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2003/01/14 ANAHEIM, CALIFORNIA - CITY COUNCIL MEETING ADJOURNED REGULAR MEETING JANUARY 14, 2003 The City Council of the City of Anaheim met in adjourned regular session. The Notice of Adjournment was posted at 9:00 A.M. on January 9, 2003 on the exterior door of the Anaheim Council Chambers, announcing the adjournment to January 14, 2003 at 11 :00 A.M. for the purpose of a Mid-Year Budget Review. PRESENT: Mayor Curt Pringle, Council Members: Tom Tait, Shirley McCracken, Bob Hernandez and Richard Chavez. STAFF PRESENT: City Manager David Morgan, City Attorney Jack White, City Clerk Sheryll Schroeder, Finance Director William Sweeney. A copy of the agenda for the meeting of the Anaheim City Council was posted on January 10, 2003 at the City Hall outside bulletin board. Mayor Curt Pringle called the adjourned regular meeting to order at 11 :09 A.M. in the Council Chambers of the Anaheim City Hall, 200 South Anaheim Boulevard. MID-YEAR BUDGET REVIEW City Manager Morgan stated that the presentation started with the fiscal year 2002/03 general fund revenue and expenditure projections and then a five-year projection would be presented. Staff would speak about balancing options and recommendations to make sure that the City stayed within balance, he said, notwithstanding the State budget impact. The State budget proposals and possible implications would be presented, he informed, and staff would be looking for Council direction and priorities. Finance Director, William Sweeney, said he would speak about the national, state economy and concentrate on City revenue and expense. Unemployment had been going up and was at six percent, he said, and the jobless picture was disappointing and 100,000 fewer jobs were created. Retail sales on the national level were up 1.2 percent for the month of December, excluding automobiles, he said, which were flat and the economy was looking for an improvement on the retail sales front and all of this impacted the City. The geopolitical risk of the possibility of war with Iraq and tensions in the far east had a bad impact on the national economy, he informed, and consumer confidence was waning and was at very low readings and he said he did not like the immediate outlook on the economy. The housing economy was very robust and most economists said that would cool as the nation moved into 2003, he said. The market had been down three years in a row, he explained, and last year he had been looking for far more of an improvement over the one-year period and most economists had predicted that the stock market would be up and historically and it was unheard of to find it down for three years in a row and it would be down again. There were very low interest rates and the ten-year treasury was over four percent and that translated into very low mortgage rates and most economists were looking for an increase of interest rates, he noted, which would drive down the number of refinancings and less money for the consumer to spend on consumable materials and supplies. Corporations were very hesitant to increase their corporate spending, especially with respect to information technology, which would not be good for the national economy, he felt. GDP was positive and the nation was not technically in a recession, he informed, and most economists suspected that the GDP would continue to show modest growth at least through ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 2 2003. He said he believed that it would expand and would be slow but steady and this translated into the City revenue picture and on the down side, it would be very modest and that would be problematic as the City looked at expenses over the next three to five-years. He said that typically when the economy improved, it was with jobs and he said he was not sure that could continue unless the job situation brightened on national and regional levels. Finance Director Sweeney said that with regard to the City, there were still impacts of September 11, 2001 on the transient occupancy tax and it was principally in a couple of areas. He said that first of all the international traveler had still not returned and that had accounted for 15 to 20 percent of hotel occupancy and was a material problem. He said that secondly, consumers were acting a bit differently, according to the hotel community, by making reservations later and not planning in advance and that could be related to geopolitical risks, fear of flying and was having a depressing impact on the hotel community. The hotel occupancy and rates were lower than projected, where in order to attract people, they were discounting rates, he informed, and the transient tax was a gross based tax and needed to be watched. Taxable sales were weak and uneven and was not like the early 1990's and auto sales were up and business-to-business was down, he explained, and there was still strength in property taxes and motor vehicle fees. Of all the City's revenue sources, he said property taxes were the most stable and as the State budget problem unfolded, a number of people at the State level would be talking about how to change local government finance and State government. Property taxes did not move a great deal and were not a volatile source of revenue and transient tax and sales tax were very volatile, he said. Vehicle license fees were doing well because of the sale of new cars and trucks, he informed. Finance Director Sweeney said the adopted general fund budget was $182.5 million and he said his presentation would be regarding the general fund, only venturing outside the general fund to the extent he would need to explain a relationship between two dissimilar functions. Labor was 71 percent of the general fund and as labor moved, the general fund moved on the expense side. Revenue, sales and transient occupancy tax represented over half of the general fund, he explained. If 100 percent of the appropriations were spent, with the weakness that was seen on the revenue side, there would be a deficit of approximately $3.2 million in the current fiscal year and measures had been taken so that would not occur and if those proposed measures were taken, there would be a surplus of under approximately $120,000. He explained how the revenue sources moved and how they reacted to external forces and factors. There was an estimated $22 million in 2003 for property taxes which was a slight improvement, he said, and this revenue source would not dramatically move year over year and would not be that much money in the overall aggregate. He spoke about the Educational Revenue Augmentation Fund (ERAF) shift and noted that City government received 11 cents out of every $1 in property taxes paid and a vast majority went to school. In the current year, the ERAF shift would cost the City just under $6 million and in return for loosing ERAF money back in the early 1990's, the State created the half cent sales tax, which was approximately $850,000 per year and the City received SLESF funds, which were restricted police funds and there was an off set to the amount, he said, but not enough to make up for the entire amount. Mayor Pringle asked why ERAF was separated out from what would otherwise go to schools and Director Sweeney stated that was the way it was reported out by the counties. Mayor Pringle said the State created a holding place, having the dollars redistributed to the different agencies and in Orange County; most of the money went for education. Director Sweeney said that the County reported it and tracked it separately. Mayor Pringle noted that 75 percent of property tax collected in the City went to schools, particularly in the context of what the ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 3 Governor had proposed for redevelopment agencies fully funding their school obligations. He said it sounded as if the Governor was claiming in his proposal that the City Redevelopment Agency would need to fully fund, with new tax increment, repay the schools 75 percent of the new property tax dollar that would be derived off of the property tax increment and the Redevelopment Agency that the City would fund 75 percent of that and the only increment maintained by the City would be the 27 percent. He said that ERAF funds go somewhere and the shifts of 1993/94 and 1994/95 moved the dollars from other local government agencies to the schools and if that was the case, the dollars would otherwise be going to the school. City Manager Morgan said he believed that the Governor's proposal was to restore funding to schools back to the 57 percent and not to also give them that added increment that ERAF provided. Director Sweeney pointed out that schools were the big winner on the property tax side. Council Member McCracken said that the funds did not go directly to the local school districts but went to the State of California and was distributed according to the size of the school districts. She said that in Orange County, less money came back than was collected by property tax. Mayor Pringle said he believed that every property tax dollar stayed in the County and that AB8 of 1978 established a formula by which every county would contribute locally to schools and the City contributed 57 percent of property tax dollars to schools. Serrano Priest decision said that every school district on its average daily attendance (ADA) formula would receive the same amount per student, he informed. For instance, he noted that the City was contributing 57 percent and City of San Francisco was contributing 23 percent of property tax dollars to schools, which meant that the State had a greater obligation to fund schools in San Francisco than here. This pointed out that the City was getting less money and the average daily attendance base revenue for schools was the same from district to district and depended upon where the money came from, he explained. Orange County was the largest contributor to schools of local property tax dollars of every county, he informed, and more money stayed for schools and that meant that the State spent less money in Orange County to bring the schools in Orange County to that average level. He said that one of the main hits in the Governor's proposed budget was to tell redevelopment agencies that they could no longer keep the increment that would otherwise be going to schools and that portion must be paid to local schools. Finance Director