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CC 07-03-07 APPROVED MINUTES CUPERTINO CUPERTINO CITY COUNCIL Regular Meeting Tuesday, July 3, 2007 PLEDGE OF ALLEGIANCE At 6:45 p.m. Mayor Kris Wang called the meeting to order in the Council Chamber, 10350 Torre A venue, Cupertino, California, and led the Pledge of Allegiance. ROLL CALL Present: Mayor Kris Wang, Vice-Mayor Patrick Kwok, and Council members Richard Lowenthal, Orrin Mahoney, and Dolly Sandoval. Absent: none. CLOSED SESSION City Attorney Charles Kilian said that the Mayor had requested a closed session regarding significant exposure to litigation - Government Code Section 54956.9(b)(I). The purpose of this closed session was to discuss potential litigation involving a number of claims by cell phone providers such as AT&T and Verizon. The City Attorney reported that this item was not on the Council's agenda as it only came to the city's attention after the posting of the agenda. It required a two-thirds vote by the Council to put the closed session on the agenda. This matter needed urgent attention as it involved a tax measure that would impact later discussions at this meeting. Kwok/Mahoney moved and seconded to adjourn to closed seSSIOn. The motion carried unanimously. At 6:50 p.m. Council recessed to the closed session and reconvened in open session at 7:12 p.m. The City Attorney reported that no action had been taken. CEREMONIAL MATTERS - PRESENTATIONS I. Proclamation for Senior Center Piano and Keyboard Members. (No documentation in packet). This item was continued to July 17. 2. Cupertino Square shopping center update. (No documentation in packet). This item was continued to July 17. July 3, 2007 Cupertino City Council Page 2 3. E-Services presentation regarding On-line Cupertino Municipal Code. (No documentation in packet). City Clerk Kimberly Smith demonstrated how to research the municipal code on the Internet, which was available from a link titled "Municipal Code" on the city's web page, www.cupertino.org. POSTPONEMENTS Lowenthal/Mahoney moved and seconded to continue item No. 10 to August 21 in order to meet legal noticing requirements, and to hear the item on a date requested by the applicant. The motion carried unanimously. WRITTEN COMMUNICATIONS The City Clerk noted the following written communications, which were distributed at the meeting: · An email dated July 3, 2007, from Planning Commissioner Marty Miller, regarding item No. 11, the Villa Serra development. · A memorandum dated July 3, 2007, from Lake Research partners highlighting the summary findings of their survey on the Utility Users Tax (UUT) and the Movie Ticket Tax. ORAL COMMUNICATIONS Administrative Services Director Carol Atwood explained that Commissioner Kathy Stakey had to leave to attend a meeting of the Library Commission, but she wished to express her gratitude to the City Council for extending the library hours. Darrel Lum, a Cupertino resident on Stelling Road, said there were several development projects in that area including the shopping center at Homestead and Stelling and Villa Serra. He suggested a master development plan be done for this section of the city including a coordinated landscaping plan. CONSENT CALENDAR Lowenthal/Mahoney moved and seconded to approve the items on the Consent Calendar as recommended. Ayes: Kwok, Lowenthal, Mahoney, Sandoval, and Wang. Noes: None. 4. Approve the minutes from the June 4 and 5 City Council meetings. 5. Adopt resolutions accepting Accounts Payable for June 15 and 22, Resolution Nos. 07- 116 through 07-117. 6. Adopt a resolution accepting Payroll for June 15, Resolution No. 07-118. 7. Accept the Treasurer's Investment Report for May 2007. July 3, 2007 Cupertino City Council Page 3 8. Adopt a resolution approving an improvement agreement, Sridhar Obilisetty and Javanthi Sridhar, 10171 Lebanon Drive, APN 342-14-008, Resolution No. 07-119. Through an improvement agreement with the City for a single-family development building permit, this applicant will be obligated to bond and construct city-specified roadside improvements, including curb, gutter, sidewalk, and driveway, along the street frontage of their building site. 9. Adopt a resolution approving a final parcel map, 21989 Lindy Lane, Xi Hua Sun and Shan Zhu, APN 356-25-024, Resolution No. 07-120. Approval of the final map permits the map to be forwarded to the County for recording, which completes the subdivision. ITEMS REMOVED FROM THE CONSENT CALENDAR - None PUBLIC HEARINGS 10. Consider Application Nos. U-2007-03, ASA-2007-05, TM-2008-07, TR-2007-03, EXC- 2007-08, Clifford Chang, 10100 N. Tantau, APN 316-19-061. Lowenthal/Mahoney moved and seconded to continue item No. 10 to August 21 in order to meet legal noticing requirements, and to hear the item on a date requested by the applicant. The motion carried unanimously. There was no documentation in the packet. UNFINISHED BUSINESS - None NEW BUSINESS 11. Consider Application Nos. ASA-2007-03 (EA-2007-02), EXC-2007-06, TR-2007-02, and V-2007-02, Michael Ducote, 20800 Homestead Road (Villa