CC 06-12-62AY
....N i's 1962 AL 2-4505
tl !A sraetnoA- 9uMlvALS 71010
I T Y UPERTINO
EMULAR or = tvn cown - Jas 12, 1962
} 1>Aal So. Snatoga- Smsyasie Head
x,
Due
.. s ,tm
,4 Ahsamtr Itsns•:�3
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thifi%
aa'tbe�s�gr lbr the
aja jams � i has
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e. a■. as eptaai�
Asa Oq, f�va+ the floor.
�' am said that tr is the
.10300
1br those people
a statement entitled Mims is
1Hanee.' begat pmeMar ASN to the City Council. 2: .- ^!erred
to sass of the pal Meted in aut statement.
said that the pobne beerlg is closed as of the acment,
1 ass that discussion is CaudIsal to aeshers of the City ammil
Sat !fit the hearing will be aloprasd /f the Cty Com=12 :.ro .zhss,
aid an eforesactioned notice mill be road Into the record.
A spectator asked the )layer if the meeting could be held at a school
Set seder -.o perzdt all the people in attendance to find a Best and
koafto=kiate In the meeting.
me Mayor referred the question to the City Attorney who answered
that it would be necessary to post special notices announcing a change
In the meeting place 4f the City Council.
Mom Mayor asked Lois Stocklmeir, Chairman of the Hater Commission, to
seder his report submitted this eveniiZ on the Alves Water System and
a passible rate increase.
Mr. Stockimeir begin by saying that the Alves irrigation system is an
part of the
Lm mrmmebmidsissued by the city in 1960. The subjctmatter
the lister Concussion report dated Done 12, 1962 includes the revenues,
maimemname and operating costs, present and future rrrtentials of the
City of Cupertino dater Department, Alves Irrigation facility, rela-
USES to rater rerenue bonds, and the question of rate increase or de-
cr ass (see here-.:above nased report signed by Louis Stockleeir for
complete details.)
Mr 3bodrlme ^.r quoted Eros his report. He also advised the City Coun-
eil of a report lade by the Water Commission relative to Special Meet-
IM Me. 2 held - n June 8, 1962. In addition, the data presented by
an elairman included a copy of the minutes of the Special Meeting of
Use t&tsr Comr/tslon on June 9th, at which time the Comdsslon voted
to smeammod to the City Council that the present schedule of rates
rw �tIon purposes the
to� C2 es Water .�tem be Increased
Msein tea Water Cbmaiselon's report and the city Manager's report on
t2 as Alms System pointed to the dmflmdling acreage available for irrl-
Dsisoses. Mr. SLocklmelr Concluded by saying that the Water
agreed that the sale !!Wines should apply to Alves as to
asmin tea. and, therefore, the recommended rate of increase is
INV Councilman Jewett that the Mater eoealsaion report on the
Um be received and f Zed. fteonded by Dempster. Carried 5
0.
-4-
The Mater repented the conclusion of the dater Commit sion report for
uis benefit of the avalanee.
A spectator asked, "What proportion goes to the farmers ?"
geltbar the Mayor nor the city Attorney .ould understand the question
wbieb was then withdrawn.
Ow Mgor reiterated that a public hearing on the subject was held at
as ]ast meeting, This statement was made for the benefit of focus
y.26 -tabs auddenee who wanted to question the Conaall or Elks statements.
Mayor asked the City Council if tbry wishe6 to reopw
€ u
no by Councilman pinrh that the public besiring be re-
Seeoadsa f Dempster and carried 5 to O.
,
3 fi Stevens, babe" f the rebi ants good, Monts Vista, and F that he ce
b�balt Of the rw,ddents of Msnaucraft !tenor am haL Terrace
" These two sroups- decided -to have one spokeaman, and
has been nomad on tbdr behalf. He said he rented to make
i !mows. First, they are cognisant of the fact t.Yat three
'.mim�els of the present council Ware not serving when the water works
was pn'ehasea in Mareb. 1960. hie stated that the Mouta Vista Water
IN Y-, could have been bought for $350,000, approzimately. Seeing the
smm of ;905,000 worth of bonds on material distributed 7'y the City
gave him to a start, he said. Their August consumption requires
about leverythingcinethe area, be said, by pasdmuch ass $33.00. or The water
users, however, in that event, would reduce their consumption so
that a 29% increase in revenue would not be realized. Htasked the
City Council if the Monte Vista residents are paying for
of their predecessors. I know that a municipal utility doesn't pay
anywhere near the taxes of a private company (a public y), he
stated. Therefore, it "doesn't ring a true bell."
