20120619 Regular City Council Meeting - Minutes (2)MINUTES OF THE REGULAR CITY COUNCIL MEETING OF
THE CITY OF VERNON HELD TUESDAY, JUNE 19, 2012,
IN THE COUNCIL CHAMBER OF THE CITY HALL LOCATED
AT 4305 SANTA FE AVENUE, VERNON, CALIFORNIA
MEMBERS PRESENT: Davis, McCormick, Maisano, Ybarra
MEMBERS ABSENT: None
The meeting was called to order at 9:00 a.m. by Mayor Pro-Tem
Davis.
Councilman Maisano led the flag salute.
Captain James Rodino announced that being disruptive at a public
meeting is against the penal code. He advised that any person
found disruptive will be asked to leave; if they refuse, they
are subject to arrest.
The City Clerk announced changes to Ordinance No. 1196 regarding
the Utility User Tax ("UUT"). He advised that the proposed
maximum rate changed from il"s to 9.8%, and the enforceable
period changed from three years to two years.
It was moved by McCormick and seconded by Maisano to approve the
changes to Ordinance No. 1196. Motion carried, 4-0.
The City Clerk also announced a request to hear the presentation
first, in the interest of time.
PRESENTATIONS
1. A Proclamation of the City Council of the City of Vernon
Commending Jansel Rodriguez and Freddy Covarruvias in
Preventing a Subject from Jumping Off the Atlantic
Boulevard Bridge
Interim Police Chief Daniel Calleros honored Jansel Rodriguez
and Freddy Covarruvias for their efforts in rescuing and saving
the life of a complete stranger. Calleros reported on the
incident that occurred on April 24, 2012, advising that
Rodriguez had encountered a subject attempting to commit suicide
on the Atlantic Bridge. while driving, Covarruvias witness
Jansel's struggle with the subject to prevent him from jumping,
and stopped to assist. The two men were able to control the
.. subject until paramedics were able to respond. Calleros
announced that had it not been for the two men, the subject
could have died.- On behalf of the City of Vernon, Calleros
commended Jansel and Covarruvias. The City Council presented
them both with a proclamation.
2. Merit Award to Detective Celestino Chavez.
Calleros honored Detective Celestino Chavez' 20 years of service
in the Vernon Police Department. Calleros reported on Chavez'
noble actions during an off -duty incident that occurred on
February 17, 2012. Chavez had received a call from a neighbor
advising of a possible theft. Upon arrival, Chavez encountered
a robber struggling with the female victim. Chavez was able to
handcuff and detain the intruder until local authorities
arrived. On behalf of the City, Calleros commended Chavez for
his noble actions, and presented him with the Merit Award.
Regular City Council Meeting Minutes
June 19, 2012
PUBLIC COMMENT
The City Clerk announced that this was the time allotted for
public comment. Mayor Pro-Tem Davis inquired whether anyone in
the audience wished to address the City Council.
Peter Corselli of U.S. Growers Cold storage protested against
the electric rate increases and Utility User Tax ("UUT"). He
reported that if both rate increases are adopted, U.S. Growers'
electric rates will have increased approximately 58% since
January, 2010. Businesses have pleaded not to go this route and
it has resulted in vacant buildings. The burden now rests with
those that remain. In his talks with union representatives,
Corselli was advised that there have been a loss in jobs.
Corselli urged the City to stop this pattern, and warned that
matters will only get worse. Business expansion is no longer an
option, and those that can, will take their businesses outside
of Vernon. Corselli stated that Vernon is no longer the oasis
it once was. Last year businesses rallied to save the City from
disincorporation, now businesses are questioning their efforts.
With the looming deficit the City has turned its back on the
businesses. Corselli questioned the City's allegiance.
Gary Jamison of Clougherty Packing, LLC, better known as Farmer
John, reiterated Corselli's concerns. The additional tax would
increase rates $1.14 million, a cost that cannot be passed down
to customers. Jamison reported that since 2007, Farmer John has
implemented a program to keep expenses down and true to the
budget. Jamison advised that the company is looking at three
options to offset costs which will all ultimately affect
productivity, usage, and jobs in Vernon. He calculated that 10t
of the UUT will come from Farmer John alone. He stated that no
one sees a favorable outcome from this.
Michael Smaha spoke on behalf of Owens-Illinois, Inc. and its
234 employees. Smaha offered the City their services and advice
in order to develop a plan to cut expenses. He recommended that
the City identify areas where cuts can be made and services that
could be administered by the County of Los Angeles,
restructuring debt, and evaluating alternative saving ideas in
Light & Power. Smaha explained that the plan would need a
timeline with benchmarks for accountability. Once the plan is
in place, Smaha recommends a UUT for two years with a cap of
$250,000, which will allow the City to address deficits in
important areas. If the City does not meet the plan's
benchmarks, he recommends a clause that would terminate the UUT.
In order to accomplish this, Smaha suggests forming a committee
of business constituents.
Smaha stated that Owens-Illinois is not supportive of the UUT,
but understands the City's current financial state. When the
City has developed a plan, with a timeline and benchmarks, the
businesses will know the City is committed to reforms and will
then start attracting businesses.
Leonor Gavina of Gavina & Sons Coffee, reported that she owns
real property at 2700 Fruitland Avenue.
Gavina stated that the company is opposed to the proposed UUT,
parcel tax increase, and electric rates increases, as all will
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Regular City Council Meeting Minutes
June 19, 2012
have a negative financial impact on her business. It would be
difficult to pass on these costs to the customers; therefore,
the company will have to absorb these expenses. Gavina reported
on the review of the company's own expenses and budget.
Businesses must all make sacrifices. She is proud to do
business in Vernon, and urged the Council to review its own
budget.
Matt Winsor of AmeriPride Services Inc. stated that he did not
think that in less than a year's time he would be fighting
against the City. Winsor argued that the City focuses on
increasing revenues but has not decreased expenditures. He
encouraged the City to look internally and remain competitive.
Winsor stated that the City should tap into its resources,
rather than simply take from the resources to maintain the
status quo.
Kurt Matsuni of Randal Foods advised that the key issue is
balance, and that the proposed UUT places an undue burden on a
handful of businesses. Matsuni explained that the budget lacked
efforts made by the City to reduce expenditures and close the
deficit gap. He mentioned that there are a lot of resources in
Vernon that the City could utilize in order to create a solution
for all.
