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HomeMy WebLinkAbout04-19-2004 MinutesMINUTES MAYOR AND COMMON COUNCIL AND COMMUNITY DEVELOPMENT COMMISSION AND THE SAN BERNARDINO CITY HOUSING AUTHORITY OF THE CITY OF SAN BERNARDINO JOINT REGULAR MEETING APRIL 19, 2004 COUNCIL CHAMBERS The joint regular meeting of the Mayor and Common Council, Community Development Commission, and San Bernardino City Housing Authority of the City of San Bernardino was called to order by Mayor/Chairman Valles at 1:35 p.m., Monday, April 19, 2004, in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. Roll Call Roll call was taken by City Clerk Clark with the following being present: Mayor/Chairman Valles; Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack; Senior Assistant City Attorney Carlyle, City Clerk Clark, City Administrator Wilson. Absent: None. 1. Closed Session Pursuant to Government Code Section(s): A. Conference with legal counsel - existing litigation - pursuant to Government Code Section 54956.9(a): People v. Danny Alcarez, et al. - San Bernardino Superior Court Case No. SCVSS 102450; Alice Thomas & Allean Wilson v. City of San Bernardino, et al. - San Bernardino Superior Court Case No. SCVSS 098359; Armando Garcia, Jr. v. Chris McWhirter, et al. - United States District Court Case No. EDCV 03-0190 RT (SGLx); Ana Lopez v. City of San Bernardino, et al. - Rancho Cucamonga Superior Court Case No. RCV 072546; Vernell Luckett v. City of San Bernardino, et al. - San Bernardino Superior Court Case No. SCVSS 106743; 1 4/19/2004 Anthony McClain v. City of San Bernardino, et al. - San Bernardino Superior Court Case No. SCVSS 100812; California Bio-Mass, et al. v. City of San Bernardino, et al. - San Bernardino Superior Court Case No. SCVSS 083473. B. Conference with legal counsel - anticipated litigation - significant exposure to litigation - pursuant to subdivision (b) (1), (2), (3) (A-F) of Government Code Section 54956.9. C. Conference with legal counsel - anticipated litigation - initiation of litigation - pursuant to subdivision (c) of Government Code Section 54956.9. D. Closed Session - personnel - pursuant to Government Code Section 54957. E. Closed session with Chief of Police on matters posing a threat to the security of public buildings or threat to the public's right of access to public services or public facilities -- pursuant to Government Code Section 54957. F. Conference with labor negotiator - pursuant to Government Code Section 54957.6. G. Conference with real property negotiator - pursuant to Government Code Section 54956.8: OLD TOWNE 1. Property: APN 0134-021-26 and 0134-021-27 688-698 West 6th Street Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency or the San Bernardino City Housing Authority and Neighborhood Housing Services of the Inland Empire, property owner Under Negotiation: Purchase price, terms and conditions 2. Property: APN 0134-021-28 621 North G Street 2 4/19/2004 Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency or the San Bernardino City Housing Authority and Rohit Doshi and Rite Family Trust, property owners Under Negotiation: Purchase price, terms and conditions 3. Property: APN 0134-021-29 631 North G Street Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency or the San Bernardino City Housing Authority and Willie Wagoner and Rose Harris, property owners Under Negotiation: ARDEN-GUTHRIE 4. Property Purchase price, terms and conditions APN 1191-021-18 2072 N. Newcomb Street Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency and Thomas E. Williams and Crystal L. Williams, property owners Under Negotiation: Purchase price, terms and conditions 5. Property: APN 1191-021-21 2073 N. Newcomb Street Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency and Lydia Mayers, property owner Under Negotiation: Purchase price, terms and conditions 6 . Property: APN 1191-021-22 2095 N. Newcomb Street 3 4/19/2004 Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency and Thomas E. Williams and Crystal L. Williams, property owners Under Negotiation: Purchase price, terms and conditions 7. Property: APN 1191-021-48 2105 Dumbarton Avenue Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency and Petri Ahonen, property owner Under Negotiation: Purchase price, terms and conditions MEADOWBROOK 8 . Property: APN 0135-292-35 123 N. Sierra Way Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the San Bernardino City Housing Authority and Carlos Dorticos, property owner Under Negotiation: Purchase price, terms and conditions 9. Property: APN 0135-291-18 174 N. Allen Street Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency or the San Bernardino City Housing Authority and Joe Gammariello, property owner Under Negotiation: Purchase price, terms and conditions 10. Property: APN 0135-291-19 168 N. Allen Street Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency or the San Bernardino City Housing Authority and Joe Gammariello, property owner 4 4/19/2004 Under Negotiation: Purchase price, terms and conditions MT.VERNON 11. Property: 540 N. Mt. Vernon Avenue APN 0138-115-04 APN 0138-115-05 Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency and Frank Ruiz, Jr., Sandra Annette Alvarado and Adrienne A. Loa, property owners Under Negotiation: Purchase price, terms and conditions 12. Property: APN 0138-114-09 Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency and Kathy T. Pham, property owner Under Negotiation: Purchase price, terms and conditions AGENCY OWNED PROPERTY 13. Property: APN 0266-362-12 5055 Hallmark Parkway Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency and Stan Robbins and Jim Robbins, purchasers Under Negotiation: Purchase price, terms and conditions Senior Assistant City Attorney Carlyle announced that the following additional cases would be discussed in closed session: Under Agenda Item IA, existing litigation: Sequenta Lawrence, et al. v. City of San Bernardino Police Department et al. - United States District Court Case No. ED CV 04-00336 VAP (RGx); Under Agenda Item 113, significant exposure to litigation: one item. 5 4/ 19/2004 Reading of Resolutions & Ordinances Deputy City Clerk Hartzel read into the record the titles of all the resolutions and ordinances on the regular agenda of the Mayor and Common Council, Community Development Commission, and San Bernardino City Housing Authority. Invocation/Pledge of Allegiance The invocation was given by Father Patricio Guillen of Libreria Del Pueblo, followed by the pledge of allegiance, led by Traletha Jackson, a graduating student from Anderson School. 