this translated to a synthetic fixed rate. He went on to point out there were two main risks as the agency would be entering into a long term contract with a number of entities who were the counter parties, and in this case the contract could be as long as 40 years. He stated staff mitigated risk of exposures to counter parties by looking to five or six very large capitalized Wall Street firms to be the counter parties and collateralization requirements were in place if their credit went down and the agency had the ability to move between the different parties. Their other risk, he indicated, was a basis risk in selling tax exempt variable rate bonds based upon a particular index. Under the swap, the agency would not be receiving a dollar for dollar match, but would receive an index that was highly correlated on an historical basis where the tax exempt variable rate paper should trade. In essence, he commented, it was not an exact match but the agencies worked with rating agencies, with bond insurance companies, with their independent swap advisor and the group in general to come up with an index they felt over time would properly be matched at a very high confidence level and also within the structure through input from the insurance companies. He explained rating agencies reserves had been established in order to have cash set aside for any unforeseen event. These were the primary risks and it was the opinion of everyone involved in the rating group, stated Mr. Young, that the swap was appropriately mitigated and appropriately sized and a direct benefit to the transaction ...... ANAHEIM CITY COUNCIL MEETING MINUTES May 11,2004 PAGE 5 Mayor Pro Tem Chavez questioned the SR 91 connector completion date of 2015 for the modified Campbell proposal. Mr. Young stated the financial advisors and Supervisor Campbell had agreed on the assumption going into this loan to have San Joaquin pay its bills and meet its debt coverage of 1.3x. He thought he heard a change in this evening's presentation related to the underlying assumption that was completely different than what was originally modeled and he found it difficult to see a situation where Foothill South could be completed by 2015 with the removal of this assumption. In answer to Council Member Tail's question, Mr. Young stated under the staff plan the bonds that would be sold today would have a capacity for a Foothill South financing for 2005. Any delay only helped because more cash was accumulated and projects could then be done sooner. Under the synthetic plan, Foothill South was to be financed in 2005 and completed in 2007. Wally Kreutchen stated there was an absolute commitment to do all future projects and the Capital Improvement Projects list had been in place for years. There was no intention to delay any of these projects. Council member Hernandez indicated there were risks associated with any plan and that any problem could be solved if enough money was applied. He felt the modified Campbell alternative was less costly to the taxpayers and had less risks involved. Replying to Council Member Hernandez, Mr. Norby indicated that neither he nor his brother Christopher stood to personally gain from any of the alternative plans being used and that he did not know of any of the supporters for the alternative plans benefiting personally. Council Member Hernandez also indicated that he would have no benefit from approval of any of the plans. At the request of Council Member Tait, Colleen Clark explained the costs associated with the synthetic fixed rate plan for bond purchases and the comparisons made through a review of similar economic proposals. Mark Young indicated the independent advisors had negotiated for the service fees and looked at large structure multi-billion dollar transactions as a basis for comparison. Mr. Young also indicated he was on a non-contingent contract and it would make no difference to him financially as to which plan was approved. Mayor Pro Tem Chavez thanked the workshop presenters for their time and effort and thanked the elected officials for their attendance during the workshop and recessed the Council meeting at 4:55 P.M. Mayor Pringle returned, calling the regular Council meeting of May 11, 2004 to order at 5:28 P.M. and welcomed those in attendance. INVOCATION: Dr. Jim Schibsted, First Congregation Church of Anaheim FLAG SALUTE: Council Member Hernandez RECOGNITIONS (To be presented at a later date): Recognizing St. John the Baptist Greek Orthodox Church. Recognizing Gloria Valdez Lopez. "!'r ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 6 Proclaiming May 16-22, 2004, as National Public Works Week. Recognizing Anaheim Memorial Medical Center long term employees, volunteers and physicians. Proclaiming May 2004, as Mental Health Month. Recognizing the U.S. Small Business Administration, Santa Ana District Small Business Persons of the Year and District Veteran Advocate of the year. Proclaiming May 2004, as Foster Care Month. Proclaiming May 16-22, 2004, as Small Business Week. Proclaiming June 6, 2004, as Heritage Day at Oak Canyon Nature Center. Mayor Pringle recessed the Anaheim City Council to call to order the Anaheim Redevelopment Agency at 5:30 p.m. to reconvene the Council at 5:31 p.m. for a joint public hearing by the Agency and the City Council. 161 PUBLIC HEARING (JOINT ANAHEIM CITY COUNCIL/REDEVELOPMENT AGENCY): RESOLUTION NO. 2004-69 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving a Disposition and Development Agreement by and between the Anaheim Redevelopment Agency and West Coast National Investment LLC regarding certain real property in the Commercial/Industrial Redevelopment Project, and making certain findings in connection therewith. Ms. Elisa Stipkovich, Executive Director of Community Development, presented a brief staff report on Item 1. She stated the Agency was proposing to sell property located at 325 South Broadway to the adjacent property owner who owned the corner gas station at Anaheim and Broadway and that State law required Council approval for sale of property by the Agency. Ms. Stipkovich reported the property would be developed in a cohesive manner for commercial retail uses and historical rehabilitation to the building would be required to bring it back to its original character She indicated Keyser Marston, an independent consultant, worked with staffto review the