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2005/12/20ANAHEIM, CALIFORNIA CITY COUNCIL REGULAR MEETING DECEMBER 20, 2005 The City Council of the City of Anaheim met on December 20,2005 to call to order the adjourned regular session of December 20, 2005 at 3:10 P.M. in the Council Chambers of Anaheim City Hall, 200 South Anaheim Boulevard. PRESENT: Mayor Curt Pringle, Council Members: Richard Chavez, Lorri Galloway, Bob Hernandez and Harry Sidhu STAFF PRESENT: City Manager Dave Morgan, City Attorney Jack White, and Acting Deputy City Clerk Erlinda Compton A copy of the agenda for the meeting of the Anaheim City Council was posted on December 16, 2005 at the City Hall exterior bulletin board. PLATINUM TRIANGLE IMPLEMENTATION PLAN & FEASIBILITY STUDY WORKSHOP: Gary Johnson, Director of Public Works/City Engineer, introduced Deputy City Engineer Russell Maguire, Rick Kreuzer, KFM Engineering, Andrea Roess of David Taussig & Associates and David Herrington of Orrick, Herrington & Sutcliff all of whom would be updating Council on the Platinum Triangle -mplementation Plan, which he explained was extensive to support the new land uses for the Triangle. He added that the programs were similar to those successfully used in the Anaheim Resort area and allowed for a comprehensive, coordinated program to be established for the development community. Rick Kreuzer provided an overview of the implementation plan with the objective of outlining the backbone improvements required to support the land use changes in the Triangle, to quantify the costs associated with the improvements, to develop a detailed construction schedule and lastly to determine the necessary cash flow to accomplish the improvements. He identified the ten streets which made up the roadway network in the Triangle: Katella, State College, Orangewood, Gene Autry, Cerritos, Lewis, Douglass, Elm and Sunkist. A diagram for each of the streets was provided in the plan which set out proposed curbs on parkway and medians, the right-of-way acquisition required to construct the improvements, and landscaping and striping requirements. He had been asked to divide the project into buildable segments so some streets such as Katella, State College and Orangewood had been broken into three projects, some into two and others, such as Cerritos, into one project. Other areas in the backbone development, reported Mr. Kreuzer, identified sewer improvements resulting from the Merit Civil Engineering, Inc. study completed in 2005. A graphic outlining those improvements as well as the local sewers which would be the responsibility of the developer was provided in the implementation plan; the same approach was presented for storm drainage and water requirements in addition to the electrical undergrounding plan for those streets. Referencing cost related to the backbone improvements, Mr. Kreuzer indicated each project was broken into elements and costed out. These included: roadway, sewer, storm drain, electrical and water if necessary, construction total, right-of-way total and a grand total. Each of those projects were then placed into a complex matrix which showed the total project cost in 2005 dollars would be approximately $99 million in construction costs, a little more than $54 million for right-of-way acquisitions and roughly $153 million overall. ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 2 The implementation schedule, he noted, was typical for a public works project and included: Administration, Preliminary Engineering, Right-of-way Engineering, Right-of-way Acquisition, Final PS& E, Bid/Award, Notice to proceed; and Construction. Taking Gene Autry as an example project, he pointed out, it would take four months to get an engineer on board, three months for preliminary work, three months for right-of-way documents, about one year to acquire partial takes of property or 18 months if the project called for full property takes, with bid award taking six months and construction around nine months, which put the total project time line up to the end of Year 3 for that particular project. These projects, he stated, were then placed into a complex total project schedule with total completion scheduled in Year 8. To explain how the corresponding costs for each project were then matched to the project schedule, Mr. Kreuzer, again using Gene Autry as an example, showed the project costing out at $4.6 million, with engineering and construction escalating at three percent per year and right-of- way escalating at five percent per year. Those projects over the eight year time line reflected $153 million in 2005 dollars and cash flows at $174 million with escalation at the end of eight years. Year one, he pointed out, would be a relatively light outlay of dollars with year three becoming more involved with construction dollars and the costs going up more dramatically each subsequent year. Mayor Pringle asked what determined the staging of the projects in the completion schedule. Russ Maguire, Deputy City Engineer, explained his staff had conferred with other departments as to where the need for development was first proposed which was why Gene Autry and parts of State College and Katella were among the earliest projects and the remaining streets were then filled in over the eight year time period. Mayor Pringle also asked why Katella had been segmented into three separate projects. Mr. Maguire responded the westerly portion of Katella through the intersection at State College and over to the entry to the stadium was the main project due to development occurring there. The next segment was the stadium entry to the 57 and as it was the only highway of national significance in Anaheim, the City needed approvals from the Federal Highway Administration, and it was staff's intent to not slow down the project to the west due to the longer permitting process. The more easterly Katella Avenue project flowed into the interchange with approvals then needed from Caltrans, which would result in another lengthy permitting process and was why that project would stand alone. Mayor Pringle asked what was the City's position related to unifying the landscape theme and did the City have a right to link the Katella project together. Mr. Maguire indicated, that it was his experience that Caltrans dictated certain trees and certain diameters in the median island and did not waiver from those requirements which would make it difficult to place 36-foot palm trees in the median island. Mayor Pringle remarked he understood the challenges in working with Caltrans but would like to have that as one of his tasks to accomplish over the next five years. He also asked why the southern section of Douglass Street was not included. Mr. Maguire responded that Douglass had not been designated as a local highway or as part of the overall arterial plan and that that portion was not a part of the backbone roadways included in this implementation plan. Mayor Pringle felt this portion of Douglass Street would have