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HomeMy WebLinkAboutPRELIM - CC - 06/08/06 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING THURSDAY, JUNE 8, 2006 CNIC CENTER COUNCIL CHAMBER I. CALL TO ORDER - 3:00 P.M. Mayor Ferguson convened the meeting at 3:04 p.m. II. ROLL CALL Present: Councilmember Jean M. Benson Councilman Buford A. Crites arrived at 3:06 p.m. Mayor Pro Tem Richard S. Kelly Councilman Robert A. Spiegel Mayor Jim Ferguson Also Present: Carlos L. Ortega, City Manager/RDA Executive Director David J. Erwin, City Attorney Sheila R. Gilligan, ACM for Community Services Homer Croy, ACM for Development Services Justin McCarthy, ACM for Redevelopment Stephen Y. Aryan, Assistant to the City Manager Rachelle D. Klassen, City Clerk Amir Hamidzadeh, Director of Building & Safety Paul S. Gibson, Director of Finance/City Treasurer Mark D. Greenwood, Director of Public Works David Yrigoyen, Director of Redevelopment & Housing Patrick Conlon, Director of the Office of Energy Management Steve Thetford, Asst. Chief, Palm Desert Police/Riverside Co. Sheriff's Dept. David Avila, Fire Marshal, Palm Desert Fire/Riverside Co. Fire Dept./CDF Grace L. Mendoza, Deputy City Clerk III. ADJOURN TO CLOSED SESSION Request for Closed Session: Conference with Legal Counsel regarding significant exposure to litigation pursuant to Government Code Section 54956.9(b): Number of potential cases: 2 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Upon motion by Spiegel, second by Benson, and 4-0 vote of the City Council/Agency Board, with Crites ABSENT, Property Negotiation Item No. 1 was added to the agenda for Closed Session. Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: 1) Property: APN 620-400-024 Negotiating Parties: Agency: Justin McCarthy/City of Palm Desert/ Palm Desert Redevelopment Agency Property Owner: City of Palm Desert Other Parties: Jorge Boone, WC Rancho Mirage, Inc. Jim Gibbons, Resort Ventures, L.P. Under Negotiation: x Price x Terms of Payment Upon motion by Spiegel, second by Benson, and 3-0-1 vote of the City Council, with Ferguson ABSTAINING and Crites ABSENT, Property Negotiation Item No. 2 was added to the agenda for Closed Session. 2) Property: Public Rights-of-way and Bus Shelters Along Highway 111 and Other City Streets Negotiating Parties: Agency: Carlos L. Ortega/City of Palm Desert Property Owner: City of Palm Desert Other Parties: SunLine Transit Agency Under Negotiation: x Price x Terms of Payment Upon motion by Spiegel, second by Ferguson, and 4-0 vote of the City Council, with Crites ABSENT, Mayor Ferguson adjourned the meeting to Closed Session at 3:05 p.m. He reconvened the meeting at 4:02 p.m. IV. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None With City Council concurrence, Mayor Ferguson suspended the agenda at this point in order to take up Section XIII - Public Hearing Items I and J. Please see that portion of the Minutes for subsequent action. 2 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 V. AWARDS, PRESENTATIONS, AND APPOINTMENTS A. APPOINTMENT TO THE BOARD OF DIRECTORS FOR THE EL PASEO BUSINESS IMPROVEMENT DISTRICT. Councilman Spiegel moved to, by Minute Motion, appoint Elyssa Goldberg to fill the vacant position left by Susan Stauber on the Board of Directors for the EI Paseo Business Improvement District (Term 12/31/08). Motion was seconded by Crites and carried by a 5-0 vote. B. APPOINTMENT TO THE RIVERSIDE COUNTY CHILD SAFETY COMMISSION. Mayor Ferguson moved to, by Minute Motion, appoint Councilmember Benson as the City's designated representative to serve on the Riverside County Child Safety Commission. Motion was seconded by Crites and carried by a 4-0-1 vote, with Benson ABSTAINING. VI. CONSENT CALENDAR A. MINUTES of the Regular City Council Meeting of May 25, 2006. Rec: Approve as presented. B. CLAIMS AND DEMANDS AGAINST THE CITY TREASURY- Warrant Nos. 230, 234, 238, and 239. Rec: Approve as presented. C. CITY COMMITTEE AND COMMISSION MEETING MINUTES. 1. Marketing Committee Meeting of March 21, 2006. 2 Parks & Recreation Commission Meeting of May 3, 2006. Rec: Receive and file. D. LETTER OF RESIGNATION from Gil Slagel - Sister Cities Committee. Rec: Receive with very sincere regret. 3 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 E. APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE by Marfia Marike and Marfia Mario for Trattoria Tiramisu, 72-655 Highway 111, B6, Palm Desert. Rec: Receive and file. F. APPLICATION FORALCOHOLIC BEVERAGE LICENSE by Garfield Beach CVS LLC for CVS Pharmacy 9646, 42-155 Washington Street, Palm Desert. Rec: Receive and file. G. REQUEST FOR APPROVAL of Funding Support for A Missing Man Memorial (Tribute to All Airmen)at the Jacqueline Cochran Regional Airport. Rec: By Minute Motion: 1) Approve funding request in the amount of $2,000 in support for the Missing Man Memorial at the Jacqueline Cochran Regional Airport; 2)appropriate$2,000 from the unobligated General Fund Reserves for the subject memorial. H. REQUEST FOR AUTHORIZATION to Review the City's Conflict of Interest Code. Rec: By Minute Motion, authorize staff to make a formal review of the City's Conflict of Interest Code and, if necessary at the appropriate time thereafter, prepare a resolution to be adopted by the City Council to effect the required amendments. I. REQUEST FOR APPROVAL to Supply Aftermarket Automotive Parts, Equipment and Services for City's Vehicle Fleet Maintenance for Fiscal Year 2006-07. Funds are available in Account No. 110-4331-413-3340. Rec: By Minute Motion, approve the use of Genuine Parts Company (NAPA), Palm Desert, California, for subject services as needed for the City's fleet maintenance for fiscal year 2006-07. J. REQUEST FOR APPROVAL of Vendor List for Equipment Rental Services to the City for Fiscal Year 2006-07. Rec: By Minute Motion, approve the use of United Rentals, Clairemont Equipment Company, and Elms Equipment Rental for equipment rental services to the City for Fiscal Year 2006-07 - funds are available in Account No. 110-4310-433-3430. 4 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 K. REQUEST FOR APPROVAL of Vendor List for the General Fleet Repair Services for Fiscal Year 2006-07. Rec: By Minute Motion, approve the use of Hovely Tire, Kim's Automotive, and Palms to Pines Automotive for general fleet repair services that are not under warranty and unable to be accomplished by the City's mechanic, funds are available in Account No. 110-4331-413-3440. L. REQUEST FOR APPROVAL of a One Year Extension for Parking Lot Sweeping Services at Presidents Plaza East and West, Presidents Plaza III and Entrada del Paseo for Fiscal year 2006-07 (Contract No. C22772). Rec: By Minute Motion, extend Contract No. C22772 with M&M Sweeping, Inc., Thousands Palms, California, for subject services for one year in the amount of $9,720 and authorize the Mayor to execute the agreement-funds are available in Account No. 110-4310-433-3320. Approved 4-0-1 (Ferguson ABSTAINING). M. REQUEST FOR AWARD OF CONTRACT - for the Interior Painting of the Department of Community Development Area as Outlined in the Scope of Work (Contract No. C25350). Rec: By Minute Motion: 1) Award the subject contact in the amount of $20,162 to M.C.M. Painting Company, Inc., Rancho Mirage, California for subject services; 2) authorize the Mayor to execute said contract- funds are available in Account No. 110-4470-412-4040. N. REQUEST FOR APPROVAL of Contract Amendment No. 1 to Contract No. C21052- For Expenditures for the EI Paseo Improvement District. Rec: By Minute Motion, approve Amendment No. 1 in the amount of $40,000 to the subject contract with Creative I Group, Palm Desert, California, and authorize the Mayor to execute same - funds are available in Account No. 271-4491-464-3215. Upon motion by Crites, second by Spiegel, and 5-0 vote of the City Council, with exception of Item L, on which Mayor Ferguson ABSTAINED, the Consent Calendar was approved as presented. 5 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 VII. CONSENT ITEMS HELD OVER None VIII. RESOLUTIONS A. RESOLUTION NO. 06-78 -A RESOLUTION OF THE CITY COUNCIL OF THE CITYOF PALM DESERT, CALIFORNIA, AMENDINGANDADOPTING LOCAL GUIDELINES FOR IMPLEMENTING THE CALIFORNIA ENVIRONMENTAL QUALITY ACT - (CEQA) (PUB. RESOURCES CODE §§2100 ET SEQ.) Councilman Crites moved to waive further reading and adopt Resolution No. 06-78. Motion was seconded by Spiegel and carried by a 5-0 vote. IX. ORDINANCES For Introduction: None For Adoption: None X. NEW BUSINESS A. REQUEST FOR APPROVAL OF TRANSFER OF THE DISPOSITION AND DEVELOPMENT AGREEMENT AS AMENDED, THE DEVELOPMENT AGREEMENT, AND RELATED DOCUMENTS RELATING TO THE ENTITLEMENTAND REMAINING DEVELOPMENT OBLIGATIONS FORA PORTION OF THE DESERT WILLOW TIMESHARE DEVELOPMENT FROM RESORTVENTURES, LP TO WVC RANCHO MIRAGE, INC. (JOINT CONSIDERATION WITH THE PALM DESERT REDEVELOPMENT AGENCY). Mr. Ortega indicated that this item was a transfer of development rights on a parcel at Desert Willow to another development entity. He offered that staff was available to answer any questions. 6 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Member/Councilman Crites moved to, by Minute Motion, that the Agency Board approve: 1) Transfer from Resort Ventures, LP, a California limited partnership to WVC Rancho Mirage, Inc., a Delaware Corporation, of portions of that certain Disposition and Development Agreement dated February 13, 1997 (as amended August 1, 1997, and January 23, 2003, the "DDA") and the Development Agreement DA 96-1 dated February 27, 1997 (the "DA"); 2) a Golf Course Use Agreement; 3) an Amendment to Declaration of Covenants, Conditions, and Restrictions (Subject Property); 4) an Amendment to Declarations of Covenants, Conditions, and Restrictions (Golf Course); 5) authorize the Executive Director/City Manager to execute such documents and take other steps as are necessary to accomplish subject transfer. Motion was seconded by Spiegel and carried by a 5-0 vote. B. REQUEST FOR AWARD OF CONTRACT FOR LANDSCAPE MAINTENANCE SERVICES FOR AREA NO. 7 (CONTRACT NO. C24900, PROJECT NO. 907-06). Councilman Crites moved to, by Minute Motion, award the subject contract to Vintage Associates Landscape, Bermuda Dunes, California, in the amount of$80,160 and authorize the Mayor to execute said contract - funds are available in the Landscape and Lighting District account. Motion was seconded by Spiegel and carried by a 5-0 vote. C. REQUEST FOR AWARD OF CONTRACT FOR CONSTRUCTION OF A MEDIAN ON PORTOLAAVENUE FROM CHICORYSTREETTO FAIRWAY DRIVE (CONTRACT NO. C25020A, PROJECT NO. 630-06). Mr. Ortega referred to the staff report and offered staff to answer any questions. In response to question by Councilman Spiegel, Mr. Ortega responded that the School District agreed to pay for part of the cost of the subject construction. Councilman Spiegel moved to, by Minute Motion: 1) Award the subject contract in the amount of$144,052 to Landmark Site Contractors, Perris, California; 2)approve a 10% contingency in the amount of $14,405.20 for the services; 3) authorize the Mayor to execute said contract - funds are available in Account No. 400-4614-433-4001. Motion was seconded by Kelly and carried by a 5-0 vote. D. REQUEST FORAPPROVAL OF EXTENSION OF SERVICES TO PROVIDE RESIDENTIAL AND COMMERCIAL STREET SWEEPING SERVICES FOR FISCAL YEAR 2006-07 (CONTRACT NO. C22562). Councilman Crites moved to, by Minute Motion, approve extension of the subject contract with Clean Street of Gardena, California, at the rate of $27.97 per curb mile for (annual total $161,442.84), and authorize the Mayor to execute the agreement-funds are available in Account No. 110-4310-433-3320. Motion was seconded by Kelly and carried by a 5-0 vote. 7 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 E. REQUEST FOR AWARD OF CONTRACT FOR LANDSCAPE MAINTENANCE AREA NO. 4 (CONTRACT NO. C25230, PROJECT NO. 904-06). Councilman Crites moved to, by Minute Motion, waive the bid documents' irregularity and award the subject contract to Pac West Land Care II, Inc., Palm Springs, California, in the amount of$111,084 and authorize the Mayor to execute said contract - funds are available in Account No. 110-4614-453-3370. Motion was seconded by Benson and carried by a 5-0 vote. F. REQUEST FOR APPROVAL OF PURCHASE AND INSTALLATION OF SECURITY SYSTEM FOR THE CITY CORPORATION YARD. Councilman Spiegel moved to, by Minute Motion, approve the subject purchase with Comtron System Inc., Palm Desert, California, in the amount of $15,426.82 - funds are available in Account No. 400-4161-415-4001. Motion was seconded by Kelly and carried by a 5-0 vote. G. CONSIDERATION OF APPROVAL OF DESIGN PROPOSAL "OCOTILLO GARDEN" FOR THE WHITEWATER PROFESSIONAL BUILDING LOCATED AT 43-100 COOK STREET. Public Arts Manager Richard Twedt explained that the applicant was required to install an ADA ramp and decided to use their AIPP (Art in Public Places) funds to create the ramp. Under City guidelines, a fence and sidewalk could be part of the featured artwork. He said the ramp would have a stylized ocotillo garden with wrought iron pieces rising up from the retaining wall. In response to questions from Councilman Spiegel, Mr. Twedt responded there would be more than one piece; the design zig-zagged back and forth because the building was 30 feet higher than Cook Street. The retaining wall therefore waved down and contained a see-through brass wired mesh. He stated the Art in Public Places Commission approved the artwork. Councilman Spiegel moved to, by Minute Motion, approve the design proposal "Ocotillo Garden" in the amount of$14,000 with Brian Gottlieb, Indian Wells, California - funds are available in Account No. 436-0000-228-9900. Mayor Pro Tem Kelly stated the Council had encouraged developers to include Art in Public Places in the design of their buildings and projects, and it seemed to be working. Motion was seconded by Kelly and carried by a 5-0 vote. 8 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 H. CONSIDERATION OF APPROVAL OF ARTWORK SELECTIONS FOR THE 2007/08 EL PASEO EXHIBITION AND AN HONORARIUM FOR EACH ARTIST (CONTRACT NOS. C25360A-R) Councilman Spiegel made the comment that the brochure was quite sensational because it displayed the art pieces in the designated locations. Mayor Pro Tem Kelly shared that it was a good program and felt that it contained enough artwork to please everyone, including himself. Mayor Pro Tem Kelly moved to, by Minute Motion: 1) Accept and approve the eighteen sculptures forthe 2007/08 EI Paseo Invitational Exhibition; 2)approve an$1,575 honorarium for each of the participating artists - funds are available in Account No. 436- 454-40-02. Motion was seconded by Spiegel and carried by a 5-0 vote. Mayor Ferguson stated he agreed with previous comments and liked all the pieces in the brochure. I. REQUEST FOR AUTHORIZATION OF AGREEMENT FOR GRAFFITI AND TRASH REMOVAL SERVICES ALONG HIGHWAY 74 (CONTRACT NO. C25370). Councilman Crites stated he read the staff report and memorandum from the Bureau of Land Management. He said the City was presently conducting graffiti removal and picking trash up at Vista Point, which was sort of the overlook entrance to the City. He suggested a trial run on this proposal until September to evaluate actual time, costs, and benefits to the City, then decide whether to continue long-term. Mr. Greenwood said a three- or four-month trial period would be a great idea. He said the staff report reflected his original estimate in a worst case scenario. Mayor Pro Tem Kelly believed that since it was the City's entryway, it would make sense to provide services from the Vista Point parking area north into the City limits. Councilman Crites agreed, but he would also like to see the portion of the highway inside the National Monument be included, noting that Caltrans would not take care of that area. In fact, he felt the area to be maintained should probably begin about two miles above Vista Point, which would benefit the City's image overall. However, he offered that if by the end of 9 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 September it appeared to be a burdensome task for the City, it could be revisited. 10 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Councilman Spiegel asked if there was any reason why Caltrans wouldn't be supportive of this financially. Mr. Greenwood said he didn't know but could offer them the opportunity to contribute. Mayor Pro Tem Kelly said they should at least be asked. Mayor Ferguson stated his problem with the whole matter was that the City would be cleaning up land that was not within City limits and presumably under someone else's custodianship. He asked staff what would be the net fiscal impact to the City as a result of this program. Mr. Greenwood stated his initial estimate was about $80,000 a year. He admitted not having full knowledge of what it all entailed, so he took a worst case approach. The proposal offered a chance to conform to a $10,000 budget through September. Staff would then know whether they had the resources to do the job and still be effective. He said the crew was used to removing graffiti from flat walls, and this would entail removing graffiti from rocks and boulders with parking and safety issues, because there are areas difficult to access. The three-month period would allow staff a fair chance to make it prudent. Mayor Pro Tem Kelly stated the City always contracted out to avoid hiring additional personnel, and this project sounded like the City would need to build up employees to take care of others' projects. He still felt that the boundary needed to be set at Vista Point. Councilman Spiegel agreed and suggested contacting Caltrans for additional support. Mayor Ferguson said Caltrans may not be able to financially support but may be able to credit the City for its future dealings with them. Although he felt there were benefits to the City, it was still Caltrans' responsibility. Councilman Crites noted the City would not be paying for it because BLM was reimbursing the City. Mayor Ferguson replied that's why he had asked what the net fiscal impact to the City would be. If the City was made whole, that would be one thing; but if the City is going out of pocket $80,000 that was another. Mr. Greenwood reiterated that BLM offered a budget of $10,000 through September 2006. The City would conform to that budget over that time 11 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 period and then decide whether it could handle the trash and the graffiti. Under that proposal, the net impact would be zero. Mayor Ferguson requested the proposal to be approved with a cap of $10,000 and revisited in September. Councilman Spiegel moved to, by Minute Motion, authorize the City Manager to enter into a reimbursement agreement with the Bureau of Land Management through September 2006 in an amount not to exceed $10,000 for the portion of Highway 74 to the Vista Point parking area, additionally asking staff to contact Caltrans about financial participation in the activity. Motion was seconded by Ferguson and carried by a vote of 5-0. J. REQUEST FOR APPROVAL TO INITIATE THE PROCEEDINGS TO LEVY AND COLLECT ANNUAL ASSESSMENTS AND TO GRANT PRELIMINARY APPROVAL OF ENGINEER'S REPORT FOR THE CONSOLIDATED PALM DESERT LANDSCAPE AND LIGHTING DISTRICT FOR FISCAL YEAR 2006/07. Mr. Alvarez stated this item was for the annual initiation to levy and collect annual assessments for the 35 Landscape and Lighting Districts. If Council approved the resolutions, a public hearing would be set for June 22, 2006, to accept public testimony. If no modifications are proposed to the individual budgets which were referenced in the Engineering's Report, the City could then proceed to assess for fiscal year 06/07. Councilman Spiegel inquired if all the residents would understand what the City was doing. Mr. Alvarez said that individual notices would not be mailed out but a public hearing notice would be advertised in The Desert Sun. In response to Councilman Crites question regarding the maximum amount assessment to residents would be, Mr. Alvarez responded it was a 3% cost of living, which was voted and approved by the residents previously. Councilman Spiegel moved to waive further reading and adopt: 1) Resolution No. 06-79, initiating the proceedings for the levy and collection of annual assessments for the Palm Desert Consolidated Landscape and Lighting District for Fiscal Year 2006/07; 2) Resolution No. 06-80, declaring the intent to levy and collect annual assessments for the Palm Desert Consolidated Landscape and Lighting District, and granting preliminary approval of the Engineer's Report for Fiscal Year 2006/2007. Motion was seconded by Benson and carried by a 5-0 vote. XI. CONTINUED BUSINESS A. MINUTES OF THE REGULAR CITY COUNCIL MEETING OF MAY 11, 2006 (Continued from the meeting of May 25, 2006). 12 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Councilmember Benson moved to, by Minute Motion, approve the Minutes of May 11, 2006, as presented. Motion was seconded by Spiegel and carried by a 4-0 vote, with Ferguson ABSTAINING. B. CITYCOUNCILREVIEWOFANARCHITECTURALREVIEW COMMISSION DECISION, DENYING A REQUEST FOR APPROVAL OF 14-FOOT HIGH SOUND BARRIER WALL SYSTEM (GLASS BLOCK TYPE) AT THE SOUTHWEST CORNER OF HIGHWAY 111 AND PAINTER'S PATH (72-191 HIGHWAY 111), PALM DESERT Case No. MISC. 06-04 (South Beach Restaurant& Nightclub, Applicant) (Continued from the meetings of March 9, March 23, April 13, April 27, and May 11, 2006). Mr. Dave Erwin requested the matter be continued to the first meeting in July. Councilman Spiegel asked if there would be some answers by that time. Mr. Erwin replied that he hoped there would be. Mayor Pro Tem Kelly moved to continue the matter to the meeting of July 13, 2006. Motion was seconded by Spiegel and carried by a 5-0 vote. C. REQUEST FOR AWARD OF CONTRACT FOR THE CONSTRUCTION OF THE FRED WARING DRIVE WIDENING SOUNDWALL (CONTRACT NO. C24100) (Continued from the meeting of May 25, 2006). Mr. Dave Erwin noted for the record that objections to the bid were received by Parsam Construction, Inc. They objected to the bid on two bases, the first was Conflict of Interest - WEC Corporation was listed on Sukut's proposal bidder list as a subcontractor to restore the backyards of the residences. They were also listed as a subcontractor with the City of Indian Wells in relation to the design of the wall. He said he met with the contractor and the objector and agreed there was not sufficient conflict to reject the bid. The second basis objected was that Sukut as the General Contractor was contracting for less than 50% of the total contract. As previously mentioned, he met with both Sukut and Parsam Construction, Inc., and was provided with sufficient information to believe the objection was not well taken. He recommended Council overrule the objections and follow staff's recommendation to award contract. Councilman Spiegel moved to, by Minute Motion: 1) Overrule objections by Parsam Construction, Inc.; 2) award the subject contract to Sukut Construction, Inc., Santa Ana, California, in