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HomeMy WebLinkAboutMinutes 2009-04-15MINUTE S ~o~za S~v,{, SPECIAL MEETING o -~ ~, REDEVELOPMENT AGENCY `' ° CITY OF SOUTH SAN FRANCISCO c'~LIFOR~~~ CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA 94080 WEDNESDAY, APRIL 15, 2009 Call to Order: 7:06 p.m. City Council and Redevelopment Agency Roll Call: Present: Councilmen/Boardmembers* Garbarino, Gonzalez and Mullin, Vice Mayor/Vice Chairman Addiego and Mayor/Chairwoman Matsumoto. Absent: None. *For reporting purposes, Participants are referred to by their titles affiliated with the City Council. Mayor Matsumoto announced an item that was proposed for emergency consideration - a resolution supporting AB 1358, Assemblyman Hill's Bill, which would ban food vendors from distributing Polystyrene and other non recyclable food packaging. The Mayor requested a roll call vote as to whether the item should be placed on the Agenda. Council voted to place the item on the Agenda by the following roll call vote: AYES: Councilmen Garbarino, Gonzalez and Mullin, Vice Mayor Addiego, Mayor Matsumoto. NOES: None. ABSTAIN: None. ABSENT: None. 1. Public Comments -Comments were limited to items on the Special Meeting Agenda. Public comments were reserved and addressed during the specific agenda items to which they pertained. 2. Caltrain Station discussion. Terry White, Director of Public Works stated that at the previous week's meeting, Council contemplated a resolution urging the Joint Powers Board (JPB) to continue the project and discussions with Union Pacific (UP). It was requested that a representative from the JPB be made available to Council, if possible. Ian McAvoy, Chief Development Officer from Caltrain was invited to attend and was present at the current meeting to answer questions and discuss reasons for project delay and funding. Mr. McAvoy stated that the JPB had been working diligently behind the scenes and had encountered two (2) major obstacles; First, with respect to ongoing UP negotiations, he framed the issue as being that UP owned property in the vicinity of the station location and trackage rights on the baseline Caltrain system. UP was negotiating on many different fronts in the Bay Area and it is clear that UP is more interested in what JPB calls a global deal on all rail issues. This has two impacts for South San Francisco: 1) UP has blocked JPB from touching any of its properties; 2) UP has denied JPB the opportunity to relocate tracks affecting the baseline project. A secondary issue was that the JPB met with Council approximately two (2) years ago to discuss a different project that included four (4) tracks with platforms on the outside. Subsequently, it was decided that the South San Francisco location did not call for four (4) tracks. A redesign was completed to include center boarding platforms, which worked better for Caltrain and still does if High Speed Rail ("HSR") were not on the agenda. Caltrain believed that HSR was going to need more tracks to operate a joint use corridor. HSR was currently in a preliminary design and environmental process which would determine HSR's locally preferred alternative on the alignment project. To operate on the levels of service that HSR and Caltrain were proposing, the station needed to be redesigned to be a four (4) track corridor, with the Caltrain tracks on the outside, similar to the Bayshore Station. Mr. McAvoy further stated he had recently attended a meeting with HSR at which he learned that practical constraints had arisen, but Caltrain still believed it had enough information to move forward with the underpass portion of the project. Barring any further UP or HSR issues, Mr. McAvoy was confident that Caltrain would be able to separate the two (2) projects out and proceed forward with the underpass. However, he noted that this would require two (2) separate contracts including a contract pertaining to the underpass and a future contract pertaining to a potential re-work that would come at an increased in cost. Mr. McAvoy next explained the length of the delay was unknown, but the HSR environmental document was expected to be complete by fall 2011. Potential lawsuits involving the particular environmental document might cause delay. UP's biggest issue was how to position itself to take advantage of one of the biggest Public Works projects in CA history, thus making the South San Francisco project inconsequential. In summary, Caltrain believed it was not prudent to continue with the proj ect because of the two (2) issues, UP and HSR alignment. Mayor Matsumoto stated that Council had hoped for the South San Francisco station to be a hub for transportation in the Downtown District. The understanding was that when electrification came, the South San Francisco Station would have more stops. She questioned whether this was going be a holdout track and whether South San Francisco had any leverage? Mr. McAvoy stated that this was one (1) of the last remaining stations on the line that still had the holdout rule due to track configuration, meaning only one (1) train could come into the station at a time while the other holds out. South San Francisco was also an expensive property to deal with because of the UP properties and storage tracks next to the station. Caltrain was committed to fixing this because of the operational constraint which impacts reliability. Caltrain