2/27/2001 - Council Minutes - CC Minutes Reg Meeting
APPROVED BY CITY COUNCIL ON MARCH 13, 2001
CITY COUNCIL MINUTES ORANGE, CALIFORNIA
OF A REGULAR MEETING February 27, 2001
The City Council of the City of Orange, California convened on February 27, 2001 at 4:30 p.m.
in a Regular Meeting in the Council Chambers, 300 E. Chapman Avenue, Orange, California.
4:30 P.M. SESSION
1. OPENING
1.1 INVOCATION
Given by Pastor Bob Dargatz, Immanuel Lutheran Church
1.2 PLEDGE OF ALLEGIANCE TO THE FLAG
Led by Councilmember Coontz
1.3 ROLL CALL
PRESENT - Slater, Alvarez, Mayor Murphy, Coontz
ABSENT - None
1.4 PRESENTATIONS/ ANNOUNCEMENTS/ INTRODUCTIONS
. Mayor Murphy announced the Council meeting will be adjourned in memory of Connie
Chestnut, community volunteer.
. The following employees received Service Recognition Awards: (C2500J.4.18)
Ruben Hernandez - Water; Daniel Norman - Police; Carol Rook - Community Services;
John Loertscher - Public Works; Mario Anchante - Community Services;
Randy Largent - Water; Glen Waipa - Police.
. A Proclamation was presented to Larry Kosmin, DVM, honoring him as ROP's (Central
County Regional Occupational Program) 2001 Business Leader of the Year. (S 1200.0)
. A presentation was made by Keith Regan, Executive Director, Orange Elderly Services,
Inc. regarding the financial status of Orange Elderly Services and the Annual Audit.
(A2100.0 AGR-0974.P)
2. PUBLIC COMMENTS - None.
3. CONSENT CALENDAR
All items on the Consent Calendar are considered routine and are enacted by one
motion approving the recommended action listed on the Agenda. Any member of
the City Council, staff or the public may request an item be removed from the
Consent Calendar for discussion or separate action. Unless otherwise specified in
the request to remove an
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CITY COUNCIL MINUTES
February 27, 2001
3. CONSENT CALENDAR (Continued)
item from the Consent Calendar, all items removed shall be considered immediately
following action on the remaining items on the Consent Calendar.
3.1 Declaration of City Clerk, Cassandra J. Cathcart, declaring posting of City Council
agenda of a regular meeting of February 27, 2001 at Orange Civic Center, Main
Library at 101 N. Center Street, Police facility at 1107 North Batavia, the
Eisenhower Park Bulletin Board, and summarized on Time-Warner
Communications, all of said locations being in the City of Orange and freely
accessible to members of the public at least 72 hours before commencement of said
regular meeting.
ACTION: Accepted Declaration of Agenda Posting and authorized its retention as a
public record in the Office of the City Clerk.
3.2 Request Council Confirmation of warrant registers dated February 8 and 15, 2001.
ACTION: Approved.
3.3 Receive and file the City Treasurer's Report, period ending January 31, 2001.
(C2500.F)
ACTION: Approved.
3.4 Request approval of City Council Minutes, Regular Meeting, February 13, 2001.
ACTION: Approved.
3.5 Consideration to waive reading in full of all ordinances on the Agenda.
ACTION: Approved.
AGREEMENTS
3.6 First Amendment to Consultant Agreement between Hirsch and Associates and City
of Orange for Santa Fe Depot Park Improvements. (A2100.0 AGR-3452.1)
SUMMARY: It is recommended that the City Council approve the first consultant
agreement between the City and Hirsch and Associates Inc. in the amount of $2,346.47.
The City is amending the contract to pay the consultant for extra design services for and
purchase of three bronze plaques for the Millennium Clock and Veterans Fountain. The
costs for the extra work and purchase of the plaques are offset by the fundraising of the
Millennium Commission and Veterans Committee. The Santa Fe Depot project has been
completed with the notice of completion and, therefore, all contractual obligations with
the consultant and contractor have been completed.
