Mayor Miller led the salute to the flag.

Mayor Miller presented Grace Kim, Finance Manager (on behalf of Mary Bradley, Director of Finance), the Distinguished Budget Presentation Award from the Government Finance Officers Association (GFOA) in recognition of both the Sunnyvale adopted fiscal year 2002/2003 budget, as well as the Ten Year Resource Allocation Plan.

Vice Mayor Risch announced that Pursuant to GC 54956.9, the Council met in closed session regarding Potential Litigation Related to the Mall Parking Lot Closure. Direction was given but no action was taken.

Suzi Blackman, President and CEO of the Sunnyvale Chamber of Commerce, announced the annual Sunnyvale Art and Wine Festival will be held on June 7^th and 8^th from 10:00 a.m. to 6:00 p.m.

Councilmember Walker made the following announcements on behalf of the Council:

On Saturday, June 14th, between 9:30 a.m. and 11:00 a.m., residents are invited to stop by for coffee and conversation with Mayor Miller at the Coffee & More restaurant, at 100 South Murphy Street. For more information, contact the City Communications Department at 730-7535.

The Sunnyvale Leadership Development Institute (SLDI) and the City of Sunnyvale are co-sponsoring three focus groups to solicit input relating to the type of leadership training that would be most beneficial to Sunnyvale community members. The focus group discussions will be held at the Sunnyvale Community Center, 550 E. Remington Drive, on Wednesday, June 4th, from 1:00 p.m. to 2:30 p.m., Wednesday, June 11th, from 6:30 p.m. to 8:00 p.m., and Friday, June 13th, from 7:30 a.m. to 8:30 a.m. For more information, or to RSVP, contact Michelle Taiariol at 730-7489, or by email at: mtaiariol@ci.sunnyvale.ca.us.

Mayor Miller announced one new addition to the Sunnyvale Wall of Honor. He is:

Tom Quaglia, a member of the public, thanked the Council for the Wall of Honor and announced Jeffrey Scruggs had been awarded the Bronze Star.

Mayor Miller announced the June 17^th Council meeting will start at 6:30 p.m. to allow sufficient time to hear public input.

Vice Mayor Risch moved, and Councilmember Howe seconded, approval of the Consent Calendar. The motion carried unanimously.

Grace Kim, Finance Manager, presented the staff report. She announced that the City is required to conduct a Public Hearing to give the citizens an opportunity to provide input to the Council prior to adoption of the budget. She reported the total recommended revenue for FY 2003/2004 is approximately $197 million, and the total expenditures are approximately $209 million. The total recommended budget for operating expenditures is approximately $180 million, with $22 million for the equipment budget and $7 million for debt service. She stated the City will be under the allowable appropriations limitation by approximately $35 million. She further stated staff is researching potential new fees and charges, local tax increases (via a 17 member ad hoc advisory committee), and fee waiver expansion.

Mayor Miller opened the Public Hearing at 7:54 p.m.

Jackie Harrison, Chair of the Library Board of Trustees, announced the Board unanimously approved the recommended library reductions and fees. She expressed concern over the future of the library services and encouraged the Council to monitor library uses and consider adjusting staff and funding levels should the use continue to rise.

Jeff Arnett, Vice Chair of the Parks and Recreation Commission, announced the board unanimously endorsed the resource allocation plan. He expressed concern over safety issues in Baylands Park due to service level reductions.

Elaine Manley, a member of the public, expressed concern regarding the proposed cuts in Public Safety, particularly in the area of undercover operations.

In response to Vice Mayor Risch, Ernie Bakin, Director of Public Safety, stated the department will still have a presence in undercover work. He stated the cuts include a Narcotics Supervisor, the elimination of a detective position as well as a reduction in hours. He stated they are exploring regionalization efforts in this area.

Councilmember Howe inquired if the recommended cuts would eliminate the Supervisor and one of the three detectives for Narcotics and Vice. Chief Bakin responded it would.

Janis Marcellino, a member of the public, expressed concern regarding recommended reductions in Public Safety and asked for assurance that narcotics enforcement would continue to be a priority.

Denise DeLange, a member of the public, expressed concern with safety issues relating to proposed reductions in Public Safety.

Werner Gans, a member of the public, inquired if the proposed cuts in Public Safety would increase the response time to fires. Chief Bakin responded the response time for emergencies will not be affected. Mr. Gans further expressed disappointment that the Employee Suggestion Program was cut. City Manager LaSala stated this program currently costs more to implement than savings realized by the City. He stated the program would not be eliminated but restructured. Councilmember Walker requested Council be advised of the status of this program and directed staff to restructure the Employee Suggestion Program and include the restructured program in the FY2004/2005 budget with review by the Personnel Board. Councilmember Walker suggested that staff continue to take suggestions, but restrict the suggestions to no-cost implementation that would benefit the City.

