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M04-05-10 1 MINUTES OF THE TOWN COUNCIL/PARKING AUTHORITY/REDEVELOPMENT AGENCY APRIL 5, 2010 The Town Council of the Town of Los Gatos conducted a Regular Meeting on Monday, April 5, 2010 at 7:00 P.M. TOWN COUNCIL/PARKING AUTHORITY/REDEVELOPMENT AGENCY MEETING CALLED TO ORDER ROLL CALL Present: Mayor Diane McNutt, Vice Mayor Joe Pirzynski, Council Member Steve Rice, Council Member Barbara Spector, Council Member Mike Wasserman Absent: None. PLEDGE OF ALLEGIANCE Peter Wedell, Los Gatos High School • Mr. Wedell led the Pledge of Allegiance. The audience was invited to participate. PRESENTATIONS Proclamation - Los Perros Day • Mayor Diane McNutt proclaimed April 10, 2010 as Los Perros Day. • Mr. Knowles accepted the proclamation on behalf of Los Gatos Unleashed. Introduction - Berko, Los Gatos/Monte Sereno Police Canine • Mayor Diane McNutt on behalf of the Town of Los Gatos and Jonathan Knowles on behalf of the Los Gatos Police Foundation introduced Berko, Los Gatos Police Department’s newest canine, to the community. • Mr. Knowles commented that the Los Gatos Police Foundation has donated funds for the police canine, Berko. • Captain Alana Forest spoke about Officer John Allderidge and Berko and thanked the Police Foundation and the community for their support. • Captain Forest invited the community to come meet Officer Allderidge and Berko at the Los Perros for a day event on April 10, 2010, at Bow- Wowzer Boutique on North Santa Cruz Avenue. 2 PULLED CONSENT ITEMS 2. Approve the appointment of Parthenia M. Hicks as Los Gatos Poet Laureate, to serve from April 5, 2010 - April 4, 2012. Mayor Diane McNutt pulled Consent Item #2. MOTION: Motion by Vice Mayor Joe Pirzynski to approve Consent Item #2 to approve the appointment of Parthenia M. Hicks as Los Gatos Poet Laureate, to serve from April 5, 2010 - April 4, 2012. Seconded by Council Member Barbara Spector. VOTE: Motion passed unanimously. Mayor Diane McNutt introduced Parthenia M. Hicks as the Town’s Poet Laureate. Ms. Hick thanked the community for the honor of Poet Laureate and recited a poem called “The Doves of Vasona.” CLOSED SESSION REPORT Council held a special meeting on March 29, 2010 to conduct a Closed Session on business relating to the Town Attorney appointments. Mr. Martello stated that direction was given and no reportable action was taken. TOWN COUNCIL COUNCIL/TOWN MANAGER REPORTS Council Matters Council Member Mike Wasserman • Commented that the Project Cornerstone organization had their annual awards banquet and Los Gatos won two out of six awards. • One award was for a program to develop assets with the youth at Fisher Middle School and the other was for the Town's outreach program to spread the word about Project Cornerstone. Council Member Joe Pirzynski • Commented about the Housing Trust program’s great success and accomplishments and that Los Gatos has been a participant in the program. 3 Council Matters – Continued Mayor Diane McNutt • Commented about the free prescription medicine drop-off program which will be held on April 17, 2010 at the Town’s Corporation Yard. • Invited Los Gatos and Monte Sereno residents to bring any unwanted medication to the Corporation Yard between the hours of 9:00 A.M. and 1:00 P.M. for the free drop-off. Manager Matters Mr. Larson • Commented that the spring edition of the Vista will be distributed to all residents by mail. • Commented that April is Keep Los Gatos Beautiful month and every Sunday at the Farmers Market the Town will be highlighting different features and events. • Commented that on Thursday, April 22, 2010, the Library will be hosting an earth day celebration for children featuring “The Wild Things" which is an organization that works with displaced wildlife. • Commented that the Town’s Arbor Day celebration will take place on Friday, April 30, 2010 at 10:00 A.M. at Belgatos Park. The Town will be planting 30 trees as part of the celebration. Did You Know…? Monica Renn, Volunteer Coordinator • Commented that the Town is hosting a “bring your on mug” campaign. The campaign encourages residents and visitors to bring their own mugs to restaurants and coffee houses as their part to keep Los Gatos Beautiful. • Commented that more information can be found on the Town's website at www.losgatosca.gov. CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION) 1. Approve Council minutes of March 29, 2010 Special Meeting. 