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CC 05-26-83 . . . . ~~c .'.' "'!'~c<' - - '-':' > "-<~'~>'.'o~f""'".'~~:)',~t., .1'''''','''''' ClTI OF CUPERTINO, STATE OF CALIFORNIA 10300 Torre Avðnue, Cupertino, CA 95014 Telephone: (408) 252-4505 CC-6l0 Page 1 MINUTES OF THE ADJOURNED REGULAR MEETING or THE CITY COUNCIL HELD ON MAY 26, 1983 IN THE COUNCIL CHAMBER, CITY HALL CUPERTINO, CALIFORNIA K9yor Gatto called the meeting to order at 7:05 p.m. in the Council Chamber. SALUTE TO THE FLAG ROLL CALL Counc. Present: Johnson, Plungy, Rogers, Spärks, Mayor Gatto Staff Present: City Manager Quinlan City Clerk Cornelius Director of Public Works Viskovich Director of Planning and Dev.lopaent Sisk Director of Finance Snyder City Attorney Kilian Mayor Gattu reviewed the background of the proposed construction tax for those present. Director of Public Works Viskovich informed Council of how staff arrived at the proposed ùollpr amounts and reviewed some of the planned improvements. Charles Newman, President, Chamber of Commerce, read a letter for the record regarding the amendment to the construction tax. de urged Council to keep the pr~sent method of fees and expressed concern re- garding a possible increase in leasing rates. Roger Maek, President, Alternate Decision Research, stated that the proposed tax could reduce long term development. He felt the Council was looking for a long te~ fiscally sound City. He stated that frontloading costs on developers would be discouraging. ,.e City of San Jose uses development agreements, and in that way a developer knows where funds are going. He stated that the General Plan encour- ag~s office space and he was not sure that Council would want to dis- courage commercial. As far as he could see, the proposed fees would not be going directly to any thinK. He felt that development agreements were preferable to any proposei construction tax. He stated that Cupertino was not an island, and if the City discourages devele,ment here, it would just go elsewhere. he saw a problem with the fees going into the General Fund which would result in not knowing pre- cisely what the money would be spent on. Mr. Newman stated that the City could use some of lts reserves for necessary road improvements. ..~";_. "'~"'-';~~'T:T". ~':,!?"~""(::ot.'~"7~:-~;r~':::'.\1O\",,,"\~~~~:~_-,; ,_.. ',-; < .10 Page 2 MINUTES OF THE MAY 26, 1983 CITY COUNCIL MEETING John Vidovich inquired regarding the ordinance and its implementation. He stated thst SOlie developers have already contributed to improvements that have not yet been done. He stated that H a developer had already received financial commitment and submitted an application, the pro- posed additional fees would be a heavy burdsn. He asked Council to give the developer a choice of which method he wished to use, i.e., conditions already received or the proposed construction tax. Upon being asked by Council, the City Attorney stated that the proposed tax can be applied at any time of a permit issuance, i.e., building, use, occupancy, etc. That would be an administrative decision. Di~cussion followed regarding excluding hotel and commercial as well as residential from the proposed construction tax. . John Volckmann, 20083 Stevens Creek Boulevard, asked if should reserves be used tÞey would be replaced by sales tax, prop~rty tax, etc. when buildout occurs. He stated there was no, timetable to spend any of the taxes that wou~d ~e paid on the traffic and road improvement. He expressed concern thaL it would go for the acquisition of land w~ich he felt was against Proposition 13 intent. He suggested that if Council did pass the ordinance that the effective date be delayed in order to allow time for looking at assessment districts. He expressed concern regarding corporations leaving Cupertino because of rent increases and costs of leases. Wally Klingman, Hewlett-Packard, requested clarifications regarding the construction tax and whether or not it would eliminate existing assess- ment districts. He was informed that if conditions are already existing on a permit, the developer could come back to City Council and see if they could be waived. New developments would not have conditions on a use permit relating to items to be built from funds generated by the proposed construction tax. Mr. Klingnan stated that cert&.n conditions listed on the use perÅ“it were not included on the submitted list of road improvements. Director of Public Works Viskovich stated that the new General Plan will modify certain previously required improvements as they are no longer necessary. However, it was stated that immediately adjacent improvements will still be required if necessary, as well as those on the list presented to Council that evening. Mr. Alan Bidwell, Manager, J. C. Penney in Cupertino, read a statement for the record. Penneys has brought approximately $800,000 in sales tax to Cupertino since opening. He stated that if the company were buildtng under the proposed ordinance, it was questionable that they would build. He stated that in the United States he could find only one city with a comparable tax. H.. '"rged that the ordinance not be enacted. . Walter Ward, General Managsr of Vallco Park, stated that Vallco would pay its fair share and that Vallco had contributed to improve- ments to the City and its street system. Vallco has contributed approximsteJy $7 million for public improvements which is being ~aid over a fifteen year period. He felt Vallco should get credit for ;'"""JÆ,,;~~~~r ~~~.