HomeMy WebLinkAboutMinutes - August 3, 2005LODI CITY COUNCIL
REGULAR CITY COUNCIL MEETING
CARNEGIE FORUM, 305 WEST PINE STREET
WEDNESDAY, AUGUST 3, 2005
C-1 CALL TO ORDER / ROLL CALL
The City Council Closed Session meeting of August 3, 2005, was called to order by Mayor Pro
Tempore Hitchcock at 6:32 p.m.
Present: Council Members — Hansen, Hitchcock, Johnson, Mounce, and Mayor Beckman (arrived
at 6:36 p.m.)
Absent: Council Members — None
Also Present: City Manager King, City Attorney Schwabauer, and City Clerk Blackston
C-2 ANNOUNCEMENT OF CLOSED SESSION
a) Actual litigation: Government Code §54956.9; two applications; Kristine Wisecarver v. City
of Lodi; WCAB case numbers WCK 0071616 and WCK 0071617
b) Actual litigation: Government Code §54956.9(a); one case; People of the State of
California: and the City of Lodi. California v. M & P Investments, et al.; United States
District Court, Eastern District of California, Case No. CIV -S-00-2441 FCD JFM
C) Actual litigation: Government Code §54956.9(a); one case; Hartford Accident and Indemnity
Company, et al. v. City of Lodi, et al., Superior Court, County of San Francisco, Case
No. 323658
d) Conference with legal counsel — anticipated litigation — significant exposure to litigation
pursuant to subdivision (b) of Section 54956.9; one case; pursuant to Government Code
§54956.9(b)(3)(A) facts, due to not being known to potential plaintiffs, shall not be disclosed
e) Actual litigation: Government Code §54956.9(a); one case; Fireman's Fund Insurance
Company v. City of Lodi, et al.. United States District Court, Eastern District of California
Case No. CIV -S-98-1489 FCD JFM
f) Actual litigation: Government Code §54956.9(a); one case; City of Lodi v. Michael C.
Donovan, an individual: Envision Law Group. LLP, et al., San Joaquin County Superior
Court, Case No. CV025569
C-3 ADJOURN TO CLOSED SESSION
At 6:32 p.m., Mayor Pro Tempore Hitchcock adjourned the meeting to a Closed Session to discuss
the above matters.
The Closed Session adjourned at 7:00 p.m.
C-4 RETURN TO OPEN SESSION / DISCLOSURE OF ACTION
At 7:05 p.m., Mayor Beckman reconvened the City Council meeting, and City Attorney Schwabauer
disclosed that there was no reportable action taken in closed session.
A. CALL TO ORDER / ROLL CALL
The Regular City Council meeting of August 3, 2005, was called to order by Mayor Beckman at
7:05 p.m.
Present: Council Members — Hansen, Hitchcock, Johnson, Mounce, and Mayor Beckman
Absent: Council Members — None
Also Present: City Manager King, City Attorney Schwabauer, and City Clerk Blackston
B. INVOCATION
The invocation was given by Chaplain Barbara Taylor, Lodi Police Chaplains.
Continued August 3, 2005
C. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Mayor Beckman.
D. AWARDS / PROCLAMATIONS / PRESENTATIONS
D-1 Awards — None
D-2 Proclamations — None
D-3 Presentations — None
E. CONSENT CALENDAR
In accordance with the report and recommendation of the City Manager, Council, on motion of
Mayor Pro Tempore Hitchcock, Beckman second, unanimously approved the following items
hereinafter set forth except those otherwise noted:
E-1 Claims were approved in the amount of $7,952,966.83.
E-2 The minutes of May 11, 2005 (Special Meeting), May 18, 2005 (Regular Meeting), July 12,
2005 (Shirtsleeve Session), and July 19, 2005 (Shirtsleeve Session) were approved as
written.
E-3 Received report of sale of surplus equipment in the amount of $38,947.
E-4 Received report on emergency air conditioning equipment replacement at Municipal Service
Center Public Works office.
E-5 Approved the plans and specifications and authorized advertisement for bids for Turner
Road Pump Station Modifications, Turner Road Underpass.
E-6 Approved the plans, drawings, and specifications and authorized advertisement for bids for
the reconstruction of Killelea Substation, the addition of 60kV power circuit breakers at
Industrial Substation, and procurement of two 60/12kV power transformers.
