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HomeMy WebLinkAbout2010-01-14MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING THURSDAY, JANUARY 14, 2010 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Mayor Finerty convened the meeting at 3:01 p.m. II. ROLL CALL Present: Councilmember Jean. M. Benson Mayor Pro Tem Jim Ferguson Councilman Richard S. Kelly Councilman Robert A. Spiegel Mayor Cindy Finerty Also Present: John M. Wohlmuth, City Manager/RDA Executive Director David J. Erwin, City Attorney Justin McCarthy, ACM for Redevelopment Stephen Y. Aryan, Assistant to the City Manager Rachelle D. Klassen, City Clerk Bo Chen, City Engineer Russell Grance, Director of Building & Safety Lauri Aylaian, Director of Community Development Paul S. Gibson, Director of Finance/City Treasurer Janet M. Moore, Director of Housing Mark Greenwood, Director of Public Works Frankie Riddle, Director of Special Programs Bill Hunley, Battalion Chief, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Andrew Shouse, Asst. Chief, Palm Desert Police/Riverside Co. Sheriffs Dept. Grace L. Mendoza, Deputy City Clerk III. ORAL COMMUNICATIONS - A (CLOSED SESSION ITEMS) None IV. ADJOURN TO CLOSED SESSION Request for Closed Session: MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: 1) Property: APN 628-130-015 Negotiating Parties: Agency: John M. Wohlmuth/Lauri Aylaian/City of Palm Desert/ Palm Desert Redevelopment Agency Property Owner: Barracuda, LLC Under Negotiation: x Price x Terms of Payment 2) Property: APN 628-130-008 Negotiating Parties: Agency: John M. Wohlmuth/Lauri Aylaian/City of Palm Desert/ Palm Desert Redevelopment Agency Property Owner: David Nelson Under Negotiation: x Price x Terms of Payment 3) Property: APN 628-120-005 Negotiating Parties: Agency: John M. Wohlmuth/Lauri Aylaian/City of Palm Desert/ Palm Desert Redevelopment Agency Property Owner: Roger Snellenberger Under Negotiation: x Price x Terms of Payment 4) Property: APNs 620-370-011, 620-370-012 Negotiating Parties: Agency: John M. Wohlmuth/Mark Greenwood/City of Palm Desert Property Owner: Lakha Properties -Palm Desert, LLC Under Negotiation: x Price x Terms of Payment 5) Property: 42135 Kansas Street (APN 637-033-001), Palm Desert Negotiating Parties: Agency: Justin McCarthy/Mark Greenwood/City of Palm Desert/ Palm Desert Redevelopment Agency Property Owner: Fannie Mae/Brian Barr, Broker Under Negotiation: x Price x Terms of Payment Conference with Legal Counsel regarding existing litigation pursuant to Government Code Section 54956.9(a): a) PDCC Development LLC, Petition for Bankruptcy, United States Bankruptcy Court, Central District of Califomia 2 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Conference with Legal Counsel regarding significant exposure to litigation pursuant to Government Code Section 54956.9(b): Number of potential cases: 2 Conference with Legal Counsel regarding potential to initiate litigation pursuant to Government Code January 28, 2010 Section 54956.9(c): Number of potential cases: 1 Upon a motion by Ferguson, second by Benson, and 5-0 vote of the City Council, Mayor Finerty adjourned the meeting to Closed Session at 3:02 p.m. She reconvened the meeting at 4:00 p.m. V. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None VI. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA - Mayor Pro Tem Jim Ferguson VII. INVOCATION - Councilman Robert A. Spiegel VIII. ORAL COMMUNICATIONS - B None IX. AWARDS, PRESENTATIONS, AND APPOINTMENTS A. PRESENTATION TO THE PALM DESERT CITY COUNCIL BY QUEEN SCHEHERAZADE AND HER COURT AS AMBASSADORS OF THE 2010 RIVERSIDE COUNTY FAIR AND NATIONAL DATE FESTIVAL. MS. BARBARA CRESON, "Queen Mom," presented the Queen's Court: MS. AMBER AMAYA, Queen Scheherazade; MS. BRANDY BRIONES, Princess Dunyazade; and MS. AMBRY ALDAY, Princess Jasmine. Each of the ladies greeted the City Council and personally invited them and all present to visit and enjoy the upcoming Fair, February 12-21, highlighting the many events and activities to be held there this year. They thanked Councilmembers for the opportunity to make this presentation and provided each with a brochure about the 2010 event. 3 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 B. PRESENTATION TO RECOGNIZE JULIE MUNSON FOR HER SERVICE TO THE CITY OF PALM DESERT AND ITS PARKS & RECREATION COMMISSION. Ms. Munson was unable to be present today; the presentation will be continued to the meeting of January 28, 2010. C. PRESENTATION OF CERTIFICATE OF ACCOMPLISHMENT TO RECOGNIZE NICHOLAS COX AS FIRST -PLACE WINNER OF THE ART IN PUBLIC PLACES FILM & VIDEO ART COMPETITION. On behalf of the City Council, Mayor Finerty presented Mr. Cox with a printed certificate in honor of his first -place entry in the Art In Public Places Film & Video Art Competition. D. PRESENTATION OF CERTIFICATE OF ACCOMPLISHMENT TO RECOGNIZE REBECCA ROWLEYAS SECOND -PLACE WINNER OF THE ART IN PUBLIC PLACES FILM & VIDEO ART COMPETITION. On behalf of the City Council, Mayor Finerty presented Ms. Rowley with a printed certificate in honor of her second -place entry in the Art In Public Places Film & Video Art Competition. E. PRESENTATION TO HONOR ED GALLARDO WITH THE CITY'S EMPLOYEE RECOGNITION AWARD FOR DECEMBER 2009. On behalf of the City Council, Mayor Finerty honored Mr. Gallardo with a printed certificate recognizing his exemplary service and congratulated him for going above and beyond the call of duty when he assisted a resident with a flat tire. X. CONSENT CALENDAR A. MINUTES of the Regular City Council Meetings of December 10 and December 24, 2009; the Adjourned Regular City Council Meeting of December 11, 2009; and the Adjourned Regular Joint Meeting of the City Council and Redevelopment Agency of December 21, 2009. Rec: Approve as presented. B. CLAIMS AND DEMANDS AGAINST THE CITY TREASURY - Warrant Nos. 131, 132, 136, 140, 141, 144, and 145. Rec: Approve as presented. 4 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 C. CLAIM AGAINST THE CITY (#655) by Edith Slater in the Amount of $1,500,000. Rec: By Minute Motion, reject the Claim and direct the City Clerk to so notify the Claimant. D. COMPLIANCE ANALYSIS AND INVESTMENT REPORTS for the Months of September 2009, October 2009, and November 2009 (Joint Consideration with the Palm Desert Redevelopment Agency). Rec: Receive and file. E. APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE by Cougar's Bar & Nightclub, 74-360 Highway 111, Palm Desert. Rec: Receive and file. F. APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE by Gelato Bella Vita, 74-998 Country Club Drive, Suite No. 240, Palm Desert. Rec: Receive and file. G. APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE by Palm Desert Country Club, 77-200 California Drive, Palm Desert. Rec: Receive and file. H. APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE by The Westin Desert Willow Villas, 75 Willow Ridge, Palm Desert. Rec: Receive and file. I. CITY COMMITTEE AND COMMISSION MEETING MINUTES.. 1. Audit, Investment & Finance Committee Meetings of September 22, October 27, and November 24, 2009. 2. Art In Public Places Commission Meeting of November 18, 2009. 3. Library Promotion Committee Meeting of July 15, 2009. 4. Marketing Committee Meeting of November 17, 2009. 5. Public Safety Commission Meeting of October 14, 2009. Rec: Receive and file. 5 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 J. LETTER OF RESIGNATION from John Weston - Art In Public Places Commission. Rec: Receive with very sincere regret. K. RESOLUTION NO. 2010 -1 - A Resolution of the City Council of the City of Palm Desert, Setting Forth Its Findings and Authorizing the Destruction of Files from the Department of Human Resources. Rec: Waive further reading and adopt. L. REQUEST FOR DECLARATION of Surplus Property and Authorization for Disposal - Desert Willow Miscellaneous Equipment. Rec: By Minute Motion, declare items listed on the accompanying staff report's Exhibit "A" as surplus property and authorize disposal as appropriate. M. REQUEST FOR ACCEPTANCE OF WORK for Contract No. C28910 -- Eldorado Median Landscape Renovation Project (Project No. 942-08) (Candyl Golf Group, Inc., La Quinta, CA). Rec: By Minute Motion, accept the work as complete and authorize the City Clerk to file a Notice of Completion for the subject project. N. REQUEST FOR ACCEPTANCE OF WORK for Contract No. C29280 - Citywide Drywell Removal Project (Project No. 500-10) (Tri-Star Contracting II, Inc., Desert Hot Springs, CA). Rec: By Minute Motion, accept the work as complete and authorize the City Clerk to file a Notice of Completion for the subject project. O. REQUEST FOR AUTHORIZATION to Refund Fees for Building Permit No. 09-48580 for a Project Located at 77-815 Michigan Drive, Palm Desert (Newton Cattern, Applicant). Rec: By Minute Motion, authorize refund of Building Permit Fees in the amount of $187.20 for Permit No. 09-48580 for a project located at 77-815 Michigan Drive. P. REQUEST FOR AUTHORIZATION to Purchase 1,050 Child Identification Fingerprint Kits in the Amount of $996, Utilizing CaICOPS Funding. Rec: By Minute Motion, approve the purchase of 1,050 Child Identification Fingerprint Kits in the amount of $996, utilizing CaICOPS funding. 