Mr. Gans further expressed concern about proposed increased personnel costs and the elimination of the sewer clean out program. City Manager LaSala reviewed the Memorandum of Understanding with city employee unions regarding wage increases for City employees, and stated there will be no management bonuses this year.

Pete Richards, a member of the public, expressed concern about the high sales tax and the increase in the number of City employees. He asked that the City not impose more taxes.

Mayor Miller verified with Councilmembers that the 6:30 p.m. start time for the June 17^th Council meeting is acceptable.

Per Mayor Miller’s request, Mary Bradley, Director of Finance, briefly reviewed the 911 fee, homeowners sidewalk repair fee, the trench cut fee, the rent for the SMART station, and municipal utility infrastructure fee.

Werner Gans, a member of the public, expressed concern about the homeowners sidewalk repair fee when a City tree causes the damage. He further stated the SMART station fee should be a direct charge to the citizen.

Director Bradley stated the sidewalk fee will be included in the 2003/2004 budget, with the rest of the fees scheduled for 2004/2005.

Mayor Miller closed the Public Hearing at 8:48 p.m.

Councilmember Howe inquired what the process and penalty is for business license violators. Director Bradley responded they do a database comparison analysis with a penalty of ten percent. Councilmember Howe inquired if staff is addressing this or if there needs to be a study session scheduled on business license fees. Director Bradley responded she has a meeting with the City Attorney to discuss business license processing efficiencies.

City Manager LaSala requested direction from Council if they wanted to restore any of the proposed cuts so that staff could consider what other areas could be reduced to offset the costs and the implications of those reductions. He suggested holding a special meeting to address these cuts prior to the June 17^th meeting so Council would have a balanced budget.

Councilmember Howe stated he would like to make motions regarding cuts in Public Safety, Parks and Recreation and Public Works, but did not feel comfortable proceeding with Councilmember Vorreiter absent.

The Council entered into a discussion regarding the restoration of some the proposed cuts, scheduling a special meeting to discuss the implications of proposed restorations, other areas to be considered for reductions to create a balanced budget, and the process for Council to follow.

Vice Mayor Risch proposed that Council identify any proposed reductions that they would like restored to give staff the opportunity to make recommendations for alternatives and to understand the implications.

Councilmember Howe moved, and Mayor Miller seconded, to remove the $350,000 in the budget for sidewalk repair fee revenue, and direct the City staff to come back with alternatives at the June 17^th Council meeting. Councilmembers may make recommendations for alternatives to the City Manager. The motion carried with Councilmember Walker dissenting.

Councilmember Howe moved, and Councilmember Fowler seconded, to reverse $110 thousand in cuts to Parks and Recreation after the Council voted to add $110 thousand for the Parks and Recreation Supervisor. The motion failed on a split vote with Vice Mayor Risch and Councilmembers Valerio and Walker dissenting.

Councilmember Howe moved, and Mayor Miller seconded, to reverse cuts in Public Safety relating to Narcotics and Vice. The motion failed on a split vote with Vice Mayor Risch and Councilmembers Valerio and Walker dissenting.

Councilmember Howe moved, and Mayor Miller seconded, to reinstate the Fire Prevention Officer. After Council discussion, Councilmember Howe withdrew the motion.

Vice Mayor Risch moved, and Councilmember Valerio seconded, to direct the City Manager to bring back an alternative to eliminating one detective position in Vice and Narcotics. The motion carried unanimously.

Mayor Miller moved, that the Employee Suggestion Program be reinstated at $2600. The motion died for lack of a second.

Councilmember Howe moved, and Mayor Miller seconded, to come back with alternatives and continue to fund the lateral clean outs as we have in the past, and direct the City Manager to report back on fees. The motion carried unanimously.

Councilmember Fowler moved, and Councilmember Walker seconded, to extend the benefits for military reservists serving in the current overseas conflict for a total of 12 months. The motion carried unanimously.

At this juncture, Mayor Miller called a recess at 9:43 p.m. and reconvened at 9:54 p.m.

Kelly Diekmann, Project Planner, presented the staff report. He stated the applicant has addressed the concerns of staff and the City Council with the revised application, and the Planning Commission unanimously recommends approval of the Special Development Permit and Tentative Map. The project includes two integral features in its design: preservation of the existing street trees and rear loaded garages.

