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HomeMy WebLinkAboutMin 01-07-04 MINUTES OF THE UKIAH CITY COUNCIL REGULAR MEETING WEDNESDAY, JANUARY 7, 2004 The Ukiah City Council met at a Regular Meeting on January 7, 2004, the notice for which had been legally noticed and posted, at 6:30 p.m. Roll was taken and the following Councilmembers were present: Rodin, Smith, Baldwin, and Mayor Larson. Councilmember absent: Andersen. Staff present: Administrative Analyst Burck, Community Services Director DeKnoblough, Police Administrative Captain Dewey, Finance Director Elton, Wastewater Treatment Plant Supervisor Gall, Risk Manager/Budget Officer Harris, City Manager Horsley, Interim Public Utility Director Kennedy, City Attorney Rapport, Community Services Supervisor Sangiacomo, Planning Director Stump, and Deputy City Clerk UIvila. 2. PLEDGE OF ALLEGIANCE Community Services Supervisor Sage Sangiacomo led the Pledge of Allegiance. 1A-12 3. PROCLAMATION 3a. Proclamation Supporting The Martin Luther Kin.q Day Event On January 197 2004 Mayor Larson read a Proclamation in support of Martin Luther King Day Event being held on January 19, 2004 and urged all citizens to actively participate in the scheduled activities and programs to honor the memory and significant contributions of this outstanding human being. Martin Bradley accepted the Proclamation on behalf of the committee and encouraged people to attend the observance. 1A-33 4. APPROVAL OF MINUTES 4a. Regular Meeting of October 157 2003 M/S Smith/Baldwin approving the minutes of the Regular Meeting of October 15, 2003, carried by a unanimous all "AYE" voice vote of the City Council. 1A-40 4. APPROVAL OF MINUTES 4b. Re.qular Meeting of November 57 2003 City Attorney Rapport noted that on page 8, all reference to the word "major" should be changed to "measure" in the second paragraph so that the second sentence reads, "The first measure ~..._ shall be considered and approved." The second sentence in that paragraph should read, "The second measure shall be considered and approved by two-thirds majority vote." Also under the third "C" should read, "The second measure ~ form ..." with everything else remaining the same? M/S Smith/Baldwin approving the minutes of the Regular Meeting of November 5, 2003, as amended, and carried by a unanimous all "AYE" voice vote of the City Council. 1A-44 Regular City Council Meeting January 7, 2004 Page 1 of 16 4. APPROVAL OF MINUTES 4a. Regular Meeting of November 21~ 2003 Mayor Larson advised that it should be noted on the first page that Councilmember Baldwin was absent from meeting. Councilmember Rodin drew attention to page 3, the latter part of the firs sentence should read, "Except as otherwise provided herein, the proceeds shall be used to supplement and not supplant General Fund revenues budgeted for public safety services." She also inquired about the blank dollar amount in the same paragraph. Discussion followed regarding the above mentioned paragraph. City Attorney Rapport determined that the sentence should read, "Except as otherwise provided herein, the amount of general fund revenues budgeted in any future fiscal year will be less than the amount that was budgeted in the 2003/2004 fiscal year." M/S Smith/Rodin approving the minutes of the Regular Meeting of November 21,2003, as amended, carried by an all "AYE" voice vote, with Councilmember Baldwin abstaining. 5. RIGHT TO APPEAL DECISION Mayor Larson read the appeal process. 1A-90 6. CONSENT CALENDAR M/S Baldwin/Smith approving item "a" through "e" of the Consent Calendar as follows: a. Received Notification To Council Regarding Purchase Of 9,000 Ft. Of #2 AWG Aluminum, 15KV, EPR Insulated Single Conductor, Jacketed Concentric Neutral, Underground Cable To The Okonite Company In The Amount Of $9,134.87; b. Received Report To City Council Regarding The Purchase Of T-Shirts For The Youth Basketball Program From Ocean Breezes In The Amount Of $5,122.39; c. Adopted Resolution No. 2004-15 Amending Appendix To City Conflict Of Interest Code; d. Awarded Purchase Of Sodium Hydroxide To Basic Chemical Solutions LLC In The Amount Of $20,748; e. Approved Budget Amendment Of $22,173 To City Of Ukiah Water System Improvement Project For Additional Costs To The Project. Motion carried by the following roll call vote: AYES: Councilmembers Rodin, Smith, Baldwin, and Mayor Larson. NOES: None. ABSTAIN: None. ABSENT: Councilmember Andersen. 1A-104 7. AUDIENCE COMMENTS ON NON-AGENDA ITEMS Martin Bradley updated the City Council on some things that are occurring regarding Ukiah Observatory Park. The Friends of the Observatory continue to work with City staff on the progress of developing the Park and restoration of some of the historical structures at the Observatory. In December 2003, he received a correspondence by Regular City Council Meeting January 7, 2004 Page 2 of 16 email, which he read aloud. He noted that they have also been in touch with someone from the U.S. Embassy in Uzbekistan where there is a similar observatory. An amateur astronomer from San Francisco is coming up this weekend to visit and his wife had actually worked in Kitab at the observatory in Uzbekistan, formerly the Soviet Union. He felt that Observatory Park is a unique feature of the City of Ukiah and he was happy that the City is preserving and protecting the property. Uzbekistan is located 39 degrees north of