E-7 Adopted Resolution No. 2005-150 approving specifications, authorizing advertisement for
bids for elevator services, and authorizing the City Manager to award or reject the contract
up to $13,500.
E-8 Adopted Resolution No. 2005-151 awarding the purchase of 20,000 feet of #1/0 medium -
voltage ethylene propylene rubber insulated underground conductor to the low bidder, The
Okonite Company, of San Ramon, CA, in the amount of $32,109.50.
E-9 "Adopt resolution awarding the request for proposal for the installation and monitoring of an
alarm system at Blakely Park pool complex, 1050 S. Stockton Street, to Matson Alarm
Co., Inc., of Fresno, CA ($13,530)" was removed from the Consent Calendar and
discussed following approval of the Consent Calendar.
E-10 Approved the donation of retired gymnastic equipment to the Stockton Rotary.
E-11 Adopted Resolution No. 2005-152 accepting the improvements at 1745 West Kettleman
Lane.
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Continued August 3, 2005
E-12 Adopted Resolution No. 2005-153 authorizing the City Manager to execute a two-year
extension option for fiscal years 2006-07 and 2007-08) of transit operations contract with
MV Public Transportation, Inc.
E-13 Adopted Resolution No. 2005-154 approving the temporary storm drainage basin agreement
for Westgate Shopping Center and directed the City Manager and City Clerk to execute the
agreement on behalf of the City.
E-14 "Transmit Draft Short Range Transit Plan and Proposed Service Enhancements and
Reductions to Council, open public comment period, and set public hearing to adopt Short
Range Transit Plan and Service Enhancements and Reductions for September 7, 2005"
was removed from the Consent Calendar and discussed and acted upon following
approval of the Consent Calendar.
E-15 Adopted Resolution No. 2005-155 appropriating funds for Central Valley Regional Water
Quality Control Board PCE/TCE oversight costs for fiscal year 2005-06 in the amount of
$32,000.
E-16 Adopted Resolution No. 2005-156 authorizing the renewal of IBM Operating System
Software for AS400 from Logical Design, Inc., of Rancho Cordova, CA, in the amount of
$31,598.00, and granted the City Manager authority to approve subsequent annual
renewals.
ACTION ON ITEMS REMOVED FROM THE CONSENT CALENDAR
E-9 "Adopt resolution awarding the request for proposal for the installation and monitoring of an
alarm system at Blakely Park pool complex, 1050 S. Stockton Street, to Matson Alarm
Co., Inc., of Fresno, CA ($13,530)"
Council Member Johnson noted that the bid received was twice as high as the engineer's
estimate and asked for an explanation.
Steve Dutra, Parks Superintendent, explained that the estimate was based on doing
minimal trenching and placing the alarm wiring through the tubing of the chain link fence.
The sole bidder would not install the alarm through the fence; however, he does not have
trenching equipment or staff, so that aspect of the project would be done by a
subcontractor.
In answer to Council Member Hansen, Mr. Dutra stated that the alarm is needed because
there is evidence that people are accessing the fenced area after hours. The alarm system
will also have sensors in areas that house electrical motors so that water does not damage
the motors.
Council Member Johnson and Mayor Pro Tempore Hitchcock were in favor of bidding the
project as originally planned (i.e. install alarm through fencing material) to save half the
cost.
Council Member Hansen felt that the cost of $13,000 plus $40 a month should be justified
in terms of problems that have been occurring; however, from the staff report ghan, there
evidently has not been any damage to the facility taking place.
Mayor Pro Tempore Hitchcock commented that some schools have installed cameras,
which have deterred or, in some cases, eliminated vandalism. She agreed with Mr. Hansen
that the expense for an alarm does not seem justified if there are no specific problems
occurring.
Continued August 3, 2005
City Manager King suggested that this item be pulled from the agenda to allow staff time to
further discuss the matter and return to Council at a future date with alternative
recommendations.
MOTION / VOTE:
The City Council, on motion of Council Member Hansen, Beckman second, unanimously
pulled the item from the agenda.
E-14 "Transmit Draft Short Range Transit Plan and Proposed Service Enhancements and
Reductions to Council, open public comment period, and set public hearing to adopt Short
Range Transit Plan and Service Enhancements and Reductions for September 7, 2005"
NOTE. This item was inadvertently pulled from the Consent Calendar by Wali Akbar who
wished to speak on Item I-1.