The Mayor said that he could certainly speak for himself in saying
that the purchase of the water company was fully recommended by a
municipal financial consultant, and this recommendation Justified in
his mind and the grinds of tte voters of the City the fact that it is
• good investment. Someday the Water Department will be regarded as
• great asset to the City government and to the -munity. The
amount of the water rate increase is the question now before the
Council -- 20% or 23%. To decide, it will be necessary to weigh all
the evidence.
Edith O'Berg stated that the report prepared by J. B. Hanauer was
based on reports submitted by two Civil Engineers.
Moved by Councilman Finch that the written statement submitted by
Harold Stevens be entered into the record. Seconded by Dempster and
carried 5 to 0.
In response to a question, Mr. Stevens said that the aforementioned
sheet was prepared by about 10 people.
Mrs. McDonald, 10571 Ainsworth Drive, spoke of the self- defeating
mature of the rate increase. It automatically results in economizing,
i.e., the people will reduce their usage of water which, in turn, will
have a bad effect on subdividers who examine the status of utilities
end also the general appearance of a neighborhood. home buyers also
look at water rates and the appearance of the surroundings. She said
that a vicious, circular spiral effect results with a detrimental
effect on expansion. Second, she suggested the possibility that the
City consider disposing of the water works to some private concern
which could handle the operation more efficiently. She said she
in P Low small organizations are afflicted with economic troubles
and how difficult it is to operate efficiently by comoarlson with
larger companies, and on this basis she asked the City to consider
offering the water system to the City of San Jose (a--- Gently meaning
th- San Jose water Worka).
Coumellman Dempster said that the City has a bond commitment to meet
as evidenced in Resolution 203 providing for the issuance of $1 million
NOT of revenue bonds and also in the official statement, notice of
sale and covenant to the bondholders. The City Council must face the
-2-
R s. �'� r }fir ?,! 4ry 'iX aa�,�� 1" � P►!t.�f'
t .9: v3iLlalQ
INN WN
Now to tat 70te2i MAP
t .ehem :..ae.e�.r ac tmr
rf City.
this cosec.
0 systems.
Qa27snt: V!p doalt the people of Qrpertino pay a tax t defray the
difference in the fttes'md$rh am nor Supposed to be necessary?
MW City Attorney said there is no provision in the law for such a
levy.
Stith O*BM statol that her company bas represented Cupertino and
memy iof in the �aop tr-
ttIm in their sle revenue a floated tpuretase the Monte
Vista Water Works. their studies were paedleated, she said, on an
rim report ptepmmd_�at the request of the Cupertino City
Qo�i�eil. ta" 1tisWry, she expUlned, is the only way D7 w2deh they
ass take recosseadstions on eny facility whether it be an airport, a
eager eystes, a itat" ttorlos, or anything else. We adj=ted I m Ord.
•tans diid, the :061ftttaM of the axw - . so as to be con-
tiel itiw: 'am' ti't ial mwfnataat is basically to
sdM>i�i ttie ietrae A! rate`fbr the edicts of bonds and
to vo tkir to both sellers
Why bra the system =is* tears from the city flan from the
iu own gwation, she 2m en-
iletkd the buatt _ LO 6r lid[ a0t lbaeseea by t!r en-
gines". Despite normal p oventson theve Mai no season to believe
brats Mpuufsicp romM Shot up. ?ire eatiasted Mater rereeom have not
tsprlilised. Oa the otuw Zd, the cost of saintwan ce and opera-
�eis"1if11 lieorsd tb rte and tMio toe hatimtes. she Mid swat bar
s sr Noted. 1 paties, and the do not 1110 'to
"llfiSrddf e9AyAl � lirile tlm rea ffeslar. fte hated
t the xoport did not misrepresent the !hots. Atferlirtt to the
�y distributed to the audieaee, she said ttm� tMO pe4ea are a di-
'tWW of the IIInWSr'' , addi that MAO o me not the
east o! the system fist nari j "IS total member of bads sold, sor
or 1 �ve Dena mood for acquisition and construction and eons of
wle:vmed't dpinM -tits *96te0 !br tim fYset eoMple at "Oaths.