2. Re -appointment - Ruben Nunez - Board of Building Commissioners - Council Member/Commissioner Johnson Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Estrada, that the re -appointment of Ruben Nunez to the Board of Building Commissioners, as requested by Council Member/Commissioner Johnson, be approved. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: Council Member/Commissioner McGinnis. 3. Proclamations & Presentations Sam Catalano of the More Attractive Community (MAC) Foundation presented certificates of recognition to key participants involved with "The Miracle at the Park" beautification project at Perris Hill Park. Nick Gonzales, Assistant to the Mayor, presented certificates of commendation to missionaries of the Church of Latter Day Saints in recognition of the thousands of hours they have volunteered to various projects throughout the city; most notably their recent assistance in the aftermath of last year's fires. David Pruitt, Executive Assistant to the Mayor, read a proclamation designating the week of April 18-24 as Victims' Rights Week in the City of San Bernardino. Mayor Valles presented a proclamation designating April 27 as Character Education Day to Randy Hill, President of the San Bernardino Rotary Club, and several other members of local Rotary Clubs. Brian Cronin, on behalf of the Humane Society, presented Henry Vasquez, EMS Coordinator, and Brian Preciado, Deputy Fire Chief, with 24 pet oxygen masks to enable them to "give a breath of life" to pets and other animals requiring this service. 6 4/19/2004 n E 0 Mickey Cruz of the Ramona Alessandro Alumni Association presented an award to Mayor Valles in recognition of her constant and continued support of the students attending Ramona Alessandro School. David Pruitt, Executive Assistant to the Mayor, read the names of the following individuals who were presented a service pin award by Mayor/Chairman Valles in recognition of their many years of dedicated service to the City: Name Department Michael Newbry Civil Service Michael Bush Fire John Hale Fire Joseph Michaud Library Erlinda Parcon Library Sharon Crawford Police Donald Stubbs Parks, Recreation & Community Services Thomas Thornley Public Services Calvin Petty SBETA Announcements Years of Service 15 20 20 5 15 5 20 10 10 Announcements were made by the Mayor, members of the Common Council, and elected officials, regarding various civic and community events and activities. Waive Full Reading of Resolutions & Ordinances Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that full reading of the resolutions and ordinances on the regular agenda of the Mayor and Common Council, Community Development Commission, and San Bernardino City Housing Authority, be waived. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. Council Minutes Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that the minutes of the following meeting of the Mayor and Common Council/Community Development Commission of the City of San Bernardino be approved as submitted in typewritten form: March 30, 2004. 7 4/19/2004 The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 7. Claims & Payroll Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that the claims and payroll and the authorization to issue warrants as listed on the memorandum dated April 13, 2004, from Barbara Pachon, Director of Finance, be approved. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 8. Personnel Actions Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that the personnel actions as submitted by the Chief Examiner dated April 12, 2004, in accordance with Civil Service rules and Personnel policies adopted by the Mayor and Common Council of the City of San Bernardino, be approved and ratified. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 9. RES. 2004-97 - Resolution of the City of San Bernardino objecting to the May 2004 tax sale of properties with City assessments. Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that said resolution be adopted. Resolution No. 2004-97 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack, Nays: None. Absent: None, 10. RES. 2004-98 - Resolution of the City of San Bernardino amending Resolution No. 655 entitled, in part, "A resolution... designating certain streets, or portions thereof as through highways..." and declaring Ohio Avenue between Olive Avenue and Pine Avenue a through highway. Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that said resolution be adopted. 8 4/19/2004 Resolution No. 2004-98 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 11. RES. 2004-99 - Resolution of the Mayor and Common Council of the City of San Bernardino awarding a contract to Laird Construction Company, Inc. for pavement rehabilitation on Hospitality Lane from San Timoteo Bridge to Gage Canal per Plan No. 10574A. Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that said resolution be adopted. Resolution No. 2004-99 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 12. Set study session - July 6, 2004 - 5:00 p.m. - Economic Development Agency Conference Room - presentation on emergency call volume management and review of apparatus replacement schedule Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that a study session be set for Tuesday, July 6, 2004, at 5:00 p.m. in the Economic Development Agency Conference Room to hear a presentation on emergency call volume management and review of apparatus replacement program. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 13. Consider reduction in Utility User's Tax rate RES. 2004-108 - Resolution of the Mayor and Common Council of the City of San Bernardino authorizing enactment of an immediate reduction in the Utility User's Tax rate and a formula for the reduction of the Utility User's Tax in subsequent years, and repealing Resolution No. 2001-239. (13A) An Ordinance of the City of San Bernardino amending Chapter 3.44 of the San Bernardino Municipal Code reducing the amount of Service Users Tax to 7.93 percent. FIRST READING (13B) Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Estrada, that said resolution be adopted; and that said ordinance be laid over for final adoption. 