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HomeMy WebLinkAboutMinutes - February 15, 2017LODI CITY COUNCIL REGULAR CITY COUNCIL MEETING CARNEGIE FORUM, 305 WEST PINE STREET WEDNESDAY, FEBRUARY 15, 2017 C-1 Call to Order / Roll Call The City Council Closed Session meeting of February 15, 2017, was called to order by Mayor Kuehne at 5:30 p.m. Present: Council Member Chandler, Council Member Johnson, Council Member Mounce, and Mayor Kuehne Absent: Mayor Pro Tempore Nakanishi Also Present: City Manager Schwabauer, Deputy City Attorney Fukasawa, 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) Conference with Adele Post, Human Resources Manager and Stephen Schwabauer, City Manager (Labor Negotiators), Regarding Unrepresented Executive Management; and Conference with Adele Post, Human Resources Manager (Labor Negotiator), Regarding Lodi City Mid-Management Association, AFSCME General Services and Maintenance & Operators, International Brotherhood of Electrical Workers, Police Mid-Managers, Lodi Police Officers Association, Lodi Police Dispatchers Association, Fire Mid-Managers, and Lodi Professional Firefighters, Pursuant to Government Code §54957.6 (CM) C-3 Adjourn to Closed Session At 5:30 p.m., Mayor Kuehne adjourned the meeting to a Closed Session to discuss the above matters. The Closed Session adjourned at 6:42 p.m. C-4 Return to Open Session / Disclosure of Action At 7:00 p.m., Mayor Kuehne reconvened the City Council meeting, and Deputy City Attorney Fukasawa disclosed the following actions. Item C-2 a) was discussion and direction given with no reportable action. Item C-2 b) was discussion only with no reportable action. A. Call to Order / Roll Call The Regular City Council meeting of February 15, 2017, 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, Deputy City Attorney Fukasawa, and City Clerk Ferraiolo NOTE: Council Member Mounce left the meeting at 8:51 p.m. 1 B. Presentations B-1 Proclamation of Appreciation to Jack Fiori (PRCS) Parks, Recreation, and Cultural Services Director Jeff Hood announced that an appreciation night will be held on Saturday, February 18, 2017, at Hutchins Street Square, in honor of Jack Fiori for all he has done for Lodi, the community, and his efforts in raising over $300,000 on behalf of the Grape Bowl. Mayor Kuehne presented a Proclamation of Appreciation to Jack Fiori for his service to the community as head of the Save the Grape Bowl Fund, which has raised $337,139 for upgrades to the stadium. Mr. Fiori stated that his passion for saving the Grape Bowl came from his love of the facility and his life-long memories of time spent at the stadium. B-2 World of Wonders Science Museum Presentation (CLK) World of Wonders (WOW) Science Museum president Sally Snyde provided a presentation and video regarding the museum's planned expansion. She reported that last year over 58,000 visitors came to the WOW with only 20 percent coming from Lodi. She stated she has given presentations on the expansion to the Lodi Historical Society, Lodi Improvement Committee, Arts in Public Places Board, and Lodi Arts Commission, all of whom seem to support the effort. C. Consent Calendar (Reading; Comments by the Public; Council Action) Council Member Mounce made a motion, second by Council Member Chandler, to approve the following items hereinafter set forth 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 $4,722,705.29 (FIN) Claims were approved in the amount of $4,722,705.29. C-2 Approve Minutes (CLK) The minutes of January 24, 2017 (Shirtsleeve Session) were approved as written. C-3 Accept Quarterly Report of Purchases Between $10,000 and $20,000 (CM) Accepted the Quarterly Report of Purchases between $10,000 and $20,000. C-4 Accept Quarterly Investment Report as Required by the City of Lodi Investment Policy (CM) Accepted the Quarterly Investment Report as required by the City of Lodi Investment Policy. C-5 Approve Plans and Specifications and Authorize Advertisement for Bids for Lodi Public Library Teen Scene Project (PW) 2 Approved plans and specifications and authorized advertisement for bids for the Lodi Public Library Teen Scene Project. C-6 Accept Improvements Under Contract for Lodi Public Library Children’s Area Expansion Project (PW) Accepted the improvements under the contract for the Lodi Public Library Children's Area Expansion Project. C-7 Accept Improvements Under Contract for Blakely Park Restroom Demolition (PRCS) Accepted the improvements under the contract for the Blakely Park Restroom Demolition. C-8 Adopt Resolution Accepting Public Improvements for The Villas at Sunwest Subdivision, Tract No. 3823 (PW) Adopted Resolution No. 2017-15 accepting the public improvements for The Villas at Sunwest Subdivision, Tract No. 3823. C-9 Adopt Resolution Authorizing City Manager to Execute Amendment No. 2 to Professional Services Agreement with Kratos Public Safety & Security Solutions, Inc., of San Diego, for Repairs and Maintenance of City Security Doors, Gates, and Access Control ($50,000) (PW) Adopted Resolution No. 2017-16 authorizing the City Manager to execute Amendment No. 2 to Professional Services Agreement with Kratos Public Safety & Security Solutions, Inc., of San Diego, for repairs and maintenance of City security doors, gates, and access control, in the amount of $50,000. C-10 Adopt Resolution Authorizing City Manager to Execute Improvement Deferral Agreement for 2351 Cabrillo Circle (PW) Adopted Resolution No. 2017-17 authorizing the City Manager