MOTION / VOTE:
The City Council, on motion of Council Member Hansen, Hitchcock second, unanimously
received the Draft Short Range Transit Plan and Proposed Service Enhancements and
Reductions, opened the public comment period, and set public hearing to adopt Short
Range Transit Plan and Service Enhancements and Reductions for September 7, 2005.
COMMENTS BY THE PUBLIC ON NON -AGENDA ITEMS
0o John Giovannoni, Jr. stated that his project at 2111 W. Kettleman Lane (Sunwest Professional
Center) is now complete and 100% leased. He has been unable to obtain an interim
occupancy certificate from Public Works so that his tenants can move into the building. He
explained that there are three power poles on Kettleman Lane, only one of which is on hs
property, though he is expected to pay costs associated to all three. Mr. Giovannoni asked
that he be allowed to put up the $125,000 and make improvements from that for Pacific Gas &
Electric, telephone, and cable utilities.
Council Member Hansen noted that he had spoken to Mr. Giovannoni previously and had
suggested he come to the Council meeting to address his concerns. Mr. Giovannoni had
received conflicting information from members of City staff. Mr. Hansen asked that staff work to
resolve this matter.
0o Jack Flockhart stated that there were some intersections on Lodi Avenue that were difficult to
maneuver in a wheelchair due to a gap of an inch or more on the sidewalk. He requested that
these areas be smoothed out.
00 Ed Beswick, Chairman of the Lodi Improvement Committee, stated that the National Night Out
event was excellent. While at the event, he heard six concerns from citizens, which he would
bring up at the next Committee meeting.
G. COMMENTS BY CITY COUNCIL MEMBERS ON NON -AGENDA ITEMS
0o Council Member Johnson noted that every police car was in operation during National Night Out
and the SWAT van came to one location. He asked that an update be provided on the status of
the Youth Commission, as he had heard changes had taken place from its original intended
purpose.
0o Council Member Mounce commented on the following matters:
1) She was glad to see the Killeleah Substation expansion project moving forward.
2) It had been brought to her attention that there were insufficient policies and procedures at
the Animal Shelter, which was creating difficulties for the volunteers.
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Continued August 3, 2005
3) She received a call from a resident who expressed concern regarding the high speed of
large trucks traveling on Lower Sacramento Road. She asked the Public Works Director to
look into the matter.
4) During National Night Out, she heard positive comments about Mayor Pro Tempore
Hitchcock from members of the community.
5) She had learned this evening that in Long Branch, New Jersey, the power of eminent
domain was being threatened upon owners of beach front property for redevelopment
purposes and she questioned how such property could possibly be considered "blighted."
6) During a conference last week, she and Council Member Johnson graduated from the
League of California Cities Leadership Academy. She commented that despite a Lodi
News -Sentinel article to the contrary, they did not attend the "beach party" during the
conference.
0o Council Member Hansen announced that a meeting would be taking place on September 8, at
which the S.H. Cowell Foundation would be looking at Lodi's east side neighborhood and the
Partnership for Families program for potential funding up to $2 million. He commended Police
Chief Adams for the successful National Night Out program, which had 125 neighborhood
parties this year. Mr. Hansen reported that he received a call from a businessperson in the 800
block of east Lodi Avenue who owns a repair shop. Customers drop trailers off temporarily on
the street in front of the business. Five of the trailers were recently cited for parking on the
street; although, the area is posted to allow truck parking. He asked staff to look into the
matter.
00 Mayor Pro Tempore Hitchcock reported that Lodi Unified School District began its school year
on Monday and of 32 elementary schools only three remain on year-round schedules. Ms.
Hitchcock mentioned that she attended National Night Out and rode with Police Captain
Noblett, who she stated had excellent public relations skills. She was proud of Lodi's Police
force and congratulated Chief Adams for doing a great job in succession planning. While
speaking with members of the public, she asked about the water rate increase issue and was
surprised that most understood the necessity for it and provided positive feedback. She
mentioned that Council recently received an email from a citizen complaining of weeds on
Hutchins Street at the entry into Lodi. Though she empathized with the complainant,
Ms. Hitchcock stated that it is a byproduct of budget cuts. She felt that Council Member
Johnson's earlier suggestion was a good idea, i.e. to enlist the assistance of volunteer groups
and civic clubs to adopt certain streets.