Serra/The Grove Project), APN: 326-09-056: a) Negative Declaration b) Architectural and Site Approval to construct an additional 116 apartment units, a public park, a recreational facility, and leasing office within an existing apartment complex (Villa Serra/The Grove), for a total of 504 units c) Tree Removal for the removal of 92 trees and a replanting plan on a proposed modification to an existing apartment development d) Parking Exception from 2 spaces per unit to 1.74 spaces per unit e) Variance from rear yard R3 (apartment) requirements The City Clerk had distributed an email dated July 3, 2007, from Planning Commissioner Marty Miller, regarding item No. 11, the Villa Serra development. Staff distributed a July 3, 2007 Cupertino City Council Page 4 photocopy of Exhibit A, Villa Serra Apartments, Proposed Green Building Practices, with some hand-written changes. Director of Community Development Steve Piasecki presented an overview of the staff report on this application. On the Franco Court side of the property, parking on Franco was eliminated, a new pedestrian path to Franco was requested and the Planning Commission was recommending no car access to Franco. Staff did recommending car access to Franco Court, believing that the benefits outweighed the possible occasional traffic issues. The park was expanded to .75 acres, the traffic operations center was to be relocated to the south and twenty additional reserved parking places were proposed if needed. There would be 92 trees removed for the construction of the project, with replacement to be done per the city's tree ordinance. 105 dead or diseased trees would also potentially need to be removed. Staff believed it was possible to save 18 trees along Homestead. He said that a parking study by Fehr and Peers determined that the parking provided would exceed current and future demand, leaving a potential of 230 surplus spaces. Disabled parking was included as required by city code. The applicant was being required to implement green building standards. There were no current or future plans to modify the school boundaries. $25,000 was being requested for pedestrian connection enhancement for the Stelling Road bridge over 280. Sound attenuation was being required for all new units along 280 and full park improvements were being required. Mr. Piasecki also noted that a requirement needed to be added for public art valued at one-quarter of one per cent, as specified in the General Plan. Applicant John Moss, representing Prometheus, said that this project would result in much less development than previously considered plans, and would have 70 one- bedroom units and 46 two-bedroom units, and the plan would not require the relocation of any of the residents. Proposed amenities included: a 5,000 square foot recreation and leasing facility, a fitness center, a theatre room, an outdoor kitchen, new pool/spa and a park. Laundry facilities were currently available in general locations throughout the complex. The new units would have washer/dryers available and as older units became available they would be fitted with washers and dryers as well. Mr. Moss noted that they were dedicating .7 acres as a public park, which they would also be improving, and he asked that park fees be waived. He said that they did not agree to sharing 50% of the cost of park maintenance. Mr. Moss noted that if the turn radius was increased at Franco, two large Coast Oaks would have to be removed. Regarding the traffic operations center, Mr. Moss agreed to the cost for relocation but not the $50,000 for improvements. He added that written notification had been sent to all residents of Villa Serra and the project had been discussed with the neighbors. Mr. Moss submitted letters of support from the following: Housing Action Coalition Group, Silicon Valley Leadership Group, PW Market, Greenbelt Alliance and John Vidovich (verbal support expressed). Patricia Bolander, a resident at Villa Serra, said she was concerned about the access onto Franco, the laundry facilities at the complex and the noise of construction. She did note that she had gone through the complex on a weekend evening and had found plenty of empty parking spaces. July 3, 2007 Cupertino City Council Page 5 The following addressed the Council concerning the Villa Serra project: Janet Takahashi, Nina Daruwalla, Kersi Daruwalla, Lowell Forte, Ben Leung, Suresh Subramanian, Vasundara Pothgantlu-Sivaraman, Mingming Mao, Xuan Yu, Daniel Yeung, Tom Hugunin, Keith Murphy and Darrel Lum. These speakers raised the following issues: Franco A venue should not be narrowed, parking on that street should be prohibited, and there should be no access to that street from the complex; fencing around park should be provided for safety reasons; the developer should maintain the park; the developer should pay all costs related to the traffic operations center relocation and improvement; disabled parking should be provided; replacement and/or improved conditions for dead/dying trees were necessary; there were possible negative impacts