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HomeMy WebLinkAboutMinutes - City Council - unsigned - 1995-01-171 01/17/95 City Council, Regular Meeting City Council Chambers 1313 California Street Redding, California January 17, 1995 7:00 p.m. The Pledge of Allegiance to the flag was lead by Interim City Attorney Calkins. The invocation was offered by Pastor Hayden Murphy, Trinity Lutheran Church. The meeting was called to order by Mayor R. Anderson with the following Council Members present: P. Anderson, Kehoe, McGeorge, Murray and R. Anderson. Also present were City Manager Warren, Assistant City Manager McMurry, Director of Public Works Galusha, Director of Electric Utility Lindley, Director of Planning and Community Development Perry, Police Chief Blankenship, Electric Utility Operations Manager Ryan, Electric Utility Power Production Manager Heckenberg, Electric Utility Resources Manager Coleman, Fire Chief Bailey, City Treasurer Linville, Interim City Attorney Calkins, Director of Community Services Gorman, Director of Finance Downing, Principal Planner Keaney, Director of General Services Masingale, Director of Parks and Recreation Riley, Superintendent- Wastewater Craig, Director of Information Systems Kelley, Director of Personnel Bristow, Director of Utilities/Customer Service Vokal, Risk Manager Mlinarcik, Transportation Coordinator Duryee, Associate Planner Morgon, Transportation Coordinator Duryee, Housing Program Supervisor Garrity, Budget Services Officer Starman, Management Analyst Bachman, Assistant City Clerk Moscatello, City Clerk Strohmayer, and Secretary to the City Council Rudolph. RESOLUTION - re Appreciation of the Services of Samuel S. McMurry to the City of Redding during His Service as Interim City Manager (A-050-080) Mayor R. Anderson recognized Assistant City Manager McMurry's accomplishments during his six months as the City's Interim City Manager. He expressed appreciation for Mr. McMurry's professionalism in dealing with issues during this difficult period of time. Mayor R. Anderson presented Mr. McMurry with a framed resolution of appreciation. Assistant City Manager McMurry thanked the City Council for the opportunity to serve as the City's Interim City Manager. He attributed his accomplishments to staff and conveyed his appreciation. MOTION: Made by Council Member Kehoe, seconded by Council Member McGeorge, that Resolution No. 95-016 be adopted, a resolution of the City Council of the City of Redding in appreciation of the services of Samuel S. McMurry to the City of Redding during his service as Interim City Manager. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge, Murray and R. Anderson Noes: Council Members - None Absent: Council Members - None Resolution No. 95-016 is on file in the office of the City Clerk. CONSENT CALENDAR The following matters were considered inclusively under the Consent Calendar: Approval of Payroll and Accounts Payable Register (A-050-100-500) It is recommended that Accounts Payable Register 13, for the period of January 3, 1995, through January 12, 1995, check numbers 215259 through 215672 inclusive in the amount of $2,422,683.06, be approved and paid 2 01/17/95 and Payroll Register 14, check numbers 391464 through 392351 inclusive, in the amount of $1,245,580.41, for the period of December 18, 1994, through December 31, 1994, be approved. TOTAL: $3,668,263.47 Resolution - Appropriating funds to reflect new Memorandum of Understanding with Local Union 1934 of the International Association of Fire Fighters * (B-130-070 & P-100-050-050) It is the recommendation of the Director of Finance that Resolution No. 95-017 be adopted, a resolution of the City Council of the City of Redding approving and adopting the 35th amendment to City Budget Resolution No. 94-199 appropriating $48,550 for additional personnel costs in the Fire Department relative to the Memorandum of Understanding with Local Union 1934 of the International Association of Fire Fighters. Comprehensive Annual Financial Report - Fiscal Year Ending June 30, 1994 (F-205-150-075) It is the recommendation of the Director of Finance that the City Council accept the City's Comprehensive Annual Financial Report for the fiscal year ended June 30, 1994. Resolution - Appropriating Funds for Transition Expenses in the City Manager's Office * (B-130-070 & A-050-080) It is the recommendation of the Director of Finance that Resolution No. 95-018 be adopted, a resolution of the City Council of the City of Redding approving and adopting the 36th amendment to City Budget Resolution No. 94-199 appropriating $46,500 for transition expenses in the City Manager's Office. It is further recommended that the Purchasing Officer be authorized to negotiate on the open market for a vehicle for the City Manager. Resolution Setting Public Hearing - Rescinding Resolution No. 95-13 and Declaring Intent to Annex Territory to Community Facilities District 1992-1 (Annexation 94-1, Oasis Road Area) (A-170-035-001 & A-150-250) It is the recommendation of the Director of Planning and Community Development that Resolution No. 95-019 be adopted, a resolution of the City Council of the City of Redding rescinding City Council Resolution No. 95-13 and approving a resolution of intention to annex territory (Annexation 94-1, Oasis Road Area) to Community Facilities District 1992, levy a special tax, and set a public hearing for 7:00 p.m., February 21, 1995. Planning and Community Development Monthly Status Report (A-050-250) It is the recommendation of the Director of Planning and Community Development that the Monthly Status Report through December 1994 for the following work areas be accepted: 1) Annexations and Mello-Roos; 2) Planning Permits; 3) General Plan; 4) Building Activity; 5) Housing; 6) Redevelopment; and 7) Property Management. Tentative Subdivision Map - Ravenwood Estates Subdivision, Unit 9 (S-4- 94), by Don Lynn (South of Old Alturas Road, east of Shasta View Drive, and north of Enterprise Skypark) (S-100-614) It is the recommendation of the Director of Planning and Community Development that the City Council accept the report regarding Tentative Subdivision Map S-4-94 approved by the Planning Commission granting permission to subdivide 5.5 acres into 22 single-family residential lots on property located south of Old Alturas Road, east of Shasta View Drive, and north of Enterprise Skypark. Award of Bid - Bid Schedule No. 2899, Plastic Utilities Duct (B-050-100) It is the recommendation of the Director of Electric Utility that Bid Schedule No. 2899, plastic utilities duct, be awarded to the low evaluated bidder, North Valley Distributing, in the evaluated amount of 3 01/17/95 $30,270.00, for the period March 1, 1995, through February 29, 1996. Funds for this purchase are included in the 1994-95 budget. Resolution - Agreement with Black & Veatch Construction, Inc. to Increase Funding Level for Startup Expenditures on the Redding Power Peaking Project (E-120-150) It is the recommendation of the Director of Electric Utility that Resolution No. 94-020 be adopted, a resolution of the City Council of the City of Redding approving an increase in the not-to-exceed total cost of Revision 1 to the Third Amendment to the Agreement for Caretaking and Support Services entered into by and between the City of Redding and Black & Veatch Construction, Inc. from $393,000 to $618,500. Insurance for Redding Power Plant (R-1090-375-550) It is the recommendation of the Risk Manager that the City Council authorize the City Manager to approve the placement of property/boiler and machinery insurance for the Redding Power Plant. Resolution - Authorizing Destruction of Certain Documents (A-050-055-750) It is the recommendation of the City Clerk that Resolution No. 94-021 be adopted, a resolution of the City Council of the City of Redding authorizing the destruction of certain records. Resolution - Authorizing Foreclosure on Delinquent 1915 Assessments (A-170) It is the recommendation of the City Treasurer that Resolution No. 94- 022 be adopted, a resolution of the City Council of the City of Redding ordering judicial foreclosure of delinquent assessments pursuant to the Improvement Bond Act of 1915, and ordering that the Tax Collector be credited with those assessments. Resolution - Rejecting Proposals Regarding Joint Purchase of Telecommunication System for Customer Service and Redding Area Bus Authority (B-050-100) It is the recommendation of the Director of Utilities/Customer Service that Resolution No. 95-023 be adopted, a resolution of the City Council of the City of Redding rejecting all bids for a private business communications system (Proposal No. 2890); declaring that the system may be acquired in the open market at a price favorable to the City; and authorizing the negotiation thereof and the execution of the necessary documentation by the City Manager. Resolution - re Street Closures for Record Searchlight Half Marathon (P-010-150) It is the recommendation of the Director of Public Works that Resolution No. 95-024 be adopted, a resolution of the City Council of the City of Redding pertaining to the Record Searchlight Half Marathon to be held on Saturday, January 21, 1995, from 6:00 a.m. to 3:00 p.m. in Caldwell Park and on portions of the City Street System and authorizing closure of certain streets for said event. Notice of Completion - Bid Schedule No. 2733, Buckeye Water Transmission Main (B-050-020 & W-030-600) It is the recommendation of the Director of Public Works that Bid Schedule No. 2733 (Job No. 9815), Buckeye Water Transmission Main, awarded to Contri Construction Co., be accepted as satisfactorily completed, and the City Clerk be authorized to file a Notice of Completion. The final contract price is $3,706,100. Resolution - re Evaluation and Compensation Consideration for City Clerk, City Treasurer, City Manager and City Attorney (P-100-320) It is the recommendation of the Interim City Attorney that Resolution No. 95-025 be adopted, a resolution of the City Council of the City of Redding rescinding Resolution No. 88-413, which established a procedure 4 01/17/95 for the evaluation and compensation consideration for the City Clerk, City Treasurer, City Manager and City Attorney. The City Manager further recommended that he continue the process of evaluating the City Clerk and City Treasurer in January of each year. MOTION: Made by Council Member P. Anderson, seconded by Council Member Murray, that all the foregoing items on the Consent Calendar be approved and adopted as recommended. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge, Murray, and R. Anderson Noes: Council Members - None Absent: Council Members - None Abstain: Council Members - None Resolution Nos. 95-017, 95-018, 95-019, 95-020, 95-021, 95-022, 95-023, 95-024 and 95-025 are on file in the Office of the City Clerk. - - - - - - - - - CITY'S OFFICIAL FOOTBALL TEAM (A-050-060) Lynn Arnett, United Way of Shasta County, read his letter dated January 9, 1995, incorporated herein by reference, into the record. He explained that the United Way of Shasta County has formed a partnership with the non-profit organization Redding Rangers, a pre-professional football team, whereby United Way's portion of gate and concession proceeds will go to local youth programs. He stated that there will be five home games played during the season, with visiting team players, coaches, families and fans bringing additional revenue into the community. He related that the Redding Rangers is viewed as a positive addition to the community and requested the City proclaim the Redding Rangers as its official football team. Walter Dice, Assistant Manager of the Redding Rangers, stated there is considerable football talent in the Redding area. He emphasized the Redding Rangers' program will provide entertainment for the local youth and assist in keeping them off the streets. He noted the additional revenue which the home games will bring into the area. MOTION: Made by Council Member P. Anderson, seconded by Council Member Kehoe, to proclaim the Redding Rangers as the City of Redding's official football team. The Vote: Unanimous Ayes PUBLIC HEARING - re Abandonment Application A-6-94, by SBP Partners (North side of Old Alturas Road and east of Edgewood Drive) (A-010-100) The hour of 7:00 p.m. having arrived, Mayor R. Anderson opened the public hearing regarding Abandonment Application A-6-94. The following documents are on file in the office of the City Clerk: Affidavit of Mailing - Notice of Public Hearing Affidavit of Publication - Notice of Public Hearing Planning Commission recommendation dated January 9, 1995 City Clerk Strohmayer advised that no protests were received. Director of Planning and Community Development Perry related that the Planning Commission, at its meeting of November 22, 1994, recommended approval of Abandonment Application A-6-94, by SBP Partners, requesting approval of the abandonment of a portion of street right-of-way located on the north side of Old Alturas Road and east of Edgewood Drive. The City Council set a public hearing 5 01/17/95 for January 17, 1995; however, at the end of December, the applicant was changed to Providence Trust Company, which also caused a change to one of the conditions of abandonment. The changes to the application resulted in the need to readvertise the public hearing. It is the recommendation of staff that the City Council adopt the necessary resolutions rescinding Resolution Nos. 94-334 and 94-335 and setting a public hearing for February 21, 1995. Mayor R. Anderson determined that there was no one present wishing to speak on the matter and closed the public hearing. MOTION: Made by Council Member Kehoe, seconded by Council Member Murray, that Resolution No. 95-026 be adopted, a resolution of the City Council of the City of Redding (1) repealing Resolution No. 94-334; and (2) declaring its intention to vacate and abandon that portion of the Old Alturas Road right-of-way shown as Parcel 1 and described in Exhibit B, and lying adjacent to properties located at 2130 to 2138 Old Alturas Road (on the north side of Old Alturas Road and east of Edgewood Drive) (A-6-94 - Parcel 1), and setting a public hearing for February 21, 1995. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge, Murray and R. Anderson Noes: Council Members - None Absent: Council Members - None Resolution No. 95-026 is on file in the office of the City Clerk. MOTION: Made by Council Member Kehoe, seconded by Council Member Murray, that Resolution No. 95-027 be adopted, a resolution of the City Council of the City of Redding (1) repealing Resolution No. 94-335; and (2) declaring its intention to vacate and abandon that portion of the Old Alturas Road right-of-way declared surplus and described in Exhibit A, and lying adjacent to properties located at 2130 to 2138 Old Alturas Road (on the north side of Old Alturas Road and east of Edgewood Drive) (A-6-94 - Parcel 2), and setting a public hearing for February 21, 1995. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge, Murray and R. Anderson Noes: Council Members - None Absent: Council Members - None Resolution No. 95-027 is on file in the office of the City Clerk. PUBLIC HEARING - re Abandonment Application A-8-94, by Redding Bank of Commerce (Northeast corner of Churn Creek Road and Mistletoe Lane) (A-010-100) Mayor R. Anderson abstained from discussion and voting on this matter. The hour of 7:00 p.m. having arrived, Mayor R. Anderson opened the public hearing regarding Abandonment Application A-8-94. The following documents are on file in the office of the City Clerk: Affidavit of Mailing - Notice of Public Hearing Affidavit of Publication - Notice of Public Hearing Planning Commission recommendation dated January 11, 1995 City Clerk Strohmayer advised that no protests were received. Director of Planning and Community Development Perry stated that the Redding Bank of Commerce has requested the abandonment of a portion of Churn Creek Road adjacent to vacant commercial property located at 1891 and 1951 Churn Creek Road. The bank is also proposing to acquire, in fee, approximately 18,750 square feet of land from the City in order to build a bank. The purpose of the abandonment and acquisition of City land is to construct a 20,000-square-foot, two-story bank at this location. The bank site plan includes parking and landscape improvements within the City's fee ownership area as well as the area proposed for abandonment. 6 01/17/95 Mr. Perry explained that the area of abandonment is a strip of land approximately 24 feet wide by 200 feet long north of the proposed bank driveway on Churn Creek Road. Abandonment of the area requested by the Redding Bank of Commerce would retain 10 feet of right-of-way behind the existing back of curb and 4.5 feet behind the sidewalk along Churn Creek Road. Mr. Perry indicated that the Planning Commission, at its meeting of December 13, 1994, recommended approval of the abandonment as proposed by the bank. It is the recommendation of staff that the City Council ratify the Negative Declaration, and adopt the necessary resolution approving the abandonment of the requested right-of-way. Council Member Murray questioned why the City did not abandon the property to the north as well. Mr. Perry explained that the property to the north is still an open drainage ditch and none of the property owners have expressed an interest in obtaining the property. If the abandonment is approved, the City will still maintain a drainage easement through the area, however, the abandonment will permit the bank to utilize the area for such things as parking and landscaping. Vice Mayor Kehoe determined that there were no individuals present wishing to speak on the matter and closed the public hearing. MOTION: Made by Council Member Murray, seconded by Council Member McGeorge, that the City Council make the following findings regarding the abandonment of a portion of City of Redding right-of-way located adjacent to vacant commercial property at 1891 and 1951 Churn Creek Road, by Redding Bank of Commerce (A-8-94): 1. Project is compatible with the Redding General Plan; 2. Project will not significantly alter existing land form; 3. Project is compatible with surrounding land use; 4. Project is compatible with the Code of the City of Redding, California, and ratify the Negative Declaration authorized by the Planning Commission on December 13, 1994. Voting was as