0o Council Member Johnson asked for the status of the Partnership for Families' proposal to
construct a building at Blakely Park.
Joseph Wood, Interim Community Development Director, reported that the Partnership has
preliminary designs for a stand-alone building adjacent to the Lodi Boys and Girls Club.
Relocation of the playground area would be necessary. The Parks & Recreation Commission
approved the elimination of some green space in order to accommodate the new building. He
noted that before contacting the S.H. Cowell Foundation, the Partnership had planned to apply
for Community Development Block Grant funds.
00 Mayor Beckman wished his wife, Nancy, a happy birthday.
H. COMMENTS BY THE CITY MANAGER ON NON -AGENDA ITEMS
0o City Manager King introduced Interim City Manager Jere Kersnar and reviewed his background.
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Continued August 3, 2005
PUBLIC HEARINGS
1-1 Notice thereof having been published according to law, an affidavit of which publication is on
file in the office of the City Clerk, Mayor Beckman called for the public hearing to consider
the appeal from Noor UI Akbar regarding the requirements of a Notice and Order to Repair
for the property located at 511 Alicante (APN 031-200-16).
Joseph Wood, Interim Community Development Director, reported that a single-family
dwelling exists on the property at 511 Alicante. In addition, there is a detached garage
structure with an addition to the rear that is planned for use as an extended living area of
the main dwelling. In April, the Community Development Department received a complaint
of un -permitted construction or remodeling. An inspection was conducted and a Notice and
Order to Repair was served on the property owner, Wali Akbar, who contested a number of
items on the notice. An administrative review was done and several issues were resolved.
What is being appealed to the Council are: 1) a lack of an adequate foundation around the
addition, and 2) a lack of adequate clearance four grade for the wood framing on the
structure. Mr. Wood noted that the addition was done in 1953 with a permit and was
intended for use as additional storage or a continuation of the garage space. It was later
converted to a conditioned space. Letters from the Planning Department from the 1970s
acknowledge its use as a conditioned living space, but clarified that it was not allowed to be
a separate unit. Mr. Akbar's position is that the City did not catch these deficiencies on
two instances before he became the owner; therefore, he should not be burdened with
correcting them now. It has been agreed that other items in the Notice and Order to Repair
would be corrected before the unit is occupied, as well as two or three items that were
noted during a subsequent inspection made at the property. Because of the close
proximity of the wood framing to grade, it has been required that any framing done is
replaced with pressure treated materials. The issues regarding the foundation and grade
separation are not life threatening; they are substandard conditions, and staff is willing to
defer correction for a period of time through the recordation of a notice against the property.
The conditions can then be corrected at the time the property is sold or transferred.
Mayor Pro Tempore Hitchcock asked whether there is liability associated with this now that
the Council is aware of the substandard conditions.
Mr. Wood explained that it is a situation that, over a very lengthy period time, would affect
the overall stability of the structure. He mentioned that case files can now be monitored
and calendared electronically for follow up.
City Attorney Schwabauer stated that, if a government entity fails to inspect or act, there is
a specific Government Code section that immunizes them, because the liability ultimately
flows with the property owner. He did not perceive a significant risk of liability to the City
based upon the action Mr. Wood proposes the Council take.
Hearing Opened to the Public
0o Wali Akbar stated that he bought the house in 1979 and was not aware of any code
violations. He stated that City staff has still not shown him where deterioration has
taken place. Also, he mentioned that the breezeway has existed since 1953 and
questioned why it should be changed now. Mr. Akbar felt that he should not be
penalized now because the City had failed to note deficiencies during previous
inspections. He pointed out that if the solution, as staff suggests, is to record a Notice
of Substandard Conditions, then it should have been done before.
Con
Continued August 3, 2005
Public Portion of Hearing Closed
Council Member Mounce stated that she had an opportunity to view the addition to the
garage. She was glad to hear that Mr. Akbar would be addressing the fire wall issue,
because it will protect the tenant. She noted that the structure would add to the City's
stock of affordable housing. She approved of staffs recommendation to record a Notice of
Substandard Conditions, as any future buyer of the property would then be aware of the
deficiencies.