9 4/19/2004 The motion carried and Resolution No. 2004-108 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, McCammack. Nays: Council Member/Commissioner Johnson. Absent: None. 14. Set Public Hearing - May 3, 2004 - 4:00 p.m. - Council Chambers - consider Water Department sewer rate adjustments Council Member/Commissioner Estrada made a motion, seconded by Council Member/Commissioner McCammack, that a public hearing be set for May 3, 2004, at 4:00 p.m. for review of Sewer Rate Study 2003. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 15. RES. 2004-109 - Resolution of the Mayor and Common Council of the City of San Bernardino ratifying the submission of an ABC Grants Proposal for Local Law Enforcement from the State Department of Alcoholic Beverage Control and authorizing the acceptance of said grant funds in the amount of approximately $50,000.00. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Estrada, that said resolution be adopted. Resolution No. 2004-109 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 16. Public hearing - resolution imposing liens on property located in the City for uncollected business registration fees RES. 2004-100 - Resolution of the City of San Bernardino imposing liens on certain parcels of real property located within the City of San Bernardino for uncollected business registration fees. Mayor/Chairman Valles opened the hearing. No public comments were received. Council Member/Commissioner McCammack requested that #48 be pulled from the list of properties (Exhibit A) at this time, as the owner of the property may be overseas in the military and she would like to exhaust all means of contacting him before imposing a lien. 10 4/19/2004 Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Longville, that the hearing be closed; that the City Clerk be directed to administratively remove any properties from Exhibit A which have been paid prior to the hearing and pull property #48; and that said resolution be adopted. The motion carried and Resolution No. 2004-t00 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 17. Appeal hearing - results of transient lodging tax audit of El Patio Hotel Note: Originally, a continuance had been requested for both Agenda Item Nos. 17 and 18, because Frank Weiser, the attorney representing the appellants in both cases, had a previously scheduled court hearing. However, staff advised the Mayor and Common Council that Mr. Weiser was, in fact, present and ready to proceed with the hearings. Please note, however, that the comments made by Mr. Weiser under Agenda Item No. 17 basically apply to both 17 and 18. Council Member/Commissioner McGinnis made a motion, seconded by Council Member/Commissioner McCammack, that the matters be continued. Staff advised the Mayor and Council that originally a continuance had been requested by Frank Weiser, the appellants' attorney; however, Mr. Weiser was present and ready to proceed with the hearings. Council Member/Commissioner McGinnis withdrew his motion. Pursuant to Resolution No. 2000-279, City Clerk Clark administered an oath to Attorney Frank Weiser and appellants Mahesh Desai and Bruce Ko that they would provide true and honest testimony. Cindy Buechter, Business Registration Supervisor, provided background information regarding the appeal. She advised that through a resolution adopted in 2003, the Mayor and Council authorized Progressive Solutions to perform an audit of the Transient Lodging Tax on the hotels and motels throughout the city. The audit was conducted on the El Patio Hotel on October 6, 2003, in accordance with generally accepted accounting principles, which utilizes statistical sampling to arrive at an auditing opinion. The review of El Patio's records covered a timeframe of January 1, 2000, through December 31, 2002. The review found discrepancies in the hotel's operating procedures that resulted in errors in assessment, collection, and 11 4/19/2004 payment of the transient lodging taxes in accordance with the requirements set forth in Chapters 3.54 and 3.55 of the San Bernardino Municipal Code. She noted that, in particular, with both the El Patio Hotel and Sahara Motel the auditor found that the room rent and the tax were not separated out to the transient at the time of registration. For example, if someone came in for a room they were told that the room rate was $40, and the customer would pay the $40. When the hotel/motel recorded this transaction on the monthly report to the City, the proprietor would back the tax out, indicating that the room rate was $36.36 and pay the City a 10 percent tax of $3.64, equating to the $40. In actuality, if the room rate is being presented as $40, the hotel/motel would owe the City $4.00 in Transient Lodging Tax. Ms. Buechter stated that the amount found to be in violation was a total of $2,771.52, including penalties and interest. El Patio requested a waiver of the penalties at a hearing before the City Clerk on February 9, 2004. Subsequently, the request for a waiver was denied by the City Clerk, and El Patio was notified of this action by certified mail on March 15, 2004. El Patio then filed an appeal on March 29, 2004, relative to the City Clerk's decision. Mr. Weiser stated that there were some legal issues he needed to raise for the record. He advised that there is a history of litigation in that the San Bernardino Hotel/Motel Association (of which both appellants are members) has overturned the previous Transient Occupancy Tax (TOT) —that in 1997 in a published opinion at 59 Cal. App. 4' 237, the Fourth District Court of Appeals declared it unconstitutional on due process grounds, saying that the tax was facially vague. Then in 1998, after the Fourth District declared it unconstitutional, the City adopted a new ordinance, presented the new ordinance to the voters, who approved it on February 4' or 5', 1998, and a new ordinance went into effect. Immediately after it went into effect, a new challenge was made to the new ordinance. That was eventually thrown out bN Judge Davis, saying that the new ordinance was constitutional. It was taken up on appeal again to the Fourth District Court of Appeals; and in an unpublished opinion in June 2000, the Fourth District declared it constitutionally suspect, saying they were reversing Judge Davis' order and sending it back to the trial court. Mayor Valles verified that this was an unpublished opinion. Mr. Weiser stated that it was an unpublished opinion, but certainly binding between the parties —the Hotel/Motel Association and the City. He stated that what we have is a tax that is now being attempted to be collected on an ordinance that has been repealed, both by the Council and the voters. He stated that he and his clients believe that is simply illegal and unconstitutional. 