07/07/2015 ANAHEIM CITY COUNCIL REGULAR AND REGULAR
AJOURNED MEETING OF JULY 7, 2015
The regular meeting of July 7, 2015 was called to order at 3:00 P.M. and adjourned to 4:30 P.M.
for lack of a quorum. The regular adjourned meeting of July 7, 2015 was called to order at 4:01
P.M. by Mayor Pro Tern Kring in the chambers of Anaheim City Hall, located at 200 S. Anaheim
Boulevard.
The meeting notice, agenda and related materials were duly posted on July 2, 2015.
PRESENT: Mayor Pro Tern Kring and Council Members Kris Murray and James Vanderbilt.
Mayor Tait and Council Member Jordan Brandman joined the meeting at 4:02 P.M. and 4:03
P.M., respectively.
STAFF PRESENT: Interim City Manager Paul Emery, City Attorney Michael Houston and City
Clerk Linda Andal.
ADDITIONS/DELETIONS TO CLOSED SESSION: None
PUBLIC COMMENTS ON CLOSED SESSION ITEMS:
Brian Chuchua, resident, recommended Council appoint a city manager experienced in multiple
disciplines essential to a large municipality with a large budget along with the ability to work and
relate to City Council members, the community, and staff.
Mark Daniels, speaking as a long term resident regarding the city manager appointment, spoke
of notable management leadership in Anaheim's past and the need to consider impacts to
current and future generations
Greg Diamond stated Council Member Murray had a conflict of interest relative to a vote on
Disney business as her staff person had extensive business ties with Disney and had been
representing Disney in a number of areas. Council Member Murray objected remarking this
statement did not pertain to the closed session item with Mr. Diamond responding that it
pertained to a Brown Act violation and was appropriate to bring up at this time because of the
importance of appointing a city manager who would be able step in and ensure there was no
conflict of interest and to stand up to special interests, especially, he contended, if votes were
traded for campaign contributions. Ms. Murray remarked those comments were not in any way
related to the closed session item and that the allegations made were inaccurate and false,
requesting the Mayor ensure order was maintained during the meeting. Mayor Tait responded
the comments were related to the city manager position and relevant in terms of allowing the
speaker to voice his opinion. Council Member Vanderbilt requested guidance from the City
Attorney as to clarification on whether the prior speaker's statements were germane. Michael
Houston, City Attorney, responded Mr. Diamond's comments were tangentially related to the
item on closed session and it was a fair decision by the Mayor to allow that to proceed. He
added that under the Anaheim Municipal Code it was up to the Mayor as the presiding officer of
the meeting to determine whether comments were germane and if the body wished to appeal
that ruling, the Council as a body could then make a determination.
Mayor Tait, in response to a comment made by the previous speaker regarding texting during
oral comments, wondered if the Brown Act addressed that issue. Mr. Houston remarked that
having a text message sent had nothing to do with the Brown Act, although if the text was read
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to the public, the message was then put into the public record and cured any Brown Act issues.
Mayor Tait requested City Council refrain from using cell phones unless it was necessary, to
allow speakers their full attention.
Cynthia Ward, CATER, remarked the city manager position was critical to management of the
city, as it was the only position that supervised senior management staff and held them
accountable for work product presented to city council for action. She pointed to specific
information in the staff report for Item No. 22 that she felt misinformed the public on a number of
elements, stating untrue information presented as facts was a violation of the public trust.
At 4:15 P.M., Mayor Tait recessed to closed session for consideration of the following items.
CLOSED SESSION:
1. PUBLIC EMPLOYEE APPOINTMENT
(Section 54957 (b) of the California Government Code)
Position: City Manager
2. CONFERENCE WITH LABOR NEGOTIATORS
(Subdivision (a) of Section 54957.6 of the California Government Code)
Agency Designated Representative: Chris Chase
Position: City Manager
3. CONFERENCE WITH LABOR NEGOTIATORS
(Subdivision (a) of Section 54957.6 of the California Government Code)
Agency Designated Representative: Chris Chase, Jason Motsick
Name of Employee Organizations: Anaheim Police Association, Anaheim Fire
Association
At 4:13, Council returned from closed session and the meeting was reconvened.
INVOCATION: Pastor Jeffrey Gang, Seventh Day Adventist Church
FLAG SALUTE: Council Member Kris Murray
PRESENTATIONS: Recognizing Salvador Zarate from the Planning Department for his efforts
to go Above and Beyond
David Belmer, Planning Director, recognized and introduced Salvador Zarate, Code
Enforcement Officer I and a member of the Homeless Outreach team, who encountered a
mother and daughter living in a park and took the time to understand their circumstances and
realized they could be helped. Through his collaborative efforts, the team found funds for a
temporary home which ultimately led to permanent housing for this family. Mr. Belmer pointed
out that in addition to recognition by the City, Mr. Zarate would be presented with a certificate of
recognition by Congresswoman Mimi Walters.
ADDITIONS/DELETIONS TO THE AGENDA: None
PUBLIC COMMENTS (all agenda items, except public hearing): Prior to receipt of public
comments, a brief decorum statement was provided by City Clerk, Linda Andal.
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Cecil Jordan Corkern offered his assistance in ending the homeless situation, by distributing
flyers for the homeless shelter and multi-service center proposed on Kraemer Boulevard.
Larry Larson praised Mayor Tait for the honor, dignity and respect he brought to politics and
talked about encouraging citizens to get involved in their city government.
William Fitzgerald objected to Disney's year-round fireworks, citing pollution and health impacts
to the nearby residential population and offering his viewpoint on those who supported the
Disney Corporation. Mayor Tait responded to the unkind personal remarks made by Mr.
Fitzgerald.
Jose Vargas, ESCRI, thanked Council Members who had supported the 100 Chances
Mentorship Program and for participating in the upcoming July 15th Launch Event to raise funds
for a program giving at risk youths a chance to work with business leaders and improve lives
through job opportunities.
Jeff LeTourneau requested the City Council table Agenda Item No. 22, to allow the community
and government to discuss this issue and ensure the future of Anaheim was not at risk. His
objection centered on the fact Council made it more difficult to place items on the ballot by
requiring a 2/3 vote for a tax increase and then without time for proper debate, was proposing a
deal that would tie the city's hands for future entertainment tax revenues for years to come.
Kara Sandoval, intern social worker in the La Palma Park area, explained she was bringing to
the attention of the city the harassment and victimization of the homeless population, via
ticketing and incarceration by the Anaheim Police Department, an effort she believed was
counterproductive to the city's goals.
Rene, warned the public against the Anaheim Police Department citing the various police
related fatalities that had occurred in the past and naming those officers involved.
Genevieve Huizar, resident, spoke of the loss of her son. She then named 15 other young men,
who she believed died at the hands of Anaheim police officers, asking why no officers were held
accountable. In addition, she opposed approval of the Disney contract, Item No. 22.
Mariana Rivera, Translation: Spanish, opposed approval of Item No, 22, stating citizens of
Anaheim paid their taxes and worked multiple jobs to make a living and she did not understand
why corporations, such as Disney, could get away without paying taxes. She linked the
nonpayment of taxes to lost revenues that could have been used for a community center in
Guinida, a facility she had long advocated for on behalf of the Guinida community.
Irma Mendoza, Translation: Spanish, opposed approval of Item No. 22, urging Council to make
the best decision for everyone and ensure Disneyland, a company with millions in profits paid
their share of taxes.
Arturo Ferreras, resident, remarked he was a volunteer organizing the community in the south
district, the poorest section of the city around Disneyland and he objected to his government
supporting corporations to enrich their profits by taking revenues from the city. His community
had been struggling for the last six years and while he was thankful for the parks and libraries,
he felt they were a reaction to protests from the community. He urged Council to serve the
public, not the interests of multi-national corporations.
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Francisco Peno, student, addressed Item No. 22, stated he wanted the Disney agreement to be
inclusive to the community and that public/private partnerships provide for good programs such
as other cities like Irvine offered and that decisions be made in favor of the future of Anaheim.
Vitoria de Gomez, resident, emphasized that many were against the proposed Disney contract
because the Disney Corporation should not be exempt from paying taxes.
Guadalupe Cisneros urged Council to consider the residents of Anaheim and vote no on Item
No. 22, or postpone the decision.
Jose Hernandez emphasized Council was elected to represent the interests of the Anaheim
community, not Disneyland or other corporate special interests, stressing that the Disney
Corporation deserved to pay its fair share of taxes.
Paul McArran, resident, highlighted the importance of the jobs Disney generated for Anaheim
and would do so again with their proposed expansion. In addition, the city benefited from all
those ancillary small businesses in the city, successful because of Disney. He referred to the
Sriracha Company that was recently in the newspapers that ended up moving from their
southern California location to Texas, adding that if Anaheim was not business friendly, Disney
could do the same. He supported approval of Item No. 22.
Linda Andal, City Clerk, encouraged the public to reserve their comments on Item No. 22 for the
public hearing on that matter so that the record would accurately reflect the comments made.
She added that comments received during the general public comment portion of the meeting
were not made part of the public hearing record. Council Member Vanderbilt informed the
public that speakers were allotted five minutes for the public hearing and only three minutes for
general comments.
Ana Lepe, Translation: Spanish, stated that as Council considered their vote on Item No. 22,
Disney would be the primary beneficiary whose sole focus was on corporate profits. She added
with her income she barely got by and did not think it fair for Disney to have taxes waived for the
next 30 years, and in effect lessening revenues that would go to the people.
Donna Acevedo, resident, stated SOAR was a coalition of businesses and former/current
elected officials and was also a political action committee (PAC) to support candidates who
aligned with the Resort District. She pointed out that Disney contributed to three political action
committees, SOAR, OC Taxpayers Association and Strong OC Neighborhoods, who then
contributed hundreds of thousands of dollars to Anaheim's political candidates. She further
stated that Disney should not be allowed to pump money into elections and that this issue
should be discussed and made transparent to the public.
Javier Luna, soccer player, thanked the Anaheim Fire Department for contributing soccer
equipment to his team and Council Member Murray for helping provide a practice site for the
soccer team at Chaparral Park. He was very appreciative of everyone's help, adding that he
wanted to be a good citizen of Anaheim.
Genoveva Garcia, resident, remarked that she had rights and obligations as a resident to pay
for taxes and while Disneyland was important to the community, she believed they had an
obligation to pay taxes as well. She urged everyone to work together for a better Anaheim.
