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HomeMy WebLinkAboutCC Minutes 2003-02-03SRCC Minutes (Regular) 02/03/2003 Page 1 IN THE COUNCIL CHAMBER OF THE CITY OF SAN RAFAEL, MONDAY, FEBRUARY 3, 2003 AT 8:00 P.M. Regular Meeting: San Rafael City Council Also Present: Rod Gould, City Manager Gus Guinan, Assistant City Attorney Jeanne M. Leoncini, City Clerk OPEN SESSION — COUNCIL CHAMBER — 6:00 PM: Mayor Boro announced Closed Session items. CLOSED SESSION — CONFERENCE ROOM 201 —6:00 PM: Present: Albert J. Boro, Mayor Gary O. Phillips, Vice -Mayor Paul M. Cohen, Councilmember Barbara Heller Councilmember Cyr N. Miller, Councilmember Absent: Gary O. Phillips, Vice -Mayor (arrived at 8:20 p.m.) a) Conference with Legal Counsel -Anticipated Litigation-G.C. Section 54956.9(b) Facts and Circumstances Indicating a Significant Exposure to Litigation: -G.C. Sect. 54956.9(b)(3)(C)-Letter from Attorney for Shapell Dated 1-13-03 and Letter from CYO Director Dated 1-10-03 -G.C. Sect. 54956.9(b)(3)(D)-Partial Draft Minutes of Special City Council Meeting of 1-13-03. Copies available for review in City Clerk's Office. Assistant City Attorney Gus Guinan announced that no reportable action was taken on 1a). b) Conference with Labor Negotiator (Government Code Section 54957.6) Negotiators' Names: Ken Nordhoff, Daryl Chandler, Lydia Romero Employee Organization: San Rafael Firefighters' Association Discussion of 1 b) continued to end of meeting. ORAL COMMUNICATIONS OF AN URGENCY NATURE: 8:00 PM Re: The Patriot Act: - File 9-1 Phillip Guillon stated he was present to propose a new resolution that would guarantee civil liberties over the U.S. Patriot Act of 2001. Explaining the need for the resolution, Mr. Guillon stated that after September 11, the U.S. Patriot Act was passed in order to combat terrorism at home and abroad by expending federal, state and local agencies' authority at the expense of civil liberties and rights. Acknowledging an air of uncertainly and respecting the hard work of the security apparatus, he indicated national security should not come at the expense of individual security, i.e., civil rights and liberties. Mr. Guillon stated individual rights must be safeguarded against privacy insurgence, racial profiling and governmental abuse of power. Examples of their newfound authority include detaining and deporting countless immigrants without due process, spying on political and religious meetings and giving the FBI access to financial, medical and other personal records. Mr. Guillon stated the resolution he was proposing this evening is even more patriotic than the U.S. Patriot Act because it would safeguard civil rights without hindering the investigative process. He reported that already, twenty-four cities and counties nationwide had passed resolutions similar to this opposing the U.S. Patriot Act, and a few weeks ago, San Francisco acted likewise. With regard to why San Rafael needs this resolution, Mr. Guillon explained that San Rafael is the epicenter of Marin County's industrial engine, the heart of a flourishing, diverse population, and the base of the Board of Supervisors' agenda formulation. He indicated that the resolutions passed in San Rafael fundamentally alter Marin County's Board of Supervisors' future agenda; therefore, San Rafael's decision on this has wide ramifications. Should the resolution pass, the Board of Supervisors would surely pass a similar resolution at the County level and the number of resolutions nationwide would increase. He stated that San Rafael is also the home of a large Latino community, now known to have surpassed the African-American minority in the United Sates, and they need the City's support now more than ever. Mr. Guillon suggested reassuring the Latino community of San Rafael's commitment to their civil rights and liberties by adoption of this resolution. Concluding, Mr. Guillon requested this resolution be placed on a future agenda for eventual adoption. He stated it would not alter City employees' actions or behavior, nor would it hurt fellow agencies or seriously SRCC Minutes (Regular) 02/03/2003 Page 1 SRCC Minutes (Regular) 02/03/2003 Page 2 hinder their investigative process, rather local agencies would now have a choice about whether to support or ignore a federal agency's request dependent on civil rights violations. He stated the resolution is also a symbolic gesture that would strengthen the minorities' trust in the electorate and democratic process. They would see and understand their individual rights and liberties were chosen over a federal government's clear abuse of power. Mayor Boro referred the matter to City Manager Gould for review in light of existing policy regarding issues at the federal level. City Manager Gould requested a means of contact for the speaker, indicating he would alert him upon making the comparison. Councilmember Miller moved and Councilmember Heller seconded, to approve the Consent Calendar as follows: AYES: COUNCILMEMBERS: Cohen, Heller, Miller and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Vice -Mayor Phillips ABSTAINING: COUNCILMEMBERS: Cohen and Mayor Boro (from item #2 only, due to absence from meeting of 1/21/2003.) SRCC Minutes (Regular) 02/03/2003 Page 2 ITEM RECOMMENDED ACTION 2. Approval of Minutes of Regular Meeting of Minutes approved as submitted. Tuesday, January 21, 2003 (CC) 4. Resolution Authorizing Amendment to RESOLUTION NO. 11247 — Agreement with Jeffery Baird Re San Rafael RESOLUTION AUTHORIZING General Plan 2020 (CD) — AMENDMENT TO AGREEMENT WITH File 4-3-353 x 115 (2020) JEFFERY BAIRD RE SAN RAFAEL GENERAL PLAN 2020 (P98-4) (Commencing 12/7/1998 and Ending on 6/30/2004) 5. Resolution Renewing Contract with Kenneth RESOLUTION NO. 11248 — Emanuels & Associates for Legislative Advocacy RESOLUTION AUTHORIZING THE Services on Behalf of Marin County Council of CITY OF SAN RAFAEL TO RENEW Mayors and Councilmembers ("MCCMC") (CM) THE CONTRACT WITH KENNETH — File 4-3-354 x 113 x 116 x 9-3-11 EMANUELS & ASSOCIATES FOR LEGISLATIVE ADVOCACY SERVICES ON BEHALF OF THE MARIN COUNTY COUNCIL OF MAYORS AND COUNCILMEMBERS FOR THE PERIOD OF JANUARY 1, 2003 THROUGH DECEMBER 31, 2003 6. Resolution Authorizing Agreement Between City RESOLUTION NO. 11249 — of San Rafael and Orca Swim Club for the 2003 RESOLUTION AUTHORIZING THE Swim Season (April through August) (CS) — SIGNING OF THE 2003 AGREEMENT File 4-10-172 x 9-3-65 BETWEEN THE CITY OF SAN RAFAEL AND THE ORCA SWIM CLUB 7. Monthly Investment Report for Month Ending Accepted Monthly Investment Report December, 2002 (MS) File 8-18 x 8-9 for month ending December, 2002, as presented. 8. Resolution Adopting the Disadvantaged Business RESOLUTION NO. 11250— Enterprise Annual Overall Goal for 2002/03 (PW) RESOLUTION ADOPTING THE File 232 x 9-3-40 DISADVANTAGED BUSINESS ENTERPRISE ANNUAL OVERALL GOAL FOR 2002/2003 AYES: COUNCILMEMBERS: Cohen, Heller, Miller and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Vice -Mayor Phillips ABSTAINING: COUNCILMEMBERS: Cohen and Mayor Boro (from item #2 only, due to absence from meeting of 1/21/2003.) SRCC Minutes (Regular) 02/03/2003 Page 2 SRCC Minutes (Regular) 02/03/2003 Page 3 PUBLIC HEARING: 9. Public Hearing — CONSIDERATION OF ORDINANCE AMENDING SAN RAFAEL MUNICIPAL CODE SECTIONS 14.03.030, 14.05.020, 14.05.022, 8.15.005 AND 8.15.270 TO PROVIDE A DEFINITION FOR "SIGNIFICANT TOBACCO RETAILER" AND TO PROHIBIT ESTABLISHMENT OF NEW SIGNIFICANT TOBACCO RETAILERS WITHIN ONE OF THE THREE ALTERNATIVE DISTANCES (1,000 FEET (ALTERNATIVE "A"), 750 FEET (ALTERNATIVE "B"), OR 500 FEET (ALTERNATIVE "C") FROM THE FOLLOWING YOUTH -ORIENTED LAND USES: SCHOOLS, PARKS, LIBRARIES, COMMUNITY/RECREATION CENTERS, DAYCARE CENTERS, AND HOUSES OF WORSHIP WITH ORGANIZED YOUTH PROGRAMS; CITY OF SAN RAFAEL, APPLICANT (CD) — FILE 10-3 x 10-1 x 10-2 x 13-1 Mayor Boro declared the public hearing opened and explained that this item was heard at the last City Council meeting (1/21/2003); however, due to an inadvertent processing problem with the local newspaper, it was not noticed and this hearing was being held as a formality to comply with this noticing mechanism. Associate Planner Damon DiDonato explained the Municipal Code text amendments before Council this evening would provide a definition for significant tobacco retailers, permit significant tobacco retailers within certain commercial districts, subject to approval of a Use Permit, and prohibit significant tobacco retailers from locating within one of three alternative distances — 1,000 feet, 750 feet or 500 feet — from specified youth oriented land uses. As indicated in the staff report, Mr. DiDonato reported the Planning Commission recommended approval of the text amendment with a 1,000 -foot alternative. He indicated the Planning Commission also directed staff to modify the text amendments to make the definitions and language consistent with the County's ordinance and consult with the City Attorney regarding the possible prohibition of significant tobacco retailers at Northgate Mall and the Transit Center. Mr. DiDonato reported that the City Attorney raised two issues for Council's consideration: 1) Whether there was sufficient evidence that uses such as Northgate Mall and the Transit Center quality as youth oriented land uses, i.e., are they places where children tend to gather and visit; and 2) Should they indeed quality as youth oriented land uses, the City Attorney