6 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Q. REQUEST FOR APPROVAL of the Consumption of Alcoholic Beverages at a Special Event on City Sidewalks for The Shops On El Paseo - January 30, 2010. Removed for separate consideration under Section XI, Consent Items Held Over. Please see that portion of the Minutes for Council discussion and action. Councilman Spiegel asked that Item Q be removed for separate action under Section XI, Consent Items Held Over. Upon a motion by Kelly, second by Ferguson, and 5-0 vote of the City Council, the remainder of the Consent Calendar was approved as presented. XI. CONSENT ITEMS HELD OVER Q. REQUEST FOR APPROVAL of the Consumption of Alcoholic Beverages at a Special Event on City Sidewalks for The Shops On El Paseo - January 30, 2010. Councilman Spiegel stated the request included closing down part of El Paseo, and the original request was for a whole day for the use of sidewalk. Economic Development Manager Ruth Ann Moore responded the original request was to start at 10:00 a.m. on Saturday, January 30, 2010, and the new request after meeting with Public Works and Applicant, it was agreed to close down the parking lot lane and the first lane in for safety barriers as noted in the map attached to the staff report. Further responding, she said the fund-raising event with Bighorn was for Eisenhower's Lucy Curci Cancer Center, which is by invitation only. She said it was also a celebration for all the new stores that opened in that block; they are expecting approximately 400 people. Councilman Spiegel asked if the event was exclusive for Bighorn residents. MR. CRAIG FLETCHER responded the event was originally for Bighorn residents only, but it was opened up to the public in order to raise more funds for the Behind a Miracle (BAM) organization. Responding to question about traffic, he said they worked out a plan with Public Works to allow one lane in each direction to be open. Further responding, he said safety guards will be at the cross walks to make sure people got across. He went on to say that all the businesses were participating. Councilmember Benson asked if there was any consideration to using the two church lots that were closer. 7 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 MR. FLETCHER clarified they were not using El Paseo for parking, because the parking will be available to the rear. He said the event will be held both inside the stores and outside on the sidewalk, which will include Fashion Runways extending out into the street. Councilmember Benson stated she misunderstood and thought the event was being held at Bighorn. Councilman Spiegel moved to, by Minute Motion: 1) Permit the consumption of alcoholic beverages on sidewalk property owned by the City on the El Paseo block located between Highway 74 and Ocotillo Drive for a special event for The Shops of El Paseo scheduled to be held on January 30, 2010; 2) deny the request to close the street in the above -mentioned block and, as an alternative, instruct staff to work with the event coordinator to block off only one lane on each side of the block closest to the sidewalks for staging the event. Motion was seconded by Benson and carried by a 5-0 vote. XII. RESOLUTIONS None XIII. ORDINANCES For Introduction: A. ORDINANCE NO. 1202 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ADDING CHAPTER 15.06 - "ENERGY CODE" - TO THE PALM DESERT MUNICIPAL CODE AND REPEALING TITLE 24, SECTION 24.30 THEREOF. Mayor Pro Tem Ferguson moved to waive further reading and pass Ordinance No. 1202 to second reading to be conducted at a public hearing at the regular meeting of February 11, 2010. Motion was seconded by Kelly and carried by a 5-0 vote. B. ORDINANCE NO. 1203 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ADDING CHAPTER 15.07 - "SOLAR PV" - TO THE PALM DESERT MUNICIPAL CODE. Mayor Pro Tem Ferguson moved to waive further reading and pass Ordinance No. 1203 to second reading. Motion was seconded by Kelly and carried by a 5-0 vote. 8 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 For Adoption: A. ORDINANCE NO. 1201 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING TITLE 24 OF THE PALM DESERT MUNICIPAL CODE, ENVIRONMENT AND CONSERVATION, CHAPTER 24.04, WATER -EFFICIENT LANDSCAPE ORDINANCE IN ITS ENTIRETY, AS WELL AS REPEALING MUNICIPAL CODE SECTIONS 8.70.330 AND 12.08.010 IN THEIR ENTIRETY RELATING TO EXCESS WATERING. Councilmember Benson moved to waive further reading and adopt Ordinance No. 1201. Motion was seconded by Ferguson and carried by a 5-0 vote. XIV. NEW BUSINESS A. REQUEST FOR CITY COUNCIL REVIEW OF THE APPROVAL OF THE STORAGE OF A RECREATIONAL VEHICLE (RV) IN THE SIDE YARD OF A RESIDENCE LOCATED AT 73-526 IRONWOOD STREET Case No. MISC 09-482 (Stanley R. Smith, Applicant). Assistant Planner Missy Grisa stated this item was a request to park a Recreational Vehicle (RV) on private property located at 73-526 Ironwood Street, which is on the northeast comer of Burroweed and Ironwood. She said the house wrapped around the corner, and the RV is parked deep to the rear of the home. The dimensions of the vehicle are 8-feet wide by 12-feet high, and 44-feet long. The RV was parked at the location without a permit and no screening was included. The Applicant went through the Architectural Review Commission (ARC), and staff noticed neighbors within 300 feet from the Applicant's home. Two complaints were made on this RV, but based on current standards and Ordinances in place, the Application was approved by the ARC. The Applicant put forth a plan to move the RV six feet away from the property line to the east and screen it up to 9-feet tall, which would provide a 75% screen with the addition of stakes, wires, and vines that will screen it from the neighbor to the east. There is a gate in front of the house where the RV can still be seen primarily from the public right-of-way. She drove by the property on two occasions to take photographs for the ARC meeting, and the gate was not closed. She displayed photographs with views from the adjacent neighbor to the east, which exposed the 44-foot RV. Because this item was requested for City Council review, another notice was mailed out, and an additional neighbor submitted a letter to the City Council, which was included in the packet for Council's review. Staff recommended approval of the Application because it met all the current Ordinances. However, because the RV Ordinance is in the process of being amended, and a Moratorium was put into effect on December 10 where no permits are issued, the City Council had the options to not approve the permit or move to approve with ARC action. 9 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Councilmember Benson stated she thought the current standard was to have RVs fully screened. Ms. Grisa responded the current Code stated RVs are required to be "adequately" screened, which was one of the issues staff was working to clarify. She said "adequately" meant something different to different parties. The ARC came up with recommending that as long as the majority of the RV was screened, it would be allowed under the current Code. Councilmember Benson stated she would be in favor of waiting until the new Ordinance was amended before approving anything. MS. ROSE LEPAN, Magnesia Falls, Palm Desert, CA, stated she moved to the Desert in 1976 with her husband, and they were local developers with an architectural office. Her beautiful 5,000 square -feet home was built on Bursera Way and couldn't image having a monstrous RV next door. She still had an empty lot on Bursera Way and wondered if she would be permitted to put such a bus on her empty lot. She said her neighbors RV was not visible from the street, and she recalled that when her home was being built, motor homes were not allowed to be visible from the street. MS. SUZANNE PRIDE, Burroweed Lane, Palm Desert, CA, stated she was born in Riverside County and has resided in Palm Desert for 20 years. She thanked the City Council for its devotion in keeping the integrity of Palm Desert to its highest regard. Over the past years, the City Council faced difficult cases, but it always made decisions based on what was best for the integrity of all. She said Palm Desert was the hub of the Valley as written in many magazines around the Country. She said Rancho Mirage and Indian Wells had a high standard of code enforcement that prohibited RVs to be parked on private property. She said Palm Desert had been seeking a simple solution for storing RVs on properties, and she displayed photographs of an enclosed RV garage located at 73-888 Joshua Tree near Ironwood Street that she thought was an example of a great solution. She said this neighbor aesthetically built a RV storage with integrity and consideration for others in the neighborhood, which increased the value of its property and