Marisa Olguin President of the Vernon Chamber reported on the
June 5, 2012, election and on the County Registrar Recorders
letter, reporting on unopened ballots. The results of the
election are yet to be determined. Olguin reported on the
Chamber's request to the County to keep the pending ballots
unopened so that the City Council could determine the results of
the election. Olguin explained that as a Charter City, Vernon
can be the final judge, which is also supported under the State
Constitution. Olguin mentioned the Chamber's involvement and
efforts for a clean election, support for pro reform leaders,
and the filling of the fifth City Council seat.
Regarding the City budget, Olguin opined that the City had a
misguided approach. She encouraged the Council to revise the
budget and do additional cuts before a UUT is passed. Olguin
advised that the UUT places an unfair burden on manufactures,
and that 50 companies contribute to approximately 85% of the
revenue. Through the workshops the City heard from the
businesses. She opined that Owens-Illinois presented a good
approach. The City should partner with businesses in a formal
manner, tied to a resolution, with checks and balances. There
are multiple businesses that are willing to support the City.
She urged the Council to revisit the budget and not pass the UUT
Ordinance. Olguin reported that with the proposed electric rate
increases, Vernon will no longer be competitive. The City needs
to come up with a strong plan so that the City is sustainable.
Curtis Kirkland, Vernon resident, echoed Olguin's concerns on
the June 5`h election. Kirkland suggested that the Vernon
Housing Commission's review violations on lease agreements. He
acknowledged the City's great strides in its reform efforts and
need to continue on this path.
Dave Gordeta of Baker Commodities, Inc. reported that during
AB46 many companies donated money, flew representatives to
Sacramento, and opened its premises to town hall meetings, at an
expense of approximately $100,000. The City spent money on
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June 19, 2012
consultants to conduct a study. According to the study issued
by Capital Matrix, a firm contracted by the City, if John Perez
was successful in disincoxporating Vernon, every business could
expect their utility bills to increase 30%. In response,
businesses rallied and defeated AB46. Gordeta advised that with
all the utility rate increases and the proposed UUT, businesses
can expect their utility bills to increase approximately 30t,
the same as they had been warned would happen if Vernon was
disincorporated. Gordeta reasoned that the situation is worse
considering all the money the City spent in efforts to save the
City, including a $60 million deal with Senator Kevin De Leon,
and various consulting fees.
Gordeta urged the Council not to vote, and table the matter.
Gordeta reported on the Chamber's public records request in an
effort to get a true sense on the City's financial status. As
he understands it the request has been forwarded to Latham and
Watkins. He reported that over the last five years Latham &
Watkins has billed the City over $14 million. Businesses want
the opportunity to get a better sense of the City's budget in
order to suggest cuts. Gordeta reported on suggested budget
cuts provided by the Chamber of Commerce. He suggested a 30 day
period in order to allow everyone to work together and reduce
the budget.
Dan Powers of Corney Management encouraged Council to continue
with the reforms, transparency and participate in the budget
process. Before increased taxes are considered, Council should
consider cuts. When businesses see cuts and the City is being
responsible with its money, they will be more favorable to
increasing revenues.
Bob Gutterman of Crown Poly agreed with the previous statements.
He stated that there is a need to delay and recommended expense
reductions, delay of capital projects, and renegotiation of the
Senator De Leon deal.
Gutterman reported that over the past year, Light and Power has
transferred $6 million to the general fund And that the current
recommendation is to transfer of 11.5% because it is a common
number in cities, which is estimated at $14 million.
Additionally the UUT would provide for an additional $12 million
to the general fund. This equates to approximately $20 million
for one year. Corselli had calculated that the increases
equated to approximately 58%. He called the UUT taxation
without representation with the ballot measure going to the
residents. He understood the process, but suggested that the
City conduct a non binding poll to get a census on how the
businesses feel.
Bill Tolen of Matheson Tri-Gas expressed his company's strong
opposition to the proposed UUT and electric rate increases. The
existing rates are already higher than surrounding areas. Tolen
reported that Matheson Tri-Gas has put plans of expansion on
indefinite hold, and has plans to place older facilities located
elsewhere back into production and that Vernon is no longer
viewed as competitive. Tolen mentioned his disappointment that
a facility that is 30 years older can be more competitive than
facilities in Vernon. Should the UUT and rate increases be
approved, the company will be forced to look at further options.
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June 19. 2012
Independent reform monitor John van de Kamp opined that this was
a healthy discussion which would not have taken place a year or
two ago. It is fair to say that no one wants to pay more taxes,
and the question that everyone is faced with is what type of
services should be provided, and how are they going to be paid
for. Van de Kamp advised that he has not heard from anyone on
how things can be balanced in a fair way. In his last report,
Van de Kamp recommended that the business community work with
the City and identify the types of services they want to have.
Someone has to make the hard decisions; can the City afford its
current level of Police and Fire services. Van de Kamp advised
that with the appointment of a new City Attorney, the City will
be able to reduce its legal expenses. If the City uses outside
consultants, government rates should be established. In the
past, the City absorbed much of the costs. A fair decision for
everyone must be made to get back into balance, and this is the
time to do it.
Doug Rosen of Superior Lithographic commented on the betrayal he
felt from the City, and opined that Assemblyman John Perez would
find the situation humorous. Rosen stated that the City is
poorly run, and that it was a mistake to support the City
against AB46.
Olguin rebutted Van de Kamp's comments and advised that the
Chamber has put together a proposed budget developed by a
volunteer committee, which made recommendations to reduce the
budget, and also suggestions on how to increase revenues. She
encouraged the Council not to vote on the budget and the
Memorandum of Understandings ("MOU") for Police and Fire. She
reasoned that the budget needs to be further reviewed before
MOUs can be considered, at which point the UUT rate and other
sources of revenue can be considered.
Patrick Rhodes of Vivian Chemical Company was not pleased with
Van de Kamp's comments about the businesses complaining. Rhodes
clarified that his concern was taxation without representation.
The City is dependent on revenues that may not come to fruition
if business move out of Vernon. Rhodes discouraged the City
from using consultants, and encouraged the City to work with
business representatives and table the vote.
Hearing no other requests for public comment, Mayor Pro-Tem
Davis thanked the public for their comments.