appropriate price of the land as the Agency was asking the developer to spend a considerable amount of money to restore the building. The price of the land to sell would be $303,000 and the developer would be required to put in at least $470,000 in improvements. In addition to the sale of the land, the developer was also agreeing to sell to the Agency a piece of land the developer owned at the corner of Santa Ana Street and Lemon Street which the Agency felt would be helpful to the affordable housing program and that site would then be developed in conjunction with the Lang project across the street. Ms. Stipkovich stated the Agency would be purchasing the site for $500,000 and would be proposing to ask the Lang Company to incorporate the property into their current development. Mayor Pringle opened the joint public hearing and receiving no public input, closed the joint hearing. Council Member Tait moved approval of Resolution No. 2004-69, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving a Disposition and Development Agreement by and between the Anaheim Redevelopment Agency and West Coast National Investment LLC T ANAHEIM CITY COUNCIL MEETING MINUTES May 11,2004 PAGE 7 regarding certain real property in the Commercial/lndustrial Redevelopment Project, seconded by Council Member Chavez. Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Hernandez, McCracken and Tail. Noes - O. Motion Carried. 2. ORDINANCE NO. 5913 (INTRODUCTION) AN ORDINANCE OF THE CITY OF ANAHEIM approving and adopting the Eighth Amendment to the Redevelopment Plan for the Redevelopment Project Alpha. ORDINANCE NO. 5914 (INTRODUCTION) AN ORDINANCE OF THE CITY OF ANAHEIM approving and adopting the Third Amendment to the Redevelopment Plan for the Commercial/lndustrial Redevelopment Project. ORDINANCE NO. 5915 (INTRODUCTION) AN ORDINANCE OF THE CITY OF ANAHEIM approving and adopting the Third Amendment to the Redevelopment Plan for the Plaza Redevelopment Project. ORDINANCE NO. 5916 (INTRODUCTION) AN ORDINANCE OF THE CITY OF ANAHEIM approving and adopting the Sixth Amendment to the Redevelopment Plan for the River Valley Redevelopment Project. ORDINANCE NO. 5917 (INTRODUCTION) AN ORDINANCE OF THE CITY OF ANAHEIM approving and adopting the Fourth Amendment to the Redevelopment Plan for the West Anaheim Commercial Corridors Redevelopment Project. ORDINANCE NO. 5918 (INTRODUCTION) AN ORDINANCE OF THE CITY OF ANAHEIM approving and adopting the First Amendment to the Redevelopment Plan for the Stadium Redevelopment Project. Item 2 was considered prior to Item 1. Mayor Pringle indicated Item 2 was a joint public hearing of the City Council and the Redevelopment Agency to consider proposed amendments to merge the Alpha, River Valley, Plaza, Commercial/Industrial, West Anaheim Commercial Corridors and Stadium Redevelopment Projects and to amend the land use provisions to conform with and track the City's General Plan. Ms. Elisa Stipkovich stated the Anaheim Redevelopment Agency had six separate and distinct redevelopment project areas: Alpha, River Valley, Plaza, Commercial/Industrial, West Anaheim Commercial Corridors and the Stadium Redevelopment Project and the City had been proceeding with amending each of the existing plans to merge all of the project areas into one. Ms. Stipkovich reported the proposed merger would allow the Agency to combine tax increment revenues from one project area and reallocate throughout the entire merged project area in order to facilitate the revitalization of blighted areas. In addition to amending each plan, Ms. Stipkovich noted the redevelopment plan for Project Alpha would be amended to include language consistent with other redevelopment plans so that the land uses within Project Alpha conform with and follow the City's General Plan as it currently existed or as it may be amended from time to time. No amendment was proposed to any fiscal or time limits in any of the existing redevelopment plans and no changes would occur to the boundaries of any of the project areas. Ms. Stipkovich acknowledged, as part of the legal requirements for this merger, the following documents had been delivered to the City Clerk and were made a part of the record of these proceedings: an affidavit of publication of the notice of joint public hearing on the proposed amendments; a certification of mailing of notice of the joint public hearing on the proposed ...... ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 8 amendments to each assessee of land in all project areas, to occupants of all existing project areas, to government boards of each taxing agency in the existing project areas and to the Department of Housing and Community Development. Additionally, prior reports and resolutions of all proceedings related to these amendments previously considered and approved by Council, Redevelopment Agency and the Planning Commission were included. Mayor Pringle opened the joint public hearing with the comment that persons making statements and giving testimony would be subject to questions through the Mayor and that all persons desiring to speak or submit written testimony would be given the opportunity to do so during the joint public hearing. Any and all oral or written testimony must be provided at the joint public hearing or to the City Clerk prior to the hearing and the Agency would not be receiving any oral or written testimony after the joint public hearing was conducted and closed. If there were any written comments received, those comments would be placed on the record. With no public input offered, Mayor Pringle closed the joint public hearing. Council Member McCracken introduced the following six ordinances, seconded by Council Member Tait: Ordinance No. 5913, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving and adopting the 8th Amendment to the Redevelopment Plan for the Redevelopment Project Alpha; Ordinance No. 5914, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving and adopting the Third Amendment to the Redevelopment Plan for the Commercial/Industrial Redevelopment Project; Ordinance No. 5915, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving and adopting the Third Amendment to the Redevelopment Plan for the Plaza Redevelopment Project; Ordinance No. 5916, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving and adopting the Sixth Amendment to the Redevelopment Plan for the River