Sweeney informed that if the two assessment appeals case moved in the other direction and if the County were to loose this on appeal, it would affect cities. It was a class action suit and the County maintained that it had strong defenses and if the litigant were to prevail, the City impact would be $2.5 million for the retroactive portion and approximately $1.3 million annually. It would cost the Redevelopment Agency $1.5 million and $1.152 million thereafter, he informed. Council Member Hernandez asked if the shortfall that would be experienced in the two- adjustment if the class action lawsuit fell through, would there be anything to balance that. Director Sweeney stated that to the extent that the other taxes went up, it would serve to partially offset it and he was not aware of anyone coming up with any split role analysis and as soon as they did, he would pass the information along to the Council. He said that this would take a number of years to resolve and it would continue to build and then have to possibly be paid back. ANAHEIM CITY COUNCIL MEETING MINUTES JAN UARY 14, 2003 PAGE 4 Director Sweeney said that the 15 percent transient occupancy tax was completely controlled by the City and was based on gross receipts. He said a combination of rate and business increases had taken place over a period of time. He spoke about rehabilitating the Resort and said that there had been no increase in business over that time and the City was able to keep their base. Prior to September 11, 2001, things had started moving up and as a result of that day, the City did not receive the types of increases that had been projected, he informed. Last year's budget was almost $70 million prior to September 11 th and before the economy started to turn, he said, and the current year budget was at $65 million and the City would still fall short because of lingering affects of September 11 th and the City was not coming back as originally projected and continuing difficulties in the economy. He said what he was looking for in 2004 through 2007 was continual improvement as the economy improved and September 11th became more of a distant memory. The 2004 projection of $59.9 million represented about a six percent increase over the current year projected, he informed. Mayor Pringle asked why it was projected that 2003 would drop dramatically and Director Sweeney said it was based on what had happened in the first half of the current fiscal year and the softness that was anticipated happening based on interviews of hoteliers and bookings. Director Sweeney explained the seasonal nature of the transient occupancy revenue source and said that peak usage was summer and then it dropped off in winter and fall periods. He explained how over many years, Council had taken actions to incrementally raise transient occupancy tax rates to fund discrete projects. He explained that the current year budget at $65.4 million, some of the money went to pay the bonds that were sold to make the improvements on the Resort and they were referred to as lease payment measurement revenues. The Visitor and Convention Bureau was paid to promote the City and the Convention Center, he said, and the Convention Center debt was fixed debt over a certain period of time and Arena land was necessary to service the debt that was land and not the building or operation. The discretionary general fund was $22 million in the current year and the amount that the City was to keep, which was materially less than the gross, was still as much as was received from all of the property tax receipts, he reported, and that important revenue source paid for all of the promotion and debt associated with the infrastructure improvement and still returned a profit. Director Sweeney explained that sales tax was an important source of revenue for the City and for every dollar spent in the City, the City received one percent of gross sales and the rest of it went to various other taxing agencies and five percent to the State of California. He said he believed that sales tax of $54.3 million of the current budget would fall short to $52 million and would represent softness. He referred to the power point presentation and referred to weak taxable sales, business to business, which was light industrial, leasing and businesses that purchase various types of electronic products, he said, and new and used automobiles as well as fuel sales. Since the business community had experienced a downturn, it would take taxable sales down and even if automobiles went up, it would not be enough to offset the downturn in the business environment. He showed the recent sales tax receipts through September 30, 2002 received from the State, which showed that new and used automobiles were doing well, construction and home improvement retail sales were all right, but every other category was down dramatically and food stores and restaurants were reduced in accordance with reduced tourism and general occupancy in the town. He said when making projections he needed to consider the trends over a two to three-year period. The motor vehicle license fees were a two percent tax on a vehicle and was in play this year with the State budget, he noted. The current year budget was $19.4 million and may go to $20.4 million because of more vehicle sales and 67 percent of that amount was backfilled by the State, he informed. He said that vehicle license ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 5 fees were four percent of the City's budget and that was true on a gross City budget with electric and water utilities and was not four percent of the general fund and was over 11 percent of the gross general fund. The cut would be 7.5 percent of the City's general fund and the net discretionary draw, taking out all fees and charges, was almost ten percent and cities would be hit far more severely than a four percent reduction. There had not been any changes made to the business license tax structure and there was a reduction in fees and charges and an equal reduction on the expenditure side and the general fund had no impact. The transfers to pay debt service were lower, he reported, because the lease payment measurement revenue (LPMR) was lower. He said that the money was going to Resort related expenses from the general fund, Convention Center debt service and the LPMR, the Resort Maintenance District, the Community Improvement Fund, Arena Fund, Neighborhood Fund Economic Development, which were all transactions done that meant the City had to pay a certain sum of money. He noted that certain improvements were made and the City was reimbursing the Agency or that particular operation for the costs. Council Member Chavez asked about LPMR and Director Sweeney stated that in 1997, the City sold $510 million in bonds to improve the Resort District to build the Convention Center expansion, new roads and sewers and the City decided that instead of having a lease payment based on the principal and interest of the debt, the City agreed to pay over the increment that came out above the current base. He said for example, if the Resort District generated $30 million per year, the City would transfer $30 million and if it was $20 million, the City transferred $20 million that year and they were called Lease Payment Measurement Revenues. When the transient occupancy tax jumped up, Council would see a higher LPMR transferred, he added. Mayor Pringle asked what the legal requirement was to refund the obligation to the Redevelopment Agency on the incentive-based reimbursements and Director Sweeney said that the Agency had received its own sales tax in certain areas such as the Anaheim Plaza transaction and the Redevelopment Agency collected the tax. Mayor Pringle asked if it was established as an increment base and Executive Director of Community Development, Elisa Stipkovich, said that the Plaza project area was adopted prior to State law changing regarding the Redevelopment Agency having the ability to formally receive the sales tax in project areas and the project was done as a sales tax with the sales tax going to the Redevelopment Agency, which was no longer allowed. Mayor Pringle asked what amount of the $1.2 million transfer was the Anaheim Plaza and Director Stipkovich said it was approximately 50 percent and represented 50 percent of what was actually received and Fry's and Anaheim Plaza were in there. It was a net gain of $1.2 million to the general fund, she added. Director Sweeney presented the expense side of the budget and said that almost 65 percent of the general fund net discretionary budget was for Police and Fire; 15 percent was for Community Services; general governmental was less that 10 percent of the budget; Public Works and Streets was 5.9 percent; Visitors Bureau was at 4.6 percent and Planning at 2.6 percent. Out of the $182.5 million budget, $145 million was the accumulation of all the general taxes and the rest were fee based. Director Sweeney projected that over the next two-year period and possibly the next three to four years, there would be slow revenue growth and higher labor costs. With a 3 percent reduction directed by City Manager citywide, he informed, the budget would be brought into balance and generate a small surplus by the end of the current fiscal year and impacts to the ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 6 community would be minimized. He noted that general fund operating expenses needed to be further reduced by 5 percent for 2003/04 and that he was looking for any type of prudent use of general fund reserves. He spoke about rising costs in the Public Employees Retirement System rates. City Manager Morgan stated said with regard to PERS, when the City had a zero rate, the City did not believe that the rate would last forever and money had been reserved for the day when the rates would go up. He said that the time had come sooner and the amounts were higher than originally planned and the City had over $3 million set aside. This was not enough to solve the problem but could be used for the rates depending on Council direction. He said that one of the reserve options that had been pointed out by the Finance Director was use of some of the dollars and Council did not have to give direction today on those pre-reserved dollars. Mayor Pringle asked if the revenues such as the vehicle license fee would be at the present level and Director Sweeney said that was correct and he