was hoping to eventually have 100 SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 2 trains running per day up from the current 98. In terms of the UP issues, Mr. McAvoy did not have an answer for that. UP was focused on its own objectives. In terms of the underpass issue, Caltrain and the Transit Authority (TA), had an obligation to work with cities to utilize the funds as best as possible and providing the underpass would not only give access to the Caltrain Station it would provide access to the Westside/Eastside section and serve as an economic development program to help the City. Mr. McAvoy further responded that Caltrain had plans to move up to eight (8) trains per hour. Trains would stop more regularly and each station would have a lot more stops due to the acceleration and deceleration times. He noted that Baby bullets are successful because they are competitive with the automobile. Councilman Mullin maintained the project was still key to Downtown revitalization and did not want to let it go, even with all the hurdles. He expressed concern, however, about building Phase One (1), a tunnel that has no pedestrian access to an existing platform in hopes of a global HSR deal, that would then trigger phases two (2), three (3) and beyond. He would not want to spend $21 million in tax payer money and have the rest of the deal implode. He expressed a desire to move forward and maintain momentum without risking tax payer money and questioned whether the funds could be placed in escrow or some other type of account until an agreement is reached between HSR and UP. Mr. McAvoy explained that he had talked with staff about doing designer risk, meaning to go forward with design for a future facility without having all of the inputs of criteria in your proposal, which would need to be tied into the HSR standard. He noted there currently was no HSR commitment to pay for a portion of the project, because it could not make the commitment until completion of the environmental document. Mr. McAvoy believed the TA has made a commitment over and above what it would normally do because it has committed to paying for the underpass, which is more than it has committed to on other locations. In terms of the escrow issue, Mr. McAvoy stated that the money was not going anywhere right now. Councilman Mullin questioned whether if Council were to take action and not move forward on the tunnel, would there be any assurance that the money for Phase One (1) would still be there when all of the issues were worked out. He felt as if the City was being faced with a Hobson's choice: if we move forward and the other phases don't happen we will have spent $20 million in tax payer money and have nothing like what was initially planned, but if we don't move forward, the money goes away and we would have absolutely nothing. Mr. McAvoy explained the TA was the origin of the funds. There was also money from the Caltrain Improvement line from a 2005 measure. There was a Capitol Program commitment to do the job even if the contract were suspended. The TA's commitment remains, and it would not take the money and spend it somewhere else. He stated that the real issue seems to be either proceeding forward without all the data and details of what the station is going to look like or waiting to do the entire project together. However, a firm commitment on when the latter was going to happen could not be given. Councilman Mullin questioned the smart way to proceed. Mr. McAvoy responded that as a Railroad Executive his opinion was to wait until the station was fully designed, to have a completely compliant underpass with a station. His professional opinion was not to SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 3 do the phases of the project separately. Councilman Mullin questioned the merit of the tunnel as the East/West connector in and of itself and the existence of East to West access that gets pedestrians under the freeway or conceivably up to the existing platform. He believed a reconfiguration must be done that would enable access up to that existing platform. Terry White, Director of Public Works explained the components to the station were the platform, the plaza, and the parking lot. Connecting these components together would be key and removing any one element would leave them dysfunctional. Having just a tunnel over to Comfort Suites, with no access to the existing station or parking lot nets the City nothing except per annum a bill to pay, plus the maintenance. Mr. McAvoy concurred with Director White. Councilman Garbarino stated he didn't see this project as being one that could be piecemealed together. Mr. McAvoy stated that Caltrain was committed to fixing the station because the alternative was to close it, which would not happen. The TA continues to be committed to the project as well. Ultimately, if costs go up exponentially then we will have to revisit funding options. If the station itself had to be redesigned and ultimately re-planned and rebuilt with HSR playing a key role, Caltrain would request money from HSR. Mayor Matsumoto commented that Jack Meyers, who owned Centennial Towers, has had headhunters from Palo Alto and other areas that were looking to take up floors. However, the lack of public transportation was a real issue. Accordingly, she had provided Jack with some information on transportation scheduling, but