Valley Redevelopment Project; Ordinance No. 5917, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving and adopting the Fourth Amendment to the Redevelopment Plan for the West Anaheim Commercial Corridors Redevelopment Project; and Ordinance No. 5918, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving and adopting the First Amendment to the Redevelopment Plan for the Stadium Redevelopment Project. Council Member Chavez indicated he would abstain on Ordinance No. 5913 as he resided within 500 feet of the project area. Roll Call vote: Ayes - 5: Mayor Pringle, Council Members: Chavez, Hernandez, McCracken and Tail. Noes - O. (Council Member Chavez abstained on Ordinance No. 5913). Motion carried. ~ ANAHEIM CITY COUNCIL MEETING MINUTES May 11,2004 PAGE 9 ADDITIONSIDELETIONS TO THE AGENDA: Item A33 removed by staff. PUBLIC COMMENTS: Caroline Greavey, representing Paint Your Heart Out Anaheim, thanked Council and the City for their support for this privately funded annual home improvement program. Ms. Greavey indicated that another 50 households of seniors or disabled low income Anaheim homeowners had the exteriors of their homes refurbished by over 1000 volunteers on May 151. Jan Grotewald, Orange County CAST, honored the Anaheim Police Department for 15 years of partnership serving abused children of Orange County. Nat Glover, Orange County District Attorney also recognized Anaheim police officers for their continued support of child abuse services team to protect victimized children and reduce trauma faced during investigative and court process. Jimmy Gaston, resident, invited Council to a kick-off meeting Friday, May 14, 2004 at the Orange Senior Center to join Feedback Board of Directors and requested a donation of $500 to offset financial cutbacks. James Robert Reade spoke of Police Department concerns. Lisa Ramos provided an update on the West Anaheim Neighborhood Development Council's 8th Annual barbeque at Twila Reid Park and thanked City staff for their support. CONSENT CALENDAR: Council Member T ait declared a potential conflict of interest on Items A5, A 13, A 16 and A27 and would abstain on those items. Council Member Chavez requested Item A24 be removed for separate discussion. Mayor Pringle removed Item A 18, A20, A21, A30 and A31 for separate discussion. Council Member Chavez moved approval of Consent Calendar Items A1- A39, seconded by Councilmember Tait, to waive reading in full of all ordinances and resolutions and to approve the following in accordance with the reports, certifications and recommendations furnished each Council Member and as listed on the Consent Calendar. Roll Call vote: Ayes - 5; Mayor Pringle. Council Members: Tait, McCracken, Hernandez, and Chavez. Noes - o. Motion carried 118 A 1. 105 A2 Reject certain claims filed against the City. 160 A3. Receive and file minutes of the Deferred Compensation Committee meetings held January 14, 2004 and March 2, 2004 and minutes of the Budget Advisory Commission meeting held March 17,2004. Accept the bid and authorize the execution of an agreement with Artistic Maintenance, Inc, in an amount not to exceed $186,912, for tree well maintenance in the west section of the City for a two-year period with three one-year optional renewals and authorize the Purchasing Agent to exercise the renewal options in accordance with Bid #6458. 160 A4 Accept the low bid and authorize the execution of an agreement with Valley Crest Landscape Maintenance, Inc., in an amount not to exceed $1,240,918, for landscape maintenance in the Anaheim Resort for a two-year period with three one-year optional ,~ ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 10 160 AS. extensions and authorize the Purchasing Agent to exercise the renewal options in accordance with Bid #6464. Accept the low bid of Waxie Sanitary Supply, in the amount of $32,760 (plus tax), for waste receptacles for the Convention Center in accordance with Bid #6471. Council Member Tait abstained. 160 A6 164 A7. 155 A8. 123 A9. 123 A10. 123 A 11. 123 A 12 123 A13. Authorize the Purchasing Agent to extend the final renewal of a purchase order from June 30, 2005 to December 31, 2005, and authorize the issuance of a change notice to Dooley Enterprises Inc. to increase the not to exceed amount from $150,378 (including tax) to $212,237 (including tax) to purchase ammunition for the Police Department. Reject all bids submitted for the Orangefair Lane Storm Drain Improvements. Adopt a Negative Declaration for the Environmental Impact of the widening of the intersection of Lincoln Avenue and Sunkist Street. Approve the Administering Agency-State Agreement for Federal Aid Projects No. 12- 5055, Program Supplement No. M073, Revision 1 for the Burlington Northern Santa Fe Corridor Soundwall Project from Imperial Highway to Yorba Linda BoulevardlWeir Canyon Road. Approve Amendment No. 1 to the Waste Disposal Agreement with the County of Orange, at a rate of $22.00 per ton, to extend the agreement for an additional three years to June 30,2010. Approve the First Amendment to Agreement with Signal Maintenance, Inc. to extend the term of the traffic signal maintenance services agreement to May 31, 2005. Approve an amendment to an agreement with the Orange County Juvenile Court Work Program to provide litter removal and weed abatement services to the City. Approve an Agreement for Acquisition of Real Property Roadway Easement Taking with Equilon Enterprises, LLC, in the acquisition payment amount of $66,000 to Grover Escrow Corporation, for property located at 201 South State College Boulevard for the Lincoln Avenue and State College Boulevard Intersection Project. Council Member Tait abstained. 123 A14. Approve the Purchase and Sale Agreement and Grant Deed with Keshab A. Talapatra and Gitashri Talapatra for the purchase of remnant property located at the southwest corner of Braeburn Street and Avondale Avenue 123 A 15 Approve the Purchase and Sale Agreement and Grant Deed with Andy Broumand, in the amount of $110,000, for the purchase of remnant property located at 1810 Westmont Drive. 123 A 16 Approve the Agreement for Joint Public Use of Property with Southern California Edison for property located on the northerly side of Disney Way from Harbor Boulevard to T" ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 11 Clementine Street for the Freedman Way/Disney Way and Harbor Boulevard Projects in the Anaheim Resort area. Council Member Tait abstained. 