Afghanistan. City Manager Horsley explained that one of the things that staff is talking about with regard to tourism, are special one-day tours of the unique places in Mendocino County. She felt that Observatory Park would be an ideal place to place on the list of unique places for tourists to visit in Mendocino County. Mayor Larson explained that this may present the City with an opportunity to promote a relationship with this city, as well as the city in Italy and Japan. It would be mutually beneficial to everyone. Mr. Bradley explained that the City Council approved to move ahead in cooperation with international relations in December 2001. John Mayfield voiced his opposition to the proposed sales tax increase ballot measure. He felt that housing needs is a real problem in Ukiah. He felt the increase in sales tax would make existing City businesses less competitive. Councilmember Rodin suggested that another perspective for attracting businesses to the community occurs when a new business is looking to come to a community where there are multiple break-ins and not enough police officers to patrol the downtown, might discourage a business as well. 1A-216 8. 8a. PUBLIC HEARING Discussion And Consideration Of A Proposal For A Progressive Residential Connection Fee And The Use Of Redevelopment Agency Funds To Reduce The Impact Of Connection Fees For Affordable Housin? Developments Interim Public Utilities Director Kennedy explained that, as directed by Council, staff is returning with some recommendations for a progressive residential connection fee and a recommendation for how the City may reduce the impact of the higher connection fee to affordable housing projects. At the Council's meeting on November 5, 2003, Council voted two to three against consideration of an ordinance that would have increased the current connection fee of $1,000 to $8,759 and directed staff to address the two issues. Administrative Analyst/Project Engineer Burck discussed the connection fees for affordable housing developments and provided Council information about how other communities address this issue. For Ukiah, she felt that the most promising source of funds to reduce the potential impact of increased connection fees for affordable housing is the Redevelopment Agency. Twenty percent (20%) of the annual tax increment Regular City Council Meeting January 7, 2004 Page 3 of 16 revenue to the Redevelopment Agency must be expended for Iow and moderate- income housing. It was her recommendation that funds from the Redevelopment Agency be used to off set some part or the entire connection fee for affordable housing developments, depending on what was determined to be necessary at that time. Staff is not suggesting that it be limited to 20%, but rather dependant on the needs and the amount of funds available at that time. She advised that the method of determining connection fees used by various cities and towns throughout California were researched, and two basic methods were found: 1) a single connection fee that applies to all residential units regardless of the volume of sewage, or 2) a progressive residential connection fee based on the number of bedrooms within those residential living units. She went on to discuss how they assign a value to the different size houses. Interim Public Utilities Director Kennedy discussed what connection fees are used for. Because of development, the collection system as well as the wastewater treatment plant, needs to be expanded because of that development. The quantity of sewage flow from a residential structure is dependant on the number of persons residing in the structure. The one feature that can indicate how many people may reside in a structure is the number of bedrooms. He discussed the City of Ukiah's establishment of a Sewer Service Unit (SSU) that is defined as a single unit of sewer discharge having characteristics of flow, BCD, and suspended solids equivalent to that generated and discharged by typical single family homes. Using the premise behind Ukiah's SSU, it is recommended that any progressive connection fee established for residential structures be indexed to the average base flow generated by 2.5 people. He discussed the chart included in the Staff Report. He advised that staff would propose that through the building permit process, any structure that has an added bedroom, there be a connection fee of 0.4 of the $8,700 is applied to that permit. In conclusion, staff is recommending that Council accept staff's recommendation for a progressive residential connection fee based on the number of bedrooms and indexed to the base utilized for the adopted Sewer Service Unit, and to direct staff to prepare an ordinance for the Council's consideration that incorporated this progressive connection fee for residential structures and acknowledge that the use of Redevelopment Agency funds to reduce connection fees for affordable housing projects is appropriate Councilmember Rodin inquired if there are an average number of bedrooms for new homes. She thought that if it is typical to have one and two bedroom homes, and we have mostly three bedrooms, then it may be too expensive. Manager Burck explained that she discussed the matter with Planning Director Stump. Planning Director Stump explained that during the past few years, there is no typical development, although the most common residential development