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7/28/2008MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA MONDAY, JULY 28, 2008 CALL TO ORDER A regular meeting of the City Council of the City of Rolling Hills was called to order by Mayor Hill at 7:30 p.m. in the City Council Chambers at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. ROLL CALL Councilmembers Present: Black, Lay, Pernell, Mayor Pro Tem Heinsheimer and Mayor Hill. Councilmembers Absent: None. Others Present: Mike Jenkins, City Attorney. Yolanta Schwartz, Planning Director. Marilyn Kern, Deputy City Clerk. Lt. Greg Ahn, LASD, Lomita Station. 3. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. a. Minutes - Regular Meeting of July 14, 2008. RECOMMENDATION: Approve as presented. b. Payment of Bills. RECOMMENDATION: Approve as presented. C. Southern California Edison Company's Application for Increase in Electric Revenues filed with the California Public Utilities Commission; A.08-07-021. RECOMMENDATION: Receive and file. d. Allied Recycling Tonnage Report for June. RECOMMENDATION: Receive and file. e. California Water Service Company transmittal for filing changes in its tariffs filed with the California Public Utilities Commission; Advice Letter No. 1866. RECOMMENDATION: Receive and file. f. Correspondence from Cox Communications regarding the launch of two full time HD channels for the 2008 Beijing Olympics. RECOMMENDATION: Receive and file. Mayor Pro Tem Heinsheimer moved that the City Council approve the items on the consent calendar. Councilmember Lay seconded the motion. Following an explanation that the correspondence from Southern California Edison Company is advisory in nature and that the City has no jurisdiction over utility rates, the motion carried unanimously. Mayor Hill presented Councilmember Pennell with a certificate from the City Council congratulating him on his granddaughter's participation in the Summer Olympics in Beijing and wishing her good luck in her rowing events. PLANNING COMMISSION ITEMS None. TRAFFIC COMMISSION ITEMS None. PUBLIC HEARINGS None. Minutes City Council Meeting 07/28/08 -1- OLD BUSINESS None. NEW BUSINESS CONSIDERATION OF OPTIONS FOR UNDERGROUNDING THE UTILITIES BEHIND 17 AND 18 PORTUGUESE BEND ROAD. Planning Director Schwartz presented the staff report providing background regarding the Council's previous actions related to this matter and the current status of the progress to date on the underground utility efforts as well as the request of the owners of 18 Portuguese Bend Road to relieve them of the requirement to underground the telecommunications lines behind 17 and 18 Portuguese Bend Road and to consider the offer that funds remaining in escrow be dedicated to the City for future undergrounding projects at other locations in the City. She reported that since the posting of the agenda and its delivery to the City Council that correspondence had been received from NextG, which provides a quote to underground their facilities in the area. At the conclusion of her report she provided information regarding the remaining funds being held in escrow for the completion of this work. Discussion ensued regarding the balance of funds in escrow, the cost estimates provided by NextG and Cox Communications, to underground their facilities and suggestions on how the work could be done reasonably. It was suggested that the utilities might not wish to complete the work and therefore have provided extremely high estimates. It was explained that the utility companies require that they install their own wires and cable and therefore going out to bid for the work is not possible. It was discussed that others could do the trenching work. Mr. Art Yoon, Manager of Government Affairs for Cox Communications, explained that this project could be completed if there was enough time and enough money. He introduced Mr. Scott Swendner who provided copies of Cox Communications construction cost estimate for this project. He indicated that the estimate, which is in excess of $200,000, is due to the complexity of the fiber optic system and reported that the parameters of the job would be much greater than just the two properties on Portuguese Bend Road. He said the project boundaries would be from Crest Road down Portuguese Bend Road to Palos Verdes Drive North. He further explained the fiber optic links at Crest Road and Palos Verdes Drive North and indicated that the fiber optic cable could not be spliced in between these two locations and therefore the entire span would need to be replaced. He said that splicing would compromise the integrity of the system. Discussion ensued regarding the process of providing cable service to individual residences and Mr. Swendner explained how emergency repairs and individual home hookups to the system are accomplished. Further discussion ensued regarding the estimate provided by Cox and whether the City should consider the entire project given the proposal by Cox. Comments were offered that this project would only benefit the property owners of 17 and 18 Portuguese Bend Road and whether the property owners would be willing to undertake this project at such a high cost. Discussion ensued regarding the underground utility project accomplished at 13 Portuguese Bend Road several years ago. It was noted that this project occurred before fiber optic systems were installed in this area. Mr. Ken