123 A17. 123 A19. 159 A22. 123 A23. 123 A25. 132 A26. 123 A27. Approve an agreement with Decision Management Company, Inc., dba Questys Solutions, in the amount of $23,017.56, for an electronic agenda management software system for citywide implementation. Approve and authorize the City Treasurer to execute an agreement with Wells Fargo Bank, N.A. for banking services for the term of July 1, 2004 through June 30, 2009. Approve the selling of one 17 -passenger vehicle and utilize $3,000 from the sale of the vehicle to purchase City identification on five senior mobility transportation program vehicles. Approve a Memorandum of Understanding with the Anaheim Family YMCA for the Anaheim Achieves After-School Collaborative for the 21st Century Community Learning Centers Grant. Approve and authorize the City Manager to execute Amendment No. 1 to the Workforce Investment Act Vendor Agreement with New Horizons Computer Learning Center, in the maximum subgrant amount of $100,000, to extend the agreement to June 30, 2005 for provision of occupational skills and training services. Authorize the Executive Director of Community Development to submit to the Department of Housing and Urban Development (HUD) the One-Year Action Plan for fiscal year 2004/05 for Federal Community Development Block Grant, HOME, and Emergency Shelter Grant funding, in the total amount of $9,153,196, and authorize the City Manager to execute all related HUD funding approval documents. Approve the following agreements: The Fourth Amendment to Agreement with The Planning Center for the General Plan and Zoning Code Update Program, in an amount not to exceed $17,000, to provide a technical peer review of the Mountain Park Specific Plan Amendment Environmental Impact Report, and the First Amendment to Agreement with The Irvine Company, in an amount not to exceed $17,000, to provide for The Irvine Company to reimburse all costs associated with providing a technical peer review of the Mountain Park Specific Plan Amendment Environmental Impact Report. Council Member Tait abstained. 156 A28 Authorize the donation of a commercial armored vehicle to the City of Cypress. 123 A29. Approve and authorize the Public Utilities General Manager to execute the Operating Agreement for Water System Interconnections with Yorba Linda Water District to provide an alternate source of water supply to the Public Utilities Department during emergency situations. T ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 12 158 A32. RESOLUTION NO. 2004-71 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM accepting certain deeds conveying to the City of Anaheim certain real properties or interests therein (City Deed Nos. 10747 through 10749). A33. RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM authorizing the destruction of certain City records more than two years old (Police Department). Removed from the agenda. A34. RESOLUTION NO. 2004-72 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving an amended records retention schedule for the Human 153 Resources Department. 153 A35. RESOLUTION NO. 2004-73 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM amending Resolution No. 97R-101 which established rates of compensation for non-represented part-time job classifications. 123 A36. RESOLUTION NO. 2004-74 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving the Workforce Investment Act Title 1 Master Subgrant Agreement between the City of Anaheim and The State of California for the term of April 1, 2004 through June 30, 2006. 123 A37. 179 A38. ORDINANCE NO. 5908 (ADOPTION) AN UNCODIFIED ORDINANCE OF THE CITY OF ANAHEIM authorizing an amendment to the contract between the City of Anaheim and the Board of Administration of the California Public Employees Retirement System (Introduced at the Council meeting of April 20, 2004, Item A22). ORDINANCE NO. 5912 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM amending the zoning map referred to in Title 18 of the Anaheim Municipal Code relating to zoning (Reclassification No. 2003-00111, 802-808 East Broadway, 801 East Santa Ana Street and 409-421 South Vine Street) (Introduced at the Council meeting of April 27, 2004, Item A20). A39. Approve minutes of the Council meeting held April 27, 2004. END OF CONSENT CALENDAR: 153 A18. Approve the elimination of Great West Life as a provider for the City of Anaheim full-time Deferred Compensation Plan. Charlene Parker, City Treasurer, indicated Item A 18 was brought before Council for the purposes of ending the contract with Great West Life as monies which remained in a 5-year certificate of deposit had since matured. The Mayor had expressed his concern that by the elimination of this provider for City employees' deferred compensation program, a complement of options was no longer being provided. Ms. Parker noted her department would perform a Request for Information in 2005 and also survey employees to see if there was a preference in plan structures to determine if another provider was feasible. '"IF' ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 13 Mayor Pringle moved approval of Item A 18, seconded by Council Member Chavez. Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Hernandez, McCracken and Tait. Noes - O. Motion Carried. 123 A20. Approve the consultant services agreement with Purkiss-RSI, in the amount of $97,941, for the design of various athletic field improvement projects at Canyon Rim and Riverdale parks, Canyon High School and EI Rancho Middle School. 123 A21. Approve a consultant services agreement with RJM Design Group, Inc., in the amount of $46,002, to master plan the reconfiguration of the athletic fields and other amenities at Crescent Middle School. Mayor Pringle addressed Items A20 and A21 jointly and indicated these were the first significant steps implementing recommendations from the Mayor's Sports Facilities Task Force. Terry Lowe, Community Services Director, further explained Items A20 and A21 were the highest priorities of the task force as these facilities were the most heavily used in the City and in need of improvements. Mayor Pringle indicated he and Terry Lowe had participated with the Mayor of Orange and Orange Unified School District staff to focus on ways to cooperatively work together on sports facilities in the Anaheim Hills area and these two items were part of that package. Council Member McCracken to approve Items A20 and A21, seconded by Council Member Chavez Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Hernandez, McCracken and Tait. Noes - o. Motion Carried. 