recommended that the code should refer to prohibiting establishment of significant tobacco retailers within a specified distance from parcels containing these uses, and not the specific properties. Councilmember Phillips arrived at the City Council meeting at 8:20 p.m. In response to the City Attorney's issues, Mr. DiDonato reported that staff conducted additional research and visited the Northgate Mall and Transit Center. He indicated that large groups of children were present at the Northgate Mall and in particular, teenagers; however, this was not so at the Transit Center. Mr. DiDonato stated staff recommends the City Council approve the text amendment with the 1,000 -foot alternative, including shopping malls. There being no comment from the audience, Mayor Boro closed the public hearing. Although sorry the process had to be repeated, Councilmember Cohen stated he was delighted to have the opportunity to vote on the issue (Councilmember Cohen being absent from the previous meeting), since he had requested it be brought up. The title of the ordinance was read: ""AN ORDINANCE OF THE CITY OF SAN RAFAEL AMENDING SECTIONS 14.03.030, 14.05.020, AND 14.05.022 OF THE MUNICIPAL CODE CONCERNING THE REGULATION OF SIGNIFICANT TOBACCO RETAILERS" Having read the minutes of the previous meeting and agreeing with the deliberations, Councilmember Cohen moved and Councilmember Miller seconded, to dispense with the reading of the Ordinance in its entirety and refer to it by title only, and pass Charter Ordinance No. 1797 to print by the following vote, to wit: SRCC Minutes (Regular) 02/03/2003 Page 3 SRCC Minutes (Regular) 02/03/2003 Page 4 AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None The following item was removed from the Consent Calendar to await the arrival of Vice -Mayor Phillips, who arrived at 8:20 p.m. 3. SECOND READING AND FINAL ADOPTION OF ORDINANCE NO. 1796 — "AN ORDINANCE OF THE CITY OF SAN RAFAEL AMENDING TITLE 18 OF THE SAN RAFAEL MUNICIPAL CODE; PROTECTION OF FLOOD HAZARD AREAS" (PW) — FILE 12-9 x 9-3-40 Councilmember Miller moved and Councilmember Heller seconded, to dispense with the reading of the Ordinance in its entirety and refer to it by title only, and approve final adoption of Charter Ordinance No. 1796 by the following vote, to wit: AYES: COUNCILMEMBERS: Heller, Miller and Vice -Mayor Phillips NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ABSTAINING: COUNCILMEMBERS: Cohen and Mayor Boro, (due to absence from meeting of January 21, 2003.) 10. Public Hearing — CONSIDERATION OF AMENDMENTS TO ENVIRONMENTAL AND DESIGN REVIEW PERMIT AND VESTING TENTATIVE MAP CONDITIONS OF APPROVAL FOR THE APPROVED REDWOOD VILLAGE (FORMERLY RANCHITOS PARK) DEVELOPMENT, PROPOSED FOR A 17.6 -ACRE SITE LOCATED NORTH OF NORTH SAN PEDRO ROAD AND LOS RANCHITOS ROAD (APN 179-131-01 AND PORTION OF 179-142-42) (CD) - FILE 10-7 x 5-5 x 4-3-380 Mayor Boro declared the public hearing opened and absented himself due to a conflict of interest, explaining he had stock in PG&E, which is still a property owner. Vice -Mayor Phillips then presided. Contract Planner Paul Jensen explained that the project was approved last April by the City Council subject to a number of environmental mitigation measures and conditions of approval, and Signature Properties had returned this evening requesting amendments to three of the conditions of approval, specifically with regard to the Tentative Map. Mr. Jensen reported that the first request pertained to the retaining wall design approval that was granted for this project. The conditions of approval require that all the retaining walls within the development be constructed using a concrete block material, either split -face or score design, and he stated that Signature requests that for some of the interior walls for the interior lots, the smaller walls of less than 3'/2 feet in height, they would like to use a treated wood. Having been reviewed by both the Planning Commission and Design Review Board, Mr. Jensen indicated they supported this change with several conditions: 1) If wood walls are used, a decorative cap should be installed. If wood walls are used, they should be addressed in the CC&Rs (Conditions, Covenants and Restrictions) within the subdivision to ensure the Homeowners Association is responsible for long- term maintenance rather than the individual homeowner; 2) An expanded list for the street names. The City's Subdivision Ordinance requires that the Planning Commission approve specific street names. The Planning Commission did suggest the condition be changed to allow staff to approve additional street names, as they felt the names sounded too much alike. This was deferred to staff in consultation with the Fire and Police Departments; 3) With regard to the right turn lane requirement to be installed at the Merrydale/Highway 101 off -ramp, which was a condition of approval last year, the condition requires that the developer work with and obtain CALTRANS approval and install this lane prior to the recordation of a final map by the City. The developer had been working with CALTRANS; however, was not successful in securing those approvals. They are requesting that the condition be changed to allow them to bond for this improvement and install the lane within one year of the final map, and this was also favorably reviewed by the Planning Commission. Mr. Jensen commented that the notice did refer to an amendment of a condition to the Design Review Permit; there was an initial request to adjust the timing of the park construction, which was withdrawn by Signature at the Planning Commission meeting. SRCC Minutes (Regular) 02/03/2003 Page 4 SRCC Minutes (Regular) 02/03/2003 Page 5 He reported that he and Signature Properties' representatives were available to answer questions this evening. There being no comment from the audience, Vice -Mayor Phillips closed the public hearing Councilmember Cohen requested confirmation on Mr. Jensen's statement that a bond would be posted for the cost of the work, and also the language in the staff report, which indicates diligently pursuing CALTRANS' approval. Mr. Jensen responded affirmatively. Councilmember Cohen also confirmed with Mr. Jensen that the recommendation from the Planning Commission was not to accept the (street) names as proposed, rather vest that authority in the Planning Director. Councilmember Cohen confirmed that both these points were reflected in the resolution. Councilmember Heller inquired whether the project sponsor had one year from bonding to complete the improvements. Mr. Jensen stated this was cited in the resolution. Councilmember Cohen moved and Councilmember Heller seconded, to adopt the resolution RESOLUTION NO. 11251 — RESOLUTION APPROVING AMENDMENTS TO VESTING TENTATIVE MAP (TS 00-02) CONDITIONS OF APPROVAL FOR THE REDWOOD VILLAGE DEVELOPMENT (FORMERLY RANCHITOS PARK) AT NORTH SAN PEDRO ROAD AND LOS RANCHITOS ROAD (APN 179-131-01 AND A PORTION OF 179-142-30) AYES: COUNCILMEMBERS: Cohen, Heller, Miller and Vice -Mayor Phillips NOES: COUNCILMEMBERS: None ABSENT/ DISQUALIFIED: COUNCILMEMBERS: Mayor Boro, (due to conflict of interest.) Mayor Boro returned to the Council Chamber 11. Public Hearing — (Continued from meeting of January 21, 2003) CONSIDERATION OF ORDINANCE AMENDING SAN RAFAEL MUNICIPAL CODE SECTION 14.19.030 TO ALLOW THE CITY COUNCIL TO ADOPT BY RESOLUTION TEMPORARY PROCEDURES AND PERMITTING REQUIREMENTS FOR THE DISPLAY OF TEMPORARY PROMOTIONAL BANNERS BY BUSINESSES LOCATED WITHIN THE CONFINES OF THE DOWNTOWN REDEVELOPMENT AREA (DOWNTOWN) AND ALONG FRANCISCO BOULEVARDS EAST AND WEST; CITY OF SAN RAFAEL, APPLICANT (CD) — FILE 125 x 11-5 x 10-2 x 10-6 Associate Planner Damon DiDonato reported the item consisted of two parts: 1) A text amendment that would allow the City Council to approve by resolution procedures and permitting requirements for the display of promotional banners downtown and along Francisco Boulevards East and West; and 2) A resolution with Planning Commission recommended procedures and permitting requirement, for the display of those banners. Mr. DiDonato explained that the recommended procedures and permitting requirements would permit businesses within the specified areas to display a maximum 32 -square -foot banner for a maximum of 60 days per calendar year, all at once or for no more than four increments. He indicated that Planning staff would be required to create the special banner permit within its database, track the permits from the approval to expiration dates and Code Enforcement would be required to generate a list of expiring permits and drive around to ensure those banners were removed in a timely fashion. Mr. DiDonato reported that banner permit applicants would be required to pay a $148 fee to cover the anticipated Planning and Code Enforcement costs and sign a pre -citation notice to the effect that failure to remove a banner would result in a citation without further warning. He reported that a condition of project approval would require the Community Development Department to review its temporary procedures and permitting requirements and prepare a report for the City Council on the success of the program, within 150 days. Referring to the statement in the staff report to the effect that in response to comments made SRCC Minutes (Regular) 02/03/2003 Page 5 SRCC Minutes (Regular) 02/03/2003 Page 6 by the San Rafael Chamber of Commerce, the