ultimately, employees would be dropped off in Millbrae, not South San Francisco. She emphasized the importance of reliable access to public transportation in promoting growth East of 101. Councilman Gonzalez expressed concern about local businesses because the project was being sold as something they would benefit from. He also expressed concern about losing the funding if Council didn't act. He questioned how much of the money for the tunnel was connected with moving the station. He further questioned how Council could be sure the money was safe if it chose to wait. Mr. McAvoy stated that approximately $18 million was dedicated to the tunnel, the rest of the $51 million project price tag was for the station. Regarding assurances pertaining to funding, Mr. McAvoy stated he could not give specific assurances because he reported to a Board of Directors, but in terms of a commitment towards Caltrain, it is prescribed by law. While there was no specific station commitment, there was a programmatic commitment to get the job done. Councilman Gonzalez questioned if the funding being discussed also supported a part of the plaza entrance. Director White stated that the Plaza was property that needed to be purchased from Caltrans. The purchase price was currently being negotiated. The City had an agreement to pay for these additional features, which were not considered as part of the JPB's responsibility. SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 4 Councilman Gonzalez stated that originally he thought that building the tunnel would, at the very least, benefit East of 101 companies, Grand Avenue shopping and promote walking, but he no longer saw that as being enough. Vice Mayor Addiego thanked Director White and Mr. McAvoy for their clarity and frankness. His inclination was to go with Mr. McAvoy's professional opinion so that all variables might be known before going ahead with the design. He had a difference of opinion about South San Francisco being a destination station not an origination station, meaning when my citizens go to work, they're not going to take the train elsewhere. He stated that commuters were going to East of 101, where tens of thousands of jobs exist. He feared that the station was in the wrong location, and believed it should be on the north end of town. Historically when Oyster Point was Butler Road, that station handled the bulk of commuters into and out of South San Francisco. He didn't believe that having commuters coming into Downtown virtually under the freeway and then going to work was going to be the key element in the revitalization of the Downtown. Councilman Mullin stated if the location was the Downtown, it could it lead to a model T.O.D. corridor which would lead to people and market rate housing in the Downtown, and the potential to make South San Francisco more than a destination station. He agreed with the sentiments of Council to go with Mr. McAvoy's professional opinion and hold off until developments with UP and HSR progressed. Councilman Mullin. expressed continued optimism for the eventual fruition of the project, just not in the original time frame. Mr. McAvoy offered to return in the future if Council or staff desired. City Manager Nagel stated that Council must come to a consensus, and noted it was his understanding that Council would like to hold off on the tunnel at this time. Mayor Matsumoto confirmed that was the consensus of the Council. 3. Study Session: review and provision of direction related to proposed Five (5) year Sewer Rate Increase Plan. Director of Public Works White introduced the staff report including a Power Point presentation addressing Council's request to follow-up on discussions had at the City Council Meeting held March 25, 2009. At that meeting, Council asked Staff to rethink some projects and determine whether it could flatten out rate increases. Mayor Matsumoto stated that public comments would be taken after Director White's presentation. Director White presented and explained the options before Council. "Option II revised" detailed rate increases that consisted of a 10% increase for years 2009-2010 and 2010-2011, followed by an 8% increase for years 2011-2012 and 2012-2013 and ending with an increase of 7% for the year 2013- 2014. This was compared to the "original Option II," which had increases of 20% for the year of 2009- 2010, 10% for the year 2010-2011 and a 5% increase for the year 2011-2012. There were no further increases for the years 2012-2014 outlined in original Option II. Director White advised Council of some of the issues that might occur when squeezing the increase SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 5 down to 10%. Pursuant to this option, the debt would be stretched out over a 20 year period yielding an extra expense of roughly $3.5 million. Director White summarized vital improvement projects necessitating the rate increase as: outfall repair totaling $400,000, reliability improvements including items such as the replacement of three (3) digesters, retrofitting grit basins, and replacing the main emergency generators at a cost totaling $25 million and seismic upgrades for $400, 000. Projects of lesser priority but considered by Council to be good environmental investments include green technology upgrades such as installing new solar and wind energy, saving energy over time and reducing the