MINUTES
It was moved by Maisano and seconded by Ybarra to approve the
Minutes of the Regular City Council Meeting held May 1, 2012.
NEW BUSINESS
1. Ordinance No. 1196 - An Ordinance of the City Council of
the City of Vernon Declaring an Emergency and Establishing
a Date for a Special Election to Submit to the Voters of
the City a Proposition to Levy a Utility Users Tax,
Establishing Procedures in Connection with Such Election,
Adding Article VII to Chapter 5 of the Code of the City of
Vernon to Codify Such Utility Users Tax Upon Approval of
Such Proposition By Such voters, Establishing Procedures
for the Levy and Collection of Such Utility Users Tax Upon
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Regular City Council Meeting Minutes
June 19. 2012
Such Approval, and Other Related Matters (first and final
reading)
City Administrator Mark Whitworth explained that the Utility
User Tax ("UUT") is designed to meet the needs of the general
fund, and that all of the revenues will go towards the general
fund. He mentioned that most cities have other sources of
revenue, receiving $0.20 to $0.30 on property tax, but that
Vernon only receives $0.07. Whitworth explained that the
Light and Power Department has historically supported the
general fund but that increasing costs have made the
department less robust. The UUT will take the burden away
from Light and Power.
Whitworth reported on the workshops and various meetings he
had with different company representatives, as such,
modifications to the ordinance were made. He recommends
adopting the ordinance in order to allow for a vote of the
people. Whitworth stated that the UUT rate will be
established by the Council, but that the maximum rate allowed
had been reduced to 9.8 Whitworth continues to meet with
business representatives on efforts to further reduce the
budget and determine the level of service that should be
maintained. The UUT is not a long term solution, and other
sources need to be considered.
Councilman Ybarra stated that it's a tough situation and that
the UUT is a vehicle for additional revenues. The rate of the
UUT will be determined by the Council. Ybarra advised that he
has requested a 10%7 budget reduction. Ybarra empathized with
everyone and the need to change and make additional cuts. If
approved by the voters the UUT rate will be a future
discussion.
In response to Councilman Maisano's inquiry, Whitworth advised
that other cities are faced with the same situation. With the
elimination of the Redevelopment Agency, the City's cash flow
has decreased and changes need to be made.
Whitworth agreed with Councilman Maisano's comment that the
issue is state and world wide. Whitworth reported that the
original recommendation was a ten year tax, but that the UUT
has a sunset of two years. He clarified that if approved
today, the timeline begins this day even though the election
is not scheduled until September.
Whitworth reported that the City is working with Independent
Reform Monitor John Van de Kamp and is communication with
Senator Kevin De Leon's office.
Mayor Pro-Tem Davis inquired on the timeline. Special Counsel
Dana Reed clarified that the ordinance does not implement the
tax but rather, establishes the election date.
Whitworth noted that Councilman Ybarra has expressed an
interest to further reduce the budget.
It was moved by McCormick and seconded by Ybarra to approve
and adopt the first and final reading of Ordinance No. 1196.
A role call vote was taken:
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June 19, 2012
- Councilman Ybarra, Yes
- Councilman McCormick, Yes
- Mayor Pro-Tem Davis, Yes
- Councilman Maisano, Yes
Motion carried, 4-0.
2. Resolution No. 2012-94 - A Resolution of the City Council
of the City of Vernon Approving and Authorizing the
Execution of a Memorandum of Understanding By and Between
the City of Vernon and the Vernon Firemen's Association
3. Resolution No. 2012-95 - A Resolution of the City Council
of the City of Vernon Approving and Authorizing the
Execution of a Memorandum of Understanding By and Between
the City of Vernon and the Vernon Police Officers' Benefit
Association (Employee Group 2)
Municipal Employee Relations Representative Mark Whitworth
reported on the negotiations process for the Memorandum of
Understanding ("MOU") for both Police and Fire Departments.
Whitworth advised that the MOUs included job security as there
would not be any layoffs for a period of two years. He noted
that this would not preclude the City from contracting
services with Los Angeles County.
Whitworth reported on the labor force reduction from 320
employees to 227 employees, and on the City's plan to
encourage early retirement for those that have been with the
City over 20 years. Potential new hires would come in at a
much lower cost and would not be entitled to the old longevity
plan.
Whitworth reported that both MOUs were approved by the
respective associations.
It was moved by McCormick and seconded by Ybarra to approve
Resolution No. 2012-94 and Resolution No. 2012-95. Motion
carried, 4-0.
4. Resolution No. 2012-96 - A Resolution of the City Council
of the City of Vernon Determining the Tax on all Parcels
Subject to the Special Parcel Tax Imposed by Ordinance No.
1076 for Fiscal Year 2012-2013
City Administrator Mark Whitworth advised that the
recommendation is part of a permitted adjustment and was
calculated using a formula. The recommendation is a 2.7%
increase which is equivalent to $28.72.
It was moved by McCormick and seconded by Maisano. A roll
call vote was taken:
- Councilman Ybarra, No
- Councilman McCormick, Yes
- Mayor Pro-Tem Davis, Yes
- Councilman Maisano, Yes
Motion carried, 3-1.
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Regular City Council Meeting Minutes
June 19, 2012
PUBLIC HEARINGS
1. Consideration of a proposed increase to Vernon's retail
electric rates.
a. Resolution No. 2012-97 - A Resolution of the City
Council of the City of Vernon Approving and
Authorizing the Removal of Certain Language to the
Public Benefits Charge and the Allocation of Funds to
Offset the Renewable Power Cost Pass -Through to
Customers
b. Resolution No. 2012-98 - A Resolution of the City
Council of the City of Vernon Amending Rate Schedule
Nos. CS, D, GS-1, GS-2, LS-1, LS-2, OL-1, PA-1, PA-2,
PA-TOU, TC-1, TOU-GS-1, TOU-GS-2, TOU-PA-1, TOU-D,
TOU-G, TOU-I and TOU-V Regarding Electrical Rates to
be Charged for Electrical Energy Distributed and
Supplied By the City within its Boundaries
Director of Light & Power, Carlos Fandino reported on the
department's efforts to lessen the customer's impact while
still meeting department goals. Fandino first addressed and
reported on the City's public benefit charge. He recommended
that the City continue the charge and use part of the funds to
offset the renewable portfolio standard ('RPS") costs.