the neighbor as well. She said a simple solution would be to build a garage to cover the RV or have it stored in one of the many facilities in Palm Desert. She encouraged the City Council to choose the same high standard of code enforcement for RV storage as its neighboring cities. MS. SUSAN CARNEY, Fairway Lane, Palm Desert, CA, stated she's owned her resident for almost 16 years. She also owned the property next door to the RV in question for 11 years. She thanked the City Council for its support and concern for property owners like herself who did not own a RV, but had a neighbor that did. She displayed several photographs of the RV, which exposed its massive size. She said the RV doubled the size of the wall, 10 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 which presented a fire and safety hazard because of the amount of fuel and propane it carried. She said this RV was too close to the home she was in the process of building. She displayed several views from her home that showed what her view would be like with and without the RV parked along the side of her home. She asked the Council if they would want to have this large bus next door with the fire Toad capacity and threat of fire spread. The safety and enjoyment of her property are compromised if this RV was allowed to remain parked right next to the wall. The City's Building Code would not allow a wall height to be higher than six feet, nor would a building structure of that height be allowed to be built next to the wall. She said the residents of Palm Desert are best served by having consistency with Codes. She said Architectural Review Commissioner Vuksic stated "He felt for the neighbor and wouldn't want to have that RV next door, but he couldn't see why they couldn't approve it." She said if any of the Councilmembers felt they would not want a RV next door, then to please not vote to leave it next to her home. She said people driving by on the street only see the RV for a few seconds, but as a neighbor, she saw it all the time from inside or outside her property. MR. STANLEY SMITH, Applicant, stated he originally bought a home on Willow Street in Palm Desert, but was not allowed to park his RV there because he was located alongside Highway 74, a frontage road. He was also not allowed to build a motor home garage, because it would be too high. He bought the piece of property on Ironwood Street, which was his current home, because it had RV parking that included RV hookup. The lot was a disaster five years ago when he purchased it, and he's since then enhanced the property. He said the RV was parked for a maximum of four to five months, because he left the area in April until the middle of October and also took trips in between, so it was not parked there continuously. He believed the value of his property increased because of the ability to park a RV. When he lived on Willow Street, he had to store it, but it was only two months before it was broken into and destroyed inside. He bought the piece of property because he would be able to park a RV there, stating it allowed him to get in it and be gone in an hour's time. It was his opinion, that if he had owned a property for 11 years as stated by his neighbor, in five years time he certainly could have come up with a plan or other solutions to avoid seeing the RV, like building a garage next to the RV. He reiterated that he met all the current and proposed standards, and he was willing to do more improvements, but he didn't know what else to offer. He said the ARC asked that he keep his gate closed, which he did constantly, but he did have to open it up when taking his car out. Councilman Kelly stated he was accused of having a conflict of interest in this matter, yet he found there was none, because he didn't own or sell motor homes or had anything to do with them. He happens to live in the same neighborhood as the Applicant, but found that his motor home was less 11 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 obtrusive than many of the front walls in Palm Desert. When driving by the Applicant's home, the RV isn't really seen unless one was actually looking for it. He noted the Applicant agreed to add additional planting there for screening. However, this case also met the proposed standards for the new Ordinance, which was even more stringent. He preferred a Tess stringent Ordinance with simpler rules that didn't require a permit process. If Council didn't approve this particular Application, he couldn't see how any others could be approved under a stricter ordinance, which will have an effect on the whole City. The City had said RVs were allowed, and many people bought homes in Palm Desert with the idea that they could have them, so to now say otherwise would be unfair. Councilmember Benson said it wasn't fair that somebody had to look at a RV next door and believed something could be done to screen the entire RV. She said the new Ordinance should include RVs to be totally screened or enclosed, but she understood Council was not dealing with that now. However, she would not approve this Application until the new Ordinance was amended. Councilman Spiegel stated the City was reaching the point where other cities had already been, like the two neighboring cities (Indian Wells and Rancho Mirage) that prohibited motor homes in their city. He didn't own a RV nor was he wild about their appearance, but on the other hand, Palm Desert had a population of 50,000 with residents that owned a RV and parked them in a required area. It was difficult for him to vote against a motor home that's concealed from the street. He understood parking a RV to the rear of a home was tough, but other than going along with what already existed, the City can become draconian in saying it could only be this one way. It was his preference to place a strict requirement and location and allow motor homes in Palm Desert. Mayor Pro Tem Ferguson stated this issue had been kicked around for months, and there was no simple answer because many lots will not accommodate a motor home no matter how one tried to fit them in. An 8,000 square -foot lot will not accommodate a house, a motor home, and provide the necessary fire setbacks to make sure a house was safe. However, this lot was almost an acre, and if a RV couldn't be parked on this property, you can't have motor homes at all in Palm Desert. He and Councilman Kelly went out to look at various types of landscaping where a trellis didn't have to be built to reach a 9- to 12-foot high screen. The plants at his home grew nicely, were easy to trim, and didn't require much maintenance. He agreed with Councilmember Benson that there should be complete screening of RVs. The following statement should not be a factor in his mind, but he just drove by the house that's being built and wondered what the owner was thinking, because it seemed the owner did everything in its power to point every window toward this RV knowing full well it was there and now was complaining about it. Setting aside that one is not supposed to have west 12 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 facing glass for energy purposes, there are so many things that could have been done when the new house was being built that could have eliminated this problem. He said it seemed the neighbor almost created this problem and now wanted the Applicant to solve it. He said the City was proposing to create a stricter Ordinance, which he supported, but the solutions were simple, one can either look out the window to see a house, a motor home, or nice landscaping, and of the three, the neighbor was better off with landscaping. He was annoyed when staff stated it couldn't find a way to deny the Application, because that's not what City Govemment was about; the Council tried to find ways to make things work. He didn't know what else the Applicant could do after complying with the landscape requirement and moving the RV back to meet the six-foot setback, which he assumed also met the fire requirement. He said Applications will need to be decided on a case by case basis, but if this one couldn't be approved, then no Application can be approved. He didn't want to become an overly -restricted City that came up with a blanket rule, because that would punish those who had legitimate recreational uses with these vehicles. He said waiting until the new RV Ordinance was in place wouldn't change anything, except to include the recommendation of the ARC to screen the RV by 75%. Mayor Finerty stated her concern had to do with safety as noted in the memo received from Chief Cooley. She wondered if Chief Cooley had driven by this particular site and made an observation or opinion. The memo indicated the City should remain consistent with its Ordinances and require the same setbacks for building structures. She was almost at that point, that when it came to re -writing of the Ordinance, that the Fire Department would need to go out and evaluate as well. Chief Hunley stated Chief Cooley was at another meeting, but that