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HomeMy WebLinkAboutMinutes - City Council - 1997-04-15 84 City Council, Regular Meeting City Council Chambers • 1313 California Street Redding, California April 15, 1997 7:00 p.m. The Pledge of Allegiance to the Flag was led by Kent Dagg. The Invocation was offered by Planning Manager John Keaney. The meeting was called to order by Mayor McGeorge with the following City Council Members present: P. Anderson, R. Anderson, Kehoe, Murray, and McGeorge. Also present were City Manager Warren, Assistant City Manager Perry, City Attorney Wingate, Public Works Director Galusha, Development Services Director Swanson, Police Captain Byard, Electric Group Manager Ryan, Electric Group Manager Russell, Human Resources Manager Bachman, Electric Utility Rates&Economics Analyst Graves, General Services Director Masingale, City Clerk Strohmayer, and Secretary to the City Council Rudolph. RESOLUTION - Designating Week of April 27-May 3, 1997, as"Just Say No" Week (A-050-060-600) MOTION: Made by Council Member Kehoe, seconded by Council Member P.Anderson, that Resolution No. 97-067 be adopted, a resolution of the City Council of the City of Redding designating the week of April 27 - May 3, 1997, as"Just Say No" Week. Voting was as follows: Ayes: Council Members - P. Anderson, R. Anderson, Kehoe, Murray and McGeorge Noes: Council Members -None Absent: Council Members - None Resolution No. 97-067 is on file in the office of the City Clerk. PLANNING COMMISSION APPOINTMENT AND REAPPOINTMENT (B-080-300) MOTION: Made by Council Member Kehoe, seconded by Council Member R. Anderson, to reappoint Marcus Woodward and appoint Paul Edgren to the Planning Commission for four-year terms expiring May 1, 2001. The Vote: Unanimous Ayes REORGANIZATION OF CITY COUNCIL (A-050-060) MOTION: Made by Council Member Kehoe, seconded by Council Member R. Anderson, to appoint Patricia Anderson as Mayor, Ken Murray as Vice Mayor, and Robert Anderson as Mayor Pro Tern for one-year terms expiring April 1998. The Vote: Unanimous Ayes Mayor P. Anderson, on behalf of the City Council, presented Council Member McGeorge with a plaque expressing appreciation for his service to the City as Mayor. Council Member McGeorge related that his term as Mayor was one of the most pleasurable years of his life. CONSENT CALENDAR The following matters were considered inclusively under the Consent Calendar: Approval of Minutes - Adjourned Regular Meeting of December 12, 1996 Regular Meeting of December 17, 1996 Regular Meeting of January 7, 1997 Regular Meeting of January 21, 1997 04/15/97 85 Approval of Payroll and Accounts Payable Register (A-050-100-500) It is recommended that Accounts Payable Register No. 20, check numbers 246320 through 246750 inclusive, in the amount of$2,385,247.72, for the period of April 1, 1997, through April 11, 1997, be approved and paid, and Payroll Register No. 20, electronic deposit transaction numbers 36834 through 37203 inclusive, check numbers 434498 through 435026 inclusive, for a total of$1,266,228.70, for the period of March 23, 1997, through April 5, 1997, be approved. TOTAL: $3,651,476.42 Adoption of Ordinance No. 2176 (F-205-600 & A-090-100) It is recommended that Ordinance No. 2176, an ordinance of the City Council of the City of Redding amending Redding Municipal Code Title 3, Aircraft and Airports, by amending Section 3.04.030, Schedule of Landing Fees. Latour Demonstration State Forest (S-050-235) It is the recommendation of the City Manager that the City Council authorize the Mayor to sign letters to Governor Wilson, Senator Johannessen, and Assemblyman Woods urging them to vote no on the Governor's declaration of Latour Demonstration State Forest as"surplus State property." Resolution - Appropriating Funds for Northern California Drag Strip Association * (B-130-070 & C-070-100 & A-090-100) It is recommended that Resolution No. 97-068 be adopted, a resolution of the City Council of the City of Redding approving and adopting the 31st amendment to City Budget Resolution No. 96-130 to appropriate $25,000 for the Northern California Drag Strip Association, in accordance with the loan agreement. Development Services Monthly Activity Report (A-050- /Z Z It is the recommendation of the Development Services Director that the Development Services Department's Monthly Status Report through March 1997 for the following work areas be accepted: (1)Zoning, Subdivision, and General Plan Amendments; (2) Building and Population; and (3) Housing Assistance and Rehabilitation. Reject Bid Schedule - Bid Schedule No. 3077, Two Fire Apparatus (B-050-100) It is the recommendation of the Fire Chief that all bids associated with Bid Schedule No. 3077, two fire apparatus, be rejected, and staff authorized to reevaluate bid