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Luis Zuniga explained that he rarely saw the needs of the community reflected on the agenda
and that Council Members should explore the quality of life difference between east and west
Anaheim. He recognized that Disney helped the city's economy, but pointed out everyone paid
taxes and Disney should as well; and with that said, the City Council should understand the
graver issues facing neighborhoods and make improvements.
lzoj Cee, resident, stated it was wrong that Disneyland did not pay taxes when every other
business must, adding the need for programs to keep kids off the street, sidewalk improvements
and the homeless.
R. Joshua Collins, Homeless Advocates for Christ, addressed the issue of ticketing and taking
property from the homeless, asking for a meeting to discuss these problems. Mayor Tait
requested Mr. Collins follow up with his office and get a meeting scheduled.
Lou Noble remarked there were many reasons why people were homeless, but most did not
choose to live in the streets. He spoke of the need for a safe zone for those that were most
vulnerable, adding that waiting for a shelter was not the answer.
Shelby Martin, resident, urged Council to postpone the vote on Item 22 and consider the
consequences that come with supporting this corporation over the residents of Anaheim.
Olivia Frida stated she had turned her life around and now held two jobs and was a
communications major as well, urging the community to not give up on their youth who were
living in poverty stricken areas.
Carmen Rodriguez, resident, urged Council to reject Item No. 22, remarking she paid taxes
while making a $9.30 hourly wage while Disney with its millions in profits were trying to get out
of paying taxes.
Gilbert Padillo, Carpenters Council, remarked the Disney expansion offered an opportunity to
boost Anaheim's local economy while creating more permanent jobs which he saw as the key to
the future of the city. He recommended the city take a proactive stance versus Disney getting a
better offer from another city and commended Council for moving forward and making the tough
decisions.
Todd Ament, distressed over earlier comments by another public comment, Mr. Fitzgerald; he
celebrated the life of Stan Pawlowski, a well-respected and highly regarded man and resident
who spent his entire life doing good for others. Mr. Pawlowski passed away this past June,
2015.
Greg Diamond pointed out that a gate tax was not on the agenda, the item involved a contract
with Disney Corporation. He reminded the public that a grand jury came out with a report in
June about Joint Power Authorities and the abuses of the JPA system urging the public to
review it. He added that he had a concern with Council Member Murray considering Item No.
22 as her aide had extensive business contacts with Disney Corporation with people that were
referred to as affiliates in the agreement and should recuse herself because of a conflict of
interest. He then asked if the City would be getting $4 million a year from the parking structure
or would the vote on Item 22 change that component.
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Jose Moreno shared a hypothetical situation with regard to a local multi-million dollar
corporation and a deal to make them exempt of any local levy of taxes for 50 years, with various
scenarios offered.
Mark Daniels appreciated the numbers of speakers attending tonight's meeting and making their
voices heard and hoped for that same enthusiasm to get people out to vote. Referencing the
recent visit by the Dalai Lama, he suggested putting the thoughts and ideas of the Dalai Lama
into effect that would benefit all in the community.
Al Jabbar, speaking as a resident not a AUHSD trustee, urged Council to postpone Item 22
decision until the community was engaged in a proper dialogue; he believed Disney would
invest their$1.5 billion either way rather than foregoing possible entertainment tax revenues for
45 years. Should Council approve the item, he requested the city ask Disney to substantially
invest in the Anaheim High School visual arts/performing arts programs annually ($3-5 million).
He also requested the City budget a line item to invest in schools, and consider the following
suggestions: partnering with the school district to put a pool in Anaheim High School or helping
fund the effort to keep Sycamore Jr. High open to allow neighborhood access to its parks.
Jose Hernandez, student at Sycamore Jr. High, asked Council to vote for a better future for him,
the community and for the people.
Breanna Bryol, Sycamore Jr. High student, urged Council to stop giving money to Disney and to
give it to her community. She thanked Council Member Murray and Lorri Galloway for the
soccer equipment provided to the youth on Anna Drive but emphasized that playing soccer on a
10x10 apartment courtyard was difficult and she hoped for a soccer field/park to be built for that
neighborhood.
Axell, Sycamore Jr. High, felt the needs of the students were not being fulfilled, and asked for
Council's assistance.
Yesenia, Anna Drive resident, thanked Council Member Murray for her help and hoped the
promise of a playing field for the neighborhood would happen.
Chris Snyder, businessman, remarked that everyone in this room was here for the same
reason; they loved Anaheim, had an investment in it and were here to support it. He added if
uninformed individuals were allowed to continue to state mis-facts, there should be a better
solution to educating the public while still being able to work together to provide a future for the
city.
COUNCIL COMMUNICATIONS:
Council Member Vanderbilt spoke about the efforts of north Orange County cities collaborating
with the County of Orange towards ending homelessness and further highlighted that the City of
Brea would be considering committing $100,000 to the Orange County Homeless Shelter and
Multi-Service Center.
At the request of Council Member Murray, City Attorney Michael Houston responded to a public
comment by providing clarification and confirmation that a conflict of interest did not exist and
Council Member Murray would be able to consider the Disney item on the agenda.
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Ms. Murray also informed the community that the City of Fullerton matched Anaheim's $500,000
contribution to the homeless shelter and the City of Orange was also moving forward with
financial support. She noted that even cities that were strapped like Placentia and Yorba Linda
were considering supporting this effort.
In response to the many comments that were offered under general comments, Council
Member Murray stated there was nothing before council tonight that would make any
corporations tax exempt and the only thing being considered was whether to continue a
financially successful partnership with Disney. She hoped the public would stay for the staff
report for a clear understanding of what was proposed. For those who asked where the city's
priorities were, she urged the community to view the budget workshops on line for specific
information or to contact any one of the council persons in person. She emphasized Anaheim
was reinvesting hundreds of millions of dollars into neighborhoods, public safety, and new
community centers at Ponderosa, Mira Loma, Guinida Lane, Paul Revere Park as that park
enhancements were being made citywide. She pointed out those investments were possible
because of the strength of the Resort District and was the reason the city did not have to look at
taxing residents and businesses further.
Mayor Tait commented that the upcoming hearing was not about a tax, it was to consider a
contract with Disney Corporation that should the citizens vote for an entertainment tax in the
next 45 years that tax would be reimbursed to Disney Corporation which in effect nullified the
people's right to vote.
Mayor Pro Tern Kring responded to comments regarding the taxes used for maintenance of the
Anaheim Resort area, emphasizing the Resort businesses assessed themselves to pay for
maintenance of the Resort District and those monies collected annually were used to maintain
the beautification of the Resort to specifically to attract tourists.
CITY MANAGER'S UPDATE: None
CONSENT CALENDAR: At 7:02 P.M., Mayor Tait indicated he would record an abstention on
Agenda Item Nos. 9 and 10 as his firm had worked with OCTA in the past year. Mayor Pro Tern
Kring then moved to waive reading in full of all ordinances and resolutions and to adopt the
consent calendar as presented, in accordance with reports, certifications and recommendations
furnished each city council member and as listed on the consent calendar, seconded by Council
Member Murray. Roll Call Vote: Ayes—5: (Chairman Tait and Council Members: Brandman,
Kring, Murray and Vanderbilt.) Noes— 0. Motion Carried
1. Receive and file Public Utilities Board meeting minutes of March 25, 2015 and May 27,
2015, Notice of Adjournment for Public Utilities Board meeting of April 22, 2015
(rescinding Public Utilities Board meeting minutes of April 22, 2015, inadvertently
B105
submitted for Council filing on June 16, 2015), Community Services Board meeting
minutes of April 9, 2015 and May 14, 2015 and Cultural and Heritage Commission
meeting minutes of May 21, 2015.
2. Award the contract to the lowest responsible bidder, American Landscape, Inc., in the
AGR-9075 amount of$1,485,354.96, for the Anaheim Hills Golf Course Turf Reduction Project and
authorize the Finance Director to execute the Escrow Agreement pertaining to contract
retentions.
City Council Minutes of July 7,2015
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AGR 9076 3. Award the construction contract to the lowest responsible bidder, De La Riva
Construction Inc., in the amount of$1,275,750, for the Manzanita Park Recreation
Building Project, adopt a CEQA finding of categorically exempt and authorize the
Finance Director to execute the Escrow Agreement pertaining to contract retentions.
4. Accept the lowest responsive bid of Waxie Sanitary Supply, in the amount of$239,475
D180 plus applicable tax, for the purchase of toilet tissue and paper towels for the Anaheim
Convention Center for a one year period, and authorize the Purchasing Agent to
exercise the renewal options, in accordance with Bid#8438.
5. Accept the bid of South Coast Mechanical & Electrical, Inc., in an amount not to exceed
D180 $131,382, to replace one air handler and two condensing units located on the rooftop of
Fire Station #1, in accordance with the scope of work, specifications, and terms and
conditions of Bid #8512.
6. Accept the bids from West Coast Lights &Sirens, Inc. and Adamson Police Products, in
a combined amount not to exceed $206,400 plus applicable tax, for police vehicle
D180 equipment for a one year period and authorize the Purchasing Agent to exercise the
renewal options, in accordance with Bid #8474.
7. Waive Council Policy 4.1 and approve an agreement with Aviation Facilities, Inc., in an
amount not to exceed $50,000 annually, for pilot training services with three one-year
AGR-7294.0 optional renewals and authorize the Chief of Police to execute any amendments or
optional renewals under the terms and conditions of the agreement.
8. Approve and authorize the Public Works Director to execute Contract Change Order No.
AGR-8299.0.1 1, and any related documents, in favor of Asphalt, Fabric & Engineering, Inc., in the
amount of$6,834.45, for construction of the La Palma Dog Park Project.
D175 9. Authorize the Public Works Director, or her designee, to accept and manage five
approved Comprehensive Transportation Funding Program grants and increase the
Public Works fiscal year 2015/16 revenue and expenditure budget by $8,986,097.
Mayor Tait recorded an abstention on this item. Roll Call Vote:AYES—4: (Mayor Pro
Tem Kring and Council Members:Brandman, Murray and Vanderbilt). NOES—0.
ABSTENTION— 1:Mayor Tait. Motion to approve carried.
D175 10. Authorize the Director of Public Works, or her designee, to accept and manage
$1,000,000 in grant funds pursuant to OCTA Cooperative Agreement No. C-5-3231 for
pavement rehabilitation construction on the Lincoln Avenue project and increase the
Public Works fiscal year 2015/16 revenue and expenditure budget by $1,000,000.
Mayor Tait recorded an abstention on this item. Roll Call Vote:AYES—4:(Mayor Pro
Tem Kring and Council Members:Brandman, Murray and Vanderbilt). NOES— O.
ABSTENTION— 1:Mayor Tait. Motion to approve carried.
