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HomeMy WebLinkAboutMinutes - December 21, 2016LODI CITY COUNCIL REGULAR CITY COUNCIL MEETING CARNEGIE FORUM, 305 WEST PINE STREET WEDNESDAY, DECEMBER 21, 2016 C-1 Call to Order / Roll Call The City Council Closed Session meeting of December 21, 2016, was called to order by Mayor Kuehne at 6:02 p.m. Present: Council Member Chandler, Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Absent: None Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo C-2 Announcement of Closed Session a) Exposure to Litigation Pursuant to Government Code §§54956.9(d)(2) and 54956.9(e)(1); One Case; Shall Not Be Disclosed, Due to Facts and Circumstances Not Yet Known to Potential Plaintiffs (CA) b) Lease of City Property Located at 125 South Hutchins Street, Lodi, California, for Adult Day Care Programs; Negotiating Parties are Lodi Health and the City of Lodi: Price and Terms of the Lease Are Under Negotiation: Government Code &54956.8 (CA) C-3 Adjourn to Closed Session At 6:02 p.m., Mayor Kuehne adjourned the meeting to a Closed Session to discuss the above matters. The Closed Session adjourned at 6:29 p.m. C-4 Return to Open Session / Disclosure of Action At 7:00 p.m., Mayor Kuehne reconvened the City Council meeting, and City Attorney Magdich disclosed the following actions. Item C-2 a) was not discussed. Item C-2 b) was discussion and direction only with no reportable action. A. Call to Order / Roll Call The Regular City Council meeting of December 21, 2016, was called to order by Mayor Kuehne at 7:00 p.m. Present: Council Member Chandler, Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Absent: None Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo NOTE: Mayor Pro Tempore Nakanishi left the meeting at 9:50 p.m. B. Presentations B-1 Presentation by Hutchins Street Square Foundation (PRCS) Hutchins Street Square Foundation Chairman Josh Elson presented information about recent projects at Hutchins Street Square, including the three main projects that were funded by the Foundation: carpet replacement, Wi-Fi installation, and replacement of the pool boiler. Mr. Elson presented Mayor Kuehne with a ceremonial check representing the money the Foundation put into the Square the past year, totaling over $150,000. Mr. Elson announced there will be a ribbon cutting and grand opening on January 19, 2017, to celebrate the carpet replacement project. B-2 Check Presentation by Tree Lodi (PRCS) Steve Dutra, on behalf of Tree Lodi, presented a check in the amount of $1,400 representing the cost of 24 trees recently planted in the area of the new boat launch at Lodi Lake by Tree Lodi with the assistance of the Parks Division and Eagle Scout candidate Logan Roper. Pat Harmon, founder of Tree Lodi in 2005, thanked Council for its support over the years and expressed hope for a continued positive relationship between Tree Lodi, the City, and the community. C. Consent Calendar (Reading: Comments by the Public: Council Action) &10111Eel 0F3 Council Member Chandler made a motion, second by Council Member Johnson, to approve the following items hereinafter set forth, except those otherwise noted, in accordance with the report and recommendation of the City Manager. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Noes: None Absent: None MOTION #2 Mayor Kuehne made a motion, second by Council Member Johnson, to approve Consent Calendar Items C-3, C-5, and C-9 in accordance with the report and recommendation of the City Manager. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Noes: None Absent: None C-1 Receive Register of Claims in the Amount of $2,893,573.71 (FIN) Claims were approved in the amount of $2,893,573.71. C-2 Approve Minutes (CLK) The minutes of November 22, 2016 (Shirtsleeve Session), November 29, 2016 (Shirtsleeve Session), December 6, 2016 (Shirtsleeve Session), December 6, 2016 (Special Meeting), and December 7, 2016 (Regular Meeting) were approved as written. C-3 Approve Plans and Specifications and Authorize Advertisement for Bids for Water Meter Program Phase 7 (PW) 2 This item was removed from the Consent Calendar at the request of Mayor Kuehne for discussion purposes. In response to Mayor Kuehne, Public Works Director Charlie Swimley stated that the new water meters are close to being real-time usage meters as staff can pull readings manually from the system for a specific time period in addition to regular 15 -minute interval updates. He confirmed it is not accessible to the public at this time, but staff will look into making that available so customers can see real-time usage. Approved plans and specifications and authorized advertisement for bids for Water Meter Program Phase 7 (per Motion #2 above). C-4 Adopt Resolution Resecting Low Bid as Non -Responsive and Awarding Contract for Hutchins Street Square North Entrance Americans with Disabilities Act Improvements to A.M. Stephens Construction Company, Inc., of Lodi ($118,529) (PW) Adopted Resolution No. 2016-217 rejecting the low bid as non-responsive and awarding the contract for Hutchins Street Square North Entrance Americans with Disabilities Act Improvements to A.M. Stephens Construction Company, Inc., of Lodi, in the amount of $118,529. C-5 Accept Improvements Under Contract for 2016 Downtown Concrete Cleaning (PW) This item was removed from the Consent Calendar at the request of Mayor Kuehne for discussion purposes. Mayor Kuehne requested that future concrete cleaning projects include cleaning the riser and gutters at the curbs. Accepted improvements under the contract for 2016 Downtown Concrete Cleaning (per Motion #2 above). C-6 Adopt Resolution Authorizing City Manager to Execute Amendment No. 1 to Professional Services Agreement with Telstar Instruments, of Sacramento, for Storm Station Telemetry Upgrades ($98,975) and Appropriating Funds ($98,975) (PW) Adopted Resolution No. 2016-218 authorizing the City Manager to execute Amendment No. 1 to Professional Services Agreement with Telstar Instruments, of Sacramento, for Storm Station Telemetry Upgrades, in the amount of $98,975, and appropriating funds in the amount of $98,975. C-7 