specifications and seek new bids from potential vendors at a later date. Resolution - re Peace Officers Memorial Week (A-050-060-600 & P-150-150) It is the recommendation of the Police Chief that Resolution No. 97-069 be adopted, a resolution of the City Council of the City of Redding proclaiming the week of May 11-18, 1997, as "National Police Officers' Memorial Week," and May 14, 1997, as"Police Memorial Day" in the City of Redding. Shasta County Peace Officer Memorial Run (S-050-100 & P-150-150) It is the recommendation of the Police Chief that the City Council approve the Shasta County Peace Officer Memorial Run scheduled for May 14, 1997, beginning at the Shasta County Courthouse and making a loop through the City to Hilltop Drive, south on Victor Avenue, and back to the courthouse, a distance of approximately 12 miles. 04/15/97 I 86 Award of Bid - Bid Schedule No. 3069, Uniform, Linen, and Laundry Services (B-050-100) It is the recommendation of the General Services Director that Bid Schedule No. 3069, uniform, linen, and laundry services, be awarded to the low bidder, Mission Linen and Uniform Service, in the evaluated total of$35,089.80, for a three-year period beginning July 1, 1997, and an optional additional two year extension. Award of Bid - Bid Schedule No. 3078, Refuse Truck Side-Loader Resolution- Appropriating Funds * (B-130-070 & B-050-100) It is the recommendation of the General Services Director that Bid Schedule No. 3078, one refuse truck side-loader to include body and closed circuit television system for Residential Collection Division of Solid Waste, be awarded to Oakland Truck Center in the amount of$148,740.74. It is further recommended that Resolution No. 97-070 be adopted, a resolution of the City Council of the City of Redding approving and adopting the 32nd amendment to City Budget Resolution No. 96-130 to appropriate $17,650 for the purchase of said side-loader. Award of Bid - Bid Schedule No. 3079, Refuse Truck Front-Loader Resolution - Appropriating Funds * (B-130-070 & B-050-100) It is the recommendation of the General Services Director that Bid Schedule No. 3079, one refuse truck front-loader to include body and closed circuit television camera for the Commercial Collection Division of Solid Waste, be awarded to Oakland Truck Center in the amount of$146,754.44. It is further recommended that Resolution No. 97-071 be adopted, a resolution of the City Council of the City of Redding approving and adopting the 34th amendment to City Budget Resolution No. 96-130 to appropriate $9,260 for the purchase of said front loader. MOTION: Made by Council Member R. Anderson, seconded by Council Member McGeorge, that all the foregoing items on the Consent Calendar be approved and adopted as recommended. Voting was as follows: Ayes: Council Members - R. Anderson, Kehoe, McGeorge, Murray, and P. Anderson Noes: Council Members -None Absent: Council Members -None Resolution Nos. 97-068, 97-069, 97-070, and 97-071 and Ordinance Nos. 2176 and 2177 are on file in the Office of the City Clerk. CONTINUED PUBLIC HEARING - re Rezoning Application RZ-2-97, by the City of Redding (Between Girvan Road on the north, Highway 273 on the west, the Sacramento River on the east, and the City boundary on the south) (L-010-230) The hour of 7:00 p.m. having arrived, Mayor P. Anderson opened the continued public hearing regarding Rezoning Application RZ-2-97. The following documents are on file in the office of the City Clerk: Affidavit of Posting - Continued Public Hearing Planning Commission recommendation dated March 18, 1997 City Clerk Strohmayer advised that no protests were received. Development Services Director Swanson provided an overview of the Report to City Council dated April 3, 1997, incorporated herein by reference, regarding the request to rezone property between Girvan Road on the north, Highway 273 on the west, the Sacramento River on the east, and the City boundary on the south from"U"Unclassified District and"U-FP"Unclassified District with Floodplain Combining District 04/15/97 87 to "M-2-F" Industrial District with Site Plan Review Combining District and "M-2-F-FP" Industrial District with Site Plan Review and Floodplain Combining Districts, "OS" Open Space District, and "U" Unclassified District. Mr. Swanson related that the public hearing was continued to afford affected property owners additional time to respond to the proposed rezoning. In addition, the City Council directed staff to eliminate items 1(b) and 1(c) from the proposed site plan review criteria for the rezoning dated February 21, 1997, incorporated herein by reference. Following the April 1, 1997, meeting 11 affected property owners were sent additional information regarding the rezoning and afforded an opportunity to respond. It is the recommendation