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HomeMy WebLinkAbout02-22-2005 MinutesMayor Judith Valles CITY OF SAN BERNARDINO CoaEsthMembers: Esther Estrada 300 N. "D"Street Susan Longville San Bernardino, CA 92418 Gordon McGinnis Website: www.sbcity.org [ lley ChhasasKeelley Rikke Van Johnson Wendy McCammack MINUTES MAYOR AND COMMON COUNCIL AND COMMUNITY DEVELOPMENT COMMISSIt OF THE CITY OF SAN BERNARDINO JOINT REGULAR MEETING FEBRUARY 22, 2005 COUNCIL CHAMBERS The joint regular meeting of the Mayor and Common Council and Community Development Commission of the City of San Bernardino was called to order by Mayor/Chairman Valles at 1:34 p.m., Tuesday, February 22, 2005, 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, Kelley, Johnson, McCammack; City Attorney Penman, City Clerk Clark, City Administrator Wilson. Absent: Council Member/Commissioner Derry. 1. Closed Session Pursuant to Government Code Section(s): A. Conference with legal counsel - existing litigation - pursuant to Government Code Section 54956.9(a): Salvador Torres v. City of San Bernardino, et al. - San Bernardino Superior Court Case No. SCVSS 082631; City of San Bernardino Municipal Water Department v. The United States Department of the Army - United States District Court Case Nos. CV 96- 8867 & CV 96-5205; Luis Alberto Jovel, et al. v. City of San Bernardino - United States Court Case No. CIV F-04-6586 AWI DLB; 1 02/22/2005 Rafeek Omar v. City of San Bernardino - Workers Compensation Appeals Board Case No. SBR 0318903; De Anna Jean Nunez v. City of San Bernardino - Workers Compensation Appeals Board - Case No. SBR 0305342; Kiranieet K. Uppal v. City of San Bernardino - San Bernardino Superior Court Case No. SCVSS 121867; Candice Dick v. City of San Bernardino - United States District Court Case No. EDCV 02-158 VAP (SGLx); Kimberlyn Hearns v. City of San Bernardino, et al. - United States District Court Case No. EDCV 03-1434 RT (SGLx). 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: Patrick Major v. City of San Bernardino Fire Department San Bernardino City Professional Firefighters Local No. 891 v. City of San Bernardino, Larry Pitzer, et al. ASCAP v. City of San Bernardino BMI v. City of San Bernardino SESAC v. City of San Bernardino MPLC v. City of San Bernardino C. Conference with legal counsel - anticipated litigation - initiation of litigation - pursuant to subdivision (c) of Government Code Section 54956.9: City of San Bernardino v. San Bernardino City Unified School District 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. 2 02/22/2005 F. Conference with labor negotiator - pursuant to Government Code Section 54957.6: Negotiator: Linn Livingston, Human Resources Director Employee Organizations: General Unit G. Conference with real property negotiator - pursuant to Government Code Section 54956.8: 1. Property: 247 W. Third Street Negotiating Parties: Judith Valles, Mayor, on behalf of the Redevelopment Agency, property owners, and Gerry Newcombe, Deputy Administrative Officer, on behalf of the County of San Bernardino Under Negotiation: Purchase price, terms and conditions 2. Property: That parcel consisting of approximately 67.75 acres identified as Parcel 1-2 at the San Bernardino International Airport, and generally bounded by Harry Sheppard Boulevard, Del Rosa Drive, Paul Villasenor Boulevard, and Memorial Drive Negotiating Parties: Don Rogers on behalf of the Inland Valley Development Agency. David Newsom on behalf of Hillwood/San Bernardino LLC. Bruce Varner on behalf of Stater Bros. Markets. James F. Penman on behalf of the City of San Bernardino Under Negotiation: Terms and conditions Uptown Project Area 3. Property: APN 0145-242-32 and APN 0145-242-33 Owner/Seller: Mayor Judith Valles, on behalf of the Redevelopment Agency of the City of San Bernardino, property owner(s) Buyer: San Bernardino City Unified School District ("District") 3 02/22/2005 IVDA Redevelopment Project Area 4. Property: Vacant land APN 0135-292-39 Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency, and/or San Bernardino City Housing Authority and Bonnie S. Johnson and George W. Ashworth, property owner(s) Under Negotiation: Purchase price, terms, and conditions Central City Project Area 5. Property: Property bounded by "E" Street, 2nd Street and 4' Street Negotiating Parties: Gary Van Osdel, Executive Director, on behalf of the Redevelopment Agency; Fred Wilson on behalf of the City of San Bernardino; Jorge Pont on behalf of Harris- Gottschalks; Chester Upham on behalf of the Upham Trust (previous J.C. Penney Building); and Robert Curci on behalf of the Central City Mall Co., property owner(s) Under Negotiation: Purchase price, terms and conditions City Attorney Penman announced that the following items would be discussed in closed session under Agenda Item No. 1B, Significant exposure to litigation: Legal information on Agenda Item Nos. 19-25; and Two or three matters under Section 54956.9. Subsections b 3 a. Reading of Resolutions & Ordinances Deputy City Clerk Sutherland read into the record the titles of all the resolutions and ordinances on the regular agenda of the Mayor and Common Council and Community Development Commission. Council Member/Commissioner Derry Arrived At 3:12 p.m., Council Member/Commissioner Derry arrived at the Council/Commission meeting. Invocation/Pledge of Allegiance The invocation was given by Jorge Carlos, Executive Assistant to the Council, followed by the pledge of allegiance, led by Council Member/Commissioner Estrada. 4 02/22/2005 Moment of Silence Mayor/Chairman Valles expressed condolences to the family and requested a moment of silence in memory of Ray Rucker Sr., City employee in the Police Department for 31 years who also served as Chief of Police and who will be most remembered for his post - retirement role as Santa Claus. Council Member/Commissioner McCammack expressed condolences to the family and requested a moment of silence be observed in memory of Louise Hunter Martin, San Bernardino Assistance League Member since 1946, who passed away one day prior to her 95`h birthday. 