is apartments and the typical apartment consists of two bedrooms. Overall, there would be two bedroom units on the average as the most common residential unit in the City of Ukiah. Regular City Council Meeting January 7, 2004 Page 4 of 16 Councilmember Baldwin asked what would happen if this City Council refused to support the proposed increases and who would end up paying for the project if the City did not radically increase the fees on new developments? Director Kennedy explained that it would depend on whether or not the City does a no- growth project. If the City wants to provide for expansion of future development, the current rate payers would have to pay for it. The $1,000 per connection fee which is currently applied would not pay for the $20 million that is needed for the expansion portion of this project. The total project would cost $60 million, $40 million is assigned to permit and facility rehabilitation, and $20 million is assigned toward the expansion portion that is needed for the next 20 years. Councilmember Rodin inquired if the City Council would have to take this matter under consideration and set a policy about what it would be for all future affordable housing, and how would that work? Manager Burck stated that she has no idea of how that would work. Staff was just looking for a source of funds to off set those connection fees for affordable housing. City Manager Horsley explained that the Redevelopment Agency could set policy or the City Council could allow the committee that reviews the applications to make those decisions. Staff will return to Council with several scenarios. The current proposal includes direction from Council to staff to create the ordinance. Mayor Larson inquired if it was staff's conclusion that to build in any kind of affordable housing discount into the fee structure wouldn't be appropriate. City Attorney Rapport explained that he didn't think staff had talked about that. He explained that the connection fees can't exceed the cost of providing the service which the fee is charged. Proposition 218 would prohibit subsidizing one type of service by another one. Staff would need to base the charge to a particular person on the cost to provide the service to that specific person. You couldn't subsidize one class of customer by charging another class of customer more. Staff does not think Prop 218 is going to apply to these connection fees. He noted that the issue is currently pending before the State Supreme Court. A decision is expected fairly soon. The Court of Appeal held that Prop 218 did not apply to the connection fees. If Prop 218 does not apply, there may be more flexibility as far as how the rates could be structured. City Manager Horsley explained that the fee for Iow and moderate income housing will be the same fee except the Redevelopment Agency, through the Low and Moderate Income Housing Authority, will subsidize the fee. Mayor Larson was under the assumption that the function of the affordable housing set aside funds in the Redevelopment Agency is to provide Iow income housing. City Attorney Rapport explained that could be a legitimate use for set aside funding. Regular City Council Meeting January 7, 2004 Page 5 of 16 Mayor Larson explained that the rate structure for the expansion of the wastewater treatment plant is based on usage and does not have anything to do with income status. Public Hearing Opened: 7:11 p.m. Those speaking against the proposed fee increase were: Andy Nichol, Jeff Trouette, and John Mayfield. Those speaking to the issue were: Sheridan Malone and Bruce Foster. Topics discussed by members of the audience centered on the need to obtain more data concerning the rate increase and population growth, and not having new developments pay a higher connection fee or it will deter further development. Manager Burck advised that the 2,349 hookups were the total units' equivalent, sewer service units, over the next 20 years for the City and the Sanitation District. She explained that that the project basically can be looked at as three different aspects of the work that needs to be done at the wastewater treatment plant. One third of the project is needed for expansion to allow new customers to connect to the sewer system. One third of the plant is needed in order to bring the plant up to the standards so that the City can continue to meet the state discharge permit. Another third of the project is needed to replace old and outdated equipment that is literally falling apart. This wastewater treatment plant is almost 50 years old, which is about 20 years beyond the rated useful life of most of the structures on the site. The plant is at the end of its useful life and needs to be replaced. Typically what is done is that the new connections are asked to pay for that part of the project that is being done only for them. The only reason why the City is doing an expansion is to allow new customers to come onto this project. The connection fee is that charge for new customers and allows the City to expand the capacity of the plant so that it can add 2,349 equivalent sewer service units over the next 20 years within the City of Ukiah and within the Ukiah Valley Sanitation District. The other part of the project, which is approximately $44 million, has to be paid for through increased monthly user charge. Those charges will be increased to fund two-thirds of