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HomeMy WebLinkAboutMin 03-06-02MINUTES OF THE UKIAH CITY COUNCIL Regular Meeting Wednesday, March 6, 2002 The Ukiah City Council met at a Regular Meeting on March 6, 2002, the notice for which had been legally noticed and posted, at 6:05 p.m. in the Civic Center Council Chambers, 300 Seminary Avenue, Ukiah, California. Roll was taken and the following Councilmembers were present: Larson, Smith, Libby, Baldwin, and Mayor Ashiku. Staff present: Public Utilities Director Barnes, Community Services Director DeKnoblough, Assistant City Manager Fierro, City Manager Horsley, City Attorney Rapport, Public Works Director Steele, Planning Director Stump, and City Clerk Ulvila. SPECIAL: 6:05-6:25 p.m. INTERVIEW OF APPLICATION FOR PARKS, RECREATION & GOLF COMMISSION City Clerk Ulvila explained that applications were received from Jim Mulheren and Fredrick Koeppel prior to the deadline. However, since that time, Mr. Mulheren has submitted a letter withdrawing his application from consideration. City Councilmembers interviewed Fredrick Koeppel on various issues concerning his application for appointment to the Parks, Recreation and Golf Commission. It was noted that Mr. Koeppel had previously served on the Commission. Issues discussed included year-round programs for children and supplemental day care, budgeting for various City recreational programs, private sector involvement in funding for the swimming pool, and the possibility of establishing a regional commission comprised of citizens and local agencies to oversee valley-wide or regional multi-recreational programs. Recessed: 6:18 p.m. Reconvened: 6:30 p.m. 2. PLEDGE OF ALLEGIANCE Councilmember Baldwin led the Pledge of Allegiance. 3. COMMENDATION 3a. Commendation to Tree Volunteers Mayor Ashiku read a Commendation to the Tree Volunteers in appreciation for their dedication and service to the Ukiah community and planting trees throughout the community through a grant received by the City from California RELeaf. Jennifer Puser accepted the Commendation on behalf of RELeaf and thanked Council for recognizing their efforts. She expressed appreciation to the City for their cooperation and especially to the City's Parks staff in working with the volunteers. She provided a status report on the number of trees planted at City parks and explained that they are about half way through with their tree-planting project. She also thanked the City for planting trees along State Street. 1 PROCLAMATION Proclamation Declaring March 7-14 as Anniversary of Arbor Day Regular City Council Meeting March 6, 2002 Page 1 of 15 Mayor Ashiku read the Proclamation designating March 7-14, 2002 as the 130th anniversary celebration of Arbor Day in the City of Ukiah. City Manager Horsley advised that there has been a request that item 4b be considered next. 4. PRESENTATIONS 4b. Fairbank, Maslin, Maullin & Associates Regarding the Results of the Recently Completed Voter Opinion Survey for the City of Ukiah Public Works Director Steele explained that the Mendocino Council of Governments (MCOG) recently approved an amendment in its overall work program for this year to complete a voter opinion survey for Ukiah, Willits, Fort Bragg, Point Arena, and Mendocino County as a whole. MCOG issued a Request for Proposals and awarded a contract to Fairbank, Maslin, Maullin & Associates (FMMA) in January 2002 to prepare and conduct the survey. At MCOG's request, FMMA conducted a survey to determine whether voters in the respective jurisdictions would support a half-cent sales tax to fund transportation related projects. Phil Dow, Executive Director of MCOG, provided Council with background information concerning the survey and its results. He referred to the Pavement Management Systems (PMS) that MCOG funded which assessed various levels to the condition of the City streets. It was determined by the PMS study that all jurisdictions need additional maintenance/rehabilitation funding and that Ukiah has the best-maintained pavement system of all jurisdictions in the County. He continued with discussion of the survey in Ukiah and noted that Ukiah residents appear to be happy with the current conditions of the streets in the City. He explained the type of legal authority that cities have to impose such a tax and noted that it would take a majority vote as a special tax. One option available includes the City pursuing the tax on its own as an individual city through sales tax revenues. He also discussed the options of legislative authority through Revenue and Taxation Code and the development of a Countywide "transportation authority" through the Public Utilities Code. David Metz, consultant in charge of the transportation survey conducted by FMMA, provided an overview of the survey conducted for the City of Ukiah. The survey found that in contrast to many other areas in Mendocino County, concern for the condition of streets and roads is relatively Iow due to the fact that the condition of the City's pavement is better than in other parts of the County. At the same time, there was a high