2. Appointment — Brenda Frederick — Human Relations Commission — Council Member/Commissioner Kelley Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that the appointment of Brenda Frederick to the Human Relations Commission, as requested by Council Member/Commissioner Kelley, be approved. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 3. Presentations & Proclamations Dr. Lyn Behrens of Loma Linda University Medical Center presented the Centennial Visionary Award to Mayor Valles for her vision in leadership and for her passion, commitment, and courage in addressing the issues of the City of San Bernardino and the Inland Valley. A proclamation designating February 23, 2005, as Rotary Centennial Day and February 23, 2005 to February 23, 2006, as Rotary Centennial Year in the City of San Bernardino and congratulating all Rotarians for their noble service and volunteerism was presented to District Governor Roy Brownie; Manuel Acosta, President of the San Bernardino Downtown Rotary; Blythe Anderson, President of the San Bernardino Breakfast Rotary; Ann -Marie Duncan, President of the San Bernardino Highland Rotary; and Wayne Rash, President of the Rotary North Club and to the President of the San Bernardino Crossroads Rotary Club. Darren Kettle, Director of Freeway Construction for SANBAG, provided an overview of the 210 Freeway construction project and provided information regarding future street closures and detours. He indicated that it is estimated the work will be completed in late 2007. 5 02/22/2005 El 5 June Durr, Public Information Officer, Mayor's Office, 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 Robert Simmons Rosemary Allen Eileen Gomez Robert Sepulveda, Jr. Tony Page Curtis Parker Sheree Meier Guadalupe Salvadore Padilla Mary Yanez Announcements Department Years of Service City Attorney 15 City Clerk 10 City Clerk 10 Development Services 15 Fire 20 Fire 15 Mayor's Office 10 Parks, Recreation & 35 Community Services Police 5 Announcements were made by the Mayor, members of the Common Council, elected officials, and a representative from the Chamber of Commerce regarding various civic, community, and chamber events and activities. Waive Full Reading of Resolutions and Ordinances Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that full reading of the resolutions and ordinances on the regular agenda of the Mayor and Common Council/Community Development Commission, be waived. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 6. Council Minutes Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that the minutes of the following meetings of the Mayor and Common Council/Community Development Commission of the City of San Bernardino be approved as submitted in typewritten form: January 10, 2005; January 21, 2005; January 24, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 11 02/22/2005 7. Claims & Payroll Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that the claims and payroll and the authorization to issue warrants as listed on the memorandum dated February 15, 2005, 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 McCammack made a motion, seconded by Council Member/Commissioner Johnson, that the personnel actions as submitted by the Chief Examiner dated February 15, 2005 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. 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 distributed. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, 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. 10. RES. 2005-43 - 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 establishing a four-way stop at the intersection of Irvington Avenue at Olive Avenue. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that said resolution be adopted. 7 02/22/2005 Resolution No. 2005-43 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 11. RES. 2005-44 - Resolution of the City of San Bernardino amending Resolution No. 3985 entitled, in part, "A Resolution ... prohibiting parking upon certain designated streets, alleys, or portions thereof..." to establish a no parking any time zone on Orange Show Road between Auto Plaza Drive and Arrowhead Avenue. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that said resolution be adopted. Resolution No. 2005-44 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 12. RES. 2005-45 - Resolution of the Mayor and Common Council of the City of San Bernardino approving the Final Map for Parcel Map No. 15635, located at the northeast corner of Waterman Avenue and Vanderbilt Way, accepting the public dedications as set forth on said map; and authorizing execution of the standard form of agreement for the improvements in said subdivision, with time for performance specified. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that said resolution be adopted. Resolution No. 2005-45 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 13. Resolutions awarding contracts - various landscape maintenance assessment districts (Areas "A", "B", "G", and "H") - Golden West Landscape RES. 2005-46 - Resolution of the City of San Bernardino awarding a contract to Golden West Landscape Contractor for the maintenance of landscaping in Assessment District Nos. 976, 991, 997, 1017, 1025, 1028, 1030, 1031, 1032 & 1035 (Area "A"). (13A) RES. 2005-47 - Resolution of the City of San Bernardino awarding a contract to Golden West Landscape Contractor for the maintenance of landscaping in Assessment District Nos. 951, 952, 1002 & 1019 (Area "B"). (13B) 8 02/22/2005 RES. 2005-48 - Resolution of the City of San Bernardino awarding a contract to Golden West Landscape Contractor for the maintenance of landscaping in Assessment District Nos. 974, 975, 981, 986, 989, 1001, 1007, 1012 & 1020 (Area "G"). (13C) RES. 2005-49 - Resolution of the City of San Bernardino awarding a contract to Golden West Landscape Contractor for the maintenance of landscaping in Assessment District Nos. 956, 968, 1016, 1023 & 1027 (Area "H"). (13D) Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that said resolutions A-D, be adopted. Resolution Nos. 2005-46 through 2005-49 were adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 14. RES. 2005-50 - Resolution of the Mayor and Common Council of the City of San Bernardino ratifying Contract Change Order No. One issued to Guzman Construction Company for storm drain improvements in Rialto Avenue from Rancho Avenue to Pennsylvania Avenue (SD04-09) and installation of Palm Avenue Catch Basin and Storm Drain per Plan No. 10311, under emergency contract provisions of the Public Contract Code. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that said resolution be adopted. Resolution No. 2005-50 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 15. Reject all bids for sidewalks submitted in response to Bid No. F-05-029 Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that the Mayor and Common Council reject all bids for sidewalks received in response to Bid No. F-05-029. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 16. RES. 2005-51 - Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the execution of an Agreement for the San Bernardino Police Department to participate as a member of the United States Department of Justice, Drug Enforcement Administration Task Force. 9 02/22/2005 Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Johnson, that said resolution be adopted. Resolution No. 2005-51 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 17. Public hearing - resolution ordering work - Orange Show Road and Arrowhead Avenue Landscape Maintenance Assessment District No. 1038 - Parcel No. 16222 (Continued from February 7, 2005) Resolution of the City of San Bernardino finding and determining the existence of less than a majority protest, that ballots representing at least fifty percent (50%) affirmative votes for the proposed assessment have been received and that the public convenience and necessity require the maintenance of landscaping in the area of Orange Show Road and Arrowhead Avenue, approving the final Engineer's Report, creating an assessment district to cover the costs of said maintenance, known as Assessment District No. 1038, ordering the work, confirming the 2005-2006 Assessment Roll, and determining that the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 shall not apply. The public hearing remained open. No public comments were received. Council Member/Commissioner McGinnis made a motion, seconded by Council Member/Commissioner Estrada, that the matter be continued to the Council/Commission meeting of March 7, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 18. Public meeting - formation of a maintenance assessment district in the Northpark Boulevard and Campus Parkway area - Assessment District No. 1036 - Tract No. 16509 Mayor/Chairman Valles opened the meeting. No public comments were received. 10 02/22/2005 Council Member/Commissioner Estrada made a motion, seconded by Council Member/Commissioner McGinnis, that the public meeting relative to the formation of the Northpark Boulevard and Campus Parkway Area Maintenance Assessment District No. 1036 be closed; and protests and ballots, if any, be carried over to the public hearing on March 7, 2005, at 4:00 p.m. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 19. Appeal hearing — results of a Transient Lodging Tax (TLT) audit for the Astro Motel (See related Agenda Item Nos. 20-25) Mayor/Chairman Valles opened the hearing. Cindy Buechter, Business Registration Supervisor, presented background information. Pursuant to Resolution No. 2000-279, City Clerk Clark administered an oath to the following individuals that they would provide true and honest testimony: Frank Weiser, Attorney for the appellant, 3460 Wilshire Blvd., Suite 903, Los Angeles, CA. In order to save time, Mr. Weiser proposed that all the legal objections he would be raising for this appeal would be the same for each appeal. He stated that he would then ask the individual motel owners to explain their accounting practices. Mr. Weiser stated that in 2002, the City went to the electorate and asked them to change its previously amended ordinance to conform with the decision in favor of the Hotel/Motel Association that declared the TLT at that time to be constitutionally suspect. He stated that the voters then voted to approve a new ordinance that took effect sometime in November 2002, and then the audits began. Mr. Weiser stated that the audits went back to the previous ordinance and found with each particular motel owner that they owed money or had incorrectly reported under both the previous 2000 Ordinance and the 2003 Ordinance. Mr. Weiser stated that his legal objections go back to the same type of objections he raised in the past, but he indicated that he would be raising some new ones. He stated that he had a problem in that the City is still not clearly defining the difference between a transient and a permanent resident. He stated that vague and confusing definitions of a transient versus a permanent resident are included in the ordinance prior to the 2002 amendment and the new 2003 ordinance, and the problem is that it still contains the word "lodging/dwelling," which was found to be inherently vague. 