of staff that the City Council approve the rezoning as recommended, approve the Negative Declaration, offer the necessary ordinance for first reading, and waive the full reading of said ordinance. Robert Sell, Jr., 7823 Eastside Road, requested an opportunity to discuss with staff the conditions being applied to the steel company, as well as his business. Mayor P. Anderson determined that there was no one else present wishing to speak on this matter and closed the public hearing. Mr. Swanson stated that the recommended site plan review criteria requires a 30-foot buffer and an 8- foot high masonry wall to separate industrial property from residentially zoned or occupied property. Council Member Murray stressed to Mr. Sell that if he has further concerns regarding any of the project's conditions to contact staff, as the City Council's action does not approve the building itself, but simply zones the property. MOTION: Made by Council Member McGeorge, seconded by Council Member R. Anderson, to approve the rezoning as recommended and make the following findings regarding RZ-2-97: 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 approve the Negative Declaration authorized by the Development Services Department. The Vote: Unanimous Ayes Council Member McGeorge offered Ordinance No. 2177 for first reading, 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 "M-2-F" Industrial District with Site Plan Review Combining District and "M-2-F-FP" Industrial District with Site Plan Review and Floodplain • Combining Districts, with site plan review criteria, "OS" Open Space District, and "U" Unclassified District. MOTION: Made by Council Member McGeorge, seconded by Council Member R. Anderson, that the full reading of Ordinance No. 2177 be waived and the City Attorney be instructed to read the full title. The Vote: Unanimous Ayes PUBLIC HEARING - re Rezoning Application RZ-1-97, by Nash Construction Co., Inc. and the City of Redding(West of Churn Creek Road and on both sides of Victor Avenue generally north of El Verano Street) (L-010-230) The hour of 7:00 p.m. having arrived, Mayor P. Anderson opened the public hearing regarding Rezoning Application RZ-1-97. 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 April 3, 1997 City Clerk Strohmayer advised that no protests were received. 04/15/97 r- 88 Planning Manager Keaney highlighted the Report to City Council dated April 3, 1997, incorporated herein by reference, regarding the request to rezone the property located west of Churn Creek Road and on both sides of Victor Avenue generally north of El Verano Street from"U" Unclassified District with "FP" Floodplain Combining District and "U-F" Unclassified District with Site Plan Review Combining District to"R-1-B10" Single-Family Residential District and"OS" Open Space District for floodplain and erosion-control purposes. It is the recommendation of both the Planning Commission and staff that the City Council approve the rezoning as recommended, approve the Negative Declaration, offer the necessary ordinance for first reading, and waive the full reading of said ordinance. Mayor P. Anderson determined that there was no one else present wishing to speak on this matter and closed the public hearing. MOTION: Made by Council Member R. Anderson, seconded by Council Member Kehoe, to approve the rezoning as recommended and make the following findings regarding RZ-1-97: 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 approve the Negative Declaration authorized by the Development Services Department. The Vote: Unanimous Ayes Council Member McGeorge offered Ordinance No. 2178 for first reading, 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 "R-1-B10" Single-Family Residential District and "OS" Open Space District for floodplain and erosion-control purposes. MOTION: Made by Council Member R. Anderson, seconded by Council Member Kehoe, that the full reading of Ordinance No. 2178 be waived and the City Attorney be instructed to read the full title. The Vote: Unanimous Ayes PUBLIC HEARING-re Adoption of the County Integrated Waste Management Plan Siting Element and the Summary Plan -(020=960& B-080-650-642) -020 — S SO The hour of 7:00 p.m. having arrived, Mayor P. Anderson opened the public hearing regarding the adoption of the County Integrated Waste Management Plan Siting Element and the Summary Plan. The following documents are on file in the office of the City Clerk: Affidavit of Publication -Notice of Public Hearing Staff recommendation dated April 10, 1997 City Clerk Strohmayer noted that no protests were received. General Services Director Masingale related that State Assembly Bill 939 mandates that each jurisdiction adopt an Integrated Waste Management Plan. He explained that the only remaining components needed for a complete