11. Approve the Agreement for Acquisition of Real Property with Moises P. San Miguel and
AGR-9077 Frances M. San Miguel, in the acquisition payment amount of$26,100, for the partial
acquisition of real property located at 1319 North Catalpa Avenue for the Brookhurst
Street Improvements from 1-5 to SR-91 (R/W ACQ2013-00457).
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AGR-9078 12. Approve the Agreement for Acquisition of Real Property with Refugio Gutierrez and
Irene Gutierrez, in the acquisition payment amount of$5,100, for a partial acquisition of
real property at 2202 West Huntington Avenue for the Brookhurst Street Improvements
from 1-5 to SR-91 (RNV ACQ2013-00463).
13. Approve the Agreement for Acquisition of Real Property with Miguel Valencia, in the
AGR-9079 acquisition payment amount of$428,000, for the purchase of real property located at
1184 North Brookhurst Street for the Brookhurst Street Improvements from 1-5 to SR-91
(RNV ACQ2013-00447).
14. Approve and authorize the Planning and Building Director to execute an agreement with
AGR-9080 Placeworks, Inc., in an amount not to exceed $740,920, to prepare the Beach Boulevard
Specific Plan and Programmatic Environmental Impact Report.
15. RESOLUTION NO. 2015-216 A RESOLUTION OF THE CITY COUNCIL OF
P124 THE CITY OF ANAHEIM dedicating certain city-owned property in the City of Anaheim
for public purposes (City Deed No. 11850).
P124 16. RESOLUTION NO. 2015-217 A 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. 11851, 11852, 11855, 11856,
11857 and 11858).
17. RESOLUTION NO. 2015-218 A RESOLUTION OF THE CITY COUNCIL OF
P110 THE CITY OF ANAHEIM vacating a public utility easement located at 1717 South
Disneyland Drive pursuant to California Streets and Highway Code Section 8330, et seq.
- Summary Vacation (ABA2015-00307).
18. RESOLUTION NO. 2015-219 A RESOLUTION OF THE CITY COUNCIL OF
P110 THE CITY OF ANAHEIM vacating a public utility easement located at 1349 Blue Gum
Street pursuant to California Streets and Highway Code Section 8330, et seq. -
Summary Vacation (ABA2015-00308).
AGR-9081 19. RESOLUTION NO. 2015-220 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving the Workforce Innovation and Opportunity Act
Subgrant Agreement between the City of Anaheim and the State of California for the
term of April 1, 2015 through June 30, 2017.
D114 20. Approve minutes of the Council meetings of May, 19, 2015 and June 2, 2015.
END OF CONSENT CALENDAR:
21. Consider appointments to the Community Services Board to fill an unscheduled vacancy
8105 term ending June 30, 2016 and Public Utilities Board to fill an unscheduled vacancy term
ending June 30, 2017.
Community Services Board
APPOINTMENT: (June 30, 2016)
(unscheduled vacancy of Grant Henninger)
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Page 10 of 30
Council Member Brandman nominated Christine Villegas to the Community Services Board and
Mayor Pro Tern Kring nominated Patricia Pina. Straw vote for Ms. Villegas reflected AYES—3
(Council Members Brandman, Murray, Vanderbilt), NOES—0, ABSTENTION —2 (Mayor Tait
and Council Member Vanderbilt): Straw vote for Ms. Pina reflected a straw vote of AYES—3
(Mayor Tait, Council Members Kring and Vanderbilt): Noes—0; and ABSTENTION —2 (Council
Members Brandman and Murray).
MOTION: Mayor Tait then moved to continue this appointment to the July 21st meeting,
seconded by Mayor Pro Tern Kring. Roll Call Vote: AYES 3: (Mayor Tait and Council
Members Kring and Vanderbilt). NOES—2: Council Members Brandman and Murray. Motion
Carried.
Public Utilities Board
APPOINTMENT: (June 30, 2017)
(unscheduled vacancy of Vincent "Chip" Monaco)
Council Member Murray nominated Ernesto Medrano to the Public Utilities Board and Mayor
Pro Tern Kring nominated Abdulrahman Abdulmageed. Straw vote for Mr. Madrano reflected
AYES —3 (Council Members Brandman, Murray, Vanderbilt), NOES—0, ABSTENTION —2
(Mayor Tait and Council Member Vanderbilt): Straw vote for Mr. Abdulmageed reflected AYES
—3 (Mayor Tait, Council Members Kring and Vanderbilt): Noes—0; and ABSTENTION—2
(Council Members Brandman and Murray).
MOTION: Mayor Tait then moved to continue this appointment to the July 21st meeting,
seconded by Mayor Pro Tern Kring. Roll Call Vote: AYES 3: (Mayor Tait and Council
Members Kring and Vanderbilt). NOES —2: Council Members Brandman and Murray. Motion
Carried.
PUBLIC HEARING: Item No. 22 was considered at 7:09 P.M.
22. This is a public hearing to consider a resolution approving an Agreement Concerning
Entertainment Tax Reimbursement by and between the City of Anaheim and Walt
AGR-9082 Disney Parks and Resorts U.S., Inc. relating to properties owned or leased by Disney
and Affiliates of Disney in the Disneyland Resort and Anaheim Resort Specific Plan
Areas and related actions.
City Council discussion and action on:
RESOLUTION NO. 2015-221 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving an Agreement Concerning Entertainment Tax
Reimbursement by and between the City of Anaheim and Walt Disney Parks and
Resorts U.S., Inc. ("Disney"), relating to properties owned or leased by Disney and
Affiliates of Disney in the Disneyland Resort and Anaheim Resort Specific Plan Areas of
the City of Anaheim, authorizing the City Manager to execute and administer the
Agreement on behalf of the City, and finding that said Agreement is not a "project" or an
amendment to a previously approved project for purposes of the California
Environmental Quality Act and is therefore exempt from CEQA review pursuant to CEQA
Guidelines Sections 15060(c)(3), 15061(b)(3), and 15378(b)(4) or, alternatively, that
none of the circumstances referred to in State CEQA Guidelines Sections 15162-15164
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Page 11 of 30
warrant or necessitate the preparation of a subsequent environmental impact report or a
supplement or addendum to previously certified, approved and adopted environmental
documentation
The Agreement Concerning Entertainment Tax Reimbursement that is the subject of the
aforementioned City Council Resolution would require the City to reimburse an amount
equal to any "Entertainment Taxes" (as defined in the Agreement) paid by Disney or
affiliates of Disney (collectively, "Disney") to the City in the future if(1) the City hereafter
adopts an Entertainment Tax that is applicable to identified properties owned or leased
by Disney within The Disneyland Resort Specific Plan No. 92-1 Area and the Anaheim
Resort Specific Plan No. 92-2 Area within the City of Anaheim and (2) Disney satisfies
certain conditions to the City's obligation to make such reimbursements that are set forth
in the Agreement, including completion by Disney of certain improvements and
investment of specified amounts in such improvements in accordance with the adopted
Disneyland Resort Specific Plan and/or the Anaheim Resort Specific Plan, each as
amended. The City's obligation to reimburse an amount equal to any Entertainment
Taxes paid by Disney would be for an initial period of 30 years commencing July 1, 2016
and ending June 30, 2046, which period may be extended for an additional 15 years
commencing July 1, 2046, and ending June 30, 2061, in each case subject to Disney
satisfying the conditions and performing the obligations set forth in the Agreement.
Linda Andal reported the City Clerk's Office received 25 letters, 18 in support of this item and
seven in opposition. All letters were forwarded to Council and were available for the public to
review as well.
Interim Assistant City Manager Kristine Ridge, stated this was a public hearing for the purpose
of considering and taking action on an agreement between the city of Anaheim and Disney
concerning the reimbursement of entertainment taxes, if any, in the future. She indicated that
along with the staff report, Council received the proposed agreement negotiated between the
City and Disney, along with a summary report as required by Government Code Section 53083
which contained economic impacts of the proposed agreement and information provided by the
Planning Director as to why no further environmental documentation was required. She
recognized Jordan Levine, economist and Director of Economic Research at Beacon's
Economic, an independent research and consulting firm indicating he was considered a leading
authority on the California state economy and its many regional economies. Mr. Levine
performed an independent analysis of the projected economic impact as a result of the
proposed agreement and a peer review of the economic impact numbers shared by Disney.
Ms. Ridge emphasized Anaheim boasted one of Southern California's most vibrant economies
due to the presence of the Anaheim Resort and because Walt Disney took a risk and opened
Disneyland 60 years ago. She added the creation of the theme park not only put Anaheim on
the map; it provided opportunities for economic growth in the city, region and the state. The
theme park became the foundation of the Anaheim Resort and today served as a thriving hub of
commerce hosting more than 23 million visitors a year despite only representing four percent of
the city's land mass. In this area, she remarked, over 50 percent of Anaheim hotels and over 70
percent of the hotel room inventory was located and responsible for generating an estimated
$147.6 million for the current fiscal year from transient occupancy tax (TOT), sales tax, property
tax and business license taxes. There were expenses associated with this activity as well which
included debt service, public safety, general government and other upkeep costs which totaled
about $80.3 million, leaving a surplus of$67.3 million available to invest in other parts of the
City Council Minutes of July 7,2015
Page 12 of 30
city. Providing more detail, she stated that TOT which was a 15 percent tax levied on hotel
guests based on cost of their rooms, citywide that TOT estimated revenue stream for FY
2015/16 was $133 million of which 92 percent was derived from the Resort.
Disney continued over the next several decades to make additional investments to their original
theme park in Anaheim, including new attractions within the park and development of hotel
properties. Also over this same period, Disney expanded, not only their presence in the U.S.,
but also on a global basis, Tokyo, Paris, Hong Kong and Shanghai. She reported the most
significant capital investment by Disney in Anaheim occurred almost two decades ago when
Disney created a second theme attraction, California Adventure, a retail experience with
Downtown Disney and the addition of the Grand California Hotel and more recently in 2012,
added the popular Cars Land at California Adventure. These extensive capital investments
were made, Ms. Ridge explained, under the umbrella of economic certainty with respect to
impacts from new taxation contained in a 1996 agreement with the city of Anaheim.
The 1996 agreement resulted in a complete revitalization of the Resort Area and enabled both
public and private investment to achieve this revitalization. The city secured bond proceeds
necessary for the public investment that were guaranteed by Disney; the proceeds funded a
parking structure, an expansion of the Convention Center and improved infrastructure
throughout the Resort area while Disney made significant investment with its own capital and in
return, was given the assurance that if any new entertainment tax was ever enacted by the city
during the construction period or for a period of 15 years beyond opening day, that any amount
required to be paid by Disney would be reimbursed to them. She added that this collaboration
secured the Resort's long-term competitiveness and economic vitality while protecting the
general fund from risk, adding that those investments created growth opportunities and jobs
generating substantial direct and indirect tax revenues to the benefit of the city's general fund.