Adopt Resolution Authorizing City Manager to Execute Three -Year Renewal Agreement with Environmental Systems Research Institute, Inc., of Redlands, for Geographic Information System Software ($162,000) (PW) Adopted Resolution No. 2016-219 authorizing the City Manager to execute a three-year renewal agreement with Environmental Systems Research Institute, Inc., of Redlands, for Geographic Information System Software, in the amount of $162,000. C-8 Adopt Resolution Authorizing City Manager to Execute Improvement Deferral Agreement for 405 South Main Street (PW) This item was removed from the Consent Calendar at the request of Mayor Kuehne for discussion purposes. Mayor Kuehne stated he was opposed to deferring the sidewalk installation and would like to vote no on the matter. In response to Council Member Mounce, Public Works Director Charlie Swimley stated the area in question is vacant of sidewalks, which is the reason the Department is willing to allow the deferral. He stated it is not uncommon to allow deferral of sidewalk installation where there is a short segment or alternate segments of roadway accessible to the public, adding this is also a less -traveled industrial area. Mr. Swimley confirmed that properties surrounding 405 South Main Street do not have sidewalk. Mayor Kuehne stated there is sidewalk across the street, but that section of town needs a walkway. Council Member Johnson stated he supports the staff recommendation, but suggested pulling the item and bringing it back after staff has an opportunity to speak with the developer. Council Member Mounce stated there are many sidewalks in need of repair and areas where sidewalks are lacking and she believed it was more important to repair sidewalks in residential areas that are heavily traveled, such as Cherokee Lane, and not an industrial area. She stated that, if an area had a missing section of sidewalk, she would support requiring the installation; however, the surrounding area in this case currently has no concrete path. She expressed support for staffs recommendation to defer the installation of sidewalk. Council Member Johnson made a motion, second by Mayor Pro Tempore Nakanishi, to pull and continue Item C-8 to a future meeting regarding authorizing the City Manager to execute Improvement Deferral Agreement for 405 South Main Street. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Noes: Council Member Mounce Absent: None C-9 Authorize City Manager to Negotiate Boat House Concession Contract Extension with Headwaters Kayak Shop (PRCS) This item was removed from the Consent Calendar at the request of Mayor Kuehne for discussion purposes. Mayor Kuehne thanked Dan Arbuckle with Headwaters Kayak Shop for his work at Lodi Lake and stated he hopes to add a concession stand at the Lake for beer, wine, and food in the future. Authorized the City Manager to negotiate Boat House Concession Contract Extension with Headwaters Kayak Shop (per Motion #2 above). C-10 Adopt Resolution Approving Updated City of Lodi Transit Division Title VI Program and Language Assistance Plan for GrapeLine Fixed Route, Dial -A -Ride, and VineLine Services PW This item was mistakenly pulled by the public for discussion purposes; therefore, it was voted upon separately. Council Member Mounce made a motion, second by Council Member Johnson, to adopt Resolution No. 2016-223 approving the updated City of Lodi Transit Division Title VI Program and Language Assistance Plan for GrapeLine Fixed Route, Dial -A -Ride, and VineLine Services. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Noes: None Absent: None 0 C-11 Approve Lodi Tourism Business Improvement District 2016 Annual Report (CM) Approved Lodi Tourism Business Improvement District 2016 Annual Report. C-12 Adopt Resolution Amending Traffic Resolution No. 97-148 by Approving 30 Miles -Per -Hour Speed Limit on Crescent Avenue, from Lodi Avenue to Tokay Street (PW) Adopted Resolution No. 2016-220 amending Traffic Resolution No. 97-148 by approving 30 miles -per -hour speed limit on Crescent Avenue, from Lodi Avenue to Tokay Street. C-13 Adopt Resolution Transferring $75,000 from Parks, Recreation and Cultural Services Fund Balance to Parks Capital and Appropriating Funds (PRCS) Adopted Resolution No. 2016-221 transferring $75,000 from Parks, Recreation and Cultural Services Fund Balance to Parks Capital and appropriating funds. C-14 Adopt Resolution Certifying the Election Results of the November 8, 2016, General Municipal Election Relating to Measure S (CLK) Adopted Resolution No. 2016-222 certifying the election results of the November 8, 2016, General Municipal Election relating to Measure S. G. Public Hearinas (Out of Order) G-4 Public Hearina to Consider Unmet Transit Needs in Lodi (PW NOTE: This item was mistakenly heard out of order and began with two public comments inadvertently made under the pulled Item C-10. Kimberly Froberg stated she believed there were many negative issues with GrapeLine and Dial - A -Ride, including difficulty in getting a reservation, paying double fair at times, and no same-day ride options. She stated that a one-hour extension on hours of operation would be helpful, suggesting that the system run until 8 p.m. instead because it is difficult and frightening finding a ride when it is dark. She expressed concerns with MV Transportation Manager, Jeff Kohlhepp, because she believed he was not following Americans with Disabilities Act (ADA) regulations and is running the system how he pleases. She stated that, if the issue is not corrected, she may take the matter to Washington. Cliff Weaver stated ADA has specific regulations that must be followed and complained that the Dial -A -Ride buses are often taken out of service if management feels they are not needed. He stated that being elderly is not a disabling condition and that certified handicapped individuals are required to be accommodated and take precedence over the elderly. Mr. Weaver stated he believed that MV Transportation staff is picking and choosing when to do same-day rides and reservations. He stated that Council should be aware of the problems with Jeff