County Integrated Waste Management Plan is the Siting Element and Summary Plan. He indicated that the Shasta County Board of Supervisors adopted the Siting Element and Summary Plan on January 14, 1997. He stated that the City published a public notice advertising the adoption of the Siting Element and Summary Plan and inviting comments, with the comment period ending April 14, 1997. It is the recommendation of staff that the City Council adopt the necessary resolution approving the Countywide Siting Element dated February 1996 and the Countywide Integrated Waste Management Summary Plan dated November 1996, incorporated herein by reference, as presented. Mayor P. Anderson determined that there was no one present wishing to speak on this matter and closed the public hearing. 04/15/97 89 In response to Council Member Murray, City Manager Warren stated that the City is required to continue reporting to the State until at least the year 2000 and is required to call the"surcharge" on tipping fees at the Richard W. Curry West Central Landfill a"surcharge," even though there is not a specified period whereby this"surcharge" will cease to exist. MOTION: Made by Council Member Kehoe, seconded by Council Member McGeorge, that Resolution No. 97-072 be adopted, a resolution of the City Council of the City of Redding approving and adopting the Siting Element and the Summary Plan of the Countywide Integrated Waste Management Plan, pursuant to Public Resources Code Section 40000, et seq. Voting was as follows: Ayes: Council Members - R. Anderson, Kehoe, McGeorge, Murray, and P. Anderson Noes: Council Members -None Absent: Council Members -None Resolution No. 97-072 is on file in the office of the City Clerk. RESOLUTION - re Corollary Electric Rate Issues (E-090-100) City Manager Warren provided background information concerning the events which have led up to the City needing to prepare for deregulation in the electric industry. He explained that the citizens' committee had recommended a 23 percent surcharge, but there were also a number of corollary issues which the City Council needed to discuss. He reviewed the answers contained in the Report to City Council dated April 11, 1997, incorporated herein by reference, to questions posed at the April 1, 1997, City Council meeting. Assistant City Manager Perry reviewed information relative to the following viewgraphs: (1) Residential Rate Comparison between the City of Redding and PG&E; (2) Small Commercial Comparison between City of Redding and PG&E; (3) 1996 Budget Cuts and 1996-97 Estimated Savings; (4) Added Costs for 1997-98 Budget; (5) Services and Information Being Obtained; and(6) Information to be Submitted over the Next 12 Months on Electric Issues. Mr. Perry related that the City has the sole discretion on how it will phase in retail electric competition beginning in the year 2000 and completed by the year 2010. He stated that after 2010, there is to be full open competition, while investor-owned utilities must allow competition beginning in 2002. He indicated that there are two ways the City can cover its debt if someone leaves the system, but stays within the electric utility service area: (1)join the ISO and adopt a State sanctioned competition transition charge (CTC); or(2) the City can establish a buy out fee along with a reliability charge. Mr. Perry also reviewed each of the corollary issues contained in the Report to City Council and provided the following recommendations: ► Public Goods Mandate-Postpone any final action until January 1998, as allowed for by Assembly Bill 1890. ► Investment in new construction-Immediately begin working with the Shasta Builders' Exchange to identify $600,000 of cost savings through efficiencies and capital equipment and use these savings to reduce the impact of the interim rate surcharge on our customers. ► Street Lights-Leave the street lights on throughout the City with the expenses continuing to be paid by the Electric Department. ► Interdepartmental Charges- Continue to have other departments perform needed services for the Electric Utility, but closely review the costs during the budget process to determine if any economies can be achieved. ► In-Lieu Payment-Continue to have the Electric Department pay a fee in-lieu of taxes, but review the amount during the upcoming budget process. This is the same for all the City's utilities. ► Civic Center Costs - Continue with the current plan to house the Electric Department's administrative staff in the Civic Center. ► Conservation Incentives - Delay taking action regarding this matter to provide staff with additional time to research the implications associated with eliminating or curtailing these incentives. 