{ a¢t L1 t.. rite psiee of the manta lists Water
has ifoQ,006 plus .000 for the Alves 11m.
�b��r, 1961; J. H mamsge ree"v d a eo of s letter t the
;'eilTOtyergrW r - Cti. `letter smNested that
to Clt,: aum I.MIK, ft the City Conseil to the effeet� Vat the
w
passant water rate• are not Pdwicg the money required ,n the GOT -
soot to the b*Wldw. as not reveaw re4niled b7 2814 e0"'
ss 1.40 times the annual debt service. The city bas no r"Our" to
tmmatian in is reasons band'ameaure, but the buyer not NO* Protec-
tdon for his investment. Thia is the reason that Bsgolution 203 Pro -
v4des for Mater rats• which will produce the Afor'°.osntioosd net rev -
namely 1.40 tinge the annual debt service. The bGW underwriter
s,. that the CMV,0*0012 IN "dsaggis6 its hstls.'- .10 maid that
a�r ISUlAillhg to t,le city maintain its credit, that this 18
for and Dbmds ae well as the says �+! e1Nr6Na;>�1I�-
yy( ygpp the dm. Shs added teat ��+�+
s k`iy a J&� rate Ingrown
L
me
OrBerW raDert of the 1fai�qr•,
that a 20�'. is. semCiemt. viv
tht oo�ined with a M$ increase rri11- b• ode -
to atlisf� ppderun4ters. to ftet. she mid, it is bar
lieetion that t: Irarsese was the yawmdatian of the Jahn
»es letter of December, 1961.
Spectator. Samabady missed the boat 22 Only two years haw elapsed
mince the preparation of the repo: '.
,%W City Attorney stated that the true ceners of the water system are
tae bondholders. Ths city is actually an administrative agency open
sting the water system until the bonds are paid off, at which time
the city will be the real owner. He explained that a group of inter -
sated Citizens a few years ago, including himself, asked the president
of the California water Service Co. If they would provide water to
areas that sight be annexed to the City of Cupertino in the future.
They were advised that C&lifornia Water Service Co. would not invadt'
the franchise area of the Floats Vista lister Yorks. Since the execu-
tive staff of the California Water Service Co. is one and the .lame as
taut of the San Jose Water Works, there was ra other agent left to
effect the transfer of the Monte Vista Water Works than the City of
Cupertino. The City Attorney acknowledged that there Mae a long bis-
tory of protected negotiations between Monta Vista. Water Works and
prospective buyers. The Monts. Vista 'later Works was up for sale, and
it was simply a question of who the buyer would be. Prior to the
sale, said Mr. Anderson, Chester Damao, the owner of the system,
borrvrad 4150,000 and sank a well near Stalling Road. The purchase
price of 5700,Ooo covered the water works plus the $150,000 note
Issued by Dasico. As a result, water was available In Monta Vista.
The water rights inherent in the rights of the Monts, Vista Water _
City had had valuabble water rights but nopwater, due,to0thedrrought.., Ne
recalled that the situation was so critical last summer that nor Water
bit household water could be sold. In the emergency er
Water Service Co. released back to the City of Cupertino the water
it was purchasing, and the City prevailed Or Aonta Vista users to cur-
tail their consumption. lose of the revenue iron Ca1lMan1a Water
Service Co. plus the decrease In revenue resulting from the cut -back
Me pat the city in the present bind.
Mr. Spaulding, 10290 Nam Drive, asked whether the city was now sell -
Ing water to Cslifbznria Hater Service Co. The answer was in the neg-
ative.
N. 011aors, 10521 Mom Drive: Is this, then, a temPOISMY increase?
Me "r answered flat it will be a temporary inorseae if that Ss
possible.
N. 0llmore, 10521 Nam Thrive: Row about passing a temporary tax In-
eresaev
anth J'Harg anemared laat the revenue bond laws prohibit the use of
Paopsrty taxes to redeem revenue bonds.
ddlmoret Now &boat a spmoial water assessment?
Amporeonr 'fM :Wet or jqey4mg a spacial water aaNewsnt world be
Iibltiw. It offeett the amount of money realized from the
4.0_041 4el -
c
[
Qllmoten Other water eompanhieb have done MS.