currently there was no set Fire Code on setbacks, but the Fire Department's professional recommendation would be to make RV setbacks similar to a building structure setback, which he believed was six feet. He said modern motor homes carried as much fire load, if not greater, because of the propane tanks, etc., than what a regular RV carried. He himself had not driven by this property, but did review some of the pictures. As far as the Fire Department was concern, it agreed with a six-foot setback from the property line, if that's what the City's building setback was. The only other thing the Fire Department would require is a three-foot clearance to any ingress on either side of the home to the rear of the yard, so that the Fire Department can get its equipment, tools, and men through. Mayor Finerty asked if this RV met the six-foot setback from the property line. Ms. Grisa responded the six-foot setback was something staff came up with in working with the Landscape Department to create an area where 13 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 landscaping had the ability to grow to full height or width. The RV did not meet the setback of the Zone, but it was pushed back six -feet from the property line. Further responding, she said this property met the six-foot setback requirement just described by Mr. Hunley with a minor discrepancy, in that the building's setback was not six feet. She said the Fire Department felt RVs should be parked where buildings can be built. Mayor Finerty stated a building could not be built where the RV was currently parked. Ms. Grisa agreed. Mayor Finerty stated safety was number one, which she thought was the main job of govemment. She would not be comfortable approving this Application unless the RV was moved to a location where the Fire Department thought it was safe to be. Councilman Kelly moved to, by Minute Motion, affirmed the Architectural Review Commission's approval of Case No. MISC 09-482, allowing for the parking of an RV in the side yard of the residence located at 73-526 Ironwood Street, subject to all conditions. Motion was seconded by Spiegel and carried by a 3-2 vote, with Benson and Finerty voting NO. B. REQUEST FOR AUTHORIZATION OF A TEMPORARY USE PERMIT AND ONE-YEAR LEASE AGREEMENT WITH PALM DESERT RC RACEWAY / CHRIS MARRALE AND DONNA PISZCZOR FOR THE USE OF A REMOTE -CONTROLLED CAR RACETRACK - SUBJECT PROPERTY IS VACANT, CITY -OWNED PARCEL LOCATED ON PAINTERS PATH WEST OF THE DESERT CROSSING SHOPPING CENTER (APN 640-091-010) Case No. TUP 09-443 (Palm Desert RC Raceway/Chris Marrale & Donna Piszczor, Applicants). Councilmember Benson stated she thought this lot was used for the same purpose before. Councilman Spiegel agreed, but the previous owner moved to Arizona leaving all the equipment, and now the toy store owner there by Michael's will take it over. He noted there were no complaints with the previous owner. Councilman Spiegel moved to, by Minute Motion, authorize: 1) Director of Community Development to issue Temporary Use Permit No. 09-443, allowing the operation of an RC racetrack on said property; 2) Mayor to execute a one-year Lease Agreement with Palm Desert RC Raceway/Chris Marrale and Donna Piszczor for said property (Contract No. C29460). Motion was seconded by Ferguson and carried by a 5-0 vote. 14 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 C. REQUEST FOR DIRECTION CONCERNING A TEMPORARY USE PERMIT TO OPERATE CIRCUS VARGAS AT THE WESTFIELD MALL, JANUARY 26 - 31, 2010. Assistant Planner Missy Grisa stated in early December Tabares Entertainment, Inc., submitted an Application for a Temporary Use Permit (TUP) to operate Circus Vargas at Westfield Mall. On December 9, 2010, Director of Community Development sent a letter to the Applicant informing them that this would not be approved over the counter. Staff discussed the matter with the Applicant, and the Applicant decided to appeal this to City Council. The event is proposed at Westfield Mall on the south side where it will be visible from Highway 111, directly north of the previous restaurant Macaroni Grill. Site Plans and Tent Layout are included in City Council packets for its review. The Circus will not include games of chance, rides, or performing animals. Additionally, no alcohol will be sold or served at the event, and no outside contractors will be allowed. Staff requested the Applicant look at other locations throughout the City to hold this event. Staff was informed that Westfield requested that the Circus be placed at this location and had made the requested for a couple of years, but this year it happened to fit into their schedule. City Council previously directed staff not to approve TUP for automobile sales in this location between Thanksgiving and Easter, but staff had seen a relaxation of this standard. Staff was concerned that the Circus setup at this highly visible location could be detrimental to the surrounding shopping district and office professional uses during the peak season by creating a visual distraction, traffic, and parking congestion. Staff was seeking direction to approve Circus Vargas at this location. She noted the Applicant and Westfield General Manager Brent Wise were available to address any questions. Mayor Pro Tem Ferguson asked what was left of a Circus if it did not include games of chance, rides, or performing animals. Ms. Grisa responded the Circus provided camival type acts that were acrobatics. Councilman Spiegel stated the Circus included trapeze artists and clowns similar to the show performed at the McCallum Theatre. MR. BRENT WISE, Westfield General Manager, stated that due to the footprint and requirements of the tent itself, Westfield was the best option. Additionally, Westfield had high standards with any event in the parking area, obviously taking into consideration its neighbors. This event was a multi -center deal, and the Centers where the event was held, had a 10% increase of traffic, which equated into sales for its shopping center. Although the event will be out in the parking lot, customers have a tendency to go into 15 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 the mall to use the food court, restaurants, and shops. He said this was an opportunity to draw people in for the weekend. Councilman Spiegel asked how Westfield did with the selling of the Christmas trees. MR. WISE responded he was still waiting on the final number on the sales outcome, but the sellers felt they were successful for their first time and had already requested to retum. With regard to the Circus Vargas, the location was right behind the police substation, the Denny's, and the Macaroni Grill. He said the tent will be visible from Monterey Avenue, but only create minor impact on neighbors. He said all the parking requirements have been met, and the store managers at Sears and JC Penny's are in full support of the event because of the traffic it can create to draw customers to their stores. MR. MARK LANDON, Tabares Entertainment, Inc., stated they looked forward to having the event in Palm Desert, and in anticipation of approval, they already had advertising agreements in place to advertise Westfield to bring people into town on Palm Desert's local NBC Station, ABC, CW Fox, and the newspapers. They are offering free bus fare for anyone in the Valley who wants to go to the Circus. He said their organization was doing a lot to bring people into the City and increase sales at the Mall. This event was held at many of their Westfield malls, and currently the Regional Director of Westfield Malls was only booking Circus Vargas and no other show. They will work with the City on the look and style to reach the appropriate appearance, in fact, they have a new tent that was purchased in September, and everything was looking very nice and sharp. Councilman Spiegel stated the Circus will generate traffic to the mall, which will bring people to the restaurants to eat lunch or dinner. He thought a Circus was a good idea and it ought to be tried. Councilmember Benson asked if food booths were part of the Circus event. MR. LANDON responded the Circus provided limited food items, which required a permit from the Riverside County Health Department. Councilman Kelly stated that with the current economy, anything the City could do to attract people to the Mall would be a good thing. He was at the Farmer's Market last Wednesday and noticed it generated traffic for the Visitor's Center tenfold, which he believed would be the same with the Circus. He recalled conducting a survey of those who attended the Street Fair and learned that 75% of its customers would go over to the mall and shop as well. He was in favor of having the Circus in Palm Desert. 