Planning Commission recommended several changes to the procedures in permitting requirements to provide clarification and streamlining, Mayor Boro requested staff to elaborate. Mr. DiDonato explained that the Chamber of Commerce requested the permits be reviewed within five working days and at that time, staff explained it was anticipated these would be reviewed and approved over the counter, as is the case with most staff level sign permits. He indicated staff anticipated this would be either the day of application or within one or two working days. He confirmed for Mayor Boro that this was the extent of it. Councilmember Heller inquired whether staff had any estimates of the amount of additional work involved for Code Enforcement. Responding, Community Development Director Bob Brown explained it was difficult to judge, which was the reason for staff's suggestion that there be a trial period to in part, evaluate not only the aesthetics of the program and its business impacts, rather also the impacts on staff time. He reported that presently, one Code Enforcement Officer is assigned to zoning enforcement and approximately 10% of that officer's time deals with illegal signs of some type Having gone through the statistics today, he reported that approximately two-thirds of these are Downtown and Francisco, the areas of highest concentration of retail uses. Mr. Brown stated his guess was that staff time devoted could end up being doubled, certainly at the beginning of the program, to educate people; however, essentially, a Code Enforcement Officer would need to go by all the permitted locations to ensure the banners were removed in a timely manner, while still enforcing any that were illegal. Realizing the question would arise as to what this would do to the Code Enforcement program, Mr. Brown stated it would require some re -prioritization with respect to what other zoning violations they address. Councilmember Heller, noting retail was not included, rather just businesses, stated it appeared that anyone could erect a banner. Mr. Brown concurred. Councilmember Miller posed a number of questions to Mr. Brown to assist Mr. Miller in getting his viewpoints into context: 1) The guiding community purpose is a Sign Ordinance to preserve and improve the visual appearance of the City as a place in which to live and work and as an attraction to non- residents who come to visit or trade? Community Development Director Bob Brown explained there are seven listed purposes of the Sign Ordinance, two of which relate most closely to the banner question. He stated that the one referenced deals with the visual appearance, also addressing the purpose of the Sign Code for attracting non-residents to visit or trade. Mr. Brown indicated it could be stated that advertising is an attractant to both non-residents and residents as an encouragement to trade. In terms of the community purpose, he stated the community purpose would be the support of more potentially viable retail, retention of that retail and the ability to inform residents of services that are provided locally. Mr. Brown stated that a further purpose (d) states "to encourage sound signing practices as an aid to business and for the information of the public." He explained this, essentially, is the same issue, ascertaining how the ability to increase advertising aids businesses and how it informs the public as to services available. 2) The guiding business purpose of a Sign Ordinance is to locate and identify the site where the business operates? Mr. Brown explained that as to the nature of the sign ordinance, the real question before Council was whether it was strictly to aid in locating a particular business or whether there also was an advertising component of that in terms of attempting to make residents and non-residents aware of services, sales, etc. Councilmember Miller inquired how this was answered in the present ordinance. Responding, Mr. Brown stated that in the present ordinance, the bias was more towards locational criteria, although there were not necessarily prohibitions about indicating goods and services to be provided. He explained that staff aesthetically, tries to balance this by not permitting an appliance dealer, for example, to list twelve different models of an item they sell. SRCC Minutes (Regular) 02/03/2003 Page 6 SRCC Minutes (Regular) 02/03/2003 Page 7 3) Was the present sign ordinance, of which the banners are a part, being revised? Mr. Brown responded affirmatively. 4) When were hearings on the new ordinance to be expected? Mr. Brown stated public forums would be conducted, commencing probably next month, and his guess was that hearings would take place in the fall or towards the end of this year. 5) What evaluation criteria and standards were proposed for the test period and were there criteria or indicators related to purpose as well as administration? Mr. Brown invited Damon DiDonato to discuss how an evaluation would be performed. Returning to the question concerning the guiding practice that governs temporary signs, Mr. Brown indicated he should mention that currently, banners are prohibited on Fourth Street, except for new businesses and those that advertise public events; however, advertising is allowed internally in windows and is limited to 25%. Mr. Brown believed this banner provision would allow the additional square footage essentially, for that same advertising purpose, however, on the face of the building where it would conceivably be more visible than just the window signage. Regarding the criteria for evaluation, Mr. DiDonato explained that during the evaluation period, staff would track the Code Enforcement time required to enforce the ordinance, as well as cooperation from business owners in voluntarily removing the banners, the amount of planning time required in each application, the visual effects of banners aesthetically to the City, safety effects and they would also track public complaints as well as input from business communities. Regarding the trial period of 150 days, Councilmember Phillips noted that the program itself allows for up to sixty days within a calendar year, and inquired as to what would happen if after 150 days it was decided to discontinue the program, i.e., what would become of the roughly half-year or would it be merely "tough luck." Staff not having anticipated this, Mr. DiDonato agreed it probably would be "tough luck." In terms of the relative impact of that cost on a business, Mr. Brown, Community Development Director, explained that the cost of banners are relatively inexpensive today with new technology, and the cost of the permit is not that great. Comparing that same advertising value to placing a significant advertisement in the Marin Independent Journal, he believed most retailers would get "more bang for their buck" with these banners. Therefore, even six months of use was probably a fairly good expenditure of funds for most retailers. Councilmember Phillips commented that it would be unwise to wait until the year-end holidays and have it short-circuited. Councilmember Cohen inquired how the 150 days tied into the tentative schedule for revision of the Sign Ordinance. Mr. Brown explained they were not related. His guess was that public hearings would be unlikely to take place within that 150 days. He stated staff was looking at the Sign Ordinance as dealing with all issues other than banners, e.g., "A" frame signs would clearly be a big issue. As staff chose to change, extend or eliminate the banner provisions, that change would be incorporated into the new ordinance. Councilmember Cohen wondered about folding the review into the revision of the Sign Ordinance, as part of the package. He indicated the same theory could apply; however, it could be reviewed in the context of the overall Sign Ordinance and perhaps, would address some of Councilmember Miller's concerns. Mr. Brown stated the larger question for Council was whether they could accept a longer time frame as he could not guarantee the Sign Ordinance review would be completed in six months. Commenting further, Councilmember Cohen stated it appeared somewhat more thought should be given to the notion of selling permits for a year and pulling the plug after 150 days. He noted that some significant portion of that fee was the upfront cost and recovering it was clearly reasonable; however, to the extent that some portion was perceived as added cost of enforcement and that particular enforcement requirement ceased, the fairness issue needed to be weighed in the context of continuing to charge the full fee for a service not being provided. SRCC Minutes (Regular) 02/03/2003 Page 7 SRCC Minutes (Regular) 02/03/2003 Page 8 Mr. DiDonato indicated there could be some confusion in terms of the permit cost. He explained that the $148 permit cost is actually per permit; therefore, an applicant could conceivably have four permits in a given calendar year each costing $148. He stated that fee is intended to cover one hour of planning time as well as one hour of code enforcement time. Noting the language specifies 60 days in the course of a calendar year and up to four separate times, Councilmember Cohen clarified that each instance incurred a separate fee. Concurring, Mr. DiDonato further explained this would reflect staff doing that work on each separate occasion. In that case, Councilmember Cohen wondered about the ordinance