City's carbon footprint. The cost of such upgrades was estimated at $5 million (net of grants and rebates). The City of South San Francisco also had a $5 million commitment to the recycled water facility with major partner contributions estimated at half or $20 million and additional contributions estimated at $13 million from CalWater and $1 million from the City of San Bruno. Staff also presented the potential environmental upgrades that could be mandated by the State Water Board, such as the removal of the threat of a near shore discharge and the elimination of blending (the mixing of a primarily treated affluent with fully or secondary treated affluent) products being pumped into the Bay. These mandates could occur within the current five (5) year National Pollution Discharge Elimination Systems (NPDES) permit. Mayor Matsumoto questioned the likelihood of the Board's Action in this regard on a scale of one (1) to ten (10). Director White estimated the number would be a four (4) based on the fact that the State Water Board did not like aspects of any plant discharging into the Bay. However, the City had a permit and the Board had so many other issues going on that by the time it got through reviews over the 5 year period, with all design, approvals and environmental aspects worked out, the City might be able to convince the Board it couldn't possibly start within the specified five (5) year period. Manager Nagel questioned the inevitability beyond the five (5) year window. Director White referred to a slide, reflecting the State's gradual increase of rates. The goal was to have South San Francisco send immaculate water to the Bay, which would come at a very high price. The City was running risks in adopting the proposed rate structure in that it was waiting one (1) year before starting on CIP projects. In preparing the proposal, staff looked at dynamic pricing as well as rates in other cities that typically charged a minimum base rate and then went by water consumption in previous years. Director White further explained that in order to charge individuals a rate based on their consumption, the City would have to revisit the process next year, after the required noticing under Proposition 218 informed customers of the City's intentions. Furthermore, additional scenarios would have to be run to ensure that cash intake remained similar to what is presently received. Director White stated that Public Works was more than happy to run scenarios for detailed examples and advised that adoption of a plan would not prevent later revisions. Mayor Matsumoto questioned the probability of increases being passed on to tenants from landlords/owners through rent increases in areas such as Old Town, where there was a higher density in units, if rates were based on usage. SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 6 Vice Mayor Addiego questioned whether the percentages applied to commercial customers and whether they applied across the board. Director White stated that the proposed increases would affect everyone equally. Citizen Margarita Lee expressed concern about rate increases on elderly individuals with fixed incomes and questioned whether rate increases could be adjusted based on age. Director White responded that state law very specifically states that you cannot specify lower sewer rates for senior citizens. Vice Mayor Addiego stated that he believed singles of any age would benefit from a usage based increase. Ms. Lee questioned how usage would be determined. Vice Mayor Addiego explained that this was being explored. He noted the City of San Mateo's rate structure as an example that South San Francisco might emulate. Citizen Dennis Beedie stated that CalWater probably had a system similar to that of PG &E in which it would hold information regarding water usage of individuals and companies for up to a year. That usage information would be important in making sure that rates were fair. He referred to the PG & E billing system and thought that South San Francisco should look at a similar type of system. He believed that those who have the most usage should bare the burden of higher rates. Director White explained that the rate one paid depended on the type of discharger one was. Different tiers of rate formulas applied to different types of businesses based upon how much they loaded the plant. The skew was towards industrial and commercial users so that they bore a bit more of the burden in favor of the residential customer. This was one of the reasons South San Francisco was on the lower end of San Mateo County for residential rates. Mr. Beedie questioned whether there might be an inadvertent omission of residents on the fringe of South San Francisco, such as Daly City, that might be using the City's facilities without paying. If this were the case, was it possible for the City to get an easement from such cities that have ocean discharge capabilities and discharge into the ocean to bypass dumping into the Bay altogether? Director White stated that at one point all sewage west of 280 went to the Daly City Plant and was discharged into the ocean. Given the logistics necessary to create a line to get over the hill now, astronomical prices laden with heavy debt would result. He noted that some of the increases being discussed stemmed from the debt incurred from compliance with the Cease and Desist Order (CDO) received