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1974/04/2474-411 City Ball, Ammheim,. Ca.lifornia .r C.OUNCIL MINU.~E~ ..- April The City Council of the City of Anaheim met in Adjourned Regular Session called for the purpose of Combined City Council-Department Head Budget Review (Session No. 2). PRESENT: ABSENT: FRBSRNT: COUNCIl, I~'MBERS: Kaywood, Seymour (Arrived 9:47 A.M.), Sueeges and COUNCIL MI~BERS: Pebley CITY MANAGER: Keith A. Murdoch ASSISTANT CITY MANAGER: Robert M. Davis CITY ATTORNEY: Alan R. Watts CITY CLERK: Alone M. Fattens FINANC~ DIRECTOR: M. R. Ringer UTILITIES DIRECTOR: Gordon W. Hoyt FIRE CHIEF: James Riley PERSONNEL DIRECTOR: Garry O. McRae CONVENTION CENTER-STADr0M DIRECTOR: Thomas Liegler POLICE CHIEF: David B. Michel ASSISTANT DIREC%OR OF DEVElOPMeNT SERVICES: Ronald Thompson Mayor Thom called the meeting to order at 9:45 A.M. ADOFTION OF SYNOPSIS - APRIL 17a 1974 AS MINlfffgS: Mayor Thom co~ended the City Clerk on the Synopsis of the first Combined City Council-Depar~nent Head Budget Review and thereupon mo~d tha~ said S~opsts as su~itted be adopted as ~he Minu~es of the Adjourned Reeler City Council meeting of April 17, 1974. Councilmn ~od seceded ~he motion. MOTION ~RRIED. ME.TRODS PROPOSED TO BALANCE THE 1974-75 BUDGET: The City Manager s~riZed chat at the last session, methods of reaching a balanced Budget v~re discussed, primarily to utilize long-term financing for a portion of the 197&-75 Budget. Relative to the Civic Center Project, Phase No. I, Mr. Murdoch pointed out that vhether the financing of this is placed before the'voters for an advisory vote or if a Joint povers action is used ~hich~ould alloy for a referendum, or if the general obligation bonding method is employed, in any one of these cases, the determining factor vould be voter approval. Either of these methods vould release $1,680,500 from the 1974-75 Budget. Hoverer if this approval is not forthcoming then the project vould not go for~rd unless this amount is found from some other source. Regarding the 220 KV construction budget, Mr. Murdoch reported that it is felt that by the end of the curreng Fiscal Year, the balance in unappro- priated reserves wtll be adequate to take care of the $1,600,000 remainder for this substation. The effect of this allocation from unappropriated reserve vould be to at least off-set the $1,600,000. Further, if the major capital items vhich could be included in a park bond issue vere deleted, this vould bring the approximate balancing figure to 4.4 million dollars differential between revenue end proposed ex- penditures. Mr. Murdoch outlined the additional sources of revenue discussed as follows: 1. Maintenance of current rate structure relationship with Southern California Edison rates,(anadditional $3,500,000 in revenue). 2. Adjustment of rater rates upvards by 20% (an additional $1,000,000 revenue). 3. Increase in sanitation charges to $2.00 per month - increase of 15% (additional $300,000 per year). CONCLUSION: With the additional sources of revenue outlined above, end includ- ing parks bond issue, Civic Center bond proposition and &llocetion of funds for remainder of construction of the 220 KV Substation out of unappropriated reserve, this vould more than balance the Budget. 74-412 City Hall, Anaheim, California - COUNCIL MINUTES - April 24, 1974, 9:30 A.M. CIVIC CENIER BOND ISSUE: in response to Mayor Thom's request for comments on the technique of placement of this bond issue before the voters, several comments were offered by Council and staff. In particular, the multiple-choice method, i.e., a question similar to shall tbs City l{all be financed by ( 1. general obligation bonds, 2. joint powers agreement bonds, 3. non-profit corpora- tion, 4. none of the above) was discounted on the basis that the information received through such election might tend to be unintelligible; for instance, if 60~o of the voters approve the general obligation bonding method and 51% approve the Joint powers agreement bonding method, the mandate issued the Council by such election would be inconclusive. City Attorney Watts proposed that Council could, if they elected to use the joint powers agency bonding method, which would not of itself be subject to voter approval but is enacted by ordinance which is then subject to a 30- day referendum period, set an election for sometime prior to adoption of this ordinance and propose to the voters - shall the City and the Redevelopment Agency enter into an agreement for the financing of a Redevelopment Project which will include a City Hall as their first redevelopment activity. This would provide a direct "yes" or "no" situation. In answer to Councilwoman Kaywood's concern that the selection of