2. Approve the appointment of Parthenia M. Hicks as Los Gatos Poet Laureate, to serve from April 5, 2010 - April 4, 2012. Vote on under Pulled Consent Items 3. Authorize budget adjustment in the amount of $83,500 in the Town’s Equipment Replacement Fund for the purchase of three 2009 Police patrol vehicles and approve purchase agreement with Downtown Ford Sales, Sacramento. 4 Consent Items – Continued 4. Adopt a resolution allocating Community Development Block Grant (CDBG) Funds to the Town of Los Gatos for Fiscal Year 2010/11. RESOLUTION 2010-031 5. Adopt a temporary ordinance amending Section 2.30.295(1) of the Los Gatos Town Code regarding the general powers and duties of the Town Manager granting enforcement flexibility during recognized periods of national, regional, and local economic adversity. ORDINANCE 2187 6. Adopt ordinance of the Town of Los Gatos amending a zone change from R-1:20 to R- 1:8 for property located at 17230 Buena Vista Avenue. ORDINANCE 2188 7. PPW Job No. 09-20 - Prospect Avenue Resurfacing Project 421-812- 0108 a. Adopt resolution declaring G. Bortolotto & Company to be the lowest responsible bidder on the project and award a construction contract in an amount not to exceed $103,911. RESOLUTION 2010-032 b. Authorize staff to execute future change orders to the construction contract as necessary up to an amount of $70,000. c. Authorize a revenue and expenditure budget adjustment in the amount of $75,705 to 421-812-0108. 8. PPW Job No. 10-06 - Park Tennis and Basketball Court Resurfacing Project a. Adopt resolution declaring Joseph J. Albanese to be the lowest responsible bidder on the project and award a construction contract in an amount not to exceed $61,250. RESOLUTION 2010-033 b. Authorize staff to execute future change orders to the construction contract as necessary in an amount not to exceed $6,000. 5 Consent Items – Continued TOWN COUNCIL/REDEVELOPMENT AGENCY 9. Approve Council/Agency minutes of March 15, 2010. 10. PPW Job No. 09-06 - Los Gatos Library Project 411-821-2104 and 411- 281-2501 a. Adopt resolution authorizing the Town Manager/Executive Director to execute a Design and Construction Agreement with PG&E to provide electrical and gas service to the Los Gatos Library in an amount not to exceed $144,750. RESOLUTION 2010-034 b. Adopt resolution authorizing the Town Manager/Executive Director to execute a Design and Construction Agreement with Verizon Telephone Company to provide telephone service to the Los Gatos Library in an amount not to exceed $102,977. RESOLUTION 2010-035 11. PPW Job No. 07-16A - Parking Lot 6 Soil Treatment and Disposal 411- 817-0702 a. Adopt resolution declaring Galeb Paving Incorporated to be the lowest responsible bidder on the project and award a construction contract in an amount not to exceed $56,300. RESOLUTION 2010-036 b. Authorize staff to execute future change orders to the construction contract as necessary in an amount not to exceed $6,000. c. Authorize reserve allocation in the amount of $62,300 from the parking reserve to 411-817-0702 for Parking Lot 6. d. Authorize budget adjustment in the amount of $62,300 to 411-817- 0702. MOTION: Motion by Vice Mayor Joe Pirzynski to approve Consent Items #1 and #3-11. Seconded by Council Member Barbara Spector. VOTE: Motion passed unanimously. 6 VERBAL COMMUNICATIONS West Valley Green Leaf Committee • Commented about the West Valley Green Leaf Program. • Presented “Certificates of Appreciation” to the Town of Los Gatos Council and staff in appreciation for installing recycling bins and solar trash compactors in the downtown area. Council Member Barbara Spector • Thanked the members of West Valley Green Leaf and the Town for their support of Green Leaf programs. Closed Verbal Communications TOWN COUNCIL PUBLIC HEARINGS 12. Adoption of a resolution continuing certain department fees, rates and charges, and amending certain fees, rates, and charges for Fiscal Year 2010/11. Staff report made by Jenny Haruyama, Budget Manager. Council Comments • Requested information on the cost comparisons for user fees with other cities. • Requested the breakdown of the various fees and would like to review the analysis from the consultant. • Questioned the methodology for the analysis and the cost for doing business in Los Gatos. • Questioned the idea behind the overhead allocation plan. • Questioned the purpose of benchmarking with other communities. • Questioned what triggered the need for a new fee study and cost recovery adjustments. • Requested clarification on the current cost recovery percentage for the Town. 7 Public Hearing Item #12 – Continued Mr. Eddes, Financial Consulting Group • Clarified that the cost allocation plan used to determine the user fee