the amount of$6,931,432.50; 3) approve a 10% contingency; 4) appropriate $887,308.97 from unobligated Fund 400 to Account No. 400-4399-433-4001; 5) authorize 13 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 the Mayor to execute said contract. Motion was seconded by Kelly and carried by a 5-0 vote. 14 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 XII. OLD BUSINESS A. REQUEST FOR APPROVAL OF CHANGE ORDER NO. 3 TO CONTRACT NO. C22870B FOR CONSTRUCTION OF THE WHITEWATER BRIDGE AT PORTOLA AVENUE (PROJECT NO. 647-04). Mr. Greenwood stated this was the third change order for the Portola Bridge project, which involved work on the retaining wall, screen walls, gates at the Portola Country Club, and basically work that was not coordinated very well during the design phase, including several issues that had arisen during the construction phase. He pointed out the second change order was a credit to the project, and the overall net of all change orders was approximately $20,000 (still within the budget contingency). Councilman Spiegel moved to, by Minute Motion, approve Change Order No. 3 to Contract 22870B with Granite Construction Company, Indio, California, for additional work at the entrance to the Portola Country Club, in an amount not to exceed $75,913 - funds are available in Account No. 400-4359-433-4001. Motion was seconded by Kelly and carried by a 5-0 vote. B. REQUEST FOR APPROVAL OF CONTRACT AMENDMENT NO. 1 TO CONTRACT NO. C24330 - ADDITIONAL ENGINEERING SERVICES TO COMPLETE THE NORTH SPHERE DRAINAGE STUDY (PROJECT NO. 517-05). Councilman Crites moved to, by Minute Motion: 1)Approve ContractAmendment No. 1 in the amount of$51,000 to the subject contract with VA Consulting, Corona, California, for additional engineering services; 2) authorize the transfer of$31,937 from contingency to base; 3) appropriate $19,063 of unobligated funds in Account No. 232-4370-433-3010. Motion was seconded by Spiegel and carried by a vote of 4-0, with Mayor Pro Tem Kelly ABSENT. XIII. PUBLIC HEARINGS A. REQUEST FOR APPROVAL OF ACTIONS RELATED TO THE ISSUANCE AND SALE OF TAX ALLOCATION REVENUE BONDS BY THE PALM DESERT FINANCING AUTHORITY FOR PROJECT AREA NO. 1, AS AMENDED (JOINT CONSIDERATION WITH THE PALM DESERT REDEVELOPMENT AGENCY AND THE PALM DESERT FINANCING AUTHORITY). Mr. Ortega stated the resolutions were necessary for issuance of the bonds that contained plans for how the bond proceeds would be used. The Agency would have the ability to change the use of the bond at a later time, but at this time, it was their best estimate. He said, the projects intended to be financed 15 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 were included in the resolutions and he recommended they be adopted. Chairman/Mayor/President Ferguson declared the public hearing to be open and invited testimony SUPPORTING or OPPOSING this matter. With no testimony offered, he declared the public hearing to be closed. Member/Councilman/Commissioner Spiegel moved to waive further reading and adopt the following resolutions relating to Project Area No. 1, As Amended, Bonds: 1) City Council Resolution No. 06-74, supplementing Resolution No. 06-56 and further making a finding of significant public benefit and other findings in connection with the issuance and sale by the Palm Desert Financing Authority of the Authority's Tax Allocation Revenue Bonds (Project Area No. 1 , As Amended), 2006 Series A (Tax-Exempt), and Tax Allocation Refunding Revenue Bonds (Project Area No. 1, As Amended), 2006 Series B (Taxable); 2) Financing Authority Resolution No. FA-55, acknowledging a finding of significant public benefit and affirming certain matters in connection with the issuance and sale of the Authority's Tax Allocation Revenue Bonds(Project Area No. 1, As Amended), 2006 Series A (Tax-Exempt), and Tax Allocation Refunding Revenue Bonds (Project Area No. 1, As Amended), 2006 Series B (Taxable), and approving the issuance, sale, and delivery of such bonds; 3)Agency Resolution No. 527, affirming the Agency's approval of documents and certain other matters relating to the sale and issuance by the Palm Desert Financing Authority of Tax Allocation Revenue Bonds (Project Area No. 1, As Amended), 2006 Series A, and Tax Allocation Refunding Revenue Bonds (Project Area No. 1, As Amended), 2006 Series B (Taxable). Motion was seconded by Kelly and carried by a 5-0 vote. B. REQUEST FOR APPROVAL OF ACTIONS RELATED TO THE ISSUANCE AND SALE OF TAX ALLOCATION REVENUE BONDS BY THE PALM DESERT FINANCING AUTHORITY FOR PROJECT AREA NO. 2 (JOINT CONSIDERATION WITH THE PALM DESERT REDEVELOPMENT AGENCY AND THE PALM DESERT FINANCING AUTHORITY). Mr. Ortega stated that essentially, the Palm Desert City Council would be adopting the same actions for Project Area Nos. 2, 3, and 4 as they did with Project Area No. 1. Chairman/Mayor/President Ferguson declared the public hearing to be open for Project Area Nos. 2, 3 and 4, and invited testimony SUPPORTING or OPPOSING these matters. With no testimony offered, he declared the public hearing to be closed. Member/Councilman/Commissioner Crites moved to waive further reading and adopt the following resolutions relating to Project Area No. 2 bonds: 1) City Council Resolution No. 06-75, making a finding of significant public benefit and other findings in connection with 16 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 the issuance and sale by the Palm Desert Financing Authority of the Authority's Tax Allocation Refunding Revenue Bonds (Project Area No. 2), 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series B, 17 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Tax Allocation Revenue Bonds (Project Area No. 2), 2006 Series C, and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series D; 2) Financing Authority Resolution No. FA-56, acknowledging a finding of significant public benefit in connection with the issuance and sale of the Authority's Tax Allocation Refunding Revenue Bonds (Project Area No. 2), 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series B, Tax Allocation Revenue Bonds (Project Area No. 2), 2006 Series C, and Subordinate Tax Allocation Revenue Capital Appreciation Bonds(Project Area No. 2), 2006 Series D, and approving the issuance, sale, and delivery of such bonds and authorizing certain other matters relating thereto; 3) Agency Resolution No. 528, approving certain documents in connection with the sale and issuance by the Palm Desert Financing Authority of Tax Allocation Refunding Revenue Bonds (Project Area No. 2), 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series B, Tax Allocation Revenue Bonds (Project Area No. 2), 2006 Series C, and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series D, and authorizing certain other related matters. Motion was seconded by Spiegel and carried by a 5-0 vote. C. REQUEST OF APPROVAL OF ACTIONS RELATED TO THE ISSUANCE AND SALE OF TAX ALLOCATION REVENUE BONDS BY THE PALM DESERT FINANCING AUTHORITY FOR PROJECT AREA NO. 3 (JOINT CONSIDERATION WITH THE PALM DESERT REDEVELOPMENT AGENCY AND THE PALM DESERT FINANCING AUTHORITY). Mr. Ortega stated that essentially, the Palm Desert City Council would be adopting the same actions for Project Area Nos. 2, 3, and 4 as they did with Project Area No. 1. Chairman/Mayor/President Ferguson declared the public hearing to be open for ProjectArea Nos. 2, 3 and 4, and invited testimony SUPPORTING or OPPOSING these matters. With no testimony offered, he declared the public hearing to be closed. Member/Councilman/Commissioner Crites moved to waive further reading and adopt the following resolutions relating to Project Area No. 3 Bonds: 1) City Council Resolution No. 06-76, making a finding of significant public benefit and other findings in connection with the issuance and sale by the Palm Desert Financing Authority of the Authority's Tax Allocation Revenue Bonds (Project Area No. 3), 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3), 2006 Series B, and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3) 2006 Series C: 2) Financing Authority Resolution No. FA-57, acknowledging a finding of significant public benefit in connection with the issuance and sale of the Authority's Tax Allocation Revenue Bonds (Project Area No. 3), 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3), 2006 Series B, and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3), 2006 Series C, and 18 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 approving the issuance, sale, and delivery of such bonds and authorizing certain other matters relating thereto: 3) Agency Resolution No. 529, approving certain documents in connection with the sale and issuance by the Palm Desert Financing Authority of Tax Allocation Revenue Bonds (Project Area No. 3), 2006 Series A, Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3), 2006 Series B, and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3), 2006 Series C, and Authorizing Certain other related matters. Motion was seconded by Spiegel and carried by a 5-0 vote. D. REQUEST FOR APPROVAL OF ACTIONS RELATED TO THE ISSUANCE AND SALE OF TAX ALLOCATION REVENUE BONDS BY THE PALM DESERT FINANCING AUTHORITY FOR PROJECT AREA NO. 4 (JOINT CONSIDERATION WITH THE PALM DESERT REDEVELOPMENT AGENCY AND THE PALM DESERT FINANCING AUTHORITY). Mr. Ortega stated that essentially, the Palm Desert City Council would be adopting the same actions for Project Area Nos. 2, 3, and 4 as they did with Project Area No. 1. Chairman/Mayor/President Ferguson declared the public hearing to be open for ProjectArea Nos. 2, 3 and 4, and invited testimony SUPPORTING or OPPOSING these matters. With no testimony offered, he declared the public hearing to be closed. Member/Councilman Crites moved to waive further reading and adopt the following resolutions relating to Project Area No. 4 Bonds: 1) City Council Resolution No. 06-77, making a finding of significant public benefit and other findings in connection with the issuance and sale by the Palm Desert Financing Authority of the Authority's Tax Allocation Refunding Revenue Bonds (Project Area No. 4), 2006 Series A, and Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 4), 2006 Series B; 2) Financing Authority Resolution No. FA-58, acknowledging a finding of significant public benefit in connection with the issuance and sale of the Authority's Tax Allocation Refunding Revenue Bonds (Project Area No. 4), 2006 Series A, and Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 4), 2006 Series B, and approving the issuance, sale, and delivery of such bonds and authorizing certain other matters relating thereto; 3)Agency Resolution No. 530, approving certain documents in connection with the sale and issuance by the Palm Desert Financing Authority of Tax Allocation Refunding Revenue Bonds (Project Area No. 4), 2006 Series A, and Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 4), 2006 Series B, Tax Allocation Revenue Bonds (Project Area No. 2), and authorizing certain other related matters. Motion was seconded by Spiegel and carried by a 5-0 vote. 19 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 E. REQUEST FORAPPROVAL OF A GENERAL PLAN AMENDMENT ADDING POLICY 10, PROGRAM 10.A AND 10.B TO THE RESIDENTIAL GOALS, POLICIES,AND PROGRAMS SECTION OF THE GENERAL PLAN; ZONING ORDINANCE AMENDMENT ADDING SECTION 25.112 TO THE PALM DESERT MUNICIPAL CODE, ESTABLISHING DEVELOPMENT STANDARDS FOR AN EL PASEO RESORT OVERLAY ZONE (EPROZ); CHANGE OF ZONE TO ADD THE EL PASEO RESORT OVERLAY ZONE TO CERTAIN R-3 PROPERTIES LOCATED ON THE NORTH SIDE OF SHADOW