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HomeMy WebLinkAboutMinutes 1997-06-05 Mayor Joseph A. Fernekes Council: James L. Datzman Eugene R. Mullin --'lohn R. Penna Robert Yee MINUTES City Council City Council Conference Room City Hall June 5, 1997 AGENDA ADJOURNED REGULAR MEETING CALL TO ORDER: (Cassette No. 1) ROLL CALL: 1. El Camino Corridor market analysis. ACTION TAKEN ADJOURNED REGULAR MEETING 6:03 p.m. Mayor Fernekes presiding. Council Present: Council Absent: Datzman, Mullin, Penna and Fernekes. Yee. Director of Economic & Community Development Van Duyn related: sometime back in March of this year Council approved a contract with the Sedway Group to perform a market analysis of three key sites in the El Camino Corridor within the redevel- opment area; the focus was to analyze the 20 acre Macy's site and a review of the 10 acre County Government Center and the driving range located south; as submitted to Council last week, the eom- pleted report provides for the retail, office use and how they fit the criteria; Mr. Curt Fuchs will make a brief presentation on the report; there are no rec- ommendations by the staff on the report, for it is strictly informational; if the Council wishes to pro- vide further direction, that is acceptable, but we are here to give you this and follow that up with more detail on any changes proposed for the redevelop- ment. Mr. Curt Fuchs related: what we did is look at the market potential for the marketing of key sites along the Macy's and County property to give a sense of market demand; key site characteristics are large enough to be developed; they all have good access, but not enough freeway access; Macy's has the best site and proximity to BART; the driving range is problematic for other than retail, but maybe Kaiser can use for medical use, for it is near exist- ing homes and is better than the driving range be- cause of the retail support; the Macy's site is superi- or because of the site, access and visibility; our retail study focused on two types of neigh- 6/5/97 Page 1 ~ENDA l. El Camino Corridor market analysis - Continued. _AC_T!QN TAKEN . 070 borhoods for a stand alone retailer; we analyzed current and potential land for retail because they believe the retail is well served; looked and com- pared retail sales from residents shopping and this suggests you are well supplied in the retail category and the market is saturated by the existing retail; additional retail could capture some business, but it would cannibalize it; assume more population if there is higher density, then it could support higher retail; etc. Discussion followed: that factors in the Graystone Development; yes, a hundred additional residents for convention retailers and the corridor is adequate- ly served for the future, for the retail uses are not supported, but a drugstore or a store could work especially as the new residences fill up, however, we are cannibalized and it would be a shifting of retail spending. Mr. Fuchs continued: he has also looked at the stand alone big box retailers and they have a strong following where people go out of their way to shop there, like Costco, Home Depot and K-Mart; only the massive sites are suitable for this because of the access; target is in Tanforan and Walmart is in Colma; we talked to Walmart and K-Mart, and Walmart is interested and is a good retailer to draw to the site and they are better than Target and K- Mart; etc. Discussion followed: Mayor Fernekes asked about a large super market like Safeway; there could be support there, but from the existing demand there is already, it would pull retail sales from other busi- ness; there was discussion in the newspaper some time ago that Safeway was closing stores and was looking for big super markets; Councilman Penna noted that when Mr. Fuchs mentioned a Walmart coming in and his marketing that area - wouldn't that be the same as cannibalizing; yes, but Target is in San Bruno and the other two are in Colma, K- Mart and Walmart and it would be cannibalizing that and maybe other stores in the City; Councilman Datzman noted page 11 of the report, dated 4/30/97, shows a Safeway in Westborough, but that has not been there for a while, and he questioned how dated the material was; the data came from a public firm; so, has any real look been taken for the giant grocery store; Mr. Fuchs does not know; Council- man Penna noted the report had a grocery store in 6/5/97 Page 2 AGENDA 1. E1 Camino Corridor market analysis - Continued. 