ACTION: Approved the first amendment of the consultant agreement between the City
and Hirsch and Associates, Inc. for the Santa Fe Depot Park Improvements in the amount
of $2,346.47, and authorized the Mayor and City Clerk to execute the consultant
agreement on behalf of the City.
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February 27,2001
3. CONSENT CALENDAR (Continued)
FISCAL IMPACT: Sufficient funds exist for this project in account no. 500-7021-
485100-0970 (Santa Fe Depot Park Improvement) in the amount of $2,346.47
APPROPRIATIONS
3.7 Appropriation for Consultant Agreement for Master Plan of Parks, Recreation and
Facilities. (C2300.H)
SUMMARY: Approval of an appropriation in the amount of $9,680 for the consultant
agreement between the City and Purkiss-Rose, RSI for the Master Plan of Parks,
Recreation and Facilities. The second amendment was for a fee increase for Purkiss-
Rose, RSI's sub-consultant, Hogle-Ireland, to perform additional work on the fee study.
ACTION: Approved an appropriation in the amount of $9,680 from Park, Acquisition
and Development Fund (510) unappropriated reserves to the Master Plan of Parks
account 510-7021-485100-0008.
FISCAL IMPACT: Adequate unrestricted fund balance is available in Fund 510 (Park
Acquisition and Development Fund) for this appropriation.
3.8 Appropriation of funds to initiate the design of traffic signals at the intersections of
Serrano and Yellowstone and Serrano and Mt. McKinley. (S4000.S.3.3)
SUMMARY: In anticipation of the increase in traffic volumes on Serrano Avenue
following its extension to Nohl Ranch Road, City staff recommends the installation of
two traffic signals at the intersections of Serrano/Y ellowstone and Serrano/Mt. McKinley
to replace the existing all-way stops.
ACTION: Appropriated $4,700 from Fund 285 Unappropriated Reserves into account
no. 285-5032-483100-6075 (Traffic Signal at Serrano/Yellowstone). Appropriated
$4,700 from Fund 285 Unappropriated Reserves into Account No. 285-5032-483100-
6192 (Traffic Signal at Serrano/Mt. McKinley).
FISCAL IMP ACT: There is an adequate fund balance for Fund 285 Unappropriated
Reserves to cover the recommended appropriations.
CLAIMS
(C3200.0)
3.9 The City Attorney recommends that the Orange City Council deny the following
Claim(s) for damages:
a. Colin Gee
b. Stephanie Chang
FISCAL IMPACT: None.
ACTION: Denied Claim(s) for damages and referred to City Attorney and Adjuster.
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February 27,2001
3. CONSENT CALENDAR (Continued)
CONTRACTS
3.10 Project S.P. 3354 - Award a Professional Services Design Contract to Integrated
Design Services, Inc. for the seismic retrofit design of City Hall and renovation of
the Administration building and basement.
SUMMARY: This contract authorizes the design consultant to review existing building
plans, reports, conceptual architectural plans, and structural calculations and provide
structural engineering and architectural construction documents for the seismic retrofit of
the City Hall complex and renovation of the Administration building and basement. Re-
roofing of all buildings will also be accomplished with the retrofit and remodel project.
The approval of a 20% contingency ($64,000) for additional design services will help
mitigate unforeseen conditions in the existing buildings.
ACTION: Continued to March 13,2001.
FISCAL IMP ACT: Funds are budgeted or are available in the following accounts:
500-5011-481105-2976
550-5011-481105-2976
$3,995,493
$ 620,403
Total $4,615,896
(City Hall Seismic Retrofit)
(City Hall Seismic Retrofit)
3.11 Award of contract to Baxter-Griffin Company, Inc. for the installation of LED units
at traffic signals City wide. (A2100.0 AGR-37 I I)
SUMMARY: The City is planning to replace the existing traffic signal heads with LED
units throughout the City using a rebate program from SCE. Following an invitation to
bid, Baxter-Griffin Company, Inc. has been found to be the lowest responsible bidder to
perform this project.