04/15/97 90 ► Capital Improvement Plan - Review the Capital Improvement Plan in detail during the budget process and eliminate or delay as many projects as possible without adversely impacting the reliability of the City's electrical system. ► Reduce Reserves - Reduce reserves by $18 million (and apply the $18 million to the Rate Reduction Fund), thereby having an Electric Fund reserve of not less than $5 million. ► Adjust Difference Between Rate Classes- Delay action until the City completes a cost of service study later this calendar year. Mr. Warren reviewed the alternatives which the City Council could consider to mitigate the impact of the 23 percent interim rate surcharge. It was the recommendation of staff that the City Council take the following action: (1) reduce the Electric Utility base rate 1 percent for all customers or 2 percent for only non-residential customers; (2) utilize one-time cost reductions for immediate implementation of the lifeline rate; (3) direct staff to further reduce expenditures that will be applied toward offsetting future rate increases on the base rate and full and continuous implementation of the Public Goods Charge; and(4) reduce the Electric Utility's reserves by approximately $18 million and apply any excess funds toward the reduction of debt. Council Member Kehoe said the Report to City Council did not consider the ratepayer's capacity to pay increased costs that will be levied on them or the willingness to pay the increased costs. He noted that over the past two weeks, he received numerous calls from ratepayers and he favored making some type of reduction in the 23 percent interim rate surcharge this evening. Council Member R. Anderson also favored reducing the 23 percent interim rate surcharge. While he acknowledged the need to act in the best interest of the Electric Utility, he noted the importance of considering the impact the City Council's actions will have on the ratepayers. He believed it prudent to consider all the options and facts before actually implementing the 23 percent interim rate surcharge. Council Member Murray opined that there had been ample opportunity provided to the City Council Members to study the facts. Council Member McGeorge referenced a letter from the National League of Cities which alluded to the magnitude of the legislation in front of both the Federal and State governments which could be either beneficial or detrimental. He believed the City Council would be remiss to reduce the interim rate surcharge too much at this time and later find that legislation has put the City in a worse position than • originally anticipated. He supported reducing the base rate, but proceeding with the interim rate surcharge in order to reduce the Electric Utility's debt. Dave Regnal felt that the City Council took action to impose the 23 interim rate surcharge without exploring other alternatives. He remarked that businesses are faced each day with the task of remaining competitive, and that people shop for value as well as look at the integrity of a supplier. He stated that the City has an opportunity over the next few years to build that confidence, and a good starting point would be to reduce the 23 percent interim rate surcharge. Mary Machado, Chair of the Greater Redding Chamber of Commerce, stated that on April 1, 1997, the Chamber of Commerce presented four issues to the City Council which needed to be addressed prior to the adoption of the surcharge. She related that the Chamber reviewed the Report to City Council and urges the City Council to take the following action: reduce the Electric Utility's contribution to new construction by $600,000, reduce the rate to non-residential customers 2 percent, eliminate the ten- percent "cushion", and apply all reductions to the non-residential customer rate effective with the next billing cycle. She explained that this action would essentially reduce the non-residential customer's charge approximately 8 to 10 percent and avoid the likelihood of having to make significant increases to residential rates when the cost of service study is completed. City Manager Warren clarified that each percent reduced off the surcharge equates to a 1 percent reduction to all ratepayers or 2 percent to non-residential ratepayers. He noted that the 10 percent "cushion" would equate to a reduction of approximately 2 percent for residential customers and 4 percent for non-residential customers. 