the project. The City has to increase the connection fees in order to add new capacity. If the City Council and/or the Sanitation District, because they could act independently of each other, decide not to expand the plant and not to allow new customers to come on, there would not be any increase to the connection fee because there wouldn't be any new connections. The state does not mandate new connections. They only say that if you have a discharge permit, you must comply with that permit and discharge to the level required by the State of California. The other two-thirds of this project are just to allow the City to continue to comply with its permit so that it is no in violation of the law. City Manager Horsley responded to inquiries made by Jeff Trouette by stating that the City Council asked staff to come back with information based on use of potential sewage use and plant use based on sewage. Council asked staff to return, basked on staff's review of other cities with different ways in which they took care of that question. Regular City Council Meeting January 7, 2004 Page 6 of 16 Councilmember Rodin explained that the rates are set for all future hookups so you wouldn't know ahead of time how much sewer usage there will be. It is only retrospectively that you can get the usage. The problem is to set a fee schedule for all future use and this is an attempt. Mr. Trouette thought that it is an attempt to fund future development and to expand the facility to accommodate 2,500 new hookups. Councilmember Rodin stated that it is an attempt to do that based on what the estimated use of the sewer system would be and to use the number of bedrooms as a way to quantify it. Mr. Trouette was of the belief that the City needs to fund some of its capital improvement from the water bills. The City needs to make the hookup fee reasonable to attract business and there is a need to add some capital improvement money into the monthly sewer fee which would put money back into capital improvement. Director Kennedy stated that $40 million of the $60 million will be financed by the monthly increase in the monthly user fee and the remaining $20 million, which is the expansion portion, will be funded only by the connection fee. It is the fee that is paid when the building permit is pulled for the new structure. Sheridan Malone explained that government can't charge more than it cost for a hookup. The actual water going in is certainly relative to the water going out, whether it goes into the storm drain or into the sewer. That is what's fair for everybody on a particular property. That is something that the City has the data on. Reality is that whether the water goes down the sewer to the treatment plant or groundwater intrusion to the sewer plant, or the river, bears wear and tear on the pipes, there is the cost of the infrastructure, and none of that gets any cheaper, including the staff. There is a need to adjust it every year to prepare to repair and maintain it, but also to replace it as some point, and he thought that should be reflected in the fees. It was of the opinion that the amount of the fee should be based on how much is metered. John Mayfield discussed the growth rate and thought that the sewer plant needs to be upgraded and expanded. However, he challenged the engineers and the City Council to look at what the real dwelling rate is in two-bedroom apartments. It was his assumption that the growth rate will only be about 1% per year. He felt that further information needs to be obtained through the census data and determine how many people live in the apartments. He thought they are over-populated. The research should be conducted before the City Council makes a decision. He recommended research be conducted regarding the growth rate that is being projected. He thought the City's consultants need to go back to the drawing board and the City Council needs to take a real hard look at this thing before it is taken to the Sanitation District. He thought it is a mistake to try to separate out the monthly fees and try to parcel it off. He encouraged Council to look at it as a package all at once, rather than splitting it out to bar the public from looking at it. Regular City Council Meeting January 7, 2004 Page 7 of 16 Bruce Foster advised that he was appalled to learn that the life expectancy of the sewer plant was 30 years. He was under the assumption that the City's sewer rates are based on the average of the December and January water bill, and thought it was a reasonable system. He is surprised that the City is not checking customer's water usage that consistently to come up with those reasonable numbers. City Manager Horsley explained that it is the difference between commercial and residential. Mr. Foster recommended that the usage be measured because it is reasonable and fair. He noted that we still use fresh water to flush toilets and why aren't they reusing gray water and working with systems that create incentives for engineers and creatively thinking people to come up with solutions to that. There is no reason for using clear water to flush a toilet because it's a lot of water. He encouraged the City Council to start thinking in the long term basis. Public Hearing Closed: 7:42 p.m. Councilmember Smith noted that there was some discussion at a Sanitation District meeting recently about the estimate of $60 million and