more traffic than the northern portion as it connected not only to the Stadium but to ARTIC (Anaheim Regional Transportation Intermodal Center) with all the potential development associated with it, and asked what was required to move it to a higher level of landscaping. Mr. Maguire indicated that to include Douglass in the arterial system, it would need to be considered as a revision to the Platinum Triangle, the General Plan and the Circulation Element. Mayor Pringle asked that this change be considered as it was unlike many of the other interconnected streets that would be the responsibility of the developers and since it would only be enhanced in terms of its ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 3 service, the City should consider where it stands in relationship to other development taking place. Staff concurred. Andrea Roess, David Taussig & Associates, Inc., indicated her firm had prepared the feasibility study for the Platinum Triangle for purposes of land-secured financing. As the direction given was to develop a plan that would have a high degree of success with voters and also minimize issues involved with formation and implementation, her focus was on two types of land-secured financing mechanisms -Assessment Districts and Community Facilities Districts (CFD). She explained the assessment district method had been around for a long time and it relied on a strict benefit method for apportioning the tax. The newer community facilities district had already been utilized by the City and was a special tax, rather than an assessment, which did not need to be directly related to the benefit. She stated CFDs required atwo-thirds vote of the land owners based on acreage owned. If there were 12 or more registered voters within the district, she pointed out, this would turn to a registered voter election. In addition, she stated, the CFD allowed more flexibility in structuring the tax and different rates could be charged for different land uses. She indicated that both methods would be collected on the County property tax bill. For an assessment district, rather than two-thirds, Ms. Roess noted, the district would fail if there was a majority protest. The assessment district also required the amount charged to a parcel be directly related to the benefit the parcel received and this benefit would be established at the time the assessment district was formed so if the land use changed in the future, the assessment would not necessarily change. The key benefit to the CFD, she explained, was the flexibility to structure the tax formula to accommodate the complicated nature of the development within the Platinum Triangle and not tie it to the strict benefit analysis. It would, however, require atwo-thirds vote which was more difficult to achieve. She added there could also be voter issues since there were currently 15 registered voters within the Platinum Triangle and the City would not want the future of the 800 acres in the Platinum Triangle being determined by 14 voters rather than all of the landowners. The main benefit for the assessment district was the lower voter threshold, however, the benefit methodology did make it difficult to implement and might even be unfair due to the changing land uses over time. From this feasibility study, a method using both the CFD and the assessment district was proposed. The CFD would cover the mixed use areas within the arena district, the gateway district, the Gene Autry district, Katella district and Stadium district, which was now referred to as the "core". The remainder of the property would be called the "outer ring" and an assessment district would be applied in this case. Ms. Roess stated both of the first two districts would be used to fund the public infrastructure discussed earlier and in addition, a maintenance assessment district would fund the on-going maintenance of facilities over the entire Platinum Triangle. Council Member Hernandez remarked there would be two different processes used to generate different levels of tax and asked how that inequality would be handled. Ms. Roess indicated that the facilities that benefit the core area had been identified and they attempted to allocate the cost of those facilities more closely so the property within the core would be paying for facilities that mostly benefit the core area. The facilities in the outer ring would be funded by the properties in the outer area and the benefit derived for each would be close. Mayor Pringle reiterated that the CFD could ascribe a lesser obligation to property which was not changing its use but that in the assessment district the tax would be a more universal type charge across the board. Ms. Roess indicated the CFD methodology provided for more flexibility when the City did not know exactly what the ultimate development and build-out would be for the site. Ms. Roess indicated a more thorough analysis would be done when forming the CFD and each residential unit would be charged based on its benefit. The property in the core would pay slightly ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 4 more than the property in the outer ring due to density and because there were more facilities being maintained. Council Member Hernandez asked if all of the revenue was returned to the City or was any of it shared with the State or the County; Ms. Roess indicated there was a small collection charge by the County of approximately $15 per fund plus about .003 percent. Ms. Roess added the costs had been worked out with the engineers to break out the year-by-year estimated costs between the core area and the outer ring over an eight year period which totaled $124 million in facilities for the core and just under $50 million for the outer ring. She added in the formation phase, a more detailed analysis of allocating costs between the core and outer ring would be provided. She also emphasized all costs would be subject to change after a more thorough analysis but that the CFD would cover the properties within the core which was estimated to be an average tax of $850 per unit to be sufficient to fund the $124 million in facilities needed for the core. For the outer ring, assessments would be based on the actual benefit each property received from the facilities, an average of $19,000 an acre. The maintenance district reflected the need for $430,000 in annual maintenance costs, breaking out the cost for the core of $1,100 per property and about $700 per acre for property in the outer ring. Russ Maguire commented once input had been received on the implementation plan and financing mechanisms, the two documents would be finalized. The feasibility study would then be the basis for going forward with Phase II which was the formation of the districts. This phase, he stated, would have public outreach, public meetings, public input and hearings and eventually go to election. The implementation plan, he stated, would be used in planning for the future years' budgets such as proposing a way to