language, indicating the scenario just described was not clear to him in reading the ordinance. Quoting from the ordinance, he stated "display banners for a total period of 60 days within one calendar year (all at once or in no more than four increments), pursuant to a permit issued upon payment of a fee." He noted it did not state that each increment required a separate permit and separate fee. Should this be the intent, Councilmember Cohen stated it should be clarified as it was ambiguous at best. Councilmember Phillips concurred, indicating he believed it was for the year. Mayor Boro indicated staff would work on this. John Sanders sought permission to read a prepared statement: "I appreciate the opportunity to address the City Council on the proposed amendment regarding the use of temporary commercial banners in the Downtown and Francisco Boulevard corridors. I am a resident of San Rafael and have operated a business here for the last eighteen plus years. I, like most businesses, desire to do business in an honest, ethical manner and in conformance with all governmental regulations. However, the San Rafael City Ordinance prohibiting the use of banners by area businesses to promote anything except opening a new business, has been both puzzling and frustrating to me. It is clear to me that the City of San Rafael understands the need to promote significant activities in their exception to the existing ordinance which allows for temporary signs promoting events like the Farmers' Market, Italian Street Painting and other fine functions conducted in the City. In allowing temporary signs and banners for these important events, I am confident the City officials understand that signs provide valuable exposure to the attraction, which improves attendance and revenues from the increased commerce and the activity. While considering enactment of the amendment concerning temporary banners, I would only ask that the City give equal consideration to the need for businesses to promote important events in their business life. These special events often have a major impact on the financial viability of the very businesses that generate sales tax, business license fees and other revenues for the City. We all recognize the need for a reasonable regulation entrusted to the City of San Rafael in this instance to maintain a semblance of order and harmony in our community. I believe that reasonable order and harmony expected by the citizens of our community can be accomplished while allowing businesses to promote important events in their business life. The ordinance amendment currently before the City Council is a good start in supporting the businesses that provide much needed revenue for the City of San Rafael. Therefore, I urge your support to the amendment to the San Rafael Municipal Code concerning temporary commercial banners in the Downtown and Francisco Boulevard corridors." Colin Russell, member Chamber of Commerce Economic Development Committee, reported that one of their tasks over the past couple of years had been to address the issue of temporary banners and he wished to express their appreciation to staff for hearing their message and coming up with what they believe to be a very viable and practical plan to help make it happen. Mr. Russell explained this all came about because of the frustration merchants have felt in trying to promote events within their businesses. In many cases, merchants knowingly, will put up banners. This has started somewhat of an inter -city warfare situation where one person erects a banner, another will report him, etc. He indicated it has created an atmosphere that is not particularly healthy or conducive to harmony; therefore, they believe that with the proper controls in place, this ordinance can achieve aesthetically pleasing banners and help the merchants promote their businesses on a level playing field. Mr. Russell commented that most other communities in Marin allow this, have successful banner ordinances and he did not see any reason why San Rafael could not also. Mr. Russell urged Council's support for the ordinance SRCC Minutes (Regular) 02/03/2003 Page 8 SRCC Minutes (Regular) 02/03/2003 Page 9 Elissa Giambastiani, San Rafael Chamber of Commerce, indicating her pleasure at being present this evening stated they had been working on this for several years. She reported it was initiated by some local businesses indicating they really wanted to use banners; however, were getting fined and did not want to do it illegally. She expressed gratification for the Community Development Department working with them to draft the ordinance. Ms. Giambastiani stated that when Councilmember Heller questioned the fact that the ordinance did not specify retailers, she thought about all of the signs she had seen displayed in the community within the past year: • Banner at the Transit Center, which she believed was still displayed; • Banners at St. Paul's Episcopal Church advertising their program for children; • Banner presently in front of St. Raphael's School, announcing open enrolment; • Banners displayed at the Methodist Church on the Miracle Mile; • The banner for the pool opening in Terra Linda was displayed all summer long. Mr. Giambastiani stated it was clear there are a lot of businesses and other organizations in the community that want to have the use of banners for specific events. She was pleased this was under consideration by Council this evening. In terms of the banner fee, she indicated that some Downtown retailers had indicated that $148 per banner usage was somewhat high; however, she anticipated this could be adjusted when staff ascertained how much time was involved in tracking. Ms. Giambastiani indicated her belief that it would take less time as the fees for keeping the banner up too long are quite large and would get the violator's attention. Lastly, Ms. Giambastiani indicated it would be a nice gesture to the business community to agree they had been suffering, times were tough and this was one business friendly gesture from the City Council for the local business community. Geoff Frank, owner of Sign*a*Rama in San Rafael for three years, reported that when customers request a banner he inquires where the banner is to be displayed. Frequently, they indicate they wish to place the banner in front of their business and he explains to them that they are allowed to have a grand opening banner for twenty-one days. He indicated that people get upset at this, and while he dislikes turning people away, he does not wish to promote illegal banners. Mr. Frank stated this ordinance was good and he appreciated Council's attention this evening. There being no further comment from the audience, Mayor Boro closed the public hearing. Regarding the question concerning the clarity of the ordinance, Mayor Boro invited Community Development Director Bob Brown to comment. Mr. Brown referred Council to page 2 of the Procedures and Permitting Requirements # 3 — Exhibit A — which indicates that "Banners shall be allowed to be displayed for a maximum of 60- days per calendar year (all at once or in no more than four increments with a separate permit being required with each increment.) He explained that this last phrase could be underlined and after a separate permit, the words "and processing fee" could be added for clarification. Councilmember Cohen believed that language to be sufficiently clear and suggested putting this language in the ordinance would address his concern. He noted the ordinance states "all at once or in no more than four increments" and stops, and believed the language "all at once or in no more than four increments with a separate permit being required for each increment" as is indicated in the Procedures, would suffice. Believing it necessary to charge for the cost of doing business, Councilmember Cohen stated he did not believe it unreasonable to charge for each processing occurrence; however, to take this approach, the ordinance should contain the same language. He believed the language was clear and satisfactory. Noting Councilmember Cohen was referring to the "Whereas" in the recitals at the beginning, Mr. Brown explained this does not appear in the actual Municipal Code; however, should Council be concerned about ambiguity, the language could be corrected. As the language was already drafted, Councilmember Cohen suggested it be included in the ordinance to be adopted. Councilmember Cohen noted that the lack of a banner program other than for grand openings had been a source of frustration for a number of merchants downtown and in other areas of SRCC Minutes (Regular) 02/03/2003 Page 9 SRCC Minutes (Regular) 02/03/2003 Page 10 the City. Understanding the reason the Sign Ordinance was originally adopted and concerns about the proliferation of signs, billboards, etc., he believed it was reasonable to try this. He noted from some speakers that as the City favors promoting activities and events through the use of banners, it was reasonable for businesses to seek to do the same. It was, therefore, reasonable for the City to respond to this request by trying it out. Should it not work and found to be offensive by the public, this would be communicated rather quickly. Councilmember Cohen indicated it made good sense to proceed on a temporary basis and gauge reaction. Having a contrary approach, Councilmember Miller stated he believed the ordinance was dedicated