on neighboring property values if these apartments were converted to condos in the future; there were questions about the validity of parking statistics arrived at by traffic consultant; there is a right of way issue to meet setback requirements; the notification process was inadequate; and there is too much reduction of green space in the project in order to provide park space. Shiloh Ballard, representing the Silicon Valley Leadership Group, stated their support of this project. She noted a recent survey had been done by the housing advocacy group, and housing affordability was a major area of concern. This project provided more affordable apartment rentals in the city and should get the city's approval. Jennifer Griffin's comments (written comments read by Mayor Wang) were that that too many units were being added, which resulted in problems concerning traffic, parking and elementary school attendance issues. Councilmember Lowenthal supported this project and felt it would be beneficial to the community. He urged Council to allow access onto Franco so that residents could get out ofthe complex at a light but deferred to the neighbors to not allow parking on Franco. Vice Mayor K wok stated that this was a nice project which provided affordable housing for the community, beautified the area, and provided a park. There were 105 trees in the complex that are dead or were dying, and he was disappointed that the owners allowed this to happen, and the project would require removal of another 92 trees. Vice Mayor K wok was also concerned about the variances being requested. Regarding the rear setback, he saw no compelling reason to add an additional twelve units, and felt that the General Plan requirement of 2 parking spaces per unit should be met. He believed the park was just a token park and should be in the center of the complex for optimum use and benefit. He felt that parking for this park was an issue, and he did not support the removal of the tennis courts to get the land for this park. Councilmember Mahoney stated that he believed this was a good project, and felt this applicant was a good example of special circumstances which justified a variance. He said that the residents did not seem to care about the tennis courts; he supported access to Franco A venue; and Council should look carefully at the park maintenance fee again, since different standards were now in place. Councilmember Sandoval noted that this was a smart project and provided revitalization to Homestead and Stelling with the lowest density possible, while providing much needed rental property with a 15% below-market-rental count. She supported the double row of trees as part of the landscaping on Stelling and a bicycle/pedestrian access from July 3, 2007 Cupertino City Council Page 6 Franco but was not convinced that a car access from Franco was necessary. She supported the park in its proposed location but recommended the placement of a fence for safety reasons. Councilmember Sandoval disagreed with comments made regarding the parking issue. She believed the consultants hired were experts in the field, had no vested interest in this project, and had determined there was more than adequate parking both for current and future use. She suggested that the park maintenance funding question should be addressed at a later time, as she was not sure renters should pay the maintenance fees for the park. Mayor Wang agreed that a fence and/or type of landscaping should be put around park. She also requested that the twenty reserved parking places near the park be put in now rather than later. Mayor Wang strongly supported adding ten percent more in parking (80 more spaces) which would also provide some guest parking. John Moss stated that his firm had gone over these project plans very carefully and they took the parking issue seriously. It was not to their benefit to have renters unhappy with inadequate parking. They believed this project included more than adequate parking and the consultant's report substantiated that point. Lowenthal/Sandoval moved and seconded to adopt a Negative Declaration. The motion carried with Council member Kwok voting no. Lowenthal/Mahoney moved and seconded to approve the Architectural and Site Approval with the following conditions: (1) Delete vehicle access to Franco Court; it will have pedestrian and bicycle access only (2) Add clause requiring public art (3) Keep the 18 trees as recommended by the Community Development Department (4) Include the parkway treatment at Stelling and Homestead (5) Allow public parking inside the apartment complex (6) Ask the Parks and Recreation Commission to add a fence around the park (7) Ask the Parks and Recreation Commission to make a recommendation about the 20 parking spaces next to the park (8) The City will be responsible for park maintenance (9) The applicant will pay the $400,000 park fee, $640,000 in improvements, and provide the land (10) Require a tight radius at the corner of Franco and Homestead (11) Keep Franco Court the same width it is now (12) Do not