MOUNTAIN DRIVE AND LARREA STREET BETWEEN LARKSPUR LANE AND PORTOLA AVENUE, Case Nos. GPA 05-04, ZOA 05-05, C/Z 05-05, (City of Palm Desert, Applicant) (Continued from the meeting of May 11, 2006). Mayor Ferguson explained that Items E and F would be considered separately; first would be Item E regarding the overlay zone over the whole area, and the second, Item F on the specific project proposed on Larrea Street. Mr. Bagato referred to his staff report previously submitted at the last City Council meeting. He stated that staff at the Development Department were trying to encourage and promote new hotel development adjacent to EI Paseo. The Council was not in favor of previous development standards presented and was now proposing an alternative. The proposed zoning ordinance amendmentwould allow a hotel exception in the R3 Zone identified in the same area that was outlined in the EPROZ . The ordinance would only be applied on a case-by-case basis. If approved this evening, the ordinance could then be applied to the project that followed this matter. He provided a copy of the proposed ordinance to the Council. In response to questions by Councilman Spiegel, Mr. Bagato responded that staff had worked on establishing standards that could approve new hotels. The initial option was an overlay zone because the R3 Zone would not allow developers to comply with the height and density development standards. The ordinance amendment proposed was their second option. Upon further question by Councilman Spiegel, Mr. Bagato stated that it was true that an applicant would still need to go through Council for approval, but there were no exceptions in the R3 Zone that would allow approval unless staff recommended variances, which would be harder to approve. Responding to Mayor Ferguson and Councilman Crites, Mr. Bagato said a development agreement was, in essence, an exception process created on a case-by-case basis, and this project could do that through a development agreement. 20 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 In response to Councilman Crites' question regarding the General Plan, Mr. Bagato replied that although he was not part of the General Plan discussions, he did not recall any reference to an overlay zone. Councilmember Benson agreed. Councilman Crites asked if anything had remarkably changed in the last two years. Mr. Bagato replied that property value had gone up and changed how development could be accomplished with affordability and how much design could be put into hotels. Councilman Crites didn't feel that the City should have to modify standards on a piece of land because the price of the land went up, even though a developer would make more money once they were done with it. Mr. Bagato stated that if the City wanted the land to remain vacant, the City wouldn't need to change their standards. Developers would just have to wait until the value of the land went back down to make for an affordable project. Mayor Ferguson stated he was not present for the May 11 meeting but had the same questions as his colleagues. He felt staff was dealing with the convergence of residential neighborhoods with commercial activity. He was interested in exploring other sites for a possible boutique hotel. He felt all proposals would be unique and needed to be considered on a case-by-case basis. To slap an overlay on the area would imply to hundreds of homeowners that they may have a hotel in front of their house. He would like to work on a development agreement that would not create the perception that hotels would run from Ocotillo to Portola. Mr. Bagato noted these properties were similar to that of Fred Waring -- it was a transitional land use and not solely residential. He said there were offices on Larrea, hotels on Shadow Mountain like the Mojave, and motels throughout the R3 Zone. He stated most of the properties were developed before the City was incorporated, and it was not a new land use. The area was limited between Larkspur and Portola because it needed redevelopment along with that portion of EI Paseo. Staff was not trying to push a new commercial use on the residents; the goal of the overlay zone was to enhance the overall area of Larrea and EI Paseo. Mayor Ferguson remarked the project had gone from Ocotillo to Portola, down to Larkspur and Portola, from an overlay zone to an exceptions process, and this matter could of been handled through a development agreement with public hearings with the directly affected neighbors. Mr. Bagato agreed. Mayor Ferguson declared the public hearing open and invited testimony in FAVOR of or in OPPOSITION to this matter. 21 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 MS. SUSAN MYRLAND, Shadow Mountain Drive, thanked Mr. Bagato for having been responsive throughout this difficult process. She was surprised to hear of the option that could have been discussed a few months ago but was pleased that the Council had been careful with the development of the area. She said during summer months, the small hotels were only half-full and worried that the area may be rapidly overbuilt. She felt the developer knew what the zoning standards were when he bought the property on Larrea Street, believing he was making a good investment. She stated good projects would come at the right time. MS. DEBORAH W. HALL, Joshua Tree Street, stated she felt the process had been enlightening and educational. She said it made sense to have individual hotels make modifications to their project in order to comply with current standards. She would like to keep the current process in place with the current zoning standards and was against a blanket overlay zone over the area. She said the quality of life in Palm Desert was unlike any other and shared how at one time Walnut Creek, California, was a lovely little City with lots of trees, but noW it looked like Wilshire Boulevard. She did not want that to happen to Palm Desert. In addressing the General Plan, she read out loud from Section III, Page 28 of the Land Use Element and Policy II, Page 29. She would like for those plans to continue to be implemented. MR. MICHAEL GILBERT, Larrea Street, stated he generally favored the overlay district. He felt the City of Palm Desert had two principal assets: The Mall and EI Paseo. Although, the Coachella Valley had become very competitive, with each City competing against the other with their commercial developments, citing the success of The River, the proposed Miles Crossing in Indian Wells, and an even larger complex being developed in La Quinta. He said EI Paseo was no different - it was a goose that lays golden eggs-but the City needs to do all it can to increase its value. If the subject overlay would benefit EI Paseo, he encouraged the City to approve it; he felt it would increase the foot traffic there, especially in the evenings. MS. BEVERLY A. BURIES, Mountain View, stated her opposition to the overlay zone. She expressed appreciation for all the questions that Council asked during the process, it gave an indication that their letters were read and that they were heard. She agreed that Shadow Mountain Golf and Tennis Resort was the backbone of the area, as Mr. Bagato indicated, and said they had coexisted beautifully for a long time, with the golf resort literally in her back yard. The two-story facility melded well with the neighborhood. However, she did not believe an overlay zone would accomplish the same and was not compatible with the area. The area is historic, and she would 22 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 like the Council to preserve its integrity with balance. The potential for a hotel row caused her to worry about an increase in crime, traffic, and transiency. She asked how the residents were going to be better notified and conferred with better for future projects. 23 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 MS. MAUREEN JORDAN, Mountain View Avenue, said her main concern was the traffic because she and a lot of her neighbors have children. She felt boutiques were great but felt the height was too high. She said they already hear the music from EI Paseo as if it was in their garage. Councilman Spiegel said he did not see the need for an overlay zone. He said projects to be developed in that area in the way of a boutique hotel would need to go through the Council and be reviewed on a case-by-case basis to make sure that people in the surrounding area were notified for their input. With no further testimony offered, Mayor Ferguson declared the public hearing closed. Mayor Pro Tem Kelly motion to, by Minute Motion, deny the recommendation for Case Nos. GPA 05-04, ZOA 05-05, and C/Z 05-05. Motion was seconded by Benson. Councilman Crites stated that he appreciated staff's intentions of wanting to protect and enhance the area of EI Paseo, but given the fact that it directly affected the residential neighborhood, it needed to be dealt in a delicate fashion through a development agreement on a case-by-case process. Mayor Ferguson agreed and clarified to the development community in the audience it was not a no-growth initiative by the Palm Desert City Council, but recognition of the fact that the City had sensitive pockets yet to be developed in the EI Paseo district. He felt an overlay zone would paint the area with too broad a stroke. He personally would prefer to have the developer or any future developer meet with residents first rather than just going ahead based on the Planning Department's recommendation, pointing out that it was not a criticism of the Planning Department. He felt overlay zones engendered fear and curiosity in people because of the uncertainty it posed to their property. He believed the market would support one or two small boutique hotels, but an overlay zone over the whole district was not needed. He said that Mr. Bill Kroonen, longtime City friend articulated very well in one of his letters to the Council that a tradition for development in Palm Desert was thoughtful, sensitive, and generally done on a case-by-case basis when dealing with existing neighborhoods. Arbitrary discussions between affected residents and developer were part of that process. He also agreed with his colleagues to continue with that approach. Mayor Ferguson called for the vote, and motion to deny the overlay zone carried by a 5-0 vote. 24 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 F. REQUEST FOR APPROVAL OF A PRECISE PLAN AND CONDITIONAL USE PERMIT TO ALLOW CONSTRUCTION OF A NEW, 12-UNIT, 36-KEY HOTEL CONDOMINIUM PROJECT LOCATED AT 73-811 LARREA STREET, Case No. PP/CUP 05-20 (Eugene Breznock, Applicant) (Continued from the meeting of May 11, 2006). Mr. Bagato stated the applicant had made some changes to the project since the last City Council meeting and was proposing two (2) options. The first option limited the BBQ seating area and private pools on the roof decks, maintaining a spa that would be pushed further away from the residences and closer to the inside courtyard of the project. A tower element would remain because it would provide access for a stairway to the roof. The second option would eliminate everything off the back buildings from the roof lowering the rear building to 25'6". Since the overlay zone ordinance and the proposed amendment were not approved, the matter would need to be continued to obtain a development agreement for the project to be approved. Councilman Spiegel asked for clarification of the picture included with their agenda packet. Mr. Bagato explained the picture showed two story poles for referencing