11 02/22/2005 Mr. Weiser stated that another due process argument he has raised is that he has a problem with the TLT in general. He stated that he understands that the City has legitimate reasons why they need the money, but he thinks there are some inherent problems with this kind of tax. Mr. Weiser stated that since the 1940's, Courts of Appeals have frowned upon these kinds of occupancy taxes; and in the 1960's, for equal protection reasons, they said that the subclassification between a transient and a permanent resident had to be rationally distinguishing between the two. He stated that two decisions came out of the City of Bakersfield: the first one said they violated equal protection, the second one said it was okay to have equal protection grounds and a TLT ordinance as long as you had this classification of 30 days between permanent and transient. Mr. Weiser stated that in the case of Brit versus the City of Pomona, it was made clear that for equal protection reasons, you should look at the subclassification between a transient and a permanent resident, in addition to the purpose of the tax. He stated that in that case, one of the purposes was that they had to use the money to pay for City services, but they couldn't distinguish why they taxed motels and/or hotels and they didn't tax apartment buildings for the first 30 days. Mr. Weiser stated that if you look at his Hotel/Motel Association's decision that led up to Mr. Penman's asking the electorate to change the ordinance in 2002, it was the decision that for due process reasons, not equal protection reasons, there is a problem with the ordinance the way it is written. He stated that it is constitutionally suspect because it would seem that it cannot distinguish as to why the apartment lodger is not being taxed. So, for equal protection reasons independent of his due process grounds, Mr. Weiser stated that he does not believe there is a legitimate objective to this ordinance, and he does not believe there is a legitimate objective to the TLT tax in general. He does not see how the City could tax motels, but not apartment dwellers, especially in light of the fact that the City distinguishes between a permanent resident and a transient in the ordinance. Mr. Weiser's third objection was that a person's right to travel is constitutionally protected under the State Constitution and he believes the TLT is fundamentally a travel tax, and the City is basically saying that it doesn't matter whether it is inside or outside City borders, we're going to tax you for staying at this motel on a transient basis. He stated that once you tax that, you get into some real problems with due process grounds. Mr. Weiser stated that he would be happy to sit down with City representatives and try to work things out and come up with a rational tax that makes sense for everyone involved. He stated that he does not want to litigate if he doesn't have to. Mr. Weiser stated that they had a problem with the City's auditor in that during the appeal hearings before the City Clerk, the motel owners brought all of their records which they left with the City. He then received a call from the City telling them that if they wanted the auditor to look them over, the owners would have to pay for it. He stated that they certainly did not agree to that. Mr. Weiser stated that he believed that many of the records were still being held by the City, and he asked that they be incorporated as evidence into the record. 12 02/22/2005 Mr. Bhagat, Manager of the Astro Motel, 111 S. "E" Street, San Bernardino, CA, stated that they charge their customers a $45 flat rate, and at the end of the month they pay 10 percent of their gross earnings and they pay the tax every month. Ms. Buechter stated that the tax and the room rent were not stated separately as is required by the Ordinance. Mr. Weiser stated that it was his understanding that it was an underreporting issue —it was not that they didn't report it, but they didn't segregate it out. He stated that they paid the full tax, so he didn't see where the problem was. Ms. Buechter stated that the room rate and the tax were not being separated. She stated that what the motel operators have done is taken the room rate and backed out the tax from that amount. Mr. Bhagat stated that they charge a flat rate of $45 including the tax, then when they file their taxes every month they pay 10 percent on the full amount, which means they are actually paying more than 10 percent. Ms. Buechter stated that what the auditor found in the motel's documents is that it was not being separated out and they were backing the tax out and, in this particular instance, the auditor indicated in his report that this proprietor represents that the motel absorbs the burden of paying the tax for the occupant, which is also a violation of the code. Mayor Valles asked Mr. Bhagat if he had been instructed on how to keep the books when he took over the duties as manager of the motel so that he would conform with the City's accounting practices. Mr. Weiser stated that he didn't think the accounting issue affects the appeal in the sense that their contention is that the tax was still paid. He doesn't know what Mr. Bhagat was advised or what he wasn't advised by Mr. Patel, but his guess is that most of the motel owners do not have very sophisticated accounting practices and they have been operating this way until these audits came along. Mr. Weiser stated that the City has three years of records for the Astro Motel, and he asked that those records, including all of the registration cards, be made part of the record. Ms. Buechter stated that she believed the City has records from four of the motels that were audited. She stated that Sr. Assistant City Attorney Huston Carlyle had written three separate letters to Mr. Weiser from July to November of last year specifically asking him to tell City staff what to do with these records, but he received no response; therefore, the City Clerk upheld the process at the hearing and then followed up with a letter in December informing them what they owed. 13 02/22/2005 City Attorney Penman advised Mr. Weiser that it would be in his client's best interest to respond to the Mayor's question so the Council could make their determination. Mr. Weiser stated that he was not advising his client not to respond, but it was his understanding that he had been given some general instruction and that he has a general format that he follows. Mr. Weiser advised that when you pass an ordinance, you can't just say the ordinance goes into effect the next day. He stated that it is the City's and not the operator's obligation to offer a reasonable amount of time to instruct the