Fandino proposes that while the benefit does not have to
sunset, 2% of the funds, equivalent to approximately $2
million, be applied to the renewable pass -through adder. The
funds would be evenly distributed per usage and it would allow
the City to give back to the customers.
In response to Councilman Ybarra, Fandino explained that the
City Council had previously approved the pass -through adder;
effective January 1, 2013, when customers will be asked to pay
the cost of renewable energy. The public benefit charge is
already being collected, and rather than using the funds as
part of rebates, the money will be given back to the
customers. Fandino clarified that it is not a direct refund,
a formula will be use to reduce the pass -through adder,
effectively lessening the bill.
Fandino addressed the rate increases. He reported on the
ongoing discussions with the Advisory Committee on Electric
Rates on the department's needs. Fandino advised that the
department has made several cuts, but that there are long-term
debts to address. Fandino reported on the pre -paid gas deal
and on public comments to address the deal including
bankruptcy and restructuring of contracts. Fandino stated
that the department cannot declare bankruptcy.
Fandino reported that increasing CAISO agreement fees,
increasing general fund transfers, and a 1.25 debt service on
existing bonds requires that the department implement an 11.5%
rate increase. Fandino understands that such a large rate
increase would be difficult for many businesses, which is why
he has proposed a rate increase of 7.8% effective July 1,
2012, a 7.8% increase effective January 1, 2013, and a 2%
increase effective July 1, 2013. Fandino explained that the
recommendation for rate increases spans two fiscal years.
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Regular City Council Meeting Minutes
June 19, 2012
Fandino advised that the department is continuously searching
for ways to further reduce costs. The department is engaged
with the Advisory Committee and willing to work with
businesses in order to keep businesses in Vernon, and continue
to be transparent.
At 10:43 a.m., it was moved by McCormick and seconded by
Maisano to open the public hearing to consider the proposed
increase to Vernon's retail electric rates.
Bob Gutterman member of the Advisory Committee on Electric
Rates announced that the Committee supports Resolution No.
2012-97, and recommends that the public benefit charge be used
to offset RPS costs. He also announced that the Committee
voted against Resolution No. 2012-98 which calls for
additional electric rate increases. Gutterman explained that
additional studies need to be conducted, and opined that it
was inappropriate to vote on the issue when there are still
ongoing discussions.
Gary Jamison of Farmer John opined that the recommendation is
rushed and expressed his disapproval.
Bob Gutterman now speaking as a representative of Crown Poly
reported that after the previous year's electric rate
increases Crown Poly commenced a study and concluded that even
without the pass -through adder or the proposed UUT, the rate
increases made the company uncompetitive in the global market.
He reported that Crown Poly and other utility users are
actively looking at alternative sources of energy. Gutterman
concluded that all the rate increase factors will result in a
20% reduction in usage, which will then spiral a need for
additional rate increases.
Marisa Olguin President of the Vernon Chamber of Commerce
reiterated the Chamber's opposition to a rate increase. She
expressed her concerns over the City's future when there is a
20t reduction in usage. She urged the Council to consider
what may happen with the top users. Olguin stated that the
general fund transfer is a factor and is an unfair burden on
utility users.
olguin advised that the City Administrator had reported a $15
million transfer to the general fund and is proposing a UUT
_ that would generate $12 million for the general fund. She
concluded that the gap equated to close to $30 million. She
urged the Council to reconsider and recommend lower utility
rates and review the general fund transfer.
Greg, a member of the audience, opined that the City has not
done its due diligence on the cost side of the ledger. He
reported on his own business and the ability to move
production to other locations outside of Vernon. Businesses
must remain cost competitive.
At 10:55 a.m., it was moved by McCormick and seconded by
Maisano to close the public hearing.
1n response to Mayor Pro-Tem Davis' inquiry on whether any
written comments had been received, Fandino reported that a
number of customers had voiced their opposition and expressed
their concerns about having to leave Vernon.
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Regular City Council Meeting Minutes
June 19. 2012
City Administrator Mark Whitworth suggested adopting the 7.81
increase effective July 1, 2012, passing along any savings to
the Light & Power department in the form of lower general fund
transfers, and revisiting the additional proposed electric
rate increases before January 2013.
In response, Fandino stated that he would not be in support of
the recommendation made by Whitworth. Fandino explained that
Light and Power had debt service coverage obligations
independent of the general fund transfer. The department must
meet a 1.25 times debt service coverage. If they fail, the
department will default on the bond.
Alternatively, Fandino recommended that if less money is to be
transferred to the general fund, that money could be used to
subsidize RPS costs or be used for different programs to help
top utility users stay competitive.
Fandino stated that he is open and willing to meet and work
with any of the businesses in order to keep business
competitive in Vernon.
Councilman Ybarra recommended a reduction in capital projects
and inquired whether Council could vote on the first proposed
rate increase, instead of approving rate increases for the
next two years.
Fandino explained that the two 7.8% rate increases need to be
approved in order to comply with the bond debt service. The
additional 20 rate increase on July 1, 2013, was to facilitate
projection costs for businesses. Fandino advised that the
City has to be cautious not to violate or mislead bond
holders. If the general fund transfer can be reduced, Fandino
advised that the money can be used to subsidize businesses'
utility bills.
It was moved by McCormick and seconded by Ybarra to approve
Resolution No. 2012-97 and Resolution No. 2012-98. Motion
carried, 4-0.
2. Consider the adoption of the proposed Budget for the City
of Vernon for fiscal year 2012-2013.
a.Resolution No. 2012-99 - A Resolution of the City
Council of the City of Vernon Approving a Budget for
the Fiscal Year 2012-2013
City Administrator Mark Whitworth clarified that the budget
does not reflect the Memorandums of Understanding associated
costs, parcel tax increase and proposed UUT. They will be
addressed when the budget is adjusted before August 31, 2012.
Whitworth reported on the City's proactive approach to reduce
the budget including employee contribution to the retirement
fund which was previously funded by the City, the freezing of
annual step increases, reduction in consultant use, encouraged
restructuring when employees leave the City, and deferred
capital improvement projects. Whitworth advised that the
majority of capital improvement projects are funded by grants.
The Senator Kevin De Leon Community Benefit Fund commitment is
being revisited.