adjustments is a formalized structure of assigning overhead costs to direct service departments. • Commented that to conduct the user fee study, they calculated the utilization of staff time and assigned costs based on fully loaded productive hourly rates. • Clarified that the cost allocation plan assigns the overhead cost for the Manager and other departments. • Clarified that the idea behind cost recovery is that the Town should recover costs consumed by the applicant and that the cost should be allocated fairly across the board. • Clarified that benchmarking provides the Council with a comparison of costs between the Town and other cities. Mr. Larson • Clarified that most of the Town’s services are not cost recovery services or fee services and are paid for by the General Fund taxes received by the organization. • Commented that the indirect cost process that the consultants use allocates overhead to those tax supported services just as it is allocated to the fee supported services. • Clarified that the idea is to take the appropriate share of direct costs for fee services and their fair share of overhead, making sure that the Town is moving towards user payment of those costs so they are not being subsidized by the General Fund. • Clarified that the last fee study done in 2005 resulted in approximately 82% cost recovery and at this time the Town is not up to a full cost recovery. • Commented that last year in the adopted budget, staff proposed the implementation of a comprehensive fee study. Staff incorporated the indirect cost allocation rate that was used by other jurisdictions which is a common methodology used for allocating overhead. • Commented that he was not clear if the indirect cost allocation rate had been looked at in the last five year fee study. • Expressed concerns that the Town’s Community Development Department was not recovering the full direct operating costs or the associated indirect overhead. 8 Public Hearing Item #12 - Continued • Clarified that the fee study was a joint study in partnership with the City of Campbell to save on the consulting costs. • Commented that based on overall fees, Palo Alto is basically 40% higher and Los Altos is 40% lower than the Town. • Clarified that the Town is currently at about a 45% to 56% cost recovery. • Clarified that if adopted, the Town would be looking at an additional 25% cost recovery. Council Comments • Questioned if any of the other comparison cities have evaluated their fees and if they have a balanced budget. Mr. Eddes • Clarified that they do not have any data relating to other cities’ evaluations or budget status, but the other cities do have a policy for cost recovery. Council Comments • Questioned the reason to retain the fees for the neighborhood center since the Town has leased it to the Los Gatos Recreation Department. • Questioned the fine for overdue children’s books. • Questioned why the bingo license fee is being dropped from the fee schedule. • Expressed concerns about the addition of a business license handling fee and requested clarification why the Town would need to charge this fee. Mr. Larson • Clarified that in the lease agreement with Los Gatos-Saratoga Recreation Department their fees are to mimic the Town’s fee schedule until the Town has vacated the premises which would be roughly two to three years. • Commented that there were no significant changes to the Town’s parks and facilities recreation fees. • Clarified that the business license fee is General Fund tax revenue and it is not based on the cost of the service, but is a tax on business operations in the Town. The fee would be the cost for handling that business license renewal which is not a General Fund activity. • Commented that this is a new proposed fee for the Town which has been adopted by other jurisdictions. Ms. Dydo, Assistant Library Director • Clarified that the overdue children’s book fine policy mimics the policy in other libraries in the area. 9 Public Hearing Item #12 – Continued Captain Forest, Los Gatos-Monte Sereno Police Department • Clarified that there was not a need or demand for the bingo license any longer and that the Town has not received any requests for bingo licenses in recent years. Open Public Hearing Mr. Knowles • Requested that the Town's arts programs receive a percentage of development fees collected by the Town. Closed Public Hearing Council Discussions • Expressed concerns about the business license handling fee. • Commented that the Town did a fee analysis about five years ago and each year various departments have raised their cost recovery