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CC 05-05-97 ~C-944 Cupertino City Council Regular Adjourned Meeting May 5, 1997 ROLL CALL City Council members present: Mayor John Bautista, Vice-Mayor Lauralee Sorensen, Councilmembers Don Bumett, Michael Chang, and Wally Dean. Council members absent: None. Staffpresent: City Clerk Kimberly Smith. INTERVIEWS Mayor Bautista called the meeting to order at 6:05 p.m. in Conference Room A of Cupertino City Hall. The following individuals were interviewed and unanimously appointed to the ad hoc Historic Research Committee: Hugh Riddell, David Smith, Jerry Stevens, Lei/md Keys,/md Denise Pan. At 6:35 p.m. the meeting was recessed, and reconvened in the Council Chambers. PLEDGE OF ALLEGIANCE At 6:45 p.m. Mayor Bautista called the meeting to order in the Council Chambers, 10300 Torte Avenue, Cupertino, California, and led the Pledge of Allegiance. ROLL CALL City Council members present: Mayor John Bautista, Vice-Mayor Lauralee Sorensen, Councilmembers Don Bumctt, Michael Chang, and Wally Dean. Council members absent: None. Staffpresent: City Manager Don Brown; City Clerk Kimberly Smith; City AtWmey Charles Kili/m; Administrative Services Director Carol Atwood; Community Development Director Bob Cow/m; Parks/md Recreation Director Steve Dowling; Public Infoinmtion Officer Donna Krey; and Public Works Director Bert Viskovich. CEREMONIAL MATTERS - PRESENTATIONS None. May 5, 1007 Cupertino City Council Page POSTPONEI~IENTS None. WRITTEN COMMUNICATIONS The City Clerk noted that there had been a fax received regarding item No. 16 and a request to continue item No. 20. ORAL COMMUNICATIONS None. CONSENT CALENDAR Sorensen moved to approve the items on the Consent Calendar as presented, with item No. 7 postponed to the next meeting and the minutes of April 21 amended. Bumett seconded and the motion carried 5-0. 1. Resolution No. 9828: Accounts Payable, April 18, 1997. -' 2. Resolution No. 9829: Accounts Payable, April 25, 1997. 3. Resolution No. 9830: Payroll, April 18, 1997. 4. Approval of minutes of the April 21, 1997, regular meeting (amended to show that the Peter Ko/Cupertino Village Associates project shall be expedited), and the April 29, 1997, regular adjourned meeting. 5. Monthly Treasurer's and Budget Report, March, 1997. 6. Review of application for Alcoholic Beverage Control license for Silver Fox, 10095 Salch Way. 7. Approval of annual Federal Communications Commission authorized TCI cable rate increase. (Postponed to May 19) 8. Acceptance of municipal improvements: 19110 & 19140 Stevens Creek Blvd., Stevens Creek Village; Community Homing Developers, Inc. 9. Resolution No. 9831: Authorizing execution of improvement agreement with Liang Lee; 21812 Lomita Avenue, APN 357-15-009. 10. Resolution No. 9832: Accepting grant of easement for roadway purposes from Liang Lee; APN 357-16-009, 21812 Lomita Avenue. May 5, 1997 Cupertino City Council Page -- 11. Resolution No. 9833: Accepting quitclaixn deed and authorization for underground water fights from Liang Lee; APN 357-16-009, 21812 Lomita Avenue. 12. Resolution No. 9834: Declaring intention to order vacation of a portion of Ricardo Road located at 22530 Ricard0 Road; retaining public utility easement, fixing time and place for public hearing. 13. Resolution No. 9835: Declaring intention to order vacation of a portion of Miramonte Road located at 10980 Miramonte Road; retaining public utility easement, fixing time and place for public hearing. Vote Councilmembers Ayes: Bautista, BurneR, Chang, Dean, and Sorensen Noes: None. Absent: None. Abstain: None. ITEMS REMOVED FROM THE CONSENT CALENDAR None. PUBLIC HEARINGS None. PLANNING APPLICATIONS None. IJNFINISItl~.O BUSINESS 14. Application No(s). 4-U-97 and 11-EA-97 - Peter Ko/Cupertino Village Associates - Use pe~irdt for new one-story 6,000 sq. ft. commercial retail building at the southwest comer of Wolfe Road and Homestead Road. Environmental Detetiitination: The Planning Commission recommends the granting of a negative declaration. Recommended for approval. The Community Development Director reviewed the staff report and highlighted the options that had been proposed to address Council's concern about setbacks. He said the Planning Commission also proposed a change in the design and a shift in the location of the bus turnout. May 1007 uperf3no C;ty Counc;l Page 4 1VIr. Peter Ko, project architect, said that the Planning Commission suggestion was to change the building design to harmonize with the main shopping center instead of duplicating the design. Once thc site plan has been selected, this item will go back to the Commission for further review. Dean, Sorensen, and Bautista preferred option one. Burner favored option two, with a larger landscaping buffer, and