105 A24. Appoint Charles M. Farano to the Anaheim Workforce Investment Board representing the Business Community for a term ending June 30, 2005. Council Member Chavez indicated organized labor had been trying to get a position on the Workforce Investment Board and asked for the status of that request. The response was the issue had been resolved at the State level and Mr. Harris, representing Orange County Labor Council, would be considered for appointment on the May 25, 2004 agenda. Council Member Chavez moved approval of Item A24; Council Member McCracken seconded the motion Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Hernandez, McCracken and Tait. Noes - O. Motion Carried l 75 A30. Adopt the positions to guide Anaheim's responses to potential renewable energy resource requirement standards legislation, including changes to the State's Renewable Portfolio Standards Program (Continued from the Council meeting of April 27, 2004, Item A 11). Mayor Pringle stated he had met with Marcie Edwards, Public Utilities General Manager to discuss this item and had voiced his concern that the position guidelines were not specific. Mayor Pringle offered the following suggestions to the list of recommended positions: the first recommendation be modified to "maximize local municipal control over development of renewal resources as a fuel diversity measure and as a source of clean fuel"; to eliminate the second recommendation and add "provide equivalent legislative and administrative protections as investor-owned utilities have with respect to renewable power" so the City would be asking for an equivalent degree of protection between public utilities and investor-owned utilities. The ...... ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 14 third recommendation would read "advocate against policies that would add pressure on municipal utilities to raise rates." Mr. Morgan was in concurrence with the modifications proposed by Mayor Pringle. Mayor Pringle moved Item A30, with identified revisions, seconded by Council Member Chavez. Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Hernandez, McCracken and Tait. Noes - O. Motion Carried 176 A31. RESOLUTION NO. 2004-70 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM declaring its intention to vacate certain public streets, highways and easements. (Abandonment No. ABA2003-00076, Lynne Avenue, Hampstead Street and Audre Drive, together with three adjacent public alleys, all bounded by Cerritos Avenue to the north, Audre Drive to the south, Walnut Avenue to the east, and 9th Street to the west). Mayor Pringle indicated this was an issue related to closure of public streets and that it would be before Council in a public hearing, however, he had some concerns about closing public streets when the residents of those streets objected. The Mayor indicated he would have a fuller discussion with staff on the matter prior to the public hearing. Council Member Chavez moved approval of Resolution 2004-70 RESOLUTION OF CITY COUNCIL OF CITY OF ANAHEIM declaring intention to vacate certain public streets, highways and easements and setting the public hearing for June 22, 2004, seconded by Council Member Tait. Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Hernandez, McCracken and Tait. Noes - O. Motion Carried 143 A40. Discussion regarding the Governor's State Budget Proposal and the appointment of the voting delegate to the League of California Cities General Assembly meeting in Sacramento on May 13, 2004. City Manager, Dave Morgan, indicated Item A40 was agendized as a meeting of the California Cities General Assembly was scheduled for May 13th asking for the City's vote for the Governor's revised proposal related to the State budget. Bill Sweeney, Finance Director, provided background on the State budget. He indicated that in January, the Governor proposed a $1.3 billion local government reduction statewide to cities and counties. At that time, he remarked, cities were told the reduction would be based on an ERAF or property tax formula and Anaheim's General Fund would be reduced by $1.3 million. Recently, indicated Mr. Sweeney, a revised agreement had been reached with the Governor on the allocation of the $1.3 billion which would be materially different from the ERAF shift proposed in January. He explained that instead of an ERAF-based shift, which was favorable to Anaheim, this reduction would now be based on one third of the City's proportionate share of sales tax, one third of the proportionate share of vehicle license fees and one third of the proportionate share of property tax. Under this proposal, Mr. Sweeney stated the hit to Anaheim would range from $3.6 million to $3.7 million. In addition to the complexity of 1/3 reduction to each of those revenues, Mr. Sweeney indicated there was going to be a reduction of no less than 2% and no more than 4% of our General Fund (for two years only). The City Manager added the League of California Cites had an initiative effort to put an item on the State ballot in November to provide constitutional protection for local governments against .... ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 15 future State redistribution of revenues. The Governor had initially stated he would oppose the League's initiative but had now affirmed if this new budget proposal was accepted by cities, the Governor would be willing to support and campaign for the initiative. Mr. Morgan also noted that it was unusual to see staff recommending the taking of additional dollars from the City, but the prospect was that after the next two fiscal years, it was believed that the League's initiative would be approved and for the first time local government would have protection and predictability about their revenue stream. Mr. Morgan also pointed out the budget presented in the mid-year workshop assumed a $1 3 million reduction from the State so these revised reductions would be an additional $2.2 to $2.3 million for two years. He also remarked that In the City's long-term financial projections, it was assumed the $1.3 million loss would be in perpetuity and the revised loses would occur for two years