to execute an Improvement Deferral Agreement for 2351 Cabrillo Circle. C-11 Adopt Resolution Authorizing City Manager to Execute Improvement Agreement for Reynolds Ranch Wastewater Pipeline Extension (PW) Adopted Resolution No. 2017-18 authorizing the City Manager to execute an Improvement Agreement for Reynolds Ranch Wastewater Pipeline Extension. C-12 Adopt Resolution Declaring Intention to Annex Territory (The Harvest Crossing Subdivision) to Community Facilities District No. 2007-1 (Public Services) and to Levy a Special Tax to Pay for Certain Public Services (Annexation No. 5); and Set Public Hearing for April 5, 2017 (PW) Adopted Resolution No. 2017-19 declaring intention to annex territory (The Harvest Crossing Subdivision) to Community Facilities District No. 2007-1 (Public Services) and to levy a special tax to pay for certain public services (Annexation No. 5); and set public hearing for April 5, 2017. C-13 Set Public Hearing for March 15, 2017, to Consider Resolution Adopting Pre-Approved Proposition 218 Consumer Price Index-Based Annual Adjustment to Rates for Solid Waste Collection (PW) Set public hearing for March 15, 2017, to consider resolution adopting pre-approved Proposition 218 Consumer Price Index-based annual adjustment to rates for solid waste collection. 3 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 6.3l). 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. Spencer Dayton suggested the City consider creating a diversity day, similar to Stockton's cultural festival, to bring all religions and cultures together, which could also generate revenue for the City. Council Member Mounce pointed out there is already such an event called Celebration on Central, which has been held annually in April/May over the last 14 years. She encouraged Mr. Dayton to contact Community Partnership for Families, which hosts the event, to share his ideas. Council Member Chandler added that the first Lodi Peace Walk was held last year, which brought together various communities, for a walk from the City Hall memorial to Blakely Park. The event, which will continue to be held annually, included food, music, and cultural activities. He suggested Mr. Dayton contact Pastor Glen Barnes as an additional resource toward his endeavor. Cliff Weaver made follow-up comments to his statement from the December 21, 2016, Council meeting, during which he complained about the City's transit system. He was disappointed that no one from the City responded to him, despite assurances that someone would contact him. He reiterated his concerns that the transit operators overcharge for same-day service, charge for missed rides, and take buses out of service whenever they want to; it is extremely difficult to get a ride daily between 10 a.m. to 2 p.m.; and there are no rides available on Fridays, Saturdays, and Sundays. Mr. Weaver stated he believes the Council should be fully aware of how its contracted service is being operated and that, if it will not look into the matter, he will take the issue to Washington, D.C., because the transit operators are not abiding by Americans with Disabilities Act (ADA) regulations. He stated that, if this conduct does not change, the City will be fined again. Mayor Pro Tempore Nakanishi expressed his disappointment that no one from the City contacted Mr. Weaver regarding his concerns, to which City Manager Schwabauer stated he will look into the matter and follow up with a response. Council Member Mounce requested that Council be notified when Mr. Weaver is contacted and also be given the details of the response. Mr. Weaver added that he has volunteered repeatedly to be on the advisory board because those who utilize the service have a right to be included on the decisions and actions relating to the Dial-A-Ride system. He complained that dispatchers are brought in to drive the Dial-A-Ride buses, adding that there should be enough employees to keep the system going in an adequate fashion. He further stated that, if General Manager Jeff Koehlhepp cannot perform the duties properly, he should be replaced. He stated he believes there is no oversight of the system and, if the City is fined, it will be penalized back to the initial days of the system. He requested that the issues be corrected. Council Member Johnson agreed that Mr. Weaver's allegations need to be investigated to determine the validity of the complaints and that Transit staff was instructed to research the matter. He reported that he spoke with Transportation Manager Paula Fernandez that morning, who informed him that she is in the process of conducting an investigation while also dealing with other pressing matters. Council Member Johnson stated that, over the last 12 years since he has been on Council, only a small number of individuals have complained about the transit system with regularity and he believes that Mr. Weaver will never be completely satisfied with the system. 