Mayor Pro Tempore Hitchcock also expressed support for staff's recommendation.
MOTION / VOTE:
The City Council, on motion of Mayor Pro Tempore Hitchcock, Hansen second, adopted
Resolution No. 2005-157 denying the appeal of Noor UI Akbar and requiring that two
corrections to substandard housing conditions, as called for in the Notice and Order to
Repair (i.e. lack of an adequate foundation for the existing addition to the garage structure
and lack of adequate separation between earth and wood) at 511 W. Alicante Drive (APN
031-200-16), be deferred through the recordation of a Notice of Substandard Conditions with
the San Joaquin County Recorder's Office. The motion carried by the following wte:
Ayes: Council Members — Hansen, Hitchcock, Johnson, and Mayor Beckman
Noes: Council Members — Mounce
Absent: Council Members — None
J. COMMUNICATIONS
J-1 Claims filed against the City of Lodi — None
J-2 The following postings/appointments were made:
a) "Adjust term (month) expiration date for all Greater Lodi Area Youth Commission
representatives and make appointments to the Commission (Student Appointees)"
was pulled from the agenda.
J-3 Miscellaneous — None
RECESS
At 8:20 p.m., Mayor Beckman called for a recess, and the City Council meeting reconvened at 8:30
p.m.
K. REGULAR CALENDAR
K-1 "PCE/TCE water rate increase issues"
City Attorney Schwabauer reported that the State of California, through the Water Quality
Control Board of the Central Valley, has determined that the City of Lodi is liable for the
contamination of perchloroethylene (PCE) and trichloroethylene (TCE) because of the
operation of its wells and sewer system. The State has issued an order to the City
mandating that it clean up the contamination at its expense. It is a joint order that named
several other parties. He noted that if the City were to ignore the order it would be subject
to fines and a lawsuit by the State. He pointed out that it is the water citizens drink and if it
is allowed to remain contaminated it would eventually get into the water system. Mr.
Schwabauer stated that if the City does not clean it up, no one else will, and there is a risk
that current and future generations would get cancer. He noted that the City has sued a
number of parties who were deemed to be responsible for the contamination and spent
millions of dollars on lawyers in an attempt to compel them to pay for the cleanup; however,
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Continued August 3, 2005
it failed. The City spent almost as much in legal fees as the cost is to clean up the
contamination. Because the City has been determined by the State to be partially liable,
the City has no chance of recovering its attorneys' fees. He explained that the California
Regional Water Quality Control Board, the Department of Toxic Substances Control, and
the Environmental Protection Agency order others to clean up pollution — they do not have
funding for pollution remediation, nor do they offer funding to others for cleanup work.
City Manager King reported that he met with Congressman Pombo and asked whether
federal funding could be secured to assist Lodi in cleaning up the groundwater. There is
nothing available at this time that the City can count on with any certainty. There is a
possibility of some funding available through the National Water Supply Enhancement Act
that Congressman Pombo has introduced.
Mr. Schwabauer noted that a number of grant applications have come to staffs attention;
however, most have been inapplicable and many would require a great cbal of time and
effort to obtain and do not generate enough funding to make it worthwhile. He reported that
in the Central Plume the City has secured settlements valued at $7,375,000. This amount
will not pay for the entire cost of the cleanup of the Central Plume and does not recover
funding taken from the infrastructure replacement program to pay legal bills. The City has
secured a settlement in the Busy Bee plume valued at $500,000, which paid for a "pay for
performance" contract. In the Southern Plume, the City has secured a settlement of
$675,000 with the Vanderlans parties. The total Southern Plume cleanup is estimated at
$2.7 million to $3 million. There are three other parties in the Southern Plume that the City
has the ability to recover against. In the South Central Western Plume, the City has
secured an interim settlement, in which the parties are paying jointly the cost to study the
contamination further and determine the best method to clean it up. These parties have
agreed to do $130,000 worth of work. In the Northern Plume, the parties have agreed to
spend $400,000 to conduct a study. The City has secured a $9 million settlement from its
own insurance carrier. Mr. Schwabauer reported that, in total, the City has recovered
nearly $17 million. Adding past legal fees, future legal fees, the cost of the cleanup, and
calculating in the settlements — there remains $45.7 million needed.