operator on what he needs to do to comply; and he believes the City's opinion has been that when these ordinances are passed under the California Constitution by the electorate, they go into effect the next day, but that is not fair. Mr. Weiser stated that these motel owners were not able to read an ordinance like a lawyer. Mr. Penman stated that the ordinance did go into effect under the laws of the State of California, and the timing of those ordinances was appropriate. He stated that citizens are presumed to know the law; and while they may not always do so, that is why they hire attorneys and that is why they hired Mr. Weiser. He stated that the Mayor and Common Council hired the outside law firm that prepared the ordinance, it was the Mayor and Common Council who made the decision to place it on the ballot, and it was the voters of the City of San Bernardino who voted to enact that ordinance. For the record, Mr. Penman noted that they had given Mr. Bhagat several opportunities to answer the Mayor's previous question and that Mr. Weiser chose to characterize his client's response rather than have him return to the podium and try to clarify his remarks. Mr. Weiser stated that he agrees with the California Constitution which states that when you go to the electorate it goes into effect the next day, but his question was, "Is that California constitutional provision constitutional?" He stated that for due process reasons, you have to give more time to an operator to learn about the ordinance before you can apply it, especially an ordinance like this one that potentially has criminal penalties and can lead to arbitrary enforcement. Mayor/Chairman Valles stated that with respect to the training given to the managers, it would appear that Mr. Weiser, as legal counsel, could have assisted in the interpretation of the ordinance. Mr. Weiser stated that each motel owner would have to address how they understood the ordinance. He indicated that the issues were whether there was underreporting, whether the City got its money, and whether the ordinance is constitutional. Sr. Assistant City Attorney Simmons responded to some of the legal issues brought up by Mr. Weiser. He stated that the new ordinance did not change the tax rate 14 02/22/2005 20. and did not change the requirement that the price of the room and the tax be stated as two separate items. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner Estrada, that the hearing be closed; and that the Mayor and Common Council uphold the decision of the City Clerk and adopt her letter of December 7, 2004, as its findings and conclusions, based upon the back-up information submitted and any additional 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. Appeal hearing — results of a Transient Lodging Tax (TLT) audit for the Budget Lodge (see related Agenda Item Nos. 19-25) Mayor/Chairman Valles opened the hearing. Cindy Buechter, Business Registration Supervisor, presented background information. Pursuant to Resolution No. 2000-279, City Clerk Clark administered an oath to the following individuals that they would provide true and honest testimony: Larry Hall, 1538 E. Main Street, El Cajon, CA, owner of the Budget Lodge, stated that he owns four other motels and doesn't characterize himself as a small operator. He stated that he has been in the motel business for approximately 15 years and has been through many TLT audits, but has never been found to owe a dime. Mr. Hall stated that this audit was performed by a company that works on a contingency basis. He stated that the City has received every penny that was collected by his facility. He stated that the original demand was for $22,000, but based upon an error previously made by the auditors, this amount was later decreased to $13,000. Mr. Hall stated that he collects $25,000-$30,000 per year in taxes for the City. He stated that he did not like the way the audit was handled and he did not like the fact that the auditors disagreed with almost everything that was said. Mr. Hall stated that he was charged with failure to report charges for extra persons occupying the room as an additional taxable event. He stated that he admitted at the hearing that he does not add transient occupancy tax on what he considers miscellaneous income. He stated that the City's ordinance does not deal with that it in any way, shape or form and added that this is an interpretation by the auditors and is in dispute at this time. Mr. Hall stated that it appears the City took all of his miscellaneous income charges and requested taxes on those as well, which is clearly not valid and has never come up in an audit in any of the three states in which he does business. 15 02/22/2005 Secondly, Mr. Hall stated that he was charged with failure to provide a receipt to each transient at the time rental payment was received, and that the City wants a breakdown of the tax. He stated that he provides a receipt upon request, and added that the people working behind the counter generally don't have time to research records to ascertain whether or not the tax is still due on someone staying over 30 days. Mr. Hall stated that they fill out a registration card for people when they only have two or three people in line. He stated that he makes it a policy to pay the TLT tax he collects from these people by discounting the room for the first 30 days by an equal amount, which is broken down on the registration card. He stated that every day there is a complete computer printout of every single transaction in his books and this was made available to the auditor. Mr. Hall stated that he provides pre-printed registration cards, that he purchases 20,000 cards at a time, and there's one for every single room rent since he has been in business. Mr. Weiser requested that a copy of the receipt and the registration cards be entered into the record as Exhibits 1 through 9. Mr. Hall stated that every transaction they perform has a separate unique transaction number and every