CITY OF PLEASANTON
CITY COUNCIL MEETING MINUTES
March 15, 2022
This meeting was conducted in accordance with Governor Newsom' s Executive Order N- 29- 20 and AB 361 COVID- 19 pandemic protocols.
REGULAR MEETING
Mayor Brown called the meeting of the City Council to order at the hour of 7:00 p.m. Councilmember Balch led the Pledge of Allegiance and provided opening remarks.
ROLL CALL
Present: Councilmembers Arkin, Balch, Narum, Testa, Mayor Brown
Absent: None
AGENDA AMENDMENTS
Interim City Manager Brian Dolan continued item 9.
Councilmember Balch pulled item 13 for presentation.
CONSENT CALENDAR
In response to Councilmember Balch, City Attorney Dan Sodergren confirmed Councilmember Balch' s prior " no" vote on Item 2 will be transferred to the second reading even if he votes to approve the balance of the Consent Calendar.
In response to Mayor Brown on item 7, Deputy City Manager Pamela Ott reported plastic sheeting is not specifically included or excluded but advised the City Council can add direction. Mayor Brown requested permanent materials be used in the temporary downtown pop- ups. The City Council agreed with this direction.
In response to Mayor Brown on item 16, Deputy City Manager Ott stated the June 4th Dash for Cash is a bicycle racing event. She advised it is in a business park on the weekend when there are very few people around.
In response to Councilmember Arkin on item 16, Deputy City Manager Ott clarified the Antiques Fair is an event usually presented by the Pleasanton Downtown Association ( PDA) and is not scheduled to return in 2022.
Mayor Brown opened the public hearing.
Darryl Smith stated he is one of the Dash for Cash' s organizers. He reported it is a cycling race happening for about 20 years where money is donated for every lap completed.
Mayor Brown closed the public hearing.
Councilmember Narum moved to approve the Consent Calendar, with an amendment to not allow plastic sheeting in item 7. Councilmember Testa seconded the motion.
City Attorney
1. Adopted findings regarding public health related to the COVID- 19 pandemic to support continued virtual public city meetings per Resolution No. 21-1249
2. Adopted and waived second reading of Ordinance No. 2236 adopting district elections for city councilmembers, establishing district boundaries of the city council districts, and amending Chapter 2. 04 of Title 2 of the Pleasanton Municipal Code * Councilmembers Balch and Narum voted " no"
City Manager
3. Approved meeting minutes of December 7, 2021
Community Development
4. Actions of the Zoning Administrator and Planning Commission
5. Approved first amendment to a professional services agreement with Van Meter Williams Pollack for $ 29, 786 to complete objective design standards for multifamily development, testing and revisions of the draft objective standards for the sixth cycle Housing Element sites, and other related services, for a new total contract amount of$ 150, 186 Economic Development
6. Public Hearing — Heard any protest concerning the renewal of the Tri- Valley Tourism Marketing District and levy of an assessment on lodging businesses within the District
7. Approved an Outdoor Dining Installation Grant Program to provide financial assistance to restaurants interested in constructing a semi- permanent outdoor dining area
8. Adopted and waived second reading of Ordinance No. 2235 extending the provisions of urgency Ordinance No. 2211, and Ordinance No. 2219, establishing a temporary 15 percent cap on commission charges by third- party food delivery services on Pleasanton restaurants during the COVID- 19 pandemic for an additional six- month period
Engineering
9. Continued — Adopt a resolution initiating proceedings for the formation of the Landscape Maintenance Assessment District, Windsor Landscape Maintenance District 2022- 1
10. Approved plans and specifications, review bids, and awarded a construction contract to Rosas Brothers Construction in the amount of$ 589, 502 for the Annual Curb and Gutter Replacements for Street Resurfacing Project, CIP No. 22509
Finance
11. Accepted the Monthly Disbursements and Investment Report for January 2022 Fire
12. Adopted a resolution declaring weeds, dirt, rubbish, and refuse upon or in front of certain described properties within the City constitute public nuisances and that they be abated, and set a public hearing regarding the abatement
City Council Minutes Page 2 of 22 March 15, 2022
Operations Services
13. Item pulled, moved to Public Hearings and Other Matters - Approve an agreement between the City of Pleasanton, City of Livermore, and Dublin San Ramon Services District for the construction and operation of a Temporary Joint Residential Recycled Water Fill Station and authorize $ 433, 333 for project expenses
14. Approved purchase order agreement with Valley Oil by increasing the not- to-exceed amount from 600, 000 to $ 700, 000 for fuel for City and Pleasanton Unified School District vehicles and equipment for FY 2021/ 22
15. Approved second amendment to the agreement with Tri- Signal Integration, Inc. for fire alarm maintenance and repair services for the not- to- exceed amount of$ 250, 000 Police
16. Approved of special event street closures for calendar year 2022 MOTION: It was m/s by Narum/ Testa to approve the Consent Calendar as recommended and as noted, with an amendment to not allow plastic sheeting in Item No. 07. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Narum, Testa, Mayor Brown Noes: None
Absent: None
MEETING OPEN TO THE PUBLIC
Councilmember Balch presented item 18 before item 17.
18. Presentation of a Proclamation recognizing Arts in Education month and April 2022 as Arts, Culture and Creativity month
Councilmember Balch read the Proclamation.
Pleasanton Cultural Arts Council President Kelly Cousins and Pleasanton Art League President Meghana Mitragotri accepted the Proclamation. Ms. Cousins thanked the City Council and expressed her appreciation. Ms. Mitragotri thanked the City Council and expressed pride in the important work of her organization continuing during the pandemic. She also thanked the Alameda County Arts Commission for its advocacy for the arts.
17. Presentation of a Proclamation recognizing March 2022 as March for Meals month in Pleasanton
Councilmember Balch read the Proclamation.
Mayor Brown reported she assists with Meals on Wheels and encouraged residents to volunteer.
Community Manager of Spectrum Community Services Meals on Wheels Carrie Oldes accepted the Proclamation. She encouraged residents to ride along with Meals on Wheels and emphasized the importance of their work with senior citizens during the pandemic.
City Council Minutes Page 3 of 22 March 15, 2022
Councilmember Testa noted her appreciation for Meals on Wheels extending back to when she would deliver meals with her grandmother as a child. She advised she delivered a route weekly during the pandemic while the organization faced a driver shortage.
19. Public Comment regarding items not listed on the agenda David Yamamoto stated the City has broken its promise not to develop a portion of the Allston Property to allow for a loop trail. He stated the Environmental Impact Review of the Courdet Trail does not consider the impacts of a second trail through the area. He advised the 22 acres are zoned agricultural which is antithetical to the construction and use of a trail. He advised another trail in this overdeveloped area will be dangerous for both residents and hikers along with wildlife. He called for the City to reconsider its decision to build the Meadowlark Loop Trail.
Joe McThorn, President of the Livermore- Pleasanton Firefighters Local 1974, requested the Council' s assistance in unfair retaliatory treatment during their current contract renegotiations. He requested Mayor Brown and Livermore Mayor Bob Woerner attend the upcoming meetings. He reported they are 74 days without a contract while all other labor groups in Pleasanton and Livermore have a fair and reasonable contract. He stated the Pleasanton negotiating team is trying to impose unfair policies through a zipper clause no other labor groups are subject to. He noted emergency responses have been delayed while they work without a contract and the Livermore- Pleasanton Fire Department LPFD) is losing good job candidates to other cities due to the lack of a contract. He advised the City has spent over $ 500, 000 in the past few years in legal fees fighting firefighters. He called for a fair and reasonable contract.