concern about the economy and jobs in Ukiah. While there is support for a half-cent transportation sales tax, it appears unlikely at this time that a two-thirds super majority of voters in Ukiah would approve such a measure. He discussed the methodology of the survey and noted that most Ukiah voters are very pleased with the direction the City is taking. He explained that for a sales tax to be viable, you need to make sure that the service that it would fund is seen as a more pressing concern than the existing amount of taxation. Regular City Council Meeting March 6, 2002 Page 2 of 15 He explained the response received about a potential ballot measure and explained that about 53% of the respondents indicated that they would vote yes, while 40% indicated they would vote no. Given that the measure needs 67% to pass, it appears that the measure would fall short of those standards. He explained the percentage strategy further. In response to an inquiry by Councilmember Larson, Mr. Metz confirmed the importance of obtaining support of community organizations. Mr. Dow discussed the PMS and how the City has made efforts to improve its road conditions through the use of MCOG funding and its General Fund. He explained that state funding has decreased and in the short term, there will not be enough funds from the state or MCOG for local cities. He suggested that Ukiah might want to consider refocusing a ballot measure on other transportation issues in the Ukiah area. In order to gain additional support the City should devise additional wording with regard to how the City would allocate those funds. Councilmember Larson explained that the City Manager prepared a short list of expenditures that the City has made over the past five years out of the General Fund. In the past five years the City has spent over $900,000 out of the General Fund to supplement the gas tax and LTF funds that are dedicated to streets maintenance. The City put into reserve $600,000 last year for special projects. One aspect that the survey doesn't address is the question of if the City decided to discontinue spending General Fund money and not be able to maintain streets to degree in which has been accustomed to, would the voters be more inclined to support a sales tax dedicated to street maintenance. He felt those factors misrepresent the ability to continue with the level of success the City has had and its not addressed in the survey. 4. PRESENTATIONS 4a. Jim Whalen, Assistant General Manager of the Northern California Power Agency, Re_cl_arding the Proposed Debt Restructuring for the NCPA Hydroelectric Project Public Utilities Director Barnes explained that the hydroelectric (hydro) participants, members of the Northern California Power Agency (NCPA), are proposing to possibly refund some bonds that will become callable very shortly. Jim Whalen, Assistant General Manager for the NCPA, explained that the purpose of the presentation is to provide Council with information about an opportunity that NCPA has to refund some bonds in 2002. There is an opportunity this year to have some significant savings by refunding those bonds. The total savings to all project participants from doing this over the life of the bonds is about $18 million. Ukiah has about a 2% share in the project, or about $370,000. He explained that Ukiah pays its share of the debt service on the project and its share is approximately $300,000 per year. NCPA is considering refunding two types of bonds: a 2012 term bond and a 2023 bond. Alex Burnett, Public Financial Management (PFM), discussed NCPA Finance Committee's goal of maximizing both savings and flexibility. Given the current savings, the Finance Committee has focused on Fixed Rate Bonds and an Interest Rate Swap. He discussed Regular City Council Meeting March 6, 2002 Page 3 of 15 borrowing costs and financial alternatives. An Interest Rate Swap is a term for a mechanism widely used in financial markets today and comprises a two-step process in order to reflect the refunding. The result is a fixed rate obligation. The first step would consist of NCPA issuing variable rate bonds. Simultaneously to that, NCPA would execute an agreement with a third party and under that agreement (the swap) it would form the basis for an interest rate exchange. This means that the counter party would pay a variable rate to NCPA, which they would pay the variable rate on the bond in exchange for NCPA paying a fixed rate. It is this exchange mechanism that results in NCPA paying a fixed rate. He explained that there are certain considerations associated with this mechanism. There is a variable payment risk in that the basis of the strategy is that the variable rate you receive will be equal to the variable rate you pay. The way they mitigate that risk is by using a very high index to built in a level of conservatism. There are some ancillary fees that are factored into the respective savings. Councilmember Libby posed several questions with regard to refinancing of a debt. Discussion followed between Councilmember Libby, Mr. Burnett, and Mr. Whalen with regard to the