Allen, utility consultant for the subdivider and the property owners of 17 and 18 Portuguese Bend Road, explained the project at 13 Portuguese Bend Road and reported that there is an Edison vault on that property. Mr. Scott Gobble, Southern California Edison Company explained that at the time of this project that Cox Communications was utilizing a coax cable system. Concerns were expressed about the huge difference between the proposal from Cox and the proposal from NextG. Mr. Allen reported that he is not sure whether NextG has a full understanding of the project at 17 and 18 Portuguese Bend Road. In response to Mr. Allen, Mr. Swendner explained the process of several utilities installing cables in a single bundle. Mr. Allen commented on the completion of the first phase of the project and indicated that a pole still needs to be moved at the rear of 18 Portuguese Bend Road. He stated that the utilities are aware of this and that the work would be completed. He explained that the Minutes City Council Meeting 07/28/08 -2- relocation of the pole has been part of the plan already being undertaken by the utilities. He also commented on the remaining funds in escrow for the project and the offer of the subdivider and property owners to grant the funds remaining in escrow to the City for future undergrounding projects. Comments were offered about the parties that have contributed to the escrow and the offer that funds remaining in escrow be dedicated to the City for future undergrounding projects. Mr. Allen explained that the subdivider and the property owner of 18 Portuguese Bend Road are both not interested in continuing with the undergrounding project behind 17 and 18 Portuguese Bend Road and are wiling to dedicate these funds to the City but that the wishes of the property owner of 17 Portuguese Bend Road are not known at this time. It was noted that she is difficult to contact. Discussion ensued regarding the requirement in the third amendment to the agreement that if the property at 17 Portuguese Bend Road sells that an additional $150,000 be placed in escrow. Further comments were offered regarding the three parties that contributed to the escrow. The City Attorney indicated that all three parties must consent to the remaining escrow funds being dedicated to the City. Discussion ensued regarding the existing agreement between the parties and the City. Dr. Robert Marshall, Subdivider, stated that he feels that the property owner of 17 Portuguese Bend Road would want to continue with the undergrounding project and remove the pole on her property. He further stated that she has not been contacted. The City Attorney suggested that the share of the escrow funds from the property owner of 17 Portuguese Bend Road be separated from the remaining funds in escrow and remain in the escrow for the portion of the project on her property. Discussion ensued regarding the completion of the project and the high amount of the Cox estimate as well as the amount of funds remaining is escrow to complete the project and the fact that there are not enough funds in the escrow funds to complete the project given these costs. The offer of the subdivider and the property owner of 18 Portuguese Bend Road to dedicate the remaining escrow funds for another project were discussed. The City Attorney offered comments regarding the degree of benefit of this project being disproportionate to the cost. He commented that the City could negotiate with the parties and explained that there might be an underground project elsewhere in the City that would be of a greater benefit in a more significant way to the community that could utilize the unused escrow funds. Further discussion ensued regarding the previous amendments to the subdivision agreement granted and the conditions in the latest amendment that required an additional $150,000 be placed in escrow if 18 Portuguese Bend Road is sold prior to completion of the remaining undergrounding, that the required undergrounding is to be completed by January 12, 2009, that no gas meter is installed and no natural gas be provided to 18 Portuguese Bend Road until completion of the required undergrounding, and that no occupancy of the residence be granted until completion of the required undergrounding. It was explained that the property owner of 18 Portuguese Bend Road is requesting to be relieved of the remaining portion of the undergrounding requirements due to the costs and constraints outlined by the utility companies and has offered that funds remaining in escrow be dedicated to the City for future undergrounding projects at other locations in the City. It was noted that the property owner of 18 Portuguese Bend Road may wish to occupy or sell the home, which would necessitate the issuance of a certificate of occupancy. Councilmember Lay indicated that given the costs and magnitude associated with the project that he would propose that the City enter into negotiations with the subdivider and the property owners of 17 and 18 Portuguese Bend Road to release the gas meter to allow occupancy provided that the amount remaining in escrow be dedicated to the City for the purposes of undergrounding and, that in the event of the sale of 18 Portuguese Bend Road and the undergrounding has not occurred that, $150,000 be added to the escrow account. He suggested that the escrow funds could be held for a period of eighteen months