04/15/97 91 Council Member Murray noted that of the 5,500 non-residential customers, 5,000 of these accounts use 10,000 kilowatts or less and equate to approximately 15 percent of the customer base. Ms. Machado indicated that the Chamber would support reviewing additional options with regard to a rate reduction for non-residential customers. Richard Johnson, 3000 Valentine Lane, stated that although he served on the citizens' committee, he would be conveying his personal viewpoints this evening. He explained that the City's Electric Utility 111 is owned by the residents and if one particular group receives a lower rate, the rest of the ratepayers must subsidize the difference. He noted that out of$0.107 paid for electricity, only $0.035 is subject to deregulation. He stressed that individuals will only have the option of purchasing electricity from another source and will not be permitted to leave the City's system. In an attempt to remain competitive, he indicated that the citizens' committee is only recommending that $200 million of the Electric Utility's total debt be paid. He believed that the cost of service study would recommend that non-residential rates be the same, if not lower, than residential rates. He cited a report prepared by A. G. Edwards which showed that typically non-residential rates for electric utilities are 38 percent less than residential rates. He noted that the City Council can establish goals this evening, but stressed that these goals may change as a result of industry competition, the economy, and legislation. He recommended that the 23 percent interim surcharge be left intact and any excess funds be utilized to reduce the non-residential rates. He suggested that any unfunded State mandates should be corrected legislatively and if that is not possible, the charge should be passed through to the ratepayer and shown on the electric bill as a mandated charge. He indicated that the 10 percent "cushion" is not actually excess funds, but funds set aside for matters outside the City's control, i.e., inflation, drought, etc. He conveyed that individuals who were vocal at the citizens' committee meetings came to realize that there are many choices, and the committee's recommendation has the least impact on the ratepayer. Patrick Hardy, 1660 Victor Avenue, provided information relative to organic carbon compounds which produce electricity. Dwight Bailey noted that the Electric Utility is still paying $237,000 annually for the new Civic Center. He questioned how the Electric Utility can take on new debt when it is attempting to pay off existing debt. He requested that this amount be removed from the Electric Utility's budget. He stressed that the taxpayers want to be informed and have a say regarding taxes and he believed this philosophy should also apply to the Civic Center bonds. Harley Crockley, 910 Canby Road, stated that senior citizens are living on fixed incomes and cannot afford to pay an additional 23 percent for their electricity. He added that many could only absorb a 10 to 11 percent increase. Kent Dagg, Executive Director of the Shasta Builders' Exchange, stated that the City must utilize the community in order to achieve a check and balance system. He cited several examples of where the City involved citizens in its process, i.e., the budget review and the committees which reviewed the Civic Center and Electric Utility. He explained that the City Manager addressed the Shasta Builders' Exchange Board of Directors regarding the issues facing the Electric Utility; and during this discussion, Mr. Warren asked the Board to consider revisiting the issue of the service connection fee the Electric Utility provides to new development. Mr. Dagg noted that the Board had previously opposed changing this fee but recognized that times are changing, and there are major problems facing the community. He said that the Board supports the City Manager's recommendation relative to reducing the Electric Utility's contribution toward new development with the following modifications: the $600,000 contribution toward new development would be reinstituted at the time the debt is paid; projects currently in progress would be afforded a grace period; and any savings achieved by this action would be applied directly toward debt reduction. He urged the City Council to keep the issue of economic development in perspective when making such decisions. Mayor P. Anderson expressed appreciation to the Builders' Exchange for its willingness to participate in the solution to this very difficult problem. 