Video
Transcript
Segment 1
[00:00:00] City Council: I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one Nation under God, indivisible, with liberty and justice for all.
[00:00:17] Mayor Kitty Moore: Thank you. Madam City Attorney, will you please call the roll.
[00:00:20] City Clerk Kirsten Squarcia: Councilmember Fruen?
[00:00:21] Councilmember J.R. Fruen: Here.
[00:00:22] City Clerk Kirsten Squarcia: Councilmember Mohan?
[00:00:23] Councilmember Sheila Mohan: Here.
[00:00:24] City Clerk Kirsten Squarcia: Councilmember Wang?
[00:00:25] Councilmember R "Ray" Wang: Here.
[00:00:26] City Clerk Kirsten Squarcia: Vice Mayor Chao?
[00:00:27] Vice Mayor Liang-Fang "Liang" Chao: Here.
[00:00:28] City Clerk Kirsten Squarcia: Mayor Moore?
[00:00:29] Mayor Kitty Moore: Here. Thank you. Madam City Attorney, will you please provide the closed session report?
[00:00:38] City Attorney Floy Andrews: Good evening Mayor. This evening we did discuss every item on the agenda and there no reportable action was taken.
[00:00:47] City Clerk Kirsten Squarcia: And Mayor, I just want to announce that Councilmember Wang will be attending this meeting remotely this evening. And so I will be requesting roll call votes for all council actions. Additionally, I will be relying on Councilmember Wang to notify me of any members of the public requesting to speak at the teleconference location.
[00:01:49] Mayor Kitty Moore: All right. Thank you. And we have no ceremonial items. Next we will receive a presentation by our esteemed Poet Laureates Keiko O'Leary and Thomas Celerier?
[00:02:05] City Clerk Kirsten Squarcia: Yes, Mayor. Just a note that Poet Laureate Keiko O'Leary's term is actually through 2025. It was extended, so just an adjustment from what's listed on the agenda.
[00:02:19] Mayor Kitty Moore: Thank you. And are they present?
[00:02:23] City Clerk Kirsten Squarcia: And Keiko and Thomas, if you could please join us at the podium. And so Keiko, you will present first and we will share your poem on the projector whenever you're ready.
[00:03:21] Keiko O'Leary: Is this microphone good for everyone? Yes. Thank you. My poem is called Friends Create Cupertino.
[00:03:30] Keiko O'Leary: From the saltwater aquarium at the Cupertino Library, a butterfly fish gazes into my baby son's eyes, then flits off in a tiny spray of bubbles. My little daughter laughs and lifts her arms. My father swings her up and holds her to his heart. 'Grandpa,' she says, with the certainty of being four years old, 'The fish are our friends.'
[00:03:55] Keiko O'Leary: Another year, when my son can walk, we dance in a circle with Otter and the other animals, bronze statues that remind us of characters from a book. They are real to my children. They are our friends. And later still, at McClellan Ranch, we draw the trees. I realize they are our friends too: oak, buckeye, redwood, accepting our attention with their silent smiles.
[00:05:05] Keiko O'Leary: My memories to me are also friends. My dad's job selling suits at Valco Mall. The joy I felt each spring on seeing blossoms of wisteria fill the trellis in the parking lot. The movie theater at the Oaks I went to as a teen. The Cherry Blossom Festival in Memorial Park. These memories are friends I visit, even though the landscape may have changed.
[00:05:34] Keiko O'Leary: I have human friends as well, writers and poets, practicing our craft together at Quinlan Community Center, at restaurants and cafes. We share our lives through the work that we create. I see the future in the sky, in clouds that rise up brilliant and edged with sun. Under that sky, in Cupertino, other friends are working too. We create the city together through everything we do. Thank you.
[00:06:52] Thomas Celerier: Thank you very much. Thank you Keiko and thank you City Council and the library for the trust. My poem is called 'The Angel's Bath'. And I think it's going to be projected. It's a poem I wrote as I was walking my dog one morning just close to home and I saw something. There's a QR code in the poem, if your phone is working you can scan it and see a little video of what inspired me to write this poem. So here we go. The Angel's Bath.
[00:07:28] Thomas Celerier: In the light of the rising, flooding, There they are, the Angels, spreading their wings, Roaring, streaming, facing the mighty star! Maybe you see them, innocent or frail? I see their auras shine with a thousand flames, Flying, taunting the bawling deer in the distance, Their wings flapping a cloud of drops, Prism squirting, their silhouettes cut out.
[00:08:30] Thomas Celerier: A white Chloe would like to touch them, Or even with its claws to grip them, Dreaming of food tastier than cockroach, But, supernatural, in turn locusts, Doves, sleeping within a Becquerel, There they are, the Angels, spreading their wings, Green, their adornments, blue and yellow irises, Sparkling sparks, Amazons.