require $50,000 to replace the cargo container with a new storage facility at the new traffic operations center (TOC) Wang offered an amendment to the motion to add 50 more parking stalls. The motion died for lack of a second. July 3, 2007 Cupertino City Council Page 7 Sandoval offered an amendment to the motion (listed above as item No. 12) to include condition 22a, amending it to require the developer to pay up to $50,000 to replace the cargo container with a new storage facility on the traffic operations center site. Mahoney seconded, and the motion carried with Kwok voting no. Sandoval offered another amendment to the motion that the City Council consider increasing the park fee credit/reducing the fee, contingent upon the design of the park. Lowenthal seconded and the motion carried with Kwok voting no. Lowenthal/Mahoney moved and seconded to approve Architectural and Site Approval to construct an additional 116 apartment units, a public park, a recreational facility and leasing office within an existing apartment complex (Villa Serra/The Grove) for a total of 504 units, with conditions one through 12 listed above, and including the two approved amendments to the motion. The motion carried with Kwok and Wang voting no. Lowenthal and Sandoval moved and seconded to approve the removal of 92 trees and a replanting plan on a proposed modification to an existing apartment development. The motion carried with Kwok and Wang voting no. Lowenthal and Sandoval moved and seconded to approve a parking exception from 2 spaces per unit to 1.74 spaces per unit for a total of 876 parking spaces. The motion carried with Kwok and Wang voting no. Lowenthal and Sandoval moved and seconded to approve a variance from rear yard R3 (apartment) requirements. The motion carried with Kwok and Wang voting no. 12. Adopt a resolution calling a General Municipal Election on November 6, 2007, Resolution No. 07-123. Kwok/Lowenthal moved and seconded to adopt Resolution No. 07-123. The motion carried unanimously. 13. Receive a report on the proposed amended utility user tax. The City Clerk distributed a memorandum dated July 3, 2007, from Lake Research partners highlighting the summary findings of their survey on the Utility Users Tax (UUT) and the Movie Ticket Tax (item Nos. 13 and 14 on this agenda). Finance Director David Woo reported that the current utility users tax was 2.4% of the utility charges (telephone, electricity and natural gas) assessed on residential and commercial service addresses in the city. Of the $2.8 million in utility user tax received in 2005-06, $365,000 came from wireless and cell phone providers. This amount was undergoing legal challenges and the city has received protest letters and taxability inquiries from the cell phone providers this year. To address this problem, cities were attempting to adopt revised utility user tax ordinances incorporating current and future ways of communications and eliminating the language subject to current litigation. Mr. July 3, 2007 Cupertino City Council Page 8 Woo noted that a voter survey had been done on the topic and it did not appear that these ballots measures would be approved by the voters. Randy Okamura, representing AT&T, commented on the number of competitors and the complexity of the telecommunications industry. A utility user tax would add to the customers' price for telephone service and he did not support such a tax on their customers. Scott Stauffer, Chamber of Commerce, stated they did not support an increase in taxes. This would negatively impact small and local businesses. Council commented on the complexity of the issue, the voter survey, the organized opposition to such an increase and the limited timeframe for a November ballot measure. Council consensus to not put this matter on the November ballot but to bring it back for discussion at another time. 14. Receive a report on the proposed theater tax. The City Clerk distributed a memorandum dated July 3, 2007, from Lake Research partners highlighting the summary findings of their survey on the Utility Users Tax (UUT) and the Movie Ticket Tax (item Nos. 13 and 14 on this agenda). Director of Administrative Services Carol Atwood noted that the recently opened AMC theatres in Cupertino Square were projected to serve an estimated 1.5 million people per year. The amount of sales tax however recovered by the city did not cover the costs of providing services such as traffic mitigation, parking and public safety needs related to the theatres. To cover these costs a $.25 per ticket tax was being proposed for the November ballot. The options before Council included the following: 1) Place the $.25 tax on AMC tickets on the November ballot; 2) place the $.25 tax on AMC and Flint Center tickets on the November ballot; 3) put the issue on the 2009 ballot; or 4) take no action. The DeAnza/Foothill College District opposed the tax on the basis that the city had no jurisdiction over the Flint Center, and instead, the District and city staff had been discussing other options, such as a possible annual