room has a folio number. He stated that when he came to the City of San Bernardino he wrote to the City Clerk indicating that he thought the City was wrong in requiring him to collect transient taxes after 30 days. Mr. Hall stated that the City Attorney insisted that he collect that tax for anybody after 30 days and he has that in his written notes. As a result, he stated that he has paid almost $30,000 in taxes out of his pocket that the court apparently has upheld were not supposed to be collected, and then the City subsequently has changed its ordinance to reflect that, and now they have a 30-day period of time that they want to collect taxes. Mr. Hall stated that he would like to receive his $30,000 back. Mr. Hall stated that he felt it would be reasonable to ask the Council to waive his penalties. He stated that if he still owed the City money he would be more than happy to pay it, but he wanted the Council to decide whether they were partners or adversaries. He stated that he has never been treated like this in any other community he has ever been in. Mr. Hall indicated that he has owned the motel for about 4 years and delayed taking over the motel from Dr. Lester because he was charged with about 64 code violations just days before he was supposed to take it over. He stated that he personally cleaned up those violations. Mr. Hall stated that when he took over the motel he had nine rentable rooms, and he currently has 68 or 69 rooms that are rentable. Council Member/Commissioner Kelley stated that he heard Mr. Hall ask the Council to waive the penalty of $6,291.19. He asked if Mr. Hall would be willing to pay the additional transient lodging fee of $6,291, plus the interest. Mr. Hall stated that he did not want to do that because he has objections to most of the charges and believes the figure that generated that amount is totally erroneous. He stated that they would have to go through the audit to agree on the number the 16 02/22/2005 He stated that they would have to go through the audit to agree on the number the auditors came up with, and he indicated that he would like a decision on whether or not he actually owes for an extra guest fee, which occurs occasionally, but he did not believe it could have amounted to $6,000. Council Member/Commissioner McCammack asked if the ordinance requires that the hotel/motel owners charge for extra guests. Ms. Buechter stated that in Chapter 3.54, which was adopted in 1997, the definition of room rental means "a total charge made by any such hotel for lodging and/or lodging space furnished any such transient." She stated that she believed Mr. Hall was taking the charge for the extra person to be a transient because that person was lodging there. Mr. Hall stated that even if a person is not going to stay there overnight, if they are going to be there longer than two hours, he expects a fee from them and he expects them to bring their registration card to the front desk. He stated that they treat this as miscellaneous income and it is their fee for enforcement, which doubles if they bust someone, and if they don't want to pay it they are thrown out of the motel. Council Member/Commissioner McCammack stated that the folio card does break out the tax at the top, but it does not break it out on the receipt and it also does not break out on the folio card extra charges collected for an extra person. Mr. Hall stated that if two people checked in they paid a two -person rate and they are not considered an extra person. Ms. McCammack stated that the question that the City Clerk and the auditor had was that there was not a real clear way to identify that extra per person rental rate anywhere on the folio card or on the receipt. Mr. Hall stated that the rate for the number of people was located on the fourth line of the card. Ms. McCammack stated that if someone had a guest for the evening, she didn't know how Mr. Hall could go back and add that once his totals were placed at the top of the card. Mr. Hall answered that he could not. Ms. McCammack stated that a question for the auditor would be whether they were underreporting that room rental revenue. Mr. Hall asked how much accounting could he afford to do for a $5 charge, and he added that he does not write a new card for an extra guest. 17 02/22/2005 income is or is not stated in the ordinance; and then she would need to know the difference in what the Clerk's Office feels is owed in tax, what is miscellaneous income, and whether or not it is supposed to be taxed according to the ordinance. Mr. Weiser stated that it was his understanding that there were no previous audits on the motels going back, at least for Mr. Hall, since the time he bought the motel, then all of a sudden they get this audit immediately after their litigation and the passage of the ordinance in 2002. He stated that he found it hard to believe that only his association members were the ones who have had these assessments, and he noted that this raised a prima facie case of first amendment retaliation. Mr. Weiser stated that the auditor was a hired hand who was looking for money from only his association members. Mr. Weiser asked that the Council recuse itself and assign a specially -appointed hearing officer for the remaining appeals. Mr. Penman stated that if Mr. Weiser had some evidence to present to the Mayor and Council that only members of his association were targeted, he should present that information. He asked Mr. Weiser if he would like a continuance so that the Clerk's Office could prepare a list of the various hotels and motels that were audited. Mr. Weiser stated that he would be more than willing to continue this and offer that evidence if the City would present him with the findings of all the audits. Mr. Penman stated that the record obviously did not reflect the names of the various businesses that have been audited, and the City received no information from Mr. Weiser as to who the members of his association are, so he couldn't tell if there