ACTION: Appropriated $72,414.00 from Fund 340 Unappropriated Reserves into
Account No. 340-5032-483100-6464 (LED Replacement Rebate Program) to be used for
the installation cost of the LED units. Authorized the award of a contract to Baxter-
Griffin Company, Inc. in the amount of $72,414.00 for the installation of LED units for
traffic signals, and authorized the Mayor and City Clerk to execute the contract
accordingly.
FISCAL IMPACT: Funds for this project will be available in account number 350-5032-
483100-6464 following the Council's action.
RESOLUTIONS
(REMOVED AND HEARD SEPARATELY)
3.12 RESOLUTION NO. 9396 (C2500.J.4.6)
A Resolution of the City Council of the City of Orange relating to the Classification
Compensation, and Terms of Employment of Executive Directors and Top Management
Employees, and repealing Resolution No. 9237 and amendments thereto.
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February 27, 2001
3. CONSENT CALENDAR (Continued)
Philip Knypstra, 5701 Rockinghorse Way, commented the salaries for Top Management
personnel are too high based on his research; and felt the salaries should be published.
Councilman Slater stated he supports this Resolution because of the need to keep Top
Managers fairly compensated. However, this also includes benefits to the City Council
which he does not agree with; but that is such a minor part of the package that he will
support the Resolution.
MOTION - Alvarez
SECOND - Coontz
AYES - Slater, Alvarez, Mayor Murphy, Coontz
ACTION: Approved.
3.13 RESOLUTION NO. 9415 (A2100.0 AGR-3642)
A Resolution of the City Council of the City of Orange finally accepting the completion
of a certain public work and improvement; Bid No. 001-03; D-134; R&L Sewer; Fernside
Street, Crystal View Avenue, Glenside Street Storm Drain Improvements.
ACTION: Approved.
3.14 RESOLUTION NO. 9416 (A2100.0 AGR-3630)
A Resolution of the City Council of the City of Orange finally accepting the completion
of a certain public work and improvement; Bid No. 990-46; Hollister Construction
Company; Metrolink Station Restroom Improvements.
ACTION: Approved.
(REMOVED AND HEARD SEPARATELY)
3.15 RESOLUTION NO. 9417 (S4000.S.4)
A Resolution of the City Council of the City of Orange temporarily closing a section of
Collins Avenue from Main Street to Batavia Street for a special event.
(Z-Car Exhibition)
The Director of Public Works explained there has been a complaint from a neighboring
business of this special event. However, there have been no other reports of incidences
and the event has always been successful and handed effectively.
Mr. Greg Smith, Motorsports Industries, thanked City staff for their efforts in assisting
with their annual event. They have always tried to have as little impact as possible to the
surrounding businesses and work closely with their neighbors. He outlined steps they
have taken to minimize impacts to adjacent businesses.
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February 27, 2001
3. CONSENT CALENDAR (Continued)
MOTION - Slater
SECOND - Alvarez
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to approve Resolution No. 9417.
3.16 RESOLUTION NO. 9418 (C2300.E. GPA-5-00)
A Resolution of the City Council of the City of Orange upholding the recommendation
of the Planning Commission and amending the Circulation Element of the General Plan
by updating the Bikeways Master Plan.
General Plan Amendment No. 5-00, Applicant: City of Orange
ACTION: Approved.
3.17 RESOLUTION NO. 9419 (A2100.0 AGR-3706.I)
A Resolution of the City Council of the City of Orange establishing a Deferred
Compensation Plan under Section 457 of the Internal Revenue Code; approving (I) a
Service Provider Agreement by and between the City of Orange and American General
Retirement Services Company and (2) a Custodial Agreement by and between the City of
Orange and V ALIC Trust Company; and authorizing certain individuals to act on behalf
of the Deferred Compensation Plan.
ACTION: Approved.
MOTION - Alvarez
SECOND - Coontz
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Item 3.10 was continued to March 13,2001. Items 3.12 and 3.15 were removed and
heard separately. All other items on the Consent Calendar were approved as
recommended.
END OF CONSENT CALENDAR
*******
4. REPORTS FROM MAYOR MURPHY - None.
5.