16 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Mayor Pro Tem Ferguson stated if Westfield was in favor of the Circus, he would do anything to help out. Mayor Finerty stated she was in support as well. Councilman Spiegel moved to, by Minute Motion, approve the Temporary Use Permit to operate Circus Vargas at the Westfield Mall, January 26-31, 2010. Motion was seconded by Kelly and carried by a 5-0 vote. MR. WISE announced this was his last official event as the General Manager of Westfield Mall. He expressed appreciation for the partnership he had with the City Council and stated he had mentioned to many the City of Palm Desert was the most supportive city he had ever worked for in his 20 years. D. REQUEST FOR DIRECTION REGARDING A PROPOSED CONDITIONAL USE PERMIT BY THE CITY OF LA QUINTA FOR NINE, 90-FOOT TALL LIGHT POLES FOR EVENING SOCCER PRACTICE AT COLONEL MITCHELL PAIGE MIDDLE SCHOOL, LOCATED AT THE SOUTHEAST CORNER OF WASHINGTON STREET AND PALM ROYALE DRIVE. Principal Planner Tony Bagato stated at the time he was writing this report, staff was requesting City Council direction in favor or opposition to a proposed Conditional Use Permit (CUP) for 90-Foot Tall fixtures. Staff received a late notice on December 7, 2010, for a public hearing on the 8th Staffs initial concern was that it didn't have time to review potential impacts on the height of the poles, because Palm Desert typically used 75-feet tall lights for recreational use. He was happy to report that at Tuesday's La Quinta Planning Commission meeting, the request was approved with 75-foot tall poles, which produced a small amount of light spill, but achieved the need. Additionally, the hours of use were reduced from 10:00 p.m. to 9:00 p.m. to lessen potential noise impact. He said the lights will only be used for soccer practice, so intense light would not be needed for a regular game field, but it will meet the demands of the La Quinta parks for soccer practice. Staff will not file an appeal on this matter, but instead support the City of La Quinta Planning Commission's decision to use 75-foot tall light poles. Councilman Spiegel asked if the light poles bother any of the neighbors. Mr. Bagato said the light poles were far away from residential homes. He forgot to mention that he had contacted the presidents of the Homeowners Association for Desert Breezes Communities, Tucson, and some residents to inform them of the upcoming La Quinta Planning Commission meeting; no one showed up at that meeting. He said there should be no direct Tight or noise impacts, and the lights will only be used for soccer practice. Responding to question, he said the light spill would be similar to the lights 17 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 at Freedom Park and Hovley Park. Further responding, he said the light impact would not be anything like the high school. He confirmed the light poles were reduced by 15 feet. With Conditions imposed by the City of La Quinta Planning Commission, NO ACTION was required by the Palm Desert City Council. E. REQUEST FOR AUTHORIZATION TO RELEASE RETAINAGE IN THE AMOUNT OF $88,283.85 TO THE WESTFIELD CORPORATION, INC., FOR WESTFIELD PALM DESERT (JOINT CONSIDERATION WITH THE PALM DESERT REDEVELOPMENT AGENCY). Councilman/Member Spiegel asked if Director of Finance agreed with the recommendation. Mr. Gibson responded this was a Redevelopment Agency matter, but he did agree. Councilman/Member Spiegel moved to, by Minute Motion, authorize release of retainage in the amount of $88,283.85 to the Westfield Corporation, per the Parking Easement Agreement dated December 9, 1999 (Contract No. C16920) — funds are available in Account No. 456-0000-206-0000. Motion was seconded by Kelly and carried by a 5-0 vote. F. CONSIDERATION OF PROPOSAL FOR A JOINT ADOPTION / SPAY & NEUTER EVENT WITH RIVERSIDE COUNTY DEPARTMENT OF ANIMAL SERVICES TO BE CONDUCTED IN CONJUNCTION WITH THE CITY'S LOW-COST VACCINE CLINIC ON FEBRUARY 20, 2010, AT CIVIC CENTER PARK. Councilman Spiegel moved to, by Minute Motion: 1) Approve a Joint Adoption / Spay & Neuter Event with Riverside County Department of Animal Services to be conducted in conjunction with the City's Low-cost Vaccine Clinic on Saturday, February 20, 2010, at Civic Center Park; 2) authorize the expenditure of $6,623 from Account No. 110-4230-442-3090 for this purpose, utilizing monies budgeted for Animal Services contingencies. Motion was seconded by Kelly and carried by a 5-0 vote. ITEM ADDED TO THE AGENDA Mr. Erwin noted an item for consideration was presented that would require a 4/5 vote of the City Council. Councilman Spiegel moved to, by Minute Motion, to add Urgency Item to the agenda. Motion was seconded by Ferguson. 18 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Responding to question, Mr. Wohlmuth stated the urgency was that staff was notified this week that All American Soap Box required a six -week commitment prior to the event to market and prepare for it. Further responding, he said both the Applicant and staff were responsible for creating the urgency, because the Park & Recreation Commission knew about the event a month ago, but staff was not aware of the advance notice that was required. Mayor Finerty called for the vote, and the motion carried on a 5-0 vote. G. REQUEST FOR APPROVAL OF THE SOAP BOX DERBY OF THE DESERT RALLY RACE TO BE HELD IN PALM DESERT ON FEBRUARY 27 - 28, 2010; PAYMENT OF A $750 FRANCHISE FEE; AND AUTHORIZE CLOSURE OF GATEWAY DRIVE TO ACCOMMODATE THE EVENT AND PROVIDE CITY STAFF AND EQUIPMENT DURING NORMAL WORKING HOURS TO SWEEP THE STREET PRIOR TO THE RACE. Councilman Spiegel noted the City of La Quinta had the only Soap Box Derby in the Valley, which was strictly local, but the proposed Soap Box Derby for Palm Desert will be an original event that will bring cars from other cities. The Derby will be held on the street behind Walmart where there will be no traffic. He believed it will be a good event for Palm Desert. Councilman Kelly moved to, by Minute Motion, approve: 1) Soap Box Derby of the Desert Rally Race to be held in Palm Desert on February 27-28, 2010; 2) $750 for the required franchise fee to be paid to the All American Soap Box Derby; 3) road closure of Gateway Drive for the purpose of a Soap Box Derby Rally Race; 4) City staff and equipment to sweep Gateway Drive during working hours on February 26, 2010 — funds are available in the Parks and Recreation Contracting Account, No. 110-4610-453-3092. Motion was seconded by Spiegel and carried by a 5-0 vote. XV. CONTINUED BUSINESS None XVI. OLD BUSINESS None 19 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 XVII. PUBLIC HEARINGS A. REQUEST FOR CITY COUNCIL REVIEW OF THE CONSTRUCTION, OPERATION, AND MAINTENANCE OF A NEW, 55-FOOT HIGH T-MOBILE MONO -PALM WIRELESS TELECOMMUNICATIONS FACILITY CONSISTING OF SIX PANEL ANTENNAS, TWO GPS ANTENNAS, ONE EMERGENCY GENERATOR, ONE PARABOLIC ANTENNA, SIX BTS RADIO CABINETS, COAXIAL CABLE RUNNING FROM THE ANTENNAS TO THE BTS, POWER AND TELCO UTILITY CONNECTION TO BE INSTALLED AT 47-900 PORTOLA AVENUE (APN 630-250-045) Case No. CUP 09-236 (Omnipoint Communications, Inc., a Subsidiary of T-Mobile USA, Inc., Applicant). Assistant Planner Missy Grisa stated this item was for installation of a 55-foot high T-Mobile Mono -Palm located inside The Living Desert on Portola Avenue, west of Indian Wells, and immediately south of Haystack Road. The Zone is Public Institution and General Plan is Public as well. To the north there is open space, to the south a reserve, to the east Indian Wells, and to the west residential property. She said all antennas will be concealed inside the trunk with one exposed dish pointing away from the street. All equipment will be screened with at least 299-square foot space surrounded by an eight -foot high block wall, which will be finished by stucco and painted to match the adjacent buildings on site. Entry gates will be locked when not in use. The Applicant requested an exception regarding the 300-foot separation from residential properties. Currently, the dimension is 268 from the nearest residents. She displayed site plans that showed the approximate location, the 13 by 34-foot wall, proposed Mono -Palm, and elevations. The Applicant originally requested that a 65-foot tall Mono -Palm be placed at the proposed location, but staff was concemed with the height, so balloon bench marks were placed to illustrate what they will look like with the existing property. She said vegetation helped to disguise it; however, staff recommended a 65-foot height to the Applicant to move forward. Staffs recommendation was to waive further reading and adopt the proposed Resolution and Conditional Use Permit subject to conditions. She noted staff issued notices to neighbors within 300 feet, but no one had come forth in favor or in opposition of the proposed project. Responding to question, she said a portion of residents at Silver Spur were notified if they were within the 300-foot radius. Councilmember Benson stated she understood the mono -palm was proposed to be further back on The Living Desert property. Ms. Grisa agreed, stating several different options were considered, but none of them seemed to work. She said the Applicant will explain more on this. Responding to question, she said she wasn't aware of the details of the lease agreement. 