only. Mr. Morgan also stated there was a request tonight for the Council to choose a representative to be in Sacramento on the 13th to express the City's viewpoint on the Governor's revised budget proposal. Mayor Pringle also indicated cities, counties and special districts combined would lose $350 million each for the two-year period and on top of that, $250 million would be taken from Redevelopment Funds, all of which still combined for a total of $1.3 billion which was the Governor's proposed local government reduction figure given in January. Acknowledging the fiscal losses were significant and would had a significant impact on the City, the Mayor also recognized this was the first governor that had sought to have constitutional protection for local government resources and that after the second year, all property tax revenues and vehicle license fees would then be protected. The Mayor requested he be designated as the voting delegate to the League of California Cities General Assembly and Council Member Chavez be designated as the alternate. Council Member Chavez moved to appoint Mayor Pringle as the voting delegate and Council Member Chavez as the alternate delegate to the League of California Cities General Assembly meeting in Sacramento on May 13, 2004, seconded by Council Member Tait. Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Hernandez, McCracken, and Tait. 148 A41. RESOLUTION NO. 2004-75 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM supporting the proposed acquisition of the assets of the San Joaquin Hills Transportation Corridor Agency and the Foothill/Eastern Transportation Corridor Agency by the Transportation Corridor System. Mayor Pringle indicated that Council had participated in the workshop earlier on this matter and that he would absent himself from discussion and voting on this matter to err on the side of caution as to whether or not he had a conflict of interest as he had done during the workshop. In the absence of Mayor Pringle, Mayor Pro Tem Chavez took over the meeting. Mr. Morgan indicated the Transportation Corridor Agency (TCA) staff had presented an analysis of various options as well as a competing presentation by Christopher Norby's office to save the San Joaquin Hills toll road from default. In that presentation, Mr. Morgan indicated that all agreed the toll road should not be allowed to fail and that the option that prevented that from happening should be the least costly, have the least impact on improvements and make progress on the future toll roads. He remarked that the disagreement came on which option provided the least impact and the fundamental difference he saw between the competing proposals was that one of them provided improvements to be done in a more timely fashion T ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 16 over the other. Mr. Morgan indicated discussion about the significance of those improvements and the impact on timing was appropriate. Council Member Hernandez questioned the propriety of taking action on this agenda item as the request to place it on the agenda was made by Mayor Pringle, who then recused himself from the meeting. Jack White, City Attorney, indicated there was no legal reason for Council to not consider this matter. Council Member Hernandez moved to remove Item A41 from the agenda, seconded by Council Member McCracken. Council Member McCracken questioned the wording "City Council hereby directs appointed representative to such action." Mr. White stated there was an attorney general opinion in 2000 related to Southern California Joint Powers Agency which opined the vote of an agency representative was valid even though it did not agree with the direction of the legislative body. Council Member Tait suggested the wording be changed to "recommend" rather than "direct". With that revision, Council Member Hernandez withdrew his motion to remove Item A41 from the agenda. Council Member Tait moved to approve revised Resolution 2004-75, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM supporting the proposed acquisition of the assets of the San Joaquin Hills Transportation corridor Agency and the Foothill/Eastern Transportation Corridor Agency by the Transportation Corridor System, seconded by Council Member McCracken. Discussion was held as to the Corridor staff recommendation versus the modified Campbell proposal. Council Members Tait, McCracken and Chavez stressed the importance of not delaying needed future road improvements Council Member Hernandez did not want to put the assets of Foothill/Eastern in jeopardy to save San Joaquin Hills toll road and felt the Campbell alternative would work and be less costly than the recommended staff proposals. Mayor Pro Tem Chavez requested a representative from the Transportation Corridor Agency be allowed to speak at this time as well as a representative for the modified Campbell proposal. Wally Kreutzen indicated the differences in the proposals were in implementing the future projects as soon as possible or pushing back those projects to a pay-as-you-go basis. He stated TCA staff's recommendation was to completely refinance all existing debt and extend that debt to 2004 and in doing so, allow for Foothill/South to be financed as soon as 2005. Eric Norby indicated that with the modified Campbell proposal, the SR 91 connector would be built in 2015, one year later than the TCA staff proposal. He stated the 1.3 debt coverage was factored into these loans and would be fully explained by Supervisor Campbell during the meeting on May 12. Mayor Pro Tem Chavez stated that during the workshop, the independent advisor had indicated the modified Campbell proposal would have the SR 91 project pushed back four years at a minimum Roll Call vote: Ayes - 3; Mayor Pro Tem Chavez, Council Members: McCracken and Tail. Noes - 1; Council Member Hernandez. Abstain - Mayor Pringle. Motion Carried. T ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 17 A42. Consider appointing a City representative and an alternate to the Transportation Corridor Agency. APPOINTMENT: ALTERNATE: No action was taken on this item. Council Member Hernandez indicated he would go into the Transportation Corridor meeting with an open mind before he made his decision on the acquisition of assets for the Transportation Corridor Agency. A43. Consider appointing a member to serve on the Housing and Community