refunding of the bonds, rate swaps, variable rates, fixed rates, and fees associated with the refinancing of the bonds. "If I referred to the refundings and called them refinancings, would I be accurate in my terminology?" and Mr. Burnett answered, "Yes, refunding is refinancing". Mr. Burnett explained that the interest rate swap is the structure by which the refinancing takes place. This mechanism is solely for the purposes of refinancing outstanding debt. He stated that, subject to the other provisions and considerations such as making sure this variable rate is sufficient to offset the other one, making sure they use very highly rated institutions, and the posting of collateral against their obligation to a third party, he felt PFM is very comfortable recommending the refunding with appropriate mitigations associated with the refunding. He noted that the fees associated with bonds usually average about 1%-2% of the size of the refunding that is being taken out. He noted that those fees are paid out of proceeds and are reflected in the annual debt service payments. Discussion continued with regard to the history of refinancing of the hydroelectric plants. Mayor Ashiku explained that with all the fees associated with refinancing, in the final analysis there is a potential $18 million savings for the Agency and $300,000 potentially for the City of Ukiah over the duration of the bond. 5. APPROVAL OF MINUTES 5a. Regular Meeting of January 16, 2002 -Clarification City Clerk Ulvila advised that at the last City Council meeting, Council directed staff to listen to the tape recording of the January 16, 2002 meeting to clarify statements made by Ukiah attorney David Nelson on page 7 of the draft minutes. The City Clerk, City Manager, and Planning Director reviewed the transcript of the meeting and recommend that the second to last sentence in the second paragraph of Mr. Nelson's comments be deleted from the minutes. Regular City Council Meeting March 6, 2002 Page 4 of 15 City Manager Horsley further explained that Mr. Nelson's statements in the draft minutes presented at the previous meeting were correct, however, one would need to hear the entire paragraph to understand that he was stating the negative sense instead of the positive and that's why it didn't look like something he would say. M/S Larson/Baldwin approving the Regular Meeting Minutes of January 16, 2002, as amended, carried by the following roll call vote: AYES: Councilmembers Larson, Libby, Baldwin and Mayor Ashiku. NOES: None. ABSENT: None. ABSTAIN' Councilmember Smith. 5. APPROVAL OF MINUTES 5b. Regular Meetin~j of February 20, 2002 City Clerk Ulvila advised that the footer on the minutes should be changed from February 6 to February 20, 2002. M/S Libby/Larson approving the Regular Meeting Minutes of February 20, 2002, as amended; carried by the following roll call vote: AYES: Councilmembers Larson, Libby, Baldwin, and Mayor Ashiku. NOES' None. ABSENT: None. ABSTAIN: Councilmember Smith. 6. RIGHT TO APPEAL DECISION Mayor Ashiku read the appeal process. 7. CONSENT CALENDAR M/S Smith/Larson approving items a through g of the Consent Calendar as follows: a. Awarded Bid for Annual Chlorine Products Contract to Pioneer Americas, LLC for the Sum of $79.49 for 150 lbs. Cylinders and $334.90 for One-Ton Cylinders; b. Awarded Bid for Liquid Ferric Chlorine to KEMIRON Companies, Inc. for the Sum of $374.85 per Dry Ton; c. Authorized the Mayor to Execute Lease No. DACWO5-1-01-618, Relating to the Lake Mendocino Hydroelectric Project; d. Received Notification to City Council Regarding the Emergency Repair of a Boiler at the Wastewater Treatment Plant by Reliance Enterprises in the Amount of $5,498.69; e. Awarded Bid to Kennedy/Jenks Engineers to Develop an Urban Water Management Plan for an Amount Not to Exceed $15,000; f. Received Notification to City Council Regarding Purchase of Three Ambulance Gurneys from Stryker EMS in the Amount of $8,851.20; g. Awarded Bid for Riverside Park Fencing Project to R.W. Murray, Inc. (A-Z Construction) in the Amount of $48,180. Motion carried by the following roll call vote: AYES' Councilmembers Larson, Smith, Libby, Baldwin and Mayor Ashiku. NOES' None. ABSENT: None. ABSTAIN: None. 8. AUDIENCE COMMENTS ON NON-AGENDA ITEMS James Mulheren, Ukiah, addressed Council with regard to cigarette smoking in businesses in the City of Ukiah. He has observed workers in the Hampton Inn smoking in Regular City Council Meeting March 6, 2002 Page 5 of 15 the building and it has come to his attention that the 711 Club allows its patrons to smoke. He expressed concern for young children in car seats that ride in cars in which their parents smoke. He suggested Council enact an ordinance prohibiting smoking in cars where children are riding. City Manager Horsley explained that the Mendocino County Health Department has jurisdiction over smoking violations and she will contact them about the situation. 