that there had been an alternate estimate that was much lower. He was asked the question about how come, if there is a much lower estimate, why aren't we using it as opposed to the $60 million. City Manager Horsley explained that the reason is because it was just an estimate versus an actual amount. Director Kennedy explained that the document was a planning document that was performed by Kennedy-Jenks. The purpose of that document was to show the Regional Water Quality Control Board that the City of Ukiah had a plan to continue to meeting its waste discharge requirements. At that time, in approximately 1998, we started exceeding some of the City's permit requirements. The operator was required by law to inform Regional Water Quality Control Board of those exceedances. Once the letter was submitted, the City had to submit a plan of how it would correct that. The City paid about $50,000 for that plan and a lot of it was based on some work that Kennedy-Jenks may have completed in 1993. It was a planning document. City Manager Horsley explained that the difference between the two was that Kennedy-Jenks had not gone out and completed a feasibility study of the plant itself and what was needed. That was the difference. One was just a ball park estimate and the other contained actual costs. When staff received the bids they were varied until staff completed the analysis of what kind of enhancements we could do in order to provide interim hookups until the plant was improved. They couldn't do that until someone had been awarded the contract to go forward with the design. They were all estimates of potential things that could be done until the selected consultant was able to review everything and complete the test and develop a final design. Manager Burck was of the opinion that the most fundamental flaw of the earlier report was that it made the assumption that the capacity existing dry weather flow capacity of Regular City Council Meeting January 7, 2004 Page 8 of 16 the plant was 2.8 million gallons a day. When the City's consultants actually evaluated the process capability of the plant, it came in at a 2.37 million gallons a day. Therefore, everything that they were recommending was based on a false assumption to begin with. A lot of the recommendations aren't valid because there was no factual basis for making those recommendations to begin with. You have to know where you are at first, to know where you need to go. The City didn't have that information four years ago when that report was published. Councilmember Rodin noted that Council previously had discussed the 1% growth rate and she expressed her interest in the pressure that is building up to develop and also the 30 year lifespan of the plant, and would the City need to do this again in 30 years and expand the plant more. Director Kennedy explained that there are various components of the facility with different life spans. He noted that certain chemicals used at the plant are corrosive to the equipment and structure. He explained that normally, the user fee will include a component that will replace some of these items. However, the current rate of $16.51 per month does not cover it. There is pressure to keep the monthly fee as Iow as possible. City Manager Horsley explained that in the early 1990's, staff presented Council with a proposed increase and Council voted against the increase at that time. There is a need to have a project or a plan in place in order to raise the fees. There was money put aside every year in the City and the Sanitation District for capital improvement projects. Currently, there is about $6 million in the Sanitation District. She was of the opinion that the extent of the improvements weren't anticipated. Manager Burck explained that staff was trying to obtain the most accurate projection of the growth that the City would want to use to know how many additional units could be expected over the next 20 years. Staff based that growth rate on what they had seen in the past and based it on the historic growth rate over a 20 year period, and the flows that were coming into the plant. As an advantage, it is an actual number. It also takes into account, not just what is happening in the City, but what is happening in the Sanitation District. One of the real challenges in trying to determine the number of new units that are going to be needed, is trying to pin down the population of the Sanitation District. It's easy to obtain census data for the City. The other challenge with the Sanitation is that the City cannot forecast which areas might become part of the Sanitation District. By basing the capacity on the 1%, it's a reasonable number, based on historical trend which has been seen in sewage flow over the past 20 years, it takes into account not only growth within the City but growth within a Sanitation District, and it allows the City to build without over-building. She explained that if the City were to over build, you would have incurred more capital costs that you needed to and you have facilities that are empty and deteriorating, that you are not using It seem to staff that it's a more prudent course to use historic increase in sewage volume over the 20 year time limit to build what we need but try not to build more than we need. Regular City Council Meeting January 7, 2004 Page 9 of 16 M/S Baldwin/Smith to reopen public hearing, carried