4 He requested the City Manager do everything in his power to accelerate the investigation into the complaints and provide answers to Council and to Mr. Weaver. If the City is in violation, the situation must be corrected; however, he stated that he believes Mr. Weaver must be willing to accept the results if the allegations prove to be unfounded. Mr. Schwabauer stated for the record that Lodi is tri-annually audited by the Federal government and has never been found to be in violation as Mr. Weaver suggests. He stated he will follow up on the allegations. Council Member Mounce suggested that many transit and Dial-A-Ride riders are afraid to complain about the system for fear of retaliation and she thanked Mr. Weaver for speaking out about his concerns. Mr. Weaver added that ADA regulations were enacted to give handicapped individuals greater freedom and mobility and the reason lawyers become involved is there are some who try to bypass the regulations. He stated that he and his family rely on this service regularly and asked that the system be repaired so it operates properly. Mayor Kuehne apologized to Mr. Weaver for the lack of follow up on his complaints and assured him the City will respond with an answer. Public Works Director Charlie Swimley stated that Mr. Weaver's concerns from the last meeting were heard by staff and that the Transportation Manager has been conducting an investigation to address the questions and issues. Transportation Manager Paula Fernandez reported that she spoke to Mr. Weaver in January, shortly after the December Council meeting, informing him that Transit will conduct a survey in order to hear from a greater number of riders since only two individuals expressed complaint. Staff contacted 180 customers, and 37 individuals participated in the survey. The results indicated that 17 passengers were very or extremely satisfied with the service; 19 indicated they were satisfied; and 2 expressed dissatisfaction with the service. Staff is looking further into the comments made by the two individuals to see where the issues lie. Further, Mr. Weaver requested that she contact the civil rights division in Washington, D.C., regarding his concern that drivers are switched from Dial-A-Ride to the fixed-route service, and the response was there was no violation because the City ensures paratransit service is available at the same time as the fixed-route system. She further stated that same-day service is a premium service and that ADA service is reservation based. Ms. Fernandez stated that staff is continuing to gather information, but she will expedite the process. In response to Mayor Kuehne, Mr. Weaver confirmed that he participated in the survey process. E. Comments by the City Council Members on Non-Agenda Items Council Member Johnson recognized City Clerk Ferraiolo for diligently working toward her Master Municipal Clerk certification, which is the highest designation in the city clerk profession. He recognized her effort, adding that it was a struggle on occasion because it required her to be away from the office to attend educational sessions and seminars. Council Member Mounce requested the Public Works Director look into the concerns expressed by neighbors in the area of Lee Avenue, Park Street, and Tamarack Street regarding speeding. The neighbors are working to gather signatures, but she would prefer the City be proactive and work with residents to schedule the matter for a future Council meeting. In response to Public Works Director Swimley, Council Member Mounce stated that a speed trailer was already utilized in that area. She further requested a report back on the matter. Mayor Kuehne reported on his attendance at the National Association of Regional Councils conference, at which discussions took place relating to transportation funding, autonomous vehicles, and the rise of Opioid addictions. He added that autonomous vehicles will be realized in Lodi sooner, rather than later, and he wants to ensure Lodi is prepared to deal with them. He 5 stated he is preparing for his upcoming San Joaquin Council of Governments One Voice trip to Washington, D.C., during which he will speak to senators and congressmen to lobby for funding for San Joaquin County. F. Comments by the City Manager on Non-Agenda Items In response to Mr. Dayton's earlier comment regarding youth, City Manager Schwabauer pointed out that the Consent Calendar item regarding the Library's Teen Scene Program advocates youth because it provides a recreational space for youth to gather and share ideas, as well as an audio- visual room to create movies and record and listen to music. The project is a result of Library Services Director Dean Gualco's creativity, hard work, and fundraising efforts. G. Public Hearings G-1 Continued Public Hearing to Consider Adopting Resolution Approving the Planning Commission's Recommendation to Authorize 250 Low-Density Residential, 95 Medium- Density Residential, and 180 High-Density Residential Growth Management Allocations for the Rose Gate II Subdivision (CD) NOTE: This item is a quasi-judicial hearing and requires disclosure of ex parte communications as set forth in Resolution No. 2006-31 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 250 Low-Density Residential, 95 Medium-Density Residential, and 180 High-Density Residential Growth Management Allocations for the Rose Gate II Subdivision. City Planner Craig Hoffman provided a PowerPoint presentation regarding Growth Management Allocations for Rose Gate II Subdivision. Specific topics of discussion included request for approval of Growth Management Allocation for 250 low-density, 95 medium-density, and 180 high-density residential lots; vicinity map; Westside map; Rose Gate II map; Westside trail; Rose Gate II trails; Planning Division guidelines; and 2016 Growth Management Allocations. City Manager Schwabauer pointed out the Blue Sheet for both this item and G-2, which slightly amends the enhanced path diagram by adding green space to both sides of the path to ensure consistent