1 UNFINISHED BUSINESS Consideration of Ballot Measures for November 2002 Election City Manager Horsley referred to MCOG's report regarding another alternative for a transportation authority. The last date for submission of a ballot measure is August 9th and she felt it important for Council to discuss various options. It also allows staff adequate time to research and provide additional information to Council. 7:58 p.m.: Mayor Ashiku left meeting. 8:00 p.m.: Mayor Ashiku returned to meeting. Phil Dow, Executive Director of MCOG, explained that there was discussion at the Board of Supervisors meeting yesterday concerning the mechanism by which a sales tax for transportation could be imposed. He discussed the method whereby the City would establish, by Ordinance, a special use tax and would need to go through the election process to obtain a super-majority vote for passage. Another mechanism permits the imposition of up to a one-cent sales tax by an authority. The authority could be established by the Board of Supervisors and would need to create an "expenditure plan" which describes the methodology and type of projects that would be funded with the revenues derived. That expenditure plan would need to be approved by the Board of Supervisors and a majority of the Ukiah City Council. MCOG envisions the needs of Ukiah, with regard to maintenance and rehabilitation of City streets, would be best approached if the City sought a legislative authority to allow the City additional capacity. MCOG proposes to invite the City Managers and Mayors to attend the MCOG Executive Committee meeting on April 1 It was noted by City Attorney Rapport that under the Brown Act, members of the Ukiah City Council could attend the meeting if it's an open and public meeting. Chris Brown, Air Quality Planner with the Mendocino County Air Quality Management District, spoke to Council with regard to emissions generated by school buses. With a 20% match locally, the state would provide 80% of the cost of the school bus. He recommended 5% of the proposed funding be dedicated toward school bus replacement. Richard Shoemaker, MCOG Board Member, explained that it is a good concept to have everyone together to discuss issues. He discussed the timeline, dealing with CEQA and obtaining support from other agencies/organizations. It was his opinion that an authority is the best way to go, however, it may be difficult for the voters to understand such a complicated issue. If the City does not participate, then the County Board of Supervisors most likely would not participate either. Regular City Council Meeting March 6, 2002 Page 6 of 15 Councilmember Baldwin recommended that the Palace Hotel should be submitted for a referendum to the voters with regard to the City's investment of local, state, or federal funds for planning or development. Discussion continued with regard to the April 1st meeting and it was the consensus of Council to encourage as much participation as possible. It was suggested that Council formulate questions in advance of the meeting and that the matter could be agendized at a subsequent Council meeting for further discussion. Councilmember Libby initiated discussion concerning the voters' perception that this may be another tax in light of the recent measures presented at the March election. Councilmember Baldwin was of the opinion that sales tax is a regressive type of tax and harms the poorest people the most. He opposed such a measure unless bikeways were included in the measure. Councilmember Libby advised that politicians are held in contempt when they don't listen to their constituents and their priorities. Councilmember Baldwin recommended a referendum or advisory measure be presented to the voters with regard to the City setting aside a small percentage of General Fund money for open space acquisition for trails. Mayor Ashiku recommended that funding for a skate park should also be considered and discussed. City Attorney Rapport explained that an advisory measure is another option to an initiative. It was the consensus of Council that a list of proposed ballot measures be brought back to Council for further review and discussion. 8:34 p.m.: Recessed. 8:45 p.m.: Reconvened. 9. UNFINISHED BUSINESS 9a. Discussion with Property_ Owner Regarding the Palace Hotel Eladia Laines-Ganulin, president of Questex and owner of the Palace Hotel, thanked Council and staff for working with her in a pro-active way concerning the Palace Hotel. She introduced Mr. Lee Rosenthall, redevelopment expert, who has been hired to assist her in assessing what should be done with the Palace Hotel. Mr. Lee Rosenthall explained that his firm has represented a large number of redevelopment agencies in the state and has expertise in preservation of buildings. He explained that Ms. Ganulin hired him to review the Palace Hotel Reuse Study (Reuse Study) and as an economic consultant, provide a specific proposal that would be presented Regular City Council Meeting March 6, 2002 Page 7 of 15 to the City of Ukiah at a later date. When asked by Mayor Ashiku about the timeframe for submitting this proposal, Ms. Ganulin advised they anticipate it being completed within 60 to 90 days. Mr. Rosenthall noted that the Reuse Study suggests that local resources