with the building turned to face the center. Chang liked both options but felt the side facing the street should be made very attractive. Dean wanted a 360 degree view of glass, and Burner favored the change in the bus duck-out. Sorensen moved to select the Option 1 site plan, accept the Planning Commission recommendation on the architecture, require a 360-degree orientation for the glass, and require a minimum 10-foot setback. Dean seconded and the motion carried 5-0. Staff said they would also follow through with the recommended change to the location of the bus duck-out. NEW BUSINESS 15. Resolution No. 9836: Authorizing execution of license agreement with Cupertino City Center Owners Association for Four Seasons Orchard Park. .--- The Community Development Director reviewed the staff report and explained that this agreement would give irrevocable, perpetual use of the property to the City. He highlighted some m/nor changes made to the agreement, which included specifying that there would be two areas set aside for public art. He recommended that the Parks and Recreation Commission take the lead on the final design of the facility. The Fine Arts Commission as a whole, or a subcommittee thereof, will work with them on the design, and the Fine Arts Commission will have direct control of public art. The caPital Improvement Projects budget to be discussed later this month will show a budget for both the facility and the public art. Also, Symantec will pay $143,000 when the building is completed, so the council will be asked to authorize payment of the cost up front and will be reimbursed in about 18 months. Burner suggested that the tree layout not be restricted to quadrants, and the design be given more leeway to highlight the four seasons theme. Bantista agreed that there may be better designs to emphasize the changing foliage. Sorensen moved to (1) Adopt Resolution No. 9836 authorizing the City Manager to execute the license agreement; (2) Direct staff to prepare a CIP proposal to advance funding of the park construction and the procurement of public art; (3) Direct the Parks and Recreation Department to prepare precise plans for the park using the conceptual "Four Seasons Orchard" as the conceptual plan; and (4) Direct the Fine Arts Commission _. to collaborate with the Parks and Recreation Commission regarding the design of the final plan, and to'initiate the public art selection process following establishment of a budget by the City Council. Burnett seconded and the motion carried 5-0. May S, I }97 Cu rtino City Coune'tl S -- 16. Resolution No. 9837: Authorizing execution of agreement for consultation services with ACI Real Properties, Inc. (an affiliate of Apple Computer). The City Clerk reported that a fax had been received from Mr. Gerry B. Andeen, former mayor of Menlo Park, objecting to the proposed sharing of sales tax revenue. He felt the proposal was immoral and contrary to the spirit of taxation, and amounts to paying kickbacks and bribes to lure tax revenue away from other municipalities. City Manager Don Brown reviewed the agreement and said that it was modeled after a similar agreement with Municipal Resource Consultants, which does business with most cities in this county. The practice is to pay that firm a perce~toge of sales taxes which they have identified as erroneously reported to various jurisdictions. This agreement with ACI Real Properties came about as a result of conversations with Apple representatives regarding their restructuring plans, including building occupancies, number of employees, and the potential for new sales tax for Cupertino. Brown said that for years there have been discussions in Cupertino about ways to get sales tax benefit from their world-class companies. The discussions with Apple were originally about relocating sales offices to Cupertino, but ended on the more significant topic of electronic commerce. This is not uniformly applied in California, and through this agreement this could be clarified to Cupertino's benefit and could possibly serve as a - clarification statewide. The agreement has the potential of significant economic benefits to the community and reimburses Apple over five years for their efforts. Bautista said this is a business-incentive deal to encourage sales tax generating activities in the city by Apple Computer. He felt that the State's incentives for generating sales tax were fundamentally wrong. Cities like Cupertino have a number of high-tech jobs but do not necessarily receive sales tax generated from these companies. Instead, cities are encouraged to attract retail sales because of the point of sales rules set forth by the State. There is little state law on the subject and it is hoped that by providing incentives to Apple