6/5/97 Page 3 ACTION TAKEN ,., 071 Sunshine Gardens that has not been there for four years and questioned the validity of the report; Mr. Fuchs stated this table was a secondary and was not verified; he stated the retail projections are based on the Board of Equalization and is believed to be valid; Walmart has indicated that Macy's was an alternative to the preferred Shearwater site and they want a co-tenant like Home Depot; they looked at office market conditions in Northern San Mateo County and currently there is no market offering and there is a shortage of R&D; talked to R&D people on the Macy's site but not for a speculative develop- ment because it lacked services and was not attrac- tive; Councilman Penna noted that the three brokers are industrial brokers and do not have experience in this area; high tech office space; Councilman Penna pointed out that bio-science is a separate industry; Macy's area is ideal for residential with some amount of retail which the market will support; Councilman Datzman noted the report mentioned a potential for a movie theater because of the park- ing and wondered if that would be addressed later on; no, the expert in the firm on entertainment and BART development is not present tonight; City Manager Wilson stated they were planning to do a major expansion in the Tanforan area, so this would be secondary and not desirable; Mayor Fernekes pointed out that was one of the discussions with BART to use the parking lot at night; the BART site is isolated, people are parking there and taking BART to work and Mr. Fuchs does not think a restaurant would work there; the report talks about high quality town homes and apartments, yet how is this justified when other houses are not selling; Councilman Penna agreed with Councilman Datzman that this is a report to start discus- sions and maybe it could be refined a little more; he has a concern with apartments because we are in a residential neighborhood with some commercial and the apartment market would be centered around commercial activities, and there aren't any, and he looks at it as another Willow Gardens or Shelter Creek; this is where you have an apartment type of complex in a residential area and this doesn't work; this report does not address the decline in this type of development, the type of people that locate there and the type of rents; besides saying there is a demand in the bay area it doesn't say why this is a good location; it mentions the desirability to be near the BART station; more than a grocery store is needed because what is being talked about is ~ENDA ACTION TAKEN __L El Camino Corridor market analysis - Continued. 2. Scavenger franchise agreement/junk collector ordi- nance. S'.~ a.'7 Councilman Yee Arrived at the Meeting at 6:43 p.m. 072 almost the scale of what exists on the Embarca- dero and the other is completion of housing in the area; the housing figures on page 4 and page 8 do not relate, one is the whole of S.S.F. and the other is a two mile radius; Colma has a large shopping district with a small population; there is one per- spective buyer, Lincoln, and this is in a redevelop- ment area and we have to take a look at the whole plan unless Council has a need to pursue a residen- tial project; Lincoln had an option on the property and we avoided talking to them until the analysis was done; the analysis said they are an excellent firm; Vice Mayor Mullin wants a list of Lincoln's residential developments in order to visit them, etc. Councilman Penna stated he had a conflict of inter- est and left the meeting at 6:40 p.m. City Manager Wilson related: back in 1989 the State of California adopted public policies for the Integrated Waste Management Act; we were told you must divert where you dispose of the waste; the big thrust was to divert the filling of land fills and getting to the recycling, and a year later we entered into a franchise agreement for a ten year period that will last to 2001; in 1995 we started working with the Scavenger Company and asked them for a work program to meet our obligation of reducing the landfill, because under State law it is the City that has the obligation to divert the waste stream and the Scavenger Company was willing to do that for us even though it is not in the franchise document; the City is required to comply with AB 939, which mandates that all jurisdictions divert at least 25 % of their solid waste from landfills by 1995 and at least 50% by 2000; a failure to comply with the diversion requirements can result in the imposition of signifi- cant fines and penalties; BFI dominates the market; education of source separation is difficult without a recovery facility and the Scavenger Co. has to go out and find funding for the 7 to 10 acres needed; to lend money the Waste Management Board looks at secure debt service, the agreement only goes to 2001, so they are talking about negotiating an ex- tended franchise agreement, without a bid process; this would meet the diversion goals, the State policy and transferring that obligation to the Scavenger Co. with full responsibility; staff has tried to maintain the low rates and continue service levels; this agreement would be a 20 year term with a ten year 6/5/97 Page 4 AGENDA ACTION TAKEN . 