landscape on both sides, which will be maintained by the City. This minor change creates a much more recreationally-inviting trail. Mr. Hoffman added that, if the trail is not aesthetically pleasing, it will not be utilized. In response to Council Member Mounce, Mr. Hoffman stated that the enhanced trail along West Gate Drive will run from Lodi Avenue and end at Harney Lane, but the area south of Van Ruiten Ranch has not yet developed. Council Member Mounce pointed out that there are homes and a school in that area, to which Mr. Hoffman stated the trail would be west of those structures. Mayor Kuehne acknowledged the developers, Tom Doucette and Dennis Bennett, for working with the City to develop the enhanced trail plan. Mayor Kuehne opened the public hearing for public comment. Kathryn Siddle, Chair of Bike Lodi, thanked City staff, Council, and the developers for the enhanced paths through both developments. The members of Bike Lodi appreciate that their concerns were heard and acted upon. She stated this trail will be an asset to the new neighborhood and the community, adding that Caltrans recently released a draft of the Statewide bicycle-pedestrian plan, which reports that by 2041 all individuals, regardless of ability, age, or income, will be able to walk or bike for their transportation needs. This new plan works toward that endeavor by improving the safety and comfort of paths and connecting residents to all Lodi has to offer. 6 Theresa Johnson expressed support for the enhanced trail and questioned if the landscaping will be designed in such a way that will prevent individuals from hiding in bushes for criminal purposes. She stated she was concerned for the safety of children utilizing the bike path. Mr. Hoffman stated that appropriate landscaping will be planted, including trees that mature without low-hanging branches and lower-lining plants, and adequate lighting will be installed. The goal is to ensure the path is usable during daylight and at night. There being no further public comments, Mayor Kuehne closed the public hearing. Council Member Mounce suggested that no plants or trees be planted that could tear up the sidewalk as that will create a greater maintenance issue for the City, as well as a hazard for people walking along the path. Mayor Pro Tempore Nakanishi expressed support for the new plan, which works toward creating an avenue for pedestrians to walk from one side of town to the other. Mayor Kuehne further thanked staff for its hard work and effort in pulling the enhanced plan together. Council Member Chandler made a motion, second by Mayor Pro Tempore Nakanishi, to adopt Resolution No. 2017-20 approving the Planning Commission's recommendation to authorize 250 Low-Density Residential, 95 Medium-Density Residential, and 180 High-Density Residential Growth Management Allocations for the Rose Gate II 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 Mayor Pro Tempore Nakanishi questioned what a quasi-judicial hearing is, to which Mr. Schwabauer explained that this language was added to Council's resolution on rules and conduct for meetings, business, and proceedings. He explained that Council serves in a legislative capacity where laws are passed that apply to everyone in the City and also a quasi- judicial capacity when it decides the application of law to fact in a particular circumstance. In the latter, those individuals involved in the issue have a right to due process, including the right to know who contacted each Council Member outside of the Council meeting with information that is material to Council's decision. Mr. Schwabauer provided the example that, if someone from Bike Lodi contacted a Council Member to lobby on behalf of this project, it would be incumbent upon the Council Member to disclose that information at the beginning of the hearing to ensure all due process rights are protected. G-2 Continued Public Hearing to Consider Adopting Resolutions Approving the Planning Commission's Recommendation to Authorize 67 Low-Density Residential Growth Management Allocations and Approve a Vesting Subdivision Map for the Villa Fiore Ranch Subdivision, a 13.7-Acre, 67-Unit Subdivision (CD) NOTE: This item is a quasi-judicial hearing and requires disclosure of ex parte communications as set forth in Resolution No. 2006-31 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 resolutions approving the Planning Commission's recommendation to authorize 67 Low-Density Residential Growth Management Allocations and approve a Vesting Subdivision Map for the Villa Fiore Ranch Subdivision, a 13.7-acre, 67-unit subdivision. 7 Council Member Mounce disclosed that she met with Dennis Bennett who asked for her support on this issue. Mayor Kuehne disclosed that he contacted and met with Bike Lodi and Tom Doucette regarding G-1 and with Dennis Bennett on G-2. In response to Mayor Pro Tempore Nakanishi, City Manager Schwabauer explained that, under a quasi-judicial item, a Council Member is required to report information learned on the matter that is not already included in the discussion and information before Council. City Planner Craig Hoffman provided a PowerPoint presentation regarding Villa Fiore Ranch Subdivision. Specific topics of discussion included the request for approval of Growth Management Allocation for 67 low-density residential lots, a vested subdivision map, and adoption of Development Standards for Villa Fiore / Van Ruiten Ranch Subdivision; vicinity map; Van Ruiten Ranch