the bonding method be done by Council and be chosen primarily with consideratiOn as to the least costly method for the individual taxpayer, the City Attorney reported that general obligation bonds, which require 2/3 majority approval, would be the least expensive financing method. In answer to Councilman Seymour's question regarding the degree that tax increment financing can play in such joint powers agreement, Mr. Murdoch' r~ported that theoretically it could be utilized to finance the entire amount, however this has not been the philosophy expressed by the Redevelopment Co~mis- sion or by the Council in the past. It has been felt that the City Hall tm a general City obligation and not a Redevelopment Agency responsibility. Mr. Murdoch remarked that in; his own opinion it would be reasonable for the Redevel- opment Agency to assume responsibility for a portion of the land acquisition and demolition costs for construction of the plaza area. The City Attorney pointed out that in .any decision regarding use of tax increment funds on public projects, the Council should carefully weigh the fact that these ultimate public projects will then be removed from the tax rolls and consequently will not add to the tax increment revenue in the future. At the conclusion of brief discussion regarding bonding possibilities on the ballot, CounciLman Seymour stated he would favor some type of selection process to be placed on the ballot for the citizenry to provide input aa to the direction they feel Council should take, provided that when the votes are counted following this election, the mandate is clear and conclusive. City Attorney Watts outlined that the next steps and responsibilities for staff, should Council determine as a result of these meetings that they do wish to proceed with long-term financing for certain projects, would be as follows: 1. Discussion with bond counsel and financial consultants. 2. To report back with recc, m,endations as to what should be placed on the ballot. 3. To report on the projected annual debt retirement obligation. qUeSTION: At the conclusion of discussion, Mr. Murdoch then advised that the i~nediate decision before Council as it relates to the balancing of the 1974-75 Budget, is whether or not they wish to attempt to include an adequate amount to go ahead with Phase No. I construction ($1,680,500) in the 1974-75 Budget. CONSENSUS OF COUNCIL OPINION: That they do wish to include the estimated cost for .Phase No. I construction of the Civic Center in the 1974-75 Budget. Councilman Seymour remarked that he felt this would provide the necessary cata- lyst for redevelopment in the downtown area and that it would be a positive force towards voter approval of the bond issue for construction of Phase No. II. 74-413 Cit~. Hall, Anaheim,. California - COONCIL MINO~S = April 24m' 1974, 9;30 Councilman She·gas concurred but expressed concern ·s to how the ability to allocate $1,680,500 will be interpreted by the voters when asked to approve the bond issue. In response to Council, Mr. Murdoch advised that it is necessary that some major item from this year's Budget be placed on a long-term financing basis, the alternative being that there will be a Budget deficit. He remarked that the expenditure of $1,680,500 from the 1974-75 Budget will place very serious financial pressure on the remainder of the Council's Budget d·cisions. PARK. BOND ISSUE: Mr. Hurdoch advised that the park bond under discussion, is meant to cover almost all of the capital improvements ·nd acquisition and develop- ment of parks included in the 1974-75 Budget. He referred to the chart en- titled "bond issue items" and discussed possible deletions or postponements from this list. Councilman Seymour remarked that he felt perhaps decisions as to what items should be placed on bond issue are rather preliminary and that he would prefer to see the City Manager begin to make some advancement on the trtr-eing process prior to such decisions relative to bonding being made. Mr. Murdoch related that this is certainly his intent but that he needs some direction from Council as to what they feel ·re the most important areas end outlined that one of the options on the park bond would be to delete the land acquisition activity and proceed with what is proposed for park improvement. With this approach, the planned park improvements could be com- pleted and the acquisition portionwould not go forward unless the bond issue is approved. This would remove $705,000 called for under the park land acqui- sition item. In addition, Mr. Hurdoch cautioned that accelerated park development will place additional monetary requirements on budget years subsequent. Councilman Seymour felt it too soon for