computer, they will have the resources and incentive to take the lead in how electronic sales are accounted for and insuring allocation to the city in which the sale- generating activities occur. The city's economic development plan had a primary goal of fmding methods by which to increase the sales tax base. By increasing sales tax revenue to the city, this agreement will provide a base for needed capital improvements such as an expanded senior center or expanded or new library. The city has a special and unique arrangement with Apple. They employ thousands of people in our community, they have been a good citizen, an their corporate headquarters are here. A lot of Cupertino's identity outside of the city is connected with Apple. Banfista felt this agreement would provide a tremendous benefit to the city with very little down side. Apple will have to generate at least $250,000 in revenue per year in order to receive any fee under the agreement. Connie Martinez, representing Joint Venture Silicon Valley, expressed her support for the Mayor's earlier comments about the current tax structure of the state which creates incentives for the wrong behavior in teims of municipal government. Joint Venture has been working under the tax and fiscal policy council, which includes City Manager Don May 5, 1997 Cupertino City Couneil Page 6 '-- Brown and Terry Ryan from Apple Computers, regarding he long-re.it issues of taxes and fiscal reform. Joint Venture's objectives for the year include the issuance of a wlaite paper on electronic commerce. They have invited Don Brown to attend the Economic Development Round Table to discuss the issue. Bumett said this is a very good arrangement for Apple and the City but he was deeply concerned about the principle involved. Although it has become common practice to give sales tax receipts back to stores that are brought into the city, usually this is done on a short-tesai basis. The current proposal is a very large mm-back. This kind of situation could easily lead to cities competing with each other for sales offices and sales tax dollars. He did not think this was a step Council should take. He agreed the sales tax problem is a mess and it was good that Joint Venture is working towards a solution to the electronic commerce issue, which needs to be addressed on a statewide basis. Burnett said he would very much like to see this money come into the community but he could not support the agreement on those grounds. Dean said that the business of computing right now is extremely competitive and the last couple of years have been tough for Apple. This will give them a vehicle to return the company to pwfitability. They are a part of the community and the city must step forward to help the company that originated in Cupertino, to say thank you. - Sorensen said this will create a win-win situation for everyone. The City needs the sales tax, and this company has been a friend to the city and many organizations in the community. It is defm_itely a business incentive for Apple and she liked the fact that it is limited to a 5-year period. It will be up to another council whether the agreement will be renegotiated after that. Chang said the tax structure issue is a broad one and should be addressed at the state-wide level as well. Given the history of Apple in this city, and that the city offers a lot of services to Apple, this is a chance for Cupertino to benefit from Apple's sales. The primary responsibility council has is to their own residents and such an incentive system makes sense. He felt it was important that this agreement have a time limit. He said he was enthusiastically in support of the approach and the benefits it would bring to the community. Sorensen moved to approve Resolution No. 9837. Chang seconded and the motion carried 4-1 with Burner voting no. Mayor Bautista re-ordered the agenda to discuss all of the items related to election campaigns at one time. 17. First reading of Ordinance No. 1757: "An Ordinance of the City Council of the City of Cupertino Adding Chapter 2.06 to the Cupertino Municipal Code Related to Campaign Finance Regarding Council Elections." (This item to be considered with Items 19 and 20.) May 5, 1997 £ul ertino £ity £oun61 Pa e 7 The City Attorney reviewed the proposed ordinance, noted two minor ainendments, and said that the appendix had been handed out separately. He discussed the qualifications of the administrative judge who would be involved in the enforcement portion of the process. That person would have prior experience as a judge in municipal court or superior court, for example, but would not be a lay person. Dean moved to approve the ordinance. Sorensen seconded. Chang said he was supportive of the ordinance but he felt it was important