Cynthia Atherton requested as a Jorgensen Lane resident that the City Council rescind the approval of the proposed Meadowlark Trail. She advised the Courdet Trail is beautiful and has proven to be heavily used but the City has not engaged with residents since 2006 about the second trail being proposed.
She advised the Courdet Trail' s safety issues would be exacerbated by installing a second trail. She advised the lack of input from residents violated the 2006 agreement with the City.
Gwenn Ertoz reported receiving a postcard to attend a meeting about the proposed trail but, upon arrival, residents were informed the trail had already been approved and the meeting was simply to discuss its alignment. She stated residents strongly oppose the trail due to its parking and vehicular safety issues. She expressed concerns about fire potential from smokers. She noted there are already several other trails in the area. She suggested moving the trailhead to Las Positas Boulevard where there are no houses.
Tania Smith spoke as a resident of Foothill Oaks Terrace in opposition to the Meadowlark Trail. She expressed concerns about the short notice and proximity to houses, adding it will be an inviting spot for burglars. She stated the trail will inevitably widen and erode with time and detract from the current beauty of the open space. She noted there are other trails in the area already. She expressed concerns about inadequate parking. She requested to leave the space open.
Andrii Vladyka spoke of the current dire situation in his native Ukraine. He asked the City Council to write to the City' s federal elected officials to request an increase in military aid to Ukraine and the establishment of a "no-fly" zone over Ukraine.
Larry Messa expressed his opposition to the proposed trail as an area resident. He noted the Courdet Trail has taken the place on the currently proposed Meadowlark Trail. He requested reviewing the trail and adding it to an agenda instead of it being approved without a City Council discussion. He advised there has been a constant battle with people not using the designated Courdet Trail space and taking a shortcut along his north fence line.
City Council Minutes Page 4 of 22 March 15, 2022
Sandeep Duggal spoke as a Jorgensen Lane resident in opposition to the Meadowlark Trail. He advised due process was not followed with the residents for their inability to offer input on the development. He advised the City long ago committed to keeping the space open in perpetuity. He expressed concerns about impacts to wildlife and fires from the short trail winding between 14 homes, some of which have fenceless open back yards. He requested the City Council reopen the approval process so there can be a sensible discussion of how to accommodate the needs of all involved.
PUBLIC HEARINGS AND OTHER MATTERS
20. PUBLIC HEARING — Review and approve the Ken Mercer Skatepark final conceptual design, CIP No. 20774, and provide direction to staff on whether to proceed further with the design or pause until construction funding is identified
Assistant Director of Library and Recreation Michele Crose reported this presentation was also made to the Parks and Recreation Commission on January 13. She reported on the design process over the past year, including community surveys, public workshops, and presentations before the City Council, Youth Commission, and Parks and Recreation Commission.
Richmond Rossi Montgomery ( RRM) Design Group Landscape Architect Gina Chavez reported on how the community outreach shaped the proposed design which includes a street plaza style feel with skating areas for different experience levels. She advised public feedback also led to the inclusion of picnic- style gatherings, the preservation of the existing trees for shade, amenities such as a drinking fountain, and focused lighting for nighttime skating. She advised there was extensively detailed feedback helping to combine the two draft design concepts into a single preferred plan.
Ms. Chavez reported the final proposed plan includes three acres of park improvements with a full acre of skateable space. She advised there will be two entrances to the skatepark- one from the main parking lot and one from the Hopyard Village shopping center. She noted the skating areas of varying ability levels, gathering spaces, spectator viewing areas, drinking fountains, bike racks, focused lighting, retention of existing perimeter landscape, and expanded parking lot with a future drop- off area.
She advised there is a space retained for a potential future restroom next to the parking lot.
In response to Mayor Brown, Ms. Chavez stated the restroom location could also be moved to the other side of the park. She clarified the two larger red blocks are shade structures for spectators and other community gatherings.
Zach Wormhoudt, President of Wormhoudt Inc., reported the current skatepark is one of the oldest still in use nationally giving it a significant place within the skating world. He advised this provided cause to preserve the existing skatepark while integrating it into the proposed design.
Ms. Chavez detailed the landscaping plans and a variety of plants to be incorporated with the existing greenspace.
Landscape Architect Matt Gruber reported on feedback from the Parks and Recreation Commission meeting where the design was approved by a 4- 2 vote. He advised the two " no" voters approved of the park' s design but were concerned about the estimated $ 8. 5 million in cost. The Commission requested adding a restroom and to look at alternative funding sources. He requested the City Council approve the design and provide direction relative to how staff should proceed until funding is identified.
In response to Councilmember Arkin, Landscape Architect Gruber clarified staff would need about 50,000 to take the completed design to a bidding process. He advised there are many unknowns in the cost estimate such as change orders and inflation leading to a 42% contingency. He noted staff could see cost changes if the design was approved but the construction was tabled but noted there also could be a greater design cost if they wait to approve it.
City Council Minutes Page 5 of 22 March 15, 2022
In response to Councilmember Balch, Landscape Architect Gruber stated the design would most likely require minor but not significant changes if there is a wait of five years before the funding is secured and the bidding process can begin.
In response to Councilmember Narum, Landscape Architect Gruber stated there has not been a value engineering study performed on the design but can be directed by Council. He advised staff is unsure of alternative funding sources might be but advised they would more likely be local donors than State grants. Assistant Director of Library and Recreation Crose advised this is different than the all-abilities playground where spaces were designed specifically for sponsors to be acknowledged. Mr. Gruber noted the cost of doing business has gone up significantly and cautioned there will be other similarly high costs for projects to be presented on April 12.
In response to Councilmember Narum, Landscape Architect Gruber confirmed the $ 8. 5 million estimate includes the cost of lighting. He advised the focused lighting was well supported by the public and also by neighbors once the height of the lighting was clarified. Assistant Director of Library and Recreation Crose advised the 10 p.m. curfew was also supported by a majority of neighbors.
Councilmember Testa encouraged corporate sponsorships. In response to Councilmember Testa, Landscape Architect Gruber clarified a portion of the parking lot in front of Bill' s Café is owned by the City and has a shared- use agreement with the plaza' s developer.
In response to Mayor Brown, Assistant Director Crose reported the 2014 Parks and Recreation Master Plan was done to assess whether the City was meeting the community' s needs. The Master Plan assessed a need for a better skatepark, ranking it relatively high. She advised everything marked deficient in the 2014 Master Plan has all been completed except for the skatepark.
In response to Mayor Brown, Assistant Director Crose reported hearing from local skate shops indicating an interest in fundraising opportunities. Staff has not reached out to larger organizations but Ms. Garcia and Mr. Wormhoudt could have connections to larger national companies and donors from the skating community.
In response to Mayor Brown, Assistant Director Crose clarified the skatepark was planned for all wheels including, roller skates, rollerblades, bicycles, and scooters. Landscape Architect Gruber advised the new skatepark would also be accessible to wheelchairs while the current one is not.