while further discovery be initiated regarding an undergrounding project on those properties either with the existing owners or a new owner of 18 Portuguese Bend Road or in another area which would benefit the City. Following further discussion regarding whether the property owner of 17 Portuguese Bend Road wishes to continue with the underground project on her property and whether she is willing to dedicate her potion of the escrow funds if the undergrounding is not completed, Councilmember Lay moved that the City Council direct staff to negotiate a 4' amendment to the Subdivision Agreement with the Subdivider and the property owners of 17 and 18 Minutes City Council Meeting 07/28/08 -3- Portuguese Bend Road and that upon completion of an acceptable 4th amendment that contains the following points, a certificate of occupancy be issued for occupancy of the residence at 18 Portuguese Bend Road and gas be released. • That the Subdivider and Property Owners of 17 and 18 Portuguese Bend Road are given an additional 18 months to complete the underground improvements from the date of this amendment, • That an additional $150,000 security deposit be made with the City at the time of sale of 18 Portuguese Bend Road, and • That if the undergrounding improvements are not completed within the eighteen months, the Subdivider and Property Owner of 18 Portuguese Bend Road agree in lieu of completion of the undergrounding improvements to release their proportionate share of the funds to the City's undergrounding fund for use on an undergrounding project of City's choice at City's discretion, and • That if the Property Owner at 17 Portuguese Bend Road does not agree to releasing her portion of the funds currently in.escrow for this project to the City after the 18 month period, then her proportionate share be retained in escrow or in trust by the City for use towards completion of the underground improvements on her property. Mayor Pro Tem Heinsheimer seconded the motion. Discussion ensued regarding the suggested eighteen -month timeframe. It was noted that the subdivider and the property owners would need time to further investigate whether any undergounding work can be accomplished on their properties with the remaining funds. Concerns were offered regarding the, remaining escrow funds being placed in the City's general utility fund for use on a project elsewhere in the City. Discussion ensued regarding the possible setting of a precedent in this case. It was noted that in future subdivision cases that the City should request larger improvement bonds. The City Attorney explained that in his opinion due to the contractual nature of this case and the benefit cost ratio being so skewed that this solution would not set a precedent. The City Attorney further explained the contractual arrangement between the City and the subdivider and property owners, which requires them to underground the utilities and the request from the parties to the contract, to change the contract in exchange for the dedication of the remaining escrow funds for another project in the City. He indicated that he feels that there are no obstacles to the two contracting parties coming up with a modification to the contract, which is of a mutual benefit as long as all parties agree. Dr. Robert Marshall, Subdivider, and Mr. Menelaos Saridakis, property owner of 18 Portuguese Bend Road, both stated that they agree to the amendments to the contract outlined during the Council's discussions this evening. Following the discussion, the motion carried by the following roll call vote: AYES: Councilmembers Lay, Pernell and Mayor Pro Tem Heinsheimer. NOES: Councilmember Black and Mayor Hill. ABSENT: None. ABSTAIN: None. OPEN AGENDA - APPROXIMATELY 8:00 P.M. - PUBLIC COMMENT WELCOME None. MATTERS FROM MEMBERS OF THE CITY COUNCIL Councilmember Pernell reported that he would be in China observing his granddaughter's participation in the Summer Olympics and will not be in attendance at the next meeting. MATTERS FROM STAFF None. Minutes City Council Meeting 07/28/08 -4- 1 MATTERS FROM THE CITY ATTORNEY CLOSED SESSION The City Council finds, based on advice from legal counsel, that discussion in open session will prejudice the position of the local agency in the litigation. Existing Litigation: G.C. 54956.9(a) Hui -Tse Sheen, Individual, Plaintiff, vs .City of Rolling Hills, Rolling Hills Community Association, et. al., Los Angeles County Superior Court, Case No. YC051963. G.C. 54956.9(a) Jonas, et al. v. City of Rolling Hills, et al., Los Angeles County Superior Court Case No. YC033955. G.C. 54956.9(a) Freeman v. City of Rolling Hills, et al., Los Angeles County Superior Court Case No. YC054015. Conference With Labor Negotiator: G.C. 54957.6 City Negotiator: Anton Dahlerbruch, City Manager Unrepresented Employees: Finance Director, Planning Director, Deputy City Clerk / Secretary to the City Manager and Clerk Typist / Receptionist. No closed session was held. ADTOURNMENT Hearing no further business before the City Council, Mayor Hill adjourned the meeting at 9:15 p.m. to the next regular meeting of the City Council scheduled to be held on Monday, August 11, 2008 beginning at 7:30 p.m. in the City Council Chambers at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Approved, ll Mayor Minutes City Council Meeting 07/28/08 Respectfully submitted, K,.,Qh,� Marilyn Kern Deputy City Clerk -5-