20 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Mayor Finerty declared the public hearing open and invited public testimony FAVORING or OPPOSING this request. MR. STEVEN LAKE, Director of Finance for The Living Desert (TLD), stated the initial lease will be $1,800 per month and renewable every five years, which will include cost of living increases for TLD as it moved forward. Councilmember Benson said she understood TLD didn't want this mono -palm farther into the property. MR. LAKE responded the placement of this tower was in an area where it didn't impact the exhibits, the gardens, or the experience that a visitor would have. He said Karen Sausman was really the one behind placing the tower in that location. He said the tower would not impact parking, and for someone inside the park, you would not have a bad view, because the tower would be placed where palm trees already exist. Councilmember Benson asked if TLD had any objections to having it moved back to where T-Mobile originally wanted it placed. MR. LAKE said it was his understanding that further away would not direct the signal; the closer it's placed, the more advantageous it will be for the neighbors that will use the tower. MS. MONICA MORETTA, Representative of Omnipoint Communications Services - T-Mobile, Irvine, CA, stated the location of the facility is placed where it would provide the least impact to TLD property as well as to their future development. She said they primarily started looking at locations within TLD that covered the maintenance yard at both ends, north and south, the Animal Hospital, and similar locations. Of the locations considered, the facility chosen will either be in the jurisdiction of Palm Desert or Indian Wells, because the property is dissected by the two jurisdictions. The feedback from Indian Wells with regard to facilities within their property, because of the underline Zone, it did not allow for the construction of ground built facilities, and they also had visibility concerns. From T-Mobile's perspective, they have to look into the variables that come into play to the site selection, which include access to the site, line of site, access of power to the utility box, availability of space for the facility and equipment, feedback from the jurisdiction and property owners. Responding to comment about putting the facility on the rooftop of TLD's main building, she said the building was only 28 feet, so it would not provide the coverage and height needed. After looking at all the different locations, the preferred location is what was being proposed this evening; the facility will not disturb existing landscaping and was away from the activities of the park, specifically public access to the park. She displayed a layout of the Alternative Location Analysis of the other properties researched before they proposed the facility at TLD. The 21 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 coverage objective was north of the water tower. They looked at the facility at the Marrakesh Country Club in two different locations. One was to mount the facility at the club house, and the second location was at the maintenance yard. Unfortunately, due to the structural analysis, the club house was not engineered or capable to support any additional weight. And the other location was rejected after the property owner decided they didn't want the facility on their property. Additionally, the water tank is seated very low and it would require to have a taller facility than what is being proposed at TLD. She offered to answer any questions. MS. ANN VANTINE, Silver Spur Trail, Palm Desert, CA, stated she's lived in the Silver Spur area for 35 years. She said the tower will block the beautiful Eisenhower Mountain where there are no trees or palms. She said the 55-feet high tower will impact those people coming down Haystack, Portola Avenue, The Reserve, and Ironwood. She said people will pass this tower day in and day out, because it will be so close to Portola Avenue. She said it should be placed behind the Animal Emergency Hospital or down by the Coachella Valley's Water Tank. She said there was property further to the north that didn't impact anyone, and the chosen location was a dumb place to put a 55-foot tower. With no further testimony offered, Mayor Finerty declared the public hearing closed. MS. MORETTA noted the water tank location was considered, but it was not feasible because the Animal Hospital had a specific area designated for quarantine. She asked that Mr. Lake elaborate more on this matter. MR. LAKE agreed the Animal Hospital was considered, but there is a quarantine. In the summer months there is no quarantine because of the heat, but it started in the fall and continued all winter long. They have animals coming and going, so they didn't want to interfere with any of that in terms of food deliveries and anything related to the animals. The location chosen had the least impact on what it did at TLD every day. Councilmember Benson understood it had the least impact on TLD, but it was also getting the benefits or financial reward. She said it was an added improvement to TLD property, but she didn't think it should be out on the street for everyone else to see. She said there were several examples around town where those towers looked terrible, and they are not shaded by anything. She said there was plenty of room on TLD property to accommodate this tower, and she was not in favor of the location because it impacted Portola Avenue and the neighbors there. Mayor Pro Tem Ferguson concurred with Councilmember Benson's comments. He said Indian Wells didn't want it, yet former Manager of TLD Karen Sausman picked the one spot that would be optimal to TLD with no 22 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 consideration for the residents and selected to put it at the juncture of three roads. MR. LAKE stated he knew and worked with Karen, and that comments made were unfair. Mayor Pro Tem Ferguson stated he worked with Karen for 15 years and was very aware of whom she was, but her first and foremost goal was TLD and not the people that lived in Silver Spur, which was apparent by where this tower was placed on the proposed map. He's been dealing with cell phone companies since he was on the Planning Commission over a decade ago, so he was familiar with why things can't go somewhere. He felt no thought went into the impact to the 7,000 people who lived in south Palm Desert that drove up Portola Avenue and down Haystack and Silver Spur on a daily basis. He agreed with Councilmember Benson that if TLD will accept the monetary benefits of the mono -palm, it should only impact the TLD. Councilman Spiegel agreed, stating there was sufficient space behind the parking lot that wouldn't impact anyone. Councilman Kelly stated it sounded like the Council agreed that TLD can find a better place. Mayor Pro Tem Ferguson moved to, by Minute Motion, continue the matter to a date uncertain in order for Applicant to propose a different location for the mono -palm telecommunications facility. Motion was seconded by Spiegel and carried by a 5-0 vote. B. REQUEST FOR ACCEPTANCE OF CAL COPS SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUNDING (SLESF) GRANT AWARD FOR 2009-2010. Mr. Aryan stated the City was eligible to receive $100,000 for CaICOPS Supplemental Law Enforcement Services Funds for Fiscal Year 09/10. These grant funds are to provide funds to local government to implement projects to reduce crime and improve public safety. In order for the City of Palm Desert to accept the available funding, an expenditure must be approved and submitted to Riverside County. The Palm Desert Police Department proposes that this funding be used to cover the staffing cost for the recently completed 2009 Holiday Theft Suppression Program and the acquisition of necessary equipment, services, and supplies to support law enforcement. He noted the Public Safety Commission recommended acceptance of this grant award. Councilman Kelly stated the City's done a great job of patrolling its commercial area, but this year he heard complaints in some neighborhoods. 