12 4/19/2004 He cited cases in a letter which he sent to both Mr. Carlyle and Ms. Buechter, which he would like to be made part of the record. He stated that just to make it official, that not only the original San Bernardino case at 59 Cal. App. 4' 237, but a subsequent case that was published in the Ninth Circuit Court of Appeals, Patel v. City San Bernardino 310 F.3d 1138, indicating it was unconstitutional to collect an unconstitutional tax once it has been declared so. Mr. Weiser stated that he sees it both ways - if Mr. Penman told the voters to repeal this tax because it's going to be rendered unconstitutional when challenged, how can the City come back now and retroactively say they want to collect it, after it has already been repealed. On the other hand, he believes the voters, themselves, have declared it unconstitutional, and there is nothing constitutionally that prohibits them to declare an ordinance or a tax to be illegal. In addition, Mr. Weiser stated that they have also raised a challenge to the tax in general in a case called Miller Bros. Co. v. State of Maryland 347 U.S. 340 & 345, 74 S. Court 535 & 539, where we indicate that the Transient Occupancy Tax is not only vague as written, but is simply illegal under the 14' Amendment because the 14' Amendment allows a taxing authority to exercise jurisdiction over somebody that has residency, some kind of situs or contact with the taxing authority; and transient residence is not sufficient under the Miller case. Therefore, they believe that the tax should not even be collected to begin with. Mr. Weiser stated that the main point is that this tax is a nullity - the tax that they are talking about where the City is trying to collect from January 2000 through November 2002. Relative to the facts of the case, Mr. Weiser stated that he thought it was very important to take into consideration that the motel owners were not underreporting. This is not a situation where they were not showing what they were collecting from the tenants. They were simply not doing the proper bookkeeping in terms of segregating out the tax from what was being collected. But everything that is reported on the TOT return in terms of gross income is, in fact, what they collected. So there is nothing that they have not shown, have not reported; and that is not sufficient to indicate that there has been an underpayment to the City. He stated that if a motel operator is collecting $40 - that $40 is what he gets from the tenant - he takes out the tax, plus what he charges. Mr. Weiser noted that there may be a technical violation of the City's code, if the code was in fact valid. But that's not enough to assess the tax. The City has to show that the tax is being underreported, and staff simply has not done that. He stated that he thought everyone would agree that stipulation on this factual record is that there's not under -reporting - it's just a matter of reporting errors. 13 4/19/2004 Mr. Weiser stated he also wanted to place in the record that he and his clients have ongoing litigation on the new ordinance —but relative to the old ordinance, there is actually still a challenge. He and his clients are asking for a refund from the City rather than the other way around. They have another case —the lawsuit that was remanded from the Fourth District is still a viable lawsuit —it's Case No. SCV 46722. He stated that there is a second amended complaint, and Judge Kafkowski overruled the City's demurrer as far as their request for refund of taxes on the old ordinance. He advised that in the second amended complaint he had attached copies of the Fourth District Court of Appeals unpublished opinion, Mr. Penman's impartial analysis to the voters, and the new ordinance. So he would like to have that placed as part of the record. (This was not done.) City Clerk Clark pointed out that that matter is not on the agenda; the matter before the Council is the matter of the appeal from El Patio. Senior Assistant City Attorney Carlyle clarified that the impartial analysis —the part that Mr. Weiser read —was an analysis of what the court opined in an unpublished opinion; it was not necessarily the view of the City Attorney's Office as to whether or not the Transient Lodging Tax at that time was unconstitutional. He stated that Mr. Simmons was prepared to represent the department and explain the legal implications of what Mr. Weiser had said. Senior Assistant City Attorney Simmons read the exact language from the Court of Appeal opinion, stating that he had filed what is called a demurrer in the trial court and the trial court upheld the demurrer saying that the statute was constitutional and essentially throwing out Mr. Weiser's complaint brought on behalf of his client, which is the San Bernardino Motel/Hotel Owners' Association. Mr. Simmons stated that the final line of the Court of Appeal opinion states, "In any event, we do not hold that the ordinance is in fact unconstitutionally vague. We merely hold that there is a reasonable possibility that the Association could amend to state a cause of action that the ordinance is unconstitutionally vague." They sent it back to the trial court to allow Mr. Weiser to amend his complaint and, in fact, he did so. He filed a second amended complaint and the litigation is, in fact, ongoing. The court overruled the demurrer. That simply allows the lawsuit to go forward —it is not a legal ruling on the merits of the case. The judge has not issued a definitive ruling in this matter. Mayor/Chairman Valles reminded the Council of the action before them —that there were three options for their consideration as outlined on the agenda. 