was not anticipating a State impact on the numbers. Director Sweeney said he believed that there should be some new revenue sources that should be explored such as the possibility of some franchise agreements. He said he would analyze those agreements over the next 90-days and possibly submit for Council consideration. He noted that he would not be proposing any new taxes and said that fees and charges could be adjusted and new charges could be introduced. Other one-time options, he said, could be any other types of direct revenue that the City had that could be associated with a direct expense. He said that one-time money had not been used to balance the operating budget although the two could be aligned together. If there was a one-time revenue source there could be a one- time expense, he noted, which would offset one another over time. He asked for direction from Council on the expenses and said that staff was striving to do things better with a leaner staff moving forward. He noted that a 5 percent reduction in operating expenses would take the $12 million deficit down to $4.4 million. City Manager Morgan said that Council would clearly want to know what the impacts were to services and employees in moving forward. He said that staff was in the process of identifying that for Council and it would be discussed with Council at length when moving forward on next year's budget. Staff had not determined the impacts and he said therein would be the Council policy and priority discussion. Director Sweeney said that when looking at the operating budget Council and staff needed to be as accurate as possible and stay in balance. He recommended a 5 percent reduction, the temporary suspension of reserving for certain future obligations and the utilization of funds previously set aside for related purposes, which would be proposals for Council to consider in the spring. He spoke about retired medical and said that it was one of the largest expenses and he proposed to pay as you go until the economy picked up or until it became apparent that the City would need to reduce. City Manager Morgan stated that not all cities in the County had retired medical and that approximately 40 percent of the cities had it. He said he believed that Anaheim was the only city that had a reserving program to fund it over time, which he recommended to Council. One of the options that staff would discuss with Council would be pay as you go on that program for one or two years, not drawing down the reserves in the program and not adding to them. Comparatively, he added, many other cities did the pay as you go program and had not pre- funded any of it. ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 7 Director Sweeney stated that staff would do whatever they could on the revenue side to promote revenue growth to the City, which meant promoting taxable sales through the efforts of the Redevelopment Agency and others, promoting the Visitor and Convention Bureau to get visitors to come into town and it would be only an indirect influence on the revenue sources and Council could not raise taxes by itself and would need to look at cost containment and incurring less expense. He said he was concerned about the vehicle license fees and said if the City was required to reduce on the order of $19.69 million over the 18 month period, the impacts would be extremely serious and would go above the information Council had seen today and he said he suspected it could be higher than that. He spoke about the $13.44 million for next fiscal year and said it was hard for him to believe that cities would not have to look at the public safety side and added that Council had a whole host of public policy decisions to be made. Mayor Pringle asked if there would be legislative action to reduce the backfill, which was the $19 million, and Director Sweeney said there would be and that it was part of the Governor's budget. City Manager Morgan said that the $19 million reflected what the Governor's proposal was and that it would start in February. Mayor Pringle stated that the Governor had also submitted $10 billion in cuts that were to start in December 2002, and the Legislature had not taken him up on that and the amount that would be taken from local governments would not start in February since it would require 2/3 vote of the Legislature. Finance Director Sweeney said that the City would need to adopt a budget by June 30, 2003. He noted that the second issue of concern was the Redevelopment Agency ERAF shift and according to the Governor's budget, as analyzed by the Redevelopment Association, the effect would be $1 million this year if it was immediate and $3.3 million next year. City Manager Morgan noted that this was the Governor's proposal and if this were to happen to the Redevelopment Agency, the ability to do any projects beyond where the Agency was today would come to a halt. He said there were agencies around the State that would be in a situation where they would not have enough increment to pay their debt service, pushing their obligation to their general funds. He said that staff would continue to monitor the situation. Mayor Pringle said that there were two recommendations made by the Governor's budget and one dealt with the 20 percent housing set-aside, which was not reflected in the presentation. Director Sweeney said it was not reflected because he did not believe that there was any impact to the City and that all of the City's funds were encumbered. Director Sweeney said that the Governor was no longer looking for the low or moderate money and was trying for what he would have received from the redevelopment agencies and the proposals from the Governor were in flux. Mayor Pringle said that the Legislature may enact, through urgency clause, the Governor's shifting of redevelopment money as of February 1,2003, which was the $1 million impact for the present fiscal year. Director Sweeney said that staff needed more time to work with the details and would return to Council with a report. He said that staff was looking for direction from Council and that staff ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 8 would continue with the 3 percent reduction of the current fiscal year, the direction being not to drawn down on available reserves. He said staff would build a budget that incorporated a 5 percent budget reduction to be seen by Council in the spring and impacts of that budget would be explained to Council as part of the process. He said specific one-time actions would be implemented and new reports for further cost containment for future years would be developed and those would be brought back to Council for consideration. He stated that there would be a proposed set of actions to address the vehicle license fee shift, in the event it was enacted. If the State was still addressing the vehicle license fee shift in the late spring, staff would need to get to Council with their budget and his position was to go with City revenues, take necessary action to balance it, and then have a separate section in the budget document that would deal with the vehicle license fees, in the event they should go away. Council Member Tait asked about the vehicle license fee shift in fiscal years 2003/04 and if the State should take it, would it be given back. City Manager Morgan responded that there were three scenarios and the first was for the State not to take the fee, the second was that it be taken for 18-months and the third was that they would take it forever. He said he believed that if the State took the fees, it would be for 18-months. Mayor Pringle noted that all of the dollars for vehicle license fees went to local government and the issue was not the shift from the State to pull money out of the pot that would otherwise go to local governments throughout the State, the issue was the State Legislature, over the last five years, had reduced the vehicle license fees by 67 percent. He said if the Governor did not propose to increase the vehicle license fees, the State had vehicle license fee backfill because five years ago the State Legislature and the Governor made a commitment to local governments that the vehicle license fee dollars would be protected. He said he believed that there would be many who would recommend raising the vehicle license fee back up as an alternative to create the backfill. If the fee was raised, he said, every dollar would come to local government and the issue would be advocating the raising of the vehicle license fee. He noted that he was concerned about structural economy of the City as a preeminent element of the budget and added that some cities would not survive at all. Council Member McCracken noted that there were housing dollars committed and capital improvement projects underway and some of those things would help the local economy. She said she had hoped that the building industry and housing was needed Statewide and that the industry may be able to pull the City out of some of this. She said more houses had been built in the past year than the City had done in previous years and some of those things may affect the next two years. Finance Director Sweeney said he agreed with Council Member McCracken and said he believed that there were some positive developments in the community. He said that if the State raised taxes, it would not be good for business and there were many offsets involved. He said he was optimistic long-term and there were great assets in the City such as housing and a great commercial recreation area. City Manager Morgan said he believed that the City had worked through this in the past and would work through it again. Council Member Chavez noted that Mr. Sweeney was concerned about the reserves not being touched and he asked to have a document that showed where, what and how much the reserves were. He said he was concerned about public safety and said that even a small terrorist incident in the City would have an impact and he suggested using whatever revenue ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 9 sources the City had, even if it meant reserves, to assure that police and fire would be able to effectively deal with a threat or incident. He was also concerned about layoffs and he asked to look at potential revenue streams. Council Member Tait said that the City needed to become a lot more business-friendly to encourage businesses to come to Anaheim. In looking at the revenue