to place this matter before the voters before it is implemented. He suggested an amendment to the motion to require that it be placed on the next ballot as a referendum. Dean said he would not accept the amendment because it was important not to procrastinate on this important action. Burner said the idea of taking it to the voters has some merit, but it is such a complicated issue that it would be difficult to deal with it effectively in that way. Bautista said that, as a proponent of this measure, he felt it was important that he be subject to the rules that he proposed, should he choose to run for re-election. The amended motion failed for lack of a second. A vote was taken on the original motion to approve the ordinance, which carded 5-0. The City Clerk read the title of the ordinance. Sorensen moved and Dean seconded to - read the ordinance by title only, and that the City Clerk's reading would constitute the first reading thereof. Motion carded 5-0. 18. Update on Proposition 208 campaign finance reform regarding aggregate contribution limits and impact of a voluntary expenditure ceiling on those limits. Baufista said he was in favor of a voluntary expenditure ceiling, and suggested distributing information to candidates about how they can agree to a voluntary ceiling. He recommended a $15,000 ceiling. Chang said he was opposed, given the current rule that contributions are now a maximum of $100 from each person. If a candidate can get a lot people to contribute $100, this reflects a lot of support by individua_ls who have little chance of undue influence, and should be regarded in a very positive light for that candidate. The original recommended limit of $43,000, based upon population, would be a reasonable amount to cover printing costs and postage if candidates wished to send out mailers a few times. Dean said that money controls the thought patterns of the voters. If the limit is set at $15,000 and each candidate reaches that, then what is being measured is the talent of the candidate, which is more important than how much money can be raised. Sorensen agreed with the voluntary cap of $15,000. She felt it was much more important to meet the voters by walking precincts than to send mailers. M s, S, 19{}7 CuI ino City CoundlPa e g -- Kilian said it would be illegal to mandate an expenditure cap. Even a voluntary cap, unless done in a very non-legal way, would result in the doubling of campaign contributions under Prop. 208, which is why it cannot be included in the ordinance. He suggested returning with a drai~ resolution which sets forth the voluntary cap as a suggestion only, but which will not raise the contribution limits. Chang pointed out that the Attorney recommended against distributing ethics statements from the Ethics Committee because they do not have the force of law, but in this case he is recommending a resolution for something in a similar category. The principle was not being consistently applied. Kilian agreed with that statement. However, the ethics statements were not formulated by the city, nor is the city involved in the enforcement. He agreed that adopting resolutions which are not enforceable is not the strongest position for the city. Burner felt that although the spending cap is not enforceable, candidates would make it known that they intend to voluntarily limit their spending. This creates a self-enforcing mechanism in the campaign marketplace to insure there is not undue influence by people who could use their own funds. This would help to level the playing field. Sorensen moved to direct the City Attorney to prepare a model resolution setting a - voluntary expenditure limit of $1S,000 adjusted for inflation. Dean seconded. The City Clerk suggested that no reference be made to inflation and that the Council review the resolution each election year to establish an appropriate ceiling. Burnett offered an amendment to the motion to delete the reference to the CPI. Dean said the CPI could be used as a guide, but if followed strictly it would result in a number like $15,075.35. Dean seconded the motion to delete the reference to the CPI, and the motion carried 5-0. A vote was taken on the original motion to set a voluntary expenditure limit of $15,000. The motion carried 3-2 with Bumett and Chang voting no. 20. Review of ethics materials distributed to candidates for City Council. The City Clerk reviewed the staff report and asked whether the Clerk's Office should continue to distribute ethics statements and enforcement procedures prepared by the Cupertino Ethics Committee. She noted that a fax had been received from Nadine Grant, representing the Ethics Committee, urging that Council postpone this decision and clarify what areas were causing confusion to allow the