14 4/19/2004 Mahesh Desai, El Patio Hotel, advised that he is collecting $40 and paying tax on the $40. Mr. Weiser stated that he wanted to quote from the Court of Appeal opinion that Mr. Simmons quoted from, because he believed it should be taken in context. He advised that the paragraph prior to the last paragraph of the opinion that Mr. Simmons read from, states, "It may seem that we keep sending the City back to the drawing board, but it is just not that hard to draft a constitutional hotel tax! City of San Bernardino, the published opinion, indicates that both the ordinance here and the ordinance in Brit, another published opinion, may have been based on the same model ordinance." Then he quoted the San Bernardino case, "We speculate that the root of the problem may lie in the model ordinance. Even so the City has done itself no favors by perpetuating the circular definitions condemned in both Brit and City of San Bernardino." The Court of Appeals went on to say, "In any event we do not hold that the ordinance is in fact unconstitutionally vague," and that was because I (Mr. Weiser) had not pled in the actual complaint sufficiently to raise the circularity issues and the vagueness issues for purposes of the original demurrer. But the Court of Appeals, in its independent review, took a very unusual position, even though I (Mr. Weiser) had not asked for an amendment and reviewed the ordinance because of the public interest on the issue and found that, in fact, we could re -amend it to make it rendered unconstitutional in its challenge. Mr. Weiser stated that he thought that from a practical standpoint, Mr. Penman was very correct and very definite in rendering it unconstitutional when challenged —that at the very minimum, we're going to go up to the court and the court is going to render it unconstitutional. Mayor/Chairman Valles reminded Mr. Weiser that his points were well taken; however, that was not what was being discussed today —today they were upholding and taking action on the City Clerk's recommendation. She stated that she was sure he would be taking this up with the City Attorney and whatever findings they have. Mr. Weiser ascertained that he was required by law to raise these legal issues, and that certainly the City Attorney could advise the Council regarding that. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Kelley, that the hearing be closed; and that the Mayor and Common Council uphold the decision of the City Clerk and adopt her letter of March 15, 2004, as its findings and conclusions, based upon the backup information submitted and evidence presented at the hearing. 15 4/19/2004 The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 18. Appeal hearing - results of transient lodging tax audit of Sahara Motel Mayor/Chairman Valles opened the hearing. Cindy Buechter, Business Registration Supervisor, provided background information on the appeal filed by the Sahara Motel. She advised that Progressive Solutions had performed an audit of the Sahara Motel on October 10, 2003, covering the period from January 1, 2000, through December 31, 2002. She advised that discrepancies were found in the motel's operating procedures resulting in errors in assessment, collection, and payment of the Transient Lodging Tax. She advised that the Sahara Motel was not separating out the Transient Lodging Tax from the room rate. Then, when they reported it to the City they were backing the tax out of the room rate and paying accordingly. She stated that the assessment by the auditor found additional Transient Lodging Tax plus penalties and interest in the amount of $13,484.37. An appeal hearing was held before the City Clerk on February 9, 2004; on March 15, 2004, the City Clerk sent the Sahara Motel a Notice of Final Determination denying the appeal, which led to the hearing today before the Mayor and Common Council. Bruce Ko, Sahara Motel, stated that since the hearing before the City Clerk he had come up with some additional information that was not available at that time. He explained that the majority of the business at his motel comes from public agencies - that they have been in the community for over 20 years and work with the public agencies of the community. He stated that one of these agencies is the County of San Bernardino and basically what happens is that they will send a client to the motel with a voucher that states how much they will pay for the room. He submitted for the record and for the Council's review copies of the vouchers, pointing out that in the lower left side it clearly states that the motel room is for so many people, from such date to such date, at $40 per night, including tax. Therefore the people being sent by the County and the motel are both being told that the rent is $40 including tax. He advised that this has been the practice of all the agencies they have been dealing with. 16 4/19/2004 Mr. Ko advised that, as Mr. Weiser had stated earlier, the motel reports all its rental income; and the only thing that is technically incorrect is an administrative error. He stated that the ordinance states that the rent has to be separated into room revenue and the tax - that the operators need to report the tax and pay the tax collected on behalf of the City at the end of the month, which he has done all these years. He stated that there is no question of under- reported revenue or any other underpaid tax in their case. In addition, over the years they have agencies which have actually given them a tax exempt letter, indicating that they are tax exempt; however, when they report for these agencies, they lump them together, so they actually overpaid the Transient Lodging Tax. (Mr. Ko had one of these letters available for the Council/Commission to examine.) Council Member/Commissioner Kelley asked Ms. Buechter to clarify exactly how the owners should be calculating and paying the Transient Lodging Tax. Ms. Buechter explained that if the operator of the motel presents the room rate as $40, then the tax owed the City (which is 10 percent) would be $4. The auditor found that the operators are not representing this to the transient and they are not showing that rate in their records. Instead they are showing the room rate as $36.36 and then paying the City $3.64 to total the $40. Also, the auditor's review stated, "We examined the respective purchase orders that were initiated by the various agencies and determined that none of them included the tax as part of the purchase order. I have advised the motel that they would need to advise these agencies that taxes are due for each and they should request an amendment to the various purchase orders so that the tax could be separated from the room rent." Council Member/Commissioner McGinnis noted that on the vouchers from the County there is something that is printed on them that says $40 per night including the tax; and inquired whether the wording on the voucher was sufficient or not. Ms. Buechter explained