Mayor Miller opened the Public Hearing at 9:55 p.m.

Tom Quaglia, Applicant and representing The Riding Group, stated they have redesigned the project per Council and staff direction with enhancements in architecture, downsize of homes, open space and parking.

Councilmember Howe inquired about condition #25 and how street parking concerns will be addressed. Mr. Quaglia responded the parking restrictions are to be included in the CC&Rs with enforcement by the Homeowners Association.

Steven Calvin, a member of the public, expressed concern about the increased traffic from the development and lot size.

Andrew Syka, a member of the public, stated he was not noticed of the development and expressed concern on the lot size, density and parking. He stated he opposes the plan in its current form.

Joseph Bro, a member of the public, stated he did not receive notification of the proposed development and opposes the project due to increased traffic, and compatibility with the neighborhood.

Peter Christensen, a member of the public, expressed concern about the impact of increased traffic in his neighborhood.

Frank Pastizzo, a member of the public, expressed traffic concerns relating to ingress and egress only on Iowa Avenue.

Ally May, a member of the public, opposes the project based on increased traffic on Iowa Avenue and the density of the project. She would like to see something in the CC&Rs to restrict rentals.

Kevin Jackson, a member of the public, stated the impact of traffic and parking was not adequately addressed, and expressed disappointment that the Bicycle and Pedestrian Committee did not have the opportunity to review the project. He submitted a list of suggestions for mitigation.

Dave Sanders, Treasurer of El Camino Christian Church, stated that he felt the impact of traffic would be nominal and the project had economic merits.

Karen Petersen, a member of the public, stated she supports zoning of R-0 for this site and expressed concern about adequate parking and increased traffic.

Jan Petersen, a member of the public, stated she does not favor R-2 zoning for the site and expressed concerns on parking and privacy.

Jackie Huang, a member of the public, expressed concern about the increased traffic to Iowa Avenue and the density of the project.

Tom Quaglia stated the Riding Group sent out notices and held meeting with neighbors. He stated there was a substantial amount of analysis regarding traffic and designed the houses to not have conflicts with driveway access. He stated the houses have an oversized two car garage and they have added additional parking.

Andrew Syka, a member of the public, expressed additional concerns about potential increased traffic and parking.

Mayor Miller closed the Public Hearing at 10:50 p.m.

Councilmember Walker moved, and Councilmember Valerio seconded, approval of the Special Development Permit and Tentative Map with conditions.

Councilmember Howe offered a friendly amendment that condition #25 (garages shall be maintained at all times to allow for parking of two automobiles) be included in the CC&Rs and that there be no accessory living units allowed. The amendment was accepted.

Mayor Miller moved to amend the motion, and Councilmember Walker seconded, that a traffic calming study be done on West Iowa from Mary Avenue to Bernardo Avenue.

Councilmember Howe offered a friendly amendment that the study not exceed $20,000. The amendment was accepted.

The motion failed on a split vote with Vice Mayor Risch and Councilmembers Fowler and Valerio dissenting.

Vice Mayor Risch, moved, and Councilmember Walker seconded, this project be added to the traffic calming study list.

Councilmember Fowler offered a friendly amendment that the $20,000 be taken from the Non-Recurring Events Reserve to fund the study. The amendment was not accepted.

Tom Quaglia offered a $20,000 donation to the City.

Councilmember Walker amended his original motion to add Iowa Avenue between Mary and Bernardo to the list of traffic calming studies.

The main motion carried unanimously.

Councilmember Howe recused himself from this portion of the meeting as he had a potential conflict of interest in owning property in the complexes, and left the room.

Annabel Yurutucu, Housing Officer, presented the staff report. She stated approval is requested for the purchase of seven condominium/townhouse Below Market Rate (BMR) units at a total purchase cost of approximately $900,000, and for Budget Modification No. 45 to appropriate funds from the Housing Fund/Housing Mitigation Sub-Fund. She stated this will allow the City to take action to make timely purchases of the BMR units that may be at risk of being lost from the City’s BMR housing stock due to forced sales.

Councilmember Fowler inquired if the $900,000 would be invested in real estate or returned to the fund. Ms. Yurutucu responded it is invested in real estate to accomplish the purchase, and then returned to the fund once the unit is resold.

Mayor Miller opened the Public Hearing at 11:20 p.m. and there being no public comments, closed the Hearing.

