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HomeMy WebLinkAboutMinutes-06-02-76-Adjourned Regular MeetingMINUTES OF THE CITY COUNCIL OF THE CITY OF DOWNEY ADJOURNED REGULAR MEETING JUNE 2, 1976 The City Council of the City of Downey held an adjourned regular meeting at 7:30 p.m., June 2, 1976, in the cafetorium of the former Downey Elementary School, northwest corner of Second Street and Brookshire Avenue, Mayor Hazel N. Scotto presiding. PRESENT: Council Members: William L. Greene Richard M. Jennings Kenneth J. Miller Theodore H. Jackman Hazel N. Scotto ALSO PRESENT: Charles W. Thompson, City Manager Ervin Spindel, Director of Community Development Edwin H. Wood, Fire Chief Robert Coates, Superintendent, Water Division Robert L. Shand, City Clerk -Treasurer Mayor Scotto announced this adjourned regular meeting is being held to hear citizen input regarding possible Acquisition of Park Water Company and Southern California Water Company systems in consolidation to a single water system throughout the City. City Manager Thompson reported negotiations for the acquisition were authorized by the City Council in October, 1974, following a study made by the firm of Wilsey & Ham regarding the feasibility of the acquisition, and staff has been proceeding with negotiations since that time. He said at this time it is believed the acquisition is feasible under terms of the appraisal made by Wilsey & Ham, and recommendations have been made to the City Council. Mr. Thompson commented on the advantages of a municipal water system, particularly in the event of a major emergency in the community. Acquisition has been reviewed by the Water Board, and the process of securing the financing and pro- ceeding with the negotiations would take a minimum of at least six -to -seven months. He mentioned there are two financing alternatives recommended: The first and recommended alternative is a "lease -back" which has an advantage in terms of cost and time savings; the second is a revenue bond. Mr. Thompson pointed out the revenue from the water system would generate enough money under present rates to pay for the bonded indebtedness, and Property Taxes or General Fund moneys would be utilized in the purchase as recommended. Referring to a map on display, Director of Public Works Spindel said there are nine different water agencies serving the City of Downey at the present time, and the City is interested in purchasing the two major private companies, Park Water Company and Southern California Water Company. The foremost advantages to having a City -operated water system is economy, reliability, and service. Water Superintendent Coates presented the following charts: Water consumption per average household as compared to surrounding cities. A comparison of Downey Water Company rates as compared to Park Water Com- pany and Southern California Water Company rates, which are approximately 50 percent higher than Downey's. A comparison of water rates during the last six years. It was noted Park Water Company anticipates another 25/ rate increase in the near future. Revenue for purchase of Park Water and Southern California Water. Fire Chief Wood said the Fire Department advocates the integration of all the water systems in the City, and in an integrated system the Fire Department would make recommendations as they relate to mains and fire hydrants within the City. He stated there are three water service needs within the community -- domestic use, industrial use, and water used for fire fighting. Also, Chief Wood indicated there is concern regarding the fire flow requirement within the City, and it is also hoped to bring Downey's water system up to a Class I rat- ing for insurance purposes, rather than its present Class II. He pointed out that with an integrated system it would be possible to control the breakdowns that occur. Council Minutes 6/2/76 (Adjourned) -1- In response to questions regarding the insurance rating, Mr. Thompson noted there are other factors in addition to the water system that decide the insurance rate. Mayor Scotto introduced the members of the Water Board. Mr. Scott Temple, past Mayor of the City of Downey and Chairman of the Water Board, said the Board recommends the acquisition of water systems. Mr. Coates responded to questions of Councilman Jennings regarding priori- ties in the event of an earthquake; whether the City is cross -tied with both the other water companies; if there are plans to build a reservoir; whether the City's annual cost includes the price it has paid for water rights purchased; taxes paid into the City by the other two companies; and the length of time it will take to completely rebuild and modernize the other two systems based on a depreciation factor. Chief Wood cited low pressure problems that occur in other systems when fighting fires. He noted the City of Downey operates on a high -low pressure system off a feeder, and anytime the pressure drops below a certain point, the Metropolitan Water System feeder takes over. Mr. Thompson said many of the water mains in the Park and Southern California Water systems are four inches or less, and for good fire fighting, as well as good reliability, a system should be six or eight inches. The proposal of Wilsey & Ham provides for replacement of certain mains and the looping of systems. Councilman Jennings questioned the cost for water rights purchased over the years. Mr. Coates stated the rights are a self -paying commodity. Noting that the water rates for Park Water are higher than Downey's, Council- man Jackman inquired if the Park Water rates would remain the same after being purchased by the City. Mr. Thompson replied yes, however, there will be an overall savings for the City as a whole, which would increase in the near future. Discussion