REPORTS FROM COUNCILMEMBERS
TAPE 1070
5.1 Councilmember Slater - Request Council send a letter to the Board of Supervisors
requesting a formal response and explanation for an apparent eastern shift in landing
patterns into the John Wayne Airport. (Tl200.1.1.B)
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CITY COUNCIL MINUTES
February 27, 2001
Councilman Slater reported a draft letter had been prepared to be sent to the County Board of
Supervisors regarding the flight patterns into John Wayne Airport; and with a few modifications
to the letter, he suggested it be sent with the Mayor's signature. In addition, the cities of Villa
Park, Costa Mesa, Newport Beach and Tustin have adopted Resolutions requesting continued
restrictions of operations at John Wayne Airport. He suggested a similar Resolution be
agendized for the next Council meeting.
Councilmember Coontz stated she has been told the flight patterns are under the control of the
FAA; and suggested sending the letter to the FAA.
MOTION - Slater
SECOND - Murphy
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to send a letter to the FAA addressing specific questions such as landing patterns at John
Wayne Airport, with a copy to the Orange County Board of Supervisors requesting their
assistance.
6. REPORTS FROM BOARDS, COMMITTEES, AND COMMISSIONS TAPE 1270
6.1 Re-appointment of citizens to the following Committees; all terms to expire June 30,
2003. (Continued from February 13, 2001.)
AUDIT COMMITTEE (terms to expire January, 2003)
Eric H. Woolery, David E. Sundstrom, Dwight Nakata, G. David Piper (alternate)
BUILDING BOARD OF APPEALS/HOUSING BOARD OF APPEALS
Frank Bauman, Jim Brennan, Jack Selman
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM COMMITTEE
Victoria James, Mary Ellen Manning, Bea Vega, Richard Ledesma, J an Mickelson
COMMUNITY VIDEO ADVISORY BOARD
Marcia Salley, Jerry Coker, Pat Buttress, Bob Mickelson
INVESTMENT ADVISORY COMMITTEE (terms to expire January, 2003)
James Hansen, Harold Jackson, Charles Simons
Mayor Murphy noted the expiration dates for the terms of the Investment Advisory Committee
and the Audit Committee will be January 2003 per Resolutions 8801 and 8802 respectively.
The terms for all other Committees will expire June 30, 2003.
MOTION - Murphy
SECOND - Alvarez
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to approve re-appointments, with terms to expire as noted.
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February 27, 2001
6. REPORTS FROM BOARDS, COMMITTEES, AND COMMISSIONS(continued)
6.2 Investment Oversight Committee Second Quarter Report for the Quarter Ending
December 31, 2000. This report summarizes the activity of the Investment Oversight
Committee. (ORI800.0.27.16)
MOTION - Coontz
SECOND - Alvarez
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to receive and file report.
7.
ADMINISTRATIVE REPORTS
TAPE 1450
7.1 Report from the City Attorney concerning a candidate's request for the City to
waive debt owed for the cost of his candidate's statements. (EIIOO.O)
The City Attorney reported that Mr. Juan Pablo Serrano-Nieblas, a former City Council
candidate, currently owes $1239 for the printing of past candidate statements. He explained that
candidates are required to prepay an estimated fee to have their candidate statement printed on
the ballot. However, if a candidate is proved to be indigent they are not required to pay the cost
in advance, but are billed on a monthly basis for the actual cost after the election. Mr. Serrano-
Nieblas was informed of the policy and signed a statement to this effect.
Mr. Juan Pablo Serrano-Nieblas, 224 N. Olive, pointed out the law merely states he can not be
charged prior to the election, but can be charged after the election; and felt his freedom of speech
and civic participation is being hindered. He has been running for CouncillMayor seats since
1982, but his current financial condition precludes him from making his monthly payments.
Council discussed the fact that no candidate is prohibited from putting their name on the ballot,
as long as they meet minimum requirements, regardless of financial circumstances; and there is
no obligation to present a candidate statement. Candidates have the option to collect campaign
contributions and spend those contributions on advertising, including a candidate statement.
Once an obligation is entered into, it should be honored; and there are many other opportunities
available for free speech.
Councilman Alvarez stated that he would make a contribution to Mr. Serrano-Nieblas' debt so as
not to discourage him from running again.