that it would be sufficient now; however, during the time frame that the audit covered, the auditor's report to the City indicated that the vouchers did not designate that the tax was included. Council Member/Commissioner Johnson inquired whether the motel owner had something on paper that goes to the customer indicating that the tax is included in the $40 room rate. Mr. Ko stated that they have the check -in cards, and when the people come in they are told that is what they are being charged —they are quoted a room rate of $40 including tax. 17 4/19/2004 Council Member/Commissioner Longville stated that she would have to take the advice of the auditor because she had not heard any reason that she should throw out the recommendation of the auditor. She stated that even though the intentions of the hotel/motel owners were good, she can only use personal experience; that she travels a lot for her work and those hotels never quote a price and say that it includes the tax —that by the time she walks out she has spent an extra 10-12 percent for tax. Mr. Weiser reminded the Council that there is no tax ordinance in effect; that it has been repealed. They are talking about an old ordinance that is a nullity, so there is no tax to collect. Council Member/Commissioner Estrada made a motion, seconded by Council Member/Commissioner McGinnis, that the hearing be closed; and that the Mayor and Common Council uphold the decision of the City Clerk and adopt her letter of March 15, 2004, as its findings and conclusions, based upon the backup information submitted and evidence presented at the hearing. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. Community Development Commission Staff Present Mayor/Chairman Valles; Council/Commission Members Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack; Senior Assistant City Attorney Carlyle, Economic Development Agency Special Council Sabo and Executive Director Van Osdel, City Clerk Clark. Absent: None. R19. Public hearing - reallocation of 2001/2004 Community Development Block Grant (CDBG) Funds - use of 2004/05 CDBG, Emergency Shelter Grant (ESG), and HOME Funds - approval of Section 108 Loan Guarantee Application RES. 2004-101 - Resolution of the Mayor and Common Council of the City of San Bernardino: (1) approving the 2004/05 CDBG Appropriations in Attachment I as recommended by the Community Development Citizen Advisory Committee (CDCAC); (2) approving the 2004/05 HOME and Emergency Shelter (ESG) Grant Appropriations; (3) approving the 2001/2004 CDBG Reallocation of funds; (4) authorizing the Mayor to execute and submit to HUD appropriate documents and to take all necessary actions to implement the City's 2004/2005 Annual Action Plan, including execution of contracts with public service agencies. (R19A) 18 4/19/2004 RES. 2004-102 - Resolution of the Mayor and Common Council of the City of San Bernardino approving and authorizing the submittal of a Section 108 Loan Guarantee Application ("Application") to facilitate two Redevelopment Agency Projects (1) Mercado Santa Fe (Subarea B, of Uptown Redevelopment Project Area) and (2) North Arden -Guthrie Retail/Entertainment Shopping Center (1VDA Project Area) to the U.S. Department of Housing and Urban Development ("HUD"). (R19B) Mayor/Chairman Valles opened the hearing. Council Member/Commissioner Johnson declared a conflict and stated he would abstain on this matter because he is a member of the board of one of the organizations. He left the Council Chambers and returned after the vote was taken. Maggie Pacheco, Deputy Director, Economic Development Agency, provided an overview of the staff report. Council Member/Commissioner Longville stated that she was going to support the motion because she wanted to get the Section 108 funds, and she thought both of these projects were worthy projects; however, the one area that has still not been addressed is the Baseline/Highland/E Street corridor, and there is no real infusion of money to deal with that. She noted that the area is getting worse and worse. Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner McCammack, that said resolutions A and B, be adopted. (The motion was subsequently amended.) Pursuant to Resolution No. 200-279, City Clerk Clark administered an oath to Penny Lilburn, Tray Green, and Rev. Dennis Brown that they would provide true and honest testimony: Penny Lilburn, Director of the Highland Senior Center, 3102 E. Highland Avenue, Patton, CA, thanked the Council for their past continued financial support through the CDBG Program. She stated that over the last couple of years they have taken a substantial decrease in CDBG funding, and she was here to ask for reconsideration of the funding cut (It was noted that last year the Highland Senior Center had received $12,500; this year they were allocated $10,000.) She advised that the Highland Senior Center is the largest and most active senior center in the Inland Empire; and because they are nonprofit the amount of funding they are seeking is minimal compared to the services provided to the 19 4/19/2004 seniors located in the City of San Bernardino. She pointed out that the scope of services that they provide are not generally provided by other senior centers, such as their transportation assistance program. Council Member/Commissioner Derry stated that he would like to add an amendment to the motion that if there is a re -allocation of excess CDBG funds, that the Highland Senior Center have priority for the $2,500 that was cut this year. Council Member/Commissioner McCammack stated that before she would second the amended motion, she needed to point out that the City of San Bernardino services lots of agencies - that the needs are huge in this community and there are lots of agencies that did not get funded at all. She noted that the funding has gone down each year, but it has gone down across the board - no one agency has been left "holding the bag" more than another. She suggested that some of the agencies that didn't receive any funding should be considered before additional money is allocated to others who have already received an allocation. Council Member/Commissioner Derry pointed out that the other two senior centers actually receive over $100,000 total for staffing and other programs, while this is the only money the Highland Senior Center receives from the City of San Bernardino. Council Member/Commissioner Estrada stated that she