source and sales tax for business to business, it was down, he noted, and he asked to look at ways to make it easier for a business to expand and open in the City. With regard to expenditures, he said that the City needed to do a needs and wants list and to work through that list and base expenditure cuts on it. Council Member Hernandez said he was concerned about building business and developing the tourism industry. He wanted to enhance the business-friendly attitude in the area of planning and moving projects forward and he asked the Convention Center to develop a team that would aggressively market City features for tourism. Mayor Pringle pointed out that in the context of tax dollars coming into the City, building a $400,000 home where the full property tax payment would be $4,000 per year and the City retained 11 percent of that, $440 per year, public safety and other services may be more than $400 per year in terms of that residence. He said if a small business in a strip mall had gross receipts of $100,000 per year, the City would make 1 percent, which would be $1,000, not including any of the other taxes that the business would pay. Mayor Pringle asked staff to work harder on business retention, growth and relocation and it was not just about redevelopment, but was a structural issue. He said that staff needed to be prepared since this would probably be the longest budget delay in the State's history and the City's responsibility was to have a balanced budget in place by the first of the fiscal year. He said staff needed to be aware that it would be into September or beyond before the State would know what it was doing. He said that vehicle license fees would be part of the ultimate budget decision and whenever the budget was passed was when the City would know about the vehicle license fees and as the City moved into the next fiscal, it needed to be cautious and protect it. He spoke regarding property tax and said that State Director of Finance, former Senator Steve Peace, had a desired business property tax option to reassess business properties to gain incremental reassessment at annual intervals as opposed to when the property was sold or ownership transferred. He said that this would have an affect on how the City would collect property tax and the reassessment would dramatically affects businesses in the City since their property taxes would go up at a rapid rate. He said that there might be competing budgets placed before the voters in the fall of 2003. Council Member Hernandez asked about Council Members conducting a focus group. Mayor Pringle said holding a workshop was the way to do that and the base line had already been defined and the next step would be focusing on alternatives. He asked for more feedback before the final budget was presented to Council. City Manager Morgan said that staff would report back to Council in 30-days and in the interim, staff was available to sit down with one or two Council Members and brainstorm and talk about the alternatives that were being developed for full consideration. Mayor Pringle suggested creating workshops with individual Council Members or two at a time so the ideas could be placed on the table and Council could participate in some of the discussion. ....... ,~_ ....__...~"......._~,._.._.___." ___,.,_._.__ ,_.._._"~, _,__ ___.___,._._____,._~___,......",~" .... _._>__,_,_.__~____.._____., ......._m.o.___.___.._____....__. ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 10 At 12:50 P.M., Mayor Pringle adjourned the adjourned regular meeting of January 14, 2003, to January 14, 2003, at 3:30 P.M. The City Council of the City of Anaheim met in adjourned regular session. The Notice of Adjournment was posted at 3:00 P.M. on January 14, 2003 on the exterior door of the Anaheim Council Chambers, announcing the adjournment to 3:30 P.M. for the purpose of a workshop on Parks and Open Space Projects. PRESENT: Mayor Curt Pringle, Council Members: Tom Tait, Shirley McCracken, Bob Hernandez and Richard Chavez. STAFF PRESENT: City Manager David Morgan, City Attorney Jack White, Assistant City Clerk Cynthia Daniel-Garcia, Community Services Director Chris Jarvi. A copy of the agenda for the meeting of the Anaheim City Council was posted on January 10, 2003 at the City Hall outside bulletin board. Mayor Curt Pringle called the adjourned regular meeting to order at 3:40 P.M. in the Council Chambers of the Anaheim City Hall, 200 South Anaheim Boulevard. WORKSHOP: City Manager Morgan stated that this was a presentation on the Park Capital Program and there were many positive projects in the Community Facilities Plan and the presentation would entail projects that were already budgeted and underway and funded and Council would be able to understand which projects would be able to continue, regardless of what happened at the State level. He added that projects would be discussed that were in planning and would be new opportunities for Council consideration. He introduced Community Services Director, Chris Jarvi, who presented the workshop. Director Jarvi noted the diversity of the City's facilities and said that there was a State and County park in the City and there were neighborhood and community parks and the quality of the parks were above reproach in terms of the design and maintenance. The City had cooperative relationships with the schools in the seven school districts, he said, and there was a high degree of public, private and non-profit partnerships that had been developed and there were special programs for special interests such as the environmental education program and special populations or handicapped residents and he had committed to providing a full spectrum. Director Jarvi presented an overview of the Parks and Open Space Projects workshop and referred to a power point presentation, hard copy of which was available in the Clerk's Office. Director Jarvi said that Anaheim and Loara High Schools planned to have a second gym developed as part of their bond projects in 2005 and Savanna and Magnolia would have gyms in 2007/08 and these would be largely for recreation purposes. He spoke about budgeted/funded and underway projects and said that the West Anaheim Youth Center/Police Station, Phase I, at a cost of approximately $9 million, included meeting and study rooms, offices, a restroom and a police substation. The gym was an extra $2 million and was not funded, he noted, since Community Services did not have the money and was not successful in ______._.____,~____._.,____.m___.'~..~..._._...._>..__.- ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 11 obtaining a Murry-Hayden grant under Proposition 12. There was an additional opportunity to try for some Murry-Hayden dollars and he said Community Services would be doing that in the future. Ross Park Phase 1/11 was budgeted/funded and underway and the improvements included lighted sports fields and basketball courts, restrooms and play areas, gazebo and picnic areas at a cost of $1.4 million and dedication was expected in late spring. Total acreage new to the park system, he said, was 5.5 acres and he said Community Services would like to expand on Ross Park by picking up on the Galaxy Oil and Home Oil parcels and there was $2.1 million allocated for that and the Galaxy Oil property was in escrow and had some toxicity problems and Community Services was working to ensure cleanup of that site. Home Oil also had hazardous problems, he explained, and Community Services was also working on that. There was $700,000 set aside for development of the site and could not be spent until the site was cleaned up, he said, and was to be used for an additional lighted, multipurpose sports field and landscaping with the total site encompassing 10 to 11 acres. Architects had been hired and were working on the plans for the Maxwell Park/Haskett Library expansion, Director Jarvi informed. Public meetings had been conducted and a final meeting would be conducted to let the public know how Community Services would be proceeding in February. It would relieve the problem of heavy use and parking as well as the added need for open space and sports field space in the City, he noted. Magnolia School District had threatened to expand to the north with parking into the ball field and that would eliminate the ball field, he said, and being able to place a parking area in the right of way, Magnolia District could expand within their existing site and not have to encroach any further on the park site, he informed. The park expansion was integral to the Haskett Library Plan for a new 24,000 square foot library, replacing the 7,000 square foot library, he said, and a State library grant had been received for the $8.5 million project, which should be under construction in January 2004 with completion in December 2004. Pioneer Park expansion should be under construction in June 2003 and completed by December 2003 for a picnic area, landscaping and street improvements on Sunkist, he said. The Energy Playfield was budgeted through Public Utilities Department and the location was on the public right of way west of Ninth Street and south of Hermosa Village, he informed. It would include a playfield as well as some energy producing capability through a unique design that would be prepared by Community Services and Utilities Departments. He noted that funding would come from public benefits fund and estimated cost and completion date was unknown. The La Palma Park Sports Complex was where the City owned a good portion of the property that was north of La Palma Park and Community Services was working on consolidating parcels and a three-field sports complex would be installed. There was one lighted field for every 540 children in west Anaheim and in central Anaheim there was one lighted field for every 1,528 children and east Anaheim there was one lighted field for every 525 children and he noted the need for a lighted sports field in the central part of the City. The City School District was interested in working with Community Services to put in a junior high school on the site and may enable the La Palma Park Sports Complex to happen more quickly than he had believed. A cost benefit analysis would be prepared and Community Services would return to Council in individual workshops, he added. The Central Library retrofit involved cleaning up the basement, moving stacks that were on the third floor down to the basement and