19841113 Regular City Council Meeting - Minutes
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MINUTES OF AN ADJOURNED REGULAR MEETING
OF THE CITY COUNCIL, HELD NOVEMBER 13,
1984 AT 4:45 P.M., IN THE COUNCIL CHAMBER
OF THE CITY HALL, LOCATED AT 4305 SANTA
FE AVENUE, VERNON, CALIFORNIA
MEMBERS PRESENT: Davis, Malburg, McCormick, Gonzales, Ybarra
ABSENT: None
The meeting was called to order by Mayor Malburg.
The Mayor indicated that the City Council was convening
today to consider Container Corporation's appeal of the August
22, 1984 denial of their request for an electric transmission
line encroachment license.
Carrol S. Blodgett, a duly appointed Certified Shorthand
Reporter and Notary Public, in the State of California, of the
firm of L. R. Linn & Associates, was present and transcribed
the proceedings before the City Council.
A copy of the transcript is attached hereto and incorpo-
rated herein by this reference as though fully set forth at
length.
At the conclusion of the appeal proceedings, the Mayor
declared a five minute recess.
At this time, the City Council reconvened in regular
session all members present before the recess, again being
present.
At 5:50 p.m., it was moved by Ybarra, seconded by
11cCormick, that the City Council go into executive session
under Attorney/Client privilege. Motion carried.
All persons with the exception of the City Administrator/
City Clerk and the City Attorney were excluded from the execu-
tive session.
Mayor Malburg declared all communication to and from the
executive session deemed private and confidential.
At 6:08 p.m., It was moved by Ybarra, seconded by McCormick,
that the City Council go out of executive session and resume
regular session. Motion carried.
There being no further business to come before the City
Council, it was moved by Davis, seconded by Gonzales, that the
meeting be adjourned.
ATTEST:
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BRUCE V. MALKENHORST, City Administrator/
City Clerk
BEFORE THE CITY COUNCIL )
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OF THE CITY OF VERNON, CALIFORNIA)
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In tn~ matter of Appeal of the )
Denial\\of the Request for an )
Electric Transmission Encroachment ~.
LicensebT the Container Corporation)
of America, Inc. )
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City Council Chambers
4305 Santa Fe Avenue
Vernon, California
Tuesday, November 13 J 1984
L. R. LINN & ASSOCI..~TES
Cer~ified Shorthand Reporte::-s
Suite iiO
ONE BUNKER HILL BUILDING
601 West Fifth Street
Los Angeles, California 9001i
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APPEARANCES:
CITY COUNCIL:
For the Appellant
Container Corpor-
ation of.America,
Inc. :
Also Present:
Reported by:
Leonis Malburg, Mayor
Thomas Ybarra, Mayor Pro Tern
William Davis, C~uncilman
William McCormick, Councilman
Hilario Gonzales, Councilman
David B. Brearley, City Attorney
Valley Professional Building
Suite 203
11350 East Valley Boulevard
El Monte, California 91731
GIBSON, DUNN & CRUTCHER
By Wayne W. Smith
333 South Grand Avenue
Los Angeles, California 90071
De 1 C. B ro 0 ks
Mary Thorke1son
Carroll S. Blodgett, CSR 619
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VERNON, CALIFORNIA, TUESDAY, NOVEMBER 13, 1984
5:00 P.M.
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MAYOR MALBURG: Good afternoon, ladies and gentlemen.
At this time I will call to order the City
Council of the City of Vernon.
We are here today to consider Container
Corporation's appeal of the August 22, 1984 denial of
their request for an electric transmission line encroachment
license.
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MR. SMITH: Yes, I will, Mr. Mayor. I am Wayne
W. Smith. I am an attorney that represents Container
Corporation. I ha-ve with me tonight Mr. Del Brooks, who
will be presenting the basic part of our presenta-tion.
I am here because on the appeal, as we understa-nd the
ordinance, we are required to address certain standa-rds,
legal standards, that we need to meet on the appeal.
Therefore, Mr. Brooks will summarize the
project and what we view as being the facts applicable
to both the transmission line that has been requested and
where we believe the facts exist to meet the legal
standards in the ordinance, and then I will briefly
summarize our position as to .how we believe we 'have met
those legal standards. We will,try not to duplicate what
1S in the presentation. We did submit a substantial packet
of material in support of this appeal, and in recognition
that you all areveryhusyand that you have that written
material, We will try'to stay away from duplication, except
where those underlying facts are necessary to our arguments.