Mayor Pro Tempore Hitchcock commented that she often hears members of the public
asking why others are not paying for the cleanup. She noted that the City spent $25 million
in an attempt to do so; however, on January 13, 2004, when the Council terminated its
former City Attorney Randall Hays and legal firm Envision Law Group, they had admitted
that the City would loose the lawsuit in court and the City would have to pay a portion of the
cleanup costs. The Municipal Environmental Response and Liability Ordinance was
overturned by the courts. She stated that the cleanup could have been done for half of the
$45.7 million now needed if the City would have accepted the original advice from former
City Attorney Bob McNatt who recommended that the City enter into mediation settlements
when this matter first became known.
Mr. Schwabauer commented that, in most cases, the businesses the City has been
dealing with were small, local businesses that did not have assets to pay for the cleanup.
In addition, almost all of their insurance policies contained an exclusion that stated, unless
the contamination was both sudden and accidental, the insurance company was not
obligated to pay.
Mr. King stated that the proposed remediation program is estimated to cost, on average, $3
million annually. The cost could be absorbed through the water and wastewater
infrastructure replacement fund; however, Mr. King felt that this would be counterproductive
because part of the reason the City is in this situation is due to leaking sewer pipes.
Another option for paying the cost would be a combination of diverting the water and
wastewater infrastructure replacements funds and absorbing some costs in the General
Fund. A third option would be solely through the General Fund. A $3 million annual cost
Continued August 3, 2005
would mean a 7% impact to the General Fund. Mr. King noted that 29 positions were held
vacant to help balance the 2005-06 budget. The General Fund is currently $5 million short
of the minimum amount of money that should be in reserve. He stated that a 7% reduction
in the General Fund could result in the following:
➢ Library — Reduction in hours from 64 to 53, as well as a 10% decrease in new library
materials;
➢ Public Works — Elimination of program to clean the downtown area and graffiti
abatement, reduction in vehicle and fleet maintenance, landscape maintenance, street
pavement maintenance, and clerical support;
➢ Fire Department — Elimination of six positions;
➢ Community Center — Cancellation of art grant program, elimination of staff for the Youth
Commission, and cancellation of the Art Hop and Celebrate American events;
➢ City Clerk — Electronic records management program would be negatively impacted
and the project to conduct in-house codification of the Lodi Municipal Code would be
terminated;
➢ City Manager — Elimination of economic development activities, delay in assistance
and follow up to citizen complaints, and a reduction in community support programs;
➢ Parks & Recreation — Special programs would be put on hold; reduction in tree
maintenance and support for School District events;
➢ Police Department — Reduction in bike patrol, traffic unit, school resource officers, and
special investigations detective.
Public Works Director Prima reiterated that the net cost of completing the groundwater
contamination remediation is $45.7 million. The amount includes 30 years of maintenance
and operation costs on the equipment that will be installed. It also takes into account the
settlements the City has received and estimates of what it anticipates to receive in the
future. Also included is reimbursement for the $12.2 million in past expenses deducted
from the water and wastewater funds. With the assistance of the financial planning firm,
Bartle Wells Associates, staff is recommending a modified, smooth, pay-as-you-go
approach with stepped in rate increases relying on the water fund to bear the cost of
PCE/TCE cleanup. A three-bedroom home customer would have a rate increase of $3.50 in
January 2006, an additional $3.50 increase in July 2006, and a third increase of $3.50 in
July 2007. An annual cost of living adjustment (based on the Consumer Price Index) would
also be included. Mr. Prima reported that PCE/TCE is in the soil as well as the
groundwater. Some buildings in the downtown area have been monitored and vapor levels
have been found that are unacceptable and need to be mitigated. In the groundwater, there
are a number of locations where samplings have found results that were thousands of times
above the standard acceptable level. The groundwater under the City is all interconnected.
Currently, none of the operating wells exceed the standard for PCE/TCE levels. Mr. Prima
briefly explained the various contamination removal methods of soil vapor extraction,
sparging, and groundwater extraction. He displayed maps that showed contamination
plume areas. He confirmed that costs related to the PCE/TCE cleanup would be tracked in
a separate fund so it could be monitored and reported to Council. A minimum of 15%
combined reserve in the water fund needs to be maintained. He showed charts of the water
fund account, as projected with and without the rate increase. Mr. Prima stated that the
most common complaint he has received is that it is unfair to charge a water rate based on
the number of bedrooms in a housing unit. He displayed charts of eight apartment units
and 16 residences with water meters, which showed a substantial variation in water usage.