could be contributed toward the project. It was his assessment of the report that, in order to make the project economically feasible, it would require the City's participation. Upon questioning by Councilmember Libby with regard to when the hotel was purchased and the intentions of the owners, Ms. Ganulin advised that it was purchased 12 years ago. She explained that she it has always been their intention to rehabilitate (rehab) or restore the building. There is a problem concerning the large amount of square footage of the structure. She is still excited about moving forward with the project and has retained Mr. Rosenthall to provide a practical assessment and review of the Reuse Study. Councilmember Libby noted that a seismic study needs to be done for the building and with that, the cost for renovations would increase. She inquired if they are looking for public money for the renovation project. Mr. Rosenthall explained that the cost for rehabilitation has not been determined. It is estimated that the cost for the seismic retrofit would be about $4.5 million. He responded to questioning by Councilmember Libby with regard to what they would do if no money were available from the City, by stating that if the seismic retrofit should cost between $3 to $5 million, it would not be economically feasible to pursue this project. He stated that demolishing the building is not being considered at this time. Councilmember Smith discussed the project being risky unless there is 100% occupancy and discussed the potential for retail businesses on the lower floor. Mr. Rosenthall explained that the Reuse Study contemplates that the project would be completed in phases. The goal is to make the project economically feasible for the City and the owner. The City may want to contribute and it would need to be determined how that could be accomplished. Councilmember Smith noted that upon listening to other constituents and considering the long period in which the building has been vacant, he does not want to spend any more public money on it. Councilmember Baldwin reminded Council that they have provided grants for fa(;ade improvements to other local businesses. It was his opinion that Council needs to decide what it wants in the downtown area, and if the owner is sincerely interested, not only in making a profit, restoring the Palace Hotel would be good for the downtown. Mayor Ashiku inquired as to what has kept Ms. Ganulin from proceeding with a plan for the Palace Hotel. Regular City Council Meeting March 6, 2002 Page 8 of 15 Ms. Ganulin explained that during the first five years, they were in litigation over the ownership of the Palace Hotel. She discussed working with previous City Manager Chuck Rough on the project and the lack of cooperation. It was her opinion that the project has to be in partnership with the City and the Palace Hotel uses need to reflect the historical aspect of the downtown area. She was happy when approached about the Reuse Study and envisioned the building operating and providing vitality to the downtown. Mayor Ashiku discussed his service on the City Council and Planning Commission over the past six years and how the Palace Hotel has been decaying during that time. He expressed his frustration with an absentee landlord who has not been pro-active with solving the problems associated with the building. He explained that he has heard repeatedly from members of the community that they do not want the City to pursue the project any further nor allocate additional public funds towards its rehabilitation. It was his opinion that the building is beyond repair and that it is time for the owner to be decisive in order to take the project forward. He urged Ms. Ganulin to look at pulling the project together on her own to make it work and then present her plan to the City Council. He inquired if the property is on the market. Ms. Ganulin advised that the property is not on the market at this time. Councilmember Smith discussed the issue concerning parking and inquired if parking would be included in their plans. Ms. Ganulin explained that there should be an allocated parking area considering the large amount of square footage contained in the building. They will address this matter when making their proposal to the City. Mary Lindley, Ukiah, described the exterior condition of the Palace Hotel and felt that people in Ukiah have been insulted by the owners' neglect of such an eyesore and lack of caring for the structure. She urged Council to establish a timeline and to take action on behalf of the citizens of Ukiah. She recommended the building be demolished and that the brick be saved, and later sold as either commemorative bricks or used for a new building. Ailene Brown, Marketing Officer representing the Savings Bank of Mendocino County, explained that they have viewed the great despair of the Palace Hotel over the years and that the owners have not been responsive to the community's needs, nor have they been good neighbors. She felt the Reuse Study was done because the City paid for it and there should be a monetary limit in