[00:08:57] Thomas Celerier: Quick, the bath is coming to an end, Burying, because the clock turns, now is the time! The hard and noble work, their labor, For the lost souls, well needing them. Here and there, in an eclipse of time, There they are, the Angels, spreading their wings, For you and me, for all of us, for him and for her, Forever, never static for more than a moment. Thank you.
[00:10:15] Mayor Kitty Moore: Thank you to our Poet Laureates for bringing the enriching literary artistry of poetry to our city. And this was an absolutely lovely way to start our meeting. Thank you so much.
[00:10:32] Mayor Kitty Moore: Next we have postponements and orders of the day. Madam City Clerk are there any postponements or orders of the day?
[00:10:38] City Clerk Kirsten Squarcia: No postponements Mayor.
[00:10:40] Mayor Kitty Moore: All right. Thank you. Next we have Oral Communications. Madam City Clerk will you please provide the instructions for speakers and call on them?
[00:10:47] City Clerk Kirsten Squarcia: Certainly. This portion of the meeting is reserved for persons wishing to address the council on any matter within the jurisdiction of the council and not listed on the agenda for discussion. The total time for oral communications will ordinarily be limited to one hour. Individual speakers are limited to three minutes. As necessary, the chair may further limit the time allowed to individual speakers or reschedule remaining comments to the end of the meeting on a first come first heard basis with priority given to students.
[00:11:51] City Clerk Kirsten Squarcia: In most cases, state law will prohibit the council from discussing or making any decisions with respect to a matter not listed on the agenda. A council member may, however, briefly respond to statements made or questions posed by speakers. A council member may also ask a question for clarification, provide a reference for factual information, request staff to report back concerning a matter, or request that an item be added to a future city council agenda in response to public comments.
[00:12:23] City Clerk Kirsten Squarcia: And Mayor, I am currently holding two requests to speak from within Community Hall and approximately six minutes. I actually lost visibility on... Oh. With and no request to speak remotely. So we're looking at about six minutes.
[00:13:29] City Clerk Kirsten Squarcia: Anyone wishing to provide comments on this item, please have your request submitted in the next nine minutes or before the last speaker has completed speaking. And we will start with San Rao, followed by Jennifer Griffin. Welcome San.
[00:13:45] San Rao: Good evening Mayor Moore and council members. I wanted to be the first to speak in person congratulating the new Mayor on her appointment and her first meeting presiding as Mayor. I know you've held a excellent meeting before as Vice Mayor acting in place of the Mayor and look forward to your efficient meetings. I can already see the meeting moving much faster than it would in many other cases, but that is also the diversity of the role. So I want to congratulate you on the appointment and wish you all the best.
[00:14:55] San Rao: And it's also unusual for council members to be this tenured in their eight years of service before they get to preside over the dais and so it's it's actually a tribute to the experience we've had on dais during the years when we had a majority that that we did. And it's also an indication of the sacrifice that many of our council members have done in yielding the Mayorship when they need not have done that. And and I'm speaking of the Vice Mayor having yielded her tenure as opportunity to be Mayor in her first term. So appreciate the service and sacrifice of our erstwhile Mayor, now Vice Mayor, as well as our erstwhile Vice Mayor, now Mayor.
[00:15:43] San Rao: And want to thank you for the votes that you have had in the term after your re-election, especially holding us to a high standard on the inter-agency matters involving the Stevens Creek Corridor. And identifying correctly that the city has obligations to its residents and to the voters in direction that is given to staff and you cannot in an inter-agency body without communication with the council direct the inter-agency staff to operate on the matters involving Stevens Creek Corridor. So appreciate your astuteness in finding that issue and being able to correctly withdraw from Cupertino being subject to inter-agency body votes that are not the jurisdiction in Cupertino. So really appreciate your seeing that.
[00:17:06] San Rao: I also want to, you know, make a point here around the the admonition of Councilmember Ray Wang in the last meeting. I think we have we have a tendency in our city to amplify some of these concerns and I think as council members and especially members on the dais, it really helps the entire city to really tone down the differences. We do not have that many differences in the city. State laws require us to hold ourselves to certain ways of approvals that we no longer did in the past that we did not have to do in the past. And so our differences are not what they used to be in the past. So I encourage all five council members to really reach out to your constituents and try and tone down the dissonance that you see sometimes showing up here. And we should not have to do that. We as a city are better. We have we have commissioners on both sides of the aisle so to speak that actually work very well together in their respective commissions and let's do the same with the residents. Thank you.
[00:18:50] City Clerk Kirsten Squarcia: Thank you San. Next we have Jennifer Griffin, followed by Rhoda Fry. Welcome Jennifer.