Mayor Brown opened the public hearing.
Andrew Lambert thanked everyone who has been working on this project and encouraged City Council action since it has been five years since it was identified as a priority. He advised generations are passing and local skaters do not want to wait longer, noting the price will only increase over time. He encouraged the City Council to move forward with the construction bidding. He advised the skatepark is the highest- demand item from the Parks and Recreational Master Plan and is acknowledged as being overdue. He advised skateboarding is now an Olympic sport.
Peter Koff commended the many Wormhoudt Skateparks around the area and lauded the proposed design for Pleasanton. He spoke of the skatepark' s community benefits and stated his intention to use it. He noted Olympics now include skateboarding.
Jimmy Craig spoke on behalf of his wife, Christina, and encouraged quick action on the skatepark process. He advised the longer the City waits the more expensive it will become. He expressed his excitement for the progress occurring and the design itself. He advised it has been a long time since the need for an enhanced skatepark was identified in 2014.
City Council Minutes Page 6 of 22 March 15, 2022
Sam Isola stated he has learned much about the City Council process from following this matter. He expressed his excitement. He noted it has been a high priority since 2014 and is the only thing identified back then not currently in existence. He commended Mr. Lambert' s consistent assistance and called for the skatepark to be named in honor of his late father, Dennis Lambert.
Scott Gillaspy stated he approves of the design and encouraged construction sooner rather than later due to inflation and other long- term cost concerns. He advised he is asked often by the local skating community about when the new park will be built and he would like to be able to offer a date. He noted how much the skating community has grown. He stated this design will be a destination skatepark. He encouraged quick progress toward construction.
Tadashi Yamaoda expressed his excitement at the expanded skatepark coming to fruition. He echoed Mr. Lambert' s comments and called for the City Council to push forward with the bidding process. He encouraged naming the expanded skatepark after David Lambert and advised it will be a great addition to the City.
Dustin reported local skaters have been promised the park would be expanded since 1995. He advised the expansion is overdue. He advised skaters can do without the seating areas to save cost. He advised there are Bay Area companies who would probably be happy to contribute to the cost. He stated he is happy to see the skatepark expansion moving forward.
Tyler Gilliland urged the City Council to approve the new design and associated construction funding.
He noted it has been eight years since the need for the expanded park was identified, during which time he has completed his undergraduate education and doctorate without any progress on the skatepark. He noted the Parks and Recreation Master Plan recognized just how long overdue the expansion is. He encouraged the City Council to keep the wheels moving on the project. He endorsed naming the expanded park in memory of David Lambert.
JoEllen Lambert advised her late husband, David, also worked on the Youth Master Plan so the family is well- aware of the 2014 Parks and Recreation Master Plan. She stated it is time for this project. She lauded how many children have gotten directly involved in this project at City Council and Commission meetings. She advised the expansion is important to the local youth and encouraged the City Council to help move the item forward as a tribute to them.
Ryan Korn echoed comments from the previous speakers and advised his support for the expansion.
He lauded Mr. Wormhoudt' s other designs around the area over many decades attracting visitors from all over the world and professional skateboarders who bring awareness to the park through the media.
He stated his approval of the proposed design and advised it is a no-brainer to make it a reality.
Mayor Brown closed the public hearing.
Councilmember Testa reported her children were heavily involved in park projects, including the BMX Park. She stated it is time to get the skatepark going and she approves of the design.
Councilmember Testa moved to approve the final conceptual design and directed staff to work on identifying funding as soon as possible. Councilmember Arkin seconded the motion.
Councilmember Arkin commended the design and advised the project is a long time coming. She stated it is a good fiscal idea to move forward quickly with the bidding process. She encouraged alternate funding sources like sponsorships.
Councilmember Arkin requested a value engineering study be taken into consideration to see what can be done to trim the costs. She noted a restroom would be a costly addition which could come later. She City Council Minutes Page 7 of 22 March 15, 2022
requested retaining at least a small seating area for the benefit of parents. She commended the shade trees and drinking fountains. She requested sensitivity towards neighbors with the lighting.
Councilmember Balch reported he was a part of the 2014 Parks and Recreation Commission Master Plan Task Force so he recognizes this is a need not yet met, but noted some of the other needs identified in 2014 were easier to pick off of the list. He commended the design and process. He stated it is a high cost and it will have to be weighed against other needs like water quality and transportation.
He advised the pandemic showed how essential the community parks are. He stated he will support the motion. He requested looking into a two- phase construction for elements such as the restroom and shade structures and also having a value engineering study. He advised corporations are still challenged by the pandemic and cautioned against expectation of sponsorship dollars being available.
In response to Councilmember Balch, Interim City Manager Dolan stated the best way to identify the potential cost of construction is to get bids. City Engineer Steve Kirkpatrick advised he has heard the City Council intends to take the design to biddable construction documents with a look into the possibility of phasing and value engineering in the meantime. He confirmed this will give the City a better idea of what to expect for cost in its Capital Improvement Plan budget.
Councilmember Narum commended the design but has concerns about cost. She requested preparation of bid documents with several add- on options such as a restroom, seating areas, and shade structures outside of the skating area itself. She advised this may help with obtaining a favorable cost by creating a second phase. She noted attracting visitors to the City helps to fund the next project through local expenditures on things like food and gasoline.
Mayor Brown thanked the local skating community for its support of the item and for helping the City Council appreciate the high- interest level. She stated how rare it is for a Parks and Recreation project to convert existing space and not have a single negative comment. She commended how all wheels will be able to use the skatepark. She expressed she is eager to get moving. She advised the skatepark will also reduce water usage needs. She recognized the entire Lambert family for its skatepark advocacy.
MOTION: It was m/s by Testa/ Arkin to approve the completion of the design phase through biddable construction documents and with the possibility of a phase plan approach as recommended and as noted. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Narum, Testa, Mayor Brown Noes: None
Absent: None
At 9: 00 p. m., Mayor Brown recessed the meeting. The meeting resumed at 9: 08 p. m.
21. Provide direction on housing policy topics including the Inclusionary Zoning Ordinance, Lower- Income Housing Fund, Workforce Housing, Affordability by Design and other City housing programs, as part of the 2023- 2031 ( 6th Cycle) Housing Element Update Community Development Ellen Clark reported staff is seeking policy direction on several large and complicated topics for potential inclusion in the Housing Element update for the sixth cycle.
Senior Planner Shweta Bonn reported the eight- year Housing Element is a State mandate to ensure the City is adequately zoned to meet its sixth cycle Regional Housing Needs Allocation ( RHNA) totals.
She provided an update on where the City is in its process, including direction from the City Council to hold this discussion about how or if the City should include the Lower- Income Housing Fund ( UHF), Inclusionary Zoning Ordinance ( IZO), Housing Density Bonus Program, workforce housing, and the concept of affordability by design.
City Council Minutes Page 8 of 22 March 15, 2022
Senior Planner Bonn reported the LIHF was first established in 1990 and most recently updated in 2018. She advised it applies to new residential development on a per unit basis and new commercial design on a per square foot basis. She noted by policy the City Council charges less than the maximum value set by a 2018 Nexus Study and listed the current fees by category compared to the maximum limits. She advised it was done to help keep Pleasanton competitive for developers. She reported the City has collected about $ 27 million in LIHF fees over the past 30 years, 45% of which is allocated to programs with 55% earmarked for supporting affordable housing projects.