from the Board in 1997. Vice Mayor Addiego recounted the discussion of ocean discharge many years ago. He explained the City's system was a gravity system, and it would cause astronomical prices to pump up and over the hill. Citizen Gino Baldisseri stated he had recently heard that water consumption was a Catch 22, residents conserve water but then the water companies raise rates. SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 7 Vice Mayor Addiego questioned whether the enterprise fund could be raided for general operating purposes. Assistant City Attorney Grossman responded that funds were deposited into a special account that must only be used for that purpose. Mr. Baldiserri questioned San Bruno's contribution. Director White stated that complicated agreements with San Bruno existed. Different processes had different contributions, but the contribution rate was approximately at 23.6%. San Bruno paid a higher cost for operations at the Shaw Road pumping station. Rates were broken out into various pieces for capacity rights, etc. Mr. Baldisseri questioned whether the increase option had already been decided on. Mayor Matsumoto explained the reason for the study session was for Council to provide direction to staff with respect to the preferred option. Mr. Baldisseri discussed the meeting of March 25, 2009, where two (2) attendees from the community were present. He stated he only saw two (2) sentences in the Burlingame Journal regarding the present meeting. He believed that more should be done to notify the public of proposed sewer rate increases. Council explained the publication of the agenda and the various locations where meeting agendas were available, such as community postings at City Hall and in the libraries located at West Orange and Grand. They also noted that agendas were available on-line. Vice Mayor Addiego agreed with Mr. Baldisseri about the community turn-out, and stated that when South San Francisco had a local working press, attendance was much greater. Director White stated that the meeting would set the path for what would be said on notices going out to all residents as part of Proposition 218. City Manager Nagel stated that all rate payers would be noticed and that mailings were expected to go out May 8th for a June 24th hearing date. Councilman Gonzalez agreed that while the meeting was well publicized, attendance was very low. Kate Rosenlieb, Finance Analyst II, clarified that usage cost rates were not in the model. Additional costs would be incurred to accommodate usage based rates, such as staffing, database creation, billing, etc. The soonest this structure could be implemented would be in one (1) year. Because the additional cost factors to accommodate usage based pricing were unknown, Finance Director Steele suggested that another 1% be added to what was shown on the slides for the last four (4) of the five (5) years. Vice Mayor Addiego asked for clarification as to where that 1% was being added; he estimated that in a dollar amount it would be roughly $5.00 Analyst Rosenlieb confirmed Vice Mayor Addiego's estimate. SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 8 Vice Mayor Addiego questioned the number of households in the city. City Engineer Razavi stated there were approximately 40,000 households in the City. Vice Mayor Addiego requested clarification that roughly $200,000 was needed to implement the usage based rate structure. Analyst Rosenlieb concurred and reiterated that the maximum was being requested. Vice Mayor Addiego noted that while he appreciated the need to frontload everything, the issue was to confirm actual need as the figures represented real dollars to real people. Ms. Lee expressed her remaining concern for the elderly, and questioned whether there was any way to come up with a rate break for them. Mayor Matsumoto stated that such a rate break was legally impossible. She further stated she believed many in the South San Francisco community were considered working poor and that age did not necessarily signify poverty. The law was designed to protect equality and the City of South San Francisco was trying to be as equitable as possible to all people. Vice Mayor Addiego stated that a usage based system would benefit users of all ages. Councilman Mullin questioned the time horizon for the proposed additional $3.5 million in debt financing. Director White stated that it was complicated due to the element of cost being spread out amongst the years, selling of bonds, etc. and referred to Analyst Rosenlieb for further clarification. Analyst Rosenlieb explained there was an array of different financing, including $9.75 million needed this year. The following year the City would borrow nothing proceeded by $14 million in the third year and $9 million in the fourth and fifth years. These proposed loans permit a flattening of rate increases and delay costs for a few years. Councilman Mullin questioned how that was represented in the five (5) year payment schedule. He further questioned the benefit a of price break given at the front end if the customer would be paying more over the entire five (5) year period and expressed a lack of support for the plan. City Manager Nagel clarified that original Option II had an increase of 35% compared to the 43 increase outlined in Option II revised. Councilman Mullin questioned the total amount paid by the customer during