073 Scavenger franchise agreement/junk collector ordi- nance - Continued. term with a ten year extension so they can borrow money; this is an exclusive franchise to handle all handle all waste and its sufficient on their part pro- viding it is source separated and has the standard clauses and safe working equipment; there is train- ing for safety and courteous employee clean-up, and the franchise fees provide an indemnity back to the City and meets the public policy goals. Discussion followed: Vice Mayor Mullin noted, with respect to the ten year option, the option rests with them as long as they meet the contract; assuming they fail to meet it for it is 30 years; yes, and the balance if they are satisfactory; the rates are tied to the market place; staff went out and identi- fied a listing of cities that were broad and big enough for their are no perfect comparisons of What the market is in charging for the services, so we made a cap after identifying sizes of cans for com- mercial and residential at 95% of the average; Councilman Yee sat through a five hour BCDC meeting in S.F., but you don't have the rates there to deal with; the Finance Director will be surveying the rates in future; Councilman Yee wants to see those numbers before Council takes final action; this is just the study; staff provided for annual cash flow and every 3 years take a look and not let them ex- ceed the 95% cap; in the past there was an audit process that determined the necessary dollars for the next year to meet the anticipated expenditure levels, however, that is not in this document for this franchise will be tied to the market place cap; the fund balance was $1.8 million and that is being eliminated and taken out of the bank and the concept will not be used in the future; the Scavenger Co. does not handle all the material that leaves this town; there is a fair amount of tonnage and it is credited to the Scavenger's account and they cannot tell you why that occurs because we don't have control over the Ox Mountain and they have partial control of how the State mandates the numbers; we started looking at the junk collectors for any person or organization has the right to collect source recycling and it is allowable under the franchise and ordinance; it is source separated because you don't want rubbish mixed in and if you can centralize all rubbish with one operator you have better control and the Scavenger Co. is handling the entire MERF; although that is current law the Company is finding reports of the County saying waste is getting in there, but this was being attributed to one of the 6/5/97 Page 5 AfiENDA Scavenger franchise agreement/junk collector ordi- nance - Continued. _AC_TIQN TAKEN ',., 074 registered companies; even if it says source you are dealing with a number of customers and there is commingling, but is it measured in pounds or tons; how does the State Health measure if the Scavenger Co. is meeting their obligations; four times a year they measure and extrapolate for that quarter; the land fill people let anyone dump material; the Mu- nicipal Code provides that no person other than the Scavenger Co. can collect solid waste, although licensed junk collectors can collect source-segregated recyclable materials and reports from San Mateo County, based on samplings at landfills, indicate that substantial amounts of solid waste from S.S.F. are disposed of by persons other than the Scavengers; these disposals threaten the City's ability to reduce the amount of waste going to the landfills and fulfill- ing compliance with AB 939; a recent APpellant Court decision says, let's not charge people to haul away trash; the Scavenger Co. keeps track of people getting junk collector business licenses; junk collec- tors want a meeting before the junk collector ordi- nance goes to Council and are concerned with the franchise; staff's thought is to proceed with the franchise and next week start meeting with the recyclers on an ordinance to meet our goals on AB 939; Councilman Yee stated the junk collector ordi- nance could change the franchise agreement; Coun- cilman Yee stated the 30 year contract concerned him, not on the time but on the commitment; the rate will be based on the cost of living; no, the rate will be based on a market comparison occurring every 36 months; Councilman Yee stated he would take Peninsula cities adjacent to S.S.F. and use that as a benchmark, he would take the annual adjust- ment based on the cost of living and the cost of living for the last 30 years, for it could be 120%; he is not ready to