had been any unfair enforcement. Mr. Penman stated that if the Council doesn't know who the members are, he didn't know how they could focus on them. Mayor/Chairman Valles stated that the accusations Mr. Weiser made prompted her to take Mr. Penman's advice. She requested that Mr. Weiser produce the names of his clients that he feels the City has taken action against. Mr. Penman stated that Mr. Weiser had indicated that he would like to have a continuance, and he asked if he wanted a continuance for all the remaining appeals. Mr. Weiser stated that he would like the continuance for all the remaining appeals (Agenda Item Nos. 21-25), and he requested that the first amendment issue only be reopened on the Astro Motel. Mr. Penman stated that that particular appeal was closed. He asked Mr. Weiser how much time he needed. Mr. Weiser answered that he would probably need about two months. Council Member/Commissioner McCammack asked if that meant that the interest would still accrue depending upon what the Council finds. 18 02/22/2005 21 22 23. Council Member/Commissioner McCammack asked if that meant that the interest would still accrue depending upon what the Council finds. Mr. Penman stated that any interest that was accruing would continue to accrue, adding that it was Mr. Weiser who requested the continuance. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that the matter be continued to the Council/Commission meeting of May 2, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. Appeal hearing — results of a Transient Lodging Tax (TLT) audit for the Desert Inn Motel (See related Agenda Item Nos. 19-25) Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that the matter be continued to the Council/Commission meeting of May 2, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. Appeal hearing — results of a Transient Lodging Tax (TLT) for the Econo Lodge (See related Agenda Item Nos. 19-25) Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that the matter be continued to the Council/Commission meeting of May 2, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. Appeal hearing — results of a Transient Lodging Tax (TLT) audit for the Foothill Motel (See related Agenda Item Nos. 19-25) Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that the matter be continued to the Council/Commission meeting of May 2, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 19 02/22/2005 24. Appeal hearing - results of a Transient Lodging Tax (TLT) audit for the Knights Inn (See related Agenda Item Nos. 19-25) Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that the matter be continued to the Council/Commission meeting of May 2, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 25. Appeal hearing - results of a Transient Lodging Tax (TLT) audit for the Terrace Motel (See related Agenda Item Nos. 19-24) Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that the matter be continued to the Council/Commission meeting of May 2, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 26. RES. 2005-52 - Resolution of the Mayor and Common Council authorizing a purchase order be awarded to Guzman Construction for the repair of potholes within the City of San Bernardino, exempting the award from the City's purchasing requirements and authorize an increase to the purchase order to Matich Corporation for the purchase of materials used for roadway pavement rehabilitation. City Attorney Penman abstained on this matter because Mr. Matich has supported his campaign in the past. He left the Council Chambers and returned after the vote was taken. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that said resolution be adopted; and that the Director of Finance be authorized to amend the FY 2004-05 budget by transferring $73,000 from Account No. 126-369-5504-7345 to Account No. 126-369-5504- 7156 for pothole repair as outlined in the staff report dated February 16, 2005, from Kerry Morford, Interim Director of Public Services. The motion carried and Resolution No. 2005-52 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 20 02/22/2005 27. Legislative Task Force update Note: No backup materials were distributed. Council Member/Commissioner Longville stated that now that the legislative season is open again, the cities in the Inland Empire meet on a monthly basis to talk about State legislation and discuss the priorities of the League of California Cities. She stated that three important issues discussed were redevelopment fees, infrastructure funding, and housing affordability. No action was taken. COMMUNITY DEVELOPMENT COMMISSION Staff Present Mayor/Chairman Valles; Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack; City Attorney Penman, City Clerk Clark, Economic Development Agency Executive Director Van Osdel. Absent: None. R28. Joint public hearing - Disposition and Development of Agency lot (188 North Allen Street) - Meadowbrook Park Homes, Inc. approved 2005 Meadowbrook Single Family Residential Disposition and Development Agreement RES. 2005-53 - Resolution of the Mayor and Common Council of the City of San Bernardino approving the disposition of the Agency lot to Meadowbrook Park Homes, Inc., pursuant to the approved 2005 Meadowbrook Single Family Residential Disposition and Development Agreement (IVDA Redevelopment Project Area). (R28A) RES. CDC/2005-6 - Resolution of the Community Development Commission of the City of San Bernardino approving the disposition of the Agency lot to Meadowbrook Park Homes, Inc., pursuant to the approved 2005 Meadowbrook Single Family Residential Disposition and Development Agreement (IVDA Redevelopment Project Area). (R28B) Mayor/Chairman Valles opened the hearing. No public comments were received. Council Member/Commissioner McGinnis made a motion, seconded by Council Member/Commissioner Longville, that the hearing be closed; and that said resolutions A&B, be adopted. 