follows: Ayes: Council Members - P. Anderson, McGeorge, Murray and Kehoe Noes: Council Members - None Absent: Council Members - None Abstain: Council Members - R. Anderson MOTION: Made by Council Member Murray, seconded by Council Member McGeorge, that Resolution No. 95-028 be adopted, a resolution of the City Council of the City of Redding ordering the vacation and abandonment of that portion of the Churn Creek Road right-of-way described in Exhibits B and E and shown as "Areas to be Abandoned" on the map attached hereto, and lying adjacent to properties located at 1891 and 1951 Churn Creek Road (A-8-94). Voting was as follows: Ayes: Council Members - P. Anderson, McGeorge, Murray and Kehoe Noes: Council Members - None Absent: Council Members - None Abstain: Council Members - R. Anderson Resolution No. 95-028 is on file in the office of the City Clerk. REQUEST TO PURCHASE CITY-OWNED SURPLUS PROPERTY - Northeast corner of Churn Creek Road and Mistletoe Lane (C-070-200) Mayor R. Anderson abstained from voting and discussion on this matter. Director of Planning and Community Development Perry explained that a letter had been received from the Redding Bank of Commerce requesting to purchase approximately 18,750 square feet of Assessor's Parcel 107-320- 15 located at 1951 Churn Creek Road. The stated purpose of the acquisition is to tie the existing landscape on the City property into the development of the bank's property for a more pleasing effect. Also, a site plan approved for the bank projected parking within the City's fee ownership. The bank has since proposed to expand the parking to utilize a much larger portion of the area. The result is the ability 7 01/17/95 to construct additional square footage on the project and to place a sign at the corner of Mistletoe Lane and Churn Creek Road. A condition of the use permit required either purchasing City land or obtaining an encroachment permit. The bank has decided to seek title of the entire area rather than just the small area previously proposed for parking. Mr. Perry stated that a portion of the land to be acquired (7,000 + square feet) has already been landscaped by the City at a cost of $13,000. There are also a 24-foot-wide drainage channel, 12-inch and 15-inch sewer trunk lines, cable TV, telephone, and a 24-inch waterline in the southeast portion of the area. The area was created as a result of the realignment of Churn Creek Road to the west of Canby Road. Subsequent to the realignment, the land was deeded to the City by the Redevelopment Agency when the Agency was advised that the bank was not interested in the property. It is the opinion of the Planning Commission and staff that the area is not needed for public purposes other than landscape. While preservation of the landscape would be nice, it is not essential, and the bank will be installing considerable landscape as part of its development. Mr. Perry added that the sale of the property should be subject to the following: 1) Modify the area to be sold to establish a uniform dimension of 4.5 feet of right-of-way to the back of the sidewalk; 2) Retain access rights along the street frontage; and 3) Retain public- service easements to provide for the existing drainage culvert as well as the water, sewer, cable TV, and telephone lines. Pacific Bell and Viacom have indicated that they have facilities in the areas proposed for sale. It is the recommendation of staff that the property be declared surplus and that the bank be asked to provide an MAI appraisal of the fair market value of the property. Once the appraisal is received, the matter will be resubmitted to the City Council for final consideration. MOTION: Made by Council Member Murray, seconded by Council Member McGeorge, to declare the property located at the northeast corner of Mistletoe Lane and Churn Creek Road surplus and request the Redding Bank of Commerce to provide an MAI appraisal of the fair market value of the property for the City Council's consideration. Voting was as follows: Ayes: Council Members - P. Anderson, McGeorge, Murray and Kehoe Noes: Council Members - None Absent: Council Members - None Abstain: Council Members - R. Anderson Vice Mayor Kehoe turned the meeting back over to Mayor R. Anderson. APPOINTMENT AND RATIFICATION OF REAPPOINTMENT - Redding Community Access Corporation (B-080-120) Mayor R. Anderson explained that the Shasta County Office of Education has recommended that Kenneth Adams be reappointed to serve as its representative to the Redding Community Access Corporation. He further stated that the Shasta County Library, due to lack of staffing, has elected not to appoint a representative to the agency. Therefore, with the concurrence of Council, he recommended that Royal Mannion be appointed to serve as the Shasta County Library representative to the Redding Community Access Corporation. MOTION: Made by Council Member Kehoe, seconded by Council Member P. Anderson, to ratify the Shasta County Office of Education's reappointment of Kenneth Adams and appoint Royal Mannion to serve as the Shasta County Library's representative to the Redding Community Access Corporation to serve three-year terms expiring February 1998. The Vote: Unanimous Ayes COMMUNITY DEVELOPMENT ADVISORY COMMITTEE - Appointment of Vice Chair (B-080-600-100) MOTION: Made by Council Member P. Anderson, seconded by Council Member McGeorge, to appoint Bill Cox as the Vice Chair of the Community Development Advisory Committee. The Vote: Unanimous Ayes 8 01/17/95 ORDINANCE NO. 2107 - Amending Redding Municipal Code Section 6.18.170 re Reduction in Downtown Mall Parking and Business Improvement Area Assessment (M-010-200-050) MOTION: Made by Council Member McGeorge, seconded by Council Member P. Anderson, that the full reading of Ordinance No. 2107 be waived and the City Attorney be instructed to read the full title. The Vote: Unanimous Ayes MOTION: Made By Council Member Kehoe, seconded by Council Member McGeorge, that Ordinance No. 2107 be adopted, an ordinance of the City Council of the City of Redding amending Redding Municipal Code Section 6.18.170 by repealing Subsections A through I, and adding new Subsections A through I pertaining to the Parking and Business Improvement Area rates of tax, specifically the reduction of said rates by 20 percent. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge, Murray and R. Anderson Noes: Council Members - None Absent: Council Members - None Ordinance No. 2107 is on file in the office of the City Clerk. ORDINANCE NO. 2108 - re Rezoning Application RZ-11-94 by the City of Redding (Property within Ridge Point Estates Subdivision) (L-010-230) MOTION: Made by Council Member McGeorge, seconded by Council Member P. Anderson, that the full reading of Ordinance No. 2108 be waived and the City Attorney be instructed to read the full title. The Vote: Unanimous Ayes MOTION: Made by Council Member McGeorge, seconded by Council Member Kehoe, that Ordinance No. 2108 be adopted, an ordinance of the City Council of the City of Redding amending Section 18.06.020 of the Redding Municipal Code relating to the rezoning of certain real property in the City of Redding to "R1-BFM" Single-Family Residential District (RZ-11- 94). Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge, Murray and R. Anderson Noes: Council Members - None Absent: Council Members - None Ordinance No. 2108 is on file in the office of the City Clerk. ORDINANCE NO. 2109 - re Amending Redding Municipal Code Chapter 10.20 - adding Enterprise Community Park relative to park hours and prohibited activities (P-050-145) MOTION: Made by Council Member McGeorge, seconded by Council Member P. Anderson, that the full reading of Ordinance No. 2109 be waived and the City Attorney be instructed to read the full title. The Vote: Unanimous Ayes MOTION: Made by Council Member McGeorge, seconded by Council Member P. Anderson, that Ordinance No. 2109 be adopted, an ordinance of the City Council of the City of Redding amending Redding Municipal Code Chapter 10.20, Public Parks-Prohibited Activities, specifically the addition of Enterprise Community Park. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge, Murray and R. Anderson Noes: Council Members - None Absent: Council Members - None Ordinance No. 2109 is on file in the office of the City Clerk. KNIGHTON ROAD/I-5 ANNEXATION (A-150-251) 9 01/17/95 City Manager Warren provided an overview of the Report to City Council dated January 13, 1995, incorporated herein by reference. He explained that the owner of a major regional truck stop located at the Knighton Road/Interstate 5 interchange has indicated to the City and the County that without City sewer, the Regional Water Quality Control Board may put enough restrictions on the truck stop so that they would have to move or close down. Consequently, the owner has requested the City and County to work together to come up with some sort of solution. It is the desire of all three parties that the jobs associated with the truck stop be retained. Mr. Warren indicated that the City and the County have been negotiating a property tax exchange agreement to facilitate the annexation of this area for some time. Currently, there are only three areas of difference, which in dollars equates to approximately $40,000. He stated that if both or either parties made some movement or could find a third party to make up the difference, an agreement could be reached. Mr. Warren related that the County has proposed a County Service Area (CSA) as an alternative to annexation. The CSA would represent a contract or agreement between the two public agencies that would provide sewer service to the truck stop without going through annexation procedures. The County is suggesting the CSA for the following reasons: 1) A CSA is less likely to have litigation and is generally a simpler method of accomplishing what is wanted because it is merely an agreement between two public agencies; 2) A CSA avoids the necessity to amend the Redding sphere of influence to extend sewer service outside the City; 3) It allows the County to retain 100 percent of the revenue from development within the area; 4) Connecting to City sewer, even through a CSA, would give the City a leg-up at LAFCO on any future annexation proceedings; and 5) A CSA can be done quicker than LAFCO proceedings. Mr. Warren explained that sewer hookups or, for that matter, development outside the City limits are not new requests for cities. He cautioned that cities generally do not like this type of approach for the following reasons: 1) It encourages urban development outside the City, often at less than urban standards and at a full range of urban services; 2) It is a precedent for others to seek City services without seeking annexation and without contributing their share of income to the operation of the City, ie., it makes it more difficult to say no to others wanting the same service; 3) Utilities and roads are the primary vehicles to encourage investment in the City; 4) In the case of this annexation for sewer service, there is potential for increased property tax from additional development; and 5) Special service provided by a full-service agency can create confusion in who should respond to emergencies and who should respond to maintenance requests. Mr. Warren recommended that the City Council direct the City Manager to approach the truck stop owner and request him to make up the difference between the City and County's position (approximately $40,000 per year) and that the entire area be processed properly through annexation. An alternative to this recommendation would be to deal directly with the property owner and provide sewer service as the truck stop owner has requested for the truck stop and school only. In this manner, the truck stop owner would have his request honored and the City would avoid the expense of the services. If this method is selected, he recommended that the City make it clear that this is a most unusual circumstance and providing sewer service outside the City would not be a practice the City will follow. Mr. Warren discussed the following viewgraphs, incorporated herein by reference: 1) Comparison of last City/County proposal; 2) Assumptions regarding Knighton Road Annexation at full development; 3) Knighton Road annexation taxes; and 4) County's Proposed Division of Taxes versus City's Proposed Division of Taxes. Under the County's proposal the City would receive approximately $59,936. In comparison, under the City's proposal the City would receive approximately $94,275, representing a difference of approximately $40,000. Mayor R. Anderson read his memorandum dated January 16, 1995, incorporated herein by reference, into the record. In summary, he 10 01/17/95 recognized the possibility of a court challenge and in order to save the 100 plus jobs, he was willing to make sewer service available to the truck stop and School District once LAFCO approval of the annexation was obtained. He stated that the contract for service would be direct with the truck stop and School District, not through a CSA and would be only for the existing truck stop, not for any future development. He opined the City should not encourage further development of the property prior to annexation. If the annexation fails or is overturned by the Court, he believed prudent business judgement would dictate that the property owner acquire property within the boundaries of one of the three cities for any future development if their proposed development requires city- type services. After reviewing the City Manager's report and hearing Mayor R. Anderson's comments, Council Member Kehoe opined that providing unlimited service via a CSA was not sound land management planning. In response to Council Member Kehoe, Mr. Warren stated County staff has indicated that if the City agrees to the County's proposal, it will proceed with the annexation. Council Member Kehoe supported Mr. Warren's recommendation, however, suggested that there be some specific timeframe developed in order to bring the matter to a close. Council Member P. Anderson stated that she was not supportive of a CSA. She pointed out the City's willingness to share the sales tax revenue with the County demonstrates the City's support of both the County and the retention of jobs. Council Member McGeorge stated he was not supportive of a CSA because it could ultimately lead to similar requests. He believed the City's proposal to be close to a win-win situation for all parties and takes into account the long-term effects. Council Member Murray stated his sole focus is the jobs which currently exist at the truck stop, as well as the potential jobs which could be created if sewer service were made available. He believed the approximate $40,000 in dispute to be minor in comparison to the employment factor. He supported resolving the issue. Julie Howard, Executive Officer of LAFCO, clarified the following points: 1) If the City were to contract directly with the property owner, the City would need to go through an out-of-agency agreement process, whereby LAFCO is requested to place the area within its sphere of influence; and 2) A tax exchange agreement cannot be adopted without considering at a minimum property tax. Ms. Howard explained that a CSA is a mechanism whereby the public agency can contract to extend services without having to conduct sphere of influence proceedings. She noted that another concept behind the establishment of a CSA was the fact that additional development would provide a stronger argument than currently exists for annexation. Currently, there is no demonstrative need for services other than sewer. Mayor R. Anderson acknowledged the County's position relative to the CSA, however, stressed that the City was not interested in entering into such an arrangement. He believed the City Manager's proposal presented a viable alternative which should be explored. He pointed out that if the City and County cannot agree on the dollars which are currently on the table, the two entities would certainly not be able to reach an agreement once full build out is achieved. In response to Council Member P. Anderson, Ms. Howard stated that depending on the hearing process, if some sort of agreement could be reached within the next week or two, the annexation could potentially be completed in May. Harry Albright, Deputy County Administrative Officer, explained that one of the terms of the CSA agreement could require all projects to be built 11 01/17/95 according to City standards. He noted the CSA proposal was a more expeditious process and avoided the risks of potential litigation. He pointed out that this is a major decision for the County as the truck stop is a major sales tax revenue source. He stressed that the ultimate goal of the County is the retention of jobs and the truck stop's viability. MOTION: Made by Council Member Kehoe, seconded by Council Member McGeorge, to not provide any City services under the auspice of a County Service Area. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge and R. Anderson Noes: Council Members - Murray Absent: Council Members - None It was the consensus of the City Council that the City Manager be directed to arrange a meeting with the County and the truck stop owner to try and reach a compromise in order to proceed with the annexation. At the hour of 8:15 p.m., Mayor R. Anderson declared the meeting recessed. At the hour of 8:25 p.m., Mayor R. Anderson reconveyed the meeting to regular session. VIACOM RATE INCREASE (T-040-050) Director of Planning and Community Development Perry stated that Viacom Cablevision has advised the City of its intention to raise cable rates effective February 1995. Given the limited increase of $0.08 in the tier the City could regulate, it is recommended that the City Council not exercise its option to regulate basic cable rates subject to the continuing practice of Viacom to provide the City a 45-day notice of any rate increase. MOTION: Made by Council Member Kehoe, seconded by Council Member McGeorge, that the City not exercise its option to regulate basic cable rates subject to the continuing practice of Viacom to provide the City a 45-day notice of any rate increase. The Vote: Unanimous Ayes UTILIZATION OF VOLUNTEERS FOR CITY CODE ENFORCEMENT (P-100-060-850 & C-110-100-400) Director of Planning and Community Development Perry provided an overview of the Report to City Council