accept that, knowing that the cost of living today is only 3 and 1/2%; he is afraid that a thirty year span is too great a time and he wants to see a maximum like his mortgage payment; there is 25% yet to go to meet AB 939; if the City does not meet the goal how much legally would we still be obligated; does the Scavenger Co. have a bond or do we have to pay; Assistant City Attorney stated the State will go to the City and we have an obliga- tion to reasonably comply and then we turn to the indemnification and assuming the caveats don't apply, they kick in and it becomes their burden; perhaps we should have a monitoring program and not wait until after the fact; City Manager con- curred, and is working with the Scavengers and told 6/5/97 Page 6 AGENDA ACTION TAKEN O75 Scavenger franchise agreement/junk collector ordi- nance - Continued. them we needed a program; the City of Millbrae has more routes with the automatic arms because of the grade structure, but does not have the industrial base; there are many variables when you look at the individual cities, so you get a sample and then you average; staff does not know how many cities had extended franchise agreements; to meet the MERF obligations there must be material separating to get the maximum amount of things out; how you deal with violators; if there was a penalty clause in the previous agreement, it can be put in this agreement; recycling fees; Mr. Doug Button stated the ScaVen- ger Co. does not charge customers for recycling; it is not through a lack of the Scavenger's efforts that more people are not recycling, but the residents or apartment owners and the MERF is needed; a lot of the land owners don't have the space or can't place bins because of the fire restrictions; Coun- cilman Datzman stated there needs to be a program to meet the State mandate; the Scavenger Co. is trying to do that in the industrial areas; Mayor Fernekes noted the MRF will get us to the 50% level, and if someone says they don't want to recy- cle the MRF will pick it up; that will be more ex- pensive, because the more you can get out volun- tarily, the cheaper it is; Ms. Stephanie Uccelli stated Andy Roach has a lot of experience in financing these types of programs; Mr. Roach stated he has worked about 20 such projects of this type of fi- nancing and has worked with companies and cities; this is financed with bonds, but these are sold on a letter of credit as required by banks and they will be happy to do it on a five year basis; each city does things differently and this is a positive part of the solid waste program, so if you are one of the cities that had a city sanitation plant and did the work, then you would have to build the facility and do it for a 20 to 30 year period; Mr. Roach stated he is an attorney, from Newport Beach, a financial advi- sor and special counsel for 20 projects where he wrote the agreements with the city and the compa- nies and arranged the financing; Councilman Datzman asked if it was normal to have this type of extended franchise agreement; he is hearing it is not unusual because of the new mandates, and if that is the case he would be more comfortable to have a list of those cities having the extended agreements; that will be provided to the staff for Council; Ms. Stephanie Uccelli gave a in-depth analysis of compli- ance with AB 939; Ms. Bobblitt thought this was going to be postponed and a presentation be made 6/5/97 Page 7 ~ENDA ACTION TAKEN ,. 076 ..._... Scavenger franchise agreement/junk collector ordi- nance - Continued. later, for she was notified of this, had a meeting Friday, and did not have the opportunity to meet with staff after preparing our side of it; she asked for a timeframe, because she did not know what the big rush was, for this could put them out of busi- ness; Ms. Lisa Bower stated her major concern is in reviewing the ordinance and last Friday at the meet- ing a suggestion was made by the city for the alter- native of coming back after considering the franchise and the ordinance rather than there being a future conflict; City Manager Wilson stated the franchise document itself would not be in conflict, the jeopar- dy is whether or not an ordinance is enacted to prohibit the franchise to meet their obligations, then the fear would be from the Scavenger's viewpoint; Councilman Yee questioned why Council needs to take action next week, why not wait until both ordi- nances are ready and adopt them at the same time; City Manager Wilson stated he had the impression there was little or no concern with the franchise document, two weeks is not critical and we are trying to get them off the calendar and we already indicated to the recyclers that we were going to continue the enactment of the ordinance; it was staff's viewpoint, for