fund the first year so the City did not have to wait for bonds to reimburse costs. Mayor Pringle confirmed that the CFD as outlined did not have the threshold number of residents living in it. Mr. Maguire replied that the vote on the CFD would be on a per acre basis for the 300 acres. Each landowner would get one vote per acre or portion of an acre and small parcels with less than one acre would get one vote. He commented there would be more than 300 votes possible due to the rounding up of a partial acre and it would require two-thirds voter approval to levy the tax. Mr. Maguire also pointed out the City owned substantial acreage in the Platinum Triangle and developers who purchased parcels had already executed development agreements acknowledging these types of assessments would be implemented and it was anticipated that the election would approve the levy. Mayor Pringle asked how the CFD could be modified and Mr. Maguire indicated if there was a modification of the mixed use zones, there would be an ability to annex into the CFD. The following timeline was provided: the Implementation Plan and Feasibility Study documents would be finalized, staff would put together proposals and contracts from service consultants to begin Phase II by the first part of February, 2006 and by next summer, final action for formation of both concurrent construction districts and maintenance district would take place. July 1, 2006 would be the start of day one of the eight-year program and once formation was complete, Phase III would be the two bond issuances. Mayor Pringle remarked it was important to attempt to complete Gene Autry all the way to the freeway and to complete Katella underneath the freeway but understood that in both cases there was a defined Caltrans position. Russ Maguire indicated that Gene Autry was part of the project that was jointly funded and the City was dealing with construction corrections that were a State obligation with one of those corrections to put back in the managed landscaping. He noted in that case, the City controlled the landscape improvements consistent with the previous Stadium area landscape master plan. Mr. Maguire would review that issue, emphasizing the City had a right to ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 5 review Caltran's plans and he would wait to ensure the State fulfilled their obligation. Mayor Pringle ended the presentation by remarking the City should make sure the landscaping was uniform as Gene Autry exited the freeway all the way to State College Boulevard. ADDITIONSIDELETIONS TO CLOSED SESSION: None PUBLIC COMMENTS ON CLOSED SESSION ITEMS: None Mayor Pringle moved to closed session for the following items: CLOSED SESSION: CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION (Subdivision (a) of Government Code Section 54956.9) Name of case: City of Anaheim v. Angels Baseball, LP, et al., Orange County Superior Court Case No. 050001902. 2. CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION (Subdivision (a) of Government Code Section 54956.9) Name of case: In re San Onofre Nuclear Generating Station (SONGS), California Public Utilities Commission Docket No. A.04-02-06. 3. CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION (Subdivision (a) of Government Code Section 54956.9) Name of case: In re Acceptance of Settlement Offer in Federal Energy Regulatory Commission (FERC) Docket No. EL00-95-000. 4. CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION (Subdivision (a) of Government Code Section 54956.9) Name of case: City of Anaheim v. Deseret Generation & Transmission Co-Operative, United States District Court for the Central District of California, Case No. SACV05-00298. 5. CONFERENCE WITH LABOR NEGOTIATORS Agency designated representative: Joel Fick Employee organization: Anaheim Firefighters Association, Local 2899. 6. CONFERENCE WITH LABOR NEGOTIATORS Agency designated representative: Dave Hill Employee organization: Anaheim Police Association 7. PUBLIC EMPLOYEE PERFORMANCE EVALUATION Title: City Treasurer At 5:45 P.M., Mayor Pringle reconvened the Council meeting. Invocation: Rabbi Mordecai Kieffer, Temple Beth Emet Flag Salute: Cub Scout Troop 546 from Anaheim Hills Presentations: Recognizing the 2005 Community Emergency Response Team (CERT) Graduates. ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 6 Recognizing the winners of the City's First Annual Holiday Lights Tour Contest. Acceptance of Other Recognitions (To be presented at a later date): Recognizing the City's Planning Department on receiving the Planning Implementation Award for Large Jurisdiction from the California Chapter of the American Planning Association. At 6:04 P.M., Mayor Pringle called to order the Anaheim Redevelopment Agency in joint session with the City Council. ADDITIONS/DELETIONS TO ANY OF THE AGENDAS: Agenda Item #14 withdrawn by staff. PUBLIC COMMENTS (ALL MATTERS EXCEPT PUBLIC HEARINGS): William Fitzgerald, Anaheim HOME, commented on Harbor Boulevard landscaping costs. Lee Blanchard, Local 504, spoke in support of Item No. 12, AEG Facilities agreement, remarking it could increase work opportunities for the 700 casual workers represented by Local 504. A visitor from China reflected on the opportunity his travel group had to experience American society, culture and life and how it would benefit them as they returned to their homes in China. Charlie Waggoner, contractor involved in construction of a $6 million project in the Ramsgate slide area, indicated it had been one year since the slide and other than securing the road and repairing the utilities, no other steps had been taken to clean up the rubble and debris and stabilizing the area for potential winter rains and urged Council to take action. Mayor Pringle remarked that Council was regularly updated on the status of the Ramsgate site and stated the City did not have the right to seize or take charge of the site and that this Council did not feel it was the responsibility of the taxpayers of Anaheim to take full responsibility for the properties. He pointed out the City was not obligated to secure the road but did so in order to repair the utilities that were underneath the road, commenting that was the only area where the City had responsibility. He added the City had tried to work with all three impacted neighborhoods to address the future but that there was no question of taking over full responsibility and obligating every resident and taxpayer of the City in that liability. James Robert Reade recognized various community members and staff for their good work, noting he would donate to the Eli Home in their names. Alma Ramirez spoke on several matters unrelated to the agenda. At 6:26 P.M., Mayor Pringle recessed the Council session to consider the Redevelopment Agency agenda and reconvened the meeting at 6:30 P.M. CONSENT CALENDAR: Mayor Pringle removed Item No's. 10, 12, 17, 21 and 22 for separate discussion and indicated he would abstain on Item No's. 18 and 20. Council Member Galloway removed Item No's. 27, 28 and 30 for separate discussion. Council Member Chavez moved to approve the balance of the consent calendar ,Items 5 - 37, seconded by Council Member Sidhu 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 ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 7 on the Consent Calendar. Roll Call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Galloway Hernandez, and Sidhu. Noes - 0. Motion carried. 