fees. • Questioned why the Town is only at 56% cost recovery. • Questioned if there are other funding sources in lieu of raising fees. • Questioned if the analysis that was done five years ago is the same procedure as being done today. • Expressed concerns about the Town being on the high end of several fees. Mr. Larson • Commented that the consultant who conducted the study five years ago was PRM and they did not bid when the Town went out to request bids for the current study. • Clarified that as part of the scope of the contract, the Town did not request a comparison between the two studies. • Commented that a cost allocation model is a methodology commonly used for these studies. • Commented that as part of the current contract the Town did not go back to critique the 2005 study, but chose to move forward with a direct cost analysis and a fair overhead allocation process based on the Town’s current costs. • Clarified that the Town has reduced staffing and costs since 2005, but there have been increases in salaries, benefits, and other costs that the Town has incurred in that time. • Clarified that in terms of the 82% cost recovery referenced in 2005 and the 56% that is referenced now, a large part of that difference may be the overhead cost allocation process that was previously used compared to the one currently used. 10 Public Hearing Item #12 – Continued Council Discussions • Questioned why other cities are coming in with much lower fees. • Commented that the cost analysis done five years ago may have been deficient. • Suggested dialogue or some analysis about the consequences of the business license handling fee. • Questioned if staff has looked at the financial gain as a result of the fee increases. • Expressed concern that Council needs additional information to proceed further with the proposed fee schedule. Mr. Larson • Clarified the fee schedule would need to be adopted in April to be incorporated it into the budget adoption process in May. • Commented that he will break the proposed fee adjustments into four separate areas: 1) where the Town is proposing to reduce the fees, staff will bring that forward as a separate actionable item on April 19, 2010. 2) for the fees less then 10% increase, staff will bring that forward as a separate actionable item on April 19, 2010. 3) for the balance of the fees that have a greater then 10% increase or staff is recommending to phase in over time, staff will provide additional information as requested by the Council with an alternative of increasing any of those fees up to 10%. 4) The last area is the new fees; staff will bring back only the fees in which Council would prefer to consider. MOTION: Motion by Council Member Mike Wasserman to drop the business license application processing fee from the fee schedule. Seconded by Council Member Barbara Spector. VOTE: Motion passed unanimously. 11 Public Hearing Item #12 – Continued Council Discussions • Questioned if direct services have been included as part of the overhead. • Questioned if the Town is analyzing what the actual costs are now compared to five years ago. • Requested clarification on the process to phase in the fees that would have greater than 10% increase. • Suggested that staff open up the discussions with a public education piece and maybe use graphics or wording that would help better understand the process. • Suggested discussion about the projected impacts of the fee increases on the public and the business community. Mr. Larson • Clarified that the direct service departments are not included as part of the overhead. • Commented that staff will open up the discussion with a review of the prior study compared to the current study, a methodological explanation on how staff does the indirect cost allocation and how the fee recovery basis leads them to the proposed fees, and some categorization of the fees that staff will present using some tiering of 5% and 10 %. • Commented that the consultants and finance staff will go back and revisit the recommendations presented by each department to see if any adjustments might be possible. • Commented that fees are not changed and adopted as budget strategies, but are based on the costs of providing the service and staff has been working on the hypothesis of Council’s prior direction which was to move fees towards cost recovery. MOTION: Motion by Vice Mayor Joe Pirzynski to continue the discussion and adoption of resolution for certain department fees, rates and charges, and amending certain fees, rates, and charges for Fiscal Year 2010/11 to April 19, 2010. Seconded by Council Member Steve Rice. VOTE: Motion passed unanimously. 