dated January 9, 1995, incorporated herein by reference. He recalled that the City Council directed staff to prepare a program and budget related to the use of volunteers to perform some code enforcement work. The program proposal consists of the following: 1) Solicit the help of volunteers to perform some routine code enforcement tasks and report back to the City Council at the mid-budget year with an implementation program and budget; 2) Solicit the help of volunteers to implement a proactive code enforcement program with the understanding it would increase City costs to monitor the program; and 3) Conduct a citywide neighborhood survey to establish priorities for the types of violations to be handled by staff based on the key concerns of neighborhoods. Mr. Perry explained that the volunteers of the proposed "Neighborhood Pride and Awards Program" would not demand compliance, enforce the code, nor seek prosecution. Although volunteers would refer some violations to staff for follow-up, it would be up to City staff to make the final decision on the merits of enforcement relative to a code violation. The scope of the volunteer's work would be limited to improving the appearance of the neighborhoods by encouraging compliance with the City Code through positive reinforcement and a sense of community pride. Thus, the scope of volunteer's work would not necessarily be confined to the City Code. If, for example, the volunteer's review committee agrees that a property has trash strewn about the front yard, the committee may send a positively worded letter to the owner encouraging the owner to help out by sprucing up the front yard. The City Code does not contain yard-maintenance requirements. Thus, volunteers would not refer to code sections in their letters. The program will include a manual prepared 12 01/17/95 by staff showing photographic examples of the types of problems volunteers should focus on. Volunteers would administer any awards programs. The volunteers' committee could also coordinate the efforts of other volunteers or community groups to render assistance to people who do not have the resources or ability to help themselves. Mr. Perry stated nine volunteers are expected to devote about 1,000 hours towards implementing the program the first year. Staff support would consume about 500 hours at a cost of $11,000. This includes the cost of training, administration, typing, writing, and processing 60 referrals from volunteers for enforcement. The total estimated start-up cost would be $21,600. With regard to staff support, Mr. Perry noted that the Planning Department is currently spending about $8,000 per year in staff time on code enforcement to process about 140 violations. Staff support for the proposed program will cause suspension of current enforcement efforts in order to administer the new program and handle enforcement referrals from volunteers. Depending on the number of people that get involved and referrals for enforcement, the City may have to increase its commitment to code enforcement as the community becomes more aware of volunteers. Mr. Perry explained that the program by itself will not turn blighted areas into healthy areas anymore than the volunteer neighborhood watch program stops crime, but the program may help deter blight, generate an awareness of the problem, and create a sense of community pride founded on being "neighborly." It is the recommendation of staff that the City Council adopt the proposed volunteer program entitled "City of Redding Volunteers' Neighborhood Pride and Awards Program" dated December 1994, incorporated herein by reference, and report back to the City Council and the Planning Commission after one year of implementation. City Manager Warren noted that although code enforcement is very difficult and time consuming, it is very important. He acknowledged that the City's current program is good, however, he commended the City Council for considering the utilization of citizens in this area. The program basically involves individuals policing themselves. He viewed the proposed program as being exceptional and recommended the City Council's support. Council Member Kehoe commended both Mr. Perry and Senior Planner King for their efforts in developing the program. He suggested that the program be expanded accordingly based on the volunteer response received from the community. MOTION: Made by Council Member P. Anderson, second by Council Member Kehoe, to accept the "City of Redding Volunteers' Neighborhood Pride and Awards Program" dated December 1994. The Vote: Unanimous Ayes RESULTS OF CITY-WIDE SURVEY OF ZONING AND BUILDING CODE COMPLAINTS (C-110-100-400) Director of Planning and Community Development Perry summarized the Report to City Council dated January 5, 1995, incorporated herein by reference, which summarized the results of the city-wide survey of neighborhood problems concerning Zoning and Building Code enforcement. In response to Council Member Murray, Mr. Perry stated that staff proposes to send a copy of the survey results to Haven Humane for their review. Council Member Murray requested staff follow up on the issues relating to animal control to determine how Haven Humane is dealing with these problems. He also suggested that the City Council review its policy regarding surveys and whether or not the surveys should be reviewed by the City Council prior to distribution to ascertain whether the survey is reflective of the City Council's objective. 13 01/17/95 MOTION: Made by Council Member Kehoe, seconded by Council Member P. Anderson, directing staff to utilize the results of the City-wide survey of zoning and building code complaints to focus on priority concerns of neighborhoods; concentrate on junk in the front yard, weeds next to buildings, inoperable or wrecked vehicles in front yards or the street, and landscape that blocks a driver's view (first four priority problems identified in survey); utilize volunteers to help focus on priority concerns of neighborhoods, spend less staff time on violations which are not a priority of the survey; and use the survey as a basis of seeking funding to deal with problem areas using a multi-department approach. The Vote: Unanimous Ayes Mr. Perry noted that it took volunteers 60 hours to compile the survey results. City Manager Warren stated that future surveys would be presented to the City Council for consideration prior to distribution. PLAN LINE STUDY FOR DRAFT UPPER CHURN CREEK AREA PLAN (GPA-1-93) AND ENVIRONMENTAL IMPACT REPORT (EIR-1-93) (G-030-010 & L-010-075 & L-010-200) Director of Planning and Community Development Perry provided an overview of the Report to City Council dated January 17, 1995, incorporated herein by reference. He stated that staff has been working with Caltrans and area property owners to identify appropriate circulation improvements to accommodate planned development outlined in the Draft Upper Churn Creek Area Plan and Environmental Impact Report (EIR). The plan area comprises nearly 5.2 square miles and is generally located east of Interstate 5, north of Lake Boulevard, and west of Twin Tower Drive. Mr. Perry explained that the concept of the new interchange was presented to area merchants by staff at a neighborhood meeting in January 1994, and to the Planning commission at the first public hearing on March 8, 1994. Considerable opposition to closure of any ramps at the existing interchange was voiced by several property owners and merchants in the area, and Caltrans and City staff were directed to develop an alternative which kept the ramps open. Mr. Perry stated that a new alternative was presented to the Planning Commission at a workshop on March 22, 1994, which included improvements to the Oasis Road and Twin View Interchanges and the construction of a Market Street flyover that would tie into Twin View Boulevard or be extended to Oasis Road in the vicinity of Salt Creek. The flyover would divert traffic from the Oasis Road Interchange, thereby reducing the extent of the improvements and the costs required at that location. While the alternative proposes reconstruction of the intersection of Twin View Boulevard and Constitution Way which will impact existing development at the four corners, it allows all freeway ramps to remain open. Cost estimates developed by Caltrans staff compare the costs of improvements centered around a new Market Street Interchange ($25 million) with the Market Street Flyover concept ($15 million). As the figures bear out, not only does the flyover concept keep all Twin View ramps open, it is a less expensive circulation solution. Mr. Perry indicated that the Planning Commission, at its meeting of December 13, 1994, directed staff to incorporate both Option 3 and Revised Option 3, prepared by Mr. Thomason's engineer, into the Area Plan and EIR documents and prepare the Final EIR and Area Plan. The Planning Commission further recommended that the City obtain preliminary engineering on the flyover. This would occur either before finalizing the land use plan or be included as an implementation measure in the Area Plan. The goal would be to establish a formal plan line for the street. The thinking of the Planning Commission is that the