which the City should invest in the project. Judy Pruden, Ukiah, discussed funding programs available through the National Trust Organization and that the City could be the lead agency for grants. Dave Hull, Ukiah property and business owner, was of the opinion that the City should not subsidize the restoration of the Palace Hotel. Ms. Ganulin explained that the eyesore situation has been an issue for her. She discussed the improvements they have made to the building and the hiring of Seizer Realty Regular City Council Meeting March 6, 2002 Page 9 of 15 as the property manager. She continued to discuss vandalism to the property and felt badly that neighbors have to look at the building. Mayor Ashiku expressed his appreciation for her responsiveness to the building; however, it has been an ongoing problem. He stated it might be in her best interest to secure someone to be present in the building in order to prevent vandalism. He advised that he is looking forward to Ms. Ganulin's proposal and encouraged her to work closely with City staff. He discussed the City's lack of money for continued funding of the project. Councilmember Libby stated that she hopes Ms. Ganulin will also look at what would become of the property if the building were to be demolished. She did not think it feasible for rehabilitation. Councilmember Smith recommended that the owners provide a specific date in which to respond back to Council. Mr. Rosethall suggested that May 15, 2002 be set for them to present their proposal to Council. 10. NEW BUSINESS 10a. Adoption of Resolution Making Appointment to the Parks, Recreation, and Golf Commission City Clerk Ulvila advised Mr. Koeppel was interviewed prior to this meeting for the vacancy on the Parks, Recreation, and Golf Commission. It is Council's policy that the nominations for Commission vacancies be rotated among Councilmembers. Councilmember Libby is designated to provide the first nomination. M/S Libby/Smith nominating Fredrick Koeppel as the "at-large member" to the Parks, Recreation, and Golf Commission; carried by the following roll call vote: AYES: Councilmembers Larson, Smith, Libby, Baldwin, and Mayor Ashiku. NOES: None. ABSENT: None. ABSTAIN: None. M/S Larson/Smith adopting Resolution 2002-30, making appointment to the Parks, Recreation, and Golf Commission of Fredrick Koeppel to fill an unexpired term of office; carried by the following roll call vote: AYES: Councilmembers Larson, Smith, Libby, Baldwin, and Mayor Ashiku. NOES: None. ABSENT: None. ABSTAIN: None. 10. NEW BUSINESS 10b. Ukiah Senior Center Status Up-date- Councilmember Larson Councilmember Larson explained that he is a member of the Board of the Ukiah Senior Citizens Center and there have been discussions over the last year regarding the status of the Center. The situation at the Senior Center has been reported extensively in the local newspaper and he has no new information at this time. Ms. Bells, Executive Director of the Ukiah Senior Center, discussed the current financial situation at the Center and that in the past, many agencies were allowed to use their facility at no charge. It has been her goal to bring the Center into compliance and the need to Regular City Council Meeting March 6, 2002 Page 10 of 15 bring revenue into the Center to offset expenses. City Manager Horsley discussed Plowshares taking over the Meals on Wheels program. She recommended that due to the accounting situation at the Senior Center, and since Plowshares is willing to take over the Meals on Wheels program, that Council may want to consider allocating funds to assist Plowshares in this effort only in the interim. Councilmember Larson explained that the Senior Center has been struggling with accounting issues for over a year and he noted the difficulties in accessing financial records. He stated that at the next Senior Center Board meeting, he would propose that the Center open its books to other agencies. The Center has received a conditional offer of funding and ongoing support to restructure and plan for the Center. One of the conditions of the funding is that money be allocated toward a consultant to work with the Board and staff. It was the consensus of Council for staff to bring a proposal back to Council at the next meeting with regard to allocating $4,000 to Plowshares' for the Meals on Wheels program. 