the different heights discussed in the original proposal of 28 feet, current code standards of 24 feet, and 25'6" after modifications were made. The front page displayed the front view from Shadow Mountain. Mayor Ferguson asked how many rooms a 12 unit, 36-key boutique would have. Mr. Bagato stated there were 12 kitchens, and each unit had three bedrooms. Each bedroom could be rented separately or as a group of two or three. The room-keys varied with a minimum of 12 and a maximum of 36 rooms. Mayor Ferguson declared the public hearing open and invited testimony in FAVOR of or in OPPOSITION to this matter. MR. WILLIAM DeLEEUW, President of Villa Property Developers, stated since the last meeting, they had redrawn the plans to lower the total height of the project in addition to eliminating roof decks and spas on the side closest to the residential structures. He stated he met with two groups of residents of the area. He wasn't sure the group he met with on Monday was in support of the project, but was confident they understood it. The other group was generally supportive of the project. He felt the direction of the Council at the last meeting was to lower the height specifically on the structures adjacent to the residential area and to obtain community input in attempts to arrive at a consensus with the residents. He felt those two goals were accomplished 25 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 and requested the Council's support. In response to the Mayor's question regarding the 12 unit, 36-key room, a Conditional Use Permit was being requested to rent the 12 units separately, similar to what Shadow Mountain Resort does with their condominiums. He stated the Architect was also available to answer any questions regarding the height. MS. DEBORAH HALL, Joshua Tree Street, stated she met with the developer, and he answered a lot of questions. However, only the second option was mentioned. She went on to share she was unclear on the following: 1) She understood that the upstairs units with three bedrooms provided a regular kitchen and an efficiency kitchen, which would mean 12 units and something else; 2) it was mentioned that the towers were 30 feet tall, but the overall height was dropped 12 feet, and questioned if that included the roof deck wall; 3) who monitored to make sure that the height and everything were correct. Her concern was quality because it affected everyone. MR. JUAN CARLOS OCHOA, Highway 111, Palm Desert, Architect for the project, pointed out the correct height would be 30 feet for the towers; the reason to keep the towers was to give a little bit of dynamic to the elevation of the buildings. If Option 1 was approved, the towers would be needed for access to the spa. He noted that in orderfor a kitchen to qualify as a kitchen, it would need to include a range. Each unit had only one kitchen; the other ones were mini bars with no cooking facilities. Lastly, the parapets were lowered by three feet, not twelve, to a height of 25 feet 6 inches. Councilman Crites asked if Option 2 eliminated the spa and the towers as indicated in the staff report. MR. OCHOA said that was not correct in regards to the towers. He stated a very short tower would remain. Mr. Bagato explained that when he looked at the new plans, he thought there were no towers because they were difficult to notice. He said the towers were lowered, but were still six inches above the parapet. MR. MICHAEL GILBERT, Larrea Street, stated he was in support of the project. He heard one of the principal concerns mentioned earlier dealt with the quality of the construction. He stated he knew the architect and developer and was personally satisfied and pleased that something this beautiful was proposed for that area. He felt it would be an encouragement to other developers to do something similar in quality; the City of Palm Desert and its residents would be the beneficiaries. He felt this project was one to be admired and could be the measuring stick by which other developments would need to follow. 26 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 MS. SUSAN MYRLAND, Shadow Mountain Drive, stated her co-op faced directly at the project She said she met with Mr. DeLeeuw and Mr. Ochoa on Monday, and a shorter building was discussed. Initially, there were few meetings with few in attendance, and remarks were made that six feet would not make a difference. In her opinion, six feet made a huge difference when you could see the mountain, which was one of the reasons she bought her unit. At the time, she knew a two-story building would be built, but was not anticipating the building height to creep up. She appreciated that the developer agreed to lower the height closer to the existing zone. She also appreciated efforts made to have more civil and respectful discussions. She said despite the changes, this would be a 36-key hotel to be sold at one million a piece and then rented out, which she felt sounded fairly speculative. She felt this project would have a tough time getting off the ground and could live with one half-failing hotel in her backyard, but not more. She wanted the Council to keep the developer to Option 2, as promised. Councilman Crites asked Ms. Myrland if she was aware that the reduction in height was on the portion of the project that was nearest to her home, and the portion furthest away from the residential areas was at 28'6", with the idea that an angle view further away could be taller but less impact. She said she understood that and mentioned she would have preferred the view poles had been placed closer to her building so that she wouldn't have to guess at the end results. With no further public testimony offered, Mayor Ferguson declared the public hearing to be closed. Mayor Ferguson noted that the City Council was being asked to approve a project for which there was no zoning and no exception process; and while the idea of a development agreement process had been suggested, he asked the City Manager and City Attorney for their advice on how to proceed. Mr. Erwin recommended sending the case back to staff and the Planning Commission with a request that the developer initiate a development agreement process, pointing out that the City could not require a development agreement; it needed to be requested by him. Councilman Crites said he understood why City staff needed to be involved, but assuming that the project retained its existing physical characteristics, which were approved by the Planning Commission, he wondered why a simple change in this process would have to go back through Planning Commission. 27 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Mr. Erwin replied the reason was that a development agreement requires public hearing both at Planning Commission and City Council levels, with the required public notification procedure for both bodies, and its approval is by an ordinance of the City Council. Councilman Spiegel congratulated the developer and the residents in working together to reach an agreement. He said there was nothing of this character adjacent to EI Paseo; he felt it would be a plus to the City and would not detract from anyone's property value. On the contrary, he believed it would increase the value of their property to have a project this unique. He stated if it was possible to approve this evening, he would move to approve. Mayor Pro Tem Kelly agreed with Councilman Spiegel. He was impressed that the project would have underground parking, with no vehicles parked outside and with no restaurant. He felt it was an upscale project and would be a nice-looking building to look at when driving by. He would be supportive of having the Council agree to move the process along. Councilmember Benson disagreed. She did not feel it was the right location for this project--too much was being crammed into a small place. Secondly, the remark that it would set the precedent for others in the area would be setting the wrong precedent. She did not feel hotels of that size would impact EI Paseo one way or the other; a "Mojave" -type would be more appropriate than a big hotel. She stated she was not in favor of the project. Mayor Ferguson asked the developer if a development agreement would be something he was interested in pursuing. MR. DeLEEUW stated he would like a motion by Council to give its blessings to the project and direct him through the proper procedures with an affirmative direction to get a development agreement. Mayor Ferguson explained that land use planning could be done through a change of zone or through an exception process, which he did not favor. However, on a case-by-case basis, it gives the Council an opportunity to prepare a development agreement,which is a contractually binding document between the developer and the City of Palm Desert. It sets forth with great specificity what will go where and how high; it is a negotiated document, which would include input from residents, City, and developer. He felt tremendous strides had been made recently, but the process would likely take another 30 to 60 days given the public notice requirements. He encouraged the developer to continue meeting with the residents and to take Councilmember Benson's comments to heart. He was generally supportive of what the developer was trying to accomplish but felt more thought and care was needed because of the constraints of the area. He was pleased that the 28 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 developer was choosing to move forward, and with everyone's extra effort, the City and residents would be happy, and the developer would have a good return on his investment. He said the Council would be in a better position to make a final decision once the development agreement was returned along with residents' comments. Upon Mayor Pro Tem Kelly's question if Council could direct staff to prepare a development agreement based on Option 2, Mr. Erwin said it could. Mayor Pro Tem Kelly moved to by Minute Motion, refer the matter back to staff and the Planning Commission, requesting that the Applicant initiate the Development Agreement process for the subject project, further indicating that the Applicant's Option 2 was preferable. Motion was seconded by Spiegel. Mayor Ferguson stated that if the residents and developer came up with additional concessions, they could include those as well. Mr. Erwin noted the Council would still have the ability to reject the project when it was presented again. Councilman Crites stated he had intended to vote against the project, because of the poor way it was handled with the neighbors and their objections to height, etc., but obviously, a lot of progress had been made. He asked staff if the developer was asking for additional exceptions other than height. Mr. Bagato stated the other exception was density. The current zoning allowed for only 18 rooms. Councilman Crites stated he was referring to setbacks, land coverage, and other requirements of the zone. Mr. Bagato replied the applicant complied with everything except for height and what they were doing within the building in reference to the 12-unit, 36-key rooms. Mayor Ferguson called for the vote. Motion carried by a vote of 4-1, Benson voting NO. G. CONSIDERATION OF APPROVAL OF AN AMENDMENT TO PREVIOUS APPROVALS TO ALLOW A DRIVE-THRU SPECIALTY COFFEE OUTLET ADJACENT TO COOK STREET, PAD NO. 4, LOCATED AT 37-825 COOK STREET. Case No. PP 03-11, Amendment No. 1. (Prest Vuksic Architects and The Evans Company, Applicants). Mr. Smith reviewed his staff report in detail. The project