year one (1) based on the original Option II. Director White responded that year one (1) would be $461.00. Councilman Mullin stated that a rate of $461.00 would rank South San Francisco at number 10 in 17 -- somewhere in the middle of the spread of rates for local cities. While he appreciated the need to SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 9 alleviate the pain of an upfront rate increase, he expressed concern about the additional funds this would require over the next five (5) years. Director White stated that once the commitment was made and bonds were sold, they would go beyond five (5) years. Adopting the flattened rate structure option would commit the City and further Councils well into the future. Councilman Mullin referred to a slide in the presentation and questioned the location of the wind units. Director White responded they would likely be on the building itself and were really a minor player, for the purpose of adding power to the building. Vice Mayor Addiego clarified the buildings were along the canal. City Engineer Razavi stated there would be a minimum of 32 architectural wind structures, each generating one (1) kilowatt, which might be expanded after further testing. Vice Mayor Addiego turned to the discussion of reclaimed or recycled water. Philosophically he felt we should be saving as much clean water from the Hetch Hetchy. He questioned whether there was a better mechanism for funding the program given its lack of a connection to processing sewage. Councilman Garbarino stated his understanding was that there would be difficulty getting recycled water from point A to point B. While he agreed the City should pursue recycled water, he recalled it was an expensive proposition. Director White stated there were two (2) components to the recycled water program. One was the physical processing of recycled water at the at the plant to create the tertiary water. The second component involved pressurizing, pumping and getting it distributed out into the community. Mayor Matsumoto commented that the water transportation issue was being dealt with in conjunction with CalWater. Director White confirmed it was Public Work's desire to have CalWater as a player in the recycled water program, but ultimate agreements with CalWater on the issue were a long way off. Vice Mayor Addiego questioned the potential availability of grants or other funds to encourage communities like South San Francisco to reclaim water. Chief Engineer Razavi noted that half of the recycled water produced would go to National Cemeteries, which were a customer of the San Francisco Public Utilities Commission (SFPUC). Accordingly, SFPUC had verbally committed to paying at least half, or up to $20 million of the cost. The balance of the water would go into other usage, with .2 million for South San Francisco, and other allocations for San Bruno and the California Golf Club. He noted this was beneficial to both sewage and water users because pumping water out to the Bay would be reduced. Vice Mayor Addiego asked for clarification as to which portion of the system's capacity would increase due to the reclaimed water system. SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 10 Chief Engineer Razavi responded that it would increase the capacity for sewage treatment indirectly. As a whole system, many things would come together such as environmental improvements, etc., which would increase capacity. Vice Mayor Addiego questioned whether it was a good investment to contribute 12% or $5 million out of a $39 million project. He further questioned whether water would be delivered by CalWater indefinitely once the City entered into an agreement pursuant to which CalWater would contribute $13 million. Chief Engineer Razavi affirmed his belief that it was a good investment and noted that water would only be delivered to South San Francisco. San Bruno had its own water company and the SFPUC would be delivering it to the National Cemeteries. What was not determined was who would deliver water to the California Golf Club. Mayor Matsumoto questioned whether the City or SFPUC was considering delivery to other cemeteries. Chief Engineer Razavi stated that the cemeteries in Colma were being looked at as a second phase in the project and it was still to be determined who would serve them -- South San Francisco or Daly City. Daly City was also looking to expand their capacity from 2.6 million to an additional 3.2 million gallons/day at a cost of approximately $18 million for processing. SFPUC had committed to pump a certain amount of recycled water by a certain date, which is why it was very anxious to participate with South San Francisco, Daly City and other entities. Vice Mayor Addiego turned to the topic of digesters. He questioned how many of the five (5) were online and if the City was not processing the City of San Mateo's sludge, would it have fewer online. Councilman Garbarino questioned how many out of the five (5) digesters needed repairing. Director White responded there were four (4) digesters, including three (3) in use and one (1) out of service, which was rotated for maintenance and cleaning. The City was helping the City of San Mateo with its sludge for a cost because it had additional capacity at the plant. If it weren't, typically the City would still have four (4), it just wouldn't be at full capacity. In response to