thought the other senior centers were set up a little differently than the Highland Senior Center; however, she did not have a problem with consideration of the additional money. Ms. Estrada suggested that the Council/Commission approve the allocations as proposed in the staff report, realizing that there is usually money left over each year where this additional funding could come from. She voiced concern, however, relative to the first $2,500 going to the Highland Senior Center without consideration for all the other agencies that weren't funded, or who also received less money than what was allocated in previous years. She felt that all the programs would have to be evaluated at the same time. Council Member/Commissioner Longville stated that she spent a number of years as a member of the Community Development Citizen Advisory Committee, and it is quite common for the Council to accept without change the recommendations of the committee, but to add a few things that they feel are important enough. She stated that the one thing that's not done, because it would involve a tremendous amount of staffing, is to go through a whole second submittal process for re -programming money. Therefore, throughout the year there will be reallocation requests; and this is the time to make these preliminary decisions. 20 4/19/2004 Ms. Longville noted that in years past the Highland Senior Center received $20,000 in CDBG funds, and the senior population has grown. She added that the only reason the funding has been reduced is that there are now more organizations to fund, which are meeting other needs that are just as critical as the senior population. Council Member/Commissioner McCammack seconded the amended motion, with an announcement to the rest of the organizations that were not funded, or had their funding cut, to come back and talk to the Council again at the time of reallocation. Ms. Pacheco stated that she would be remiss if she did not advise the Mayor and Council that preliminarily the plan for any funds potentially available at the end of the closing year is for staff to ask the Mayor and Council to look at allocating these funds to the City's Code Enforcement Division. She stated that the City Administrator had advised staff that there is a shortage of funding in Code Enforcement and staff was asked to look at prioritizing any CDBG funding for this purpose. She added that she believed it would be less than $75,000. She also made note of the fact that for the last five years they have consistently been allocating $300,000 for Public Service; however, since resources are very limited there may be a point where they have to cut the Public Service component of the CDBG Program. Mayor/Chairman Valles reaffirmed that the motion before the Council was to adopt resolutions A and B, with an amendment that should there be any unallocated funds, that the Highland Senior Center would be considered. (She acknowledged that Mr. Derry had actually said "given priority", but in response to Ms. Estrada's concern that all the other recipients should be able to vie for these funds, with all requests coming back to the Council, she was using the word "considered." Mr. Derry concurred with the Mayor's verbiage.) Tray Green, Shoppin 4 Seniors, 1540 Barton Road, Redlands, CA, thanked the Mayor and Council for their support over the past four or five years; and explained that they provide a grocery shopping and delivery service to the City's low income senior citizens, especially those who are housebound. Reverend Dennis M. Brown, P.O. Box 7088, San Bernardino, CA, founder of Impact Ministry and Crusades, Inc., advised that his organization has been applying for funding for over 10 years and has never been funded regardless of what they have applied for. 21 4/19/2004 Ms. Pacheco stated that she and her staff would be happy to provide technical support relative to the completion of their application; and that there are also some grant opportunities for after -school programs. Council Member/Commissioner Estrada made a substitute motion, seconded by Council Member/Commissioner McCammack, that the hearing be closed; and that said resolutions A and B, be adopted, with the amendment that if there is any reallocation of funds, that the Highland Senior Center will be reconsidered. The motion carried and Resolution Nos. 2004-101 and 2004-102 were adopted by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, McCammack. Nays: None. Abstentions: Council Member/Commissioner Johnson. 20. Resolution of the City of San Bernardino authorizing the Mayor to execute a Services Agreement with the San Bernardino City Unified School District for the operation of the School Crossing Guards Program by the Police Department. (Continued from April 5, 2004) Note: No resolution was included in the backup materials. Mayor/Chairman Valles noted that staff had requested that this item be tabled. Senior Assistant City Attorney Carlyle advised that the City Attorney's office had conflicted off on this item because City Attorney Penman's wife is a member of the school board; however, Special Counsel Sabo had reviewed the matter. Council Member/Commission McCammack made a motion, seconded by Council Member/Commissioner Estrada, that the matter be tabled. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 21. RES. 2004-104 - A Resolution of the Mayor and Common Council of the City of San Bernardino declaring intention to establish a Community Facilities District for new development for the ongoing operation and maintenance of a fire station for the Verdemont Area and to levy a special tax within said Community Facilities District, setting a public hearing thereon and authorizing the publication and mailing of notice thereof (Community Facilities District No. 1033), and repealing Resolution No. 2003-361. 