to visual appearance. He understood the economic arguments in terms of the advantage to the individual stores and businesses; however, a proliferation of signs that appear within existing programs defeats the very purpose of the Sign Ordinance. He favored beginning with the Sign Ordinance itself and not rushing into the Banner Ordinance. Concerning its assistance to businesses, Councilmember Miller stated everything had been done in the City to raise the Downtown. It was not being anti -business in any way, shape or form or not encouraging business, rather he wanted to be very careful about the proliferation of signage up and down a street where so much time and energy had been expended with maintaining the sign program and its conditions. He reiterated he would prefer to wait and do this concurrently with the sign program. Agreeing with Councilmember Miller, Councilmember Heller stated she had problems with the visual aspect, noting car dealers, service stations, schools, churches, nail salons, all retail, etc., could have a banner. She believed it was not fair to other parts of the City to keep this in the downtown, should this be the choice. She noted other areas would want banners as well as all of the "businesses" in the rest of the entire City. To her, this was a big problem, believing the entire City should not be discriminated against by only allowing a small area to have banners. Councilmember Heller stated she would be happy to look at it again in conjunction with the Sign Ordinance and was not happy with it at this point. Councilmember Phillips stated his view was that it was a trial period and he was willing to allow the program to run for that trial period to evaluate the visual impact. Should there be a proliferation, he believed it indicated something about the business community's judgment as to the value of the signs, i.e., it apparently, would indicate there was value from a business standpoint. He believed the Chamber of Commerce made a good argument with regard to the economic times and this would further demonstrate sensitivity to the business community. Running for 150 days would afford the opportunity to pull back should it not turn out as preferred. He, therefore, was willing to support a trial period to be in a position to make a better judgment at the end of that period. Councilmember Phillips indicated it does not necessarily have to tag onto the Sign Ordinance and believed he could make judgments, separate and distinct. Councilmember Heller stated she understood apartments were not included. Associate Planner Damon DiDonato stated he believed it only applied to commercial districts within the downtown and within Francisco Boulevards East and West. Apartments, he believed were under separate rules for advertising for lease. In relation to the fee of $148 occurring with each permit, Councilmember Phillips encouraged staff to evaluate the fee structure to ascertain whether it could be done more efficiently in the event of multiple permits. Mayor Boro inquired whether Councilmember Phillips was proposing adopting the ordinance without the fee structure. Councilmember Phillips clarified this was not the implication, rather in the event of an on-going program, he suggested it be looked at differently from a fee structure standpoint. Mayor Boro noted this temporary approach was agreed to several months ago at which time it was obvious it would be some time before getting to the Sign Ordinance. He stated it also was agreed it would be limited initially to the Downtown and the Francisco Boulevard area. While it could have application throughout the City, the whole point was to do this as a trial; therefore, tonight's proposal was consistent with what was agreed. Mayor Boro believed the criteria for evaluation was important and he would be very interested to see how it worked if people really did comply. He was also interested in the type of assessment received from the public and the City's and others' feelings regarding the visual impact of the signs within the community. During this time frame and perhaps without substantial extra work, Mayor Boro indicated it could be helpful to ascertain what similar sized communities do in this respect, i.e., towns such as Burlingame, San Mateo, Walnut Creek, as Councilmember Miller made a point that the SRCC Minutes (Regular) 02/03/2003 Page 10 SRCC Minutes (Regular) 02/03/2003 Page 11 whole purpose of the Sign Ordinance was to address the visual clutter that existed at one time. Mayor Boro agreed with the speaker who commented about some of the tactics in San Rafael regarding citing, etc., and the fact that people had "risked" the wrath of the Code Enforcement officers and violation indicated the merchants feel there is some value to it. Considering merchants to be conventional retail merchants, Mayor Boro stated he was somewhat surprised as to the broad depth this could apply to and suggested it be evaluated going forward. Mayor Boro stated he believed the Banner Ordinance should be given a trial; he was counting on the Chamber of Commerce to work, not only with their members, rather also with others in the community to ensure compliance. While it was not possible to regulate content, it was possible to judge what is seen, which could have an impact going forward should this become permanent. With the business community working with staff and its members, it could be re- evaluated in five to six months. He indicated his support for this evening's recommendation. Councilmember Cohen stated this should either be put in the context of the Sign Ordinance or not, and should it be in the context of the Sign Ordinance, which has a number of stated purposes, including protection against visual blight, this made sense. Given that, he believed the approach proposed and approved by the Planning Commission was the correct one as he did not believe it made sense to go through a revision of the Sign Ordinance and conduct a trial period afterwards. It made more sense to take advantage of the opportunity offered by the timing of this now to do a trial period and ascertain whether it resulted in visual blight or a lot of community concern. If it appeared to work, it could be incorporated in the context of the Sign Ordinance revision. Should it not work, the Sign Ordinance could be proceeded with without any reference to banners. Councilmember Cohen stated he was going to suggest this be brought back within the hearings of the Sign Ordinance; however, in light of the concerns expressed by some Councilmembers, he would remain with the recommendation for the 150 days. Depending on the status in 150 days, he indicated he might recommend at that time extending it further, as ultimately, it should be done in the context of the Sign Ordinance. In light of concerns expressed, he stated he would move these actions, sticking with the 150 days and bringing it back in five months to evaluate the effects. In the event of a trial period, Councilmember Miller stated this should include evaluation criteria and as this was not included in the ordinance, he had difficulty with it. Mayor Boro suggested that within thirty days, staff return to Council with elements of evaluation, which could be included with the application. Councilmember Cohen indicated that as discussed, the language on the permitting should be changed. 1) The title of the ordinance was read: "AN ORDINANCE OF THE CITY OF SAN RAFAEL AMENDING SECTION 14.19.030B.3 TO ADD A NEW SUBSECTION 14.19.030B.3(3) CONCERNING THE REGULATION OF TEMPORARY COMMERCIAL BANNERS WITHIN CERTAIN ZONING DISTRICTS OF THE DOWNTOWN REDEVELOPMENT AREA AND ALONG FRANCISCO BOULEVARDS EAST AND WEST (P02-07)" Councilmember Cohen moved and Councilmember Phillips seconded, to dispense with the reading of the Ordinance in its entirety and refer to it by title only, and pass Charter Ordinance No. 1798 to print, as amended, by the following vote, to wit: AYES: COUNCILMEMBERS: Cohen, Phillips and Mayor Boro NOES: COUNCILMEMBERS: Heller and Miller ABSENT: COUNCILMEMBERS: None 2) Councilmember Cohen moved and Councilmember Phillips seconded, to adopt the resolution. Staff directed to return with evaluation criteria for the City Council to gauge the effectiveness of the temporary procedure. RESOLUTION NO. 11252 — RESOLUTION APPROVING TEMPORARY ROCEDURES AND PERMITTING REQUIREMENTS FOR THE DISPLAY OF TEMPORARY BANNERS WITHIN THE DOWNTOWN AND ALONG FRANCISCO BOULEVARDS EAST AND WEST IN THE CITY OF SAN RAFAEL (P02- 07) SRCC Minutes (Regular) 02/03/2003 Page 11 SRCC Minutes (Regular) 02/03/2003 Page 12 AYES: COUNCILMEMBERS: Cohen, Phillips and Mayor Boro NOES: COUNCILMEMBERS: Heller and Miller ABSENT: COUNCILMEMBERS: None OLD BUSINESS: 12. RESOLUTION ADOPTING AMENDMENTS TO THE CITY OF SAN RAFAEL BUDGET FOR 2002/2003 (MS) — FILE 8-5 Introducing the item, City Manager Rod Gould announced that the presentation would be broken into two parts. First, Mr. Nordhoff would address amendments to the current budget to ensure that the City remained in the black through June 30, 2003. In the second part of the presentation, Mr. Gould explained staff would present the challenges they are aware of in 2003-2004 and 2004-2005 as the process of developing the next two-year budget is initiated. He reiterated he wanted everyone to be clear this was a two-part presentation and invited Ken Nordhoff, Assistant City Manager, to commence with the current year