him to commit ·ny answers in this ·re· and referred to his .question ·t the end of the last Budset Session regarding availability of Federal funding for park development ·nd whether this might be a feasible alternative. Mr. Nurdoch replied that direct Federal funding for local parks in Anaheim is a remote possibility at this point. That unless these parks are meant to be regional facilities or are in areas in which there is · recogniz- able dearth of park facilities such ·s low-income areas in cities, Federal funds are not readily available. Mr. Murdoch further related that there is curently an inventory of City property purchased for park sites ·nd not devel- oped due to the philosophy of purchasing property when development becomes imminent in the ·rea. He pointed out that he could be more optimistic regard- ing Federal fund availability for preservation of Peralta Adobe as · historical ~on~lent. ~I~C.~!.CAL~ILITIIs BUDi~ET: In view of the fact that major emphasis is being placed on long-term financing, Mayor Thom suggested that a clear and accurate definition of what ia really entailed in such long-term financing be dis- cussed. He related that in 1972 the electorate approved an $8,000,000 bond issue to acquire the balance of the electrical services. In connection with this the City agreed to take 220 KV service. Pursuantto the Southern ornia Edison settlement, the City of Anaheim received $2,000,000 towards the construction of · 220 KV ~ubstation, necesaitatin$ the City buds·tins approxi- mately an additional $3,000,000 ($1,400,000 - 1973-74 Budget; $1,600,000 1974-75 Budget). Mayor Thom suggested perhaps that part of the Budget deliberations should include an in-depth analysis of what the monetary re~urns might be if the citizens chose to sell the electrical utility, thereby greatly decreasing capital obligations, and perhaps releasing many millions of dollars which could be utilized to retire debt service on such facilities as the Stadium and Convention Center. This might ·leo free enough of the City's obligations to permit City Hall construction without long-term indebt~dness. He felt this should be analyzed and compared against the economic benefits versus costs to the City of going into electrical generation. 74-414 City Hall, Anaheim, California = COUNCIL MINUTES -April 24, 1974, 9:30 A.M,. · Councilman Sneegas pointed out that Mayor Thom's suggestion would mean giving up $3,000,000 per year income received from the electrical utility and that it made no business sense to himwhatsoever to sell a facility which produce~ revenue for the City and which the people voted in favor of, to finance projects which produce no revenue or substantially less. Councilman Sneegas left the Council Chamber. (10:55 A.M.) In response to the Mayor's request for comment from the remainder of the Council, Councilman Seymour expressed some lack of confidence and/or under- standing of the figures as shown,particularly for the Utilities Department. He inquired, if the electrical utility produced $3,000,000 in revenue, then why was $1,600,000 taken from the General Fund. Mr. Murdoch advised that all monies which are spent'on the' electrical utility come from the Electric Utility Fund; that the water and electrical utility, both have separate funds. The one million plus dollars spent on con- structio~ of the 220 KV substation was money taken from the Electric Fund whtch was generated by electric revenues exclusively. In addition, over and above this amount, $3'000,000 approx!_m~_tely was transfered to the General Fund from the electric utility. The City Attorney added that had this expenditure for the Lewis Sub- station not been taken from the Electrical Utility Fund, there would have been in excess of $4,000,000 transferred to the General Fund. Councilman Seymour observed that the City of Anaheim has increased their electrical rate, whereas the Southern California Edison Company hasnot' increased rates at least for an interim period, and that this variance between the two rates does create more revenue for the City. He stated that what the voters were told when the electrical bond issue was placed on the ballot was that comparing the rates the City of Anaheim would charge its retail electrical consumers and those paid by:consumers of Southern California Edison, the City of Anaheimwould offer lower rates-. Des- pite the fact that the current energy shortage and high costs of fossil fuel were not forecasted at that time and although the City has no control over the commissions which permit these rate increases to become effective, Councilman Seymour stated that the City of Anaheim electrical consumer is not now receiving the package which he was sold when the electric