23 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 He said next year some of those neighborhoods need to be targeted for patrolling. Mayor Finerty declared the public hearing open, and invited public testimony FAVORING or OPPOSING this matter. With no public testimony offered, she declared the public hearing closed. Councilman Spiegel moved to, by Minute Motion, accept the CaICOPS Supplemental Law Enforcement Services Funding (SLESF) grant award of $100,000 to cover the cost for the 2009 Holiday Theft Suppression Program and the acquisition of necessary equipment, services, and supplies to support front-line law enforcement services. Motion was seconded by Ferguson and carried by a 5-0 vote. C. CONSIDERATION OF AMENDMENTS TO THE PALM DESERT ENERGY INDEPENDENCE PROGRAM (EIP) REPORT; FIRST READING OF AN ORDINANCE AMENDING CHAPTER 3.30 OF TITLE 3 OF THE PALM DESERT MUNICIPAL CODE; AUTHORIZING THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED OBLIGATION IMPROVEMENT BONDS TO THE PALM DESERT REDEVELOPMENT AGENCY TO ADDITIONALLY FUND THE EIP, A VALIDATION PROCEEDING IN CONNECTION WITH EIP LIMITED OBLIGATION IMPROVEMENT BONDS, A NO -ACTION LETTER REQUEST TO THE U.S. SECURITIES & EXCHANGE COMMISSION TO FACILITATE THE PUBLIC OFFERING OF EIP LIMITED OBLIGATION IMPROVEMENT BONDS, AND CITY ADVANCE TO ENERGY INDEPENDENCE FUND; AND APPROVAL OF RELATED DOCUMENTS (JOINT CONSIDERATION WITH THE PALM DESERT REDEVELOPMENT AGENCY). Mr. Gibson stated staff had been meeting with underwriters and bond counsel to discuss options to keep the Energy Independence Program (EIP) moving forward. One of the issues was obviously the validation of the bonds to avoid having problems in a foreclosure type of process. Funding the program was also a concem, and in the process, it was determined that from the City's standpoint it would fund it up to $15 million from both City and Redevelopment Agency (RDA), and an additional $5 million would come from Redevelopment, and the City's portion is $4.69 million; both the City and Agency will receive interest earnings as part of their investment in the Program. On top of that, it was felt the guidelines needed to be amended, so that if the City wished to sell these loans to bond holders/public, that it met additional guidelines to allow that to happen, which are reflected in the proposed guidelines presented this evening along with the resolutions to adopt the additional funding for both the City and RDA. Councilman/Member Spiegel asked if the City expected to sell these bonds. 24 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Mr. Gibson stated it was a possibility, but right now the bonds would be taxable at an eight to ten percent interest rate if the City tried to sell them, which was obviously above what the City was currently charging. Staff is hoping the Federal Government will change its guidelines to a non-taxable bond, which would bring the interest rate down to what the City was offering. The actions for consideration this evening will help keep the program running, and it will take about 2-3 years to use up these funds, so staff is hoping the guidelines will change and the validation will be concluded. Further responding, he said only $4.3 million had been spent on the program in a period of a little more than a year. He said Wells Fargo issued a bond for $5 million of which $2.5 million was paid back to the General Fund. Mayor Pro TemNice Chairman Ferguson noted the $15 million investment will bring a 7% income of $1 million a year for as long as the City decided to hold the notes. Councilman/Member Spiegel asked how many people are on the waiting list. Redevelopment Manager Martin Alvarez responded there were 250 on the interest list that are lined up to proceed with the program. Further responding, he said staff will process applications in early spring, which will line up for the summer months. Mr. Gibson noted the $4.3 million would be the immediate available money, and there was still money that hadn't been used in the range of $2 million. The RDA money will not be available until the City's rolls are bought. He expected it would be a year before those bonds are actually billed. Councilmember/Member Benson said she was concerned about something she read in The Desert Sun that stated some of the new rules were that individual homeowners would open up their books to inspection, which she thought would only be necessary if the homeowner was in default. Mayor Pro TemNice Chairman Ferguson stated he interpreted that to mean that he would have to provide the pamphlet on his air conditioner and a work order receipt. He didn't interpret that to mean someone could go into his checkbook. Mr. Gibson stated that in order for the City to make this a public offering for bond issue, the Federal Govemment made these types of requirements in the guidelines, and without it, the City could not offer the bond issue to the public. The only reason to go on the property is to verify that the assets are still there on the property. Mayor/Chairman Finerty declared the public hearing open and invited anyone who wished to come forward to speak on the subject to do so at this time. 25 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 MR. EARL SCHMID, President/Owner of Desert Power, stated his company was an alternative energy company in Palm Desert. He's lived in Palm Desert since 1981 and opened his business in 2000. He said the company had been aggressive because of the City's goal to reduce energy consumption by 30%, which was in line with their business. He commended the City and community for adopting that goal; however, he was concemed about the insurance requirement, proof of insurance, and 10% cap placed on property value. He believed the cap will eliminate many people they already had agreements with to install solar systems. He's heard that solar should be the last option, but if the City wanted to reduce the energy consumption by 30% without getting 100% participation, it wouldn't be realistic. He said the goal can't be reached by changing light bulbs, pool pumps, and air conditioners, even though they are all good things and they should be done. He believed in order to reach the 30% goal, solar systems will need to be installed on a substantial percentage of homes in Palm Desert. He said solar systems are a good investment because it increased the value of a home, and it lasted 40+ years according to the Department of Energy. However, placing a 10% cap on home values on loans, will make it difficult to reach the 30% energy reduction goal in this depressed housing value. MS. DIANA CHUANG, Bond Counsel with Richards, Watson, & Gershon stated she wanted to address some of the comments and questions made. In terms of the books and record keeping language, it only related to the actual improvement during construction, installation, and the continued maintenance and repairs of the assets as a controlled prudent fiscal measure. With respect to the comment about insurance, it is an addition to enabling the public offering in compliance with the Securities and Exchange Commission (SEC) No -Action Letter request. The reason for the No -Action Letter, as far as the Federal Govemment and SEC, if you have a long view as the purpose of this program and there is no insurance covering the improvement and the house burns down, the insurance will cover the house but not the improvement. Therefore, when that property wants to change hands, who would want to buy a property where they are paying an extra tax and getting no benefit. The City could be in a position where there are taxes on property for no additional value and creating a house that may not be marketable years from now. Therefore, the required insurance, which is not incrementally more expensive, will provide the protection and value intended to be there; it's difficult to realize energy savings if there are no improvements in the property. As to the value -to -lien ratio, there is some discretion where property owners can appeal to the City Manager to have a lower value -to -lien ratio. She said the City analyzed the existing pool of loans and found that the average value -to -lien ratio was about 12.5 to one; therefore, the City already exceeded the minimum that would be imposed, and it was also a very prudent fiscal management tool. 26 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Mayor Pro TemNice Chairman Ferguson asked Ms. Chuang to explain what the SEC No -Action Letter was and why these regulations needed to be adopted. MS. CHUANG stated the SEC No -Action Letter is a process by which the Federal Government who has security regulations that govem when someone is going to sell an investment product to another party that adequate information be provided about that investment so that the buyer can make an informed decision. When a governmental agency is the issuer of bonds, they are usually exempt because their financial reports are public. When a governmental agency acts as a conduit and is passing through obligations that are payable by someone else and relate only to private improvement, it essentially looks, smells, and feels like a loan. However, the SEC says the ultimate credit is not the City of Palm Desert, it's really the property, because the property secured the tax. Generally this action is prohibited and would require registering like a public company, the filing of a registration statement, and coordination of annual financial reports as to the underlying securities. In this instance, the City of Palm Desert's bonds are exempt, but all the underlying property loans have to be registered with the SEC in order to enable a public offering. Now private placement is possible without a public offering, but the cost is generally at a higher interest rate, because it comes with a restriction on the trading, and it needs to be sold to another qualified institution, buyer, or accredited investor. Because