required an amendment from the original site plan of the area. Staff believed the architect came up with a reasonable and workable circulation layout for the site. The project was reviewed by the Architectural Review Commission, which found 29 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 it acceptable; the Planning Commission approved the project at its May 16 meeting by a unanimous vote. He went on to say that Mr. Evans presented the project in 2003, he had originally shown a drive-thru restaurant on this site but did not have the detailed plans. The Planning Commission suggested emphatically that he could come back later with the specific proposal. Mr. Smith proceeded to further describe the project in detail, as outlined in his staff report, and recommended Council's approval. Councilman Crites commented that the project was not as close to the freeway as the freeway overlay zone suggested. Responding to Mayor Pro Tem Kelly's questions about location of the boundary line for the overlay zone, Mr. Smith said the City Council did establish a line when the overlay was established; it was then expanded as part of the development agreement. He said that line was currently south of the subject location. Councilman Crites stated the original concept of a freeway overlay zone would not allow this project. Mr. Smith stated it would have been close and wouldn't know because it would be at the extreme end of the boundary. Mayor Ferguson stated that originally the intent of the freeway overlay zone was to provide the means to get off the freeway, for people to get relief from their travels and noted that drive-thru's were not allowed anywhere else in the City. To qualify for a drive-thru, extras like open space, public art, picnic pavilions needed to be included as part of the project. Mayor Ferguson stated he didn't see any of that included. He said the architect worked on the Wendy's on Washington and Country Club and it was understood that future drive-thru's could look like that. He felt the architect did a fabulous job on that particular project. In this project he wondered what had happened. On all accounts he felt it was an unimaginative shoe box building with yawning slapped on it and nothing about the package met the intended requirements and goals of the freeway overlay zone. Mr. Smith stated he would let the architect respond to those questions, but noted that the corner of the building was closer to Cook Street from the original approval without the drive-thru. They viewed the changes as an advancement in the plan by pushing the building away from the street by creating a large patio area with greater landscape setback on the corner. Mayor Ferguson declared the public hearing open and invited testimony in FAVOR of or in OPPOSITION to this matter. 30 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 MR. RICK EVANS, Country Club, Palm Desert, Developer with The Evans Company. He fully described the project and the ideas advanced in the layout and design. The franchise was located in Palm Desert and described as a terrific coffee operation. He explained the drive-thru was scaled down to allow for a seven vehicle stacking and endeavored to disguise the drive-thru lane. Huge efforts were made to keep the semblance of main street and enhancement to the projectwhile maintaining the circulation diagram thatwas originally proposed with the Precise Plan in 2003. The second change was the shape of the building to avoid having a single box, which was uninteresting, an addition of half-circle seating along Cook Street to accommodate more capacity. The concept was for both the restaurant and coffee shop to use the patio. By moving the building away from the street, the patio was then placed on the shade-side of the afternoon sun and provided for a better landscape zone. He felt strongly that this drive-thru at this particular location would be helpful to keep a walking, meandering-type of environment along main street and the University Village Park accessible to the offices, retail stores, and hotel. In regards to Art in Public Places, he said they were developing their own for the entire sites, it was still in process and they intend to comply with the Code in all cases. He stated their particular concept to create a community and not just shopping. He mentioned the drive-thru pad on Gerald Ford was within the freeway overlay zone but also not near the freeway, and this project was not more than 100 feet off the original overlay zone. He stated they could switch the buildings and be in the freeway overlay zone. He felt it was important to have a coffee shop, but if not approved with the drive-thru, more than likely there would not be one. This building would have three different tenants and all three would be food related. The name of the coffee shop is "Bad Ass Coffee Company," based out of Salt Lake City, Utah. Their first store was in Kona, Hawaii and the name came from the Hawaiian coffee people who lovingly nicknamed the burro that took the coffee down off the hill. Christine Bannate is the franchisee, a longtime Palm Desert resident, who put her heart into this project. Her first store was in Rancho Mirage located in the Von's Center on Highway 111 and Bob Hope Drive; her second store was in La Quinta at Point Happy. In response to Councilman Spiegel's questions, Mr. Evans replied that the largest building, which is 2,000 square feet, was behind the coffee shop and would probably be an Italian restaurant; the one next to that would be a sit- down Italian Cafe, and the third location would be a juice store. Upon further question by Councilman Spiegel, Mr. Evans confirmed that the project would not pencil unless approved as a drive-thru. In response to Councilman Crites' questions, Mr. Evans replied that the applicant had the exact same business in Rancho Mirage without the drive- thru and was successful; although, had only been open there for four weeks. 31 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 In answer to endorsing the pedestrian bridge, Mr. Evans said there were great connections and linkage constructed at Berger, University Park, and Cook Street that would allow for pedestrian access until such time the bridge is reconsidered and adopted. Councilmember Benson was doubtful that people from all areas would drive out there to sit and drink coffee, nor did she see the need for a drive-thru. MR. EVANS answered that according to statistics in the coffee business, a drive-thru would add about 30% of the volume to the shop. It was an important part of volume to Ms. Bannate's business as well as a great service to the community. It would also provide a competitive advantage in relation to the Starbuck's down the street that was approved a few months' prior. With no further testimony offered, Mayor Ferguson declared the public hearing closed. Mayor Pro Tem Kelly stated he had finally overcome his opposition to the square look if it had a good color scheme. This building looked like it had a good color scheme, even without the cupolas that he preferred. As far as the freeway overlay, it seemed that this location was more appropriate than the one located at Gerald Ford, and it was accessible to University Park. Councilman Spiegel stated he had a problem changing the standard because the project was a little bit over the line. He felt the standard was already established and for years, they have denied other drive-thru projects. Councilman Crites understood the owner's perspective about having a competitive disadvantage with their business, given that Starbucks is near the freeway. However, if this project was approved, the next project would have a disadvantage, and so on; and the City would be faced with drive-thru creep. Councilmember Benson stated her concern was not with the location but the need for a drive-thru there. She related that she recently waited 30 minutes at a new coffee shop without drive-thru, and it was doing fine. Mayor Ferguson commented that the first committee he served on in Palm Desert was the Comprehensive Zoning Ordinance Review Committee, and the first matter he dealt with there was the freeway overlay to allow drive-thru restaurants. At the time, they were dealing with a Katrina Heinrich, who was going to have one big central area loaded with amenities. It was going to be freeway-friendly to get people off of the freeway and into town, hoping they would stay a little bit, at least stopping in Palm Desert instead of going on to Ramon Road and Palm Springs. The first freeway overlay-zone approved project was Wendy's, and it turned out to be as great as he had hoped for. 32 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 The other was a Jack-in-the-Box and going to be great also. However, this project lacked creativity and did not include any benefits. He suspected that when initially approved, the developer thought he could have a drive-thru without the extra benefits. In his opinion, the developer did need to include all the extras. Secondly, the project was over the freeway overlay zone. As far as the competitive disadvantage, other places on Highway 74, Jack-in-the- Box, McDonald's, and Burger King, were all denied for a drive-thru, and for the Council to now vote yes for no apparent reason, even when the project didn't meet the current ordinance, would be horrible precedence. Councilman Crites moved to deny Resolution 06-81. Motion died for lack of a second. Mayor Pro Tem Kelly questioned whether the project could be approved without the drive-thru. Mayor Ferguson asked whether the developer preferred the project to be turned down all together or get approved without a drive-thru. Mr. Evans replied he didn't know how to answer that, because the previous building was already approved. He said this project was designed and laid out specifically to accommodate a couple of brilliant opportunities, and one of them was the multi-tenant coffee shop with drive-thru. Councilman Crites moved to, by Minute Motion continue the matter for two weeks for staff to prepare a Resolution of Denial, providing the applicant two weeks to look at his options, rather than putting him on the spot. Councilman Spiegel seconded the motion. Mr. Evans stated this was a big project, and they had tried to be sensitive to the City Council and everyone involved with the project. He stated this was a huge disappointment, because they were using their business sense to determine the right location for the right uses in the center, not a map that was done 15 years ago with the Wonder Palms Development Agreement. Councilman Crites offered to recall his motion for a continuance. Mr. Evans said it wouldn't be necessary. Mayor Ferguson called for the vote, and it carried by 4-1, with Mayor Pro Tem Kelly voting NO. H. CONSIDERATION OF A FIRE FACILITIES IMPACT MITIGATION FEE PURSUANTTO THE FINDINGS OF A NEW NEXUS STUDY(Continuedfrom the meeting of May 25, 2006). Mr. Ortega stated that this item was a continuance of a hearing previously considered with regard to the Fire Facilities Impact Fee for the North Sphere. 