map; vesting map; Westside trail; Villa Fiore trail; and 2016 Growth Management Allocations. In response to Council Member Chandler, Mr. Hoffman stated there is no parking on West Gate Drive because there are no houses fronting the street. He stated there are masonry walls on both the east and west side, and there will also be Class II bike lanes and the enhanced system. Council Member Mounce pointed out that West Gate Drive on the map goes behind Wal-Mart and Lowe's all the way to Rose Gate and there are homes there that would prevent the bike lane going through. Mr. Hoffman stated that West Gate Drive jogs slightly and is on the west side, and Mr. Schwabauer added that the street curves so it does not impact the houses. Council Member Mounce questioned when the developers pay their fees in relation to vesting maps, to which Mr. Hoffman stated they pay at the time of the building permit. With regard to the Villa Fiore project, the applicant requested vesting standards to protect against changes in State regulations, and the City agreed on the condition the developer pays the development fees in existence at the time of the project. Council Member Mounce stated she was pleased to hear that because she is opposed to locking in development fees at today's rate when a project may not build for another five years when costs are higher. In response to Council Member Johnson, Mr. Hoffman stated the masonry wall on West Gate Drive will have a detached trail system with landscaping, as well as landscaping between the trail and sidewalk. In response to Council Member Mounce, Mr. Hoffman stated that the homes constructed in this development will pay $500 a year for maintenance agreements, which will be indexed at 2 percent going forward, in addition to the property tax bill. In response to Mayor Pro Tempore Nakanishi, Mr. Hoffman stated this development will be issued improvement plans and final map in the very near future; homes will likely be constructed this year for the Van Ruiten phase; and Rose Gate will begin construction in 2018. Mayor Kuehne opened the public hearing for public comment. Dwayne Johnson stated that he and his wife are interested in purchasing a home in this development and questioned how close the trail will be to the houses because he was fearful of the potential of criminal activity that could occur along the pathway. Mr. Schwabauer stated that the five-foot walkway and landscaping will equal a distance of 10 feet and the purpose of the design is to entice residents and citizens to walk and bike in the area, as well as put more eyes on the street. There is no change in the plan to fence-in the trail, which can create a nuisance and encourage crime. There will be no space for people to hide and engage in criminal activities; in fact, he stated he believes the design will attract more families and reduce crime. There being no further public comments, Mayor Kuehne closed the public hearing. 8 Council Member Chandler made a motion, second by Council Member Johnson, to adopt Resolution No. 2017-21 approving the Planning Commission's recommendation to authorize 67 Low-Density Residential Growth Management Allocations and Resolution No. 2017-22 approving a Vesting Subdivision Map for the Villa Fiore Ranch Subdivision, a 13.7-acre, 67-unit 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-3 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) 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 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 water rates. Specific topics of discussion included water rate setting, background, recommendation, options, water operating balances, water meter program status, seven-year summary, recommended water flat rates, recommended meter rates, three-percent increase amounts, two-percent increase amounts, local rate comparisons, and regional rate comparisons. In response to Council Member Chandler, Mr. Swimley confirmed that staff's recommendation is to increase the rate by 3 percent and, if Council decided to add Option 4 to the recommendation, the process of increasing rates would continue until the end of the Water Meter Project, after which the rates would sunset. City Manager Schwabauer added that Option 4 includes the sunset in the rate increase to avoid requiring a subsequent Council action to add the sunset. Council Member Mounce questioned if the date of the sunset could be changed from January 1, 2021 to December 4, 2020, while she is still serving as a Council Member, to which Mr. Swimley responded that the minor change in date would not be an issue. In response to Mayor Kuehne, Mr. Swimley stated that Phases 7 and 8 remain in the Water Meter Program, which include the area east of the railroad between Kettleman Lane and Lockeford Street. Most of the remaining areas are in the east side of town, which is the oldest part of town with 80- to 100-year-old infrastructure. By the end of the project, over 26 miles of infrastructure will be replaced. Mayor Kuehne stated that the Heritage District needs the most attention. Mr. Swimley agreed, stating that was the reason behind accelerating the project as much as possible with the pace of the project still matching the revenues. Council Member Mounce stated that the project should have started with the east side as it is the most challenging area because many of the older homes have pipes under houses and into the alleyways, which could increase project costs. In response to Council Member Mounce, Mr. Swimley stated that the area near Highway 12 and Lodi Avenue had a significant amount of older pipes, but the contractor was able to make quick changes when problems were encountered. He stated that, because the most difficult portions of town were saved for last, staff and the contractors have learned to recognize complications and be more versatile in addressing them and the crews have minimized complaints and learned to be more efficient. He confirmed that Phase 8 will include relocating a significant number of pipes from backyards to the front. In response to Council Member Johnson, Mr. Swimley stated that the remaining areas in the Water Meter Project will be more costly and challenging, which is why they were split into two phases. 