by a unanimous voice vote of the Council to reopen the Public Hearing to public comment. Public Hearing Reopened: 7:47 p.m. John Mayfield reminded Council of what is happened in the plumbing industry in the last 15 years in that they now use in all new construction, Iow flow toilets. The contribution in gallonage from a home is about 40% less than it was 20 years ago. There are some very fundamental flaws in the assumption. He felt that some of the assumptions made by the City's consultants/engineers are flawed. Sheridan Malone advised that all of the new hookups in the valley, particularly with sewer, are using new sewer pipes and there is not much ground water intrusion on those pipes during wet weather. He noted on the west side of the City there are many old sewer pipes that are adding millions of gallons to the treatment plant and they need to be replaced, too. It's not all centered on new development. Mayor Larson explained that the factor Mr. Malone spoke about was taken into account by the engineering consultants in their analysis. Public Hearing Closed: 7:55 p.m. City Manager Horsley stated that the Inland Water and Power Commission and the Army Corp of Engineer are going through this same debate because of the issue of raising the dam and how much water is going to be needed. They are looking at a study that was done in 1990 and it shows a very slow rate of growth and there was a real controversy over whether it was a true figure and reality. They are also struggling with that same issue because it is difficult to determine exactly what it will be. There is the thought that it will be higher because of the push north. Councilmember Baldwin noted that as long as the Sanitation District pays its fair share of the expansion project, it doesn't need to adopt the same structure that the City is considering adopting. If the majority of the single family dwelling units are going to constructed in the Sanitation District as opposed to the City, this structure might be more relevant inside the City limits than inside the Sanitation District. If the City were to assume that the growth pressures as so tremendous and the City does need 4,000 or 5,000 units, rather than 2,500 units, he inquired if that capacity add millions of dollars to the cost of the project. Manager Burck concurred with Councilmember Baldwin's observation. She explained that the City is trying to avoid adding more money to the cost of the project. She reiterated that the City wants to build what it needs, but it should be careful to not build more than what it needs. She noted that there are competing factors. There is a movement from the Bay Area to Northern California. If you raise the connection fees up to a certain point, that in itself will act as a governor to growth. Another factor to consider of importance is the water supply. It was her belief that it will have an impact on growth as well. Reclaimed water would be another investment that would need to be made. Until the City has a reclaimed water system that allows it to augment its potable Regular City Council Meeting January 7, 2004 Page 10 of 16 water supply, the City has to recognize that it is a limited resource and that, in itself, could affect the amount of growth that takes place in the next 20 years. Councilmember Baldwin inquired if it is conceivable that the City would reach the 2,500 unit allowed by the expansion. If water were found, the City could reach that total in eight or nine years. Manager Burck responded that it is possible, however, it doesn't seem probably based on what has occurred in the past. City Manager Horsley explained that land zoning would need to be changed dramatically. Councilmember Baldwin inquired if it is conceivable that the City may be back in a few years looking for a way to expand capacity again. Manager Burck responded that it is conceivable, however, she doubted it. One of the hallmarks of Brown and Caldwell's design is to plan for future expansion. They don't do a project and then see it as an isolated event without any regard to what may happen in the future to that plant. When they design any type of plant improvement, they are always looking toward the future. Inherant in their design is the ability to expand it at a reduced cost of what the City will be incurring now, with a plant that is not designed to be easily expanded or easily improved. Councilmember Baldwin noted that with the lining of sewers, it is conceivable that the technology could improve and it may be a way of expanding capacity as well. Manager Burck felt that it is a deficiency that is in that industry. She didn't know why because there are a number of companies that manufacture all sorts of different products for rehabilitating sewer system. However, none of them seem to be addressing the key problem or issue. With the fact that America's infrastructure, as a whole, is decaying, that pressure of the marketplace will bring new technology quickly to market that will address that issue. Councilmember Baldwin inquired if it would be possible to tweek the fees for the one bedroom versus the three bedroom project, and if we wanted to keep some progressivity in the rates, and if we think that the majority of the new construction is going to be two and three bedrooms, and there would be a small minority of one bedrooms, He inquired if it would be conceivable to tweek the rate to