bonds were passed, i.e., lower electric rates than Southern California Edison. Utilities Director Gordon Hoyt briefly related the history of whole- sale rate increases initiated by Southern California Edison which include a 55~% increase in September, 1973; a 707. increase filed which is now in the Court of Appeals; and the increase in base rates upwards by 2U% effective August 4, 1974; in addition, a fuel clause adjustment which was denied without prejudice. In response to these actions by Southern California Edison, Mr, HoTt advised that it was necessary for him to recommend rate increases to become effective prior to the actual decision from the Public Utilities or Federal Power COmmissions due to the fact that there is a one month lead time in imple- mentation of any City of Anaheim retail rate increase which mmounts to the loss by the City of substantial sums of money. In addition, Mr. Hoyt explained some of the litigation in which the City of Anaheim is engaged, namely-two proceedings before the Federal Power Co~nission, Docket Nos. 8146 and 8570. Mr. Hoyt advised that the City of Anaheim retail rates have been creased only to pass along the full amount of the wholesale rate'increases from Edison. He related that even though the Anaheim electrtc utilities wholesale purchase rates have gone up they had been able to handle these without a retail rate increase until September of 1973, and the rates paid by Anaheim customers were 30% under those of Southern California Edison up to that point. He further commented that some of the current litigation, if successful, may again reverse the situation so that the promises made to the Anaheim citizenry could again be fulfilled with rates lower than Southern California Edison. He.added that rates are now just below or the same as rates charged by Edison to its retail consumers, 74-415 City H~)lm Anaheim, Califotmii - COUNCIL MINUTES = April 24, !974. 9:30 A.M. In answer to Councilman Seymour, Mr. Hoyt advised that the current differential between the rates of the City of Anaheim and Southern California Edison brin~ an additional $1,084,000 in excess each month. However, at the time that the fuel adJus~nent clause goes into effect, then the amount of these savings will be reduced by the time it takes to implement hi~her rates. Councihnan Seymour remarked that the basic question is how profitable is the electrical utilitiy if it is forced to raise rates to keep abreast of its Southern California Edison power costs, the alternative being to look for additional monies somewhere else in the Budget. Mr. Hoyt reported that the estimated revenue projection for the coming Fiscal Year is $46,345,000 with the current rate s~ruc~ure, however he projects ~hat if the Anaheim retail rates are placed Just on top of Southern California Edison rates, the City could realize $49,400,000. He advised that these revenues include $3,000,000 for the cou~unity which goes to the General Fund, i.e., they are paying $3,000,000 less than they would pay for the same amount of power to Southern California Edison. Totally, the benefit derived by the commnity from the electric utility is closer to $5,000,000when all factors are considered, and these dollars, if there were no municipal utility, would Just go out for direct purchase of electrical power. Councilman Seymour analyzed this philosophy stating it appeared to him that the municipal govermnent is Just taxing the citizenry in another area. Mr. Hoyt pointed out that if Southern California Edison were providing the electrical service, the citizen would be paying more for electricity and more for City goverre~ent as veil. City Attorney Watts pointed out that it is important to understand that currently Council is speaking of short periods of time, that the Anaheim retail customer has been permitted to keep many thousands of dollars in his pocket because of the various procedures used by the Anaheim electric utility and because up until September of 1973, the Anaheim rates were substantially lover. The Anaheim rates are still below Edison, but barely, and as of Hay 1, 1974, when the Edison retail rates are increased, the Anaheim consumer will again have lover rates. Further, Mr. Hoyt explained that because of the fLl~l costs, i.e., interest, depreciation, and taxes for a public utility as opposed to a private utility, are t~rice as hiEh therefore the public utility has to be able to pro- vide services at less cost than the private utilityj Basically, he pointed out that there is a tax deduction by utilizing a municipal utility which all Anaheim citizens are able to enjoy. In answer to Hayor Thom's comment about the long-term indebtedness facing the City if the electric utility participates