9 In response to Mayor Kuehne, Mr. Swimley stated that he could not recall a time when water was not delivered to customers due to a failure in infrastructure; however, there are times when water is turned off for a planned outage for maintenance, but customers are provided ample warning to plan around it. He further stated that, during his career in Lodi, there has not been a water order issued for quality because Lodi protects its water aggressively to ensure it meets State and Federal water quality standards. Council Member Mounce expressed concern for those on low and fixed incomes, as well as disability, who cannot afford the cost of everyday life, which is compounded by increases across every service and function, i.e. water, wastewater, electricity, gas, fuel, vehicle registration, etc. The $1.38 increase in water rates is not the problem; it is the collective of all of the increases that make it tougher to live in Lodi. She stated she would like an option presented that would mitigate this rate increase yet still provide the necessary infrastructure on the east side of town. Mayor Pro Tempore Nakanishi echoed Council Member Mounce's comments, stating that low- income seniors complained that rates across the board are increasing and they felt they were being punished for conserving water. Lodi has a superb water and wastewater system, and he stated he would prefer to have low rates now and take care of the remaining infrastructure later. In response to Mayor Kuehne, Mr. Swimley stated there are 240 miles of pipeline for the entire utility, a state-of-the-art water treatment plant that will be in place for a long time, and 4,000 hydrants and valves that must be exercised regularly so they are ready for use when needed. He stated the trained staff in Public Works takes pride in its efforts to maintain a reliable, high-caliber resource. In response to Council Member Chandler, Mr. Swimley stated that Galt recently installed water meters, Stockton already has them, and he was uncertain where Manteca is with its meter program. He stated that Tracy's water rate is at the low end because it funded its capital program through a community facilities district instead of through the rate on customers' water bills. Council Member Mounce expressed frustration with how meeting procedures were handled, specifically with failing to recognize Council Members for comment, and left the meeting at 8:51 p.m. Mr. Schwabauer explained that conservation is only part of the utility's problem, and the driving factor behind the rate increase is the $5 million a year the City is spending to replace the infrastructure in town. He agreed it is incongruous that usage decreases due to conservation while the rate increases; however, the majority of the rate is not associated with conservation. The Water Meter Program is not affected by the amount of water consumed. The drivers are the City's cost to pay for the water supply, the operating and maintenance costs, and the cost of the debt service on the plant. He added that the State instituted the Groundwater Management Act that requires all entities overlying the groundwater supply to reduce water use in the groundwater basin, which will be a painful process. Council Member Johnson requested clarification about the options presented, stating his understanding was that each one - financing, adjusting the rate increase, and deferring maintenance - would cost more than the recommended 3 percent increase in the long run, to which Mr. Swimley replied in the affirmative. Mayor Pro Tempore Nakanishi stated that Lodi has adequate water and that returning to normal water usage would increase revenue coming into the utility. He stated that he supports leaving the rates as is and using reserve money in the meantime. If he had a second choice, he would support Option 3 with no rate increase until 2020 and financing the Water Meter Project by borrowing $1.5 million. Mr. Swimley corrected Mayor Pro Tempore Nakanishi, stating that $1.5 million represents the interest on an $8 million loan to finish the Water Meter Project without raising rates. Mr. Schwabauer added there is $8 million worth of construction left to finish and, if the City financed the project, it would ultimately cost $9.5 million because of the $1.5 million in interest. He stated bond market representatives indicated it would cost $3.5 million in interest to 10 take out a bond, but local banks are able to loan money at a more favorable rate of $1.5 million. Mr. Schwabauer further explained that financing the Water Meter Project would prevent a rate increase at this time; however, rate payers will ultimately pay in the future when another project comes along because it would be impossible to absorb the cost