reduce the cost for a three bedroom unit and increase the cost for a one bedroom unit. Director Kennedy stated that he based his proposal on average flow of 207. City Manager Horsley explained that the formula could be changed and change the assumptions of the number of people per unit and that would change the rate. Councilmember Rodin suggested that the formula should be weighted so that there isn't such a disparity. Regular City Council Meeting January 7, 2004 Page 11 of 16 City Manager Horsley explained that if that's what Council likes, staff will come back with something similar. Councilmember Baldwin concurred with Councilmember Rodin in that there should be less disparity between the units. Director Kennedy noted that Council could look at Vacaville's rate structure and inquired if that is what the Council wants. Councilmember Rodin and Baldwin responded affirmatively. Councilmember Baldwin noted that it does seem like the number of one bedroom apartments would be significantly less and we don't want to over collect. Manager Burck stated that the City wants to be as accurate and equitable as can be. Mayor Larson referred to the Vacaville formula and inquired if it would increase the basic connection fee. There was discussion of the Vacaville rate schedule. Manager Burck stated that it is her belief that staff can make an adjustment to the Vacaville schedule to achieve more of what the City Council is looking for. City Manager Horsley explained that it is Council's direction to leave the schedule the way it is where two bedrooms is $8,759 but reduce the reduction it for one bedroom and reduce the increase for three bedroom units. She will work on the rate schedule with Staff. Mayor Larson stated that the growth rate is not an issue here because they are talking about increasing the capacity at the plant for 2,400 units, regardless of whether they are all built next year or at a later date. We are basing this on 20 years of growth rate records. Whenever the City gets to the 2,400 mark, whenever that is. He inquired if any jurisdictions have used metered use as a basis for collecting capital improvement variable fees, current users versus new users having a different rate. He provided the scenario of keeping the connection fees at $1,000 and then base the rates on current user rates being based on a certain formula that takes their metered water usage and use that to pay for the rebuilding of the plant for current capacity. Then new users would pay the same or a modestly higher connection fee, and a different formula would be calibrated for new users. Assuming the City bonds this project, they will be paid off over an extended period of time. The money is not due right away but could be paid out over a period of time. If it could be reflected in a two-tiered rate system, one that reflects the new connections paying for the new capacity over a period of time. He felt that what a lot of the audience was expressing tonight was the impact of a very high connection fee on builders being willing to invest in the development of new housing. Director Kennedy envisioned a surcharge applied to those new homes. Regular City Council Meeting January 7, 2004 Page 12 of 16 Discussion followed with regard to purchasing a new home and amortizing the connection fee with the mortgage. Councilmember Rodin recommended staff to come back with a revised progressive fee schedules as discussed by staff and Council at this meeting. Councilmember Baldwin voiced his support of the recommended action with the proviso that a progressive fee structure be adjusted to reduce the amount for three- bedroom units above the two-bedroom units and thereby increase the cost for a one- bedroom unit (similar to the Vacaville schedule). City Manager Horsley explained that staff was planning to bring the ordinance back to Council for consideration at that time. Councilmember Smith requested that some of the concerns expressed by Mr. Mayfield in terms of the projections that they be reviewed and studies again to make sure the appropriate numbers are being used for the growth rate. Mayor Larson recommended that staff look into a different meter based formula for amortizing these capital improvements. City Attorney Rapport explained that there are two different issues to consider and they should be discussed seperately so as not to be confused: 1) One issue is whether Council wants to have some kind of two-tiered rate structure to pay for some of the capital improvement costs, and 2) A separate issue is how Council wants that rate structure to work; whether it is based on water useage or something else. Council should be addressing direction to staff with regard to folding some of the capital costs into a two-tiered rate structure. Councilmember Smith liked the concept of how that is derived at, needs to be studied and brought back to Council for consideration. Mayor Larson explained that he was referring to the capital expansion fees. He would like to see an analysis of what kid of flexability we could build into that to possibly at the builders/owerns' option, defer some of the costs. Councilmember Rodin inquired as to the percentage of the increase. Director Kennedy estimated that for $40 million at 3% over a 20 year period, there would be a payment of $53.7 million. Spreading that over the estimated existing connections of 9,800, it would be $22.72 above the current monthly fee. Discussion followed with regard to a $20 million project and how the fee would be calculated. City Manager Horsley inquired if Council wants staff to figure that out and present the calculations when they come back? Regular City Council Meeting January 7, 2004 Page 13 of 16 Recessed: 8:25 p.m. Reconvened: 8:35 p.m. M/S Baldwin/Rodin to continue item 10c, under Unfinished Business, "Discussion regarding light pollution in the Ukiah Valley- Vice-Mayor Baldwin" to the first meeting in February, and carried by unanimous consent. 