Anderson: You are probably referring to mutual water companies in
the bill arras. They do this, but they have built in methods for
ss�_dh special assessments.
��eould possibly darn out to a5ddry hole ?l being drilled,by
hSUsr if so, the City is out #50,000. The City Attorney reiterated
r �mZ tAe decrease in =rte! ecmsonptlom plus the � Utea' ro m�
itdamla Pater Service 00. plea the coat of pompi�
S6 021mg Bond up to 1lomta Meta have put the city in its present
* dieamsmt.
1lis. rwcaald: Can Ym z18V .3WW hook -ups?
Aderson: Yes, with tbm ms» mall.
41M. IleDcmald. his any othst water Soirig to be available, much as
yporw rater? _
The her armwered that water delivered thro gh the South Bay Aqua-
duct is expected by 2W. llomta Vista is earmarked
litiea Of Rettcch HetcbY -
avy, The city has also explored the
w ;.er, but tbis s'nPPlY is very, veryVo ly.
The City manager said that the transrrission lines necessary to de-
liver Retch Hetchy water rill cost about $1} million. if Cupertino
connected to the Sunnyvale Retch Hetchy line, 325,000 gallons per day
would be delivered at a cost of $250,0x00, approximately. wa
Mr. Stocklmeir said that the cost of ter from the South 83y Aque-
duct aaccre foot dfor Hetch Hetchy water. f Horeveergthe Southc s
Bay Aqueduct
water would be untreated at that price.
The Mayor emphasized the fact that the city is obligated to raise the
rates, and, in fact, it will be forced to do soi He sail that if we
don't do it, somebody will do it for us.
Spaolding: Can we expect another increase for next yea':'
Mayor: No.
Elko•, 1049J Crests Drive: Does the city have any recourse to taxa-
tion to meet the hater Department coats?
Mayor: No.
Abe City Manager their explained some of the mayor difference$ between
the figures estimated by J. B. Hanauer and the actual figure
am thing, the industrial water sales have not reached anywhere near
$24,000 arouelly �is estimated. The pumping costs have been more than
anticipated so that overall the receipts, or the revenues, have been
lower then anticipated and the expenditures have been higher. He
said positively that the 28% Increase which he has proposed is not
_mended to provide any mousy, whatsoever or recreation purpoass but
Is necesr:y solely or the proper operation of the Water Department.
m i
e City Muager reviewed the operating staff, explaining ep
City has eve girl in the office and two men outside. The outside son
are on duty practically seven days a week, alternating seven days one
,.-•ek and five the next. No overtime 1s paid. Mr. Storm said the op-
eration is economleal, and be would like to see San Jose Water Works
or any other utility run it hey better.
go would be available or recreation afromttheCShateS�sDepartment or atsv
]oust 10 years.
Re concluded by saying that he will be happy to shot anyone 01 be arced the
is and the msVm eMteiently than byrthe former lOwners the
!Sneed by Comeilamn Flneh that the public hearing bs closed. 3ecor"
ey tbmelloon Jewett and carried 5 to 0.
Mbw@Id by Comeihsn Finch that an emergency ordi -muff be created
slaing the water rates 20% as per the recommendation of the Mater
amwalssion. Seconded by Salch.
Cbmellsia Jewett asked for the status of a previous Motion mode st
tfim Meeting o:: June 4th.
g Ot%pymy rerissmd to the City Clerk who WIMd for a recess
pit Yam pravloms x mmtea.
�� piDfS93 i.
IMMIX g the previous mopm the City Attorney:rnled the na+" Motion .
in or wow. the prior motion to table taking praeedenoe.
MbW& br,Coanclldn Jewett that the recomwe elation of the hater CaM-
SMOdon to raise the water rates by an averago of 20 per the Mater
010dweton report be accepted (June 4th notion), amended to include
am Alves line for an equal inerecae of 20%, the city Attorney to
ddtt s'fid increase as an urgency Mater Department ordinance. Sac -
move by Saich and carried 5 to 0.
heed by Counellman Finch twat the meeting be adjourned. Seconded by
Dempster and carried 5 to 0.
sa. • :a,rr
■eating adjourned at 9:57 P.M.
A PPIKWM:
A/ John J. Henetti
yor
IQ' M:
7T Zaarance K. Pftrtr7WW-vNW