12 Public Hearings – Continued 13. Amendment of Road and Traffic Impact Fee Ordinances a. Introduction of an Ordinance of the Town of Los Gatos amending Article VII of Chapter 15 establishing traffic impact mitigation fees and rescinding resolution 1994-55. b. Introduction of an Ordinance of the Town of Los Gatos amending Article IX of Chapter 15 of the Town Code relating to the mitigation of road impacts caused by construction projects. Mr. Larson • Commented that given the prior discussion relating to the fees, staff would like to introduce this issue for some background information for Council. • Commented that the timeline for amending the traffic impact mitigation fees is not as urgent therefore staff would like to rescind the recommendation before Council and lay forward a presentation from the consultants on how staff got to this point relating to traffic impact mitigation fees. • Commented that these fees have not been adjusted since 1994 and staff's approach was to phase these fees during a six year window. Staff report made by Jenny Haruyama, Financial Budget Manager and Mr. Gainer, Financial Consulting Group. Council Comments • Requested clarification about traffic impacts and the mitigation fee adjustments. • Requested clarification on traffic mitigation costs for general office use and why the cost is higher for general office buildings. • Expressed concerns about the estimated deterioration of the Town’s roadways. • Commented that the numbers seem very significant and suggested that staff take a look at the methodology used for the fee recovery. • Commented that there is a need to update the mitigation fees and suggested that staff continue to move forward. • Expressed concerns about the methodology used to determine fees increases. • Expressed concerns that the increases will deter business in the Town. • Requested clarification relating to fast food restaurants and the increase to the construction fee for that type of restaurant. • Would like to see comparisons from other cities. 13 Public Hearing Item #13 – Continued Mr. Gainer • Clarified that the fee increase would be significant due to the number of trips on roads and the road mitigation fee is designed to recover the cost to refurbish Town roads due to vehicle traffic associated with construction activity. • Clarified that there is a big difference in the peak hour trips for different types of businesses as it relates to the traffic mitigation fee. Mr. Larson • Clarified that he would like to receive indication from Council that staff should continue to work on the mitigation fees. Council Discussions • Commented that the list of projections for traffic mitigation impacts should be updated to reflect the current infrastructures of the Town. • Suggested that staff continue to research the issues on the traffic mitigation fees and bring back to Council at a future date. • Commented that Council has no concerns about the proposed road impact fees. 14. Approve proposed annual maintenance rate increase for Landscape and Lighting Assessment District-1 Hillbrook Benefit Zone to $175 or, dissolve the Landscape and Lighting Assessment District-1 Hillbrook Benefit Zone resulting in no further maintenance obligation to the Town. RESOLUTION 2010-037 Staff report made by Kevin Rohani, Town Engineer. Council Comments • Questioned if the Town were to dissolve the Landscape and Lighting District would the Water District be open to having the property owners take on the responsibility. • Questioned if the Water District agreed to continue, would staff be willing to meeting with the residents to discuss alternate landscaping issues. 14 Public Hearing Item #14 – Continued Mr. Rohani • Clarified that he has not had any conversations with the Water District regarding the continuance of service with the property owners. • Clarified that staff is willing to meet with the neighborhood and if there is consensus for a new look and feel, the Town can work with the residents and price the work for the level of maintenance to meet the wishes of the community. Mr. Larson • Clarified that the new fee level would then be maintained for any changes in terms of the landscaping, irrigation systems, etc. and once the improvements were paid off, any Town investment in that improvement would result in a reduced fee that reflects the new ongoing maintenance cost. Open Public Hearing Ms. Rose, Town Clerk Administrator stated that the only protests received at this time were the seven protests which were included in the staff