in the utility without raising rates. Mayor Pro Tempore Nakanishi reiterated that his preference is not to raise rates, with the second option of borrowing $8 million and restructuring the rates. Council Member Chandler agreed with comments by Council Member Johnson that the other options will be more costly and will delay the Water Meter Project. As painful as it is to raise rates, he believed that customers prefer smaller, incremental increases over sporadic, hefty increases. He expressed support for staff's recommendation of a 3 percent increase, along with Option 4 providing for a sunset on the rate. Mayor Kuehne stated that many people do not realize how precious water is until they do not have it, adding that he worked in third world countries raising money to build wells for those who do not have clean water. Lodi delivers a regular flow of clean water, and he stated he believes water is a luxury that individuals cannot live without. Mayor Kuehne stated he does not wish to slow down or stop the Water Meter Project, especially for the portion of town that needs the infrastructure improvements the most, and he too agrees with smaller, incremental rate increases along with Option 4 providing for a sunset on the rate. He stated that he believes the financing option would only put the City in further debt. Mayor Pro Tempore Nakanishi stated that Option 3 for financing the project would provide money in phases and provide relief to customers over the years. Mayor Kuehne opened the public hearing for public comment. Spencer Dayton spoke in opposition to the proposed rate increase, stating that many Lodi residents work minimum wage jobs and are on a low or fixed income. The additional $1.38 added to the water rate only compounds with all of the other rate, fee, and tax increases, and he stated he was concerned these constant rate increases will drive residents out of Lodi because of the high cost of living, thereby causing this community to die in the future. Mr. Spencer stated he supports the financing option even though it may cost $1.5 million after interest. Mike Lusk distributed a letter of opposition (filed) to the proposed rate increase because of the burden it places on City rate payers and a recycled water claim (filed) requesting reimbursement on monies raised for recycled water at the White Slough Water Pollution Control Facility that was put into the general fund instead of the water utility. He stated that originally the contracts stated water would be sold and the money would go into the water utility, but after three years of negotiation, that changed in the contract and the $1 million payment was funneled into the general fund instead. He stated he believed that money should go back to the water utility under the recycled water program. Don Cooper stated the title of this item is ambiguous and the discussion has veered off onto water quality, operations and maintenance, and water design, which should be independent topics. He requested that someone from the City inspect his water, particularly on a Monday morning, to test it for chlorine because it smells and tastes unpleasant. He stated the reserve funding should remain because the east side may present issues when the Water Meter Program commences in that area. He suggested offering loans to be purchased by customers if they can make more money versus investing in CDs. He stated there is a high population of seniors and fixed-income individuals trying to pay their bills and suggested a line item on bills that indicates the minimum amount of water needed to survive, which could help soften the blow for customers on the new rate. He further suggested another line item for a public goods charge that would put money together over time as an incentive for customers to modify sprinklers, toilets, and dishwashers. Mr. Cooper stated he would rather pay for the deficit as a surcharge on the rate, instead of part of the volumetric rate, that is time specific to a certain period. Regardless, the City needs a plan that does not delay or stop the Water Meter Program because it is important to complete the project. 11 Mayor Pro Tempore Nakanishi requested he be provided a sample of Mr. Cooper's water when Public Works tests it. Liz Bowman agreed with Mr. Cooper that this discussion is becoming muddled with other issues, it appears as if some of the Council Members do not understand the complexities of the issue, and it appears there is conflicting information being provided. She suggested the matter be postponed until all of the details are settled in order to make a proper, well thought-out decision. Theresa Johnson expressed opposition to the proposed water rate increase, stating there is a significant number of residents living on a low or fixed income and the added 3 percent will create a hardship for them. She stated the Council is a steward of the citizens' money in the decisions it makes and it should not make a decision that would take the operating reserve below the threshold. She further stated she does not support the financing option because of the unknowns that may happen with health, pension, and new legislators and she prefers skipping the year to see what happens with these critical unknowns. The City is also looking to raise other rates for electricity and solid waste and, eventually, enough is enough. There being no further public comments, Mayor Kuehne closed the public hearing. Mr. Schwabauer reiterated that a reduction in the use of water