21 02/22/2005 The motion carried and Mayor and Common Council Resolution No. 2005-53 and Community Development Commission Resolution No. CDC/2005-6 were adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. R29. Hearing - Resolution of public interest and necessity for acquisition of real property: 1307 Spruce Street (AP #0138-115-02) San Bernardino, California RES. CDC/2005-7 - Resolution of the Community Development Commission of the City of San Bernardino declaring the public interest and necessity of acquisition of real property by the Redevelopment Agency of the City of San Bernardino for community redevelopment purposes over the property known as 1307 Spruce Street, San Bernardino, California (AP #0138-115-02) in the Mt. Vernon Corridor Redevelopment Project Area. Mayor/Chairman Valles opened the hearing. No public comments were received. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that the hearing be closed; and that said resolution be adopted. The motion carried and Resolution No. CDC/2005-7 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. R30. 303 West Third Street - Loan Modification and Collateral Assignment and Consent to Assignment 2000 CDBG Program Section 108 Project Development Loan Agreement RES. 2005-54 - Resolution of the Mayor and Common Council of the City of San Bernardino approving a 2005 Loan Modification and Collateral Assignment Agreement and Consent to Assignment by and among 303 LLC, the Redevelopment Agency of the City of San Bernardino and the City of San Bernardino and approving a 2005 Redevelopment Loan Agreement by and between the Agency and the City (303 Third Street Project). (R30A) 22 02/22/2005 RES. CDC/2005-8 - Resolution of the Community Development Commission of the City of San Bernardino making certain findings relating to the temporary investment of low- and moderate -income housing funds and approving a 2005 Loan Modification and Collateral Assignment Agreement and Consent to Assignment by and among 303 LLC, the City of San Bernardino and the Redevelopment Agency of the City of San Bernardino and approving a 2005 Redevelopment Loan Agreement by and between the City and the Agency (303 Third Street Project). (R30B) Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that said resolutions A&B, be adopted. Mayor and Common Council Resolution No. 2005-54 and Community Development Commission Resolution No. CDC/2005-8 were adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. R31. Resolution of the Community Development Commission of the City of San Bernardino, California, approving termination of the Loan Agreement between the Redevelopment Agency of the City of San Bernardino and the San Bernardino Symphony. Council Member/Commissioner Estrada stated that she had requested that perhaps they could defer the loan payments for a period of five years, but still keep intact the terms of the agreement in order to ensure that it remains the San Bernardino Symphony. City Attorney Penman stated that his office did not have an opportunity to look at the loan agreement because it had just been handed to him, but in glancing at it he noticed that it included some very complicated legal language. He stated that this agreement should have been prepared by the City Attorney's Office and requested that the matter be continued for two weeks. Council Member/Commissioner McCammack stated that if they were going to do some kind of deferral or forbearance, she suggested that the interest not accrue, and at the end of a period of about 20 years, the Symphony should be given an opportunity to agree to certain things such as keeping the name San Bernardino and keeping it within the City of San Bernardino in exchange for giving them and the City an opportunity to renegotiate the loan. Council Member/Commissioner Longville stated that it should be a no -interest loan and the City should be patient. She stated that symphonies are the kinds of organizations that benevolent benefactors will sometimes rescue and it is her belief that someday, somebody will bequeath some money and pay the City back, but the City could not afford to forgive the loan. 23 02/22/2005 Council Member/Commissioner Kelley made a motion, seconded by Council Member/Commissioner Johnson, that the matter be continued to the Council/Commission meeting of March 7, 2005. The motion carried by the following vote: Ayes: Council Members/ Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. R32. RES. CDC/2005-9 - Resolution of the Community Development Commission of the City of San Bernardino, California, approving an Amendment to Section 6 of the Personnel Policies and Procedures for all Employees of the City of San Bernardino Economic Development Agency. Council Member/Commissioner McCammack made a motion, seconded by Council Member/Commissioner McGinnis, that said resolution be adopted. Resolution No. CDC/2005-9 was adopted by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Kelley, Johnson, McCammack. Nays: None. Absent: None. 33. Public Comments Bob Caddel, 1423 Morgan Road, San Bernardino, CA, distributed a flyer and invited the City Council and staff to attend a banquet at the National Orange Show on March 3, 2005, featuring Mr. Vince Evans, former football player whose NFL career spanned 18 years, who will speak on "How to Come from Behind & Win." Reverend Betty Long, 734 W. 10" Street, San Bernardino, CA, thanked the City for installing the new wheelchair ramps at 10" and "H" Streets. She also spoke in opposition to the Lakes and Streams project. Larry Hall, 1538 E. Main Street, El Cajon, CA, spoke regarding an article in The Sun newspaper regarding the lawsuit against the City of San Bernardino over the bed tax and comments made by City staff. 24 02/22/2005 34. Adjournment At 6:35 p.m., the meeting adjourned. The next joint regular meeting of the Mayor and Common Council/Community Development Commission is scheduled for 1:30 p.m., Monday, March 7, 2005, in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. No. of Items: 34 No. of Hours: 5 RACHEL G. CLARK City Clerk BYOL��"-^�� Linda Sutherland Deputy City Clerk 25 02/22/2005