Development Commission, representing the South Neighborhood Council, term to expire June 30, 2006. APPOINTMENT: Upon the return of Mayor Pringle, this item was continued to May 25, 2004 without objection from Council. Mayor requested the City Clerk to follow up with obtaining applications to fill this appointment from the South Neighborhood Council and would also apprise Council as to meeting schedules for all neighborhood councils. PUBLIC HEARING: 104 B1. A public hearing to consider a resolution to create Underground District No. 51 (Lincoln Avenue/Magnolia Avenue). RESOLUTION NO. 2004-76 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM creating Underground District No. 51 (Lincoln Avenue/Magnolia Avenue). Bob Templeton, Public Utilities Department, reported that Under Ground District 51, titled Lincoln Avenue, would travel from west of Brookhurst to west of Magnolia Avenue. He indicated construction would be completed in October 2005 Mayor Pringle opened the public hearing and receiving no testimony, closed the hearing. Council Member McCracken moved to approve Resolution 2004-76, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM creating Underground District No. 51; seconded by Council Member Hernandez. Roll Call vote: Ayes - 4; Mayor Pringle, Council Members: Hernandez, McCracken and Tait. Noes - O. Temporarily Absent - 1: Council Member Chavez. Motion Carried. 104 B2 A public hearing to consider a resolution to create Underground District No. 52 (Broadway Street Phase II). RESOLUTION NO. 2004-77 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM creating Underground District No. 51 (Broadway Street Phase II). T ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 18 Bob Templeton, Public Utilities Department, indicated the City was entering the second phase of the Broadway Underground Project which would take Broadway from Euclid to Manchester. He stated the project would be completed in 2005 and would be approximately 7400 feet in length. Mayor Pringle opened the public hearing and receiving no testimony, closed the hearing. Council Member McCracken moved to approve Resolution 2004-76, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM creating Underground District No. 51; seconded by Council Member Hernandez. Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Hernandez, McCracken and Tail. Noes - O. Motion Carried. 179 B3. CONDITIONAL USE PERMIT NO. 3420 DETERMINATION OF PUBLIC CONVENIENCE OR NECESSITY NO. 2004-00014 AND NEGATIVE DECLARATION: OWNER: Dong S. Park, 1523 West Katella Avenue, Anaheim, CA 92802 AGENT: Isabel Garcia, La Estrella RestauranUMarket, 718 South Philadelphia Street, Anaheim, CA 92805 LOCATION: 1523 West Katella Avenue. Property is approximately 0.56 acres, located at the northeast corner of Katella Avenue and Bayless Street (La Estrella Market) Conditional Use Permit No. 3420 - Request to amend or delete conditions of approval for an existing convenience market and take-out restaurant to permit retail sales of beer and wine for both on and off-premises consumption. Determination Of Public Convenience Or Necessity No. 2004-00014 - Request to permit retail sales of beer and wine for off-premises consumption within an existing convenience market. ACTION TAKEN BY THE PLANNING COMMISSION: Request to amend Conditional Use Permit No. 3420 denied (PC2004-29) (4 yes votes, Commissioners Flores and O'Connell voted no and Commissioner Romero absent). Determination of Public Convenience or Necessity No. 2004-00014 denied (PC2004-30). Negative Declaration previously approved (6 yes votes, Commissioner Romero absent). Appeal of the Planning Decision submitted by the Agent, Isabel Garcia. MOTION: CEQA FINDING: NEGATIVE DECLARATION. RESOLUTION NO.: 2004-78 CONDITIONAL USE PERMIT NO. 3420. RESOLUTION NO.: 2004-79 DETERMINATION OF PUBLIC OR CONVENIENCE NO. 2004-00014. Ms. Vander Dussen, Planning Director, indicated this item was before Council as the Planning Commission had denied a request to amend a Conditional Use Permit (CUP) to allow retail sales of beer and wine for on and off-premises consumption and to allow seating for 26 customers in an existing convenience/delicatessen restaurant. She reported CUP 3420 was originally approved in June 1991 for a convenience market without the sale of alcoholic beverages and that the Planning Commission had denied two requests for off-premises sale of alcoholic beverages in 1992 and 1993. In 2000, she commented the Commission denied a request for on-premises sale of beer and wine due to public opposition and over-concentration of licenses in the area. The current request for modification of the CUP to permit retail sales of beer and wine for both on and off-premises consumption was denied by the Planning Commission due to neighborhood opposition and opposition from the Anaheim City School T ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 19 District since this location was in close proximity to a residential neighborhood and Stoddard Elementary School. Staff had recommended Planning Commission approval of the request based on the fact the crime rate in the area was 30 percent below City average and the business did not generate significant police activity. Ms. Vander Dussen noted the applicant proposed to limit the hours of operation from 8:00 a.m. to 9:00 p.m. daily. Staff had recommended a one year time limit to determine if sale or beer and wine would increase crime rate or promote increased calls for service. She explained the City must make a determination of public convenience or necessity for alcoholic beverage applications when properties are located in police reporting districts with an average crime rate 20 percent above the citywide average or within a census tract with undue concentration of off-premise sale licenses Ms. Vander Dussen indicated the market was located in a district which had an over- concentration of ABC licenses and that the Police Department continued to recommend denial for that reason. In addition to concerns expressed by the Police Department, Ms. Vander Dussen reported the Commission considered testimony at the hearing from the school district, residents and representatives from the adjacent Buddhist Temple and that the testimony focused primarily on the negative impact the off-premises sales could have on the neighborhood, the local elementary school and the park The school district's