MAYOR MALBURG: Fine. Before we continue, at this
time I would like to dismiss the chief officers, the
Chi~f of the Fire Department and Chief of the Police
Department. You are excused. Thank you very much. Oh~
r didn't see you over there. You are excused, too.
Fine, we can proceed now.
Sir, would you please give us your name?
MR. DEL BROOKS: Yes. My name is Del Brooks of
Container Corporation of America. I am project manager
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1 for the cogeneration project here in Vernon.
2 Briefly, Container Corporation of Am~rica plans
8 to construct, install and operat~ a cogeneration facility
4 to generate electric power and steam for our paper mill
S at 2000 57th Street. This facility would generate
6 approximately or up to, I should say, 40 megawatts of
electric power. The power would be sold to Southern
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California Edison as is appropriate under FERC rules
for cogeneration facilities.
The project is necessary to maintain the
viability and ~ompetitive position of the mill. All of
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our competitors in this area are. either cogenerating or
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have cogeneration projects underway at various stages of
completion.
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Container Corporation of America has been in
the Vernon business community since 19.46 and plans to
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continue operations In Vernon as long as we can maintain
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the economic viability of the mill. We have asked for
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an encroachment license in order to construct a direct
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line between our mill property going west on 57th Street
and then south on Alameda exiting the city boundaries
which would eventually connect to the Southern California
Edison. This line would be built to utility standards.
It would be constructed by Southern California Edison,
the same people that do the construction and operation
and maintenance of the Vernon city system. It will travel
a fairly short distance inside the Vernon boundaries, since
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it is roughly 900 feet from our mill property to the city
1 boundary along Alameda Street.
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2 There are other lines present In the ,area along
3 that general route and therefore it poses no more impact
4 to the environment or to any more risks to tbe city than
;) currently exist. The streets or the construction of the
6 lines would not pose any substantial problerns,traffic
7 problems or any other type Qf difficulties. It IS
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common utility construction and the line would
be for export of power only. That is the way tbe
cogeneration facility is designed. The only way that we
would use this line would be to export power out and not
to bring po.wer into the City of Vernon.
The direct line avoids problems, of metering
complications which would be encountered if power .was
transmitted through the city system. It avoids any
conflicts or disruptions that a meter might cause on
the city system and is in general a much simpler approach.
We have been in negotiations with the City
Staff for approximately two Years now concerning a.wheeling
agreement. The.se negotiations have not proved fruitful
at this point, in fact, we were just negotiating today.
The latest proposal by the City Staff would require Container
Corporation of America to pay approximately $800,000 per
year in wheeling charges. This is opposed to direct line
costs Qf approximately $300,000 for the one-time cost.
We have also proposed that the city could construct the
line and operate it as a special facility for us so that
there would not be any non-CIty-owned lines within the
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1 outside the City.
2 On the first point, intrusion into the Vernon
3 serVice area, we believe that is factually incorrect.
4 This direct line would cause no intrusion whatsoever into
5 the Vernon service area, only export. pOWer out of the
6 service area, would not infringe or intrude in any fashion
7 into the service that is provided by the City of Vernon
8 within its service area. We have discussed this with
9 the PUC~ and they have confirmed our interpretation as
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correct. We had hoped to be able to present tonight an
opinion letter from them on that issue, but were unable
because of logistics to get it to us in time for the
meeting tonight. They have told us that it is 'correct
that this direct line simply exporting power outside of
the City would not infringe on Vernon's service area and
that should not provide any basis for the denial of the
direct line application~
Secondly, 1 am uncertain as to the basis for
the denial based on a "longstanding policy." We are
unable to find any such policy stated anywhere in any of
the City of Vernon's written materials to which we have
been able to obtain access. We believe that the law that
is applicable to an administrative body, which l,understand
the City Administrator to have been acting in in denying
the application, that an administrative body cannot
exercise unfettered discretion in dealing with an applicatio
for a permit, and I believe that is what we are,faced with
if our permit is to be denied on the basis of an asserted
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city boundaries on the city'system.