Kohlhepp and MV Transportation so the issues can be corrected. Mr. Weaver expressed frustration with the system, stating that MV Transportation lost its contract in Stockton and Sacramento because it is doing what it wants to do; not what it is required to do. He pointed out that Lodi can be heavily fined if it does not follow ADA regulations and further suggested that Mr. Kohlhepp receives a significant bonus at the end of the year because of it. He stated that transportation for the elderly and the handicapped were not meant to be on the same system and that he cannot get a ride on Sundays because of the reservations. Mr. Weaver stated he cares about the City and does not want to see it fined, but he will file a writ with Washington if necessary. Ms. Froberg further complained that people often have to wait for rides, people are turned away, and certain GrapeLine bus stops have been removed or changed. She requested that the stop at Lockeford and Loma Streets not be taken away because she utilizes that bus stop regularly to get back and forth to the Library where she volunteers. Mayor Pro Tempore Nakanishi requested a staff response to the allegations. 5 Public Works Director Charlie Swimley stated the Transit system is heavily audited and overseen by the Federal government and the employees are dedicated to following the rules to ensure the Transit Division remains solvent and can accommodate as many people as possible. He stated there is a high population of users with many trips and stops, but he is always looking to improve the system. He further stated he believed Lodi's system is much more personal and attentive than many others in the Valley. Mr. Swimley stated Transit staff works with customers as much as it can and that it is required to comply with Federal regulations. He recognized and thanked Transportation Manager Paula Fernandez and Transportation Planner Julia Tyack for their hard work and oversight of the system. Council Member Mounce pointed out that Lodi outsources this service to another company, staff cannot be completely certain about how MV Transportation operates, and these comments are serious allegations and should be investigated because Lodi will be forced to defend itself if a claim is filed. Notice thereof having been published according to law, an affidavit of which publication is on file in the office of the City Clerk, Mayor Kuehne called for the public hearing to consider unmet Transit needs in Lodi. Transportation Manager Paula Fernandez provided a presentation regarding unmet Transit needs in Lodi. Specific topics of discussion included San Joaquin Council of Governments' (SJCOG) annual requirement to conduct assessments of transit systems; 13 public meetings throughout the County, with Lodi's as the last hearing; advertisement of free rides to and from the public hearing; fliers on buses, comment cards at the Transit Station and City Hall, and notices posted on the website; and recommendation to conduct public hearing and receive testimony from the public on unmet transit needs. Ms. Fernandez introduced Ryan Niblock representing SJCOG, Jeff Kohlhepp from MV Transportation, and Transportation Planner Julia Tyack who also represents San Joaquin County's Social Services Technical Advisory Committee, which compiles and reviews all of the comments received throughout the County. In response to the earlier comments, Ms. Fernandez stated that staff watches over the contractor, performs liquidated damage assessments, requests reports to hear how drivers speak to customers, and plants secret riders on buses to report on the safety of drivers. With regard to the comment there are an inadequate number of drivers, staff reviews the ridership data system, which tracks the number of reservations and how many were denied, and those reports are reviewed with the Federal government. Ms. Fernandez stated that most of the comments received from the public are complimentary, specifically that Lodi's system is friendly and like a family and that the drivers are sweet and provide door-to-door service. If riders are denied service, staff looks into the reasons. She suggested the subscription service may need improvement because riders often make reservations for several days and then cancel. Ms. Fernandez reported that one member of the public attended the public meeting, a lifestyle fair was conducted at the LOEL Center, and in January staff will conduct an inventory and get more involvement from Dial -A -Ride passengers, including a telephone survey. Council Member Mounce stated she has had past experiences with Dial -A -Ride, adding that they were primarily positive encounters; however, she has heard from others that there is more work necessary to improve the system and the City should pay attention to the comments being made. Council Member Johnson suggested the complaints be itemized and researched and, if the audit proves the claims are untrue, the information should be disseminated to those expressing the claims; otherwise, if the complaints are proven correct, the City has an obligation to do something about them. Mayor Kuehne opened the public hearing for further public comment in addition to those received previously. Jeff Kohlhepp, General Manager with MV Transportation, stated Lodi has contracted with MV since 2003 and he started with the company in 2004 as a driver. Mr. Kohlhepp stated he is proud 3 of MV's service, drivers, and dispatchers and that, while not perfect, he strives to continually make the system better. The drivers enjoy working in this community and interacting with passengers. He stated MV's books are open for review and he is available to answer questions and respond to comments and concerns if any specifics are brought up. Council Member Mounce clarified that a specific allegation was brought up that handicapped individuals are not taking priority, to which Mr. Kohlhepp stated he will gladly assist with looking into the complaint. In response to Mayor Pro Tempore Nakanishi, Mr. Kohlhepp stated there is an issue with the subscription calls because there could be 120 reservations made and a third