5. Reject the certain claims filed against the City. C118 6. Receive and file minutes of the Public Utilities Board meeting of October 6, 2005; Deferred 8105 Compensation Committee meetings held May 24, 2005, June 8, 2005 and July 13, 2005; the Investment Advisory Commission meetings held February 15, 2005 and August 16, 2005 and the Park and Recreation Commission meeting held October 26, 2005. 7. Approve the 2006 Investment Policy. D117 8. Waive the sealed bidding requirement of Council Policy 306 and authorize the Purchasing D180 agent to issue a purchase order to McMahan Business Interiors, in anot-to-exceed amount of $51,054 (including tax and freight) for office furniture for the new Haskett Branch Library and accept the bids from Interservice, TFS Incorporated, in anot-to-exceed amount of $103,260 (including tax and freight) and Universal Seating Company, in anot-to-exceed amount of $67,722 (including tax and freight) for public furniture for the new Haskett Branch Library, all in accordance with Bid #6693. 9. Waive the sealed bidding requirement of Council Policy 306 and authorize the Purchasing D180 Agent to issue a 6-month purchase order for Hernandez City Services for shopping cart retrieval services in an amount not-to-exceed $24,000 for the Planning Department. 11. Accept the bid from Ski Incorporated, DBA Bielski Window & Masonry Cleaning, in a not-to- 1678 exceed amount of $22,800 (including tax), for window cleaning services for the Convention Center for a period of one-year, with four one-year optional renewals, and authorize the Purchasing Agent to exercise the renewal options, all in accordance with Bid #6670. 13. Approve aone-year lease agreement for the Police West Station with Anaheim West Plaza 3867 Partners, LLC for a base monthly rent of $7,200 plus 6 percent of the common area operating expenses. 14. Waive City Council Policy 306 and approve an agreement with Robert D. Johns to manage and operate golf professional services at the Dad Miller and Anaheim Hills Golf Courses. WITHDRAWN BY STAFF 15. Authorize the Community Services Department to accept two awards of a-rate funds from D150 the Federal Government to be used at the Haskett Branch Library; $35,824.06 for computer network cabling and $39,007.26 for computer network hardware and increase expenditure appropriations in the Public Works budget for Haskett Library by $74,831. 16. Approve and authorize execution of the Joint Use Agreement with the Anaheim Union High 1679 School District regarding scheduling and use of facilities. 18. Approve the Agreement for Acquisition of Mobile Home and Improvements with Bernardo 3868 and Gregoria Rosete, in the amount of $12,800, for one mobile home located at 1844 South Haster Avenue, Space No. 17, for the Gene Autry Way (West)/I-5 Freeway Highway project. ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 8 MAYOR PRINGLE ABSTAINED. VOTE: 4-0. 19. Award the contract to the lowest responsible bidder, Silverline Nevada, Ltd, dba California 3869 Fence and Supply, in the amount of $89,571.85 for Pearson Park cactus garden fencing improvement and authorize the Finance Director to execute the Escrow Agreement pertaining to contract retentions. 20. Approve the second amendment to the design agreement with DMJM+Harris, Inc., in a not 2754 to exceed total amount of $1,037,700, for the Gene Autry Way (West) project. MAYOR PRINGLE ABSTAINED. VOTE: 4-0. 23. RESOLUTION NO. 2005-229 A RESOLUTION OF THE CITY COUNCIL OF THE D117 CITY OF ANAHEIM amending the Deferred Compensation Plan for full-time employees, as last amended by Resolution No. 2004R-147. RESOLUTION NO. 2005-230 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM amending the Deferred Compensation Plan for part-time employees, as last amended by Resolution No. 2004R-148. 24. RESOLUTION NO. 2005-231 A RESOLUTION OF THE CITY COUNCIL OF THE D175 CITY OF ANAHEIM (i) reviewing the need for continuing the local emergency theretofore proclaimed by the Director of Emergency Services of the City of Anaheim as ratified by City Council Resolution No. 2005-17, (ii) determining that the need for continuing the focal emergency exists, (iii) authorizing and ratifying certain acts and orders by the Director of Emergency Services, and (iv) approving and authorizing certain additional remedial actions relating to the impending peril. (Concerning land movement and property damage in the vicinity of 357, 365 and 373 Ramsgate Drive). 25. RESOLUTION NO. 2005-232 A RESOLUTION OF THE CITY COUNCIL OF THE D129 CITY OF ANAHEIM authorizing the Fire Chief or his designee to submit a grant application on behalf of the City of Anaheim to the Office of Domestic Preparedness of the Department of Homeland Security for the fiscal year 2006 Assistance to Firefighters Grant Program (AFGP) and if awarded, authorizing the acceptance of such grant on behalf of the City and amending the budget for fiscal year 2005-06 accordingly. If grant funds are awarded, increase fiscal year revenue and expenditure appropriations by $120,507 in Program 213-310-2219-1599 and by $30,126 in Program 101-310-2219-5797 and authorize the Finance Director to carry forward into future fiscal years any unexpended appropriations. 26. RESOLUTION NO. 2005-233 A RESOLUTION OF THE CITY COUNCIL OF THE D154 CITY OF ANAHEIM approving a Letter of Understanding between the International Brotherhood of Electrical Workers, Local 47 and the City of Anaheim. 29. RESOLUTION NO. 2005-236 A RESOLUTION OF THE CITY COUNCIL OF THE P124 CITY OF ANAHEIM accepting certain deeds conveying to the City of Anaheim certain real properties or interests therein. (City Deed Nos. 10885 through 10889). 31. RESOLUTION NO. 2005-238 A RESOLUTION OF THE CITY COUNCIL OF THE ARA CITY OF ANAHEIM finding and determining that a Project Area Committee need not be ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 9 formed in relation to the proposed amendment of the Anaheim Merged Project Area through amendments to the constituent existing redevelopment plans for the Alpha, River Valley, Plaza, Commercial/Industrial, and a portion of the West Anaheim Redevelopment Project Areas. (See related Agency Item #1). 