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Regular City Council Meeting Minutes
June 19, 2012
The City is looking at whether assets such as safety can be
outsourced in order to generate revenue. The new Human
Resource Director will be responsible for health care costs.
Whitworth restated the City's commitment to Councilman
Ybarra's request to reduce the budget by 10%. Whitworth
recommended the approval of the budget, with the
acknowledgement that there will be modifications.
At 11:11 a.m., it was moved by McCormick and seconded by
Maisano to open the public hearing to consider the adoption of
the proposed Budget for the city of Vernon for fiscal year
2012-2013. Hearing no comments, at 11:12 a.m, it was moved by
Ybarra and seconded by Maisano to close the public hearing.
In response to Councilman Ybarra, Whitworth confirmed that the
City's efforts will be to reduce the budget by 5-10$ and make
the appropriate changes during the adjustment.
It was moved by Ybarra and seconded by McCormick to approve
Resolution No. 2012-99. Motion carried, 4-0.
CONSENT CALENDAR
It was moved by McCormick and seconded by Ybarra, that the
matters on the Consent Calendar be approved as recommended.
Motion carried, 4-0.
1. Warrant Registers
a. Approval of Payroll Warrant Register No. 672, totaling
$3,779,814.92, which covers the period of April 8,
through May 19, 2012, and consists of the following:
I.Ratification of direct deposits, checks and
taxes totaling $2,743,198.30; and
2. Checks and electronic fund transfers (EFTs)
through the General bank account totaling
$1,036,616.62.
b.Approval of City Warrant Register No. 1359, totaling
$1,193,904.72, which covers the period of May 25,
through June 11, 2012, and consists of the following:
1.Ratification of wire transfers totaling
$780,890.95; and
2.Ratification of the issuance of early checks
totaling $214;960.12; and
3. Authorization to issue pending checks totaling
$198,053.65; and
c.Approval of Light & Power Warrant Register No. 324,
totaling $1,159,766.32, which covers the period of
April 24, through May 7, 2D12, and consists of the
following:
1.Ratification of wire transfers totaling
$825,384.02; and
2. Ratification of the issuance of early checks
totaling $72,407.94; and
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Regular City Council Meeting Minutes
June 19. 2012
3.Authorization to issue pending checks totaling
$261,974.36.
d.Approval of Gas Warrant Register No. 112, totaling
$17,993.27 , which covers the period of May 25,
through June 11, 2012, and consists of the following:
1. Ratification of the issuance of early checks
totaling $6,077.82; .and
2. Authorization to issue pending checks totaling
$11,915.45.
2. Community Services
a. Building Department Report for the month of May 2012,
to be received and filed.
3. Health Department
a.May 2012 Monthly Report, to be received and filed.
4. Police Department
e. Activity Log and Statistical Summary of Arrest and
Activities for the period of May 16, through May 31,
2012, to be received and filed.
itl: -MAb. Qt.Dkl
1. Resolution No. 2012-100 - A Resolution of the City Council
of the City of Vernon Adopting an Appropriations Limit for
the Fiscal Year Ending June 30, 2013 Pursuant To
Government Code Section 7910
It was moved by McCormick and seconded by Ybarra to approve
Resolution No. 2012-100. Motion carried, 4-0.
Special Counsel Dana Reed recommended that both Resolution No.
2012-101 and Resolution No. 2012-102 be addressed at the same
time.
2. Resolution No. 2012-101 - A Resolution of the City Council
of the City of Vernon Approving and Authorizing the
Execution of Encroachment License Agreement No. 410 By and
Between the City of Vernon and Nile Financial
Director of Community Services and Water Kevin Wilson reported
that Nile Financial, owner of Bon Appetite, has a fire line
constructed in the public right-of-way. The company had entered
into a 25 year encroachment license agreement which is now
expiring. Wilson recommends a continuation of the license
agreement.
3. Resolution No. 2012-102 - A Resolution of the City Council
of the City of Vernon Accepting the Work of SAIL
Construction, LLC in Accordance with Contract No. CS-0015
of the City of Vernon
Wilson reported on the resolution for SAK Construction, LLC
advising that staff had issued a change order to replace sewer
piping. The work has been completed. Wilson recommends the
approval of the agreement and issuance of final payment.
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June 19, 2012
It was moved by McCormick and seconded by Maisano to approve
Resolution No. 2012-101 and Resolution No. 2012-102. Motion
carried, 4-0.
4. Resolution No. 2012-103 - A Resolution of the City Council
of the City of Vernon Approving and Authorizing the
Execution of a Tolling Agreement By and Between the City
of Vernon and the Water Replenishment District of Southern
California
Director of Community Services and Water Kevin Wilson reported
that the Water Replenishment District ("District") is being sued
by a number of cities and that the case is currently being
appealed. Wilson advised that with the recommended tolling
agreement the City agrees to not sue the District and if
determined by the courts will be entitled to repayment on
adjusted rates.
It was moved by Maisano and seconded by Ybarra to approve
Resolution No. 2012-103. Motion carried, 4-0.
5. Resolution No. 2012-104 - A Resolution of the City Council
of the City of Vernon Approving a Lot Line Adjustment for
the Properties Located at 2929 E. 54th Street and 5215 &
5375 S. Boyle Avenue in the City of Vernon
Director of Community Services and Water Kevin Wilson reported
that the current owner requested a new lot line in order to
separate the property and not have to conform to toxic control
requirements for the entire location.
It was moved by Ybarra and seconded by McCormick to approve
Resolution No. 2012-104. Motion carried, 4-0.
Special Counsel Reed recommended that Resolution No. 2012-105
and Resolution No. 2012-106 be heard together as they relate to
the same issue.
6. Resolution No. 2012-105 - A Resolution of the City Council
of the City of Vernon Repealing Resolution No. 2012-26
Regarding the Conflict of Interest Code for the Ad Hoc
Advisory Committee for Business Development
7. Resolution No. 2012-106 - A Resolution of the City Council
of the City of Vernon Repealing Resolution No. 2011-171
Regarding the Conflict of Interest Code for the Ad Hoc
Advisory Committee on Electric Rates
Robert Stern, who has been working with the City on the reform
efforts, reported on his review of the Conflict of Interest Code
for Vernon's two Advisory Committees. Stern concluded that the
Committees are not subject to file a statement of economic
interest as they do not make final government decisions. Stern
recommends that the Conflict of Interest Codes for the
Committees be repealed, but encourages committee members to
continue filing.