are cancelled. He stated it is best to schedule resources with the amount of reservations received, but in reality employees call in sick or leave employment, and MV does its best to provide service while working around disruptions. He stated that, if a transit system does not meet its assessments, it can be fined, but MV meets those requirements very well. He repeated that he is happy to work with the City on researching changes to improve the system. There being no further public comments, Mayor Kuehne closed the public hearing. There was no action necessary on this item. D. Comments by the Public on Non -Agenda Items THE TIME ALLOWED PER NON -AGENDA ITEM FOR COMMENTS MADE BY THE PUBLIC IS LIMITED TO FIVE MINUTES. Public comment may only be made on matters within the Lodi City Council's jurisdiction (Government Code Section 54954.3, Lodi City Council Protocol Manual Section 6.31). The Council cannot take action or deliberate on items that are not on this agenda unless there is an emergency and the need to take action on that emergency arose after this agenda was posted (Government Code Section 54954.2(b)(2)). All other items may only be referred for review to staff or placement on a future Council agenda. Don Cooper stated he wished to speak on the proposed water rate increase that was mentioned in the Lodi News -Sentinel. Mayor Kuehne informed him that he would have an opportunity to do so under Public Hearing Item G-2. Janice Wiederrich recounted an issue with the new utility billing system, stating she paid her bill online but received a late notice two weeks later. The Finance Department would not accept the online confirmation number as proof of payment, and she was told to obtain proof from her bank that the payment cleared. Ms. Wiederrich stated that the Finance employee indicated the office receives over 100 similar calls a day and he suggested she speak at a meeting to alert Council to the problem. City Manager Schwabauer stated that staff is aware of the problem and is working on a resolution. He did, however, assure the public that the City will not shut off utilities without first working through the issue. Kimberly Froberg stated she had a similar situation and was told by Finance staff that the City was working on the issue. Mike Lusk presented a handout (filed) regarding the Impact Mitigation Fee schedule and his request to add another category for future recycled water capital improvements. He stated he believed Council could add this independently as a single item or address it when the five-year update comes up in 2017. Mr. Lusk questioned if recycled water would be an independent enterprise under the regulations or if it would be part of an existing system, such as the water or wastewater enterprise systems. Mr. Schwabauer stated that, if recycled water is delivered through "purple pipe" for landscaping purposes, it would be a part of the water service; however, a system has not yet been created for recycled water, which would likely be metered separately. He stated, since there is no way of using recycled water yet, there is no system in place to bill for it, and any decision will be made at that time. 7 Bruce Womack, member of Tree Lodi, stated it has been a pleasure working with Steve Dutra, Tree Lodi volunteers, staff, and the community and it pleases him greatly to see all the positive things these people are doing for Lodi. E. Comments by the City Council Members on Non -Agenda Items Mayor Pro Tempore Nakanishi thanked Mr. Lusk for his concept about potable water, stating this has been discussed previously and will likely happen in the future. He reported that he attended the Groundwater Banking Authority meeting last week and reminded the public that the law mandates a Groundwater Sustainability Agency be created by 2017. He stated this effort could cost as much as $250,000 for the County and cities, but a grant was received for technical studies. He believed that potable water will come later once groundwater sustainability is in place. Council Member Mounce thanked City Attorney Magdich for her recent training session for Council Members and board and commission members on ethics, stating that ethics is an important topic in Lodi and throughout the State and that the League of California Cities and the Fair Political Practices Commission offer ethics training as well. Council Member Mounce recounted a situation in which a well-known developer asked her, following her election to Council, not to vote for John Beckman as Mayor; however, she supported his nomination because it was his turn to serve as Mayor and she based her decision on information in front of her and on citizen feedback. She stated she was proud that she stood up for what she believed was the right decision for her first vote and first night in office and for making the ethical choice. Further, Council Member Mounce stated that the median on the finished road on the west side of the Harney Lane Grade Separation project appears to be built on a mound that may be causing water to run off, which could kill the vegetation planted in the area. Public Works Director Charlie Swimley stated he would look into the matter. Council Member Mounce stated she supports the concept of an Impact Mitigation Fee for "purple pipe," stating that citizens should not have to pay the costs borne by the impact of new development, citing the new overpass and the demand brought on by Costco and other developments. Finally, Council Member Mounce wished everyone a happy holiday. F. Comments by the Citv Manaaer on Non-Aaenda Items City Manager Schwabauer thanked former Parks Superintendent Steve Dutra, who retired from the City, for his continued dedication and hard work with Tree Lodi and its partnership with the City. He stated that "purple pipe" is being installed at the Orchard Lane Subdivision; however, there is currently no system to deliver recycled water to the City. He stated that Mr. Lusk's idea is worth looking into and he will discuss it further with staff. G. Public Hearinas G-1 Public Hearing to Consider Adopting Resolution Approving the Planning Commission's