Senior Planner Bonn reported the IZO was adopted in 2000, requiring new multifamily residential projects with 15 or more units to provide 15% affordable units, new single- family residential projects of 15 or more units to provide 20% affordable units, and commercial, office, and industrial developments to either pay LIHF or provide affordable units. She advised the specific mix of affordability levels is left to the City Council' s discretion, along with an option to pay an in-lieu fee instead of constructing the affordable units. She noted generally rental housing units have provided affordable units and for- sale developments have paid the in- lieu fee. She advised the IZO requires an Affordable Housing Agreement to formalize the process.
Senior Planner Bonn reported the Density Bonus Ordinance was adopted in 2013 but advised State laws have since changed significantly so the ordinance now requires updating. She advised there could also be further study of the concept of an Affordable Housing Overlay Zone ( AHOA) making a development eligible for additional concessions if there is a high number of affordable units.
Senior Planner Bonn reported there are several policies in the General Plan and Economic Development Strategic Plan acknowledging the need for workforce housing and a goal of increasing the diversity of housing products. She advised common themes regarding workforce housing from City Council discussions are to provide housing in Pleasanton for people who work in the City and also to address the needs of households earning the Area Median Income ( AMI) but still cannot afford to live in Pleasanton. She provided two potential definitions of workforce housing for City Council consideration with Option 1 defining it around those earning local wages and Option 2 defining it at those earning over 80% of AMI but unable to afford Pleasanton' s market- rate housing. She advised both options have a similar intent. She reported City staff prefers Option 2, the Housing Commission supported Option 1, and the Planning Commission preferred the term workforce housing remain undefined.
Senior Planner Bonn stated the small- scale infill concepts of " affordable by design" and the " missing middle" are related to workforce housing. She stated these are units of a smaller size, accessory dwelling units ( ADU), Senate Bill ( SB) 9 units, and can be on targeted areas for infill. She advised the Planning Commission also showed interest in having scaled impact fees for different sized units. She advised missing middle units are often smaller and offer the appearance of a single- family home, including townhomes, courtyard homes, and duplexes.
Senior Planner Bonn reported the California Statewide Communities Development Authority ( CSCDA) Program is scheduled to come before the City Council in April.
Senior Planner Bonn reported staff recommends consideration of raising LIHF fees, consideration of a more comprehensive LIHF update, and keeping the policy for expenditures flexible. She advised the Planning Commission agreed with this and advised fees should be proportional to the home size. She advised the Housing Commission agreed with the Planning Commission and requested a more strategic direction for LIHF expenditures.
Staff recommends making the IZO percentages equal between single- family and multifamily developments and identifying a target income- level split for the affordable units. She advised the Planning Commission recommended making both single- family and multifamily 20% and encouraging developers to build affordable housing rather than pay in- lieu fees. She reported the Housing Commission agreed with the Planning Commission.
City Council Minutes Page 9 of 22 March 15, 2022
Staff does not have a recommendation on the AHOZ but advised the City Council could consider whether or not a study should be included in the Housing Element. She advised the Planning Commission was split on an AHOZ while the Housing Commission generally supported exploring the concept.
Staff recommends using Option 2 to define workforce housing based upon AMI. She advised the Planning Commission recommended not defining the term for fear of leaving out a certain population.
She reported the Housing Commission supported Option 1 with a modification to specify employees, households, and wages for Pleasanton.
Staff does not recommend a program to facilitate small- scale infill. She advised the Planning Commission agreed, noting the potential impact on neighboring residences. She reported the Housing Commission was interested in exploring the concept further but noted it should not be a high priority.
She advised this can be done outside of the Housing Element process.
In response to Councilmember Arkin, Interim City Manager Dolan stated the in-lieu fees are often directed to grants, rental assistance, homeless outreach, and other programs.
In response to Mayor Brown, Interim City Manager Dolan confirmed the new down payment assistance program can also derive funding from in-lieu fees. Housing rehabilitation loans and grants also fall into this category.
In response to Councilmember Narum, Interim City Manager Dolan confirmed funds directed to Goodness Village also came from in- lieu fees.
In response to Councilmember Arkin, Senior Planner Bonn confirmed there has to be an update to the density bonus to comply with State law.
In response to Councilmember Arkin, Director Clark clarified the Pleasanton employment component of workforce housing can be enforced through a local preference in the rental or sale of the unit. The Planning Commission' s intent with this area is to match local housing to local wages because of the disconnect between AMI and the City' s high housing prices. She clarified workforce housing can be addressed either based on affordability or preferential treatment.
In response to Councilmember Balch, Director Clark clarified that scaled impact fees would relate to the size of the home. She advised the Nexus Study parsed this out into several tiers based upon square footage but the City Council chose at the time to establish only two tiers.
In response to Councilmember Balch, Director Clark clarified anything deed- restricted will require subsidy with the scale varying based upon the level of affordability required.
In response to Councilmember Testa, Director Clark stated there are multiple State laws enacted over the past 10 years leading to the need to update the City' s Density Bonus Ordinance. She advised the State has broadened the eligibility for a density bonus and offered more bonuses. She confirmed the City essentially does not have a viable ordinance at this point because there have been so many State- level changes since its adoption.
Mayor Brown noted Pleasanton is one of only 170 California cities with an IZO, representing 35% of the State' s municipalities.
In response to Mayor Brown, Director Clark clarified Pleasanton requires deed restrictions in perpetuity wherever possible.
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In response to Mayor Brown, Interim City Manager Dolan confirmed the 2018 Nexus Study justifies higher LIHF fees. Director Clark clarified a developer would currently pay the same affordable housing fee regardless of the size of a single- family house so long as it is larger than 1,500 square feet.
Mayor Brown opened the public hearing.
Jocelyn Combs stated that after community support, funding is the most predictable indicator of successful affordable housing projects. She stated the LIHF is critical and encouraged a dramatic increase in LIHF fees with an in- depth review soon. She recommended all LIHF fees go towards building low- income housing and not just 55% of the fees. She encouraged the Council, with each subsection of this discussion, to choose each option that would increase affordable housing. She encouraged directing staff to start discussions with non- profit affordable housing developers now. She noted Pleasanton at present is the only city in Alameda County without any active affordable housing construction.
Becky Dennis expressed confusion over the status of the LIHF payments from 10X Genomics. She supported raising LIHF fees, particularly for commercial development because commercial development generates the greatest demand for lower- income housing. She noted when one city raises fees it allows other neighboring cities to also raise their fees and encouraged Pleasanton to show leadership for the Tri- Valley region. She encouraged more non- profit development. She endorsed replacing the IZO with a focus on middle- income non- profit development for City employees.
Jeff Schroeder, Senior Vice President of Ponderosa Homes, reported Ponderosa Homes has created more affordable housing in Pleasanton than any other single developer over the last 30 years. He advised when a City provides funds for affordable housing projects it creates a legal need to pay prevailing wages which can increase the cost of development by 30%. He advised the LIHF fees can go towards housing programs like rental assistance for community benefit. He advised the IZO works best for rental housing and noted they have to qualify on an income basis annually. He encouraged the City to consider the missing middle through creativity in affordable by-design for- sale housing. He endorsed making fees based upon the unit size.