22 4/19/2004 Council Member/Commissioner Kelley made a motion, seconded by Council Member/Commissioner Derry, that said resolution be adopted. Resolution No. 2004-104 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, Derry, Kelley, Johnson, McCammack. Nays: Council Member/Commissioner McGinnis. Absent: None. 22. RES. 2004-105 - A Resolution of the Mayor And Common Council of the City of San Bernardino directing the preparation of a Map and an Engineer's Report for Community Facilities District No. 1033. Council Member/Commissioner Kelley made a motion, seconded by Council Member/Commissioner Derry, that said resolution be adopted. Resolution No. 2004-105 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, Derry, Kelley, Johnson, McCammack. Nays: Council Member/Commissioner McGinnis. Absent: None. 23. RES. 2004-106 - A Resolution of the Mayor and Common Council of the City of San Bernardino approving agreement with special legal counsel regarding Community Facilities District No. 1033. Council Member/Commissioner Kelley made a motion, seconded by Council Member/Commissioner Estrada, that said resolution be adopted. Resolution No. 2004-106 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, Derry, Kelley, Johnson, McCammack. Nays: Council Member/Commissioner McGinnis. Absent: None. 24. RES. 2004-107 - A Resolution of the Mayor and Common Council of the City of San Bernardino approving form of Mitigation Agreement in the Verdemont Fire Station Service Area and authorizing execution of the final form of Mitigation Agreements with participating developers (Community Facilities District No. 1033). Council Member/Commissioner Kelley made a motion, seconded by Council Member/Commissioner Estrada, that said resolution be adopted. Resolution No. 2004-107 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, Derry, Kelley, Johnson, McCammack. Nays: Council Member/Commissioner McGinnis. Absent: None. 23 4/19/2004 25. RES. 2004-103 - A Resolution of the Mayor and Common Council of the City of San Bernardino approving goals and policies for the use of Community Facilities Districts pursuant to the Mello -Roos Community Facilities District Act. Council Member/Commissioner Longville made a motion, seconded by Council Member/Commissioner Estrada, that said resolution be adopted. Resolution No. 2004-103 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, Derry, Kelley, Johnson, McCammack. Nays: Council Member/Commissioner McGinnis. Absent: None. 26. Review and take action regarding the need for continuing in effect the local emergency caused by the Old Waterman Canyon Fire pursuant to Government Code Section 8630 (c)(1) Note: No backup materials were submitted for this item. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Estrada, that the Mayor and Common Council confirm the need for continuing in effect the local emergency caused by the Old Waterman Canyon Fire. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 27. An Ordinance of the City of San Bernardino amending Section 5.76.200 of the San Bernardino Municipal Code relating to taxicab rates. FIRST READING Council Member/Commissioner McCammack stated she would abstain on this matter because one of the taxi companies is a business client. Council Member/Commissioner McGinnis made a motion, seconded by Council Member/Commissioner Derry, that said ordinance be laid over for final adoption. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson. Nays: None. Abstentions: Council Member/Commissioner McCammack. 24 4/19/2004 28. RES. 2004-110 - Resolution of the Mayor and Common Council of the City of San Bernardino to provide for an increase in rates for taxicab service. Council Member/Commissioner McCammack stated she would abstain on this matter because one of the taxi companies is a business client. Council Member/Commissioner Johnson made a motion, seconded by Council Member/Commissioner Derry, that said resolution be adopted. Resolution No. 2004-110 was adopted by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, Derry, Kelley, Johnson. Nays: None. Abstentions: Council Member/Commissioner McCammack. Absent: Council Member/Commissioner McGinnis. 29. Set workshop - May 17, 2004 - 7:00 p.m. - Council Chambers of City Hall - proposed new Charter Micaela Cruz, 5004 Coyote Lane, San Bernardino, CA, representing the League of Women Voters, quoted from the Brown Act regarding open government in California and expressed concern regarding the lack of public input on this matter. She stated that the League was asking for a workshop for residents before the document is presented to the Council; that the public has been excluded from the process. Mayor/Chairman Valles asked whether Ms. Cruz was wanting an additional workshop for residents prior to the one being scheduled for May 17. Ms. Cruz answered in the negative, stating that her statement had been prepared prior to knowing a workshop was being proposed; however, the League did want to be on record relative to the importance of public participation in the process. Council Member/Commissioner McCammack suggested that the workshop be held in the Council Chambers rather than the Economic Development Agency Boardroom in the event someone is watching the live televised discussion and wants to come and participate. Council Member/Commissioner Estrada made a motion, seconded by Council Member/Commissioner Longville, that a workshop be set for Monday, May 17, 2004, at 7:00 p.m. in the Council Chambers of City Hall, 300 North "D" Street, regarding the proposed new Charter. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 25 4/19/2004 30. Public Comments Gil Navarro, Chairman, Mexican American Political Association, P.O. Box 3196, San Bernardino, CA, distributed a letter and spoke regarding the hate crime at Our Lady of Rosary Cathedral; and requested that the Mayor and Council create a resolution denouncing this hate crime and letting the community know that such acts will not be tolerated. Mayor/Chairman Valles advised that any resolution should denounce all types of hate crimes and bigotry, not just one individual act. Council Member/Commissioner Johnson stated that Mr. Navarro should also present his letter to the Human Relations Commission. Steven Figueroa, MAPA Voter Registration & Education Corp., stated that he came to the meeting specifically to support Mr. Rick Avila; and made comments regarding the recent court trial and the money being spent by the City on this and other legal matters. Rick Avila of Avila Construction stated that the City Attorney's Office needs to be investigated for corruption relative to the amount of money being spent on outside attorneys. 31. Adjournment The meeting adjourned at 6:02 p.m. The next joint regular meeting of the Mayor and Common Council/Community Development Commission is scheduled for 1:30 p.m., Monday, May 3, 2004, in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. No. of Items: 31 No. of Hours: 4.5 RACHEL G. CLARK QCity Clerk By: 2�it Linda E. Hartzel Deputy City Clerk 26 4/19/2004