MOTION - Slater
SECOND - Alvarez
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to deny the request from Mr. Juan Pablo Serrano-Nieblas to waive the debt owed for the
cost of his candidate statement.
8. REPORTS FROM CITY MANAGER - None.
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CITY COUNCIL MINUTES
February 27,2001
9. LEGAL AFFAIRS
9.1 ORDINANCE NO. 4-01 (FIRST READING) (A2500.0 Capital Facilities Fees)
An Ordinance of the City Council of the City of Orange Amending Sections 15.38.060 and
15.38.080 of the Orange Municipal Code deleting the codified fee rates from the Fire Protection
Facilities Program Areas and providing for the rates to be adjusted annually by Resolution of
City Council.
MOTION - Coontz
SECOND - Alvarez
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved that Ordinance No. 4-01 be read by title only and same was set for second reading by the
preceding vote.
10. NOTICED HEARINGS
10.1 PROPERTY ACQUISITION BY EMINENT DOMAIN, 1201 W. LA VETA AVENUE:
(A2100.0 AGR-3707)
Time set for a noticed hearing on resolution of necessity to acquire the following strip ofland for
the West La Veta Avenue Widening Project.
1201 W. La Veta Avenue
Assessor Parcel Number: 390-682-03
Property Owner:
PRG Investment Equities, a California Limited Partnership
The Director of Public Works reported this is a strip ofland varying in width from 4 feet to less
than 8 feet. In order for the Council to acquire any property, they need to make the findings
that, 1) the public interest and necessity require the acquisition of the property for the proposed
project; 2) that the proposed project is planned and located in the manner that will be most
compatible with the greatest public good and the least private injury; 3) that the property is
necessary for the proposed project; and 4) that an offer has been made to the 'owner of record of
the property pursuant to California Government Code.
Councilmember Coontz commented she was glad to see that parkway trees will be part of the
project to enhance the taking of existing landscaping.
The City Attorney explained that the property owners have basically agreed to the amount the
City has offered; but other details still need to be worked out.
No public comments on this item.
RESOLUTION NO. 9410
A Resolution of the City Council of the City of Orange declaring the public interest and
necessity of acquiring certain real property located at 1201 West La Veta Avenue and
authorizing the acquisition thereof.
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CITY COUNCIL MINUTES
February 27,2001
10. NOTICED HEARINGS(continued)
MOTION - Slater
SECOND - Coontz
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to adopt Resolution No. 9410.
10.2 PROPERTY ACQUISITION BY EMINENT DOMAIN, 1120 W. LA VETA AVENUE:
(A2100.0 AGR-3708)
Time set for a noticed hearing on resolution of necessity to acquire the following strip ofland for
the West La Veta Avenue Widening Project.
1120 W. La Veta Avenue
Assessor Parcel Number: 390-711-02
Property Owner:
CRC Real Estate and Business Corporation, a California
Corporation
The Director of Public Works reported this strip ofland varies in width between II and 14.5 feet
and is 1959 square feet along with a temporary construction easement.
No public comments on this item.
RESOLUTION NO. 9411
A Resolution of the City Council of the City of Orange declaring the public interest and
necessity of acquiring certain real property located at 1120 W. La Veta Avenue and authorizing
the acquisition thereof.
MOTION - Alvarez
SECOND - Slater
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to adopt Resolution No. 9411.
10.3 PROPERTY ACQUISITION BY EMINENT DOMAIN, 455 SOUTH MAIN STREET:
(A2100.0 AGR-3709)
Time set for a noticed hearing on resolution of necessity to acquire the following strip ofland for
the West La Veta Avenue Widening Project.
455 South Main Street
Assessor Parcel Number: 390-682-06
CHOCO Realty Company, a California Nonprofit
Corporation
Property Owner:
The Director of Public Works reported this strip of land varies in width between 4.5 and 7 feet
and is 2035 square feet.
No public comments on this item.
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CITY COUNCIL MINUTES
February 27, 2001
10. NOTICED HEARINGS (Continued)
RESOLUTION NO. 9412
A Resolution of the City Council of the City of Orange declaring the public interest and
necessity of acquiring certain real property located at 455 South Main Street and authorizing the
acquisition thereof.