remodeling the second floor to move adult collection and provide quiet study areas for adults and remodel the first floor to provide more children's area, he explained. ~.._,-._-^"._,--_.,._----_._--,.,_._-~----+~-~._--"._,-._-~- ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14,2003 PAGE 12 Director Jarvi spoke about projects in planning and said that a workshop was planned to discuss the Downtown Library on February 4, 2003. The Brookhurst Community Center project came about because of public meetings held in west Anaheim and there was a need for a variety of different things, one of which was for senior facilities. Architects, Dougherty and Dougherty, were hired to do the plans for Americans with Disabilities Act improvements to the restrooms, new lobby offices, counseling rooms, a game room and a multiuse classroom at a cost of $1.7 million, which was only partially funded, he said. The City was $653,000 short and there was the option of phasing or deferring the project because of the lack of funding and the budget constraints, he informed. Community Services was looking into the development of a 10,000 square foot skateboard park in east Anaheim at the East Anaheim Police Station/Community Center. He said that a permanent or temporary facility had been looked at and may be made similar to the downtown skate center as opposed to what was at Brookhurst and the difference in cost was that the downtown skate park was $170,000 and it would be $300,000 for the full project. He said that for $300,000, this was a project that Council could consider deferring since the project had not yet begun. Staff had been asked by Council to look at making better use of the Magnolia High School sports field reconfiguration site and a designer was brought in and they suggested an approach that was presented to the School District and the School District ask that the sports field reconfiguration be done rather than the two soft ball fields that had previously been proposed and would cut down on potential conflict with surrounding neighbors, he explained. The reconfiguration would require $2.3 million, which would leave the City approximately $1.5 million short on the project, he informed, so it was another project that could be either funded or deferred. Director Jarvi said that there was about ~ mile difference between where the West Anaheim Youth Center was to go and where Schweitzer Park was going in and that Carbon Creek Channel was adjacent to that. What was needed in order to create the connection was to build a bridge and wall and some things to go with that. Staff was working with the County to obtain Measure M funds for the project so it would not cost the City anything if staff were successful in obtaining the funds. Director Jarvi spoke about other projects identified by Councilor projects that had been started and needed additional funding to accomplish or there had been high public demand, he said. Community Services had entered into a contract with a designer to look at a facility for the East Anaheim Community Center and Dougherty and Dougherty was asked about having a library, gym and a skateboard park fit on the same site and they were able to design plan where all three would fit. He noted that in 2001 there had been a Mello Roos election where Community Services had gained the approval to place the library on the site since it was purchased with Mello Roos money. Council had expressed the desire to build a gym, he said, and a desire to build the skateboard park, and Community Services had commissioned a study to look at it. He asked for Council direction and priorities. Staff had been directed to look at an interim library in the East Anaheim Community Center building and using some of the unused 10,000 square feet of space that would hold over until a more permanent facility could be built. Mayor Pringle asked about the Mello Roos direction and if there were any designation of where the dollars would go in terms of what types of services. City Manager Morgan stated that it was directed for a police station or police facility and the City went back to the voters to obtain approval to also use the site for library purposes and approval was received. He said if Council had other visions for the site, the City could ask the voters for approval of other uses. Mayor Pringle asked how much money was generated for that use and Director Jarvi said that no money from Mello Roos was generated since the site was originally purchased with Mello Roos funds and there was no on-going revenue. ANAHEIM CITY COUNCIL MEETING MINUTES JAN UARY 14, 2003 PAGE 13 City Manager Morgan stated that the original acquisition of the site was approximately $7 million and $6 million were Mello Roos dollars identified for a police station at another location. The City added another $1 million of general fund money to acquire it and the voters gave the City approximately 10 percent that could arguably be used for non-police purposes. He said that staff was looking to Council for direction on other elements of the site for non-police uses and it would need to be confirmed with the Mello Roos members. In response to Mayor Pringle, City Attorney White said that the age of the site that could be used was the same as the age of dollars that went into the purchase. Approximately $1 million of City general fund money was used and $7 million of Mello Roos money and the City had the right to approximately 1/ih of the use for non-designated Mello Roos approved uses, he explained. The two uses approved by the taxpayers in the Mello Roos Districts were library and police, he added. In response to Mayor Pringle, City Manager Morgan said that the community center was justified because of $1 million of general fund money. Mayor Pringle asked at what election could other uses occur and City Attorney White said that a special election could be done by mail and the last Mello Roos election conducted was a mail election and was not near as expensive as a normal election. Mayor Pringle asked to have the cost of the election brought back to Council. Community Services Director Jarvi presented other project opportunities for sports field improvements. The first was at La Palma Park Sports Complex, which may bring a gym and meeting room for community purposes. There were sports field improvement opportunities at Yorba Regional Park where there would be a combination of a lighted softball and soccer field with additional parking and an equestrian staging area at an estimated cost of $2.3 million and staff had proposed that the County would pay 2/3 and the City would pay 1/3 at $800,000. sports field improvements at EI Rancho, Dale, South, Orangeview and Brookhurst Junior High Schools would assist in meeting the challenge of not having enough practice facilities in the City, he noted. Sports field improvements for Imperial Highway where there was approximately 23 acres at the northeast intersection of Imperial Highway and SR-91 and staff had been in discussions with CalTrans about the use of the site. He said that there could be two lighted fields on the site for approximately $3.7 million or three softball/soccer fields, one full soccer field and a little league field for $8.9 million in development. There were competing interests on the site with OCTA and the OCWD, he noted. Sports field improvements on the Shantz property of 6.6 acres, which could be used for parking and three linear fields at a cost of $2.5 million in acquisition and $4.91 million in development, he said. Sports field improvements for Nohl Ranch Sportsfield (Olive Hills) and design and development costs were unknown at this time, he said, and at least the grading could be covered by Utilities Department. Sports field improvements on Edison rights of way through north, south, east and west and potential uses of the right of way through the City, depended on the adjacent uses and site use options included practice sport fields, trails, landscaped picnic opportunities, dog parks and skate parks. City Manager Morgan stated that as part of the budget process last year, there was $10 million identified to be transferred to the park and play site fund, which was not appropriated but discussed to move $10 million over to help do a gym in east Anaheim and west Anaheim and matching funds for La Palma. He said that since that time, Community Services had reported that the school districts would be developing four to six gyms over time with school bond dollars. ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 14 He said that the plan before Council was to do the youth center and police station on Beach Boulevard and the plan was to defer the gym since the school districts would be building them anyway. He said that staff was working on having the project fund itself on Phase I at La Palma, and the school district, since they had bond dollars, wanted to acquire some of the land that the City owned. Staff was hoping that the dollars brought to staff to acquire the land would be enough to finish whatever acquisition was needed as Phase I and maybe even have dollars to do initial Phase I sports field work. Beyond that, there were no matching funds, he reported, and staff would return to Council with a report. ADDITIONS/DELETIONS TO CLOSED SESSION: None. PUBLIC COMMENTS - CLOSED SESSION ITEMS: None. Mayor Pringle moved to recess to Closed Session, seconded by Council Member McCracken. Motion carried. The Council recessed to Closed Session at 4:20 P.M. 1. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54957.6: Agency designated representative: David Hill Employee organizations: Anaheim Police Association 2. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION (Subdivision (a) of Section 54956.9 of the Government Code) Name of case: Vista Media Group, Inc. v. City of Anaheim, et aI., Orange County Superior Court Cases Nos. 814050 and 00CC08157. 3. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION (Subdivision (a) of Section 54956.9 of the Government Code) Name of case: City of Anaheim v. Huntcor, Inc. et aI., Orange County Superior Court Case No. 02CC18801. 4. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION (Subdivision (a) of Section 54956.9 of the Government Code) Name of case: City of Yorba Linda v. City of Anaheim, Orange County Superior Court Case No. 01 CC09320. AFTER RECESS: Mayor Pringle called the regular Council meeting of January 14, 2003 to order at 5:17 P.M. and welcomed those in attendance. INVOCATION: Pastor Jimmy Gaston, State College Church of Christ FLAG SALUTE: Council Member McCracken PROCLAMATIONS AND DECLARATIONS: Connie Kuhn, District Officer Manager, presented the AAA Community Safety Silver Award to the City of Anaheim. ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 15 Recognitions to be presented at a later date were a declaration recognizing Salvation Army Captains Antonio and Aide Horta; a declaration recognizing CSSS, Inc. on its 25th anniversary; proclamation recognizing April 3 - 5, 2003, as Phi Theta Kappa Days; a declaration recognizing the National Association of Music Merchants and a declaration recognizing June Tait, Assistant Superintendent, Magnolia School District. At 5:26 P.M., Mayor Pringle recessed the City Council meeting until after the Redevelopment Agency meeting. 5:33 P.M. Joint Public Hearina with the Redevelopment Aaencv and Anaheim City Council: 4. To consider approving an amended and restated Disposition and Development Agreement by and between the Anaheim Redevelopment Agency and Brookfield Southland Holdings LLC. regarding certain property at 2300 to 2340 West Lincoln and making certain environmental and other finds in connection therewith (Continued from the Council meeting of January 7,2003, Item No.4). 123 Mayor Pringle noted that the public hearing had been held at the meeting of January 7, 2003 and had been closed. He opened the hearing for public comment and hearing none, closed the public hearing. Council Member McCracken offered Resolution No. 2003R-6 for adoption. RESOLUTION NO. 2003R-6 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving an amended and restated Disposition and Development Agreement by and between the Anaheim Redevelopment Agency and Brookfield Southland Holdings LLC. regarding certain property at 2300 to 2340 West Lincoln and making certain environmental and other finds in connection therewith (Continued from the Council meeting of January 7,2003, Item No.4). Roll call vote: Ayes - 5; Mayor Pringle, Council Members Tait, McCracken, Hernandez and Chavez. Noes - O. Motion carried. Mayor Pringle reconvened the City Council meeting at 5:35 P.M. ADDITIONS/DELETIONS TO THE AGENDA: City Clerk, Sheryll Schroeder, announced that the following was an emergency item to be added to the agenda: Item A9 to waive Council Policy 306 and authorize the Purchasing Agent to issue an emergency purchase order in an amount not to exceed $47,509 for the repair of the Utility Service Center roof, located at 909 East Vermont Street. Council Member Hernandez moved, seconded by Council Member McCracken, to add Item A9 to the agenda. Roll call vote: Ayes - 5; Mayor Pringle, Council Members Tait, McCracken, Hernandez and Chavez. Noes - O. Motion carried. PUBLIC COMMENTS: ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 16 James Robert Reade spoke about officers in the Police Department. Peter Vasquez stated that he was a street vendor with a vehicle and had to move every ten minutes. He explained that Code Enforcement was watching him and he had to move 200 feet from one spot to the other because of the ten-minute rule. Council Member Chavez asked for backround regarding the ten-minute rule. Executive Director of Planning and Community Development stated that the City ordinance required that trucks be moved every ten-minutes. The City practice was to respond only to citizen complaints, he informed, and Code Enforcement would respond if trucks were in place for longer than 20-minutes or more. He explained that residents called in when concerned about the excessive time trucks were parked in one specific spot or there was excess trash, noise or crowds gathering. It was also Code Enforcement practice to not issue citations for that, they issued notices of violation, which were warnings and encouraged compliance, he explained. Code Enforcement staff had attempted to be as lenient as possible and still balance concerns by the citizens. Mayor Pringle asked Mr. Vasquez what part of the City he provided service for and Mr. Vasquez responded that he worked on Kaufman and Center Streets over by State College, Wakefield and Leatrice Streets by Katella, between Orangethorpe and Haster Street and Beach Boulevard and Loara Street and Ball Road. He said he had paid over $10,000 in citations and he believed that should be his profit. Mayor Pringle asked Mr. Vasquez where he saw Code Enforcement activity the most and Mr. Vasquez responded that it was in the Kaufman and LeatricelWakefield areas. Director Fick stated that he would provide secure information from Code Enforcement to the City Manager and Council. He said that Mr. Vasquez had recently been contacted by Code Enforcement regarding a particular instance on Kaufman responding to a letter that was written to the City expressing concerns about his produce truck being parked all day, each and every day, including Sundays, in front of a particular property. He noted that Code Enforcement was only contacted regarding the excessive parking. Council Member Tait asked Mr. Vasquez what a more reasonable time limitation would be and Mr. Vasquez responded that the City of Fullerton had given him 1.5 hours, which was fine, and the cities of Buena Park and Santa Ana had given him no time limit. He said he believed that 1.5 hours would be fair to be able to serve the customers. Michael Baker, Executive Director of Boys and Girls Clubs of Anaheim, said that Marie Calendar's had agreed to give a percentage of proceeds raised to the Boys and Girls Clubs of Anaheim and asked for support. Alma Ramirez said she believed that the City Attorney had not prosecuted certain individuals and stated that those individuals met at 711 Helena Street to conspire crimes. MOTION: Council Member McCracken moved to waive reading in full of all ordinances and resolutions, seconded by Council Member Tait. Motion carried unanimously. CITY MANAGER/DEPARTMENTAL CONSENT CALENDAR A1 - A9: On motion by Council Member McCracken, seconded by Council Member Tait, the following items were approved in 118 105 160 160 158 123 179 160 ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 17 accordance with the reports, certifications and recommendations furnished each Council Member and as listed on the Consent Calendar. Council Member McCracken offered Ordinance No. 5848 for adoption. Motion carried unanimously. A 1. Reject certain claims filed against the City. A2. Receive and file minutes of the Public Library Board meeting held December 9, 2002. A3. Accept the low bid of Aramsco, Inc., in the amount of $40,346.10 (plus applicable tax and delivery charges), for the purchase of six APD2000 portable chemical detectors for the Fire Department in accordance with Bid #6333. A4. Accept the low bid of Master Wash, Inc., in an amount not to exceed $23,929, for mobile vehicle washing services in accordance with Bid #6342 and authorize the Purchasing Agent to exercise up to four one-year renewal options. 160 A5. Waive Council Policy No. 306 and authorize the Purchasing Agent to issue a purchase order to Motorola, Inc., in the amount of $163,472.97 (tax and freight inclusive), for Motorola radio pack sets and associated equipment for the Police Department. A6. Approve the Stipulation Regarding Settlement Concerning the City's Right to Take with Dennis Berger and Edith Berger, in the settlement amount of $47,500, for acquisition of property located at 1120 West Lincoln Avenue for the Lincoln Avenue-Phase II/Street Widening Project (RIW ACQ 2001-00005). A7. Approve the Third Amendment to Agreement with Managed Restaurant Services to extend the contract on a month-to-month basis for a period not to exceed three years for continued food and beverage service at the Anaheim Hills Golf Course. A8. ORDINANCE NO. 5848 (ADOPTION) AN ORDINANCE OF THE CITY OF ANAHEIM amending the zoning map referred to in Title 18 of the Anaheim Municipal Code relating to zoning (Reclassification No. 2002-00080, located at 226-230 North Rio Vista Street) (Introduced at the Council meeting of January 7,2003, Item A13). A9. Waive Council Policy 306 and authorize the Purchasing Agent to issue an emergency purchase order in an amount not-to-exceed $47,509 for the repair of the Utilities Service Center roof located at 909 E. Vermont Street. END OF CONSENT CALENDAR Council Communications: Council Member McCracken said that she had attended a rededication of the 91 express lanes and she said she believed that this was the first step that was being taken to make sure that people could be moved and improvements to the 91 Freeway were being planned and that the City would see positive things occurring. Mayor Pringle noted the OCT A purchase of the toll lanes to mitigate and clean up traffic congestion on the 91 Freeway. ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 18 Council Member McCracken informed that certain lanes were already being re-striped to add additional lanes, from Green River to the 241 Freeway. There was land for additional lanes between the 241 Freeway and Imperial Highway and in the Orange County stretch, improvements would be seen happening relatively soon. The Riverside piece of the 91 Freeway, had a sales tax that was used for transportation and they had already begun to make plans for improvements on the other side. Council Member Hernandez inquired about discussions regarding the flyovers for the connection to the 241 Freeway. Council Member McCracken stated that was another agency that she would be working with and they had their first planning meeting with Riverside Transportation Agency and the Orange County Transportation Agency. She said she asked that they include the TCA's that would govern the 241 Freeway so that long term plans could go into place to be able to make connectors. She added that the problem was the 241 Freeway dropped all of the traffic onto the 91 Freeway and backed up traffic west of the 91 Freeway. Mayor Pringle announced that the Angels would be recognized by the California State Assembly on January 21, 2003. He added that he had welcomed the Professional Convention Manager's Association as they held their convention in the City. He commended Convention Center staff and the Visitor's and Convention Bureau and noted that this was the largest convention that the City had. 6:00 P.M. PUBLIC HEARINGS: 176 C1. To consider the abandonment of Babbitt Avenue together with the drainage easement extending westerly