Councilman Garbarino's question, three (3) digesters from the 1950s definitely needed repair, including replacing steel banding to protect against failure due to a strong seismic event. Mr. Beedie questioned whether digesters would be built with increased height allowing them to remain on the same footprint. Director White explained that rebuilt digesters would have a slight increase in height as shown on the slide. This would increase capacity to allow cogeneration. Mayor Matsumoto questioned the potential to offset costs by entertaining other cities aside from San Mateo. Director White responded that yes, there was potential in that regard. Vice Mayor Addiego questioned CalWater's motivation for contributing one-third of the cost of the SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 11 recycled water program. He wanted to know what rights they would acquire by contributing $13 million. Director White explained that while there were no formal agreements solidified, CalWater desired the product to provide to potential customers, which would mean more Hetch Hetchy product to distribute to other users. Vice Mayor Addiego stated he understood the City was asking for the maximum numbers. He expressed a desire to take time to study the numbers and review the results at a future date. Chief Engineer Razavi commented that CalWater had quotas established with SFPUC in regard to how much recycled water they had to develop, because number one (1) was the Hetch Hetchy water that they used and number two (2) they were trying to get a lot of theses uses out of the well system. Mayor Matsumoto requested Council to provide direction to staff as to which option to pursue regarding sewer rates. Councilman Gonzalez requested clarification on what Council was going to approve, Option II from the first (1St) meeting or revised Option II. He expressed concern for those on a fixed income, but noted that the City had the obligation to maintain the water plant. Vice Mayor Addiego advised that finances were uncertain for all, including those on fixed incomes and those who work. He further commented that the timing of the rate increase was difficult. Councilman Garbarino agreed with the statement and added that if the May 19th bonds and propositions didn't pass, the government would be wanting even more from cities. He believed Option II revised was the more attractive option. He commented that rate increases, as unpopular as they were, had to happen. He noted that the rates for Option II revised were lower but more debt would accrue. Mayor Matsumoto questioned the debt amount again. Director White restated that the debt was $3.5 million spread over 20 years. He noted that Option II was based upon numbers calculated two (2) to three (3) months ago. He suggested that Council give direction to run further numbers in Option II for updated calculations. Vice Mayor Addiego stated Option II revised was more palatable. He saw it as the gentler option for the next year or two (2) and hoped residents would agree. Mr. Beedie concurred with Councilman Mullin about the cost of carrying $3.5 million in loans. He saw Option II original as the better option. Councilman Mullin stated his support for original Option II. Even though it maybe more painful in year one (1), he believed that it would keep rates lower in the long run not to carry the $3.5 million debt. He agreed with Vice Mayor Addiego about the recycled water element and felt it should be thought through a bit more. Councilman Gonzalez voiced his support for original Option II. SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2UUy MINUTES PAGE 12 Councilman Garbarino stated that he reversed his choice to the original Option II after taking into consideration carrying the costs of the $3.5 million. Vice Mayor Addiego stated he could go with the majority for original Option II. Mayor Matsumoto stated that Council had reached a consensus for Option II original. Discussion Re~ardin~- Eme~~ency Consideration ofAB 1358 Assistant City Attorney Grossman stated that the emergency clause of the Brown Act might not apply to Special Meeting Agendas. He therefore advised Council to avoid formal consideration of the issue through the emergency vote. As an alternative, Councilmembers could individually support AB 1386 through staff-drafted letters and/or the item could be placed on the Consent Calendar for the next City Council meeting. Council agreed. RECESS: 9:30 p.m. MEETING RESUMED: 9:44 p.m. 4. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code § 54956.8) Property under negotiation: City Owned Property at Oyster Point Marina (APN #'s 015-010-240, 015-010-260, 015-010-270, 015-010-500, 015-010-600, 015-010-630, 015-190-170, 015-190-190) Agency negotiator: Marty Van Duyn Negotiating Parties: City of South San Francisco, South San Francisco Redevelopment Agency, and Oyster Point Ventures, LLC. TIME ENTERED CLOSED SESSION: 9:45 p.m. OPEN SESSION RESUMED: 11:00 p.m. Report out of Closed Session: No Reportable Action. 5 . Adjournment. Being no further business, Mayor Matsumoto adjourned the meeting at 11:00 p.m. Submitted by: Anna M. Hernandez, Depu Cit Clerk City of South San Francisco Deputy Clerk, Redevelopment Agency Approved: Ka t~~~~'Satsumoto, Mayor City o outh San Francisco Chairwoman, Redevelopment Agency SPECIAL REDEVELOPMENT AGENCY & CITY COUNCIL MEETING APRIL 15, 2009 MINUTES PAGE 13