Recommendation to Authorize 42 Medium -Density Residential Growth Management Allocations for the Grupe - Harvest Crossing Subdivision (CD) Notice thereof having been published according to law, an affidavit of which publication is on file in the office of the City Clerk, Mayor Kuehne called for the public hearing to consider adopting resolution approving the Planning Commission's recommendation to authorize 42 Medium - Density Residential Growth Management Allocations for the Grupe - Harvest Crossing Subdivision. City Planner Craig Hoffman provided a PowerPoint presentation regarding the 42 Medium - Density Residential Growth Management Allocations for the Grupe - Harvest Crossing Subdivision. Specific topics of discussion included vicinity map, cluster map, parking map, elevations, Growth Management Allocations for 2015 and 2016, and recommendation. Council Member Mounce stated she has received complaints that Lodi's growth management allocations are over allocated and she asked Mr. Hoffman to explain how many allocations are 0 left in each designation and how much the City could grow if a developer took all of the allocations. Mr. Hoffman stated that since 1991, when the City adopted a provision for growth allocations, the anticipation was Lodi would grow by 2 percent; however, the City has grown by only 0.7 percent each year. Unused allocations rollover to the next year, which has allowed the City to accumulate a high number of allocations. In 2012, the City Council eliminated a number of approved growth allocations, and since then a number of projects have started to build and others are coming soon but far less than those envisioned for a 2 percent growth. He stated that 2 percent growth would equal 425 units a year and pointed out that projects often take two -and -a - half years to go through the entire process of Council approval, plan approval, building the site, and building houses. Council Member Mounce pointed out that, after approving all of these projects, there are still 5,290 growth allocations remaining. She felt that a majority of the public prefers Lodi to remain compact and they would be unhappy to learn there are that many remaining allocations. She questioned if it was time again to retire some growth allocations, to which Mr. Hoffman responded that 2017 would likely be the appropriate time to eliminate excess allocations. He further stated it is prudent to maintain a higher allocation of high- and medium - density designations than low-density. Council Member Chandler stated he prefers balanced growth and is pleased with the proposed project because it makes the best use of land while using as little land as possible. He stated that his goal, as a farmer, is to preserve farmland and believed this development was appropriate. Mr. Hoffman stated that standard densities were required to be met on this site, such as the number of trees, and the applicant did not want any trees removed; however, he created a tree preservation plan to maintain as many trees as possible and plant more where feasible. The applicant also donated $5,000 to Tree Lodi for its Arbor Day celebration. Mayor Kuehne opened the public hearing for public comment. Jane Wagner-Tyack presented a letter (filed) relating to long-term water availability and land use decisions. She expressed concern regarding the effect development has on water sustainability and the demand on sufficient drinking water supply that new development creates. She asked that Council keep this in mind for this and all future development proposals. Don Cooper expressed concern that the development includes a Homeowners Association because, in his experience, they rarely work well and questioned the plan relative to roadways within the development to address emergency vehicles because the Homeowners Association should not have to bear the cost. He urged Council to ensure this was a viable long-term project. Mr. Cooper further stated he sees new developments in the Sacramento area with solar systems and believes the City should look into this further with impact fees that encourage energy management. There being no further public comments, Mayor Kuehne closed the public hearing. Council Member Chandler made a motion, second by Council Member Johnson, to adopt Resolution No. 2016-224 approving the Planning Commission's recommendation to authorize 42 Medium -Density Residential Growth Management Allocations for the Grupe - Harvest Crossing Subdivision. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Noes: None Absent: None G-2 Public Hearing to Consider Adopting Resolution Setting Pre -Approved Engineering News Record Adjustment Index for Usage -Based and Flat Water Rates for Residential, Commercial, and Industrial Customers (PW) 0 Notice thereof having been published according to law, an affidavit of which publication is on file in the office of the City Clerk, Mayor Kuehne called for the public hearing to consider adopting resolution setting pre -approved Engineering News Record (ENR) adjustment index for usage - based and flat water rates for residential, commercial, and industrial customers. Public Works Director Charlie Swimley provided a PowerPoint presentation regarding pre - approved ENR adjustment index for usage -based and flat water rates for residential, commercial, and industrial customers. Specific topics of discussion included water rate setting, recommendation, water production, water operating balances, water meter program status, seven-year summary, recommended water flat rates, recommended metered rates, increase amounts, and rate comparisons locally and regionally. Council Member Mounce stated that legislation requires water meters be installed by 2025 and questioned if the water meter program were delayed a few years, would the scenario of a water rate increase change, to which Mr. Swimley responded in the affirmative. In response to Council Member Johnson, Mr. Swimley explained there is a timing issue associated with newly -installed meters, stating it takes time to get meters programmed into the billing system after they are installed and customers are given a time