-- . MINUTES OF THE MAY 26, 1983 CITY COm¡CIL MEETING the Environmental Impact Fund. Be also stated that there was nothing in the proposed ordinance regarding credit for what has been done. Be also want ad verification of the elimination of the second tier concepe. Grant Wbeeler of Four Phase stated that Four Phase presently has no plans to expand and would not be affected by the proposed ordinance at this time, but should they in the future want to expand, the dollar a square foot could be a significant amount. A representative of Heasurex stated that representatives from Heasurex seldom come out to address items. However, the difference between the present Bç and the proposed $1.00 per sq ft. caught their atten- tion. He stated that during the hearing some questions have been answ"red and if it really is a "wash" between the present system and the proposed aystem, it is of no real eoncern to them. Howev~r, he stated there seems to be some skepticism that the cost would come out the same. ~¡rk Kroll, 100 N. Wolfe Road, requested clarification regarding the "structured parking lot." He was informed that the intent was that the construction tax would be charged when parking fees are a source of revehues. Mr. Kroll requested that the definition be clarified in the ordinance. . Richard Maddigan, attorney, Cupertino, stated that he has been trying to renegotiate the lease on his office space b..d finds the new terms roughly twice what he was paying just a few months ago. He stated thbt the proposed construction tax affects the entire marketplacB and not just new development. He felt the front end load would make it more difficult to compete with other areas. He stated that the sales tax could flow out of the City as goods would be cheaper in other areas He stated that there is no way of knowing that even if the tax were paid the proposed improvements ~ould be done. He also felt the improve ments proposed are of a citywide, pre-existing nature and it was not fair to have the last developers along 90lve citywi1e problems. Helen Lewis, Valley Medical Laboratories, Town Center, stated that her company was growing and she wished to stay in Cupertino. She has been looking for a building, but the cost is almost prohibitive. She asked that Council consider that there are people making contribu- ti:ms to the ,"ommunity, and they ".ould like to stay here. It was moved by Counc. Sparks, seconded by Counc. Plungy and passed unanimously to closs the public nearing. j Discussion followed regarding the collection process. It was pointed out that should it be changed, it would be nec,>ssary to change an additional section of the Cupertino Municipal Code. The collEction of the construction fees is an administrative process. Coun~il, by consensus, amended Ordinance No. 1224 as follows: (a) Chapter 3.32.050 - time of payment will be revised to state occupancy permit except for mobilehomes (remain as is) and residences (at ti~ of final approval of utilities). CC-610 Page 3 ?ublic hearir.g closed aío Page 1+ First reading of On\. 1'1.Z4 .Of vehicle purchases . .. ,.,. ,',. .1,.....,'-<..,. MINUTES OF THE MAY 26, 1983 CITY COUNCli. MEETING (b) Add definition of non-commercial parking lots to lilt of dp.finitioal. (c) Add to exceptions a atatement that if a building plrmit were applied for prior to May 27, 1983 thw applicant is exempt from the increase of construction tax approved in this ordinance. (d) Page 3, Sectiofl 3,32.040 "USE" was amended to reed: Resideotial/ Mobileholl\eS/Mobileh01lle Iou" and "Industrial/officI and cOlllllØrcial, quasi-public", and "Hotel and ""'tel." The City Attorney was directed to draft the appropriate wording for the revision of Chapter 3.32.050. It was moved by Counc. Plungy, seconded by Counc. Rogers and passed unanimously to read Ordinance No. 1224 by tit.e only and the City Clerk's reading to constitute the first reading thereof. It was announced that second reading of the ordinance would be held at the regular meeting of Monday, June 6 st which time the ordinance would become effective. Bid Op~ning, Vehicles, DPW 83-Z0 It was moved by Counc. Sparks, seconded by Counc. aogers and passed unanimously to award one new esb and chassis (6,500 GVW), one new cargo van (6,600 GVW), three new ~ ton mid-size trucks, and two new 4-wheel drives to Swanson Ford for a total of $80,685.98. Contract for two new 4-door sedans was aw~rded to Carl Chevrolet for a total of $17,048.2Z. One new cab and chassis (10,50U ~JW) W&3 not awarded. $'1.3,834.20 will be taken from the existing equipment reserve and $73,900 from the fixed asset account. At 9:Z6 p.m. the meeting was adjourned. ",t2~ r::!d'