32. ORDINANCE NO. 6008 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM M142 adding new Section 11.04.075 to Chapter 11.04 of Title 11 of the Anaheim Municipal Code prohibiting certain vehicles on public property. (Introduced at the meeting of December 6, 2005, Item #34) 33. ORDINANCE NO. 6009 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM D108 amending Title 3 of the Anaheim Municipal Code relating to business licenses. (Introduced at the meeting of December 6, 2005, Item #35) 34. ORDINANCE NO. 6010 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM C280 amending the Zoning Map referred to in Title 18 of the Anaheim Municipal Code relating to zoning. (Reclassification No. 2005-00166.) (Introduced at the meeting of December 6, 2005, Item #36) 35. ORDINANCE NO. 6011 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM C280 amending the Zoning Map referred to in Title 18 of the Anaheim Municipal Code relating to zoning. (Reclassification No. 2004-00141). (Introduced at the meeting of December 6, 2005, Item #37) 36. ORDINANCE NO. 6012 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM 3735 granting a franchise to EarthLink, Inc., to install, operate and maintain aCity-wide wireless broadband communications network upon certain City-owned facilities located within the public rights-of-way in the City of Anaheim; and stating the terms and conditions upon which said franchise is granted. (Introduced at the meeting of December 6, 2005, Item #40. ) 37. Approve minutes of the special meeting of December 6, 2005 END OF CONSENT CALENDAR: 10. Decrease the mileage reimbursement rate from 48.5 cents to 44.5 cents per mile to match D128 the decrease approved by the Internal Revenue Service to be effective on January 1, 2006. This item was removed from the consent calendar by Mayor Pringle to emphasize that the City was reducing reimbursement rates as the cost of gasoline had decreased. He then moved to approve the mileage reimbursement rate of 44.5 cents per mile, seconded by Council Member Hernandez. Roll call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Galloway, Hernandez and Sidhu. Noes - 0. Motion carried. 12. Approve an Exclusive Booking Agreement between the City of Anaheim and AEG Facilities, 3866 Inc. granting exclusive booking rights for all public events at the Anaheim Convention Center Arena and authorizing the Convention, Sports and Entertainment Director to execute the Agreement. David Meek of Sports, Entertainment and Convention Department, recommended approval of the exclusive booking agreement stating AEG's contacts would attract sporting events, concerts and ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 10 would help with sponsorships as well. Mr. Morgan pointed out there were guarantees built into the agreement and the City would be guaranteed $2.5 million during the five year term. Mr. Meek indicated AEG was looking at a number of acts for the opening night for the 7,000 seat facility and had been talking to Rob Thomas, Black-eyed Peas and other entertainers of that caliber. Council Member Chavez expressed support for the agreement, remarking with four sporting, cultural and entertainment venues, there was not another city to offer this type of entertainment and moved to approve the AEG booking agreement, seconded by Council Member Sidhu. Roll call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Galloway, Hernandez and Sidhu. Noes - 0. Motion carried. 17. Find and determine it to be in the public interest to sell certain property without public 1682 bidding pursuant to Charter Section 1222; approve the Settlement Agreement between Southern California Edison Company and the City of Anaheim related to San Onofre Nuclear Generating Station and authorize the Public Utilities General Manager to execute the Agreement and all related documents. (Continued from the December 6, 2005 agenda, Item #24). Marcie Edwards, Public Utilities, reported this item was intended to accelerate the transfer of Anaheim's interest in the San Onofre Nuclear Generating Station (SONGS). She stated when the City's liabilities and potential risks were averaged together with the economic advantages and disadvantages, it was more beneficial for the City to accelerate the transfer. She explained the current operating agreement that would have extracted the City from SONGS in the year 2011 had a number of uncertainties, remarking the Nuclear Regulatory Commission had a history of assigning fairly broad financial responsibilities and this agreement would mitigate that exposure. She emphasized the need for resource portfolio flexibility; the need to reduce base load capacity; and to be able to bring in more shapeable, efficient and less capital intensive resources to fill in that gap were the driving forces behind this agreement, adding it was staff's recommendation to approve the settlement agreement as negotiated. Mayor Pringle confirmed with Ms. Edwards that the City had taken similar action regarding the settlement agreement with SONGS last year and was now looking to advance that divestment by four years due to a number of cost factors and in doing so would save the City $3 million. Council Member Sidhu asked a number of questions: when was the land purchased and its total cost, and if Anaheim retained its interest in SONGS, what additional capital investment would the City have to make to the year 2011. Ms. Edwards indicated the City's investment began with the second unit operating in 1983 and the third unit in 1984 and the original investment was $210 million. Council Member Sidhu asked what would happen to the investment after 2007. Ms. Edwards responded the $210 million purchase as depreciated by June 2005 would have a value of $139 million and with two years of additional depreciation and on-going amortization of nuclear fuel, the net value projection would reflect $63 million. Allowing for inventory reimbursement, the value on the books would be $50 million. If the City retained its interest to year 2011, an additional $6 million dollars would be required for capital investments. Council Member Sidhu asked if Edison would be paying the City for its interest in this agreement. Ms. Edwards indicated this was a negotiated settlement agreement which assumed a number of issues with respect to nuclear fuel, with proposed capital, with capping marine mitigation and while Edison would have the use of the resource which they need, they would also be assuming $25 million in operating and maintenance costs but the City would be getting zero dollars for that interest. She further stated for what Edison was getting for $125 million, she would be able to buy in the replacement market a product that could be shaped for approximately $52 million. For municipalities, Ms. Edwards commented, it ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 11 was the debt service component which defined profitability and value to the stakeholders and the bottom line for the decision to get out of SONGS reflected a combination of judgment factors and some projections for necessary capital, the environmental arena and the legislative arena. She believed there were substantial risks to retain SONGS interest in the portfolio and she did not want the ratepayers to pay the fully loaded fixed cost of the facility plus any additional exposure to liability and future capital investments to only be able to recover a marginal cost when it was sold in