In response to questions posed by Council Members, Mr. Prima reported that a number of
water meters will be purchased and installed this year. The usage will be monitored and
staff will calculate a residential metered rate for water. Since 1986, the City has been
installing services on homes that are ready to take a water meter. In 1993, the City began
charging new developments for the cost of meters and so far has collected $700,000 for this
I
Continued August 3, 2005
purpose. Services installed prior to the 1980s are not ready to take a meter and will need
to be dug up, re -plumbed, and the water meter installed — at a cost of approximately $300
for the meter and $1,200 for the connection. The connection Vork for 540 units has been
done as part of the infrastructure replacement program. If water meter implementation is
done over the course of 20 years, the City can handle the service line replacements through
the infrastructure program and charge customers only for the water meters; however, that
would be a future decision for the Council to make.
Mr. Schwabauer reported that the City borrowed $15,750,000 from Lehman Brothers and
spent the money on legal fees. The interest rate was 25%, which added up to $32 million.
The City settled with Lehman for $7.9 million, so it did not pay any interest on the loan nor
did it repay all the principle that it used. Lehman Brothers was paid from USF&G (the
City's insurance company) recoveries and $6 million of this payment is part of the net
amount of $45.7 million.
Mr. King stated that notices will be mailed this week to property owners advising them of
the public hearing on September 21 and their right to protest the proposed rate increase.
Direction is needed from the Council related to how the protest should be calculated.
In reply to Mayor Beckman, Mr. Prima reported that within the next five years staff
anticipates having a clear understanding of what the costs are going to be and will be able
to project more accurately into the future. It is hoped that the rate amount could be
adjusted downward at that time.
Mr. Schwabauer added that the resolution to approve the rate increase will include a
section stipulating that staff will report to Council every five years regarding the actual
revenues and expenses of the remediation program.
Council Member Hansen noted that the Low Income Discount program is also factored into
the water rate increase.
PUBLIC COMMENTS:
co Walter White was opposed to the inequitable practice of charging water rates according
to the number of bedrooms, rather than by actual usage. He favored charging
according to the number of people living in a home or through water meters. He felt
that revenue derived from new property taxes should pay for the contamination cleanup,
rather than ratepayers. Mr. White stated, however, that after listening to the
presentation this evening, he would not protest the water rate increase.
00 Bill Crow expressed opposition to the water rate increase. He recalled that rates were
just increased in April 2004. He believed there should be a more equitable way for
charging for water and felt that the ratepayers should not have to pay for mistakes
made by others.
00 Barbara Flockhart recalled that 20 years ago she came before Council and asked that
something be done about the Orangeburg pipe pollution on the eastside. She
explained that this type of pipe collapses and the pollution spreads. At that time, the
Council did not believe it was important and declined to take action. She did not feel
that new development in Lodi was paying its fair share. She opposed the proposed
water rate increase and believed that an increase in other services such as electricity
would soon follow.
00 Mike Mamoulelis stated that items of interest to the public should be placed at the
beginning of the City Council agendas, so that people who wish to speak do not have to
wait for extended periods of time. He felt that the City Council and other officials
should have been more vigilant about what was occurring regarding the lawsuit
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Continued August 3, 2005
undertaken by former counsel. He asked if other avenues have been fully considered to
get needed funds for the cleanup.
00 Dean Meier indicated that further analysis of funding options would be helpful and
suggested that graphs be superimposed so that each alternative could be compared.
Council Member Hansen summarized that mistakes were made, they were admitted, and
now it is time to move on. He recalled that, over the past two and a half years, the Council
has worked hard to resolve this matter. Hundreds of hours have been spent in negotiations,
court rooms, and meetings trying to find the best possible solution. A plan is now in place
to accomplish the PCE/TCE cleanup. He objected to a headline in today's Lodi News -
Sentinel that said Lodi's water rate would be one of the highest in the state in two years, as
that projection is impossible to know. He reported that Mr. Prima had written a
memorandum in 1978 that recommended Lodi consider replacing its aging sewer Ines.