It was moved by Maisano and seconded by McCormick to approve
Resolution No. 2012-105 and Resolution No. 2012-106. Motion
carried, 4-0.
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June 19, 2012
8. Resolution No. 2012-107 - A Resolution of the City Council
of the City of Vernon Approving and Authorizing the
Execution of an Application for the 2012/2013 Used Oil
Payment Program
Leonard Grossberg, Interim Director of Health and Environmental
Control, advised that since 1997, the Department has applied for
and received the grant to pay for educational materials.
Grossberg requests its continued submission and use.
It was moved by McCormick and seconded by Ybarra to approve
Resolution No. 2012-107. Motion carried, 4-0.
Resolutions Nos. 2012-108, 2012-109, and 2012-110 were all
addressed under one motion.
9. Resolution No. 2012-108 - A Resolution of the City Council
of the City of Vernon Approving and Authorizing the
Execution of an Agreement for Exclusive Purchase of Goods
and Related Services with Rapid & Reliable Copier Service
for Purchase of Supplies and Maintenance Repairs of
Copiers
Director of Light & Power Department Carlos Fandino reported
that the service was sent out to bid and that the lowest bidder
was selected with an estimated cost of $20,000.
10. Resolution No. 2012-109 - A Resolution of the City Council
of the City of Vernon Approving and Authorizing the
Execution of an Agreement for Continuation and Upgrade of
Dedicated Internet Access Services under the Business
Markets Master Service Agreement By and Between the City
of Vernon and Level 3 Communications, LLC for Dedicated
Internet Access Services
Director of Light & Power Department Carlos Fandino advised that
the agreement provides internet access to customers.
11. Resolution No. 2012-110 - A Resolution of the City Council
of the City of Vernon Approving and Authorizing the
Execution of an Agreement for Exclusive Purchase of Goods
and Related Services with General Data Company, Inc., for
Purchase of Printer Supplies and Repair of Printers and
Facsimile Machines
Director of Light & Power Department Carlos Fandino reported on
the bid for toner and services on the printers. He clarified
that the service does not include copier machines and that the
lowest bidder was selected with an estimated cost of $55,000 per
year.
It was moved by McCormick and seconded by Maisano to approve
Resolution No. 2012-106, Resolution No. 2012-109, and Resolution
No. 2012-110. Motion carried, 4-0.
12. Resolution No. 2012-111 - A Resolution of the City Council
of the City of Vernon Adopting an Amended and Restated
Sick Leave Policy and Repealing all Resolutions or Parts
of Resolutions in Conflict Therewith
Director of Personnel Martha Valenzuela reported that in 2007,
the City adopted a resolution which allowed for the accrual of
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Regular City Council Meeting Minutes
June 19. 2012
sick leave hours that could either be used to obtain service
credit or cash payment. Based on new fiscal costs, Valenzuela
recommends the elimination of this benefit in light of the
City's financial status.
City Administrator Mark Whitworth added that even thought the
benefit has been in place since 2007, the benefit has not been
used.
It was moved by Ybarra and seconded by McCormick to approve
Resolution No. 2012-111. Motion carried, 4-0.
13. Resolution No. 2012-112 - A Resolution of the City Council
of the City of Vernon Accepting the Bid of Carmenita Truck
Center on Bid No. 1464 for the Purchase of a 2012 Ford F-
750 Regular Cab XLT (F?F) Asphalt Truck with a P3 Loader
Corporation Unitized Patcher for the Community services &
Water Department, Approving and Authorizing the Execution
of a Vehicle Purchase Contract and the Issuance of a
Purchase Order Respecting Said Bid
Martha Valenzuela Purchasing Director reported on the previously
approved request for proposals and the current request to accept
the lowest bidder. Valenzuela advised that the expense was
budgeted and will be included in fiscal year 2011-2012.
City Administrator Mark Whitworth further added that the
purchase had been deferred for three years, capturing the cost
in the current fiscal year eliminates the expense from the next
fiscal year.
It was moved by Maisano and seconded by Ybarra to approve
Resolution No. 2012-112. Motion carried, 4-0.
14. Resolution No. 2012-113 - A Resolution of the City Council
of the City of Vernon Approving the Payment of Premiums
for Insurance for Medical, Dental, and Life, Benefits for
Employees during the 2012-2013 Fiscal Year
Risk Manager Willard Yamaguchi reported on the yearly
recommendation for payment of premiums for employee benefits.
Yamaguchi advised that the resolution conflicts with the newly
adopted Memorandum of Understandings ("MOU"), advising that the
MOUs increased the premium payment allowance for Police and
Fire.
Special Counsel Dana Reed recommended that the resolution be
adopted as is, should it be found in conflict with the MOUs, it
should be amended to include all full-time employees not in
MOUS.
It was moved by McCormick and seconded by Ybarra to approve
Resolution No. 2012-113. Motion carried, 4-0.
15. Resolution No. 2012-114 - A Resolution of the City Council
of the City of Vernon Approving the Continued Payment of
Premiums for Medical -Dental Insurance for Retired
Employees During the 2012-2013 Fiscal Year
Risk Manager Willard Yamaguchi reported on efforts to encourage
retirement using the retirement benefits. Yamaguchi advised
that there are several employees who have over 20 years of
Page 15 of 22
Regular City Council Meeting Minutes
June 19, 2012
service. Medical costs have been capped in order to control
costs.
It was moved by McCormick and seconded by Ybarra to approve
Resolution No. 2012-114. Motion carried, 4-0.
ORDINANCES
1. ORDINANCE NO. 1194 - An Ordinance of the City Council of
the City of Vernon Adding Section 2.123.1 to Article XVII
and Amending Article XVII, Sections 2.123, 2.125, and 2.128
of the Vernon City Code Relating to the Vernon Housing
Commission (second reading)
Special Counsel Dana Reed advised that the ordinance
establishing the Vernon Housing Commission did not have
provisions for Council to remove Commissioners. The proposed
ordinance allows for the oversight of the Commission by City
Council. This is the second reading and if adopted will take
effect in 30 days.
It was moved by Ybarra and seconded by Maisano to adopt
Ordinance No. 1194. A role call vote was taken.