period to assess their usage on a metered versus flat billing rate so they can make adjustments before the new metered billing goes into effect. Further, the time delay gives staff an opportunity to ensure the meters are working properly and to trouble shoot any issues that arise. In response to Council Member Chandler, Mr. Swimley stated that evaporation losses vary throughout the year. In summer, water from irrigation can evaporate 12 inches a month; whereas, in winter it is likely little to none, but it depends on the level of irrigation. Those who over -irrigate are contributing to the aquifer recharge, and there is a fair amount of recharge from the river, Lodi Lake, and the canal. In reference to the local rate comparisons, City Manager Schwabauer pointed out that the City of Tracy finances its water infrastructure with a Mello -Roos District; therefore, Tracy citizens are not paying infrastructure costs in their water bill, but they are paying it in their tax bill, which is the reason behind the lower average bill for Tracy. In response to Mayor Pro Tempore Nakanishi, Mr. Swimley stated that Lodi's infrastructure replacement program started in 2001. He stated he believed Lodi had great foresight and discipline to continually improve the system over the last 15 years, which has left the City's water and wastewater infrastructure in excellent shape with the exception of a few locations on the wastewater side. Council Member Mounce questioned if the remaining money after the completion of the water meter program could be returned to ratepayers as a refund, to which Mr. Swimley responded that would be a Council decision. She stated the first charge of the East Side Improvement Committee (now Lodi Improvement Committee) was to advocate for east side infrastructure and it was, therefore, difficult for her to now advocate pushing out the water meter program for a few years, but she will if it would reduce the shock of a water rate increase. She stated that all of the rate increases combined add up, especially for those on fixed incomes. Council Member Mounce suggested staff revisit the rate model and push out the water meter program to soften the impact on the utility; otherwise, she would not support the request. Mayor Kuehne opened the public hearing for public comment. Mary Jean East stated she was upset over the Lodi News -Sentinel article that reported the City needs to continue funding the water meter program, but the downward water usage, due in part to conservation, is driving the proposed water rate increase. She stated she was extremely proud of her water conservation efforts during the drought, but it now feels as if citizens are being penalized with a 3 -percent increase for conserving water. She stated she was not in favor of either option: smaller, more frequent increases or larger, less often rate adjustments. 10 Mr. Schwabauer stated that Ms. East's point was well taken and explained that Lodi's water utility is driven exclusively by operating and maintenance costs. The cost structure is driven by the cost to deliver the commodity to homes, not by the cost of the commodity, and it is necessary to raise dollars to deliver the commodity. The other issue is the expensive infrastructure program the City choose to undertake and Council's decision to fund it through rates. Mr. Schwabauer explained that the program could have been funded any number of ways, but the selected option was to do so through the rate structure. He stated it was a known factor that over time rates would need to be increased and the rate model was set in place when this process began. If the water meter program is delayed, it will negatively affect those customers still on a flat rate who are desperate to get on a metered rate to save money. On the other hand, delaying the project would eliminate a cost response for those who will be forced to pay by the gallon. He stated there are tradeoffs and extending the program will make it easier for some and more difficult for others. Mike Lusk stated that at least 41 percent of residents in Lodi are low income, with many of them on fixed incomes. Social Security has not given an increase over the last five years, and the three utilities, i.e. water, wastewater, and refuse, have averaged an 8 to 9 percent a year increase. Mr. Lusk stated he was opposed to the water rate increase and suggested the City reward citizens for their efforts in reducing water consumption during the drought by maintaining this year's budget at the same level as last year. He further suggested the City hold off on new water projects until funds are available and pass the bad debt collection back to the appropriate enterprise systems, minus the cost of collecting the bad debt. In addition, he stated the impact fee agreements should be canceled to pay for the capital improvements in this budget because Lodi has subsidized developers with $11 million that could be in the impact fee fund and used for capital improvements. Mr. Schwabauer explained that capital improvements serve existing homes and the homes constructed in the current system had these improvements. The impact mitigation fee can only be collected to serve new development; not existing. Mr. Lusk countered that the City spent $30 million for the water treatment plant for future development and those costs could have been covered by impact fees. Those fees could be used to pay down the Certificates of Participation, which is part of the current budget, and that would reduce expenses this year. He further stated the City should pay back the impact fees it transferred out of the water fund to pay for Fire Station 4, which would also cover the cost of the program this year instead of increasing rates. Mr. Schwabauer confirmed that impact mitigation funds were borrowed from one impact fee account to another and the repayment source is impact fees from new homes. Until that money comes in from new development of homes, there is no source of revenue to pay back that loan. Mr. Lusk stated that homes were built during the last 15 years and, if the impact fees had not been reduced, there would be