2A- UNFINISHED BUSINESS Adoption Of Ordinance Amendin~ The Airc)ort Industrial Park Planned Development Ordinance By Establishing New Regulations For The 32-Acre Mixed-Use Area Planning Director Stump advised that on December 17, 2003, the City Council conducted a public hearing and voted 4-0 (Andersen absent) to adopt a Mitigated Negative Declaration and introduce an Ordinance amending the Airport Industrial Park Planning Development by establishing new regulations for the 32-acre Light Manufacturing/Mixed-Use area. M/S Smith/Rodin adopting Ordinance No. 1051, an Ordinance of the City Council of the City of Ukiah amending the Airport Industrial Park Planned Development; carried by the following roll call vote: AYES: Councilmembers Rodin, Smith, Baldwin, and Mayor Larson. NOES: None. ABSTAIN: None. ABSENT: CouncilmemberAndersen. 10. NEW BUSINESS 10a. Adoption of Resolution Requesting Local Agency Formation Commission Approval Of A Contract To Provide Water To The RCHDC Affordable Housing Project Via An Out-Of-Service Area Agreement Planning Director Stump advised that on November 5, 2003, the City Council agreed in concept to provide water service to a Rural Communities Housing Development Corporation (RCHDC) affordable housing project on a parcel outside the City Limits. Approx 150 units on 8 acres of affordable housing. Some typos on page 2, exhibit D should b4e referencre to le. Bill Randolph, Emmett Jones, Bill English M/S Smith/Rodin with additon of: with provisio of wording, add G on page 2-=3, cutomer sjhall submit plans for project ot city for approvla and shall develop property in accordance with plans by the city and other revisions as noted by staff adopting Resolution 2004-16, A Resolution of application by the City of Ukiah requesting the Local Agency Formation Commission of Mendocino County to undertake proceedings to approve an Out-Of-Area Water Service Agreement between the City of Ukiah and rural Communities Housing Development Corporation for APN 002-101-17, carried by the following roll call vote: AYES: Councilmembers Rodin, Smith, Baldwin, and Mayor Larson. NOES: None. ABSTAIN: None. ABSENT: CouncilmemberAndersen. 10. NEW BUSINESS Regular City Council Meeting January 7, 2004 Page 14 of 16 10b. Authorization For The City Manager To Sign And Submit A Joint City/County Grant Pre-Application Proposal To The Federal Economic Development Administration For Infrastructure Improvements Relate(~ To The Orchard Avenue Brid~e Project Planning Director Stump advised that City Staff has been working with Madeline Holkamp, Executive Director of the Economic Development Finance Corporation, to prepare and submit a grant pre-application proposal to the Federal Economic Development Administration (EDA) for infrastructure improvements related to the orchard Avenue bridge project. He discussed the funding that the EDA grant would provide at an estimated total cost of the improvements of 1 - 1.5 million dollars. Bill Randolph briefly spoke to Council regarding the matter. M/S Smith/Rodin authorizing the City Manager to sign and submit a joint City/County grant pre-application proposal to the Federal Economic Development Administration for infrastructure improvements related to the Orchard Avenue bridge project. Discussion Motion carried by the following roll call vote: AYES: Councilmembers Rodin, Smith, Baldwin, and Mayor Larson. NOES: None. ABSTAIN: None. ABSENT: Councilmember Andersen. 10. NEW BUSINESS 10c. Discussion Regarding Light Pollution In The Ukiah Valley-Vice-Mayor Baldwin Councilmember Baldwin advised that Susan Knopf provided a demonstration of shielded down lighting, unshielded lighting, spot lighting, and partially shielded lighting. 10. NEW BUSINESS 10d. Selection of Councilmembers For Meeting With Regional Water Quality Control Board City Manager Horsley advised that wld like one or two councilmembers to go with them M/S determining that Councilmembers may be able to attend the RWQCB's workshop on February 3 and 4, 2004, carried by the following roll call vote: AYES: Councilmembers Rodin, Smith, Baldwin, and Mayor Larson. NOES: None. ABSTAIN: None. ABSENT: CouncilmemberAndersen. 11. COUNCIL REPORTS Councilmember Smith reported he will be in Sacramento during the next Council meeting to attend a NCPA workshop. Councilmember Andersen may also be attending the workshop. Regular City Council Meeting January 7, 2004 Page 15 of 16 12. CITY MANGER/CITY CLERK REPORTS City Manager Horsley inquired as to which Councilmembers are planning to attend the Chamber of Commerce installation dinner. Councilmember Smith advised that he planned to attend. 13. CLOSED SESSION No action taken. 14. ADJOURNMENT There being no further business, the City Council meeting was adjourned at 9:47 p.m. Marie Ulvila, Deputy City Clerk Regular City Council Meeting January 7, 2004 Page 16 of 16