In response to Mayor Brown, Director Clark clarified that 10X Genomics is subject to impact fees but received credit for demolishing the existing retail development on the site. She advised that 10X Genomics will pay affordable housing fees in Phase 2 of its construction.
Mayor Brown closed the public hearing.
In response to Mayor Brown, Senior Planner Bonn clarified a comprehensive update to the Nexus Study supporting the LIHF would likely not happen for a few years. She advised the current study took three years to complete and staff is recommending using the current study to evaluate fees and potentially conducting a more comprehensive study midway through the Housing Element.
Councilmember Testa endorsed both the Housing Commission' s recommendation for the LIHF. She noted it includes the Planning Commission' s concept of making the fees proportional to home sizes and advised it also covers directing more of the fees directly back to building affordable housing. She stated she does not prefer in-lieu fees because those fees often do not go towards affordable housing. She noted only 55% of in-lieu fees go towards affordable housing and rarely directly towards construction.
She called to change the authorized services accounting for the remaining 45%.
Mayor Brown clarified the goal is not to set policy but to determine what they want to discuss in the future in more detail.
Councilmember Testa moved to approve the Housing Commission' s recommendation for the LIHF.
Councilmember Arkin seconded the motion.
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Councilmember Arkin called for a future discussion of not having LIHF fees in certain circumstances.
Director Clark clarified this would be part of the IZO discussion.
Councilmember Arkin agreed with everything in the Housing Commission' s LIHF recommendation. She called for a future update on the fee schedule to get closer to the maximum levels. She echoed Councilmember Testa' s call to reduce the number of services able to draw into LIHF fees.
Councilmember Balch agreed with the Planning Commission to make the fees proportional to house size. He advised there should also be a smaller fee for units designed small specifically for affordability.
Councilmember Narum agreed with the Planning Commission and stated the Housing Element should acknowledge the City Council is reevaluating the LIHF. She advised that in-lieu fees are rarely collected on small projects. She cited Lund Ranch as an area where affordable housing did not make sense for being so far from public transportation. She advised the City needs to maintain some flexibility on the LIHF uses, noting the City used LIHF funds to turn 30-year affordable units into perpetuity.
In response to Mayor Brown, Councilmember Narum confirmed she is happy to have a policy discussion on permissible LIHF uses another time.
Mayor Brown noted the funds are spent in several ways, including Tri- Valley Resources, Education, Activities, Community Participation, and Housing ( REACH). She agreed with the varying fees based upon size. She expressed support for this being a future discussion topic.
Councilmember Narum stated she could not support the changes in LIHF spending options.
Mayor Brown stated they all agreed on the $ 100, 000 down payment assistance grants and those do not build anything.
Councilmember Narum commended the City' s donation to Goodness Village.
Councilmember Testa agreed with these two projects but questioned if the LIHF was the ideal source of funding. She stated the LIHF fees should create brick and mortar buildings.
Councilmember Balch clarified the City Council votes on how to use the fund and can vote no to any expenditure from the fund. He advised maintaining existing affordable housing with the LIHF is much cheaper than creating new stock. He called for maintaining the flexibility of use for the LIHF as the staff has recommended.
Councilmember Narum and Mayor Brown agreed.
Director of Community Development Clark clarified staff is asking about what things should be pursued in the Housing Element. She advised the City Council can always have a future discussion either in a general sense or about a specific project.
In response to Councilmember Balch, Councilmember Testa denied a friendly amendment to remove the Housing Commission' s recommendation from her motion. She stated they are not making policy tonight but rather just calling for future discussion.
Councilmember Balch made a substitute motion to approve staff and the Planning Commission' s recommendations. Councilmember Narum seconded the substitute motion.
City Council Minutes Page 12 of 22 March 15, 2022
In response to Councilmember Arkin, Director Clark clarified a discussion of whether or not to have these fees is part of the IZO discussion because the IZO allows for in- lieu fees. She clarified this portion of the item is about establishing the level of the fee and stating how it is expected to be used.
Councilmember Balch clarified his substitute motion does not preclude having a discussion of LIHF uses in the future and simply applies to the Housing Element. He advised the City should not raise the issue with the State at this juncture.
Councilmember Narum noted the City Council gets to vote on every expenditure from the LIHF.
In response to Councilmember Testa, Interim City Manager Dolan stated if the concept of a future discussion is included in the Housing Element it could create an expectation on HCD' s behalf to expect certain outcomes. Director Clark advised the City has to report annually on its progress and suggested it would be better to leave this area less formal.
Mayor Brown stated the City has been very supportive of homeownership.
SUBSTITUTE MOTION: It was m/s by Balch/ Narum to approve the staff and Planning Commission' s recommendations for the Low- Income Housing Fund. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Narum, Mayor Brown Noes: Councilmember Testa
Absent: None
Senior Planner Bonn reviewed the recommendations from staff, the Planning Commission, and the Housing Commission relative to the IZO.
In response to Councilmember Balch, Interim City Manager Dolan stated whether 15% or 20% is better for inclusionary housing depends on whether or not the City intends to receive LIHF fees on for-sale units. He stated he would not expect a for- sale project to be built with 20% inclusionary housing. He endorsed the 15% threshold for for- sale developments if the goal is to get all of the units built or 20% if the City Council is willing to accept the in-lieu fee.
In response to Mayor Brown, Interim City Manager Dolan confirmed developers can make affordable by-design units within a development as part of its affordable housing requirement. He advised this is negotiated in the housing agreement but the City has historically emphasized lower income levels. He clarified the City would not let ADUs count towards an inclusionary housing requirement unless they were rent- restricted.
Councilmember Narum called for a policy where the IZO is at 20% for both with language allowing flexibility based upon the affordability split. She advised building to lower income levels would allow for a lower overall percentage.
In response to Mayor Brown, Councilmember Narum confirmed this would lead to a no net loss situation but noted how hard it has been for the City to build very low income and low- income housing units.
Councilmember Narum moved to approve staff' s recommendation with a consistent 20% for both for- sale and rental developments. Councilmember Balch seconded the motion.
Councilmember Arkin stated the in-lieu fees have been what is getting the City in affordable housing trouble and called for something stronger than the current process. She expressed support for the Planning Commission recommendation and requested a friendly amendment.
City Council Minutes Page 13 of 22 March 15, 2022
Mayor Brown noted projects would still come back to Council. Councilmember Narum agreed, noting it will ultimately be the Council' s decision. She accepted the amendment. Councilmember Balch also accepted the amendment.
In response to Councilmember Testa, Senior Planner Bonn confirmed that IZO is only applicable on housing projects of 15 units or more.
In response to Councilmember Testa, Director Clark confirmed the City charges a LIHF fee for every project, even a single- family home being split under Senate Bill 9.
MOTION: It was m/s by Narum/Balch to approve the Inclusionary Zoning Ordinance with 20% distribution for both, including Planning Commission recommendation and consideration of limitations on in-lieu fees. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Narum, Testa, Mayor Brown Noes: None
Absent: None
Senior Planner Bonn reported on the staff, Planning Commission, and Housing Commission recommendations on an Affordable Housing Overlay Zone ( AHOZ).