in power generatin~ pro- Jects, and particularlywhat kind of revenue may be expected to off-set such indebtedness, Mr. Hoyt advised that there is · substantial investment involved in generation projects and usually these are amortized over a 30 or 35 year period. From the lntermountain Power Project, Mr. Hoyt estimated that the benefit to the City from reduced cost of power alone over the life of this project is rather conservatively $600,000,000, using for comparison purposes the rate which the City will pay to purchase power from Edison tn mid-19?4, including the fuel adjustment. Mr. Murdoch pointed out tb~t the Intermountain Power Project does not contemplate any long-term debt but rather a contract in which the City would asree to purchase power from that source. For benefit of Council, Mr. Hoyt su~rized the events and liti~a- tion, the result of which ~ms that the City of Anaheim now has the benefits of reserved sharing and the guaranteed right to participate in the San Onofre Project as well as other power generating facilities, whereas this ability vas blocked previously. He noted that it vas the past Council*s intention to get into the generation and transmission aspects of the business and if not, a different course would have been followed upon settlement of the litigation. Further he briefed the Council on the outcome of the City,s attempt to enter into the NavaJo Project. 74-416 City Hall, Anaheim, California - COUNCIL MINUTES - April 24~ 1974, 9:30 A,M? Due to lack of time, further report and discussion on the electric utility was deferred to the next Budget session. DOCUMENTATION PRESENTED TO COUNCIL THIS DATE: 1. Inventory of City-owned parcels of property together with list of those authorized for sale on April 2, 1974. 2. Outline of library construction costs. 3. List of neighborhood parks for possible acquisition and/or devel- opment on park bond issue. 4. S~m~ary of cost estimate totals for storm drain district to 1978. 5. Master Plan proposal - paramedic services. In reference to Item No. 1, inventory of City-owned parcels, Mr. Murdoch pointed out that there are certain properties not included on this list which are as yet undeveloped but for which there is anticipated purposes, namely the Shorb Wells property t,~,~ediately adjacent to Yorba Park and the proposed fire station site south of Lakevtew, which may be developed instead for addi- tional City yard activities. PARAMEDIC PROGRAM: Fire Chief James Riley briefly related the history of the legis- lation (Wadsworth-Townsend Act of 1970) and ensuing events which brought the paramedics program into being. He reported that the Orange County Fire Chief's Association, in anticipation of co~,unity interest in application of such a program to this County initiated and conducted a study in conjunction with the Master Plan for Fire Protection Services, a Mas~er Plan for Paramedics. Chief Riley indicated the variegated map exhibited in the Council Chambers and advised that this is a composite of the service areas desisnated by the Master Plan for paramedics study. In order to provide such service on a cost- effective basis, it was necessary in most instances to i~nore geographical boundaries. The plan calls for 26 paramedic units to provide service throughout Orange County. In implementation of the Master Plan, attempts have been made to place these units in direct relationship to existing fire station facilities, and the units are therefore not precisely-where they should be theoretically, leaving some gaps in the system, two of which affect the City of A~aheim. Chief Riley reported that for the purposes of Budget priority discus- sion, the City of Anaheim paramedic needs as related to the Master Plan were established. It was determined that an independent program for Anaheim would require three units: one located at the Headquarters Station; one at Station No. 5 at Kraemer Street; and .one somewhere between Station Nos. 2 and 4 to serve the westerly portion of the City. The independent paramedic program for Anaheim calls for a two year implementation, costs for the first year including employee fringe benefits, $181,000 for two paramedic units. Under the County Master Plan for paramedics, the City of Anaheim would require three units as well, the difference being that Anaheim would pay full cost for one unit, the other two being on a shared-cost basis. The estimated net savings under the Master Plan would be $110,000 to $112,000 per year. However he pointed out that the draw- back is that at this point the Master Plan has not yet been adopted. Chief Riley concluded with a statement that the Fire Department is greatly concerned with continuance of traditional fire protection services