MOTION - Coontz
SECOND - Alvarez
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to adopt Resolution No. 9412.
10.4 PROPERTY ACQUISITION BY EMINENT DOMAIN, 1231 W. LA VETA AVENUE:
(A2100.0 AGR-3710)
Time set for a noticed hearing on resolution of necessity to acquire the following strip ofland for
the West La Veta Avenue Widening Project.
1231 W. La Veta Avenue
Assessor Parcel Number: 390-682-08
Property Owner:
CHOCO Realty Corporation, A California Nonprofit
Corporation, as to an undivided one-half interest; and
PRG Investment Equities, L.P., A California Limited
Partnership, as to an undivided one-half interest
The Director of Public Works reported this strip of land varies in width between 4 and 4.5 feet
and is 790 square feet, along with a temporary construction easement.
No public comments on this item.
RESOLUTION NO. 9413
A Resolution of the City Council of the City of Orange declaring the public interest and
necessity of acquiring certain real property located at 1231 West La Veta Avenue and
authorizing the acquisition thereof.
MOTION - Slater
SECOND - Alvarez
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved to adopt Resolution No. 9413.
11. RECESS TO THE MEETING OF THE ORANGE REDEVELOPMENT AGENCY
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CITY COUNCIL MINUTES
February 27,2001
12.
RECESS TO CLOSED SESSION
TAPE 2280
The City Council recessed at 5:47 p.m. to a Closed Session for the following purposes:
a. Conference with Real Property Negotiator pursuant to Government Code Section
54956.8:
(NOTE: Item #1 was not discussed)
I) Property: Parcel located at 920 West La Veta Avenue
Negotiating Parties: City of Orange and R.B. Newcom Enterprises
Under Negotiation: Price and Terms of Payment
2) Property: Parcel located at Northwest Corner of Spring and McPherson
Negotiating Parties: Union Pacific Railroad and City of Orange
Under Negotiation: Price and Terms of Payment
b. Public Employment, pursuant to Government Code Section 54957.
Title: Assistant City Manager
(NOTE: This Item was not discussed)
c. Conference with Legal Counsel pursuant to Government Code Section 54956.9 - existing
litigation:
Diane Thomas v. City of Orange, et aI., Orange County Superior Court Case No.
00CC04546.
d. Conference with Legal Counsel - anticipated litigation pursuant to Government Code
Section 54956.9(b) (one potential case, Employment Solicitation Ordinance).
e. To consider and take possible action upon such other matters as are orally announced by
the City Attorney, City Manager, or City Council prior to such recess unless the motion
to recess indicates any of the matters will not be considered in Closed Session.
7:00 P.M. SESSION
ANNOUNCEMENTS - Councilman Alvarez introduced Timothy Salas, and his father Ed
Salas, and announced the establishment of the Timothy Salas Trust Fund. Timothy is 10 years
old and was diagnosed with a brain tumor last year. He is currently undergoing radiation and
chemo therapy. The Trust Fund was established to collect donations to help defer costs and will
be used specifically for medial and education expenses. The Fund has been set up at the
Washington Mutual Bank at 615 E. 1 st Street, Tustin, CA; or donations can be sent in care of
Mike Alvarez at 360 S. Glassell, Orange.
13.
PUBLIC COMMENTS
(C2500.N)
Mark Burkhardt, 3447 E. Ruth Place, Chairman of the McPherson Neighborhood Preservation
Committee, presented a petition from the Committee in opposition to the development of the
railroad easement located south of Chapman A venue to La Veta A venue. They support a
bike/walking path along the street and not behind their homes. He also read a letter form Mr.
David Hepp objecting to the development of a trail on the railroad property.