Director Clark advised the topic was brought up by a Planning Commissioner. Staff found it would be too heavy of a lift to accommodate a standard above the State' s.
In response to Councilmember Testa, Director Clark clarified it is about recognizing there are two sides to a coin because if you want to offer 100% affordable housing a City generally has to offer more density and fewer restrictions on things like building size and parking in return. Councilmember Testa noted the value capture of an AHOZ. She advised she had a conversation with another community that explored the concept and advised it makes projects undesirable for the community.
Councilmember Narum called to have AHOZ tabled or continued until after the City Council has discussed the CSCDA Program. She advised the CSCDA sounds like a better way to go.
Mayor Brown called to table the discussion regarding AHOZ. The dais concurred.
Senior Planner Bonn reported on the staff, Planning Commission, and Housing Commission' s recommendations for defining workforce housing.
In response to Mayor Brown, Director Clark clarified the intention is to put a finer point on what constitutes workforce housing for better policy targeting.
Councilmember Narum recommended not having a definition due to concerns of where to stop the inclusion list.
Councilmember Testa endorsed the staff' s recommendation of Option 2 using AMI as a delineation.
In response to Mayor Brown, Councilmember Testa advised she wants Pleasanton' s workers to have the first preference.
In response to Councilmember Arkin, Director Clark clarified they could add a provision specifying local employees to Option 2.
Councilmember Narum noted AMI is based on all of Alameda County and just not Pleasanton.
City Council Minutes Page 14 of 22 March 15, 2022
Councilmember Arkin moved to approve staff' s Option 2 with an amendment to specify local employees. Councilmember Testa seconded the motion.
MOTION: It was m/s by Arkin/ Testa to approve staff' s recommended Workforce Housing Option 2 with an amendment to specify local employees. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Testa, Mayor Brown Noes: Councilmember Narum
Absent: None
Senior Planner Bonn reported on staff, Planning Commission, and Housing Commission' s recommendations for small- scale infill. She advised this can be done outside of the Housing Element process so staff does not want to make requisite amendments to the Municipal Code at this time.
In response to Councilmember Testa, Director Clark advised it can also be included in an upcoming discussion of objective design standards. She confirmed this can be explored on a limited basis during the objective design standards discussion.
In response to Councilmember Testa, Director Clark confirmed some cities have accommodated SB 9 by increasing the density of single- family residential zones.
Councilmember Arkin noted courtyard- style homes and townhomes are good but advised the City does not have many of them.
Councilmember Narum recommended discussion on whether to require new housing projects to have ADUs. She agreed with Councilmember Arkin' s comment about the City having a lack of good starter home inventory. She expressed support for a policy of encouraging starter home construction meaning they are affordable by design due to their size and not being opulent.
Director Clark explained the intent is to not over densify single- family neighborhoods but rather work with infill sites.
Councilmember Balch inquired if there was support for adding something to the Housing Element without it being too narrow. Mayor Brown explained the City already does this, citing the Garden Creek duplexes, and advised policy is not needed for it.
Councilmember Testa advised the entire City Council wants developments like Garden Creek but for them not to be in the middle of established single- family neighborhoods.
Councilmember Narum advised the City Council needs to formally recognize the need for starter homes and get away from 2,500- 3,000 square foot homes.
Director Clark reported she is hearing the City Council agree to integrate affordability by-design concepts into new residential development.
Mayor Brown concurred.
In response to Mayor Brown, Director Clark clarified that ADUs are a separate policy topic.
In response to Councilmember Balch, Director Clark confirmed they can work affordability by-design concepts into the Housing Element rather than a formal development of new zoning standards.
City Council Minutes Page 15 of 22 March 15, 2022
Councilmember Balch moved to integrate language into various policies of the Housing Element to encourage smaller housing units and affordability by- design concepts into new residential developments, including ADUs where appropriate.
Director Clark clarified that ADUs are a separate discussion and should not be included at this time.
Senior Planner Bonn clarified staff recommends the Housing Element would encourage ADU construction and require new single- family subdivisions to include ADUs when appropriate and feasible.
In response to Councilmember Testa, Senior Planner Bonn confirmed this is specific to new development.
Mayor Brown advised it would not be deed- restricted like the IZO but would be affordable by-design smaller units.
Councilmember Balch moved to approve the staff' s recommendation. Councilmember Narum seconded the motion.
MOTION: It was m/s by Balch/ Narum to approve staff' s recommendation about Accessory Dwelling Units. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Narum, Testa, Mayor Brown Noes: None
Absent: None
22. Receive an update on the 2022 water supply, Stage 2 - 15% mandatory water conservation, and adopt a resolution to activate Stage 2 Water Drought Rates Director of Operations and Water Utilities Kathleen Yurchak reported this is an update on the 2022 water supply, an update on the 15% water conservation target, and the adoption of a resolution to activate Stage 2 water drought rates.
Managing Director of Utilities Dan Repp reported the first six months of Water Year 2021 were the fourth driest on record. He advised the statewide snowpack is only at 63% of its average accumulation.
He noted water supplies are currently adequate assuming conservation targets are met and noted conservation during the fall exceeded the 15% target. He reported the State Water Project allocation is currently at 15% and is likely to go down.
Deputy Director of Business Services Tamara Baptista reported the City Council adopted drought rates in 2015 as a part of the water and sewer rate study to help the City' s utility financially stable. She advised these rates were not available during the 2015 drought so the City used excess use penalties instead with restrictions on how the revenue could be spent. She explained staff is requesting activation of the Stage 2 drought rates to help achieve the 15% conservation mandate.
Deputy Director Baptista clarified drought rates generate revenues to recover costs while excess use penalties are intended to be more of a punitive measure and are not designed to be a revenue- generating mechanism. She detailed the Stage 2 rates as outlined in the City' s Master Fee Schedule.
Deputy Director Baptista reported the City of Livermore activated Stage 1 drought rates on October 1, 2021, the Dublin San Ramon Services District activated its Stage 2 drought rates on November 5, 2021, and Zone 7 has not yet activated its drought rates. She advised staff recommends Pleasanton activate Stage 2 drought rates effective May 1, 2022.
She reported the estimated loss of revenue for the Fiscal Year 2021- 2022 is $ 3. 2 million in part due to the 15% mandatory conservation. She advised the year- to- date water sales are at only 46% of the City Council Minutes Page 16 of 22 March 15, 2022
annual budget. She clarified that due to the City' s bi-monthly billing cycles a May 1 rate increase would not impact revenues until fiscal year ( FY) 2023.
In response to Councilmember Testa, Director Yurchak clarified the 30- unit threshold in the 2015 drought was based upon excess use penalties. She advised the excess use penalties did not impact residents with very low bimonthly usage but the drought rate is applied uniformly.
In response to Councilmember Balch, Director Yurchak clarified whether it has to be uniform is a policy decision. She advised this will be the first time the City has activated drought rates. She explained it would be a policy decision if the City Council wanted to remove the lowest tier users from paying drought rates and that a majority of customers are in the lower usage tiers. She noted there is already a revenue loss of$ 3. 2 million in FY 2021/ 22.