33 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 City Council reviewed the document that provided the legal justification for such a fee, which included a formula that allocates cost to the area to be developed. The reason for the continuance was that the BIA (Building Industry Association) wanted to discuss with staff the cost attributed to the actual cost for the fire station, and staff wanted to add truer costs for the land value. At least three meetings had been held with the BIA, with several iterations of the proposed cost. He said staff and BIA have reached an agreement, as indicated in the June 8, 2006, memo by Director of Finance Paul Gibson. He called attention to the staff report's second page and the column entitled, "Updated Per Unit Fee," which is the one to be considered by City Council. Although it is slightly different from the one proposed at the prior public hearing, staff recommended this fee be adopted. He further understood that BIA's representatives agreed. Mayor Pro Tem Kelly asked what comparative criteria were used to come up with the unit costs for low, medium, and high density, which resulted in $182/unit for high density and $709/unit for low density MS. FELISE ACOSTA, Consultant with Rosenow, Spevacek Group, Inc., introduced Ms. Lynn Kelly, the associate handling the calculation. MS. KELLY directed attention to page 8, Table 2, where developed units in the subject area were identified, including acreage. She said the development fee was based on the proposed development that will occur in the area versus the existing. From Table 2, the cost per net acre was calculated (see Table 3, page 9), and the total cost per net acre was recalculated to $2,262. The service cost attributable to new development is based on that cost per net acre; approximately 37.6% (approximately 1,534 acres) of the area is undeveloped and will be subject to the development impact fee, which she said was outlined in Table 4 of their report. Mayor Pro Tem Kelly said that wasn't really his question, as he was concerned that the fee should be related to the need for fire services. In his experience, there was less demand for fire services in low density development than in high density; yet the high density per unit cost is much lower. MS. KELLY responded by explaining that there would be a greater number of dwelling units on high density development, and costs were based per acre. Therefore, she said the cost was distributed over a higher number of dwelling units on high density; on a per-acre basis, the cost is the same, $2,262. 34 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 MS. ACOSTA clarified that the fire fee was allocating the cost of a new station proportional to what was yet to be developed. She said the new development 35 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 that would occur in the area is the reason a new station was required. However, not all of the costs for the new station could be allocated on new development. For that reason, the methodology was to determine what portion of the cost would be to construct the new station that will serve the area, not the cost associated with providing fire services themselves. Upon further inquiry by Mayor Ferguson as to the overall difference in per acre cost for a 4-unit-per-acre development (4 x $709 = $2,836) and a 10- unit-per-acre development (10 x$182 = $1,820), Mr. Gibson replied that the actual calculation was based on acres; and no matter what type of basis being used, it was still $2,262 per acre. He said it was the amount of units being put on the property that gets divided into the acreage. Further responding, he said the formula was developed in order to account for the estimated number of units to be developed over the life of this area of the City. He confirmed that it was an identical per-acre fee. Councilman Spiegel asked what the final cost to the City would be once the area is developed. Mr. Gibson answered that including land costs of $1.7 million, the City's total cost for the project would be $9.2 million, of which it will recover $3.5 million from new development; the remaining $5.8 million would come from Redevelopment and General funds. Mayor Pro Tem Kelly reiterated his concern about the inequity of the per-unit fee. He believed it will take more services and equipment to protect high density development per acre than it would low density. Mayor Ferguson declared the public hearing open on the Fire Facilities Impact Mitigation Fee. MR. FRED BELL, Executive Director, Building Industry Association - Desert Chapter, 77-570 Springfield Lane, Palm Desert, thanked City staff for their cooperation throughout the nexus study process. Although his organization posed a number of questions on the way the nexus study was done, they have been able to agree on it overall and with the findings made by the City's consultant, based on the calculations and assumptions in the report. He said his group appreciated the City's taking time to work with them. With no further public testimony offered, Mayor Ferguson declared the public hearing closed. Councilman Crites moved to waive further reading and: 1)Adopt City Council Resolution No. 06-72, approving a Fire Facilities Impact Nexus Study and Fire Facilities Impact Mitigation Fees; 2) Pass Ordinance No. 1120 to second reading, Updating the Fire Facility Impact Fee applicable to all new Commercial, Residential, and Industrial 36 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Development within Fire Service Area No. 71. Motion was seconded by Spiegel and carried by a vote of 4-1 with Mayor Pro Tem Kelly voting NO. I. CONSIDERATION OF THE RE-FORMATION OF THE PRESIDENT'S PLAZA III PROPERTY AND BUSINESS IMPROVEMENT DISTRICT. Senior Management Analyst Martin Alvarez stated that on April 13, 2006, City Council initiated the process to reform the District; ballots were mailed out to 16 property owners, and the public hearing was set for this date. Staff recommended for City Council to open the public hearing, direct staff to count the ballots, and return with a recommendation. He offered to answer any questions. Mayor Ferguson noted his conflict with the matter and recused himself from the Council Chamber. Mayor Pro Tem Kelly declared the public hearing open and invited testimony in FAVOR of or in OPPOSITION to this matter. With no further testimony offered, he declared the public hearing closed. Staff was directed to have the ballots counted for the subject assessment district. Following staff's counting of the protest proceeding ballots, Mayor Pro Tem Kelly called for the results. City Clerk Rachelle Klassen reported the total value of the ballots cast was valued at$20,775.12 with$16,372.06 valued YES and$4,403.06 valued NO. Councilman Spiegel moved to waive further reading and adopt: 1) Resolution No. 06-82, declaring the results of the property owner protest proceeding for the re-formation of the Presidents' Plaza III Property and Business Improvement District; 2) Resolution No. 06-83, approving and/or amending the Engineer's Report regarding the re-formation of the Presidents' Plaza III Property and Business Improvement District; 3) Resolution No. 06-84, approving the Final Management District Plan for the Presidents' Plaza III Property and Business Improvement District, FY 2006/07; 4) Resolution No. 06-84A, Ordering the Formation of the Presidents' Plaza III Property and Business Improvement District, and the levy and collection of assessments for FY 2006/07. Motion was seconded by Crites and carried by a vote of 4-0, with Mayor Ferguson ABSENT. J. CONSIDERATION OF ACTIONS RELATIVE TO THE FORMATION OF THE PALM DESERT HIGHLANDS UNDERGROUNDING ASSESSMENT DISTRICT NO. 04-01. Councilman Spiegel noted that he would recuse himself from the discussion and action on this matter. 37 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Mayor Ferguson stated that those who had submitted ballots were entitled to change their vote based on public testimony received prior to going to tabulation. Director of Office of Energy Management Patrick Conlon stated the project had been in the formation stages for over a year. The project was requested by the residents in that area and involved Southern California Edison lines, Verizon, and Time Warner Cable. He stated the ballots were mailed out to all the property owners and announced that once the public hearing was open, anyone who had already submitted their ballot could change their mind by their public testimony. The testimony would be considered their final vote regardless of what the ballot indicated. At the close of the public hearing, ballots would be counted and status of the vote reported to the City Council. He indicated that it would take a simple majority protest to lose the Assessment District. He offered to answer any questions. Mayor Ferguson declared the public hearing open and invited testimony in FAVOR of or in OPPOSITION to this matter. MS. BETTY DRUMMOND, Bel Air Road, stated she was a resident for over 15 years. She said her home experienced a lot of ground movement because it sat on an earthquake fault area, and she was concerned that installing underground wiring would only aggravate the cracks already there. She supplied pictures of the cracks across the pool, patio, the garage, and onto the street. She said the street had already been re-paved two or three times over the past several years. She also had pictures showing the easement across the back of her lot and showing the tall trees with wires underneath them. She said Edison had declined her request to have them cut down and was told it was up to her to have the trees trimmed. She said her home is on a slope, and the neighbors would be looking down onto her yard if they did away with the trees. She said she was dead set against the underground wiring but would pay the assessment if it passed. MS. LUCE FELTS, Beverly Drive, stated she was against the project mostly because of the money involved. She wondered why she would be required to pay more than $26,000 when a similar job was done in the Silver Spur Ranch Area for an average of $9,000 to $12,000. She said she was on a fixed income with her home paid off, but the assessment would cause a hardship if her tax payments were raised. She stated that she already had the lines from the poles to her home buried and felt the City was trying to take her money. She said the City was conducting a facade improvement along Highway 111 and EI Paseo, offering to meet property owners with $40,000 just to improve the front of their building. In this situation the City wants to 38 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 take $26,000 from someone like her who was just getting by. She was strongly against the project. MS. BONNIE BITNEY, Bel Air Road, stated she felt the fee was outrageous. She said two of herfriends who lived out in the Silver Spur area paid $10,000 and $12,000 respectively. She believed the electric, telephone and cable company should pay for it. MR. DAVID WARE, Skyward Way, stated he was involved with Undergrounding District 17. As background information, he shared that he was part of the core group of ten that initiated the project 2 '/ years ago. Since then, they worked closely with the City and the Redevelopment Agency. He thanked the Council for the cooperation and professionalism of staff during the long process and was thankful for the City spending Redevelopment money to help subsidize the project. In rebuttal to earlier comments from residents, he stated the situation with Silver Spur was different. The layout of the project was different and the bidding process took place over two years ago. He also stated that the electrical contractor lost over $1,000,000 on that project. He felt fortunate that this project was structured to have $3.5 million paid by the Redevelopment Agency. The money was a one-time offer; if the vote didn't pass, the money would be unavailable for Undergrounding District 17. Mayor Ferguson again requested anyone wishing to turn