followed. Mayor Scotto called for speakers from the audience. Mr. Joe Lubin, 7820 Allengrove Street, questioned whether the proposed pur- chase price of approximately $6 million will be increased. Mr. Thompson said the final price has not been set. Mr. Lubin asked if he would eventually have to pay higher costs for water service since there are plans to upgrade some of the mains. Mr. Thompson stated the proposal is that the system will pay for itself. Mr. Lubin asked if Park Water and Southern California Water systems are purchased, will -there be three different rates in the City. Mr. Spindel replied yes, three different zones would be set up so that the citizens in the present City system will not be paying for the acquisition of other companies; the acquisition would be paid by revenues derived from the areas purchased. Mr. Lubin raised questions regarding the fire flow requirements of the City's water system. He asked for clarification of what the City is proposing. Mr. Spindel stated it is recommended the City purchase Park and Southern California Water Companies in the City of Downey west of the San Gabriel River. Mr. Arturo Soto, 9731 Pomering Rd., inquired about the possibility of pur- chasing all the other water companies in the City at the same time. Mr. Coates said it is the City's desire to purchase only Park Water and Southern California Water at this time. He listed the other water system in the City and their rates. Mr. Lubin raised further questions regarding the proposed acquisition, which were responded to by Mr. Coates. Council Minutes 6/2/76 (Adjourned) -2- Mr. Jack Brown, 7744 Corbin Avenue, asked what the minimum charge for Downey Water is. Mr. Coates replied $6.04 for two months. A discussion was held regarding Franchise Tax and costs for hydrant maintenance. Chief Wood reviewed the problems encountered with the water mains when the City first took over its own system. Mr. Lubin asked if the entire City will have an opportunity to vote on this matter and be supplied with full information prior to going to the polls. Mr. Thompson explained it is recommended that Park and Southern California Water systems be acquired by the City through a "Leaseback" arrangement, which would entail the City Council establishing a non-profit corporation, levying and selling bonds, and then leasing the facility to the City. The City would pay off the indebtedness from funds received from the sale of water. This arrange- ment would be the least expensive and most efficient way for the City. No Prop- erty Tax money would be involved in the transaction. Mr. Thompson said the City Council has the discretion to make a determination as to whether or not that method is followed. Further, he indicated it is recommended that operationally the systems would be operated under one management, one operation, so that all of the systems would benefit through improved efficiency of the system. He stated that under the "leaseback" arrangement, if there is no tax money involved, the City Council is empowered to make that decision and would be subject to referendum, but it would not be subject to a vote if there is no indebtedness incurred by the City. Mr. Warren Heer, member of the Water Board, said the first interest of the Board is to provide equal water to all of Downey. He commented on some of the advantages of a consolidated water system. Mr. Mike Huggins, member of the Water Board, discussed complaints he has received and pointed out that anyone complaining about the other two companies must take their complaints to the Public Utilities Commission (PUC). Mr. Coates explained the City's telemetering system, which pumps water into the system. He pointed out that Downey would not benefit from a reservoir and, therefore, a ground water basin is used. Mrs. Lillian Mulley, Member of the Water Board, said since she has been on the Water Board she has only received two complaints. Mr. Coates commented on the City's natural gas engine that is being installed at the new well on Telegraph Road. He pointed out the engine will operate off propane in the event of a natural disaster. A discussion was held regarding the PUC "rate of return" Mr. Lubin explained the formula for PUC rate increases. Councilman Jennings inquired if the Council were to determine it wanted the people of Downey to vote as to their desire for a water system, what would the City Manager's recommendation be. Mr. Thompson stated he would recommend a revenue bond, and under that arrange- ment it would require a majority vote at a general election. However, he pointed out his first recommendation at this time would be a "leaseback" arrangement, which is the most economical because it would not require an election, but would be subject to a referendum. Mr. Martin Lewis, 11619 Coldbrook Avenue, raised questions regarding the water rates. It was moved by Councilman Jennings, seconded by Councilman Miller, and passed by unanimous vote to continue the input hearing to 7:30 p.m., June 14, 1976. Mayor Scotto commented that at the last Council meeting people were present to address the Council regarding an agenda item, but she was not aware of this until after the Council had taken action. She said she has a copy of a sign-up card for citizens to fill in their name and agenda item on which they wish to speak, and the card can be filled out prior to a Council meeting and presented to the City Clerk. Council Minutes 6/2/76 (Adjourned) -3- Following discussion, this matter was referred to the City Manager for other suggestions. Mayor Scotto indicated she will circulate the card to the Council. Mayor Scotto read a letter from James S. Mize, County Board of Supervisors, regarding cities in the County that share in a subsidy of 25 cents for the RTD bus fare