I think this concludes our basic description
of the project and the basic facts for both the line and
the project.
Mr.. Smi th..
MR. SMITH: I think as you see you will be
pleasantly surprised when I conclude my presentation that
the time we are going to consume is going to be much
shorter than may have been earlier anticipated, but
the package of materials that we submitted was so
voluminous .and tve are eliminating that and trying to avoid
duplication.
I will briefly discuss why We be.lieve that we
have met the three standards ifrthe ordinance, and why
we believe that the two bases which were stated in the
letter frQm the City indicating~hy the application was
being denied, why those two bases are improper and not
a valid means or not' valid bases, rather, for denYing the
application.
First, the two items that are mentioned in the
letter from the City -~ actually there is a letter, I
guess, from, I forget whose letter carne first, Mr. Vaits
or Mr. Malk.enhorst's, but one of the letters states that
there are two bases upon which the City Staff recommends
against granting the application and those are incorporated
into the denial. Those two bases are intrusion into
Vernon service area and what is stated to be a longstanding
policy of the City against allowing such a line to connect
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"langstanding palicy," which a citizen who. appraaches it
filing an applicatian is unable to. determine and which
apparently cauld be brought aut ar nat braught o.utas it
wauld suit the purpose af the Administratar. I think
the palicy that guides the granting aJ permits and
particularly the denial af permits must be mare <;:learly
articulated and available to. the public. So I don't believe
that palicy, Whatever it might be, can farm a basis for
denial af the applicatian.
Naw turning to. the three paints that are mentiane
In the City's ardinance Sectian 22.88 far this appeal.
We believe that our applicatian and Mr. Braaks' presentatian
mare than amply demanstrates CantainerCarparatian will
be substantially damaged by the refusal to. grant the permit.
If this cageneratian facility cannatbe campleted and
the pawer saId toSauthern Califarnia Edison, it will be
necessary far Cantainer Carparatian to. clase its facility
and to. relacate this'paper pulp aperatian to. same ather
locale where it is able to. aperate with a cogeneratian
facility.
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As Mr. Braaks pointed aut, all af the campetitars
are either using cageneratian ar have annaunced plans to.
build cageneratian facilities. These paper recycliIlg ar
paper pulp operatiansare very high energy users and it
IS difficult to. be campetitive and indeed impossible to.
be campetitive withaut meeting the competitian's use af
cagenera t ian fac i 1 it ies.
The second criteria that there be no. ather
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reasonable method of obtaining the desiredresUlt~ We
believe that an alternative of a one~time cost o~ $300,000
to establish a direct line of a couple city blocks cannot
be said to be a reasonable alternative to a whe.eling
agreement With a charge of $800,000 a year, particularly
when that is coupled with a gO-day termination provision,
which means that they could end up with their multimillion
dollar facility and no ability to sell the power at all.
We believe that the options that have been
presented by the City create an environment of economic
duress on Container Corporation. The City is ina position
of having the power of a monopolist in that it has control
over the only physical facilities that exist in the city
today for the transmission from this cogeneration facility
to a customer. Coupled with that, the City of Vernon
possesses legislative and administrative power to grant
or deny permits, so it controls every possible facility
or means by which CohtainerCorporationcan manager to
sell this electricity to a consumer or to a customer.
We beLieve that itis an improper exercise o~ that power
for the City to demand fees in the range of $800,000
for a wheeling agreement, particularly where there is
this easy alternative of a direct line running a very
short distance directly out of the city.
We believe that that argument also dovetails
into the last point ln that the granting of the permit
or license will not be materially detrimental to the public
interest, safety, health, welfare or injurious to other
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property. We believe it IS self-apparent that the short
distance of this line through heavy industrial uses in
an area where there already exists other power lines, power
facilities, is not going to create any additional impact
whatsoever, and that there will be absolutely no detrimental
impact to the City. Indeed, the only detrimental impact
we see that could occur to the City, and we are very
desperately trying to avoid, is the impact of coming to
an impasse where this plant cannot be kept open because
of the inability to build the cogeneration facility and
transmit the power to the Southern California Edison for
sale, which would leave the City in the position of losing
a facility that has been here for almost 40 years and
which employs" as I understand, about 160 people, and
we believe that would be a great loss to the City, to the
public, and certainly a great loss to my client Contain~r
Corporation.