report. Mr. Workman • Questioned why the Town is leasing something that belongs to the Flood Control District and questioned when the lease arrangements began. • Questioned why certain properties located on Hillbrook Drive are not in the district. • Commented that there is a parity issue because the strip of land across Blossom Hill Road is being maintained, but is not part of an assessment district. • Expressed concerns on the cost associated with the landscape contractors and feels it is a lot of money for the size of the lawn area. • Expressed concern about the cost of watering the area and that it is over- excessive with water run-off into the gutters. Council Comments • Questioned why only 7 of the 34 residents submitted protest letters. Mr. Workman • Commented that the people who did not enter protests are possibly too busy or lost track of the notice. Closed Public Hearing 15 Public Hearing Item #14 – Continued Mr. Rohani • Commented that as part of a public agency contract process, the Town must receive multiple bids for contracts. • Commented that the Town just received new bids for the maintenance of the six landscape and lighting districts and the overall cost for all the districts was in the mid $20,000 range, with the Hillbrook assessment being about $3,500. • Clarified that a contractor working for a residence would not need to adhere to laws and requirements that a contractor working for a municipality must, which automatically raises the price of the work. • Clarified that it was the property owners and neighborhoods located in the assessment districts who initiated the request to receive enhanced maintenance and the Town did not require all properties to be a part of the assessment district. Mr. Martello • Commented on the history of how the Town may have become involved with the Water District and that while the Water District would allow home owners to contract directly with the district, it would be most likely only through a Home Owners Association in order to meet the requirements of General Liability and Workers’ Compensation insurance, which is expensive. • Commented that in past circumstances the Water District has not necessarily wanted to maintain property like this assessment district to the level that it is maintained. Mr. Rohani • Commented that the lease agreement between the Town and the Water District was initiated to allow Town vehicles to access the backside of Blossom Hill Park through the Water District property. Council Comments • Commented on supporting a motion with the understanding that staff will communicate with the neighborhood to discuss what alternatives are appropriate to reduce the costs in the future. 16 Public Hearing Item #14 – Continued MOTION: Motion by Council Member Steve Rice to adopt resolution approving the proposed annual maintenance rate increase for Landscape and Lighting Assessment District-1 Hillbrook Benefit Zone to $175 or, dissolve the Landscape and Lighting Assessment District-1 Hillbrook Benefit Zone resulting in no further maintenance obligation to the Town. Seconded by Vice Mayor Joe Pirzynski. VOTE: Motion passed unanimously. OTHER BUSINESS 15. February 20 Council Retreat Follow Up Mr. Larson • Clarified that there is one recommended wording change to Attachment two in the last box of the Civic Enrichment column to read "Restructure and re-focus arts and culture programs and services to meet community priorities and needs." Ms. Jacobs • Requested clarification of what actions Council would like staff to pursue on the downtown parking strategic goal. Council Comments • Clarified that a specific action on the downtown parking is to consider the potential of continuing the current assessment district for the funding of an additional parking structure. Mr. Larson • Suggested broadening the downtown parking strategic language in order to create other possibilities and suggested that the language could read "explore additional mechanisms to increase the availability and usability of downtown parking to meet business needs." Council Comments • Commented that the re-phrase offered by Mr. Larson more broadly captures what Council was talking about at the retreat. • Commented that by maximizing the use of our resource we would gain additional parking without additional major expenses. 17 Other Business Item #15 – Continued Open/Closed Public Comments MOTION: Motion by Vice Mayor Joe Pirzynski to approve the February 20 Council Retreat Follow Up. Seconded by Council Member Steve Rice. VOTE: Motion passed unanimously. ADJOURNMENT Attest: Jackie D. Rose, Clerk Administrator