Ms. Ridge remarked that Disney had shared that over this period, they doubled their workforce
from 13,000 to 28,000 employees and attendance had increased by 60,000. For the city, the
largest revenue stream, i.e. transient occupancy tax (TOT), over this period tripled from $44
million to the projected $133 million for this fiscal year. Disney also remained the city's largest
employer in the area and the largest single taxpayer in the city.
In continuation of the city's and Disney's 60 year relationship, Ms. Ridge stated Disney
approached the city and expressed an interest in making significant capital investments in their
Anaheim properties. Their proposed investments would include a 5,000 space parking garage,
improving traffic circulation in the Resort area with the majority of the investment going toward
additional park attractions which would increase park attendance and length of stay at area
hotels. For this significant investment Disney was requesting a continuation of the provision
found in the 1996 agreement which would soon be expiring after a period of 20 years. They
requested a continuation of the assurances provided under that agreement while they
considered where to make investments worldwide. Under the proposed agreement Disney
would be required to make a minimum of$1 billion of capital improvements beginning before
December 2017 and completed by December 2024 to receive the first extended rebate period of
30 years along with an opportunity for an additional investment of$500 million for an extension
of another 15 years. The city would be obligated in the event that any entertainment taxes were
enacted by the voters to reimburse Disney an amount equal to 100 percent of the amounts
remitted to the city from the tax. In the event of default by Disney of any of the agreement
provisions, any reimbursement would be suspended and the amounts would be returned to the
city. If the default continued, the city could then terminate the agreement.
City Council Minutes of July 7,2015
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Ms. Ridge commented the proposed agreement was a realistic way to facilitate investment and
future revenue for city services all with no funding or bond financing required by the city. The
contemplated Disney investment would include an infrastructure investment of a 5,000 space
parking structure and necessary ingress and egress for an eastside gateway and to improve the
traffic circulation in that part of the resort. The majority of the capital investment would be made
in the existing footprint of one or more of the two existing theme parks, generally bound by
Disneyland to the west, Harbor to the east, Ball to the north and Katella to the south. Such a
development, she remarked, would create construction jobs, permanent jobs, and increased
attendance along with revenues for the city's general fund.
Ms. Ridge then introduced Jordan Levine from Beacon Economics who evaluated the projected
economic impact resulting from the proposed Disneyland investment.
Mr. Levine Power Point presentation and explained economic impacts would take into account
three factors; i) the direct activity that was undertaken by Disney or its visitors, ii) a secondary
effect in the form of supply chain impacts and the third iii) was the increased spending in the
local economy or induced impacts. He explained in economics, this was measured by using
multipliers which looked at historical relationships between spending or economic activity and
the amount of jobs or subsequent expectations one would have. Spending by Disney or by its
visitors would stimulate either the retailers where that money was being spent or the supply
chain that would generate additional demand for downstream suppliers. He added all of these
entities throughout the supply chain, workers that were paid wages, represented the induced
effect or an increase in economic activity due to spending by the workers which was then
funneled back into the local economy and formed the basis as to what the impact of the
proposed agreement would look like.
He considered two major components, an upfront one-time impact associated with the
expansion construction at a cost of$1 billion or upwards of$1.5 billion which depended on the
length of the agreement, the contract provisions (such as architect, engineering, permitting,
etc.), and the ongoing impacts subdivided into two separate categories, i)the more direct
economic activity at the Resort, but also the ii) additional attendance, more visitors to Anaheim,
who would spend money and put back dollars into the local economy over and above what
was spent at the Resort. He relied on figures from the Orange County Visitors& Convention
Bureau for tax revenues associated with on-going operations and to look at average spending
patterns with tourists that come to the Orange County area. That information was applied to
Beacon's estimates of the scenario of increased attendance after the expansion where the
various tax revenues were found: TOT, sales tax revenues and property tax revenues —all
derived from the increased spending on behalf of the additional visitors. The same process was
used for the second phase of the potential agreement with an additional $500 million expansion
and the secondary and direct effects in terms of ongoing operations.
Another area to discuss, Mr. Levine pointed out, was the projected economic impact in terms of
overall business activity and jobs. For the $1 billion expansion, that amount translated to $1.4
billion because of the addition of those indirect and induced effects. The $1 billion construction
would stimulate additional businesses throughout the supply chain, creating jobs which would
lead to additional economic output of about $400 million. He added the additional attendance at
the park was conservatively estimated at $380 million of additional spending in the economy on
an annual basis which would then ripple through the rest of the economy to create upwards of
about $560 million in total economic activity. The same effect, he stated, would occur in relation
to jobs, with the upfront construction expected to generate 10,000 direct jobs through the life of
City Council Minutes of July 7,2015
Page 14 of 30
the construction that would end in 2024 but also generating 2,700 secondary jobs that would be
created throughout the rest of the economy, not directly associated with this project. In addition,
ongoing operations would generate 1,800 jobs with indirect and induced effects growing that
number up to 3,000 jobs on an on-going basis as a result of the expansion.
For the second phase of the expansion, Beacon Economics used the same approach which
resulted in approximately half the estimate given that the investment was half the size than the
$1 billion initially reviewed. Overall the results of the analysis and the conclusions made
regarding this expansion was that it would have a significant economic impact on the City that
was both a significant upfront impact as a result to that $1 to $1.5 billion of capital infusion,
creating jobs throughout the various sectors, including the construction sector, but would also
stimulate additional jobs throughout the rest of the economy through the secondary supply
chain. In addition, there were the more permanent effects from ongoing operations that was
found to be significant and derived largely from the fact that more visitors would be coming to
Anaheim and spending money both at the Resort and throughout the rest of the economy, such
as hotels and restaurants, which in turn would generate significant impact in jobs, tax revenue,
and economic output for businesses located in the city.
The ultimate conclusion, Mr. Levine remarked, was that all of the existing revenues Anaheim
was currently getting from the Resort, would remain intact plus the city would capture additional
tax revenues between $17 and $27 million per year, depending on whether they do both phases
of the expansion or not. This translated to upwards of$560 to over$800 million a year in
additional economic activity generated throughout the economy and 3,000 to 4,500 additional
full-time jobs for a year, and on top of that was the upfront impacts associated with construction.
Mayor Tait opened the public hearing for comments:
Michael Colglazier, Disneyland Resort President, remarked when the expansion of Disneyland
was being considered, there were many considerations to be resolved, however two issues
stood out. The first was infrastructure needs— he stated to expand the Resort to attract more
guests, a parking structure was needed along with many street improvements. Secondly, while
Disney was ready to assume the market risk of the expansion, it needed assurance that
Disneyland guests would not be targeted for a local entertainment tax that would negatively
impact return on investments as well as future growth plans of the Resort. Thanks to the
foresight of city leaders in 1996, an agreement was created in which Disney would expand the
Disneyland Resort and the city would invest in supporting infrastructure and create an
entertainment tax policy that provided the assurance necessary for Disney to make such a
major investment in Anaheim. Since then, he pointed out, the Resort district created tens of
thousands of jobs, many for local Anaheim residents. It also generated $5.7 billion annually in
economic activity, while attendance increased by more than 60 percent and the TOT driven by
guests; adding that the main contributor to the city's general fund more than doubled going from
$45 million in 1996 to $110 million last year. Now, on Disney's 60th anniversary, Disney and the
city were in similar positions to 20 years ago, with the growth of the last 20 years reaching
maximum capacity and a significant increase in future attendance requiring a sizeable
investment in structured parking and with the entertainment tax policy that assured such a
vibrant environment for investing set to expire next year. He emphasized the proposal did not
ask the city to fund any infrastructure that would enable the expansion nor did it add any
obligation to the city's debt, however, Disney was asking to extend the assurance that
Disneyland Resort guests would not be subject to an entertainment tax for 30 years on the
condition that the Walt Disney Company invested $1 billion to expand the Resort. In addition,
City Council Minutes of July 7,2015
Page 15 of 30
he indicated if Disney should invest an additional $500 million on a separate theme park
investment, that policy would extend for another 15 years. He added this agreement helped
pave the way for a major expansion in the Resort, an investment that would again grow the
Resort and Anaheim's revenues and he looked forward to the next chapter of Anaheim and the
Disneyland Resort.
Craig Farrow, resident, remarked Disney paid taxes, had always paid taxes and would pay in
perpetuity, regardless of whether this agenda item passed or not. Another misconception, he
pointed out, was if this item failed and there was a gate tax at some point, Disney would not pay
for the gate tax, it would be everyone who bought a ticket and entered the park and if the public
understood these facts, it would make for a better understanding of the issue. He and his wife
supported the continuation of the current entertainment tax policy, remarking it was hard to
argue with the success that policy already brought to Anaheim. He urged Council to encourage
the Disney Corporation to expand the Disneyland experience for all and continue the growth of
revenues in the future.
Norma Trujillo stated she was a 4th generation resident, homeowner, taxpayer, Latina, and cast
member of Disneyland Resort for nearly 14 years. She urged support of the agreement being
considered by Council as the contributions of the Disneyland Resort extended beyond its
potential economic impact, and reflected directly on the quality of life of her family and friends.
The Resort provided her with a job and a professional career with an opportunity to retire and
she wanted future generations to have the same opportunities. She spoke of the various
community support and work of Disney.
Former Senator Lou Correa, supported this agreement that would generate good economic
activity in the city, put the trades back to work and employ veterans. He believed the real issue
was that many residents did not feel they were a part of the city and were being left out. He
urged the city to work with the Anaheim Union High School District and come up with a solution
to their needs and get the youth off the street and into programs that would lead to a better life.
He supported this measure but asked that Council create jobs, invest in this community, and the
youth.
Gail Eastman, resident and former Council Member, remarked there was much to do in the
community as the public had stated and that it was incumbent on the council to make sure the
concerns of the community were addressed. She hoped Council would approve this agreement
because business needed the assurance they could count on and report to their investors or
Disney could take their dollars and invest in another city. With the jobs that would be created
and the income that comes from increased activity, she felt the city would be in a position to
make bold moves like supporting the school district for a pool or the La Palma Park expansion.
She urged council to move forward to make things better for Anaheim.
The City Clerk indicated that Sam Hahn, called to the podium earlier, was unable to stay but left
a letter of support for Item No. 22 which would be forwarded to Council the next day.