an increase in those funds. He stated there are issues the City overlooked that could be done that may please residents enough to support another attempt at a sales tax measure in the future. Mayor Pro Tempore Nakanishi stated the suggestion of returning money to the rate payers is intriguing and, at this time, he was opposed to raising rates because it was poor timing. Don Cooper spoke in opposition to the proposed 3 -percent increase in water rates, stating that he was surprised by his comparative bill because it indicates he will experience a 51 -percent increase per month from his average flat rate to his average meter rate, taking his payment from $20 to $69. He stated there needs to be greater communication to the public so they understand where the City is heading with its rate structure to meet its capital costs. He stated he believed the rate design is well-written with the increases between each of the tiered rates and was pleased there is not a flat rate for amount of water given when water is not utilized in the winter. He questioned if there was public notification of the rate increase and whether citizens had an opportunity to vote for or against it. Mr. Schwabauer explained that Proposition 218 requires a notification process for adjustments; 11 however, there is an exception for a five-year implementation of a Consumer Price Index (CPI) based adjustment. If the rate system unrelated to a CPI or Engineering News Record (ENR) adjustment was redesigned, then a special notice would be required. In this case, the typical 45 - day public notice was given, along with the opportunity for citizens to protest at the hearing. Mr. Cooper stated he believed citizens should be allowed to vote on the matter, a rate increase at Christmas is poor timing, and the water meter program was paid for by the $300 every household paid for their meter. Mr. Schwabauer pointed out that the water meter program costs $5 million a year because it also includes replacement of all water lines throughout Lodi, including tearing up the streets, to serve neighborhoods, and the $300 only paid the cost of the meter. Mr. Swimley stated to Mr. Cooper that the increase he noted in his bill is the transition from a flat rate to a metered rate and that a typical two-bedroom home with a large lot will likely see an increase because the cost transitions to usage; not number of bedrooms. Mr. Schwabauer further explained that he is likely a high water user, which is the reason for the increase in his bill. Mr. Swimley stated that the purpose of providing customers a comparative bill is to educate customers on their usage before the metered rates go into effect the following year. He further stated that the rate structure was designed to be revenue neutral so that the metered rate would equal the amount collected for flat rates, and Mr. Schwabauer added there was some anticipation that some rates would increase and some would decrease due to usage. Mr. Cooper stated he believed the quote in the newspaper about getting 100 percent of the City's investment back in four years was a rash assumption on the City's part. Susan Rabusin, in response to the comment made by Council Member Mounce, stated she does not believe the City would return excess funds to citizens, adding that, even so, a check for a minimal amount would not make a difference because over the long run citizens are paying much more than that. She stated that citizens may get on board with the proposal if the City presented a plan that would drop rates and stated that the timing of the increase is poor. Mr. Schwabauer stated there will come a time when Council will be forced to make a decision about rates supporting a capital improvement program. He stated it was commendable that Council opted to fund this major capital improvement program on a pay-as-you-go process through the rate structure instead of borrowing money and paying interest, which would have been even more costly. When the meter program is complete, a decision will be necessary to adjust rates, pay off the debt, or continue to fund the water operation. He stated that paying off the debt will reduce rates over the long run, but it is a decision that Council will have to make. Liz Bowman stated she was pleased with the City's past response to her safety concern, but she was unhappy with the current statements from staff on this issue. She stated that she believed most people would fall in the two higher tiers as water users, not necessarily because they use too much water, but because larger families use water for every day necessities, such as cooking, cleaning, irrigating, etc. Ms. Bowman stated that she felt her past requests for an electric utility oversight committee were dismissed by staff with the excuse that the subject matter was too difficult to understand, but she repeated her willingness to volunteer and learn the technicalities. She suggested the decision on the water rate increase be postponed until after Christmas so the public can be better informed and that the issue to form a committee be brought back before Council. Alex Aliferis expressed his opposition to the proposed rate increase, as well as the proposed electric utility rates on a later agenda item, because many citizens are on a fixed income and those on Social Security have not received an increase in a long time. There being no further public comments, Mayor Kuehne closed the public hearing. Council Member Johnson stated that the quandary the City is in now is whether to pay for the program now or later and that he believed postponing the decision to a future date will result in 12 the same arguments brought forth today and will accomplish nothing. With regard to public notice, the City legally posted the notices and meetings and, despite efforts, the public does not show up for the meetings. Council Member Johnson stated that no one wants to raise rates, but the water meter program is in motion and should be continued to completion. MOTION #1 Council Member Johnson made a motion to adopt resolution setting pre -approved Engineering News Record adjustment index for usage -based