opposition was due to proximity of the convenience market to Stoddard Elementary School. Planning staff believed the establishment of on-premises sale of beer and wine would not have a negative impact in the area given the limited hours of operation and that all beverages would be only served with meals and recommended approval of the request subject to a time limit of one year to review the crime statistics. The off-premises sale of beer and wine could potentially have a negative effect on the area, and staff recommended denial of that portion of the request and the associated determination of public convenience and necessity. Ms. Vander Dussen stated the petitioner had indicated they agreed with all of the recommended conditions of approval including the reduction of the number of seats, however, they still wished to seek approval of the permit to do the off-sale beer and wine. Council Member Hernandez asked how on-premises sale of beer and wine could be controlled so as not to allow any off-premises sale. Planning staff replied that enforcement could be used if a condition of approval was not met. Mayor Pringle opened the public hearing. Ray Cordova, representing the applicant, indicated that of the five off-sale alcohol licenses in the census tract, they were identified as Food 4 Less, Savon, and Circle K market and two liquor stores and that most were closed before 9:00 p.m. He indicated that three sisters owned and operated the market and deli restaurant providing Salvadorian food to a small clientele. He indicated that by reducing the number of dining seats from 26 to 10 to meet the original conditions of the CUP, they would need off-premise sale of beer and wine to offset the loss of dining seats. One individual spoke in favor of the on-sale and off-sale beer and wine for the convenience market. Y' ANAHEIM CITY COUNCIL MEETING MINUTES May 11, 2004 PAGE 20 The daughter of one of the owners of the convenience market spoke in favor of the CUP stating the intention was to provide a service to customers who walk to the market and add to the quality of life for the community. Robert Egger, resident, spoke in opposition to the CUP citing over concentration of businesses allowing sale of beer and wine. Tom Rizzuti, Facilities Planner for the Anaheim School District, voiced concern for the safety of the students based on the proximity of the market to Stoddard Elementary School and Park and the over concentration of alcohol licenses in the neighborhood. In response to Mayor Pringle, Mr. Rizzuti indicated the school district board did not take action on this matter. Mayor Pringle asked if the school district monitors open field play space during the weekend at the elementary school or relied on City staff at the adjacent park as the Mayor indicated he had seen the park well used during the weekend and had not observed any abuses attributed to beer or alcohol. He felt there should be a baseline as to whether they was any offensive activity taking place at the school or park now as it related to a year from now. With no other public testimony offered, Mayor Pringle closed the public hearing. Mayor Pringle confirmed that dropping the number of dining tables from 26 to 10 was a condition of the original CUP and that the applicant had agreed to that restriction. Council Member Chavez indicated when this matter went to the Planning Commission staff was supportive of the off-premises sale of beer and wine. Ms. Vander Dussen indicated staff changed their viewpoint as a result of the testimony received at the Planning Commission hearing. Council Member McCracken clarified if Council approved the on-sale beer and wine, the applicant would still have to request an ABC license and might run into difficulty being located next to a church. She also confirmed that if the proposal was to allow the on-premises sale of beer and wine, a determination of public necessity would not be needed. Mayor Pringle stated this was a specialty store addressing a specific community and he did not feel there was a proliferation of licenses in this area, citing the concentration of licenses in the Resort area from hotels and restaurants. The Mayor indicated he would support both the on- sale and off-premise sale of beer and wine with the condition that the crime statistics be reviewed in one year to determine if there were any changes. Should changes occur during the one-year time period, the Mayor would be willing to revoke the CUP and therefore the burden was placed on the applicant to monitor their service. Additionally, with the concurrence of the applicant, the Mayor wished to add a condition that no shopping carts would be allowed at this convenience market. Council Members Hernandez, Chavez and Tait voiced their support for the on-premises and off- premises sale of beer and wine with the stipulation of a one-year time limit giving and opportunity for this business to succeed. Council Member McCracken would not support the CUP, as the community opposed the sale of beer and wine and had done so for many years. ,.. ANAHEIM CITY COUNCIL MEETING MINUTES May 11,2004 PAGE 21 Council Member Chavez moved to make the CEQA finding of negative declaration, to approve Resolution No. 2004-78 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving an Amendment to Certain Conditions of Approval in CUP No. 3420 and Amending Resolution No. PC 91-87, and to approve Resolution 2004-79, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM finding and determining that the public convenience or necessity would be served by the issuance of an alcoholic beverage control license for the premise located at 1523 W. Katella Avenue, Anaheim, CA, Application No. 2004-00014. Roll Call vote: Ayes - 4; Mayor Pringle, Council Members: Chavez, Hernandez and Tait. Noes - 1; Council Member McCracken. Motion Carried. COUNCIL COMMUNICATIONS: Mayor Pringle reported that from March 1 to May 7,2004, the Home Improvement Holiday Program issued 1,918 permits, which is valued in excess of $12,000,000. He noted there were three weeks remaining in the program which waived certain building permit fees for participants. ADJOURNMENT: There being no further business to come before the City Council, Mayor Pringle adjourned the meeting at 8:02 P.M. to May 25, 2004 at 2:00 P.M. for the FY 2004/05 Budget Workshop. R;speCt!UIIY sUbml!led: /-~~~-~~ Sheryll Schroeder, MMC City Clerk -