Jay Burress, Anaheim/Orange County Visitor& Convention Bureau, remarked the agreement
had already been proven and when Disney invested in Anaheim with Cars Land, hotel
occupancy went up, the average daily room rate increased, and there were more tax revenues
derived from that effort and going to the city. The tourism industry supported this effort and he
urged Council to approve the item and launch a new chapter in Anaheim as a destination resort.
City Council Minutes of July 7,2015
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Shaun Robinson, Visit Anaheim and Anaheim Hilton, remarked the Anaheim Hilton had 1,600
guestrooms, the largest hotel in the county and that it was a challenge keeping that hotel filled.
He added when he became the general manager of the Hilton five years ago, the Disneyland
team visited and asked how they could help, a partnership important to the hotel because of the
number of tourists visiting Disneyland. He pointed out that segment of business for the last five
years had risen 76 percent which he attributed to the investment Disney made to the theme
park and the partnership Disneyland had with hotels outside of their own. He pointed out the
proposed expansion would mean 100 new jobs in the Hilton alone and that most of those
employees were people living in Anaheim. He added Disney had a proven track record,
exceeded expectations, and he was in support of this agreement.
Dennis Kuhl, Chairman of Angels Baseball, requested Council extend the Disneyland
agreement, remarking it was not about a tax, it was about a business agreement. He stated
there was no other city this size with a major league baseball team, a major league hockey team
and a Resort, and each of those organizations paid taxes and were willing to do so. He pointed
out Disney was taking all the risk in this agreement; they were making the big investment and
were also the largest contributor giving back to the community and should be commended for
their generosity,
Lacy Kelly, Executive Director ACCOC, read a letter supporting the agreement continuing the
city's current no gate tax policy for Disneyland on behalf of the board of directors for the
Association of California Cities/Orange County. She indicated this program continued existing
public policy that brought about strong taxpayer benefits including resounding economic growth,
full stream city revenues, and extraordinary job creation with numerous residual benefits.
Patrick Pepper, SOAR, emphasized the Disney Resort had been a great partner to the city,
creating thousands of jobs, helping hotels stay full and creating the need for new hotels as well.
The proposed investment by Disney would add jobs, put more spending money back into the
local economy and create added tax revenue. Because 55 percent of revenues came from the
Resort area, he also recommended diversification, such as getting big box retailers positioned in
other parts of the city to spread revenue sources city wide and ultimately creating more jobs; for
all those reasons, he was supportive of this item.
Jill Kanzler remarked SOAR strongly supported Disney's investment. She highlighted the past
two decades of Disney's work in Anaheim, an effort that revitalized the Resort that set the stage
for 20 years of economic growth and prosperity. She emphasized the Resort District was the
single biggest contributor to Anaheim's ability to invest in neighborhoods and the proposed
expansion would provide revenues to address the services that the Anaheim public was
requesting. Ms. Kanzler then read a letter from Sally Feldhaus who was not able to be present
at this meeting expressing her full support for the Disney agreement.
Kerry Condon, Anaheim Police Association, representing over 600 current and retired police
officers, spoke in support of agenda Item 22 emphasizing the Walt Disney Company had been a
great partner with Anaheim for 60 years and the Disneyland Park had put Anaheim on the map.
He acknowledged the funds generated in the Resort area helped keep city services going when
cuts had been made in most other cities and the department was able to offer various youth
programs, such as Cops4Kids, Explorers, GRIP and Safe Schools. This commitment to the
youth by the department and organizations such as Disney, the Angels and the Ducks showed
the city was well invested in its youth.
City Council Minutes of July 7,2015
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Pete Mitchell, representing the Orange County Coalition of Police and Sheriffs, spoke in support
of Item No. 22. He stated the Anaheim Police Department had supported the Angels and the
new four diamond hotel program to attract and generate more tax dollars and had supported the
Convention Center expansion because it was done six times before with such success, and
supported the Disney partnership that would continue the economic vitality of Anaheim into the
future.
Mark Daniels, resident, opposed Item No. 22, stated there was too much at stake to make a
decision now and requesting the matter be tabled to give the public a chance to become fully
informed and possibly make modifications to the agreement. He added that the money being
generated from the Resort was supposed to be used to improve the rest of the city pointing out
some areas of the city north of Vermont did not benefit from those revenues.
Phil Salermo representing Local 500 cement masons urged Council to go forward with the
Disney expansion, creating jobs and laying a foundation for young people to have a chance at a
job with a good company. He added that Local 500 offered its Helmets to Hard Hats program
and welcomed all veterans.
Joe Calderon, union member, remarked he had the privilege of meeting Walt Disney when he
was building the Matterhorn and had also worked on the Monorail and Bear Mountain. He
supported Item No. 22.
Jesus Ortiz, local resident and employee of Hilton Anaheim, spoke in favor of Item No. 22
remarking Disneyland was the cornerstone of this community and the proposed expansion
would continue the economic prosperity for the city, the Disney Corporation, and associated
businesses in the future.
Keith Kananzias, resident and Hilton employee, explained that as a homeowner in Anaheim, he
was able to take advantage of the First Time Home Buyers program at Colony Park, and he was
thankful for that and the opportunity to develop a career in Anaheim by working at Disney and at
Hilton Anaheim while going to school full-time. He had also implemented a program with the
hospitality industry called Experience Hospitality, a joint effort with the California Restaurant
Association and Cal Poly Pomona, offering tours to high school students that focused on the
hospitality industry and introduced students to those opportunities, adding that Disney was a
strong partner in that effort. He spoke in support of the Disney proposal.
Gary Sherwin, OC Visitor Association and Visit Newport Beach, remarked in the last two years
the Association saw tourism promotion offices opening in Beijing, Shanghai, Dubai and Mexico
City, and that many Anaheim businesses including Visit Anaheim were actively engaged in
marketing efforts in those areas. He reported that working with the international offices,
Disneyland was a huge driver of visitors from the Middle East and China and that a vibrant
Disneyland was critical to the collective success. The OC Visitor Association strongly supported
the proposal to continue the city's existing entertainment tax policy,
Rueben Franco, OC Hispanic Chamber of Commerce, urged Council to support this agreement
providing the benefits the proposed expansion would have and the ripple effect on the
community and will help small businesses thrive.
John Robinson, California Attractions & Parks Association, supported the Disney agreement
adding that his trade association included Disneyland as one of their largest competitors yet
they believed this was good policy and a way to promote and encourage growth in tourism and
City Council Minutes of July 7,2015
Page 18 of 30
the theme park industry in California. He added without these types of agreements, the
business climate in California was challenging with new tax schemes always being considered
and this agreement would offer Disney some assurance for the future and was an example for
other communities to consider.
Bryan Starr, representing OC Business Council consisting of 300 of the region's largest
employers, spoke in support of the tax surety policy Council was considering. He stated
Disney's willingness to invest $1.5 billion in today's economic and regulatory environment was
remarkable and should be celebrated. He pointed out that Disneyland doubled its workforce
and increased attendance by 82 percent since 1996 and Anaheim now collected $110 million
this year in transient occupancy tax as a result.
Mario Rodriguez voiced Hispanic 100's support for Disneyland Resort and the agreement they
were seeking to extend, as this policy made fiscal sense and established long-term, economic
returns and would further expand local tourism which ultimately generated increased taxes and
revenue for the city. He added that Disneyland Resort had supported the internship and
scholarship program of Hispanic 100 which enabled scholarships to well-deserving Latino
students.
Karen Donner, resident, remarked Paris was the number 1 city tourist destination. She
supported the Disney agreement because of the new jobs and opportunities it would create and
the revenues it would generate for the city.
Wallace Walard, speaking on behalf of the OC Business Council and as an economist, offered
the following information: tourism was important to the local and regional economy and
represented about 200,000 employees in Orange County; the tourism and hospitality industry
was strong along with health care during the economic downturn and was one of the industries
that helped the county weather the downturn better than most. He added the county had an
economic development strategy and tourism was one of the top three industry clusters
highlighted in that report and when Orange County economic development professionals were
surveyed, the top industry cluster in terms of current job growth and prospective job growth was
tourism and the ongoing need for investment in both infrastructure and specifically infrastructure
related to tourism. He added that tourism brought in dollars from outside the region and that
there were very few industries able to do that. He believed that based on Beacon's report and
the OC Business Council analysis, the benefits of this proposal far outweighed the costs.
William Fitzgerald spoke in opposition to Agenda Item No. 22, remarking his Anaheim HOME
economist stated this proposal was misleading and unnecessary since Disney would likely
invest $1 billion in the theme park, without an incentive.
Rick Cheatham, Anaheim Firefighter Association, commented the Association supported Item
22 because members recognized the tax implications on businesses ability to reduce its liability
and continue generating revenues for the city's general fund that supported public safety in the
city.
Carolyn Cavecche stated the Orange County Taxpayers Association supported extending the
no gate tax policy that had served Anaheim and the county over the last two decades. She
added that any entertainment tax would not meet her organization's criteria on tax policy, that it
be fair, understandable, cost effective and good for the economy. The existing no entertainment
City Council Minutes of July 7,2015
Page 19 of 30
tax policy resulted in unprecedented economic growth for Anaheim and benefited the entire
Orange County economy and she urged a yes vote on this item.
Patricia Gaby was opposed to Item No. 22, urging Council to listen to the people, not the "suits".
She felt the deal offered circumvented the law and believed Council Member Murray had a
conflict of interest regarding any vote related to Disneyland as a member of the SOAR advisory
board.
Council Member Kris Murray responded as a point of personal privilege, stating she was not a
member of the SOAR advisory board but that she continued to be a strong supporter of SOAR's
objectives. She added that corporations in Anaheim had supported every council member
including the mayor in every single election and linking that campaign financial support to
Council's policy obligations was false.
Melissa Beck, Big Brothers, Big Sisters in Orange County and Inland Empire, supported the
Disneyland proposal, citing creation of jobs, over$100 million in additional wages to local
residents annually, and over$300 million of new revenues generated annually by the $1 billion
Disneyland expansion. She spoke to Disney's commitment to Anaheim's youths making a
principal investment and serving over 50 percent more children in the city, including a new
partnership with the AUHSD to bring mentoring and career development to students through the
P21 program.
Dave Coedill, California Building Industry Association, remarked his organization was aware of
the need for a strong economy and for that reason was here to support the Disney proposal. He
added there had been no testimony that he had heard that invalidated the facts and figures
presented and pointed out that it was rare to have an opportunity to make such an important
decision for the city's future especially with a proven track record of success and opportunities.