and flat water rates for residential, commercial, and industrial customers. The motion failed for lack of a second. Council Member Chandler stated he agrees with Council Member Johnson; however, he would like to be respectful of the public and the timing. He expressed concern that foregoing small, regular increases is a mistake because it is the responsible way of keeping the City's finances on track, but he would prefer at this time to delay the decision. Mr. Schwabauer cautioned that deferring an increase at this time will force the water utility to borrow money from elsewhere; however, there are no funds available in the general fund. Council Member Mounce suggested bringing this matter back to a Shirtsleeve Session to discuss options, such as borrowing money during a down period, postponing the water meter program, or ascertaining whether the rate increase is truly necessary. She believed the matter should be brought back after Christmas and the public properly notified. Mr. Swimley pointed out that postponing projects will increase costs as the price of construction increases in the future. He stated that the plans and specifications were prepared for Phase 7, but staff can make adjustments on how it was put together. Mr. Swimley stated that construction costs have been relatively low during the last four years and that, although he understands the concerns about timing, the delay could increase the overall cost of the main work. Mayor Kuehne suggested a compromise of increasing the water rate by 1.5 percent, instead of 3 percent, and delay the water meter program slightly. Mayor Pro Tempore Nakanishi stated that he understands the fiduciary responsibility and the City should tell citizens when the time comes that it is in the red and then take care of it. He opted for not raising rates at this time and to better inform citizens when this discussion returns to Council. MOTION #2 Mayor Kuehne made a motion, second by Council Member Chandler, to adopt resolution setting pre -approved Engineering News Record adjustment index at 1.5 percent, instead of 3 percent, for usage -based and flat water rates for residential, commercial, and industrial customers and delaying Phase 7 of the Water Meter Program for a short period of time. VOTE: The above motion failed by the following vote: Ayes: Council Member Chandler, and Mayor Kuehne Noes: Council Member Johnson, Council Member Mounce, and Mayor Pro Tempore Nakanishi Absent: None Mr. Schwabauer stated staff will review the rates and the water meter program further and come back with a recommendation to keep the utility solvent. Council Member Mounce pointed out that Item G-5 is to discuss electric utility rate increases and the end of the solar program. She stated she believed the public was not adequately notified of the matter and that many of the same concerns brought up for the water rate increase will be brought up for the utility rates. She suggested that Item G-5 be pulled and postponed until after Christmas. 13 MOTION #3 Council Member Mounce made a motion, second by Mayor Pro Tempore Nakanishi, to pull Item G-5 from the agenda relating to the public hearing to consider introducing an ordinance amending Lodi Municipal Code Chapter 13.20 - Electrical Service - by repealing and reenacting Article III, "Rates," in its entirety. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Council Member Mounce, and Mayor Pro Tempore Nakanishi Noes: Mayor Kuehne Absent: None RECESS At 9:40 p.m., Mayor Kuehne called for a recess, and the City Council meeting reconvened at 9:50 P.M. NOTE: Mayor Pro Tempore Nakanishi left the meeting at 9:50 p.m. G-3 Public Hearing to Receive Comments on and Consider Accepting City of Lodi's Report on Water Quality Relative to Public Health Goals (PW) Notice thereof having been published according to law, an affidavit of which publication is on file in the office of the City Clerk, Mayor Kuehne called for the public hearing to receive comments on and consider accepting City of Lodi's Report on Water Quality relative to public health goals. Water Plant Superintendent Andrew Richle provided a PowerPoint presentation regarding the City of Lodi Report on Water Quality relative to public health goals (PHG). Specific topics of discussion included background, report guidelines, water sources and data considered, constituents over PHG, current treatments, and compliance. Mayor Kuehne opened the public hearing for public comment. There being no public comments, Mayor Kuehne closed the public hearing. There was no action required on this matter. G-5 Public Hearing to Consider Introducing Ordinance Amending Lodi Municipal Code Chapter 13.20 - Electrical Service - by Repealinq and Re -Enacting Article III, "Rates," in Its Entirety EU This item was pulled from the agenda pursuant to Motion #3 under Item G-2. H. Communications H-1 Monthly Protocol Account Report (CLK) Council Member Mounce made a motion, second by Council Member Chandler, to approve the monthly Protocol Account Report through November 30, 2016. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Council Member Mounce, and Mayor Kuehne Noes: None Absent: Mayor Pro Tempore Nakanishi 14 Regular Calendar - None Ordinances - None K. Reorganization of the Following Agency Meetings: 1) Lodi Public Improvement Corporation: 2) Industrial Development Authority; 3) Lodi Financing Corporation; and 4) Lodi Public Financing Authority Council Member Johnson made a motion, second by Council Member Chandler, to adopt the following resolutions: Resolution No. LPIC2016-01 reorganizing the Lodi Public Improvement Corporation; Resolution No. IDA -39 reorganizing the Industrial Development Authority; Resolution No. LFC-26 reorganizing the Lodi Financing Corporation; and Resolution No. LPFA2016-2 reorganizing the Lodi Public Financing Authority. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Council Member Mounce, and Mayor Kuehne Noes: None Absent: Mayor Pro Tempore Nakanishi L. Adjournment There being no further business to come before the City Council, the meeting was adjourned at 9:57 p.m. ATTEST: Jennifer M. Ferraiolo City Clerk 15