committee a chance to respond and fred solutions to address those concerns. Kilian said that historically the city was not involved in campaign reform or campaign ordinances of any kind, but the city agreed to distribute the voluntary campaign ethics provisions as a matter of courtesy. Now the city bas adopted an ordinance for which people can be prosecuted. It is important that those people not be confused about what is May 5, 1997 Cul ertin0 City C0uneil Page 0 - law and what is voluntary in nature. The Ethics Committee materials include the county code of ethics, which has different contribution limits than are now allowed. Kilian said a lot of the ethics material is not related to campaign finance. However, it's important for people to realize that the finance materials council just passed by ordinance has the force of law, and people will tend to bc confused by material that the city docs not prepare or enforce. He suggested that staff prepare a resolution that encourages candidates to find out about the code of ethics in their area and make every endeavor to be responsible to follow it. Candidates would make that obligation to the committee, not the City of Cupertino. Dean said it was more a question of etiquette and the committee was not informed in a timely matter regarding this proposal to change the process. These were community volunteers trying to participate in the process and it is important to hear from them. Sorensen agreed that they needed to be represented. Burnett said he had some concerns about the process as it took place last time but he would like to discuss it with the Ethics Committee. Chang agreed. Dean said he spoke to Nadine Grant this evening and apologized for not notifying the committee that this item was on the agenda. Donna Krey read an electronic communication from Nadine Grant about the potential -. confusion that candidates might have given that the city is not the enforcement agent for the ethics statement. The campaign ethics committee would be happy to address the problem and suggest some alternatives. In 1994 the committee and council felt this was an important enough statement that it should be included a part of the regular package, which includes a California state-enforced statement. This is not like an endorsement request to candidates, so it should not be treated in the same manner. She asked Council not to discard the time invested by the citizens in the campaign ethics committee. After discussion it was decided that June 2 would be the best time to address this issue to allow for the appropriate materials to be printed for the nomination period. Kilian thought the council might be helped by knowing how many ethics complaints have acm_ally been processed through this system and how effective it has been, and perhaps the Ethics Committee could provide that infommtion as well. Bautista suggested that the attorney draft a sample resolution addressing the situation as he had suggested which would be discussed with the Ethics Committee on June 2. Dean moved to continue this item to June 2. Sorensen seconded and the motion carried 5-0. May 5, 1997 Cu rtino City Council Page 10 ORDINANCES 18. Second reading and enactment of Ordinance No. 1756: "An Ordinance of the City Council of the City of Cupertino Amending Title 19 of the Cupertino Municipal Code By Rezoning a 25 Acre Parcel Located at 22371 Cupertino Road Fwm Medium-High Density Residential 10-20 Dwelling Units Per Gross Acre (R3) to Low Density Residential 1-5 Dwelling Units Per Gross Acre (R1-10) Zone - (Application 1-Z-97)." The City Clerk read the title of the ordinance. Sorensen moved and Dean seconded to read the ordinance by title only, and that the City Clerk's reading would constitute the second reading thereof. Motion carried 5-0. Sorensen moved and Bumett seconded to enact Ordinance No. 1756. Motion carded 5-0. COUNCIL REPORTS In response to a question by Council, the Public Works Director discussed street-sweeping services and the modifications being considered in terms of route changes. He said that the Los Altos Garbage Company has begun to offer street sweeping. Their contract expires at the end of this year, and if their bid is competitive they may be chosen to do both tasks, .which would solve the problem of the sweeping schedule not being compatible with the schedule for garbage pickup. Chang discussed the Leadership Cupertino program and job opening. This will be a self- sustaining program to provide information to community members to enhance leadership efforts in community and government institutions. This is a joint project among the Chamber of Commerce, DeAnza College, and the City. The cost will be paid through fees or fund-raising. ADJOURNMENT At 8:12 p.m. the meeting was adjourned.