the market. She felt that was a significant drain on the rate base and was the reason she was making this recommendation. Council Member Sidhu asked what the three percent of ownership in SONGS equated to the total 100 percent of utility the City had and Ms. Edwards indicated it was roughly 10 percent. He also asked what the disadvantages of selling were. Ms. Edwards indicated the largest exposure was the volatility associated with the current legislative environment. She explained there was always the potential for legislation to be developed that would create a new set of mandates but that she would still recommend that holding onto the interest to hedge against that potential disadvantage would be fairly costly. Council Member Sidhu remarked he had read an article that said the PUC had approved $748 million to be invested in SONGS and that out of the $700 million over the next 37 years, the cost to the customers would be 50 additional cents per customer per month. Council Member Sidhu asked how much it would cost the City's ratepayers to keep Anaheim's interest in SONGS after 2011. Ms. Edwards indicated the City's share would be between $24 to $27 million dollars and if that was apportioned over the next 37 years, it would not be a significant increase to the ratepayers. She emphasized it was not solely the capital requirements as there were other aspects to the overall decision given Anaheim's relative size, the ability to manage risks and liquidity which was separate from the portfolio which she deemed the critical driver for this action. Setting that aside, she stated the decommissioning involvement currently was $95 million if Anaheim exited in 2007, in 2011 it would be approximately $113 million and if the City stayed until 2022, it would be approximately $265 million assuming that the current estimates of $3.1 billion for a successful decommission of the plant hold true. She commented if the escalation rate held the same, it could be over $8 billion and given Anaheim's size, the value of the energy and the lack of inflexibility was wha# affirmed the decision to transition out of the facility now. Council Member Sidhu pointed out there would only be a $25 million investment over the next 37 years compared to collecting dollars for selling energy and there would be enough funds to decommission the plant in the future, and he did not feel the City should have a $210 million investment come to a halt and zero out in 2007. He was not convinced that losing the original $210 million investment would be better than making an additional $25 million investment in the facility. Ms. Edwards responded the depreciation of the book value of the asset could have been accelerated over the last few years and the asset could then have had a value of zero. She indicated she was supportive of nuclear power but that this particular facility, given the City's current portfolio, presented significant risks and that this settlement agreement provided an opportunity to adjust base load and was staff's best aggregate judgment. Council Member Sidhu questioned why the other SONGS partners were not offered the interest. Ms. Edwards stated San Diego Gas & Electric and Riverside Utility were the other participants. San Diego's portfolio indicated they would not be interested and Riverside, which had experienced substantial base load growth, had a portfolio which allowed them to not only move ahead with peaking energy but no need to adjust to make room for it. She pointed out the current contract called for first right of refusal on the part of Edison and since it was a negotiated settlement which involved the management of liabilities and risks with the major operating agency in SONGS, it was critical to have enough on the City's side to create awin/win in the agreement. Council Member Sidhu asked when the agreement with the first right of refusal was signed and Ms. Edwards stated it was in the 1980's and that the PUC had approved the operating agreement. Council Member Sidhu wanted to ensure the City was getting the best deal and believed by offering the interest to ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 12 others, a better deal could be found and asked why it was not offered to Riverside. Ms. Edwards explained Anaheim had so much base load that there were times it was necessary to back down energy that cost Anaheim customers half as much in order to be able to accept this base load from SONGS, an on-going economic cost to the utility. The only way to get enough value was to sell the energy on a marginal cost basis which she could continue to do. She added it was not the marginal costs that were the problem, it was the fixed cost. She indicated Riverside had not shown any interest and San Diego had a different strategic plan, which left Edison. Council Member Sidhu asked if Ms. Edwards had discussed this with Riverside or San Diego; Ms. Edwards responded as she had read all of the state testimony that outlined San Diego's strategic direction, their perceptions of the facility and what they did and did not get out of it, she had no need to discuss it with San Diego. Additionally, she understood that Riverside could not offer Anaheim an agreement that would create enough value for the Anaheim Utility to leave. Mr. Shortino provided background on the operating agreement explaining Southern California Edison had first right of refusal if Anaheim opted out of its interest in SONGS. Mayor Pringle remarked that last year Council had made a decision hearing all these factors to opt out of ownership in SONGS by 2011, recognizing that Council Members Galloway and Sidhu were not members of the Council at that time. The question before Council now was whether to accelerate that by four years to save the City $3 million and to insure that additional liabilities that may incur to those owners between 2007 and 2011 were avoided. He pointed out that Ms. Edwards and her team had concluded it would save the City money and exposure and he trusted that opinion. He emphasized Marcie Edward's knowledge and experience and the fact that the California Independent Systems Operators, the statewide system that controlled the flow of power throughout the State of California, had asked her to oversee that organization for 18 months ending in 2005. He believed in getting the best return for Anaheim citizens and felt the analysis and recommendation for the settlement agreement put the City in a better position overall. Council Member Galloway provided her perspective, indicating the focus of Anaheim Utility had been to provide the best service at the lowest rate and trusted Ms. Edwards's judgment. She concurred that opting out now and lessening the liabilities and risks to Anaheim Utility payers made sense. Council Member Sidhu offered a final comment. He recognized the high quality of staff in Anaheim and trusted Ms. Edwards judgment, however he would not support the settlement agreement. He believed nuclear energy was more efficient and that Anaheim's