04/15/97 92 In response to Council Member Murray, Mr. Dagg clarified that the Builders' Exchange's support is predicated on the City Manager's recommendation to reduce the Electric Utility's contribution to new construction by$600,000. He stated that the Builders' Exchange would like to meet with staff as quickly as possible to determine where this reduction should occur. Paul Edgren indicated that he was at the Builders' Exchange Board of Directors meeting when the City Manager made his presentation. He explained that the Exchange would like to have the ability to look at the various costs and determine the most feasible area to derive the $600,000 savings. He noted that deregulation is a very complicated matter and recommended that the City implement a 14 percent interim rate surcharge and increase the rate in six-month intervals. Council Member Kehoe noted that the City Council, at its meeting of February 1, 1994, shifted the cost of street lighting from the General Fund to the Electric Utility. He supported the General Fund once again paying the costs associated with street lighting and indicated any savings achieved by the Electric Utility through this action should be utilized to reduce the interim rate surcharge. He favored an aggregate reduction of at least 5 percent in the interim rate surcharge. Council Member Murray expressed concern with eliminating or reducing the 10 percent "cushion" given the fact that the department's reserves are being reduced to such a low level. He viewed the"cushion" as an additional 2 percent reserve. He stated he was also concerned about the issues raised by the Chamber of Commerce relative to the inequity between residential and non-residential rates, due to the fact that Redding is only one of two cities west of Mississippi where non-residential rates are higher than residential rates. He indicated that the other city, the City of Roseville, is in the process of changing its rates. Council Member McGeorge explained that information regarding deregulation is changing rapidly and he supported retaining the 23 percent interim rate surcharge. He also favored applying any surcharge reduction to non-residential customers only, thereby attempting to balance the current inequity. Council Member P. Anderson pointed out that the 23 percent interim rate surcharge is actually less than that recommended by the citizens' committee, as the City Council was not interested in raising the rates again in October 1997. Since information will be forthcoming from the cost of service study, as well as bond counsel, she was inclined to leave the 23 percent interim rate surcharge in place pending receipt of this additional information. Council Member Murray stated that he would not support any motion which would prohibit the implementation of a Lifeline Rate Program. MOTION: Made by Council Member Kehoe, seconded by Council Member R. Anderson, to reduce the Electric Utility base rate by 2 percent and reduce the interim rate surcharge by 2 percent for both residential and non-residential customers. Voting was as follows: Ayes: Council Members - R. Anderson and Kehoe Noes: Council Members - McGeorge, Murray, and P. Anderson Absent: Council Members- None Motion failed. Council Member McGeorge and Mayor P. Anderson questioned what expenditure reductions the General Fund would be required to make in order to pay the costs associated with street lighting. Council Member McGeorge did not believe there was sufficient information to make a decision on the issue of street lighting this evening. • Council Member Murray believed the concept of having the General Fund pay for street lighting had merit and should be explored further. Council Members Murray, R.Anderson, and McGeorge did not want to deplete the Electric Utility's reserves to a point where it could not operate adequately. Council Member Murray noted that the City Council may have to increase the Utility's reserves at a later date. 04/15/97 93 MOTION: Made by Council Member Murray, seconded by Council Member McGeorge, to postpone taking any action on the Public Goods Charge until January 1, 1998; utilize one-time savings anticipated in fiscal year 1996-97 to fund a lifeline rate program for low-income customers; reduce expenditures in the Electric Utility's budget by $300,000 in the upcoming budget process and increase revenues by an additional $300,000; reduce the Electric Utility's reserves to $5 million and apply the excess funds toward the reduction of debt; and adopt Resolution No. 97-073, a resolution of the City Council of the City of Redding reducing the City's contribution toward new development by$600,000 and applying this savings to the non-residential customer base rate which will result in an approximate 2 percent reduction. Voting was as follows: Ayes: Council Members - McGeorge, Murray, and P. Anderson Noes: Council Members - R. Anderson and Kehoe Absent: Council Members -None Resolution No. 97-073 is on file in the office of the City Clerk. Council Member R.Anderson explained that he could not support the motion, as he believed the rate decrease could be greater. ELECTRIC UTILITY LIFELINE RATE PROGRAM (E-090-100) Assistant City Manager Perry provided an overview of the Report to City Council dated April 8, 1997, incorporated herein by reference, regarding the establishment of a Lifeline Rate Program. He explained that Assembly Bill 1890 mandates a public goods charge which can be used to fund certain types of