budget period. Mr. Nordhoff reported that the staff report was very similar to that approved this evening for the Redevelopment Agency. He explained this was the eighteen -month period of the two-year budget and identified the status of finances at the six-month juncture of the second fiscal year. He referred to the fairly significantly sized handout summarizing progress on over 700 objectives established by the City Council in July, 2001 and although comprehensive, he encouraged Councilmembers to evaluate it. Mr. Nordhoff indicated that he or City Manager Gould could answer questions on this, either tonight or separate from the meeting. Reporting matters for this fiscal year changing fairly markedly last July, Mr. Nordhoff stated that Council directed staff to set aside a further 5% General Fund reserve, approximately $1.5 million. He indicated that fortunately, that decision and a combination of items listed on page 2, making some expenditure reductions including everything from eliminating positions to reducing the level of sidewalk and street maintenance, offset fairly significant losses in taxes, most notably, sales tax which is down approximately $2.5 million today. Mr. Nordhoff stated that because of that there were no really significant changes to propose this evening to complete the course of this fiscal year. As mentioned by Mr. Gould, Mr. Nordhoff indicated he would address how things look like for the next couple of years; however, to finish out at June 30, 2003, did not require significant adjustment: On the revenue side, staff was proposing a further reduction of $250,000 in sales tax, related to five straight running declines in sales tax revenue, and believed to be the bottom. Auto sales had been propping this up, tied into zero interest, zero down, etc., and staff was unsure as to how long this would last. Mr. Nordhoff stated that because car sales had been strong, staff was projecting a higher level of collection from Motor Vehicle License Fees, which as of today, were still being collected. Noting the Governor proposes reducing these fees by $1 million this year, should that play out into next year, the figure would be more than $2 million. He indicated that no provision had been made for that $1 million loss, noting that AB 4X and a companion Senate Bill would probably be on the Governor's desk tomorrow for signature. On the expense side, Mr. Nordhoff stated a couple of things were being proposed operationally that were somewhat unusual. He explained there are eight vacant positions in a variety of departments and it is proposed to hold these open to the end of the fiscal year, which would save the overall budget approximately $280,000 and approximately $206,000 of the General Fund. It is also proposed not to immediately recruit for Public Works Director Dave Bernardi's successor, rather work with Andy Preston as the Interim Public Works Director, at least through the next fiscal year, at a nominal savings this year, realizing more the following year. Mr. Nordhoff reported that one of the big ticket items is the use of Redevelopment Bond monies, and it is proposed that $1.9 million of a $3 million total be earmarked towards finishing off the new Public Works facility, and $1.1 million be committed to a variety of parking related projects, everything from new revenue control systems in the garage to the new meters on streets. He indicated that the Agency would fund those projects from bonds and the City, which has some discretionary monies from land sales for the Corporation Yard, as well as money in its parking fund, is being requested to return a like amount of money to the Redevelopment Agency. This, he stated, would satisfy the use of these funds as far as the bond requirements are concerned. Mr. Nordhoff stated that staff is projecting a surplus balance in the General Fund of $172,000 at this time, which is above the 10% reserve level established and held by policy for many years. He indicated the extra 5% started out a year a half ago is essentially gone. SRCC Minutes (Regular) 02/03/2003 Page 12 SRCC Minutes (Regular) 02/03/2003 Page 13 At this point, Mr. Nordhoff paused for questions. With regard to the two transfers, or loans, of money from the Redevelopment Agency both to Parking and covering of the new structure for Public Works, Mayor Boro confirmed that these monies would be repaid to the Agency. Mr. Nordhoff explained the bonds were being put into the projects and the City would repay the monies to the Agency, which satisfies, in particular, a School District obligation, highlighted on page 4 of the report. Councilmember Miller confirmed with Mr. Nordhoff that last July, because this was anticipated and planned for to the amount of $1.5 million, approximately only $200,000 was needed to catch up. Mayor Boro stated he favored getting closure on the resolution, subsequently commencing discussion on the future, to avoid confusion, and invited comment from the audience. There was no comment from the audience. Councilmember Phillips requested clarification on the item under Expenditures dealing with $25,336 for organizational development efforts, which was one half of the training program. Mr. Nordhoff stated staff addressed this in closed session approximately one month ago whereby the City was no longer sponsoring a training program which sunset in December, 2002, and included a position. He stated staff was requesting that some of this money be added back; however, wished to set aside some money to work in a series of workgroups and have some discretionary money available to bring in consultants or experts where appropriate. He indicated he could elaborate further in the presentation. Councilmember Phillips complimented the City Manager and Assistant City Manager for putting Council in the position of discussing fairly nominal amounts. He appreciated the early warning, particularly now. Mayor Boro concurred; however, stated Council was anticipating what they could control and agreed the staff, City Manager and Assistant City Manager had done a super job in dealing with this. He stated that funding ongoing expenses out of reserves had not even been thought of. The "rainy day" fund had been used to take care of some capital items and individual important projects; however, there would not be that much discretion going forward. He noted that all cities and county governments were in this and it remained to be seen what happened and how it was dealt with; however, he thanked staff for getting the City to this point. Councilmember Cohen stated that to look at some neighboring local governmental agencies and read articles from around the State, he believed there were a number of cities not nearly as well positioned as San Rafael. While San Rafael had a lot of hard work to do to deal with what is coming, he believed the City was better off than most because of the foresight of staff, which he appreciated. Councilmember Phillips moved and Councilmember Cohen seconded, to adopt the resolution. RESOLUTION NO. 11253— RESOLUTION AMENDING THE 2002-2003 BUDGET AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None Mayor Boro stated there now would be a discussion from the City Manager regarding the future. Commencing the presentation, Assistant City Manager Ken Nordhoff reported that approximately a year ago, staff began providing information to employee groups at a time of working through initiating new contracts with bargaining groups. In an attempt to follow suit this year, Mr. Nordhoff reported a meeting took place last week and he would discuss some key points in anticipation of the next two-year budget. He believed this would be good background information for the Study Session on Wednesday, February 5, 2003 and indicated copies of his presentation were available this evening. Regarding the City's Financial Picture, Mr. Nordhoff reported: • A continued weakened economy with everything being rolled back in six-month increments; therefore, items sensitive to economic recovery, such as hotel, sales, and business license taxes would not improve until very late in this year, and most likely next year; SRCC Minutes (Regular) 02/03/2003 Page 13 SRCC Minutes (Regular) 02/03/2003 Page 14 • Staff continues to recommend holding the 10% reserve for emergencies, contingencies, etc.; • It is intended to fulfill current labor agreements and other contracts; • No expansion in services is anticipated; • Ensure existing projects are completed; • Looming threats such as State grabs of money and the war in Iraq, together with a number of other variables. Regarding Actions to Date, Mr. Nordhoff reported this was a quick highlight, seen by employees and contained in table 2 of the staff report. Mr. Nordhoff reported that Sales Tax, the City's largest source of money at $16.8 million, approximately 30% of the overall budget and 43% of the General Fund, was cut back $2.5 million in July 2002 and was cut by a further $250,000 in 2003 to line up with projections. He stated the City is currently down from results of 2000-2001 and recovery is slow with not a lot of new retailers to add new dollars. This was further explained on the chart which followed. Interjecting, City Manager Gould reported on an article over the weekend concerning ABAG's (Association of Bay Area Governments) projection for retail sales in this area, which suggested growth in 2003, with further growth in 2004. Mr. Gould