from the terminus thereof. At the meeting held December 17, 2002, Item A27, the Anaheim City Council adopted Resolution No. 2002R-250 declaring its intention to vacate certain public streets, highways, and service easements (Abandonment No. ABA2000-0007 A, Babbitt Avenue, in its entirety). REQUESTED BY: Seaward Properties, L TD, 923 North Main Street Orange, CA 92867; and Walter and Janice Duong, as joint tenants, 877 North Batavia Street, Orange, CA 92868. Public Works Civil Engineer, Natalie Meeks, recommended the abandonment of Babbitt Avenue since the property owners adjacent to that street had requested the abandonment to consolidate the roadway into a comprehensive, commercial development of all of the properties. She said Public Works proposed retention of public utility easements and as part of the agreement, they would dedicate an additional seven feet along State College Boulevard to have the ultimate right-of-way. The value of the plan had been set by an appraiser and as part of the motion approving the agreement for sale and the two quitclaim deeds, it was recommended that the Council also approve such sale, without public bidding as otherwise required by Charter Section 1222, upon a finding that the sale was in the best interest of the City. Mayor Pringle opened the public hearing. Mark Hilgren, Seaward Properties, L TD, was present and stated that he would answer any questions. ANAHEIM CITY COUNCIL MEETING MINUTES JAN UARY 14, 2003 PAGE 19 Mayor Pringle closed the public hearing. Council Member McCracken moved, seconded by Council Member Chavez, to approve the CEQA finding of Categorically Exempt, Class 5. Motion carried unanimously. Council Member McCracken moved, seconded by Council Member Chavez, to approve two quitclaims and an agreement for the sale of the City's right, title and interest in and to the abandoned area. Motion carried unanimously. Council Member McCracken moved, seconded by Council Member Chavez, to approve such sale without public bidding as otherwise required by Charter Section 1222, upon a finding that the sale was in the best interest of the City. Motion carried unanimously. Council Member McCracken offered Resolution No. 2003R-7 for adoption. RESOLUTION NO.: 2003R-7 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING ABANDONMENT NO. ABA2000-0007 A. Roll call vote: Ayes - 5; Mayor Pringle, Council Members Tait, McCracken, Hernandez and Chavez. Noes - O. Motion carried. 176 C2. To consider the abandonment of a portion of a certain pipeline easement located north west of the intersection of Country Hill Road and Mohler Drive, 481 South Mohler Drive. At the meeting held December 17, 2002, Item A28, the Anaheim City Council adopted Resolution No. 2002R-251 declaring its intention to vacate certain public streets, highways, and service easements. (Abandonment No. ABA2002-00057, located northwest of the intersection Country Hill Road and Mohler Drive, 481 S. Mohler Drive). REQUESTED BY: Godfrey Nwogene, P.O. Box 5702, Gardena, CA 92049 Mayor Pringle opened the public hearing and hearing no testimony, closed the public hearing. Council Member Tait moved, seconded by Council Member McCracken, to approve the CEQA Finding of Categorically Exempt, Class 5. Motion carried unanimously. Council Member Tait moved, seconded by Council Member McCracken, to approve the quitclaim and agreement for the sale of the City's right, title and interest in and to the abandoned area. Motion carried unanimously. Council Member Tait offered Resolution No. 2003R-8 for adoption. RESOLUTION NO.: 2003R-8 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING ABANDONMENT NO. ABA2002-00057. Roll call vote: Ayes - 5; Mayor Pringle, Council Members Tait, McCracken, Hernandez and Chavez. Noes - O. Motion carried. 179 C3. WAIVER OF CODE REQUIREMENTS CONDITIONAL USE PERMIT NO. 2002-04622 ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 20 AND NEGATIVE DECLARATION: OWNER: Suites 0 Weekly, 30 Harbor Sight Drive, Rolling Hills Estates, CA 90274 AGENT: Gary Frazier, Acacia Housing Advisors, 6445 Joshua Tree Avenue, Orange, CA 92867 LOCATION: 2748 West Lincoln Avenue. Property is approximately 1.7 acres having a frontage of 125 feet on the south side of Lincoln Avenue located 670 feet east of the centerline of Dale Avenue (Lincoln Inn). To permit the conversion of an existing 117-unit motel (Lincoln Inn) to an 84-unit affordable senior citizen's apartment complex with a density bonus with waivers of a) minimum age restriction for senior citizen's residential complex, b) minimum number of parking spaces, c) minimum landscape setback abutting an arterial highway, d) minimum building site area per unit, e) minimum floor area per unit, f) minimum width of pedestrian accessways and g) maximum density bonus. ACTION TAKEN BY THE PLANNING COMMISSION: Waiver of Code Requirement approved, in part, approving waivers (b), (c), (d), (e) and (g) and denying waivers (a) and (f) (5 yes votes, Commissioners Boydstun and Koos absent). Conditional Use Permit No. 2002-04622 granted (PC2002-169). (Review of the Planning Commission's decision requested by former Mayor Daly and former Council Member Feldhaus). Executive Director of Planning and Community Development, Joel Fick, presented the staff report and stated that the applicant had proposed to convert an existing 117 -room motel to an 84-unit, affordable senior citizen apartment complex. He said that the motel was built in 1969 and the conditional use permit that allowed the motel was approved in 1968 by Council and expired in January 2001, due to non-compliance with conditions of approval. The motel, which currently housed long-term residents rather than transient guests, was operating without a conditional use permit, he informed. Since the complex was originally constructed and intended as a commercial motel business and not permanent housing, five waivers were necessary to accommodate the conversion to senior apartments. The first waiver was minimum number of parking spaces and based upon the proposed number of apartments, 102 parking spaces were required and 92 were proposed and the Traffic and Transportation Manager had agreed that the 92 spaces would be sufficient for the project, he informed. The second waiver was minimum landscaping adjacent to Lincoln Avenue and Code required a 20-foot average, 15-feet minimum for landscaping adjacent to Lincoln Avenue and due to an existing circular driveway where the landscaping would normally be, there was ten feet that currently existed, he said. The third waiver was minimum land area for an apartment unit and Code required 1,200 square feet of land area per unit, based on 84 units and there would be a total of 881 square feet of land area per unit. He said that the fourth waiver was minimum floor area per unit and the Code required studio apartments to have a minimum of 400 square feet and 60 of the studio units would have 325 to 396 square feet of floor area and for two bedroom units, 700 square feet was required and 16 of the units had between 600 to 667 square feet of floor area. The fifth waiver was a maximum density bonus and he stated that Code allowed a 25 percent density bonus for affordable senior citizen apartments and based on the size of the lot, Code allowed 62 units plus an additional 15 units for a total of 77 units, he explained, with 84 units proposed. Since the project was defined as an affordable project, the City would be tied to a binding affordability agreement through Community Development and Council had the ability to approve the project for the density bonus, he informed, and other waiver incentives that were deemed necessary to achieve the affordability. In converting the property, the applicant had proposed a complete rehabilitation and redesign of the complex, including the addition of two elevators, four laundry rooms, five indoor common rooms, expansion of the main existing common room and the ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 21 redesign and enhancement of the five existing courtyard areas, he said. The current motel rooms would be combined for greater square footage and completely refurbished to accommodate amenities that would typically be found in senior citizen apartment units, he noted. The Planning Commission unanimously approved the applicant's proposal as requested based upon the adaptive reuse of the existing structure and elimination of blighted buildings, contributing towards solving housing needs in the community by providing permanent, affordable housing, in conformance with the City's housing goals as set forth in the Housing Element, elimination of overcrowded housing conditions that should result in the reduction of vehicle trips and calls for police service attributed to the property and reduction of transients in the neighborhood, he explained. To ensure that the conversion would result in the highest quality design possible, he said, Planning Commission imposed a condition on the conditional use permit that required final plans be submitted to staff showing landscaping, signage, light fixtures, mechanical equipment, pedestrian gates, fencing driveways, enhancements, detailed elevations of the buildings and detailed recreational amenities. If this were new construction, he said, staff would approach the project differently and since this was a major renovation of an existing blighted property, staff supported the Planning Commission's approval. Mayor Pringle opened the public hearing. Jimmy Gaston said he served as President of Anaheim Supportive Housing for Senior Adults, which was in partnership with Gary Frazier, Acacia Housing Advisors, which had the property under contract. He was in support of staff recommendation. An item mentioned by various people in the community had to do with mold that he said he believed was probably in the structure. To finance the property, anyone would insist that all mold be abated, he said. In west Anaheim, most every neighborhood experienced increased traffic, crime and a heavy impact on schools and this kind of property would decrease traffic, crime and lower the impact on schools and he added that long-term residents would be assisted with relocation. Esther Wallace, West Anaheim Neighborhood Development group, said that there had been many problems with the Lincoln Inn. She said that WAND was not concerned about the group that was taking over the Lincoln Inn and refurbishing it. She said that WAND had been