does not drive the cost of operating the water treatment system. If people use less water, the City recovers less money; if they use more, the City recovers more money. He stated that use drives how much revenue the City receives but not what it costs to operate the system. In response to Mr. Lusk, he stated the City did not fund the $40 million Water Meter Program with a Certificate of Participation, which would have turned it into a $70 million project; instead, it was a "pay-as-you-go" plan. The consequence of such a plan, and not having to pay off debt, is the short-term need for a 3 percent increase over the next three years and a sunset at the end of the Water Meter Program. Mayor Pro Tempore Nakanishi made a motion to hold off on setting the pre-approved Engineering News Record adjustment index for usage-based and flat water rates for residential, commercial, and industrial customers and wait for a year and a half. The motion failed for lack of a second. Mayor Kuehne stated that he was opposed to borrowing money and prefers the "pay-as-you-go" plan because it creates less hassle and heartache at the end of the program. Further, he expressed opposition to deferring maintenance on the east side of town because of the older infrastructure, adding this area needs improvement the most. He stated that he believes the staff recommendation of 3 percent is the best option because it will not take the fund below the operating reserve and he was supportive of adding the Option 4 sunset to the rate. Prior to voting on the below motion, Mayor Kuehne asked if the maker of the motion, Council Member Chandler, would amend the motion to change the sunset date from 2021 to 2020 as Council Member Mounce requested, to which Council Member Chandler stated he believed it was unnecessary to move the date forward. Council Member Chandler made a motion, second by Mayor Kuehne, to adopt Resolution No. 2017-23 setting pre-approved Engineering News Record Adjustment Index for usage-based and flat water rates for residential, commercial, and industrial customers as recommended by staff, including a “rate sunset” at the end of the Water Meter Program whereby water rates will be reset going forward from January 1, 2021. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, and Mayor Kuehne Noes: Mayor Pro Tempore Nakanishi Absent: Council Member Mounce 12 RECESS At 9:53 p.m., Mayor Kuehne called for a recess, and the City Council meeting reconvened at 9:58 p.m. H. Communications H-1 Monthly Protocol Account Report (CLK) Council Member Chandler made a motion, second by Mayor Pro Tempore Nakanishi, to approve the monthly Protocol Account Report through January 31, 2017. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Noes: None Absent: Council Member Mounce I. Regular Calendar I-1 Receive and File City’s Comprehensive Annual Financial Report (Fiscal Year 2015/16) by Macias, Gini & O’Connell, LLP (FIN) City Manager Stephen Schwabauer provided a PowerPoint presentation regarding the City's 2015/16 Comprehensive Annual Financial Report (CAFR) and introduced Scott Bruner with Macias, Gini & O'Connell, LLP. Specific topics of discussion included auditor's opinion, status of City's financial position, highlights of financial records, pension stabilization fund, net pension liability, change in accounting, single audit, and management letter. Mr. Schwabauer reported that he is working with Council Member Mounce and the League of California Cities to address the California Public Employees Retirement System (Cal-PERS) issue. He stated he believes it is time for legislators and public employees to stand up and say cities have an obligation to provide public services and that cities will not be destroyed even though it may come at a cost of reduction in pensions. Mr. Schwabauer pointed out a typographical error on page 13 of the CAFR that reflects an "A" rating for Electric Utility, when it should be an "A-" rating. He stated the report submitted presents a balanced financial statement that reflects a strong financial position for those things councils control. Looming on the horizon are situations beyond Council's control, such as Cal-PERS that may once again drop its rate from 7 percent to 6.25 percent, which will only magnify the current problem. Mr. Schwabauer stated he is discouraged at the approach from Cal-PERS that this is a city problem that was created by cities when Cal-PERS assured cities in 2000 that they would not pay a penny for the program even if it increased. Unfortunately, the position of Cal-PERS was morally and factually incorrect, and he stated that he and the Council are united to fight this issue in the coming years. He stated he was proud to submit a strong financial statement to the City Council. Mayor Pro Tempore Nakanishi stated that Lodi is a fiscally-sound city with less debt, but if the situation does not improve, cities will go bankrupt. Council Member Johnson made a motion, second by Council Member Chandler, to receive and file the City's Comprehensive Annual Financial Report (Fiscal Year 2015/16) by Macias, Gini & O'Connell, LLP. VOTE: The above motion carried by the following vote: Ayes: Council Member Chandler, Council Member Johnson, Mayor Pro Tempore Nakanishi, and Mayor Kuehne 13 Noes: None Absent: Council Member Mounce J. Ordinances - None K. Adjournment There being no further business to come before the City Council, the meeting was adjourned at 10:16 p.m. ATTEST: Jennifer M. Ferraiolo City Clerk 14