stated staff was unaware of how ABAG arrived at this projection as it was in direct contradiction to staff's projections and those of the sales tax analysts. Continuing, Mr. Nordhoff stated that the No. 2 source of money for the City is Property Taxes - $7.3 million for this year — approximately 13% of the overall budget and almost 20% of the General Fund. He indicated this is a very stable revenue source as long as no one else is "picking the City's pockets." While property does not turn over a lot, property values continue to rise and the City has benefited from a lot of development and redevelopment in the last few years. From the following chart Mr. Nordhoff indicated that the top bars were the ERAF (Education Revenue Augmentation Fund) shift, the money the State began taking back in 1992-93, with more in 1993-94, and to date, the City continues to lose over $1 million per year in property tax. Mr. Nordhoff reported that Motor Vehicle Fees, the third largest source of revenue for the City at 6% of the overall budget and 8% of the General Fund, are clearly tied to new car sales in the community. With regard to the "backfill" portion, he reminded Council that the tax was lowered in 1998, gradually reduced based on the State's fiscal condition. It started out at a modest 25% per year and accelerated up to 67-'/2%. He reported that the Governor proposes to sunset this in his budget proposal, resulting in a $1 million reduction to the City now, and a larger figure next year. Mr. Nordhoff reported that legislators working their way through the bills are attempting to return Motor Vehicle Fees back to 1998 levels; however, he cautioned against false comfort as should this be successful, there would be no protection of the money in that it returns to local government without definition. He noted the chart demonstrated very stable tax projections in terms of Motor Vehicle taxes. With regard to Hotel Taxes, Mr. Nordhoff reported these taxes are very much tied to the economy. They began to slide back in 2001, before 9/11, and are down almost $500,000 from where they were some years ago, a drop of 27%. Mr. Nordhoff indicated they would not come back until tourism and business travel, and particularly, conferences for larger hotels, began to recover, which is unpredictable. He noted the chart indicated fairly stable growth to 2001, declining significantly from then on. Mr. Nordhoff explained that Property Transfer Taxes, the taxes remitted through the County, $2 tax per $1,000 assessed value, have been fairly stable in that values are holding up with no significant turnover in property. He indicated the volumes tend to fluctuate from month to month; however, a modest increase is expected this year compared to last. With regard to Business License Taxes, Mr. Nordhoff reported that per the City's ordinance, the tax rate is capped by an adjustment of CPI, which this year is 1.4%. He stated it is based on an annual cycle and noted that the taxes being collected presently and due on January 1, 2003, are for 2002's activity. Collections in 2001 appeared very strong; however, a decline is expected this year. He explained that with higher unemployment, higher office vacancy rates, and slower sales, people either base their tax on number of employees, typically down, or gross receipts, also down. He indicated the chart would demonstrate these taxes are expected to fall for the first time in a long time. Mr. Nordhoff stated these were the major revenue components. Other small items would be SRCC Minutes (Regular) 02/03/2003 Page 14 SRCC Minutes (Regular) 02/03/2003 Page 15 addressed when developing the budget at future meetings Regarding Costs, Mr. Nordhoff stated that most significantly, costs for the City looking ahead to the next couple of years would be benefit driven. He reported that healthcare costs are "going through the roof," up approximately 20% this year for the PERS health programs offered to all employees, and it is expected that these rates would continue to increase, not necessarily 20% per year; however, certainly something significant. Discussing Workers Compensation, Mr. Nordhoff explained this affects both active and retired employees. He explained that someone could be injured, leave employment with the City; however, still have an open Workers Compensation case that could require future medical payments, etc. He reported there are constant changes in the law, such as the temporary disability rate, commencing January, 2003, went from approximately $490 to $620 per week, costs which have to be borne, by State law. Therefore, people injured and temporarily absent, are costs the City incurs. Mr. Nordhoff noted that reserves have been on the rise for three years running. The City adds approximately $500,000 per year to the cost of reserves and is required to hold sufficient money on hand to pay both current obligations, as well as those planned in the future. Future medical, etc., are the City's obligation. Pension Costs — Mr. Nordhoff reported discussions took place in the past concerning the County Pension system, or any pension system with a defined benefit plan and three sources of money: 1) employees/members contributions; 2) what employers pay; and 3) what the investment market does. To the extent the investment market is doing well, employers pay less; this was benefited from in the middle to late 1990s. To the extent the reverse is taking place, as has been the case in the past couple of years, just the opposite occurs. Therefore, two years running of pension losses had been evidenced in the Marin County Retirement System, and was no different for PERS or any other plan. Mr. Nordhoff anticipated fairly significant increases. These costs would probably increase approximately $900,000 for 2003- 2004, which has nothing to do with new pension tiers, rather merely the cost of doing business, rising even further in the following year. He estimated the costs at 2002-03 - $3m; 2003-04 - $4m; and 2004-05 $6.6m. On the chart, Mr. Nordhoff identified the safety pension rates for Police and Fire personnel. Going back to 1995-96, these were pretty significant, as the City was working -off times of significant losses in the system and a lot of pension obligations. Benefits were realized from these falling for several years; however, they are now expected to climb fairly significantly. Regarding the non -safety sector, Mr. Nordhoff stated increases would also be seen in this sector, albeit not as significant. Regarding State Budget Proposals, Mr. Nordhoff indicated he would discuss immediate threats and what is anticipated on the horizon. He indicated the Governor was proposing eliminating funding for mandated programs that a lot of municipalities are required to do — a loss of $30,000. Interjecting, City Manager Rod Gould, having spent some time in Sacramento last Friday, indicated he would update Council on current status. Mr. Gould reported that the Governor's proposal to take $1 billion from cities in VLF this current fiscal was going nowhere. He explained that no one in the legislature liked the idea and the Governor joked in a meeting that he could not find a single vote in either the Assembly or Senate for the idea. He reported that this afternoon, the Senate approved on a 23:16 vote, sending AB 4X to the Governor's office for signature or veto. While it was not clear what the Governor would do, his idea of taking $1 million from San Rafael in this calendar year was gone. Mr. Gould reported that the State mandated reimbursement was lost to the City. The State would be $1 billion in debt for unreimbursed mandates to local government by the end of this fiscal year and he believed the State was working overtime in an attempt to figure out a way to "wash that debt." Reporting that the Library Grant was gone, Mr. Gould believed it a shame in that it helped augment the City's book buying budget. He reported voters voted for gas tax monies for local roads two years ago; however, there was an escape clause in the initiative that allowed the State to suspend these payments should there be an economic crisis. That had been triggered and there would be no payments for the next three years, which seriously hurts the City's road resurfacing program. SRCC Minutes (Regular) 02/03/2003 Page 15 SRCC Minutes (Regular) 02/03/2003 Page 16 Mr. Gould reported the Governor also suggested taking $500 million statewide from Redevelopment Agencies in set-aside monies, monies specifically earmarked for the provision of affordable housing, and this was also gone; however, solace should not be taken from this, because as pointed out by the Governor, everyone of these proposals not acted upon meant additional pressure to locate other savings elsewhere. He reported that Vehicle License Fees constitute the single biggest threat to cities and counties statewide. In Marin County, it is $15 billion to the County of Marin, to all the cities and towns $19 million, and to San Rafael, somewhat over $2.1 million annually. Mr. Gould stated it was very important that the Governor sign this bill; however, even so, the City was not out of the woods unless the apportionment was untouched. He reiterated that the State Reimbursement and Library Grant were gone; however, the gas tax monies would be fought over and there could be a legal challenge. Mr. Gould reported learning that low-income after-school childcare grants were being passed to