three percent interest in SONGS had a monetary value and did not feel that leaving that investment on the table was appropriate and the City should be looking at ways to recover that investment either through offering the interest to other participants or in retaining the investment. Council Member Hernandez stated Ms. Edwards had a clear vision of the future of energy in California and trusted the recommendation for the settlement agreement. He indicated discussions had taken place about renewable energies and the mandates to increase Anaheim's assets and believed this action would provide a step in that direction and was supportive of the agreement. Council Member Chavez moved to approve the settlement agreement with Southern California Edison, seconded by Council Member Galloway. Mayor Pringle remarked he had seen the analysis, the cost figures, and understood the risk potential. He also stated if Anaheim did not buy that power, it would go back to the operator through the operating agreement and it was not Anaheim's right to shop that power on the open ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 13 market. He also indicated the $50 million in residual value for the original purchase price in SONGS was solely because Anaheim chose to depreciate its value at a certain rate, not its true value and he was comfortable to have a net $3 million benefit to the utility by opting out of the agreement four years early. Roll call vote: Ayes - 4; Mayor Pringle, Council Members: Chavez, Galloway, and Hernandez. Noes - 1, Council Member Sidhu. Motion Carried. 21. Approve an attorney services agreement with the firm of Allen Matkins Leck Gamble & 3870 Mallory, LLP to provide legal services to the City and authorize the City Attorney to execute the agreement. Jack White reported the City had been in discussions with representatives of the National Football League (NFL) concerning the possibility of building a stadium and bringing an NFL team to Anaheim and indicating they were now at the stage to write agreements. Since the NFL was represented by a large, nationally known law firm, Mr. White was recommending the City utilize a firm with experience in dealing with the NFL and was recommending the firm of Allen Matkins Leck Gamble & Mallory specifically for their expertise in government entitlements, environmental work and financing as well as their background in working with the NFL. Council Member Sidhu asked if the City was ready to finalize the agreement and if not, could the City wait until there was some firm agreement between the NFL and Anaheim; Mr. White responded this was the stage of the process where the NFL wanted to move forward with Anaheim and putting together a written agreement was the next step. He pointed out the NFL law firm had several hundred attorneys on staff and because of the importance for Anaheim to have a solid agreement drafted, Mr. White recommended the firm of Allen Matkins for their specific expertise and staff for this purpose. Council Member Sidhu felt it was too early to take this step without a firm agreement in place. Council Member Chavez commented that hiring a legal firm with this type of background and prestige would send a message that Anaheim was very serious about this and would be hiring the best to represent the City and make every effort to insure the citizens of Anaheim get a good deal. Council Member Chavez moved to approve the attorney services agreement with Allen Matkins et al, seconded by Council Member Hernandez. Council Member Hernandez stated it was no secret that the City had been negotiating with the NFL for the last 18 months and the organization would like a final document to present to their owners and unless the City had the legal means to prepare that, Anaheim would not be providing the level of sophisticated service that was necessary. Roll call vote: Ayes - 4; Mayor Pringle, Council Members: Chavez, Galloway, and Hernandez. Noes - 1; Council Member Sidhu. Motion carried. 22. Award the contract to the lowest responsible bidder, GKK Works Construction Services, 3871 Inc., in the amount of $1,759,000, for the East Hills Branch Library and Police Department tenant improvements and approve and authorize the Finance Director to execute the Escrow Agreement pertaining to contract retentions. Mayor Pringle wanted to emphasize this award bid was a future construction project for East Anaheim and Anaheim Hills and was a project that had fallen off the radar and he wanted the community to be aware of the City's interest in enhancing library services at the existing facility and to build out the second floor in order to provide police service in the Anaheim Hills area. ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 14 Council Member Sidhu moved to award the bid to GKK works Construction Services, seconded by Council Member Hernandez. Roll call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Galloway, Hernandez and Sidhu. Noes - 0. Motion carried. 27. RESOLUTION NO. 2005-234 A RESOLUTION OF THE CITY COUNCIL OF THE D150 CITY OF ANAHEIM adjusting the amount of the park in-lieu fee and rescinding Resolution No. 2004R-128. 28. RESOLUTION NO. 2005-235 A RESOLUTION OF THE CITY COUNCIL OF THE D150 CITY OF ANAHEIM adjusting the amount of the park in-lieu fee for the Platinum Triangle area and rescinding Resolution No. 2004R-179. Council Member Galloway requested Item No's. 27 and 28 be taken together as they were related and asked for clarification relating to the in-lieu park fees. Terry Lowe, Community Services Director, reported that Anaheim had a park dedication ordinance that required annual review of park development fees based on the cost of land acquisition and development. The first ordinance was citywide and the second ordinance related to the Platinum Triangle only. The ordinance, he stated, contained a formula for this calculation and it was applied using current industry standards. The formula actually indicated a 30-40 percent increase in fees was warranted, but staff felt this would be an unprecedented increase which could be detrimental to the economic development of some of the projects and recommended a lower fee increase of 15 percent. Council Member Galloway was supportive of the fee reduction, She asked for specifics on the use of these fees, whether if was used for maintenance of parks throughout the City or specifically for those within the Platinum Triangle. Mr. Lowe explained it was required under State law that the fees be used for park development and park rehabilitation within the general service area of the project, pointing out there would be significant parkland developed by the builders within the Triangle who would receive some break from those fees for providing that parkland. He added the City looked to developing at least two new parks at the perimeter of the Platinum Triangle with these funds as well as doing significant rehabilitation for a number of parks in the central and east part of the City that would serve the new residents coming to this area. He commented staff could put together a comprehensive list showing what those $40 million in projects could do. Ms. Galloway added the reason she pulled this item was to indicate her support and her understanding that parks added to the quality of life for Anaheim residents. Just as important as parks were to the quality of life, she also believed that affordable housing was and that in-lieu fees could have brought affordable housing necessary for the workforce needed for the Platinum Triangle. Council Member Galloway moved to approve Item 27, Resolution No. 2005-234 and Item No. 28, Resolution No. 2005-235, seconded by Council Member Chavez. Council Member Sidhu concurred with the reasonable increase and recognized the need for updating the City's park facilities which were 20 to 30 years old and very well used. Roll call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Galloway, Hernandez and Sidhu. Noes - 0. Motion carried. 