Kevin Curtis, Rainforest Cafe/Anaheim Restaurant Council, indicated he was involved in this
community serving on the Workforce Investment Board and a member of the Chamber of
Commerce and employed 450 hourly and 20 salaried personnel. He encouraged the Council to
approve this agreement as it would renew a commitment from Disney to build $1 billion or more
worth of improvements in the park or on adjacent Disney properties, a huge investment that
would make a difference to Anaheim citizens.
Teresa Hernandez, OC Lincoln Club, stated Lincoln Club was opposed to tax increases and
supported pro-business policies and Disney's proposal to extend its current agreement in
exchange for a $1 billion expansion of the Disney Resort. She indicated Disneyland and
surrounding properties currently contributed about$150 million annually in taxes, more than 50
percent of Anaheim's general fund revenues and the additional investment would grow those
revenues substantially and create thousands of new jobs for residents of Orange County. She
added that assurance should be extended to every entertainment business in Anaheim because
business owners big and small risked everything and should have the security to invest in their
community without the fear that in the future they would be taxed to meet city budget shortfalls.
She added that the job of business was to pay their fair share of taxes and to create jobs, and
Disney had been a champion of that premise.
Gia Ly, Vietnamese American Chamber of Commerce, explained the OCVACOC accounted for
14 percent of the Anaheim population and 22 percent of its businesses owners and was part of
City Council Minutes of July 7,2015
Page 20 of 30
the fabric of Orange County. On behalf of those members, she urged Council to support Disney
as a job provider, economic driver, and as a community partner.
Ron Miller, LA/OC Building Trades, stated building trades created careers, and his organization
fully supported that effort. He added the agreement with Disney in 1996 gave the city 20 years
of experience as to what to expect with another investment commitment by Disney, and the
provisions of that agreement should be made permanent based on the success of the current
contract.
Ernesto Medrano, LA/OC Building and Construction Trades Council, voiced his support for the
Disney agreement as a resident of Anaheim, adding that his family and the building trade
members supported it as well. He pointed out that construction was coming back and was one
of the biggest signs that the economy was turning around. He indicated that this year the
Anaheim City Council advanced the city with an incentive to encourage new hotels, construction
beginning on the Convention Center expansion and with the no gate policy, city leaders were
building a solid future for Anaheim.
Richard Samaniego, IBEW/OC Bus Managers, remarked his organization currently represented
163 maintenance and electricians at Disneyland and with Disney's proposed expansion, it would
put many members back to work who had six difficult years behind them. A theme park that
could attract 30,000 new guests, he emphasized, was something this Council should support.
Ross McCune, Anaheim Chamber of Commerce, spoke in support of Item No. 22, remarking
Disney was taking the same path to success that it had taken before, reinvesting in their
business, recreating interest and working at attracting new guests. He urged Council's support
of this policy.
Matt Sutton, California Restaurant Association, stated restaurants in and around the Anaheim
Resort was aware that their success was directly related to the success of the Anaheim Resort.
Those local restaurants provided thousands of local jobs, generated millions in local tax
revenues, and a pathway for youths as their first job as well as careers and ownership
opportunities for others. He added that the Beacon report figures were compelling, but the cost
of not pursuing this agreement should have been a consideration as well. He believed
public/private partnerships such as these were what made Anaheim such an inviting place for
conventions, for restaurant development, and for the hospitality industry in general, and this
agreement would help move that investment forward.
Jim Adams, resident, spoke in support of the continuation of no gate tax for Disney remarking
the city had done well with this partnership for 60 years and he wanted to see it continue. He
had seen Disney's growth since moving to Anaheim in 1959 and had seen the Resort Area
improve and neighborhoods surrounding the Resort improve as well.
Bobbie McDonald, Black Chamber of Commerce of OC, commented that Disney's investment in
the city and that it was a testament to city leadership. The Black Chamber of Commerce
supported Disneyland for the economic impacts it generated, the supply diversity and workforce
development it offered to minority and ethnic communities, and for the opportunities it offered for
ancillary businesses and entrepreneurship. The Chamber believed the economic benefit from
Disneyland's proposal would continue to ensure and enhance financial growth and expand
business growth for all, asking Council to vote in favor of the proposal.
City Council Minutes of July 7,2015
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Jerry Alder, Anaheim GardenWalk, spoke in support of Item No. 22 offering two observations,
that a world class amenity like the Disneyland Resort was still expanding after 60 years and that
all cities work toward developing tax policies that best benefits their circumstances for the good
of the local economy. He believed this was good tax policy now and would be good tax policy in
the future.
Larry Slagle, Yellow Cab Company of Greater OC, shared a brief story about his father's
personal business growth that he linked directly to Disneyland and visitors of the Convention
Center. He emphasized that $68-70 million went into the general fund for things other than
Resort activity and was used for public safety and community projects, all revenues generated
by visitors, not residents. He looked forward to a unanimous decision.
Elizabeth Arteaga, resident and business operator spoke in support of the agreement with
Disneyland citing the community's need for jobs, and Disney's generosity to students and the
underserved community at large.
D.R. Heywood, speaking as a resident,joined the comments of those who spoke in favor of the
Disney proposal, Item 22, stating a broad coalition should speak to the opportunities and
benefits to be derived from the Disney proposal.
Jose Moreno read an email he had sent to Council as a resident, taxpayer and father, urging
Council to reject a deal that was in reality a tax exemption and binding for 45 years. He
recommended Council take the time to reassess the agreement, allow time for the public to
consider the matter, and not rush it through with only nine days' notice and ultimately to get the
public to agree with the deal.
Armando Cepeda, high school teacher, urged Council to postpone their decision and take the
time to give the public an opportunity to assess the proposal, specifically because the majority
of speakers against this issue cited economic issues with business interests on one side and
struggling citizens on the other. He believed Disney would make a significant investment
regardless of this agreement and urged Council to find a way to compromise and not split the
community.
Art Montez, speaking as an interested citizen and not as a Centralia school board member,
remarked he was speaking on behalf of the neighborhoods that reflected the lowest income
areas in the city. He stated Council had an opportunity to direct staff to develop partnerships
with labor, the schools and Disney to change the environment and address the needs of these
communities; he urged Council to take action.
John Gillespie, resident, spoke in opposition to Item No. 22, stating it was a mistake to take
away voting rights and the choice of the next generation to be able to address a bad economy,
asking Council to reconsider the 30 year provision.
Vincent Sanchez, representing Congresswoman Mimi Walters, stated she supported the
continued no gate tax for Disney, a policy that along with Disney's $1 billion investment, would
start a significant economic stimulus for the region resulting in an economic output that would
exceed half a trillion dollars for local Anaheim businesses, create 10,000 construction jobs, and
3,000 permanent positions in the Anaheim Resort.
John Kalinski, Marriott Hotels, spoke in support of the Disney expansion and appreciated the
passion that was reflected in the public comments. He emphasized he would like that passion
City Council Minutes of July 7,2015
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applied to finding and attracting other industries to Anaheim to expand economic development
in other areas of the city and in the meantime, the public could enjoy the benefits of Disney's
commitment to Anaheim's future.
Carrie Guerriero, former Anaheim resident, stated she drove from Mammoth Lakes, tourism-
based town, because she opposed the Disney deal and thought Council's priorities should be
on infrastructure, the high crime rate, gang activity and an underperforming school district. She
recommended Disney be assessed to help pay for the needs of the future.
Robert Cernice opposed the Disney contract, stating the term of the agreement was too long.
He pointed out that Walt Disney talked about how he started Disneyland without any assistance
from local government, using his own funds and at his own risk and while no one disagreed that
Disney had expanded Anaheim's economy, it was a private for-profit corporation with profit as
their primary motivation. He urged Council reconsider the matter.
Neil Runsvold, resident, remarked the city had seen from the recent recession how difficult it
was to balance the budget without sufficient income and should keep their options open for a
gate tax in the future to lessen impacts to city services and meet an ever-increasing population
need. He urged Council to reject this agreement.
Joanne Sosa, Take Back Anaheim, opposed approval of Item No. 22 stating that it would
protect a single corporation from an admissions tax. Should the item be approved, she
recommended Mr. Moreno's suggestion to the OC Register be considered, that the contract be
amended to include language in which Disney would agree not to participate in campaign
finances or endorsements in city elections.
Francisco Peno urged Council to reconsider Item No. 22, specifically the length of the 45 year
term of the agreement.
An unidentified speaker spoke against Item No. 22 remarking that something should be given in
return to the City for a no gate tax for Disneyland for 45 years, i.e. a protective labor agreement
that guaranteed union jobs were not farmed out to Arizona companies that paid less with no
benefits, or some way to address the many needs of Anaheim's low income neighborhoods. He
stressed that the people needed something in return for Council approving that agreement.
Gretchen Shoemaker, resident/business owner, objected to approval of Item No. 22, because
the contract negated the public's right to vote on a gate tax and have it applicable to Disneyland
for a term of 45 years. Referencing a recent article in the Orange County Register, she further
objected to political action committees, the Disney Corporation's contribution to those PACs,
and the resulting special interest influence on local government.
Victoria Michaels, resident/business owner, stated she had requested but not received the
KPMG study relative to the 1996 Disney agreement. She stated she had.the Beacon Economics
analysis subsequently reviewed by an economist who commented that no real business would
make an investment decision on the basis of such an incomplete analysis and offered a list of
questions to be answered by the city. She then requested Council postpone tonight's action or
if it was approved, requested Council Members refrain from accepting any political donations
from Disney or any related PACs.
Richard Toro stated that he concurred that Disneyland was an important part of the city's
economy but the people had questions and wanted answers. He also felt it was inappropriate to
City Council Minutes of July 7,2015
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schedule such an important matter after a major holiday and referenced the Orange County
Register article regarding campaign contributions and political influence.
Mayor Pro Tern Kring, responding to Mr. Toro's statement, indicating Disney did not support her
during her candidacy and that she voted on the merits of a project, not on whether someone did
or did not support her.
Chris Snyder, member of the community and President of The Catch Restaurant, remarked The
Catch was one of the beneficiaries of the economic stimulus Disney brought to Anaheim and he
had listened to the comments made from both sides. He supported Item 22 because it spoke to
the grander vision, bringing an investment to Anaheim that would secure its future. He stated it
was not just the investment to be made by Disney; it was the multiplier effect of that vision for
generations to come. He agreed that attracting other revenue streams to Anaheim was
important but also felt that incentive must be part of attracting private business, whether it was a
major league baseball team or whether it was a vision to become a transportation hub for the
region.
Doug Pettibone, resident/business owner, had reviewed the contract with Disney and believed
there were provisions to protect the city including the provision that allowed the City Manager to
review costs and ensure the $1 billion invested in the city was a qualified capital investment as
well as the indemnity provision which protected the city against attorney fees in the event of
litigation or a referendum; however, his concern was with the length of the term of the contract
because it tied the hands of future Council Members for 45 years. He urged Council to step
back and reevaluate this decision.