plan line study would determine the best alternative for the flyover, comparative costs, and the interim street plan until it is constructed. The estimated cost for this work amounts to approximately $45,000. Associated with this is the need to revise the Area Plan and EIR to reflect the new street planning in order to amend the General Plan. 14 01/17/95 Mr. Perry stated that at this point in time, there seems to be consensus among City staff, Caltrans, area merchants, affected property owners, and the Planning Commission that the best mitigation of traffic impacts from future growth in the area is the construction of the Market Street flyover, along with modifications to the Oasis Road and Twin View Interchanges. However, until adequate engineering is available, it is difficult to assess the impacts of the proposed circulation improvements on the area. Until the location of the flyover is set, the arterial connections cannot be properly located nor can a logical land-use pattern or financing plan be developed. It is the recommendation of staff that the City Council authorize staff to defer the consideration of the area plans but authorize staff to proceed to circulate a Request for Proposals to obtain engineering services to finalize the cost estimates for the Market Street Flyover. In response to Council Member Murray, Mr. Perry clarified that staff's recommendation would ascertain the touch-down point of the Market Street flyover, as well as ascertain the best of the three alternatives based on cost comparison, traffic flow and land use. Virgil Weld, representing the Mr. Levenson, a large retail property owner in the Upper Churn Creek Area Plan, stated that prior decisions made by the City Council, and the Planning Commission, as well as agreements which have been reached with the City, have pretty well secured the road alignments as they relate to his client's property. He requested the City Council to direct staff to include the following in the plan's EIR: Traffic impacts, air quality and other environmental considerations. His client, who is a driving force behind the Upper Churn Creek Area Plan, does not understand why staff does not consider the EIR to be the proper forum for these issues. He stated that he has volunteered to provide staff the necessary information to be included in the report. In response to Council Member P. Anderson, Mr. Perry explained that several years ago, Mr. Weld's client proposed to construct a 700,000 square foot mall which required the preparation of an EIR, along with other studies which included encroachment into South Creek's 100-year floodplain. After the project failed to move forward, the City took the lead in attempting to resolve the differences between the City, the property owner and Caltrans and developing solutions to traffic issues. He explained that the Upper Churn Creek Plan already exists and absent the interface with the Interstate Highway, it would not require an amendment at this time. The Plan deals in gross acreage and gross land use and is not capable of dealing with specific land use. Additionally, there is no funding or staff expertise available to accommodate the developer's request. The mall's implications, i.e., turn lanes, traffic volumes, and encroachment into the floodplain are the developer's burden to resolve. Chris Kraft, Sharrah Dunlap Sawyer, Inc., representing Thomason Development, encouraged the City Council to approve staff's recommendation. He stated that his client owns property which is directly impacted by the proposed flyover and until the exact location is determined, his client is not able to proceed with the property's development. MOTION: Made By Council Member Kehoe, seconded by Council Member Murray, authorized deferring preparation of the Buckeye Area Plan and authorized staff to circulate a Request for Proposal to obtain engineering services to finalize the cost estimates for the Market Street flyover. The Vote: Unanimous Ayes 1995 FUNDING FOR COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENT PARTNERSHIP PROGRAM (HOME) PROGRAMS (G-100-075-203 & G-100-030-040) Director of Planning and Community Development Perry stated the Department of Housing and Urban Development (HUD) notified the City it will receive $984,000 in Community Development Block Grant (CDBG) funds for the 1995-96 program year, an increase of nine percent over last year's allocation. 15 01/17/95 Mr. Perry explained that the Community Development Advisory Committee will soon begin the 1995 CDBG funding process. The primary task of the Committee is to review the annual funding requests made for the City's CDBG funds and to recommend appropriate funding scenarios to the City Council. The following City Council goals were noted with regard to CDBG funding: a full 20 percent of the annual CDBG funding be reserved up front for the costs associated with the general planning and administrative activities; no more than 15 percent of the annual allocation be used for public service activities; City's Housing Rehabilitation Program would not compete with non-City activities for CDBG funding. Based on these goals, the following use of funds has been established for 1995-96 program year: Housing Rehabilitation - $216,500; Administration - $99,400; Planning - $99,400; Public Service - $149,100; and Community Projects -$419,600, for a total of $984,000. Mr. Perry indicated that HUD also notified the City it is eligible to receive $445,000 in HOME Investment Partnerships Program (HOME) funding. While the City has been an entitlement community for the purpose of receiving CDBG funding for a number of years, last year was the first year that it became an entitlement community (Participating Jurisdiction) for HOME funding. While the designation of Participating Jurisdiction status afford the City an opportunity to receive funding directly from HUD based on the formula allocation, without competition with other communities, the maximum it will receive as a Participating Jurisdiction is $500,000, $445,000 from HUD and $55,000 from the State. Last year, based upon the City's successful performance in previous years, the City Council opted to decline the Participating Jurisdiction status and continue to compete with other communities for the State HOME program funding. The application was successfully funded at $1,000,000. The City has submitted three HOME applications to the State and has been fully funded each time, for a total of $3,000,000. The City's HOME program includes a low-income homeowner rehabilitation program, a rental rehabilitation program for low-income renters, a down payment assistance program for low-income first-time homebuyers, and an "age-out" foster youth rental assistance program, which links rental assistance with supportive services to help 18-year old foster children become self- sufficient. It is the recommendation of staff that the City Council confirm the CDBG funding assignments, and decline to accept the Participating Jurisdiction for the HOME Program. MOTION: Made by Council Member Murray, seconded by Council Member Kehoe, to confirm existing City Council funding categories and assignments for the 1995-96 program to be developed by the Community Development Advisory Committee and decline to participate as a Participating Jurisdiction status for the HOME Program. The Vote: Unanimous Ayes PURCHASE OF CITY-OWNED SURPLUS LAND - 4800 Mt. Lakes Boulevard (C-070-200) Council Member Murray abstained from discussion and voting on this matter. Director of Planning and Community Development Perry recalled that the City Council, at its meeting of December 6, 1994, referred Michael Burke's request to purchase approximately two acres of City surplus land located at 4800 Mt. Lakes Boulevard to City departments and the Planning Commission. Mr. Burke is in the process of acquiring the adjacent parcel to the south on Mt. Lakes Boulevard on which he plans to construct three buildings for general industrial purposes. Mr. Burke's purpose for acquiring the City property would be to allow for more parking and to enhance circulation for the large trucks that will be accessing the property after development. Mr. Perry stated that the Planning Commission considered Mr. Burke's request at its meeting of January 10, 1995, and determined that the sale of the property for industrial purposes would be consistent with the General Plan. It was also the Planning Commission's recommendation that the area considered for disposition to Mr. Burke be expanded to include 16 01/17/95 the steep area to the east. The expanded area comprises approximately 6.6 acres. The purpose would be to provide a more regular lot configuration and to avoid leaving the City with a useless residual area. It is the recommendation of staff that the City Council authorize staff to obtain an appraisal on the area recommended by the Planning Commission and to negotiate an agreement with Mr. Burke for the sale of the same. Staff would bring back the Purchase Agreement for the City Council's consideration. MOTION: Made by Council Member Kehoe, seconded by Council Member McGeorge, authorizing staff to obtain an appraisal on the area recommended by the Planning Commission and to negotiate an agreement with Mr. Burke for the sale of the same. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge and R. Anderson Noes: Council Members - None Absent: Council Members - None Abstain: Council Members - Murray RESOLUTION - Adopting Projected November 1995 Electric Utility Rate Adjustment for Fiscal Year 1996 Planning Purposes (E-090-100) Electric Utility Director Lindley recalled that the City Council at its meeting of November 1, 1994, adopted a 3.42 percent rate increase effective November 1994, but chose to defer a decision regarding a forecasted November 1995 rate increase. Staff was directed to present an analysis of various funding strategies which could be used to reduce the projected rate increases at the City Council meeting on January 17, 1995. Mr. Lindley stated that staff has prepared alternative rate forecasts for several funding strategies. Each alternative assumes that the Electric Utility's future operating expenses will continue to be held at a minimum and that no new expenses or sources of revenue will occur beyond those included in the October 1994 rate forecast. The Report to City Council dated January 11, 1995, incorporated herein by reference, includes a description of each funding strategy investigated and a table comparing the projected rate increases of the current forecast to the projected increases for each strategy. Four basic categories of funding strategies were investigated: 1) Funding strategies which vary from the Electric Utility Rate Mechanism; 2) Funding strategies which apply reserves or bond proceeds in different investment combinations; 3) Funding strategies which modify the City's existing electric Power Cost Adjustment (PCA); and 4) Strategies which reduce the reserves of the MSR Joint Powers Agency. Mr. Lindley explained that none of the strategies investigated, when compared to the fall 1994 forecast, significantly affects the long-term price of electricity sold to our customers. However, the strategies do affect the timing of electric rate increase, thus offering the City Council an added degree of control when implementing a multiple-year electric rate strategy. Importantly, all of the strategies, except for the one which maintains the absolute minimum rates required by bond covenants, point to the need for electric rates to be at least 10.2 percent higher than present rates by November 1996, which would be accomplished by one rate increase in November 1995 and another in November 1996. Finally, although modifying the City's PCA would not affect the ultimate price of electricity sold to our customers, it does have merit and is worthy of consideration because it will limit the focus of future rate hearings to those power cost issues which can be influenced by the City. Mr. Lindley stated the City's Electric Utility reserve fund currently exceeds the requirements of the Rate Mechanism, although, the fund is projected to decline to the minimum level consistent with the Mechanism over the course of the next three fiscal years. Reserves, notwithstanding, the driving influence regarding rate requirements for the City's Electric Utility during the next two years is the projected Debt Service Coverage Ratios (DSCR). The use of reserves to pay down 17 01/17/95 debt or prepay future expenses has some, but not a material, effect on the DSCR and, in some instances, could, in the long term, cost ratepayers more by exacerbating the shortfall in reserves projected to begin in the next three or four years. The Electric Department believes that investment and financing decisions should be made based on existing knowledge with regard to Electric Utility financial information and recommends selection of a strategy which best balances risks and benefits over the short and long terms. Given that underlying premise, the Electric Department would not recommend changing its present funding strategy nor would it recommend altering the Rate Mechanism. It is the recommendation of staff that the City Council: 1) Adopt a resolution which establishes a forecasted 6.0 percent rate increase for November 1995 to be used for budgeting and other planning purposes; 2) Direct staff to continue to explore new investment/financing strategies as interest rates and the financial market evolve and bring to the City Council, for its consideration, any new strategies which may provide long-term benefits; and 3) Direct staff to develop and present alternatives for modifying the City's existing electric Power Cost Adjustment. Electric Utility Resources Manager Coleman reviewed the following viewgraphs as depicted in the booklet entitled Funding Strategies, incorporated herein by reference: 1) Funding Strategies - Including history, rate mechanism, forecasting, updated forecast; funding strategies; and conclusions and recommendations; 2) Typical Rate Comparisons at the Time of Resource Commitment (Page 4) - Since the 1970s, the City has been striving to achieve energy independence, go into real time schedule, and keep power costs as low as possible. At the time the various resource commitments were made, the City predicted the resource commitment would cause rates to be higher in the near term and provide significant savings in the long-term; 3) October 1994 Projected Rate Increase Pursuant to Rate Mechanism (Page 9); 4) Historical Electric Utility Reserves (Page 10) - Reserve growth is attributed to the following factors: 1) $6 million rebate from a settlement between Western Area Power Administration (WAPA) and Pacific Gas & Electric (PG&E); and 2) $4 million agreement with PG&E, whereby PG&E will reimburse the City the cost to upgrade the gas lines as they are utilized by the City; 5) Historical Annual Rate Increases (Page 16); 6) Rate Adjustment Mechanism Summary or Parameters (Page 17) - 1) Debt service coverage ratio to be at least 1.2; 2) Reserve to be at least 20 percent of O & M; 3) Limit annual rate increase to 6 percent or less; and 4) Prepare for future major expenditures; 7) Simplified Financial Operating Results (Page 18); 8) Simplified Financial Operating Results Debt Service Coverage Ratio (DSCR) (Page 19); 9) Simplified Financial Operating Results Reserves as a Percent of O&M (Page 19A); 10) Projected Debt Service Coverage Ratios with No Future Rate Increase (Page 27); 11) Projected Reserves with No Future Rate Increases (Page 28); 12) Projected Rate Increases Needed to Meet Rate Mechanism (Page 29) - Based on updated information, staff is now projecting a 8.28 percent increase in 1996 due in part to the following: Because of the calendar year/fiscal year shift in accounting between the City and what it owes MSR, some of the money expected to be paid in fiscal year 1997, is now due in 1996, thereby creating debt service coverage problems. The two-year combination is less, however, the increase is more dramatic in the first year than originally projected; 13) Projected Debt Service Coverage Ratios with Rate Increases Consistent with Rate Mechanism (Page 30); 14) Projected Reserves with Rate Increase Consistent with Rate Mechanism (Page 31); 18 01/17/95 15) Projected Average Retail Rate (Page 33); 16) Base Case versus Minimum Bond Covenants (Page 36); 17) Compounded Rate Increases Base Case Versus Minimum Bond Covenants (Page 37); 18) Power Cost Adjustment (PCA) (Page 45) - The following facts were noted: 1) Adopted in 1988; 2) Automatically passes Western Area Power Administration's revenue adjustment clause through to customer; 3) Other uncontrollable power cost increase could be added to PCA; 4) Such line item adjustments are common in wholesale market; and 5) Are becoming more frequent in retail market; 19) Projected Net Expenses (Page 47); 20) Compounded Rate Increases Base Case vs. Modified PCA (Page 50); 21) Conclusions (Page 56 and 57) - 1) Rate mechanism meets its original objectives: utility's financial health, rate stability, and long term planning; 2) Near term rate reductions lead to long term rate increases; 3) Rate increase will be needed for the next 3-4 years, as previously projected; 4) Any rate fine tuning has less effect than the forecasting uncertainty; 5) Investment/Financing strategies which may provide long term benefits should be considered; 6) The interest rates on existing debt are too low to justify early payment of debt; and 7) Modification of the PCA is worth further review. 