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CITY COUNCIL MINUTES
February 27, 2001
14. PUBLIC HEARINGS
14.1 WATER SERVICES RATES
TAPE 2750
(C2500.P)
Time set for a public hearing to consider the adoption of specified rates, fees and charges for
water usage and services. Water rates have not been revised since 1993 and water related fees
and user charges have not been revised since 1990. The proposed ordinance will make changes
to existing rates, fees, and user charges so that revenues will match expenses and adequate
reserves will be maintained within the framework of a seven year plan prepared by municipal
consultant Hilton Farnkopf and Hobson. A water rate increase of 9% per year for the next three
years is recommended. Inequities within the current water rate structure will be adjusted and
charges will be more appropriately apportioned to individual customers. In addition to the
recommended changes to fees and user charges, an indexing method is proposed for water rate
adjustments for those operating expenses determined by other agencies and utilities.
STAFF REPORT
The Director of Public Works reported water rates have not been revised since 1993 and water
related fees and user charges have not been revised since 1990. A recent study was conducted
and report prepared by municipal consultant Hilton Farnkopf and Hobson. The major goals of
this study were to meet revenue requirements, establish rate equities, and promote water
conservation. Various alternatives were reviewed with the goal to maintain a 25% fund balance.
The findings of the study concluded with a recommendation for a 9% rate increase for the next
three years, an adjustment of the inequities within the current rate structure and a proposed
indexing method for future pass-through increases.
He reviewed the current rates and operating expenditures noting that pass-through costs represent
58% of the operating expenditures. Pass-through costs are determined by other agencies and
utilities and are specifically limited to four areas - energy costs for electricity and natural gas,
Orange County Water District Replenishment Assessment Charges, purchased water costs and
debt service. He noted that part of the proposal states that if an increase in pass-through costs are
in excess of what is projected, the City Manger would have the authority to approve an
adjustment to the rates, up to 6%, in anyone year.
He compared the current rates and proposed charges, noting that both the current and proposed
rates are lower than the average Orange County city rates for low, medium and high use
households.
Three additional proposals include the elimination of the current $50 deposit collected on new
accounts; establishing a new delinquent penalty fee of 10% and increasing the turn-off service
charge fee from $20 to $30.
He further reported there is no proposal to transfer water fees to the General Fund. The Water
operation should be run as an enterprise account and is not supported by the General Fund.
TAPE 4150
Councilmember Coontz asked about reviewing the pass-through charges on a more regular basis,
the number of wells in the City, and the degree of the City's possessive interest in ground water.
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CITY COUNCIL MINUTES
February 27, 2001
14. PUBLIC HEARINGS (Continued)
The Director of Public Works stated there is a proposal to do an annual review of pass-through
rates because of the volatility of costs, and any changes can be brought back to Council. He
stated there are 16 wells in the City and the City is limited to pumping 75% of our water from
groundwater. Most of the groundwater basins are in the flat area of the County, and currently
there are no adjudicated water rights.
Councilmember Coontz spoke on the impQrtance of water conservation especially for
developments in East Orange, and the need to ask developers to be involved in conservation
programs.
Councilman Alvarez pointed out a letter had been received from the Apartment Association of
Orange County stating that the water rate proposal will negatively impact multi-family units.
The Director of Public Works stated they randomly polled water bills in order to make
comparisons. They found that in the smaller multi family units, the increase would range from
negative .7% for a duplex to 7.13% for a five-plex. This indicates that the smaller units are
currently subsidizing other customers in the system and would benefit from the new rate
structure. The larger complexes would see a 24% to 28% increase, indicating they have
probably been subsidized all along by other users.
MAYOR MURPHY OPENED THE PUBLIC HEARING
TAPE 4900
Matt Petteruto, Apartment Association of Orange County, requested a two week postponement
as they have not had enough time to fully review the report and the affect on apartment
buildings. The report appears to penalize multi family units with exceedingly high rate
Illcreases.
Councilmember Coontz pointed out that the Association sent letters to the Council but did not
send the letters to City staff; and it was her understanding the Association was not available to
meet with staff prior to the hearing.
Dennis Bilodeau, Cully Drive, Orange County Water District Representative, clarified that the
City could pump 100% of their water from ground water but would have to pay exceedingly
high rates to do so. In reviewing the report, he noticed it assumes that the Orange County Water
District would be raising replenishment rates by about $7 per acre foot per year. However, it is
actually closer to $8 and could be in excess of an additional $2 above that. He also questioned
the need for a surcharge for residences in unincorporated areas.