of the desire to keep the interest rate low to maximize a bond offering, a public offering will yield a lower interest rate. She said there is an exception if this was the type of relationship where it's payable from a private source, and that exception is that if there are adequate governmental controls over the operation and ownership of the private improvement, it will require regular reporting, insurance requirements, and making books and records available. These are the types of requirements the SEC has deemed in the past to enable them to issue a letter to Palm Desert that they will not take enforcement or action against it for selling an unregistered security. Mr. McCarthy stated the City of Palm Desert was not only pioneering a new financial tool and energy savings for sustainability, but it was also pioneering a whole new asset class in the capital market. The recommendations from the City's underwriters, bond counsel, and fiscal advisors were designed to shape the product to be able to enter the market and create liquidity and increase the capital that's available to finance these types of loans in the future. If these requirements are designed to help the City be successful, it should be able to expand the market for the product beyond the City's $15 million cap. With respect to the lien -to -value, it's actually lien -to -value on assessed value and not a lien -to -value in terms on how the bank would approach it where they would be required to look at how much mortgage debt there was, and look at Senior's and Junior's first and second credit lines. He said the City was much more permissive than what a conventional 27 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 lender might be in terms of providing a second deed of trust type of loan, and it's all in order to facilitate the expansion of both the City's ability to secure energy savings, expand the market, and increase people's accessability to capital for this very purpose. With no further public testimony offered, Mayor/Chairman Finerty closed the public hearing. Mayor Pro TemNice Chairman Ferguson said he attended the grand opening of Green Zone, a business incubator for altemative and renewable energy sources and was amazed to the volume of interest generated locally. He said many companies are doing business in Palm Desert and hiring people. The $9 million that will be infused into the program will hopefully last two years. He said 15 other states, including New York, Texas, and Colorado have all adopted AB 811, and they too, will have the same cash demands, probably even more so because not every city was as blessed as Palm Desert. He believed there will be recognizable debt instruments that will freely trade at some point. He said it was the vision of former City Manager Carlos Ortega who figured $15 million would be enough to get the program up and running. When the bond markets came around and recognized its superiority, it was easy to find third party funding with the City's program. In the meantime, the City will generate $1 million every year. He thanked Director of Finance Paul Gibson for putting all the documents and guidelines together. Mayor Pro TemNice Chairman Ferguson moved to: 1) Conduct public hearing regarding proposed amendments to the EIP Report; 2) Waive further reading and adopt City Council Resolution No. 2010 - 3, approving Amendments to the Energy Independence Program Report and Administrative Guidelines Prepared Pursuant to Section 5898.22 of the California Streets and Highways Code; 3) Waive further reading and pass Ordinance No. 1204 to second reading, amending Chapter 3.30 of Title 3 of the Palm Desert Municipal Code - Public Works Contracts and Bidding Requirements; 4) Waive further reading and adopt City Council Resolution No. 2010 - 4, providing for the Issuance and Sale of its Energy Independence Program Limited Obligation Improvement Bonds (Taxable), in One or More Series and in Aggregate Principal Amount not to exceed $5,000,000; approving as to form and authorizing the execution and delivery of one or more Bond Purchase Agreements in connection therewith, and authorizing certain other matters relating thereto; 5) Waive further reading and adopt Redevelopment Agency Resolution No. 569, authorizing the Redevelopment Agency's investment in and purchase of the City of Palm Desert's Energy Independence Program, Limited Obligation Improvement Bonds (Taxable), in One or More Series and in Aggregate Principal Amount not to exceed $5,000,000; approving as to form and authorizing the execution and delivery of one or more Bond Purchase Agreements in connection therewith, and authorizing certain other matters relating thereto; 6) Waive further reading and adopt City Council Resolution No. 2010 - 5, authorizing Judicial Validation Proceedings relating to its Energy Independence Program, Limited Obligation Improvement Bonds, and a No -action Letter 28 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 Request to the U. S. Securities & Exchange Commission, appropriating moneys from the General Fund to additionally fund the Program, and approving additional actions related thereto. Councilman/Member Spiegel asked if there had been any foreclosures on any of the properties with an EIP loan. Mr. Gibson responded there were none. Further responding, he said the first interest payment will come in January and May. Councilman/Member Kelly asked what would be the risk to the City if it sold bonds to run the program. Mayor Pro TemNice Chairman Ferguson responded there was none. He said the EIP Finance Committee made up of himself, the Mayor, the Finance Director, and Redevelopment Manager Martin Alvarez discussed what to do with the $1 million income. He said a portion can be set aside as a reserve in case there is a foreclosure or threat of harm to the City. However, the City analyzed the default rate on all the assessment districts, and the default rate before going to tax sale was about 2.9°A), and the default rate where a foreclosure actually happened was 1.6°A°, and that's only on those that are forced into assessment districts, not people who are borrowing from the City and making an improvement on their home. Given the City's priority and very low default rate, the City's biggest concern would be a fire to a property. Further responding, he confirmed he didn't see a risk but an opportunity to build a reserve to take care of any possible problems. MS. CHUANG added that if the City issued a bond now, it would be additionally payable from the General Fund because the market had accepted that, for instance, the Wells Fargo funds were General Fund credit. The actions today will enable the sale of bonds that are secured and payable solely from the revenues from these loans, and if necessary for foreclosure proceedings. The idea is that the spread currently being generated with the interest earnings, the City was building a reserve. If bonds are issued through the public market, there is always a requirement that a year's worth of debt service be set aside in case of cash flow ups and down variations. There is expressed language in the offering documents that would be prepared that state they are limiting solely these revenues from these contracts, and that the City of Palm Desert was not on the hook for it or payable from the General Fund. Councilmember/Member Benson seconded the motion, and it carried by a 5-0 vote. 29 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 XVIII. REPORTS AND REMARKS A. CITY MANAGER Mr. Wohlmuth proudly reported that he'd just been reinstated for his California Driver's License. B. CITY ATTORNEY None C. CITY CLERK 1. Reminder of Joint City Council - Redevelopment Agency Study Session, Thursday, January 28, 2010, 2:00 p.m., Administrative Conference Room, to Receive Presentation from the Coachella Valley Economic Partnership (CVEP). Ms. Klassen reminded City Councilmembers of the next Study Session on January 28. 2. Ms. Klassen called attention to the new entry on this and all future agendas under Section E - Mayor and Members of the City Council - "City Council Consideration of Travel Requests and Reports." She said it was available for Councilmembers to make such requests and reports. D. PUBLIC SAFETY o Fire Department None o Police Department None 30 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 14, 2010 E. MAYOR AND MEMBERS OF THE CITY COUNCIL o City Council Requests for Action: 1. Councilman Kelly requested an excused absence from the next regular City Council Meeting on January 28, 2010, as he would be out of town celebrating his wedding anniversary. With City Council concurrence, the request for excused absence was granted. o City Council Consideration of Travel Reauests and Reports: None o City Council Committee Reports: None o City Council Comments: None XIX. ADJOURNMENT On a motion by Spiegel, second by Ferguson, and 5-0 vote of the City Council, Mayor Finerty adjoumed the meeting at 5:48 p.m. ATTEST: _ .. RA HELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA 31