Councilmember Walker moved, and Councilmember Fowler seconded, to approve Budget Modification No. 45 to appropriate funds from Housing Mitigation Sub-Fund for the purchase of the BMR units, and approve the purchase of the following seven BMR housing units: 514-A Porpoise Bay Terrace, 437-D Costa Mesa Terrace, 929 E. El Camino Real, 705-1 W. Fremont, 466-A Costa Mesa Terrace, 614-7 San Conrado Terrace, 903-12 Sunrose Terrace. The motion carried unanimously.

Mary Bradley, Director of Finance, and Charlene Sun, Budget Analyst, presented the staff report. She stated Council expressed interest in considering a policy to establish oversight for resource allocation decisions within a department. If Council wishes to have closer oversight of resource allocation decisions, an appropriation control policy could be established that would require departments to seek Council approval for re-appropriation between programs that exceed $100,000 or 5% (whichever is greater), of the annual program budget up to a maximum threshold of $250,000. For programs with annual budgets less than $500,000, the maximum re-appropriation threshold would be limited to $50,000. Any changes over the maximum threshold would require Council approval. She noted staff will be providing Council with an enhanced Program Outcome Measure Exception Report three times a year beginning FY 2003/2004.

In response to questions from Mayor Miller and Vice Mayor Risch, Director Bradley stated the re-appropriation between programs that exceed $100,000 refers to programs with annual budgets over $500,000.

Mayor Miller inquired about the Rate Stabilization Fund and the Enterprise Fund. Director Bradley responded Enterprise Funds are governed by revenues so the appropriations are in the plan. She stated that should the Enterprise Funds financial position become worsened as evidenced by going into the Rate Stabilization Fund, that would be the trigger to bring it to Council.

Councilmember Fowler inquired when the policy would take effect. Director Bradley responded it would take effect at the beginning of the fiscal year.

Mayor Miller opened the Public Hearing at 11:28 p.m. and, there being no public comments, closed the Public Hearing.

Councilmember Fowler moved, and Councilmember Walker seconded, to approve the proposed appropriation control policy that would require departments to seek Council approval for re-appropriations between programs that exceed $100,000 or 5% of the annual program budget, whichever is greater, up to a maximum threshold of $250,000. For programs with annual budgets less than $500,000, the maximum re-appropriation threshold would be limited to $50,000. Any changes over the maximum threshold would require Council approval. The expenditure limits would be calculated based on the program budget within the same fund. Further, if the overall budget is expected to exceed the appropriated amount for a given fiscal year, then the department would seek Council approval for service level changes and/or budget modifications at the earliest time possible. Policy to take effect at the beginning of the next fiscal year.

Mayor Miller offered a friendly amendment that staff come back to Council with suggestions regarding the Rate Stabilization Fund. The amendment was accepted.

Councilmember Walker offered a friendly amendment to change the maximum re-appropriation threshold for budgets less than $500,000 to state limited to $50,000 or 50% of the program budget, whichever is lower. The amendment was accepted.

The motion carried unanimously.

Robert Walker, Director of Parks and Recreation, presented the staff report. He reported on May 3rd, 2003, the City dedicated its first official skateboard facility, which is the largest of its kind in the area. Given the unique nature of the facility, if it is Council’s desire to have a plaque installed, that could easily be accomplished.

In response to Councilmember Valerio, Director Walker stated the funding would come from the Skate Park Project and it is reimbursable by the State under Proposition 12.

Mayor Miller opened the Public Hearing at 11:35 p.m. and, there being no public comments, closed the Public Hearing.

Councilmember Howe moved, and Mayor Miller seconded, approval to install a plaque at the Fair Oaks Park skateboard facility. The motion carried unanimously.

Aretha Ferrell-Brown, Assistant to the City Manager, presented the staff report. She reported that after the March 18th, 2003 Report to Council on IGR assignments, Mayor Miller was appointed by the League of California Cities (LCC) to the Ethics Education Taskforce. Because this intergovernmental appointment was made by an outside agency, Council must ratify it.

Mayor Miller opened the Public Hearing at 11:39 p.m. and, there being no public comments, closed the Public Hearing.

Councilmember Walker moved, and Councilmember Howe seconded, ratification of Mayor Julia Miller’s appointment to the LCC Ethic Education Task Force. The motion carried unanimously.

Eric Huang, a member of the public, advocated for persons who practice Falun Gong and asked the public to write to their congressman about the human rights atrocities in China.

There were no comments.

There were no comments.

Mayor Miller declared the meeting adjourned at 11:44 p.m.

Respectfully submitted,
Susan Kitchens, City Clerk