In response to Councilmember Testa, Councilmember Balch agreed each low usage customer would not cost the City much individually, but noted low usage customers are such a substantial percentage of the customers the combined total would amount to a lot of money.
Councilmember Balch called for an analysis of how much money the City would lose by exempting low usage customers from the Stage 2 drought rates.
In response to Councilmember Balch, Deputy Director Baptista advised the City Council can postpone the decision, but advised staff recommends making the rate increase effective May 1. Director Yurchak advised waiting six weeks to make the switch allows time to communicate the rate change to customers.
In response to Councilmember Balch, Director Yurchak advised the reserve policy calls for the Water Fund to be at 34% and noted it would dip to 33% if item 23 is approved later tonight.
In response to Councilmember Testa, Deputy Director Baptista advised Zone 7 is about to begin its multi- year rate study. She confirmed if Zone 7 raises its rates it would be passed along to Pleasanton' s customers.
In response to Councilmember Testa, Deputy Director Baptista clarified the Water Enterprise Fund comes from separate funding sources than the General Fund.
In response to Councilmember Arkin, Deputy Director Baptista confirmed both fixed costs for things such as equipment and variable costs for things like the water factor into the rates customers pay.
In response to Councilmember Arkin, Director Yurchak advised she has not seen any programs from the State to offset the costs of water sales. Deputy Director of Business Services Baptista revised her previous answer that fixed costs are about 50% of revenues while variable costs stand at about 80% of revenues.
In response to Councilmember Arkin, Deputy Director Baptista clarified excess use penalties would punish those who use more water but advised those revenues have restrictions on how it can be used which is why staff is recommending the drought rates. She advised if drought rates are unsuccessful in achieving the desired conservation, staff would return with a request to enact excess use penalties.
She reported staff evaluate the situation monthly based on water usage.
In response to Councilmember Narum, Deputy Director Baptista clarified there is a blended rate for the City' s water, including what Zone 7 charges. She confirmed the deficiency is in the fixed rate the City must pay Zone 7.
City Council Minutes Page 17 of 22 March 15, 2022
In response to Mayor Brown, Deputy Director of Baptista confirmed the excess use penalties collected were low because customers abided by them and conserved. She confirmed that for the Phase 2 drought rates is everyone pays the same while being encouraged to conserve water.
Mayor Brown opened the public hearing.
Olivia Sanwong reported Zone 7's last Water Rate Study was conducted in October 2018 with another scheduled for October 2023. She noted Pleasanton' s last Water Rate Study was in 2015 and Pleasanton' s Water Rate Study is out of date. She noted the Dublin San Ramon Services District DSRSD) pays almost double what Pleasanton does for the fixed charge and advised this is contributing to the City's issues. She encouraged the City to update its Water Rate Study. She reported Zone 7 lists its variable rate a $ 2. 06 although both the DSRSD and Pleasanton websites use a higher number. She advised the City' s operating fund is at 34% with a goal of 35% so there is flexibility.
VP advised Zone 7 has used drought emergencies whenever a rate increase is on the table and advised 2022 is the window where Zone 7 can lock in a rate increase for the next four years. He encouraged the City not to blindly follow Zone 7. He questioned why Zone 7 tried to get the 15% back through its customers instead of conserving its budget. He stated it is not a true drought emergency because the staff presentation showed water supplies are adequate to meet the City' s needs. He encouraged the City Council not to fall into the hands of Zone 7 and not to approve the rate increase.
Mayor Brown closed the public hearing.
Mayor Brown advised the City Council will continue with item 22 and move item 23 to the next meeting.
Mayor Brown advised she would rather have residents pay a smaller amount now than a large fee at a later date when the City runs out of water.
In response to Councilmember Testa, Councilmember Narum confirmed the City is currently performing a Water Rate Study. Mayor Brown noted the new study will also include issues related to Per- and Polyfluoroalkyl Substances ( PFAS). Councilmember Narum advised it will also involve drilling new wells.
In response to Councilmember Testa, Director Yurchak reported new water rates based on the forthcoming study would be effective on January 1, 2023, and new sewer rates would become effective on October 1, 2022.
Councilmember Testa agreed with VP' s public comments about penalizing those who conserve with higher rates. She advised the City is also looking at other future increases and noted she is uncomfortable with activating the drought rates. She reported Zone 7 is not yet increasing rates because it is waiting to see what the future conditions will be.
Councilmember Narum recalled in 2015 the City Council did not look at sample bills like those presented tonight. She advised she has a philosophical challenge of telling a customer who did their part for conservation they have to pay more for what they did use. She advised at this juncture, the City does not have many choices because it will need to maintain the Water Fund' s reserves if it issues bonds to finance the PFAS and new well. She advised she does not like activating the Stage 2 drought rates but noted the City probably does not have a choice.
Councilmember Narum moved to activate the Stage 2 water drought rates. Mayor Brown seconded the motion.
Mayor Brown advised residents have done a great job reducing water usage in the past. She reported they are in a drought and stated that 15% is an achievable conservation goal. She explained raising the City Council Minutes Page 18 of 22 March 15, 2022
rates is a more upfront, honest, and transparent move resulting in a bill almost identical to current bills so long as a customer conserves their 15%. She advised the City has PFAS and other water projects coming up they will have to fund and as the cost of doing business.
In response to Councilmember Arkin, Deputy Director Baptista advised staff will update the City Council every two months on the water usage levels and the potential need to continue charging the Stage 2 drought rates. She explained the duration of the higher rates will depend on the community' s reaction and conservation achievement. She advised if the drought rates are not activated, it will further hurt the City' s water budget and staff would likely return with a plan to activate at least excess usage fees if not excess usage fees and drought rates. She advised the main goal is to keep the City financially stable.
Director Yurchak advised the City would be using more of their reserves to offset operating costs.
Deputy Director Baptista advised that based on the FY 21/ 22 numbers, the Water Fund' s reserves could be gone in three years beyond just the consequences of needing these reserve funds for PFAS and other upcoming needs.
Councilmember Balch advised there is not a tier of lower consumption use by customers allowing the reserves to be drawn down in a fiscally prudent manner. He noted the reserve exists so the rate payments are not used for capital projects. In response to Councilmember Balch, Deputy Director Baptista confirmed the definition of the lower- use tier of customers could be set at any usage threshold as a policy decision.
Councilmember Balch called to find a usage level where a customer could not feasibly conserve any more than they do and thus be exempt from the drought rates. He advised the City Council does not have information on an exemption for a group of customers while still meeting revenue needs.
Mayor Brown noted people in the lower usage range could only be paying about two dollars more on each bill with the Phase 2 rates.
Councilmember Balch called to continue the item so staff can work out mathematically if exempting lower users would be financially feasible.
In response to Councilmember Balch, Interim City Manager Dolan clarified a 20- unit user will only pay an additional 11 cents per month. Councilmember Balch reported a customer who uses just 10 units may not have any room to conserve for using so little water and they do not have an opportunity to lower their bills through reduced usage.
In response to Councilmember Arkin, Deputy Director Baptista confirmed lower users who conserve 15% at drought rates will pay about the same as they would pay with no conservation efforts but keeping the current rates. She advised this is the goal of the drought rates.