we still have objectives and want to meet those objectives, but if not possible we felt a greater obligation to meet the public concerns, for that is the diversion and overall public rates; Assistant City Attorney stated there is legislation in Sacramento, AB1066, that will limit the enforcement of indemnification such as this franchise and that would apply to those enacted after the first of next year; Councilman Yee stated this is the first time Council has discussed the item, so there shouldn't be any thoughts by staff that there doesn't appear to be any problems, for nothing came from him saying that this looks okay; so, his suggestion and comment tonight, for this is the first time we discussed this and, staff has to deal with Council concerns, so two weeks may be appropriate; City Manager stated that may be because there are issues that could change the language, so it may be the 25th before it is redrafted; Councilman Datzman had discussions with the City Manager, because he didn't have information on history; he also saw an article in the paper that they are concerned and are talking about the real focus on the franchise agree- ment and people are saying they have concern with the recycling; if that is the case, then the questions raised about how many recyclers or junk collectors 6/5/97 Page 8 A~ENDA ACTION TAKEN 077 r2. Scavenger franchise agreement/junk collector ordi- nance - Continued. Closed Session, pursuant to GC 54957.6, labor nego- tiations for AFSCME, Management, Confidential and 6/5/97 Page 9 needs to be answered; staff thinks there are 8 or 9 and two organizations; only two attended the meet- ing and one said he could have named another 5 players that should be on the list; Councilman Datzman stated he did not know what happened at the meeting Friday, but it may be that the issues will take time to resolve and it should be postponed, as well as the franchise agreement; City Manager expects to have the franchise agreement worked out by the 25th, as well as the junk collectors; Council- man Datzman is concerned with the engineering, education and enforcement on the landfill; City Manager stated suggested transferring the enforce- ment over to the market place, the obligation, and through their marketing and education they have to go through the MRF; if you take a look at the origi- nal ordinance modification, it took away the incen- tive to take anything other than source separated material, so you create an economic thing rather than being a policeman; Councilman Yee sat on the Scavenger Subcommitte when he first came to Coun- cil and has gone through a lot of education dealing with the current franchise agreement; there were a lot of heated discussions trying to be fair on both sides; the concept is good, we need to streamline a certain area so as to protect it, and we need to do the best we can to negotiate an agreement, that is our job to get the best deal for our citizens; Vice Mayor Mullin stated his initial appraisal was that there is some economic sense in an extended fran- chise and the goals, but he doubts most cities are going to meet it at year 2000 because a lot of people didn't meet the 25% and are way short, including S.F.; when he was elected he inherited Mrs. Teglia's three boxes on the Scavengers and believes these two subjects are inexplicably tied together and it's foolish to take them separately; there have been issues raised that are valid and have material impact on the franchise, but in the broad scope he thinks the approach the scavengers are using does make sense to the citizens and we are here to give them predictability in the rates and looks forward to input from the other parties for an equitable conclusion; Mayor Fernekes concurred with the Vice Mayor and said we are trying to get the best rates for the residents as we did in the electric con- tract we adopted, so we are looking at the 25th or sometime shortly thereafter. Council entered a Closed Session at 8:05 p.m. to AGENDA ACTION TAKEN 3. Closed Session - Continued. Executive Management. RECALL TO ORDER: ADJOURNMENT: discuss the item noticed. 078 Mayor Fernekes recalled the meeting to order at 9:05 p.m., all Council was present except for Councilman Penna, no action was taken and direc- tion was given. M/S Yee/Mullin - To adjourn the meeting. Carried by unanimous voice vote. The time was 9:06 p.m. RESPECTFULLY SUBMITTED, Barbara A. Battaya, City of South San Francisco APPROVED. lac entries of this Council meeting show the action taken by the City Council to dispose of an item. Oral communica- tions, arguments and comments are recorded on tape. The tape and documents related to the items are on file in the Office of the City Clerk and are available for inspection, review and copying. 6/5/97 Page 10