program. She mentioned the City this current year is providing approxi- mately $940,000 to RID through SB 325 funds. It was moved by Councilman Jennings and seconded by Councilman Jackman to decline the RTD invitation to participate in the program and authorize the Mayor to respond. Councilman Miller suggested dividing the total subsidy the County now has on a per capita basis and allocate that sum to the local cities to provide their own appropriate system. Mayor Scotto said she feels the City should receive at least 50 percent of the $940,000, and if that 50 percent went into the regional RTD service, it would provide a fine local hometown feeder circulation system. She asked that that also be included in the responding letter. So ordered by the Mayor. Mr. Thompson will prepare the letter. Mayor Scotto commented on receipt of a letter from the Mayor of Santa Fe Springs regarding the Fire Department proposal, noting that the Santa Fe Springs' City Council would not desire to enter into a proposal action with the City of Downey but have advised their Fire Chief to discuss with Downey the joint use of training personnel. There being no objections, Mayor Scotto said she would respond to the letter saying the City of Downey is interested in the joint training program. Mayor Scotto explained she has been corresponding with the City of Guadalajara regarding a mural to be painted by a Guadalajara artist for the City of Downey. She said she has been advised that the City of Downey is to furnish transporta- tion for the artist and two helpers, and she feels this is "out of hand". She advised the Chamber of Commerce has been collecting funds for this purpose so that the project will be going ahead. It was agreed to let the Downey Chamber of Commerce continue with the project. Speaking to the Downey Veterans Memorial, Mayor Scotto said she has been contacted by a gentleman who pointed out that the marble memorium needs repair and the platform needs to be raised. She asked the City Manager to contact the gentleman regarding what can be done. Mayor Scotto asked if one of the Council Members could attend the Downey Elks' "Teenager of the Year" award tomorrow in her place. Councilman Jennings said he will attend. Mr. Thompson advised that the City of Downey is and has been a member of the League of California Cities and the Los Angeles County Divisional League, paying annual dues of $40, which has been budgeted. However, he said, this year the League has raised its dues to $325, and he requested Council's approval. Councilman Jennings asked for a report on the organizations in which the City of Downey is a member. Mr. Thompson said last year the City dropped its membership in the National Conference of Mayors but does belong to the League of California Cities, the Los Angeles County Division of the League, SCAG,ard the National League of Cities. It was moved by Councilman Jennings, seconded by Councilman Greene, and passed by the following vote that the budget be expanded to include the League membership. Discussion ensued. AYES: 5 Council Members: Greene, Jennings, Miller, Jackman, Scotto Mayor Scotto reported the Animal Control Authority has requested the City Council to provide a letter stating its desire to lease or sell its property on the south side of Telegraph Road east of the Rio Hondo Channel for a future site of the Animal Control facility. Councilman Jennings inquired if it would affect the nearby residential area. Council Minutes 6/2/76 (Adjourned) -4- Mr. Spindel replied there is no nearby residential area. Mr. Thompson commented on the results of recent noise Level tests at this location and said the people who filed the petition will be notified and staff will discuss the test results with them. He noted the ambient level of the Freeway is well above any other reading obtained. Mr. Spindel said the property is just east of the Water Department property and permission will have to be obtained from the Water Department to install a driveway across their property at Telegraph Road. Councilman Greene indicated he would like to speak to the citizens in the area before voting on this matter. Councilman Miller questioned the availability of funds to build a new facility. He said he would like to explore this further. Mayor Scotto stated her desire for this matter to move along quickly. Mr. Thompson indicated he can make a report to the Council based on the information now available and will have it ready by the next Council meeting. Further discussion ensued. Mr. Thompson stated at this point the Authority is investigating through its Administrative Committee and Director the use of steel buildings in the approximate amount of $200,000, plus the cost for equipment, which would have to be spread over a period of years and be prorated among the cities being served by the facility. Lynwood is coming into the Authority July lst; also the cities of Montebello and Bell Gardens are requesting service through the facility; then the costs will be proportionately reduced. He said it is felt the facility would serve six or seven cities. Councilman Jennings indicated the Council should receive a complete package on the appraised value of the land, the cost of the building, the pay -out costs, et cetera. Councilman Greene stated his objections to the joint Animal Control program. He said this is costing a great deal of money. Mr. Thompson said he will provide a complete report to the Council. Councilman Jennings requested a report on the different levels of service and costs to be provided by the County beginning July 1st. There being no further business to come before the City Council, the meet- ing was adjourned at 10:00 p.m. Robert L. Sh nd, City Clerk -Treasurer HazeL�. Scotto, Mayor Council Minutes 6/2/76 (Adjourned) -5-