programs such as the Lifeline Rate Program. He noted that for the City of Redding, the mandated public goods charge equates to approximately $1,600,000 annually. Mr. Perry stated that staff is recommending that the City Council establish a lifeline rate to assist qualified senior citizens and handicapped persons, as these seem to be the groups most in need and at the greatest risk in the City's service area. It is further recommended that the City Council set aside one-half of the public goods charge, or approximately $800,000, to fund the lifeline rates. Mr. Perry indicated that the proposed program would provide a flat 20 percent discount for the first 600 kilowatt hours of electric usage and that the discount be reduced by a like percentage amount in concert with any reduction in the interim rate surcharge. He stated that citizens which qualify for the lifeline rate must also be City residents and may only qualify at one service location. He related that customers would be immediately disqualified if they provide erroneous information, fail to pay their electric bill, unless special payment arrangements have been made, or if their circumstances change so that they no longer qualify. Mr. Perry acknowledged that the initial verification and ongoing certification of lifeline customers will be labor intensive and recommended that the program be administered through the Housing Authority, Customer Service, or by contract with a nonprofit organization. Initially, volunteers will need to assist with the initial sign up. Council Member Kehoe encouraged staff to focus the program on an individual's ability to pay rather than an arbitrary label, i.e., senior citizen, handicapped, etc. Council Member R. Anderson stated that staff needs to review whether it is cost effective to perform income checks, etc. He also recommended that age limits, income, and verification procedures need to be defined. Mr. Perry related that initial feedback has indicated that verification of social security and disability benefits should be fairly simple. Council Member Murray related that he wanted the City Council to make an affirmative statement that it intends to set aside$800,000 for a lifeline rate program which will have an implementation date which coincides with the 23 percent interim rate surcharge. 04/15/97 r- 94 Frances Jenkins, 2652 Sharon Street, acknowledged the difficulty the City will have in determining those ratepayers who are eligible to receive the Lifeline Rate Program. She indicated that senior.citizens like her who are living on fixed incomes will receive no relief from this program as they have annual incomes which exceed $15,000. Melinda Brown, People of Progress, urged the City Council to adopt a Lifeline Rate Program which also assists the low-income ratepayer. She also suggested that the City Council consider phasing in the interim rate surcharge. She noted the need to educate ratepayers as to the amortization program which is available to customers to avoid having their electricity turned off, either through the 7-day notice or the shut-off notification. She offered to assist the City in establishing the lifeline rate program and even recruiting volunteers to assist with the initial sign up. Harley Crockley, Redding Pilgrim House, recommended that the City only add 5 percent of the recommended 23 percent interim rate surcharge to anyone over 62 years of age. MOTION: Made by Council Member McGeorge, seconded by Council Member R. Anderson, to direct staff to begin the process of acquiring the $800,000 necessary for the Lifeline Rate Program, begin developing resources for checking which ratepayers should receive assistance, and have the implementation date of the lifeline rate program coincide with the 23 percent interim rate surcharge, even if it means making the implementation date retroactive. The Vote: Unanimous Ayes At the hour of 9:52 p.m., Mayor P. Anderson adjourned the meeting to the Annual Meeting of the Redding Joint Powers Financing Authority. At the hour of 9:55 p.m., Mayor P. Anderson reconvened the meeting to regular session. CLOSED SESSION -Labor Negotiations (P-100-050-050) • Mayor P. Anderson stated that the City Council would be adjourning to closed session pursuant to California Government Code Section 54957.6 to discuss the following: Conference with Labor Negotiator(Randy Bachman) regarding International Association of Fire Fighters (IAFF), Local 1944. At the hour of 9:56 p.m., Mayor P. Anderson adjourned the meeting to closed session. At the hour of 10:10 p.m., Mayor P. Anderson reconvened the meeting to regular session. No action was taken. ADJOURNMENT There being no further business, at the hour of 10:10 p.m., Mayor P. Anderson declared the meeting adjourned. APPROVED: ATTEST: dagArGoei City Clerk • 04/15/97