Councilman Ybarra, Yes
- Councilman McCormick, Yes
Mayor Pro -Tern Davis, Yes
- Councilman Maisano, Yes
Motion carried, 4-0.
2. ORDINANCE NO. 1195 - An Ordinance of the City Council of
the City of Vernon Adding Section 2.147.1 to Article XIX
and Amending Article XIX, Sections 2.147, 2.149 and 2.150
of the Vernon City Code Relating to the Sustainable
Development and Energy Efficiency Commission (second
reading)
special Counsel Dana Reed advised that the proposed ordinance is
identical to the Vernon Housing Commission ordinance in the
oversight of the Sustainable Development and Energy Efficiency
Commission.
It was moved by Ybarra and seconded by Maisano to adopt
- Ordinance No. 1195. A role call vote was taken.
- Councilman Ybarra, Yes
- Councilman McCormick, Yes
Mayor Pro-Tem Davis, Yes
- Councilman Maisano, Yes
Motion carried, 4-0.
NEW BUSINESS
1. Authorization to approve and issue Change Order No. 1 to
Interwest Consulting Group in order to extend their
agreement from July 1, 2012 to June 30, 2013 and
incorporate the City's Living Wage provision.
Page 16 of 22
Regular City Council Meeting Minutes
June 19, 2012
Director of Community Services and Water Kevin Wilson advised
that the agreement serves both for emergency plan checks and
over flow of work. He advised that the services have not been
used to date, and is recommending an extension of the existing
agreement with no change in costs.
It was moved by Ybarra and seconded by McCormick to approve
change Order No. 1 for Interwest Consulting Group. Motion
carried, 4-0.
2. Authorization to issue purchase orders to the following
vendors for the purchase of transformers:
a. Howard Industries
b.HD - Cooper Power
c. HD - GE
Director of Light & Power Carlos Fandino reported that the
department had gone out to bid on the different transformers in
order to replenish the inventory. Fandino reported that bond
money for this capital improvement will be used.
In response to Councilman Ybarra, Fandino advised that once the
purchase has been complete, the City will recover the expense
through the bond money. Fandino also confirmed for Councilman
Ybarra that this expense will be captured in the new fiscal
year, 2012-2013.
It was moved by McCormick and seconded by Ybarra to approve the
purchase orders for transformers. Motion carried, 4-0.
3. Approval of the Employee Health and Wellness Fair to be
held September 27, 2012.
Risk Manager Willard Yamaguchi advised that FIA, the employee
health benefit insurance broker has agreed to coordinate the
employee health and wellness fair. There is minimal cost to the
City; however, the request includes a 30-minute lunch extension
for employees who participate in the event.
It was moved by McCormick and seconded by Maisano to approve the
Employee Health and Wellness Fair on September 27, 2012. Motion
carried, 4-0.
4. Repeal of City Council housing assignments that were not
effectuated through a written lease on or before July S,
2011.
Special Counsel Dana Reed explained that when City Council
established the Vernon Housing Commission ("VHC") it transferred
all right and power over the leases to the Commission. The
recommendation will reiterate VHC has the sole authority, and
repeal any agreements in conflict. Reed advised that all
current leases will be transferred to the new one-year leases
established by the VHC.
In response to Councilman Maisano, Reed advised that no tenants
have entered into new leases with the exception of the two
recently filled units.
Councilman Maisano inquired whether there were any tenants who
did not have a valid lease. In response, Reed confirmed that
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Regular City Council Meeting Minutes
June 19, 2012
every unit has a lease. Assistant to City Administrator Kristen
Enomoto further clarified that in this scenario, written leases
referred to all written agreements whether they were month -to
month or five-year leases, which all current tenants have.
It was moved by Ybarra and seconded by McCormick to repeal
housing assignments that were not effectuated through a written
lease on or before July 8, 2011. Motion carried, 4-0.
DISCUSSION AND POSSIBLE ACTION ITEMS
1. Presentation by Director of Community Services & Water
Department and Hogle Ireland Inc. on various housing
options.
Director of Community Services and Water Kevin Wilson reported
that the current zoning ordinance does not allow for additional
housing and that Hogle Ireland Inc. ("Hogle") is assisting in
the process of identifying new sites.
Laura Stetson of Hogle gave a brief presentation on the
different options. Stetson advised that she is seeking
direction from Council on which sites should be focused on for
the housing overlay and direction on whether consolidated
residential units and/or caretaker units should be considered.
Councilman McCormick recommended consolidated residential units
and Location No. 6 as the focus of the housing as it was already
identified in the request for proposals for new housing. He
proposed Location No. 4 as an alternative.
Stetson clarified that an overlay will be considered for these
locations. The underlying zone will remain industrial. The
recommendation will be to consider Location Nos. 4 and 6.
Wilson sought guidance on which parcels to consider for the
homeless shelter zone. He suggested either Location No. 8 or 9.
Councilman McCormick opined that Location No. 9 would be a
better option.
Stetson confirmed that the caretaker units are not to be
considered.
2. Presentation by Director of Community Services & Water
Department on the alternative analysis for the construction
of a proposed transit line along the former Pacific
Electric/West Santa Ana Branch right of way.
Director of Community Services and Water Kevin Wilson presented
the study on preferred alternatives for the proposed transit
line as prepared by the Southern California Association of
Governments ("SCAG"). Wilson reported that the East Bank Option
and West Bank Option 3 are being recommended by the consultants.
Wilson is recommending an alternative alignment, which parallels
Santa Fe Avenue, be considered and continue to be studied.
In response to Councilman McCormick, Wilson advised that the
City is requesting that SCAG study a fully grade separated
transit line. For the vehicle type a light rail and low speed
maglev are being recommended. Wilson advised that if the
Council is in agreement, a formal letter of recommendations will
Page 18 of 22
Regular City Council Meeting Minutes
June 19, 2012
be drafted and Councilman McCormick, as a member of the steering
committee, can make the presentation. Members of the Council
were in agreement with the recommendations.
3. Cancellation of the July 3, 2012 City Council meeting due
to the July 4, 2012 Holiday.
Special Council Dana Reed advised on a possible special City
Council meeting to discuss the possibility of the City taking
back the June 5, 2012, election from the County Registrar
Recorder's Office as requested by Curtis Kirkland and the Vernon
Chamber of Commerce. Reed expressed his concerns over the
proposal to take back the election and the possible liability.