10. NEW BUSINESS 10c. Authorize the City of Ukiah's Commissioner to the Northern California Power Agency to Vote to Participate in the Proposed Refunding of the Hydroelectric Project Debt Mayor Ashiku advised that the Northern California Power Agency (NCPA) has $514,780,000 in bonds outstanding for the hydroelectric project and approximately $95,000,000 of the bonds is refundable this year. At today's interest rates it is possible to refund the bonds at a lower interest rate such that future hydroelectric project debt service costs to project participants are lowered. Public Utilities Director Barnes explained that the refunding would be similar to the past refunding, except that the bonds would be refunded with a variable interest rate. The participants would then enter into an agreement with a third party to swap the variable rate for a fixed interest rate. He discussed three options available to the City. It was his opinion that if a financially strong third party participates in the interest rate swap, as described in the presentation by NCPA; risks for this type of refunding would be very Iow. He recommended that Council direct its Commissioner to vote to participate in the refunding as outlined in Option #1. Discussion followed concerning the refinancing, interest rates, and the length of the financing. Councilmember Smith noted that at the NCPA meeting last week, it appeared that the members were supportive of the venture. M/S Smith/Baldwin authorizing the City of Ukiah's participation in the Hydroelectric Project Debt Restructuring for Option #1. Further discussion followed with regard to staff's recommendation of Option #1. Councilmember Libby: 'S'~~ asking a yes vote on a $95 million refinance. This is not Regular City Council Meeting March 6, 2002 Page 11 of 15 the first refinance. It is yet another refinancing. Refinancing and more investment are a way of life with the utilities, and these are points of major concern for me. Every refinancing is sold to the City as if it was a money saver, but it rarely is. There are usually upfront fees and right around the corner is always another investment. Our utility investment are way out of hand. I'm concerned we could be a train waiting to wreck. We need to put on the brakes. I would like to see us move away from the way things have been done. Sometimes things done at NCPA are right for others but not right for us. What is good for Palo Alto or Roseville may not be good for Ukiah. I am going to case a "no" vote. This isn't about a single refinancing. It is about a continual patter of refinancing, coupled with more investments that are burying our ratepayers. I would like to see a change of direction in our thinking". Director Barnes responded to questioning by Council and explained that typically, existing bonds can be refunded twice and then they have to be called. The City would not be adding any additional debt. There are some transactional fees but they have been deducted from the potential savings. The purpose of refinancing is to reduce the amount of payments the City makes and the interest rates for debt service. Motion carried by the following roll call vote: AYES: Councilmembers Larson, Smith, Baldwin and Mayor Ashiku. NOES: Councilmember Libby. ABSENT: None. ABSTAIN: None. 10. NEW BUSINESS l Od. Introduction of Ordinance Amending Ukiah City Code to Adopt Special Conditions on Extending Electric Service to Hard to Serve Areas City Attorney Rapport explained that the recent approval of the Hull/Piffero subdivision in the western hills provides the immediate stimulus for this ordinance. The owners plan to sell the five lots to separate, unrelated buyers and would prefer that each owner's use of electricity be separately metered and that each owner have independent responsibility for their separate electric service. City Staff felt this could be an on-going issue and a policy should be developed to provide flexibility in the rules. The proposed ordinance amends the City Code to authorize the City Manager to make the subdivision owners retain ownership and the responsibility for maintaining electrical distribution facilities within the subdivision that will provide electricity to an electric meter. Discussion followed between staff and Council related to the wording of the proposed Ordinance. It was noted by City Attorney Rapport that the purpose of the proposed Ordinance is to allow the City more flexibility and to protect the City's interest. Councilmember Baldwin referred to the wording of "may impose" and questioned its meaning as stipulated in the proposed Ordinance. Considerable discussion ensued between City Attorney Rapport and Council with regard to the use of terms such as "may", "shall", and "should". M/S Ashiku/Libby introducing Ordinance by title only. Regular City Council Meeting March 6, 2002 Page 12 of 15 M/S Ashiku/Libby to end debate, carried by the following roll call vote: AYES: Councilmembers Larson, Smith, Libby, and Mayor Ashiku. NOES: Councilmember Baldwin. ABSENT: None. ABSTAIN: None. Motion regarding introduction of the Ordinance by title only, carried by the following roll call vote: AYES: Councilmembers Smith, Libby, and Mayor Ashiku. NOES: Councilmembers Larson and Baldwin. ABSENT: None. ABSTAIN: None. City Clerk Ulvila read the title of the Ordinance. M/S Ashiku/Libby introducing Ordinance adding Article 6 to Chapter 7 of Division 4 of the Ukiah City Code establishing special rules for electrical service to "hard to serve areas", carried by the following roll call vote: AYES: Councilmembers Smith, Libby, and Mayor Ashiku. NOES: Councilmembers Larson and Baldwin. ABSENT: None. ABSTAIN: None. 10. NEW BUSINESS 10e. Discussion and Implementation Direction Regarding Proposed Pocket Park and Entryway Sign on Perkins Street at the Railroad Depot Site City Manager Horsley described the site of the