30. RESOLUTION NO. 237 A RESOLUTION OF THE CITY COUNCIL OF THE CITY D182 OF ANAHEIM adopting the 2005 Urban Water Management Plan. Mayor Pringle indicted this item had initially been removed from the consent calendar by Council Member Galloway, but that she had earlier stated no further discussion was necessary. Council Member Galloway moved to approve Resolution 2005-237, seconded by Council Member ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 15 Hernandez. Roll call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Galloway, Hernandez and Sidhu. Noes - 0. Motion carried. 38. That the City Council nominate and appoint one Council Member to serve as Mayor Pro D114 Tem for one year. Mayor Pringle recommended Richard Chavez continue as Mayor Pro Tem for calendar year 2006. Council Member Hernandez nominated Harry Sidhu. As no other nominees were offered, a straw vote for Council Member Chavez was taken which reflected: Ayes - 3, Mayor Pringle, Council Members Chavez and Galloway. Noes - 2; Council Members Hernandez and Sidhu. The straw vote for Harry Sidhu was: Ayes - 2: Council Members Hernandez and Sidhu. Noes - 1: Council Member Galloway. Abstention - 2: Mayor Pringle, Council Member Chavez. Richard Chavez reappointed as Mayor Pro Tem for 2006. 39. Consider two appointments to the Senior Citizen Commission, one term to expire June 30, B105 2006 (Josephine Winder) and one term to expire June 30, 2008 (Joan Helms). Mayor Pringle continued this item to the January 10, 2006 meeting. 40. That the City Council nominate and appoint one representative to the Orange County 0144 Vector Control Board of Trustees. Mayor Pringle stated the Vector Control Board recently had a property tax increase voted on by the people to assure the Board was able to address the West Nile virus and he was personally concerned some boards serve in a manner unaccountable to anyone. He believed it was wiser to appoint a council member to serve in that capacity who would be held accountable by the voters and by the council members. He also added he believed the duties of the vector control board should be taken over by the County and would work to accomplish that. Mayor Pringle nominated Harry Sidhu to the appointment and with no other names offered, Council Member Sidhu was unanimously appointed. 5:30 P.M. PUBLIC HEARINGS: 41. A public hearing to consider the creation of Underground District No. 53. (La T104 Palma/Brookhurst) Gil Montez, Public Utilities Department introduced project manager Dick Lee who reported the City was in its 15th year of the undergrounding program which had under grounded 84 circuit miles of utilities. This district he reported would be District No. 53 and was bounded by La Palma to the south between Brookhurst and Euclid, all the way up on Brookhurst and Euclid to the 91 freeway so it formed a U-shaped district. He explained there were 12 kV lines, approximately 9,000 feet in length and it would serve a mixed use of residential and commercial customers. To select a street for undergrounding, he indicated staff looked at reliability in terms of engineering and making sure facilities would be upgraded with new equipment, and also looked at coordinating the Public Works Department so the underground project would be in concert with the construction activities, which in this instance, would take place with the street rehabilitation project on Brookhurst. He also indicated staff looked at geographic diversity to make sure projects were placed throughout the City to improve Anaheim's image. Mayor Pringle opened the public hearing ANAHEIM CITY COUNCIL MEETING MINUTES DECEMBER 20, 2005 Page 16 Alma Ramirez recommended the City take a look at all of the La Palma area which was becoming dilapidated and in need of refurbishment. With no other comments, the hearing was closed. Mayor Pringle responded to the public comments indicating the area between Brookhurst and Euclid north of La Palma was a good area surrounded by John Marshall Park and near Servite High School. He added that the commitment Anaheim has made to undergrounding utilities, enhancing streets with landscaping and addressing the public infrastructure made a huge statement to the City's commitment in improving neighborhoods. Council Member Chavez moved to approve Resolution No. 2005-239, seconded by Council Member Sidhu. RESOLUTION NO. 2005-239 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM creating Underground District No. 53 La Palma/Brookhurst. Roll call vote: Ayes - 5; Mayor Pringle, Council Members: Chavez, Galloway, Hernandez and Sidhu. Noes - 0. Motion carried. Report on Closed Session Actions: None Council Communications: Councilmembers Hernandez and Galloway wished all happy holidays and good health in the new year. Councilmember Sidhu commented on his first year in office and thanked City employees for their hard work and the firefighters and police officers who put there lives on the line every day. Councilmember Chavez complimented staff and the fine job they did on getting major projects done in 2005 and also commended those employees that would be work the holidays keeping things safe and operational for the rest of the community. City Manager Dave Morgan recognized Bob Templeton, Utility Department, who had announced his retirement after serving Anaheim for 35 years. Mayor Pringle commended Council Members Galloway, Hernandez and Chavez for stepping up at the last minute and attending a meeting with the Anaheim Union High School District when it was learned that the school district wanted to take over a piece of City property that Anaheim had been planning to develop with a mix of housing. He was proud of the Council team and the City staff pulling together to accomplish great things for the benefit of Anaheim, the 10th largest city in the State of California and reviewed some of the accomplishments of the past year. Adjournment: At 8:02 P.M., Mayor Pringle adjourned the December 20, 2005 meeting. ~RQe~sgprec~tful~lyQsubmitted, V~~C) it~(f-mil- Erlinda Compton Acting Deputy City Clerk