Greg Diamond remarked there had been applause this evening for comments from those who
were guaranteed higher profits from this deal, but little for the public speaking against the
proposal. He did not think the projections would pencil out because the money that flowed into
the general fund went right back out to repay the construction bonds that the city borrowed to
build the Disney parking garage, having borrowed $500,000 and repaying $1.5 billion. He
emphasized the public speaking against the proposal understood that those revenues were not
going to neighborhoods. He also believed Disney would make that investment without this
proposed contract because the profits to be made were so significant and they had already
gone through the CEQA process. He recommended a compromise to place a cap on any
proposed admission tax pointing out that the Orlando site had a gate tax of 6.5 percent which
went to the state of Florida, not to Orlando, and not take away the people's right to enact an
admission tax in the future.
Ms. Rivera supported Jose Moreno and his efforts to keep the community informed and to
provide help for those in need and objected to statements against him. She asked where the
revenues projected to be generated from this proposal would go, suggesting the homeless
shelter would be an option to consider. She expressed concern over the length of the contract
term.
Due to time constraints, at 11:06 P.M. the City Clerk requested a 5 minute recess to reset the
video taping of the meeting. Mayor Tait briefly recessed the meeting and reconvened at 11:15
P.M.
Cynthia Ward, in response to an earlier comment, stated the unfunded liability for the 1997
Disney bonds was $200 million more than the unfunded liability of public employee pensions,
City Council Minutes of July 7, 2015
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which meant if projected revenues did not hit their mark, public employees would end up taking
a hit rather than the Disney bonds. She asked Council to delay making a decision regarding
Disney's proposed agreement because she doubted the current contract's legality as she was
not able to prove that Council actually approved that agreement in 1996. She also believed
Council Member Murray had a conflict of interest on any vote related to Disney because Ms.
Murray's aide stated on her Form 700 that her company received over$10,000 from Disney.
She added that financial reports on Item 22 were not made available, and that the 1996 report
that addressed the Disney parking garage was incomplete and she could not find parking
garage revenues from that facility shown in the current budget. She believed all of these issues
should be addressed before voting on the agreement and urged Council to table the item.
Council Member Murray requested the City Attorney respond to the conflict of interest comment
made. Mr. Houston responded that for conflict of interest purposes, despite the fact the Form
700 pertained to a calendar year, any potential conflict was 12 months from the last date that
work was done or compensation was paid. Regarding Council Member Murray's aide, that was
the case based on the brief discussions he had with her this evening, that there was no financial
interest at issue here and nor was there any participation into making a government decision by
the aide as well.
Amin David, remarked as a city investment strategy, Anaheim was already highly over-invested
in tourism and hospitality industry and lacked diversification, a risk should there be a
catastrophe in the future. He stated Disney had overreached and there would now be an
initiative to go forward next year with a gate tax because there was no reason to vote against it
and Disney would see that gate tax rebated to them. He believed this agreement was flawed
and was strongly opposed to it.
Todd Ament, Anaheim Chamber of Commerce, remarked he was raised in the Patrick Henry
neighborhood and saw many sides of Anaheim growing up, starting out at the YMCA trying to
help people of all economic incomes. He added in 1994 and 1996 Council voted to transform
Anaheim and secured its future, a policy that invited investment, created jobs and multiplied
many times over. The next chapter in Anaheim's future success was the Convention Center
expansion, the 4-diamond hotel policy, and Disney's reinvestment of over$1 billion that would
create a stable environment for investment, thousands of new jobs, and generate new revenues
that could address all areas of concern raised by the public. He urged Council to approve Item
No. 22.
Mayor Tait responded that when he ran for mayor, he supported making business easier in
Anaheim and with the Regulatory Relief Program, that unnecessary red tape had made it easier
for all businesses. He did not support taxing Disney and had always been against taxes;
however he believed this issue was not about supporting a tax for Disney, it was about the
people's right to vote.
With no other comments offered, Mayor Tait closed the public comment portion of the hearing at
11:30 P.M.
MOTION: Mayor Tait then moved to continue Item No. 22 to the next council meeting to allow
for a full and vigorous discussion during normal meeting hours, seconded by Council Member
Vanderbilt.
City Council Minutes of July 7,2015
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Roll Call Vote: AYES —2: (Mayor Tait and Council Member Vanderbilt). NOES — 3:(Council
Members: Brandman, Kring and Murray). Motion Failed.
Mayor Pro Tern Kring offered the following in response to public comments made:
• Walt Disney had been quoted as saying Disneyland would never be finished as long as
there was imagination and she believed that statement had proved to be true and would
continue in the future.
• Business interests mattered because if it wasn't for the business community investing in
Anaheim and generating jobs and taxes, the city would not have the ability to update
neighborhoods, fix parks and establish resource centers throughout neighborhoods
along with increasing public safety.
• The City Council was listening to the public who had voiced their concerns and was why
creating jobs was an important priority.
• Disney was asking for a 30 year commitment of the continuation of no entertainment tax
and they would invest $1 billion into Disneyland to begin in 2017; she was supportive of
that agreement, recognizing that Disney had the option of putting their investment in one
of their parks in the nation or worldwide. She believed the agreement was good for the
people of Anaheim and would generate new jobs and increase the general fund to pay
for public services the people wanted.
• In 1996, 22 percent of the Resort area revenues went into the general fund and today,
the contribution to the general fund was at 24 percent, however, she pointed out, the
total amount had increased substantially from $100 million in 1996 to $300 million, and
24 percent reflecting significantly more.
Council Member Vanderbilt remarked the initial 1996 agreement was proposed for an indefinite
time period, asking Mayor Tait who was seated on the City Council that year, how the 20 year
term came to pass. Mayor Tait stated at that time he was able to negotiate the "indefinite"
provision down to 20 years. He added that Disney had also guaranteed the $500 million worth
of bonds, and if revenues had not met projections, Disney would have been on the hook for the
bonds. He added that was not the case with this agreement, adding with the benefit of more
wisdom gained over the years, he believed this contract should not be approved.
Council Member Murray thanked staff for informing the public well in advance of the normal
public hearing notices and providing information to multi-media outlets including the Orange
County Register before the meeting. She then requested staff respond to questions raised
about the revenue projections as well as the economic analysis provided by Beacon Economics.
Ms. Ridge responded that the city consulted with Beacon Economics for an independent
analysis of Disney's proposal and did not rely on the KPMG report commissioned by Disney.
She advised that because KPMGs numbers were widely circulated, Beacon performed a high
level peer review of those KPMG numbers and Jordan Levine could speak to his methods for
the City's commissioned study and could also talk about the summary peer review of the KPMG
report if questioned.
Jordan Levine stated he stood behind the Beacon analysis, and had tried to be as transparent
as possible during his presentation about how the analysis was conducted. He identified the
per person, per day spending figure that was projected to grow, the increase in visitor spending
which was the direct effect that fed into the multiplier analysis, and then used IMPLAN, the
input/output analysis software considered to be the industry standard. He added Beacon was
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an independent research and consulting firm, a data-driven company who looked at all the
numbers and tried to answer the question "what happens when $1 billion was put into a local
economy and what does that mean in terms of secondary effects?That approach enabled him
to answer the question honestly and in reviewing the KPMG numbers, corroborated much of the
approach they used which was, "what were the ripple effects from the upfront $1 billion and the
additional spending impacts of increased visitors to Anaheim?" As to questions why Beacon did
not look at some of the other issues raised, Mr. Levine responded, Beacon only answered the
questions they were asked to research.
Council Member Murray emphasized the following points: There were few opportunities for
elected officials to act in a leadership role where they could support the type of economic engine
Anaheim had. She added that this agreement required no cost to the city; it had been tested
under extreme conditions during the worst economic downturn the nation faced, with Anaheim
coming out stronger than most cities in the state. In response to the public who believed that
the city was not investing in public safety or not prioritizing neighborhood improvements, she
stated the current $1.7 billion offered $10 million in supplemental funding, and listed the
following: 10 new police officers added over four fiscal years, additional firefighters and a new
firehouse, renovations of existing parks citywide, adding a full-service resource community
center at Ponderosa along with opening one at Mira Loma Park. She highlighted the fact there
were 52 parks for 52 square miles of the city and Anaheim was expanding that profile each
year.
She spoke to the AA rating on the city's general obligations bonds, a $300 million capital
improvement budget, implementation of pension reforms across the spectrum, and meeting
annual funding obligations for pensions and other unfunded liabilities, something very few
agencies were doing.
Ms. Murray was supportive of this opportunity, Disney's proposal to invest a minimum of$1
billion in Anaheim with no risk and no cost to the taxpayers. With that investment, was an
agreement that Anaheim would not enact a gate admission tax, a tax that had never been
considered even when the economy was at its lowest in 100 years. She pointed out that
Disneyland was already the largest tax provider in the city. A gate tax would only impact
residents and visitors who took advantage of the multiple entertainment venues Anaheim had to
offer, people who were already paying taxes at the highest level in one of the highest taxed
states in the nation. She believed this agreement being considered was sound fiscal policy and
would ready to support it.
Council Member Brandman inquired if this agreement was approved would the City Manager
expect the projected revenues discussed in the economic study would see the same schedule
of investment in neighborhoods, infrastructure and public safety as had been done in the last
three years. Mr. Emery responded in the affirmative, remarking parks, public safety, and street
improvements had been the priority of this City Council and any excess revenues would be
proposed for those three areas. Mr. Brandman also confirmed with the City Manager that
securing the city's reserve fund was also a priority of the Council with Mr. Emery stating
reserves were currently at 11 percent of the budget and in the five-year projections, that
percentage was anticipated to increase significantly.
In response to statements made by former Senator Lou Correa and school trustee Al Jabbar,
Council Member Brandman provided details on the community's commitment to ensure
Anaheim High School had a pool, an important goal of his. Regarding La Palma Park, he stated
City Council Minutes of July 7,2015
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he ran on completing the full master plan expansion of La Palma Park that was envisioned in
1950, drafted by city staff in the 90's and was ready to go with a city stadium and the school
district as its primary client. He spoke to both these issues because the revenues from the
Resort were a major part of funding all of these programs. He was supportive of the Disney
agreement because it was the continuance of a good policy and good partnership and would
yield the same type of benefits; that is, create new jobs (both temporary and permanent) and
generate high-yield revenues for the City and subsequently provide for addressing the
community's needs.