Mayor Brown advised the City is in a drought and water costs more.
In response to Councilmember Testa, Deputy Director Baptista confirmed staff looked at the mid- year budget and it reflects a smaller purchasing expenditure to Zone 7 assuming customers conserve 15%.
She advised even with this assumption, they are still drawing down their reserves.
Councilmember Narum clarified the City gets a fixed bill from Zone 7 regardless of how much water it buys. She explained the City has to be able to pay the bill to keep the Water Enterprise Fund whole.
Mayor Brown advised the City has to cover its losses while reducing water consumption.
Mayor Brown advised she is not interested in drawing down reserves because the City is going out for a PFAS- funding bond and the reserves are necessary to get a good rating on those bonds.
City Council Minutes Page 19 of 22 March 15, 2022
In response to Councilmember Arkin, Councilmember Narum clarified the projections of the bonds' impacts on the reserve will cause a large dip in the future, so the reserve has to be built up ahead of the debt issuance.
MOTION: It was m/s by Narum/ Brown to adopt a resolution to activate Stage 2 Water Drought Rates. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Narum, Mayor Brown Noes: Councilmember Testa
Absent: None
23. Approve an agreement between the City of Pleasanton, City of Livermore, and Dublin San Ramon Services District for the construction and operation of a Temporary Joint Residential Recycled Water Fill Station and authorize $ 433, 333 for project expenses Director Yurchak reported DSRSD and the City of Livermore approved the agreement. She cautioned not approving the agreement tonight will delay the project even further and advised it was scheduled to go out to bid this week.
The City Council agreed to hear the item.
In response to Councilmember Balch, Director Yurchak reported last time the City of Livermore and DSRSD each had wastewater treatment plants available to recycle wastewater. She estimated this situation impacts about 2,500 customers, leading to the $ 250, 000 revenue estimate. She advised there is a planned analysis after the first year on the viability of continuing the station and whether $ 100 is the right price point for a season pass. She reported staff has heard there will be interest in using this to augment landscaping watering because of the mandatory conservation.
In response to Councilmember Balch, Director Yurchak expected there will not be problematic lines of customers because there is not much traffic at the proposed site and larger spaces for residents to form a line. The facility also has a large entrance in which to queue residents and there will be 20 stations to fill water vessels with a hose.
In response to Mayor Brown, Director Yurchak confirmed there is a safety element with the hoses because it is not potable water.
In response to Councilmember Balch, Director Yurchak confirmed the $ 1. 3 million cost includes about 1 million for construction and $ 300, 000 in operational costs. Staff hopes it would be operational by June and noted the bidding window has been shortened to help get it started as soon as possible. She confirmed it is a five- year program and only if there is a drought in effect.
In response to Councilmember Balch, Director Yurchak confirmed the City, collectively with the City of Livermore and DSRSD, would be subsidizing 2, 500 customers.
In response to Councilmember Balch, Director Yurchak expressed her belief the City of Livermore and DSRSD are trying to collaborate regionally by putting up 33% of the cost when Pleasanton residents have used 46% of the water for past versions of this program. She advised the three agencies felt dividing the costs and revenues equally was fair. She confirmed Pleasanton' s accounting services expenses are included in the cost- sharing.
In response to Councilmember Balch, Director Yurchak advised the decision of whether to extend the program more than five years is based upon DSRSD potentially using the site for other purposes.
City Council Minutes Page 20 of 22 March 15, 2022
Councilmember Balch explained a $ 140 season pass per customer over five years would recover all of the anticipated costs. Director Yurchak explained she would have to go back to the City of Livermore and DSRSD to approve a change in the season pass pricing. She confirmed the $ 100 rate is in the agreement and that a review of the rate in future years will be done at the City Council level. She recommended assessing the interest level in the first year and then adjusting accordingly.
Mayor Brown noted there were also probably more Pleasanton residents using the service in its previous incarnation because the facility was located in Pleasanton and not the planned site in the City of Dublin. She advised it also did not include the City of Livermore in the past.
Mayor Brown expressed doubt enough residents would pay $ 100 to participate in this program.
Mayor Brown opened the public hearing. There being no speakers, the public hearing was closed.
Councilmember Balch explained it is a bad deal based on the math and noted he dislikes having to state this because the program is so popular. He advised he participated when it was last offered. He noted the discussion about drought rates and the importance of maintaining the Water Enterprise Fund in criticizing the costs.
Mayor Brown reported speaking with Interim City Manager Dolan about whether the City could do this itself for a similar cost. She noted there are costs for security, storage, and other things the City would be solely responsible for.
Councilmember Narum advised all of the City' s recycled water is spoken for and Pleasanton is receiving extra recycled water from the City of Livermore.
Councilmember Balch advised the regional partnership component might be the proper justification for him but called for the rate to be enough to recover the Water Enterprise Fund' s expense in light of the previous discussion. He expressed concerns this is not the right use of the City' s money.
Councilmember Narum noted the low reservoir levels and advised the need to conserve water will extend at least into next year.
Councilmember Balch called for a better thought- out long- term plan.
Councilmember Arkin advised she had the same question Councilmember Balch of whether people will pay for a service that was free in the past. She advised she concurs with his thinking it is a tough decision especially with the other agencies already approving it.
Councilmember Balch advised this will benefit 1, 600 residents while the other 77, 000 will now be paying drought rates on their water. He reported he cannot support the item.
In response to Mayor Brown, no Councilmember made a motion to support the item.
City Attorney Sodergren called for a motion to not approve the agreement if City Council so wishes.
Councilmember Balch advised he would be agreeable to the proposal if the season pass rate accounted for the City' s costs. He estimated this rate would need to be $ 140 to recover the investment and advised Pleasanton can make the City of Livermore and DSRSD change their tunes.
Councilmember Balch moved to approve the agreement amending the seasonal rate to $ 140.
Councilmember Narum seconded the motion.
City Council Minutes Page 21 of 22 March 15, 2022
In response to Councilmember Testa, Councilmember Balch agreed to amend the amount to $ 150 and for the anticipation of fewer participants than in the former program.
Councilmember Balch reported with the smaller estimate of customers, the fee would have to be $ 200 to break even. In response to Mayor Brown, he agreed he did not think enough people would pay $ 200.
He advised the expectation of $ 150 is reasonable. He accepted Councilmember Testa' s friendly amendment. Councilmember Narum also accepted the amendment.
MOTION: It was m/s by Balch/ Narum to approve the agreement amending the seasonal rate to 150. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Narum, Testa, Mayor Brown Noes: None
Absent: None
MATTERS INITIATED BY COUNCIL
Mayor Brown called for a future discussion about the Meadowlark Trail based on public comment.
Councilmember Narum stated she was on the Planning Commission when the Meadowlark Trail was approved and the callers all neglected to mention they negotiated for 35 extra feet.
Mayor Brown advised this needs to come through as a staff report. Councilmember Balch requested the staff report include a map of Meadowlark Trail.
COUNCIL REPORTS — None.
ADJOURNMENT
The meeting adjourned at 12: 11 a. m.
Respectf/ Ily su" miffed,
celyn • i.
ity Clerk,
d
City Council Minutes Page 22 of 22 March 15, 2022