counties as part of the realignment idea and perhaps, here there could be 50 cents on the dollar. He indicated it was very important to find a way to augment these funds, otherwise 38 low-income children at Pickleweed would not have after-school programming after this year. He reported the Childcare Division was working hard to attempt to figure out a way to absorb them into its program. Regarding Booking Fee Reimbursements ($165,000 per year), Mr. Gould stated his understanding from the State was that this was gone. On Redevelopment Funds, he reported there would be a hit to Redevelopment. The idea was to start at $250 million statewide and build to $1 billion the next four years, which would essentially, take 30% of San Rafael's Redevelopment Funds; however, all of San Rafael's is pledged to debt repayment. While he was not quite sure how this would work, the fear was it would boomerang against the General Fund and come out of property taxes. Mr. Gould reported the Governor indicated that as part of his comprehensive reform proposal, he needs to change the way Redevelopment is financed in California, and this was worrying. Mr. Gould noted Mr. Nordhoff had already discussed mid -year actions and some measures to forestall spending. Referring to a chart generated by Lydia Romero, Assistant to the City Manager, Mr. Gould indicated it summarized the City's situation: Downward pressure from rising costs of benefits and downward pressure from stagnant revenues for a sour economy, plus the threat of a State money grab. To help Councilmembers in their decision-making, Mr. Gould reported four types of input were being sought: 1) The Public Opinion Poll completed a week and a half ago, which would be addressed at the Advance on Wednesday (February 5, 2003); 2) A series of five "San Rafael Choices" meetings in different sectors of the City to solicit the public's ideas and what it would like to see being done to help provide a reasonable amount of public safety and quality of life services, while staying in the black; 3) An employee working group is being formed requesting employees to evaluate the situation and furnish their ideas of where there could be cost savings, efficiency gains, additional revenues or changes in the way work is performed, in order to assist in bridging this gap; and 4) The management team is busy developing options to streamline and sculpt each and every operating department into a shape that in July 2004, would match anticipated revenues. This is difficult to predict not knowing the outcome of the State Budget crisis; however, indications forecast a period of three to five years of constant pressure from the State of California over local revenues. Mr. Gould stated that at this dynamic time, Council's support is appreciated in understanding the situation and making the decisions necessary to move the City forward consistent with its financial principles. Mayor Boro thanked City Manager Gould and Assistant City Manager Nordhoff. SRCC Minutes (Regular) 02/03/2003 Page 16 SRCC Minutes (Regular) 02/03/2003 Page 17 COUNCILMEMBER REPORTS: 14. a) Koshland Program: - File 9-3-65 x 9-1 Councilmember Miller reported that the San Francisco Foundation's Koshland Program would make a presentation at the National Community Building Network's Annual Conference in Chicago this spring. He stated the conference was basically a gathering of the principal funders throughout the nation, as well as some major providers. Councilmember Miller reported that the Koshland Program had selected the Canal Youth and Family Initiative as their primary topic at this conference. He indicated the CYFC had been developed and was administered by the San Rafael Community Services Department. Councilmember Miller explained that the main components of the Initiative include the formation of the Canal Youth and Family Council, a group of youth and adults, meeting monthly to discuss and take action on issues the group determined to be community priorities. An additional component of the CYFC is the development of the Canal Communications Network, an inclusive information delivery system that seeks to reach every household in the Canal neighborhood. He reported the Foundation's presentation would feature some of the youth and staff from the Canal Youth and Family Council and was a major deal for the City as it was being presented before numerous types of funders, etc. b) Mission Statement — English and Spanish Translations: - File 9-3-65 x 9-1 Councilmember Miller distributed the English and Spanish translations of the Mission Statement of a group of Guatemalans working together in the Canal neighborhoods. Their four basic programs consist of a virtual hiring situation, free mobile health clinic, literacy teaching series and a day of cultural activities, celebrations, etc., scheduled to take place this year on March 15 at Pickleweed Park, moving to Santa Rosa and Oakland, etc., in the ensuing years. Councilmember Miller stated this was a very active group and at a later date, there would be an invitation to meet with their counselor corps. c) United States Conference of Mayors' meeting in Washington: - File 9-1 Reporting having attended the United States Conference of Mayors meeting in Washington recently, Mayor Boro stated the issues being faced in San Rafael were common throughout the nation. Every city was in financial trouble, had transportation and housing problems and was very concerned about homeland defense and lack of funding for it. Of significance to Mayor Boro was the fact that while the California statewide debt is projected to be $35 billion, supposedly, the debt for the remaining 49 states combined is $34 billion, which was indicative of the severity of the crisis in California. He anticipated tough times going forward and the City would be tagged to help solve the problem. d) Transportation: -File 170 x 9-1 Spending a substantial amount of time on transportation related issues Mayor Boro noted the struggle to convince people of the benefit of supporting transportation measures on the ballot. He referred to a report on employment levels this year and those projected in the future in major regions throughout the country that indicated San Francisco and San Jose were at the bottom this year, having had losses. On the chart of an approximate 320 regions throughout the country, Mayor Boro was astounded to find Santa Rosa and Fairfield/Suisun in the top ten or fifteen as two areas of growth in the future. Noting ABAG's recent discussions on the so called "out commute," he stated people needed to be convinced that doing nothing would not prevent people from coming to or going through Marin. e) Marin Transit District: - File 113 x 170 x 9-1 Councilmember Heller reported being a member of the Marin Transit District Board through the Marin County Council of Mayors and Councilmembers and distributed copies of a newspaper article dated January 29, 2003. She indicated that the Bridge Board was evaluating an approximate 25% to 40% cut in realignment of transit services, which directly impacts everything the local transit district does. She stated the Marin Transit District would be working with the Golden Gate Bridge District in an attempt to put the two plans together and keep local transit as healthy and active as possible. She noted this was a tremendous change in what the transit system had looked like, and would look like after the end of this year. Councilmember Heller stated it was intended to have this in place by September. While unsure of the ramifications for the entire County, Councilmember Heller indicated the same transit would not be evident. SRCC Minutes (Regular) 02/03/2003 Page 17 SRCC Minutes (Regular) 02/03/2003 Page 18 Mayor Boro noted this was a critical issue not only for the Bridge District, but also the residents of San Rafael, many of whom are transit dependent. The CMA (Congestion Management Agency) and Bridge District would have to ensure those lifeline routes for the community continued. While noting the County's bus service is run by the Golden Gate Bridge District, Mayor Boro indicated that a lot of busses were funded by CMA dollars or transportation dollars from Marin. The hope was that redundant routes would be evaluated for more efficiency, perhaps combining routes. He noted the subsidy the District gives to transportation is at approximately the $35 million level and if something does not happen, the bulk of tolls would go to transit, which, he indicated could not transpire as there are other needs for toll monies, i.e., to maintain the bridge. Mayor Boro was hopeful the Bridge District could explain where the increase had gone. He noted they had all the problems that exist in the City of San Rafael, including an increase in benefits and insurance costs, reduced monies from the federal and state levels, all of which translated into less money to run the District. Mayor Boro stated San Rafael had a big interest in transportation as so many were transit dependent. There being no further business, the City Council meeting was adjourned at 9:45 p.m. Mayor Boro stated Council would return to Closed Session to discuss item 1 b). At the conclusion of the Closed Session, Mayor Boro announced that no reportable action was taken on 1 b). ADJOURNMENT: 11:08 PM JEANNE M. LEONCINI, City Clerk APPROVED THIS DAY OF 12003 MAYOR OF THE CITY OF SAN RAFAEL SRCC Minutes (Regular) 02/03/2003 Page 18