Council Member Vanderbilt inquired how the public could review the KPMG study. Ms. Ridge
responded that the city did not have the report in its possession, but that Disney had quoted
numbers from the KPMG report in media releases. He inquired if Beacon Economic used the
KPMG numbers for their analysis with Mr. Levine responding that Beacon conducted its own
independent analysis and compared their findings with information that was made public as a
summary check of Beacon's ultimate conclusions.
Mayor Tait inquired how Beacon came up with results without using KPMG numbers. Mr.
Levine remarked he applied the $1 billion investment and allocated it using percentages to
various categories of expenditures that were associated with nonresidential construction
projects and the INPLAN model would account for leakage to other areas which were why there
would be different impacts in different categories. The Mayor asked how much more TOT tax
would the city receive once the development was built with Mr. Levine responding it would be
$14.9 million in TOT, sales, and property tax. Mayor Tait also inquired what the non-TOT tax
would reach in a year with Mr. Levine indicating there would be approximately $3 million in sales
and property tax. Mayor Tait invited Mr. Colglazier to comment who responded that he did not
know the specifics of the KPMG study and that KPMG was hired so that Disney could have an
understanding of how the city would evaluate it. From his standpoint, he believed the best way
for the city to look at the potential of this investment was to look at what happened when Disney
invested nearly the same amount of money, about $1 billion, into the expansion of Disney
California Adventure; adding, the growth of TOT from that investment was in excess of what
was being projected tonight. Mayor Tait asked if the Beacon figures were similar to Disney's
with Mr. Colglazier indicating the numbers were consistent.
Council Member Vanderbilt inquired if Beacon supplied all the job creation data in their report
with Mr. Levine remarking he did and it was referenced in terms of full-time equivalent units or
hours and not broken down into part-time or temporary hours. Noting that Government Code
Section 53083 was referenced in the Beacon report and that the provision required economic
development subsidies to be broken down by full-time, part-time and temporary positions, Mr.
Vanderbilt inquired of the City Attorney if that omission affected the notice.
City Attorney Michael Houston asked Beacon's economist if it was possible to extrapolate part-
time and temporary hours from the full-time equivalent hours provided in the Beacon report with
Mr. Levine indicating it was not possible to determine those numbers. Mayor Tait wondered
why that was not possible with Mr. Levine indicating that the research looked at the historical
pattern of output and jobs on an industry-by-industry basis, on a geographic-by-geographic
basis and did not make the distinction whether hours worked were in full-time, part-time and/or
temporary hours. Mr. Houston then stated that in terms of what the statute would appear to
require and hearing Mr. Levine's response, further breakdown of those full-time equivalent
hours was not possible. Council Member Vanderbilt added as he read this law, it appeared the
law was asking that the public be given some confidence that an economic subsidy would have
_ _ _
City Council Minutes of July 7,2015
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some specific event. He asked if Mr. Levine had done other reports for other jurisdictions in the
same manner with Mr. Levine remarking he had always expressed jobs using the INPLAN
model as full-time equivalent units. In response to Mayor Tait, Mr. Levine stated he had not
conducted a report on a subsidy or contingency subsidy since this law was passed.
Mayor Pro Tern Kring asked for confirmation that there was no economic subsidy being
considered with Mr. Houston remarking this agreement did amount to an economic subsidy
because it granted a reimbursement right to Disney in the event they performed certain
obligations under the agreement. Mr. Emery remarked that it there was an expansion at the
Resort that required more delivery vehicles to arrive, through the analysis of the economic
models in place, the city could not determine whether those drivers would be full-time, part-time,
or whether the dock worker who is loading that truck was either, but what the city was saying is,
based on the economic activity being generated, a specific number of full-time equivalent hours
were needed and ultimately the individual employer would be making those decisions. Council
Member Vanderbilt wondered if there could be a subsequent report prepared with that
information provided. Ms. Ridge remarked that AB 562 which created the law referenced in the
government code section required disclosure to the extent information was available in the
context of the $1 billion investment adding that Mr. Levine indicated he could not provide a
breakdown of those hours. As to the question posed whether the city would be able to
withstand a lawsuit, Mr. Houston responded it could because staff and the economist indicated
it would be very difficult if not impossible in this model to predict that information and he was
confident if the city was unable to determine that information, it was not necessary to provide it.
Mayor Tait was disappointed that this item was not continued to allow for further input and
discussion. And he felt an issue of this importance should have been noticed much earlier than
the 9 days' notice over the 4t" of July holiday which did not give the public enough time to digest
the report. He pointed out that Disney invested $1 billion in Carsland without requiring a 30-45
year prohibition on taxing and with approval of this agreement, there would now be precedent
set for a prohibition against tax. He emphasized the issue was really about the people's
fundamental right to vote and by approving this agreement, that right would be negated and it
only passed as legal because the agreement maneuvered around the law and created a
contract whereby if the people voted for an entertainment tax, Disney would be reimbursed that
tax. He spoke about the Orange County Bankruptcy that happened when he first took office
and how municipalities were unprepared for such an event and how the recent economic
downturn took everyone by surprise and impacted services and employees in the city. He also
pointed out it was a different world than 20 years ago and the city had a massive amount of debt
now, $560 million in unfunded pension obligations, Disney bonds at $700+ million, Convention
Center expansion bonds at $200 million, versus a general fund budget of$280 million. At some
point he stated, there might be a need in the future to pass an entertainment tax, and this
agreement took that tax off the table for 45 years. For those reasons he would not support Item
No. 22.
Council Member Murray stated this agreement did not give away the right to vote for a tax
increase and if one was approved by the residents, that tax would not be on visitors only, it
would be imposed on any resident or visitor enjoying Anaheim's entertainment venues. She
pointed out such a tax was regressive as well, because it disproportionately impacted the
working poor. She added that she was also open to offering this agreement to any
entertainment business. She believed jobs were a high priority in Anaheim because the
unemployed and underemployed deserved jobs and the way to end childhood poverty was
getting people back to work and making sure there were quality jobs for decades to come. This
City Council Minutes of July 7,2015
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was a decision she was willing to make to secure a $1 billion investment today and secure the
city's long-term vitality.
Mayor Pro Tern Kring remarked that nine days' notice offered enough time for the public to
analyze this agreement and make their voices heard as seen by the numbers of speakers
participating. She added the details of the information had been available since the end of June
with articles in the newspapers continuously. More importantly, this agreement would have the
impact of increasing revenues to the city long-term and those debts and obligations would be
paid. She believed this agreement was good policy, would create thousands of jobs and was a
win/win for all involved.
Mayor Pro Tem Kring moved to approve RESOLUTION NO. 2015-221, A RESOLUTION OF
THE CITY COUNCIL OF THE CITY OF ANAHEIM approving an Agreement Concerning
Entertainment Tax Reimbursement by and between the City of Anaheim and Walt Disney Parks
and Resorts U.S., Inc. ("Disney"), relating to properties owned or leased by Disney and Affiliates
of Disney in the Disneyland Resort and Anaheim Resort Specific Plan Areas of the City of
Anaheim, authorizing the City Manager to execute and administer the Agreement on behalf of
the City, and finding that said Agreement is not a "project" or an amendment to a previously
approved project for purposes of the California Environmental Quality Act and is therefore
exempt from CEQA review pursuant to CEQA Guidelines Sections 15060(c)(3), 15061(b)(3),
and 15378(b)(4) or, alternatively, that none of the circumstances referred to in State CEQA
Guidelines Sections 15162-15164 warrant or necessitate the preparation of a subsequent
environmental impact report or a supplement or addendum to previously certified, approved and
adopted environmental documentation , seconded by Council Member Murray.
DISCUSSION: Council Member Vanderbilt asked if a city sales tax was inclusive or exclusive
as it applied to this agreement regarding an entertainment tax. Mr. Houston responded the
agreement referenced any tax, fee or charge imposed by city or city agency based on the sale
of admission tickets or other admissions media. Mr. Vanderbilt indicated he was inquiring in
case the city needed to raise revenues and did not pursue a gate tax or amusement park tax but
did pursue a sales tax similar to Measure M, and would this agreement include that tax. Mr.
Houston stated that citywide sales that applied to a broad variety of sales could be outside of
what was captured by this agreement but it would depend on how such a sales tax or tax
measure was written. The concept here was that taxes focused on theme park or parking
related to theme parks or other themes focused on theme parks compared to businesses
generally in the city would be covered by this exception. Council Member Vanderbilt restated
that an entertainment tax, parking tax, sales tax were all incorporated within an entertainment
tax with Mr. Houston remarking it did in general, but not a tax that applied to a broad variety of
businesses within the city and was intended to be a general tax on business activities.
Mr. Vanderbilt had a follow-up question to the full-time equivalent hours and/or part-time or
temporary jobs that was found in the narrative section of the report. He comprehended the
Beacon report did not have information on whether any of the projected 3,000 jobs were part-
time or full-time. The issue that arose during public comments, he explained, related to
individuals working two part-time jobs in order to make a living wage. Mr. Levine responded
that the information would be relevant to the quality of jobs being created but the INPLAN
software did not care whether 8 hours were filled by two individuals or one. Mr. Vanderbilt
pointed out that with the trickle-down effect; the impact of someone who was making part-time
work probably had less economic impact than someone making a full-time salary. Mr. Levine
responded that from an economic standpoint, the fact that two people go out and spent$1 each
City Council Minutes of July 7,2015
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in the economy would be the same benefit if one person went out and spent $2, the point of the
economic impact model was pertinent to other aspects of evaluating quality of jobs and what
public policy priorities were but was not relative to how much spending would lead to multiplier
effects to the rest of the economy.
ROLL CALL VOTE: Ayes— 3: (Mayor Pro Tern Kring and Council Members: Brandman and
Murray.) Noes—2: Mayor Tait and Council Member Vanderbilt. Motion Carried.
REPORT ON CLOSED SESSION ACTIONS:
Michael Houston, City Attorney, reported on Closed Session Item No. 1 - City Council approved
the appointment of Paul Emery as City Manager, subject to Council's public consideration of an
employment agreement. Approved Vote: 4-1: Ayes: Mayor Pro Tem Kring and Council
Members Brandman, Murray and Vanderbilt; Noes: Mayor Tait.
COUNCIL COMMUNICATIONS:
Council Member Brandman requested staff place a resolution for consideration on the July 21
agenda in support of H.R. 2140, Vietnam Human Rights Act of 2015; requesting it in solidarity
with Anaheim's sister city, Garden Grove who adopted this policy in previous months.
ADJOURNMENT:
With no other business to conduct, Mayor Tait closed the July 7th meeting at 1:05 A.M.
esp tfully submitted,
Linda N. Andal, CMC
City Clerk