We are hopeful that the Council will see that
we have indeed met the standards on this appeal and will
authorize the issuance of this direct line license for
the erection of this line for a very short distance so
that this power, when the cogeneration facility is completed.
can be transmitted out of the City of Vernon and sold to
a customer of Container Corporation.
Unless there are any questions from the Council,
that completes our presentation.
MAYOR MALBURG: Any questions from the Council?
(No reply.)
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MR. SMITH: Thank you, SIr.
MAYOR MALBURG: Mr. Brearley.
MR. BREARLEY: Your Honor, I think that the procedures
as I see it, in that the Staff has indicated its
unwillingness to recommend to the Council that the encroach-
mentlicensebe granted for the purpose stated, th~
ordinance provides alternative methods of obtaining a
license) namely, appeal of that Staff decision to the
Counc i 1.
Container Corporation's appeal can be made
before the Council.
We have now received from Container Corporation
their written exhibits and the legal arguments and the
14 management arguments made by Container. I would recommend
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that you take all of this under advisement and that YOLl
instruct the Staff to do several things.
One, I think it is necessary tq determine whether
an ErR review is necessary, because granting by this Council
of an encroachment license is a discretionary act to the
extent that it has environmental impacts leading to the
need to be considered, I think, which the Community Service
Department should review and determine their position on
whether there is an EIR problem which requires a review
of that kind, or whether a negative declaration should
be filed prior to the Council's determination.
The second thing I think that should OCCUr IS
that you shOUld instruct me and other conSUlting attorneys
for the City to give you a written opinion adVising you
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1 of what discretion you have In this matter. Mr. Smith
'2 has made his legal argument giving you his legal opinion
3 concerning what he thinks the status of the issue is. I
4 think before you make a decis ion that you should request
5 a written opinion from myself or from a consulting attorney
6 for the C i t Y .
7 The third thing I think you should do is, after
8 the legal opinion is wri t'ten and received, for staff to
9 review and determine whether they wish to submit any
10 documents to the Council for your consideration In light
of what has been submitted to you at this time. I would
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suggest that if the Staff wishes to submit additional
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documentation that it be Sent to Container, there be set
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a time to allow them to respond. I think if you will follow
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that procedure, at least you will place this matter into
a position where a decision can be made in the future.
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I think at this time it would be difficult to make a decisio
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without, number one, clearing away the EIR problem, if
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there are any, number two, having some advice .as to what
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discretion you have in this matter.
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MAYOR MALBURG: Fine. Are there any further questions
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from the CouncLl?
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Fine. We will start, I guess, with the first
item which would be the determination on the EIR, whether
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it is necessary or not; is that correct?
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MR. BREARLEY: Yes. I think you ought to refer that
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to the Community Services Department so they can do an
evaluation as to whether or not a report is necessary or
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1 negative declaration should be. filed. I think you have
2 to do some form of EIR review.
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should take what occurred today under advisement, and
advise Container when these other matters will be presented
to Council and set that time.
MAYOR MALBURG: Fine.
COUNCILMAN GONZALES: So move.
COUNCILMAN DAVIS: Seconded.
MAYOR MALBURG: Moved by Gonzales, seconded by Davis.
That will be t'he order, if there is no objection. That
will be the order. We are closed.
MR. BREARLEY: Before you close the meeting, I have
another issue to put before you on other ligitation.
MAYOR MALBURG:
MR. BREARLEY:
Fine.
Do you want to take a five-minute
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16 take five minutes?
MAYOR MALBURG: Fine. Would the Council like to
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COUNCILMAN GONZALES: Yes.
MAYOR MALBURG: That will be the order. We will
recess for five minutes.
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C n R T r F r CAT E
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L.. ,... '-iNN 4i A.SSQ(;tA'fts
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6 I hereby certify that r am a duly ,appointed Certifi<:d
7 Shorthand Reporter and Notary Public: in the State of
8 California.
!) r' further certify that the foregoing is a true and-
10 correct transcript of the.,proceedings had in the above..
11 entitled ~atter on the~ate specified therein~ and %ha%
12 said t.ranscript is a. true and correct transcription of my
13 stenographic notes.
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Dated. at Los Angeles, California, this,
NOVEMBER , '19 84
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day of
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