Phillip Knypstra, 5701 E. Rockinghorse Way, reviewed a spreadsheet he submitted and spoke on
promoting water conservation.
Marvin Sobel, 411 N. Meadowbrook, wanted to ensure that the rate adjustments would solve
inequities and would not affect low income residents; and spoke on water conservation.
Bob Bennyhoff, Orange Park Acres, spoke in support of the rate increase, and that it is long
overdue.
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CITY COUNCIL MINUTES
February 27, 2001
14. PUBLIC HEARINGS (Continued)
MAYOR MURPHY CLOSED THE PUBLIC HEARING
TAPE 5970
Council discussed the need for on-going reviews of rate adjustments and whether to approve an
annual plan, a 2-year plan or 3-year plan.
The Director of Public Works reported this is part ofa larger 7 year financial plan with a current
proposal for just the first 3 years. At the end of the first 3 years, another 3 year proposal will be
brought back at another public hearing. However, the Council would be able to bring this back
for a public hearing at any time if the need arises. A long range plan will establish stability and
predictability for long range financial planning and give the City a basis upon which to project.
Also, the administrative costs of preparing a rate structure report every year would add to the
overall costs. With regard to the indexing model, it is being proposed in order to react quickly to
uncontrollable costs - but only in the 4 areas discussed.
The Director of Public Works also pointed out that this has been very much a team effort - that
the Finance Department has been very involved and will continue to be involved in all future
reviews.
Councilman Slater congratulated staff on a great job and agreed with the idea that they have to
plan in advance as long as there are annual reviews. He wished the Apartment Association had
made more of an effort to meet with City staff, but can probably still do that before the final
reading of the Ordinance.
Councilman Alvarez stated that with the oversights in place, he did not have a problem with a
long range plan.
Councilmember Coontz suggested this could be subject to an annual review during the budget
process.
Mayor Murphy stated they have to make sure they are meeting revenue requirements and pointed
out the affect this has on all City services. He supports the equity issue as there is a wide range
of housing and business types and a one-rate scenario is outdated.
Council discussed the fact that as long as there are annual reports, a 3 year plan would be
sufficient. It was also suggested that between the first and second readings of the Ordinance the
Apartment Association meet with City staff.
TAPE #2
The City Attorney suggested the following additional wording for the proposed Ordinance: The
following sentence be added to Paragraph 2: "Provided that the Director of Public Works shall
report annually to the City Council prior to any annual increase approved by this Ordinance."
He proposed the following sentence be added to Paragraph 3: "However, prior to
implementation, at a regularly scheduled meeting, the City Manager shall prepare a report to the
City Council identifYing the proposed pass through rates and the need therefore."
PAGE 15
CITY COUNCIL MINUTES
February 27, 2001
14. PUBLIC HEARINGS (Continued)
ORDINANCE NO. 5-01 (FIRST READING)
An Ordinance of the City Council of the City of Orange amending and revising the Master
Schedule of Fees and Charges to adopt new water rates and new water fees and charges.
MOTION - Slater
SECOND - Coontz
AYES - Slater, Alvarez, Mayor Murphy, Coontz
Moved that Ordinance No. 5-01 be read by title only and same was set for second reading by the
preceding vote, with the following additional language: Paragraph 2 - Provided that the Director
of Public Works shall report annually to the City Council prior to any annual increase approved
by this Ordinance; and Paragraph 3 - However, prior to implementation, at a regularly
scheduled meeting, the City Manager shall prepare a report to the City Council identifYing the
proposed pass through and the need therefore.
15. PLANNING AND ENVIRONMENT - None.
16. ADJOURNMENT
MOTION - Alvarez
SECOND - Murphy
AYES - Slater, Alvarez, Mayor Murphy, Coontz
The City Council adjourned at 9: 10 p.m. in memory of Connie Chestnut, community volunteer.
(L~~~/A'Z
CASSANDRA J. C THCART, CMC
CITY CLERK
/Jlf~JJii
PAGE 16