careful with having senior units in west Anaheim and there had been three senior builders that had come in wanting to put up a brick building for seniors to live in with no elevators or amenities. Acacia Housing would make the surroundings comfortable for the seniors with elevators, gardens, recreation rooms and fireplaces, she said, and the developers had been asked to build the units with handicapped access. WAND had worked with the developer and approved 277 senior apartments for low-income seniors and a special 22-unit AIDS apartment unit. She said that WAND was concerned about the small rooms, from 325 square foot up and 60 out of 64 studio and one-bedroom apartments were under size and 16 of the 20 two-bedrooms were under size. The present Code allowed for 10 percent or 20 percent studios and there were to be more than that in the complex, she said, and that this was setting a precedent for west Anaheim and for the City to allow the waivers to come in. She said she heard repeatedly at the Planning Commission meeting that if one group was allowed to do something, the other group should also be allowed. She noted that there were only seven-foot setbacks for tract homes. She said that WAND was concerned about the black mold on the walls and she asked what would be done about the mold. She asked if the ceilings would be taken out or if the floors would be removed. She noted that she had seen pictures of the mold on the ceilings and walls and seniors had compromised immune systems and some were susceptible to the black mold and others were not. She asked for the mold to be checked by the Health Department and even though the mold would be removed, sometimes it could not be completely removed because of the porous walls. The minimum age wanted in the complex by WAND was 62, not 55, she said, ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 22 because that would serve the needy seniors. She said that WAND felt that the building should be taken down although it was plain that the outer structure was sound but WAND was concerned with the inner wall structure. She said she had known a person that had lived in the facility and had respiratory problems the whole time he lived in the facility and she hoped that the mold could be cared for. Dan Van Dorpe stated he was the founding partner of Van Dorpe Structural Engineers and specialized in residential buildings and senior housing. He said he was in favor of the project and that it would enhance the neighborhood by upgrading the overall property, creating less traffic and less potential for crime. He had been asked to do a preliminary analysis of the building and he informed that it would be brought up seismically; equivalent to current Codes, and the overall structural integrity would be improved. Esther Villas said she was the leasing agent at Harbor Village Apartments, which was adjacent to the motel that had many problems, and she was in support of the project. City Clerk, Sheryll Schroeder, announced that there were three people who were in support of the project but did not wish to speak. Judithanne Gollette said she was with the West Anaheim Neighborhood Development Business and Land Use Committee and that the project would reduce the money coming in and it had previously been an income producing property. She said the property was being looked at to be taken off the tax rolls and the project would have increased services for fire, ambulance and emergency because of the number of seniors that were going into the units. She said it might be a bandaid for a piece of property that had gone into blighted conditions because of the landlord. In looking at a building that had problems with its construction, she said she was not sure how in depth anyone could examine the building until all the drywall was done. She said that the City had created a 385-page document about the problems in the building and the standard of having 400 square feet for a studio apartment and 60 out of 64 units that would be studio apartments did not meet City standards. Even taking 117 -units and making it 84-units, she said, and even with the density bonus, it should be 77-units and she asked if it was really better for the seniors to be there with the mold. WAND had been working with contractors and developers for five years to make sure that there would be quality senior housing and she wanted it to be the best for the seniors. She noted that there were 38 more motels and she asked if the City was ready to take on the liability for the mold that may be in the pores of the structure. She said that senior apartments were needed and the seniors were interested in seeing the building torn down. The building had been blighted and was a problem and she asked to go forward with quality construction and to make sure that there was enough housing for seniors and that it was not apartments. Mayor Pringle closed the public hearing. Jimmy Gaston said that he did not want anything going up that would be harmful to the seniors and it was an existing structure and a number of things that had already been done architecturally. City staff had looked at the project and said that this would be good for the seniors and the size of units were larger than many in the area. He stated that he had a professional team and it was a good project and that they would do whatever it took to get rid of the mold. ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 23 Council Member Chavez said he was concerned about the relocation of the families and he asked how many children lived in the complex. Pastor Gaston said that there were approximately 200 adults and 50 children. Council Member Chavez said he was concerned that there were not enough apartments and that they would need to be on a waiting list. He asked if and how the people would be moved out during the remodel. Gary Frasier said he was with Acacia Housing Advisors and his company had done preliminary concepts of how it would happen. He said that because of the zoning, any person who was not 62 years old would need to leave and the professional relocation consultant who had extensive experience in the City would work with Acacia and the City. It was estimated to take three to four months to find suitable replacement for everyone that did not qualify, he informed. There were between ten and 25 senior citizens to stay during the renovation and it would be phased by building with one building at a time being shut down. Some of the people who lived in one building would have to move to the other, he added. Council Member Tait asked about the relocation assistance that was given to the long-term residents, particularly families and Mr. Frasier stated that it was both federal and state law that govern this and the laws were triggered by investment of public funds and Acacia could not go forward without public funds. He said Acacia would be applying for funds from Anaheim Community Development and that had not been done until the public hearing was approved. Anyone that had lived there for more than 30-days was considered a permanent resident and under state and federal law must be relocated. Suitable replacement housing, under a relocation plan, would need to go through other City agencies for approval, he informed. Council Member Tait asked if there would be assistance for anyone who had trouble coming up with first and last months rent and Mr. Frasier said that he would ask Anaheim Housing Authority to assist Acacia with rental assistance payments. The federal assistance did not cover first and last month's rent, he said, and those were items that Acacia needed to budget into the development budget. Mayor Pringle noted that there were problems in terms of senior citizen housing needs and low- income family needs in the City and there was a need to protect the integrity of the City in a variety of ways. He said that Acacia was taking a facility and improving it and reducing the total number of units and that there were currently seniors living in small units already or families living in the smaller motel units. He said that Mr. Gaston and Mr. Frasier were addressing a situation and trying to make the best of it and he supported that direction. He commented that this may be setting a precedent, which was to have individuals in the community step up and form non-profit organizations and look to solve problems in the City dealing with housing needs and to a certain extent, live beyond strict rules in the City, not to make the City worse, but make the City better. Mayor Pringle moved, seconded by Council Member McCracken, to approve the CEQA Finding of Negative Declaration. Council Member Chavez voted no. Motion carried. Mayor Pringle offered Resolution No. 2003R-9 for adoption. RESOLUTION NO.: 2003R-9 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM GRANTING CONDITIONAL USE PERMIT NO. 2002-04622. ANAHEIM CITY COUNCIL MEETING MINUTES JANUARY 14, 2003 PAGE 24 Roll call vote: Ayes - 4; Mayor Pringle, Council Members Tait, McCracken and Hernandez. Noes -1, Council Member Chavez. Motion carried. Report on Closed Session Actions: City Attorney White reported that Council, by unanimous vote, ratified the filing of a lawsuit in the case of City of Anaheim vs. Huntcor, Inc., at ai, Orange County Superior Court Case Number 02CC18801. Council Communications: Council Member Tait commented that when the City voted to shut down Lincoln Inn, he was opposed to the reason it was shut down, that it violated a 30-day restriction on staying in motels. The City passed a law that did not allow people to stay in a motel beyond 30-days and he said he thought it was not a good law and asked that the issue be placed on the agenda. City Manager Morgan stated it was a provision of a conditional use permit and applied to three to five properties. Council Member Tait asked to have an ordinance prepared that would not allow the 30-day stay as a condition. City Attorney White noted that the item would return to Council in connection with existing litigation and he suggested that if this was not placed on an agenda within two-weeks, it would be brought back to Council as part of another item. Council Member Chavez commented that it was his goal to find affordable housing in the City. Adjournment: There being no further business to come before the City Council, Mayor Pringle adjourned the meeting at 6:45 P.M. Respectfully submitted: ~A.fi ALuu&A- Sheryll Schroeder, CMC/AAE City Clerk