22) Recommendations (Page 58) - 1) Adopt a 6 percent forecasted rate increase for November 1995; and 2) Direct staff to continue to explore financing and investment strategies for further City Council consideration and develop and present PCA alternatives. In response to Council Member P. Anderson, Director of Finance Downing stated the Finance Department is responsible for investing the bonded funds, with the City Treasurer responsible for the idle funds. She explained that staff is reviewing various alternatives, including Lehman Brothers' proposal, with regard to investing funds. MOTION: Made by Council Member Murray, seconded by Council Member McGeorge, that Resolution No. 94-29 be adopted, a resolution of the City Council of the City of Redding establishing a projected 6.0 percent electric utility rate increase for November 1995, to be used for budget and planning purposes only. Voting was as follows: Ayes: Council Members - P. Anderson, Kehoe, McGeorge, Murray and R. Anderson Noes: Council Members - None Absent: Council Members - None Resolution No. 94-29 is on file in the office of the City Clerk. REJECT BID SCHEDULE NO. 2898 - Purchase of Personal Computers (B-050-100) Director of Information Systems Kelley requested the City Council to authorize the following: 1) Reject all bids received concerning Bid Schedule No. 2898, purchase of personal computers; 2) authorize staff to rebid using ten name-brands and revised specifications; and 3) approve purchase of seven additional personal computers not contained in the approved 1994-95 budget for which funds have been identified in departmental budgets. Council Member P. Anderson preferred the direct purchase of computers rather than utilizing financing. City Manager Warren recommended that the City Council approve staff's recommendation. He stated that at the time the bid is awarded, the City Council will be provided alternatives to either finance the computers utilizing reserve funds, or negotiate an agreement with the vendor to pay a portion in this fiscal year, with the remainder paid in fiscal year 1995-96. MOTION: Made by Council Member McGeorge, seconded by Council Member P. Anderson, to reject Bid Schedule No. 2898, purchase of personal computers, authorize staff to rebid for personal computers using ten name brands and revised specifications, and approve the purchase of 19 01/17/95 seven additional personal computers not contained in the approved 1994- 95 budget for which funds have been identified in departmental budgets. The Vote: Unanimous Ayes FRANK COUGHLIN'S PRESENTATION TO THE CITY COUNCIL - re City Maintenance of Residential Sewer Connections (W-020) Director of Public Works Galusha recalled that Frank Coughlin, representing Harry Purcelli, addressed the City Council on December 6, 1994, regarding the denial of claim number 95-058-874 against the City for $2,301.77 for the maintenance and repair of a private sewer connection which connects an apartment complex at 3745 Churn Creek Road to the City sewer main located in Churn Creek Road. Following the conclusion of Mr. Coughlin's presentation, the City Council requested staff to prepare a report to provide more information to the City Council on the history and justification for the current City policy, and the implications of changing the policy. Additionally, the City Council requested the report to include the following: 1) Explain why maintenance responsibilities of water service lines differ from private sewer connections; 2) What is the magnitude of the sewer connection problem? What are the number of private sewer connection failures and the estimated repair and maintenance costs; 3) What is the mechanism the City uses to acquire sewer systems for maintenance; and 4) Does the City's current policy still make sense? Mr. Galusha provided an overview of the Report to City Council dated January 12, 1995, incorporated herein by reference, outlining staff's responses to the aforementioned questions. Mr. Galusha explained that if the City Council were to consider altering the current policy and accept maintenance of the private sewer connections in public right of way, then a sewer cleanout should be installed at the property line to provide the City access for maintenance of that portion of the sewer connection in the public right of way. The cleanout would also provide the delineation of maintenance responsibilities between the utility and private property. The estimated cost for a standard sewer cleanout installation would be approximately $350 per connection. This translates into an overall cost of approximately $8,000,000 for these installations. Mr. Galusha noted that in addition to the cost of installing a cleanout at each service connection, the Wastewater Utility would also have increased operational costs in responding to the many customer calls and repairs that are now paid for by the private sector under the current policy. Public Works issues about 10-15 encroachment permits per year to private contractors to repair private sewer connections within the public right of way. These costs, which under current policy are the responsibility of the private property owners, are estimated to range from $30,000 to $50,000 each year. In addition, Public Works investigates about 150 reports per year from wastewater customers for possible City main sewer stoppages. The investigation shows that 60 percent of these calls are a result of problems with private sewer connections. The property owner contacts a private contractor to clear or repair his private sewer connection. If the City's Wastewater Utility were to assume this responsibility, its budget would need to be increased by $150,000 to $200,000 each year to provide for additional staff, equipment or contract service to accomplish this work. Regardless of whether the City increased staff or contracted out this additional workload, these increased operational costs would require approximately a $1.00 per month increase in the monthly wastewater rate. It is the recommendation of staff that the City Council reaffirm its long-standing City policy of not maintaining any of the private sewer connections as per City Code Section 14.16.340. In response to Council Member Murray, Superintendent-Wastewater Craig stated that when sewer blockage calls are received, a maintenance man is dispatched to the location. The maintenance man checks both the upstream manhole and the downstream manhole to determine if there is a problem with the sewer main in the street. If no problem is located, the City informs the property owner to contact a private contractor to 20 01/17/95 check the residence's service connection lateral. In most cases, the City is never notified as to where the blockage was located. Council Member Murray questioned why the City charges to issue an encroachment permit if the City has taken the position that the private sewer lateral must be maintained by the homeowner. Mr. Galusha replied that it has been standard City policy that any time the street is dug up to require an encroachment permit. He noted that the cost of the permit is minimal and is subsidized primarily by the City. Frank Coughlin, 1863 Keystone Court, entered his rebuttal dated January 17, 1995, incorporated herein by reference, into the record. He recommended that the City correct its ordinance to reflect the correct terminology, and responsibilities for maintenance and that the City honor claims where private individuals have done work which should have been performed by the City. Council Member Murray believed Mr. Coughlin was presenting the facts as he understood them. Due to the difference in interpretations, he requested that the Public Works Department and Mr. Coughlin meet with the City Manager in order to ascertain the facts. Following the conclusion of that meeting, he requested the City Manager to prepare a recommendation for the City Council's consideration. MOTION: Made by Council Member Murray, seconded by Council Member Kehoe, to direct the City Manager and Public Works staff to meet with Mr. Coughlin in order to ascertain the facts and request the City Manager to prepare a recommendation for the City Council's consideration. The Vote: Unanimous Ayes AMENDMENTS TO CHAPTER 6.32 OF REDDING MUNICIPAL CODE REGARDING VEHICLES FOR HIRE (T-100-150 & T-100-500) Interim City Attorney Calkins related that the City Council, at its meeting of January 3, 1995, directed the City Attorney's Office to amend Chapter 6.32 of the Redding Municipal Code by repealing Section 6.32.030 which required a determination of public convenience and necessity. The City Council further directed that the chapter be amended to make the acquisition of the permit an administrative process. It is the recommendation of staff that the City Council offer the ordinance for first reading. William Thompson, 8921 Impasse Lane, stated that the information regarding this item was not received until Monday. He, therefore, requested a two-week continuance in order to prepare a response. Council Member P. Anderson requested staff to prepare an ordinance which depicts the changes which have been made to the ordinance. Council Member Murray suggested that Mr. Thompson submit any written information to the City Clerk a few days prior to the meeting for distribution to the City Council. It was the consensus of the City Council to defer consideration of this matter until its meeting of February 7, 1995. ROUTINE REPORTS AND COMMUNICATIONS Notice of Filing Gas Core Procurement Incentive Mechanism by PG&E (S-050-350) Notice from Federal Energy Regulation Commission re filing by Washington Water Power Company - Docket No. ER94-1507 (E-120-050) ADJOURNMENT There being no further business, at the hour of 10:07 p.m., Mayor R. Anderson declared the meeting adjourned to 8:00 a.m., February 4, 1995, at City Hall Conference Room A, 760 Parkview Avenue, Redding, 21 01/17/95 California, for a City Council Workshop to review the City's Capital Improvement Program. APPROVED: ________________________________ Mayor ATTEST: ______________________________ City Clerk