fundraiser to help cover the extra library hours. Jeff Lokey, attorney for AMC theatres, stated their opposition to this proposed tax. He noted that the city had strongly supported the theatres coming to Cupertino Square and although at this time they did not generate a large amount of sales tax they were a major anchor of Cupertino Square. He also believed it was not good practice to encourage businesses to come to the city and then impose a new tax on them. He encouraged Council to let the theatres get more established and deal with this matter in 2009. Dr. Martha Kanter Chancellor of the Foothill-De Anza College District, representing the Board of Trustees, students, teachers and staff, stated they did not support such a tax on Flint Center. She noted that Flint was an enterprise program which brought funds back into the community. Thanks to Measure E money they had been able to modernize and July 3, 2007 Cupertino City Council Page 9 refurbish Flint. It was an ongoing issue to provide well received programs with rising costs and Flint was now covering its expenses: Dr. Kanter offered a partnership with the city to work closely together on alternative fundraising options. Mike Rohde, Cupertino Square General Manager, stated that they had worked hard to get AMC in Cupertino Square and he did not support the additional tax to the theatres. There had been an investment of time and effort and he believed such a tax set a bad tone for other businesses considering a move to Cupertino. Paula Davis supported Dr. Kanter's comments: They had worked hard to provide quality entertainment and the Flint Center was now operating at a moderate profit. She did not support a tax increase and believed there were other ways to reach fiscal goals, perhaps by holding a fundraising event. Scott Stauffer, representing the Chamber of Commerce, stated they did not support this proposed tax. This did not provide a good environment for encouraging new businesses into the community. Council discussed the importance of the revitalization of Cupertino Square to the community and the key role the AMC theatres played in this revitalization. Council also noted that currently it was a good economic climate but this may not always be the case. The issue of diversifying the city's revenue stream was mentioned and it was suggested that the Strategic Economic Committee be directed to continue discussions on ways to increase such revenue options. The Council members agreed that this issue would not be put on the November 2007 ballot. 15. Adopt a resolution amending the voluntary expenditure limit, Resolution No. 07- 121. The City Clerk distributed an amended copy of the draft resolution to add Attachment A, which was referred in the document. She explained that the purpose of the resolution was to add a definition of "expenditure." The voluntary campaign expenditure limit set earlier in the year remains unchanged at $26,500 Lowenthal/Kwok moved and seconded to adopt Resolution No. 07-121. The motion carried unanimously. 16. Adopt a resolution adopting the attached policy regarding environmentally preferred purchasing, Resolution No. 07-122. Sandoval/Lowenthal moved and seconded to adopt Resolution No. 07-122. The motion carried unanimously. July 3, 2007 Cupertino City Council Page 10 17. Accept the resignation of two commISSIOners and set an application deadline and interview date: a) Parks and Recreation commissioner Roger Peng b) Technology, Information, and Communications commissioner Charlie Ahern K wok/Lowenthal moved and seconded to accept the resignations. The City Council concurred to leave these seats vacant for the time being, and to include them in the annual vacancy list, with appointments to be made in January 2008. Vice-Mayor Kwok thanked Roger Peng for his seven years of service and wished him a speedy recovery. ORDINANCES - None ST AFF REPORTS COUNCIL REPORTS Councilmember Lowenthal reported that he and Councilmember Sandoval had a meeting scheduled for August 21 at the Controller's Office in Sacramento. This meeting was to discuss Educational Revenue Augmentation Funds (ERAF) and to obtain a clear understanding of what monies the city should be receiving. Councilmember Lowenthal asked staff to provide them with legal background on this issue for their meeting. It was also noted two representatives would be attending from Saratoga. Mayor Wang wished everyone a Happy Fourth of July and invited the community to the city's pancake breakfast, parade and fireworks. ADJOURNMENT At 12:25 a.m. the meeting was adjourned. Staff reports, backup materials, and items distributed at the meeting are available for review at the City Clerk's Office, 777-3223, and also on the Internet at www.cupertino.org.Click on Agendas & Minutes/ City Council/ Packets. Most Council meetings are shown live on Cable Channel 26, and are available at your convenience on the web site: Visit www.cupertino.org and click on View Meetings Online. Videotapes are available at the Cupertino Library, or may be purchased from the Cupertino City Channel, 777-2364.