their ballot in to do so at this time. With no further testimony offered, Mayor Ferguson declared the public hearing closed. Mayor Ferguson directed staff to have the ballots counted in the protest proceeding for the subject District. Following staff's counting of the protest proceeding ballots, he asked for the results. City Clerk Rachelle Klassen stated that the results of the protest proceeding were a total valuation of $960,021.34 in SUPPORT and $944,178.50 in OPPOSITION, with 102 properly returned ballots and 10 invalid ballots returned. Mayor Ferguson asked staff if the City had different payment options available to the residents. Mr. Conlon replied that there is a 30-day cash collection period, where the resident could opt to pay their assessment off in cash at a discount; the second payment option would be to finance the project for them upon the sale of bonds spread over 30 years on their tax bill; and the third option was 39 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 the HIP program available to help qualified low and low-moderate income individuals with this assessment. Mayor Ferguson asked if there was a due-on-sale mechanism. Mr. Conlan stated there was not. In response to Mayor Pro Tem Kelly's questions, Mr. Conlon said if a resident chose the bond plan, they would see that on their tax bill. Mayor Ferguson asked what an assessment of $26,000 would amortize at over a 30 year period. Mr. Conlon stated the City would sell 30-year bonds at a 6.4% or 6.5% percent range, which calculated to about$1,000 or 1,200 40 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 a year, or an additional $600 per tax payment period on their property tax bill. Councilmember Benson asked how many ballots were mailed out. Mr. Conlon answered that there were 125 property owners in the single-dwelling area and 40 condominium owners at Palm Desert Tennis Club, for a total of 165 ballots. Ms. Klassen further responded that 102 valid ballots were returned,and there were 10 invalid. Mayor Pro Tem Kelly asked what constituted an invalid ballot. Mr. Conlon replied that an unmarked or unsigned ballot would be considered invalid. Mayor Pro Tem Kelly went on to say that in order for the vote to fail, there had to be 50% vote "no," and if a voter didn't vote at all, they may as well vote "yes." Councilman Crites offered that a voter had to vote"yes" in order to have any affirmative impact; if they didn't vote at all, there was no impact. He explained that it was not 50% of the voters, it was 50% of those casting ballots' assessed valuation. Mayor Ferguson restated that there were$960,000 IN FAVOR and$944,000 NOT IN FAVOR, and the City Clerk had determined that there was not a majority protest. Councilman Crites said he would be moving approval, but he would also like staff to research a due-on-sale provision. He said the City would accrue the interest, it would only be due upon sale of the property, and the City would have first call on those proceeds. Councilman Crites moved to waive further reading and adopt: 1) Resolution No. 06- 85, making findings regarding all special assessments levied against parcels proposed to be assessed in Highlands Utility Undergrounding Assessment District No. 04-01. 2) Resolution No. 06-86, ordering modifications to the engineer's report in connection with Highlands Utility Undergrounding Assessment District No. 04-01, approving such Engineer's report as so modified, confirming the assessments in improvements to be made and designating such district a utility undergrounding district pursuant to Chapter 12.12 of the Palm Desert Municipal Code; 3) Resolution No. 06-87, authorizing the issuance and sale by the City of not to exceed $3,530,0000 aggregate principal amount of its Highlands Utility Undergrounding Assessment District No. 04-01 limited obligation improvement bonds, series 2006; approving as to form and authorizing the execution and deliver of certain documents in connection therewith; and approving certain other matters relating thereto; 4) By Minute Motion, approve the Fiscal Agent Agreement between the City of Palm Desert and Wells Fargo Bank, N.A. (Contract No. C25380). 41 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Mayor Pro Tem Kelly said he was worried because the vote was very close. He would feel more comfortable if there was a stipulation that a property owner could pay when the property is sold. Mr. Ortega stated that even after the bonds were sold, a property owner who wished to pay their debt off could do so. He said many times a prespective buyer would ask for the assessment to be paid off at the close of a property sale. Councilman Crites disagreed, believing instead that the central issue was those property owners who did not have or felt they did not have the financial ability to assume the extra $600 for each of the two assessments per year. He would like to see the property owner have the option of foregoing the collection of that debt and allow the City to collect whatever interest it would be paying on the bonds for the project, and then received the lump sum payment when the home is sold. He clarified that it would not be the City advising a property owner to choose that option, it would be their choice. He reiterated his strong suggestion that this be researched. Mayor Ferguson agreed with Mayor Pro Tem Kelly that the benefit residents would receive is deferred at best; they would get some immediate aesthetic returns, as seen with the residents at Silver Spur. But their property values would go up considerably; and when they sell their home, they would realize the benefits of the assessment they had been asked to pay. If they have the option of paying when they receive the benefit, it solves a cash flow problem for many income-restricted seniors and others who just don't have an extra $600 every six months. He preferred the no-cash option for residents that gives the ability for them to parachute out when they sell their home and realize the proceeds. He further agreed with Mayor Pro Tem Kelly's point that with the close vote, one half of the group would be unhappy either way; but at least the half that was successful, according to the rules that were set up, should be given deference. Mayor Pro Tem Kelly noted he was not concerned with people being angry with him; but generally speaking, he hoped that future assessment districts would pass by a much larger percentage. He believed anytime a decision was 50/50, it was dangerous; he felt terrible that this one was so close. Councilman Crites pointed out that he would feel terrible if the City Council did not allow the people in the majority to achieve their goal. Mayor Pro Tem Kelly agreed. 42 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 Councilmember Benson seconded the motion, and it carried by a vote of 4-0, with Spiegel ABSENT. Councilman Crites again reminded staff that City Council was very serious about investigating the feasibility of the deferred payment option for affected property owners, especially given the closeness of the ballot results. XIV. REPORTS AND REMARKS A. CITY MANAGER None B. CITY ATTORNEY None C. CITY CLERK Mrs. Klassen thanked Deputy City Clerk Grace Mendoza, Director of Finance/City Treasurer Paul Gibson, and Acting Director of Special Programs Frankie Riddle for helping her operate a Election Returns Collection Center at Palm Desert City Hall Tuesday night for the California Primary Election. D. PUBLIC SAFETY o Fire Department None o Police Department None E. MAYOR AND MEMBERS OF THE CITY COUNCIL o City Council Requests for Action: 1. Residential Remodelinq — Councilman Crites remarked that, especially in the residential area on the City's south side, there has been an issue of people remodeling homes and increasing 43 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 their height. He noted that the maximum height for single- family residences was 18 feet, but many of the existing neighborhoods averaged a height of 12 feet. Consequently, when a home's height was increased to 18 feet, it tended to cause significant acrimony for some neighbors. Therefore, he asked staff to consider a manner in which to notify neighboring 44 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 residents whenever such a remodeling project came in to increase height to over 14 feet. He asked if staff could provide a report on the suggestion by the next meeting, offering that a home next to the Hopalong Cassidy House was an example. 2. County Gradinq Specifications — Councilman Crites provided his colleagues with a copy of the County's new policy regarding grading without a permit, which he felt provided stringent regulations. He asked City officials to review and see if it would be of value to Palm Desert. 3. National Monument Siqns — Councilman Crites presented a copy of proposed signage developed by the Bureau of Land Management for the National Monument. He said they would cost approximately $20 each, and he asked staff to check to see where these would be appropriate for installation along the City's trails system, especially the newer sections that are inside the National Monument. . o City Council Committee Reports: 1. Parks & Recreation — Councilman Spiegel said in the past week, he and Mayor Pro Tem Kelly, along City staff, met with officials of the Coachella Valley Recreation & Park District regarding the City's concerns with the District. He noted that the City considers the District its provider of recreation programs for residents, but it didn't seem to be their main objective. District General Manager Stan Ford asked for time to respond to the City's concerns, which were outlined in a report to the City Council by Parks & Recreation Services Manager Janis Steele. 2. Sister City Awards — Councilman Crites reported that the City had just been notified of its receipt of two Sister City Awards, and he asked staff to provide his colleagues with the information. He felt the City should be proud of this honor. o City Council Comments: 1. Councilmember Benson commented that she came down EI Paseo around 2:00 p.m. today and was impressed at the law enforcement presence she saw at that time. 45 PRELIMINARY MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING JUNE 8, 2006 2. Mayor Pro Tem Kelly stated that he and Councilmember Benson attended an assembly at Lincoln Elementary School, where the Second Graders were recognized for their award- winning "Weird World of Worms" project. He noted that they were honored for their achievement with a meeting with President George W. Bush in Washington, D.C. Councilmember Benson agreed that the students were extremely bright and enthusiastic, and it was a rewarding event. 3. Councilmember Benson stated that the Habitat For Humanity Groundbreaking earlier this week (Virginia Avenue) was also very rewarding. She noted it was the largest attendance they'd had at a groundbreaking, with many of the contractors present who would be working on the project. She said it was hoped that the house would be done within a month. 4. Mayor Ferguson delivered a thank you to Senior Management Analyst Pat Scully for the tour of City Hall she recently provided to 30 kindergarten students. He said they were presented with "Good Citizen" badges, and they especially enjoyed seeing the Council Chamber. XV. ORAL COMMUNICATIONS - C None XVI. ADJOURNMENT Upon motion by Crites, second by Spiegel, and a 5-0 vote of the City Council, Mayor Ferguson adjourned the meeting at 6:55 p.m. JIM FERGUSON, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA 46