Candidates might have a cause of action against the City or
Council members as individuals. Reed reported on a similar case
during the Bush versus Gore election in 2000. The state of
Florida was in the middle of counting the ballots when the rules
changed. This cannot be done as it violates the 14`h amendment.
Reed advised that it would take weeks of research to give a
definite legal analysis on the proposal. Reed recommended
holding a meeting before the end of the week.
City Administrator questioned whether action can be taken, and
inquired whether the recommendation needed to be agendized. In
response Reed explained that one of the exceptions is when or
where to hold a meeting. Discussions on whether or not to hold
a meeting are not against the Brown Act.
Council first addressed the recommendation to cancel the July 3,
2012, meeting. It was moved by McCormick and seconded by
Maisano to cancel the regular July 3, 2012, City Council
meeting. Motion carried, 4-0.
Whitworth recommended that the discussion on the possibility of
taking back the June 5, 2012, election be agendized at a special
meeting scheduled for June 20, 2012, at 1:00 p.m.
It was moved by McCormick and seconded by Ybarra to set the
special meeting for June 20, 2012, at 1:OOp.m.
ORAL REPORTS
Interim Police Chief Daniel Calleros reported that on June 12,
2012, patrol officers uncovered an elaborate marijuana
cultivation operation at a warehouse location. Over 400 potted
plants of marijuana were located. Calleros reported that the
business was a high utility user.
Calleros reported that on June 14, 2012, patrol officers
investigated an assault with a deadly weapon incident. A
suspect had threatened his girlfriend with a knife during a
verbal dispute. The suspect was located at the scene and taken
into custody.
On June 17, 2012, patrol officers responded to a call involving
an assault with a deadly weapon. A female suspect had
deliberately rammed her vehicle several times into a vehicle
driven by the suspect's ex-husband's female acquaintance. The
female suspect was located at the scene and taken into custody.
On June 17, 2012, patrol officers arrested a male subject for
suspicion of commercial burglary. The incident began when the
Page 19 of 22
Regular City Council Meeting Minutes
June 19, 2012
business' alarm company reported activation of the system. Upon
arrival,officers were advised by a witness that the suspect had
fled the location. During the course of the investigation,
officers located the suspect's vehicle parked near the business.
Officers conducted a surveillance of the suspect's vehicle and
within a few hours the male subject returned to the vehicle.
Officers followed the vehicle but the suspect fled on foot. The
suspect was later located on a rooftop and was taken into
custody. Calleros noted that the merchandise taken from the
business was recovered near the point of entry.
Calleros reported that motor officers will be participating in
the Southeast Traffic Coalition taskforce on June 20, 2012, to
assist Huntington Park and Southgate Police Departments with
specific traffic enforcement in areas with high incidents of
traffic collisions.
Calleros reported that there had been no acts of vandalism since
the last meeting and advised that the two locations previously
reported by the Council members had been addressed.
Assistant Chief Andrew Guth reported that most calls have been
routine in nature. He advised that there has been a spike in
traffic collision incidents with extractions. The department's
training focus continues to be wild land fire.
Guth reported on the completion of the promotional examinations.
He advised that although there are no openings, an eligibility
list has been established. The list will be valid for the next
two years.
â˘irector of Light & Power Carlos Fandino reported on various
responses including a vault incident where Patriot Environmental
was called out to clean-up potentially hazardous material.
In response to Mayor Pro-Tem Davis' inquiry on the power outage
that occurred over the weekend, Fandino advised that the outage
was caused by a mylar balloon. Fandino reported that there have
been several incidents involving metallic balloons.
Leonard Grossberg, Interim Director of Health and Environmental
Control, announced that the Sustainable Development and Energy
Efficiency Commission meeting is scheduled for 3:30 p.m.
Kevin Wilson, Director of Community Services and Water
Department, reported that the Advisory Committee on Business
Development had started reviewing the zoning ordinance for
possible amendments.
Assistant to City Administrator Alex Kung announced that the
next Oversight Board to the Successor Agency to the
Redevelopment Agency meeting is scheduled for July 12, 2012.
City Administrator Mark Whitworth announced the Vernon Housing
Commission had authorized staff to enforce the lease provisions
on existing tenants. There are currently two first responders
assigned to the housing units. The cap is set at 4 units for
first responder priority. The Housing Commission has requested
that City Council revisit the divestment of the Huntington Park
units, the item will be agendized at the next Council meeting.
Whitworth announced that the regular Housing Commission meeting
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Regular City Council Meeting Minutes
June 19, 2012
for July had been rescheduled. The Commission will be
discussing transitional hardship procedures.
Whitworth reported that the search firm had selected six
qualified candidates for the City Attorney position; additional
interviews are scheduled for June 20, 2012. He also reported on
the search firm process for the Human Resource Director and
Health Director positions, and advised that interview meetings
will be scheduled in July.
Whitworth reported that the City is working with legal counsel
to address the Ca1PERS findings. He advised that the JLAC
report will be released in the upcoming week. He advised that
the initial letter from the IRS regarding employee tax matters
is common practice.
CLOSED SESSION
At 12:52 p.m., it was moved by McCormick and seconded by
Maisano, that the City Council go into closed session to discuss
the items listed under closed session. Motion carried, 4-0.
1. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
Significant exposure to litigation.
Government Code Section 54956.9(b)(3)
Number of potential cases: 1
The City has received a claim for damages pursuant to the
Tort Claims Act. The claim is available for public
inspection.
2. CONFERENCE WITH LEGAL COUNSEL -PENDING LITIGATION
Government Code Section 54956.9(c)
Number of potential cases: 2
At 1:23 p.m. it was moved by McCormick and seconded by Maisano,
that the City Council exit closed session. Motion carried, 4-0.
Chief Deputy City Attorney Willard G. Yamaguchi reported that
the City Council unanimously agreed to reject the claim for
damages.
The City Clerk announced that there were no further items on the
agenda.
Page 21 of 22
Regular City Council Meeting Minutes
June 19. 2012
At 1:24 p.m., it was moved by McCormick and seconded by Maisano,
that the meeting be adjourned. Motion carried.
ATTE `
Wil and G. Y agu i
City Clerk
William J. Da 's
Mayor Pro-Tem
Page 22 of 22