and for this reason reco~aends that the additional fire protection services in the northeast industrial area and in the growth area of the canyon receive precedence over consideration of a paramedic program, however if additional monies are available he would then very much like to become involved and provide these services for Anaheim. In reply to Councilman Seymour, Chief Riley indicated that he would . estimate the County Master Plan for paramedics will be implemented within the coming Fiscal Year. Mr. Murdoch pointed Out Chat if the City wished to proceed with an independent program in the 1974-75 Fiscal Year, prior to implementation of the Master Plan program, the two unit concept presented by Chief Riley would not be contra to the Master Plan proposal, and once the Master Plan is adopted, would require only that the existing units be relocated. In addition, he noted that it appears some of the equipment and training expenses of these programs can be Federally funded through the Emergency Medical Act. 74-417 City ]~!1, Anaheim, California - COUNCIL MINUTES - April .,24, 1974, 9;30 A.M. Councilman Seymour suggested that the Fire D~partment attempt to negotiate a sharing sit, etlon with neighboring cities in order to further reduce the costs of any proposed paramedic progrmn. The City Hanager reported that in connection with the lntermountain Power Project, each of the particip~ting agencies has agreed to carry a function, the cost of which will be credited against their Participating share. The City of Anaheim has been requested to enter into an agreement with Sky Choppers of Utah, Inc., said Organization to perform the necessa.ry aerial surveillance. In anBwer to Councilman Seymour, Mr. Hoyt advised that it is ex- pected that all of the participatory agreements will be signed by next month and that essentially the cost of this agreement ($4,000maximum) will be applied to the $50,000 which is the City of Amaheim's'proportiop~te share. Mr. Watts added that the Intermountain Power Project agreement calls for the Los Angeles Depar~nent pf Water and Pmeer to complete the study and they will compute the necessary expenses to be billed to lntermountatn Power Project. There is also a provision in the agreement for "in-kind" services to be credited against a particiPating agent's proportionate share. RE,SOLUTION NO. 74R-198: Councilman Thom offered Resolution No. 74R-198 for adoption, approving the terms and conditions of an agreement between the City of Anaheim and Sky Choppers of Utah, Inc., for services in connection with the Intermountain Power Project (not to exceed $4,000). Refer to ResolutionBook. A RESOLUTION OF Tfl~ CITY COUNCIL OF Dig CITY OF Allt'ltllM APFROVII~ TI~ TEllS AND CONDITIONS OF AN ACRE~ BET~EN THE CITY AI~D SH CRD~S, INC., A~ A~RIZING ~ ~YOR A~ CI~ C~RK ~ E~C~ ~ID AG~E- ~ ON BE~ OF ~ Cl~. Roll Call Vote: AYES: COUNCIL MEMBERS: Kay~ood, Seymour and Thom NOES: COUNCIL HEMBERS:. None ABSENT: COUNCIL HEHBERS: Pebley ~nd Sneeges The Hayor declared ResolutionNo. 74R-198 duly passed and adopted. CO--SAND DISCUSSION BY COUNCIL: Councilman Seymour requested mmnm statistical analysis regarding the costs of operation of the police helicopter service and in tmrticular how many additional surface units could be Implanted for the cost of this service, as a trade-off. In addition, he ~ould like ~ consid- eration given to the possibilities of sharing the helicopter service and costs thereof with other Orange County cities. In addition, Councilman Seymour reamrked that in connectton vtth dePartment heads' salary review in October, that his m~in consideration will be the degree a department head has effected a cut b~ck on expenses, throush increased efficiency, bettarmanaseriel procedures, etc., ~tch he cmn display in his department vhile still maintaining & reasonable level of service, lie noted that if an individual can exhibit that he is ableto swve the texp&yers som~ money while providtn$ servtces,'he (Councilm~n Seymour) ~e~uld not be verse to sharing that savings with the department heed to · suba~nttal degree. The City Council determined that the next Budget sesston vould be held Thursday, M~y 2, 1974, at 9:30 A.M. 74-418 ,~ity H~ll, A,~mh, eima C·liforni· - COUNCIL 14INIrIES -April 24~ 1974~ 9:30 A. DJOUR~NT: Councilmn Kayvood moved to ·djourn to Thursday, April 25, 1974, 7:30 P.M., at the Anaheim Hills Golf Course Clubhouse for the purpose of · joint m~eting with the City Planning Commission, Anaheim Hills, Inc., home- o~ners' groups and interested property ovners, to discuss current and future develop~nt in the Santa Aha Canyon/Anaheim Hills ·re·. Councilm~n Seymour seconded the motion. ~lOTION CARRIED. Adjourned: 12:27 P.M. Signed City Clerk