Unfortunately, it was acted upon and has contributed to the difficult situation Lodi now
faces. In reference to water meters, he believed that many people would be shocked at the
amount of water they actually use because of leaking irrigation, household plumbing, etc.
Council Member Mounce expressed concern for low-income individuals. She favored a 20%
discount as well as exemptions for hardship. She felt that all ratepayers should be able to
vote on the matter.
Mr. Prima noted that in homes where bedrooms have been converted to another use, the
billing can be adjusted accordingly.
In response to Council Member Hansen's earlier statement, Mayor Pro Tempore Hitchcock
noted that she spent the last six and a half years trying to change the course being taken
and work toward resolution. She stated that, "the best way to avoid future battles is not to
rewrite history, but to remember the war."
MOTION #1:
Council Member Mounce made a motion, Beckman second, to allow property owners and
ratepayers (e.g. tenants) to protest/vote on the proposed water rate increase to be
considered on September 21, 2005.
DISCUSSION:
Council Member Hansen recalled that only property owners were allowed to submit protests
the last time this process was conducted in April 2004. There were approximately 18,000
property owners at that time. He pointed out that the base number will increase if all
ratepayers are allowed to submit protests, which makes a majority vote even more difficult
to obtain.
City Attorney Schwabauer stated that Proposition 218 is complicated, conflicted, and does
not provide adequate direction for him to determine and definitively advise Council on the
correct way to proceed. He stated that there are three directions that can be taken and all
of them are equally defensible: Accept protests from 1) property owners only, 2) all
ratepayers, or 3) per parcel (fractionalized) votes from property owners and renters.
Proposition 218 states that notices are to be sent to all persons owning real property as
shown on the last equalized assessment roll.
Council Member Hansen pointed out that if a property owner in the area of the
contamination was in favor of the rate increase to ensure the cleanup is funded and chose
not to file a written protest, but rented the property to someone against the rate increase
who did file a protest — by accepting the renter's vote it would override the property owner's
rights. He noted that homeowners pay property taxes, have an investment in the
community, and Proposition 218 specifically states that the notice is to be sent to property
owners.
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Continued August 3, 2005
In response to Council Member Johnson, Mr. Schwabauer acknowledged that, as recently
as last year, many jurisdictions would not have applied Proposition 218 to a water rate
increase; however, that view is changing due to a California Supreme Court case.
Council Member Johnson stated that because Proposition 218 is clear about sending
notices to property owners, he favored counting written protests only from them.
Mayor Beckman felt that either way of accepting protests seemed reasonable.
VOTE:
The above motion failed by the following vote:
Ayes: Council Members — Mounce and Mayor Beckman
Noes: Council Members — Hansen, Hitchcock, and Johnson
Absent: Council Members — None
MOTION # 2 / VOTE:
The City Council, on motion of Council Member Johnson, Beckman second, voted to
proceed with the Proposition 218 notice to property owners regarding the September 21,
2005 public hearing to consider proposed water rate increase and to allow only property
owners to protest/vote on the matter. The motion carried by the following vote:
Ayes: Council Members — Hansen, Hitchcock, Johnson, and Mayor Beckman
Noes: Council Members — Mounce
Absent: Council Members — None
K-2 "Adopt resolution regarding City vote on property assessment ballot for City property within
the Central Delta Water Agency"
Public Works Director Prima stated that the Central Delta Water Agency covers the central
portion of the San Joaquin Delta. It is conducting a Proposition 218 assessment
proceeding in which ballots are accepted. They are proposing to increase an existing
property assessment from $5 to $8 per acre. Lodi's 1,000 acres of White Slough property
is within the district. The district's primary role is in lobbying and litigation on behalf of the
properties in the district and it is focused on Delta water issues. He suggested that a "no"
vote be cast.
MOTION / VOTE:
The City Council, on motion of Council Member Johnson, Beckman second, unanimously
adopted Resolution No. 2005-158 submitting a "No" vote on property assessment ballot for
City property within the Central Delta Water Agency.
L. ORDINANCES
None.
M. ADJOURNMENT
There being no further business to come before the City Council, the meeting was adjourned at
11:00 P.M.
ATTEST:
Susan J. Blackston
City Clerk
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