proposed pocket park along Perkins Street at the train depot site. North Coast Rail Authority (NCRA) staff has agreed to give the City an encroachment permit for one year. Community Services Director DeKnoblough discussed the conceptual plan for the pocket park as noted in the Staff Report. It is estimated that the landscape portion of the project will cost between $5,000 and $7,000. In addition, a monument sign will cost approximately $1,000 to $3,000 depending upon the design. No funds have been identified for this project in the current budget. Should Council wish to proceed, staff would return the item to Council with an encroachment agreement between NCRA and the City/Agency and a specific project budget. Councilmember Larson inquired as to the setback from the sidewalk for the monument sign and felt it should not obstruct the visibility for vehicles. He was of the opinion that it is a good project and should be pursued. Councilmember Baldwin preferred the park without a sign and inquired about incorporating boulders into the stream as a visual enhancement. Councilmember Smith was of the opinion that it would be appropriate to have a "Welcome to Ukiah" sign and it should be set back sufficiently from the street. Bill Randolph, representing the E-Center Fisheries Program, advised that they would be happy to work closely with the City to clean the stream. The E-Center plans to do some tree planting on the south side of the stream in order to keep the water cooler and will place materials in the stream, such a boulders, to provide diversity. City Manager Horsley explained that any plans related to the property would need to be reviewed by NCRA and their approval would need to be obtained. Staff will also work with Regular City Council Meeting March 6, 2002 Page 13 of 15 the E-Center. Mary Lindley, Ukiah, drew attention to an area near the site that might contain toxic waste. She felt Council should authorize the clean up of the creek and approve the pocket park in order to make the area more useable. Discussion continued with regard to the pocket park conceptual plan and signage. Consensus of Council directed Staff to pursue the pocket park concept. 11. COUNCIL REPORTS Councilmember Smith reported that at the last meeting of the Main Street Board they reviewed their annual dinner process and felt they need to make some changes to their budget. There has been renewed interest in the Cinco de Mayo celebration by the Hispanic community and that the event will continue. Tomorrow the Board will meet to discuss how to meet their financial shortages. He reported attending a NCPA meeting in Santa Clara on February 28th' He discussed Basin 2000 concerning pumping of water from Lake County to the geysers that is 60% complete, There was concern with the interconnection agreement expiring in March, FERC working on a five month extension, and necessary steps to operate within ISO protocols which may replace the interconnection agreement. Much concern was expressed with regard to P,G.&E.'s bankruptcy. Councilmember Larson reported attending a Skatepark Committee meeting and since the presentation to Council by high school students regarding a skatepark, other agencies have expressed interest in participating in the project. Councilmember Libby reported attending a meeting with the Chamber of Commerce and their guest speakers included Frank Mc Michael from LAFCO and Carrie Brown from the Farm Bureau. The Chamber Board is looking forward to knowing more about issues related to the City, such as water issues. She also attended a meeting for Recreation Center and they are moving forward with their project. They will be applying for a Community Development Block Grant (CDBG). Mayor Ashiku reported that he attended the Rural Communities Housing Development Corporation (RCHDC) annual meeting. RCHDC recognized Bill Howland's retirement from the chair position and commended him for is contributions to the agency. He advised that in the future should Council disagree on a particular item, they should not take it to a personal level because it seems to have a negative influence. There is a need to look at the bigger picture and at times there is a need to set aside personal objections for the common good of the City. 12. CITY MANAGER/CITY CLERK/DIRECTOR REPORTS City Clerk Ulvila reminded Council that Statements of Economic Interests, FPPC Form 700, are due on April 2, 2002 in the City Clerk's office. Regular City Council Meeting March 6, 2002 Page 14 of 15 She also discussed an invitation received from North Coast Opportunities with regard to their reading to children program and they invited Council and City employees to participate in this effort. City Manager Horsley advised that the Closed Session item has been postponed. 13. CLOSED SESSION a. G.C. §54957.6 - Conference with Labor Negotiator Employee Negotiations: Fire Unit Labor Negotiator: Candace Horsley No action taken. 14. ADJOURNMENT There being no further business, the City Council meeting was adjourned at 11:07 p.m. Marie Ulvila, City Clerk Regular City Council Meeting March 6, 2002 Page 15 of 15