[00:19:03] Jennifer Griffin: Good evening City Council. Happy holidays to everyone. Hope everyone has a restful beginning for the new year. I just want to speak tonight, I'm going to start out in terms of oral communications with the status of retail in Cupertino. I don't know if mentioning the SB 330 moratoriums, if that's appropriate for now or if that was for number 10? Can I talk about the multiple SB 330s at oral?
[00:20:20] City Attorney Floy Andrews: Since you'd be talking about more than just one project, I think it's appropriate.
[00:20:23] Jennifer Griffin: Yes, the proliferation and the issues. So in that regard, I had submitted several letters to City Council and they had been put in the oral section. So I do believe that there the status of retail in Cupertino has reached a crisis situation. I coined the word 'refugee retail' and 'refugee restaurants'. I hope it doesn't offend anyone, but we have so much retail in Cupertino that is so vulnerable especially with the multiple five to six SB 330 projects.
[00:21:37] Jennifer Griffin: It's not their fault individually, it's just as a collective, it is causing tremendous problems for retail which is our main shopping area along Stevens Creek Boulevard. And I think that we need to do more as a city to make sure that our retail is not lost to other cities. We are potentially going to become a bedroom community to other cities like Sunnyvale, Santa Clara, etc. I don't really want Cupertino to become a bedroom community with no retail, but that seems to be where we're going.
[00:22:22] Jennifer Griffin: I think that we need to make sure that any retail is potentially displaced by SB 330 projects or other projects along Builder's Remedy, along Stevens Creek Boulevard, that we reach out and make sure that these retailers are not being evicted from their leases immediately after any type of permit is given. That they are retained on site. Those are our city tax dollars that are being lost.
[00:23:32] Jennifer Griffin: We need to make sure that they have a home, that they are known, that they're welcomed in other retail locations in Cupertino, especially restaurants. When I moved to Cupertino to take my first job at Tandem in the 1980s, Cupertino had everything in it. I could shop for everything in Cupertino. That is not the case anymore. I hope that in the future the city will make sure that our refugee and restaurant retail stay. Thank you.
[00:24:05] City Clerk Kirsten Squarcia: Thank you Jennifer. And next we have Rhoda Fry followed by Lisa Warren. Welcome Rhoda.
[00:24:10] Rhoda Fry: Hi, good evening. I think this is the last meeting of the year and so that means we get to think about New Year's resolutions. Yay. So I've got a few on my list, I'm sure you have some on your list as well. One of them is in my public comment today and that is that study sessions don't have action items. They there are some cities that codify that study sessions don't have action items and some it's just a tradition.
[00:25:20] Rhoda Fry: It is good practice. Please read my public comment. It happened in 2023, we had a study session that had a vote attached with it. Many residents and council members were not too happy about it. I did some research, went back nine years of study sessions, there were no actions taken. So that would be one one thing on my on my list for you guys if you're willing to take it.
[00:25:48] Rhoda Fry: Another one would be to reduce the expenditure level for contracts without the city council seeing it. The numbers have been going up and I'm driving around the city as much as I love our city and as much I love to see improvements, we need to budget. And I just seem to think I just see things that are happening in the city that seem a little bit on the nice to do rather than need to do. And we're seeing that we're going to get into budget issues. And so I'd like to see the city be more frugal and in order to do that I think that we need some eyeballs from the council on that. So that would be another item on my on my to-do list if I were sitting on the dais.
[00:27:23] Rhoda Fry: Let's see, what else did I want to tell you about? Yes. Yes, Shop Cupertino, as Jennifer was talking about. It's super important. I think I might have suggested this in the past, although tongue in cheek, if the council would be willing to do a song to the Macarena or something, Shop Cupertino. Like salute the flag, do that part, and then we gotta Shop Cupertino because every time you spend a hundred dollars in Cupertino on taxable items the City of Cupertino gets a buck for doing all the wonderful things that they do.
[00:28:35] Rhoda Fry: And at the same time, I'd like to see our business licenses get updated. It's not hard to find businesses that don't have business licenses. In fact, when Councilmember Wang was working on the restaurant week which he brought to us and everybody loved it, brought a lot of people into our restaurants, he also happened to have found that a lot of restaurants did not have business licenses. And that means when we get people to pay business licenses, we get to reinvest in those businesses and advertise for them. And the same goes for other businesses within the city. Thank you. Merry Christmas and Happy New Year and happy of all the holidays that you may celebrate. Thank you.
[00:29:12] City Clerk Kirsten Squarcia: Thank you Rhoda. And next we have Lisa Warren. Welcome Lisa.
[00:29:18] Lisa Warren: Thank you. So my voice is not fully here. And I wasn't going to speak but I want to thank Jennifer for all of her comments about retail and the lack of and and the well, I won't waste my voice. I echo everything she said. I've been complaining, yes complaining, or worried about the loss of retail and the feeling that developers really don't give a hoot as long as they're making the money they want. And I find that tragic because people are worried about people getting hit on bikes and cars. We don't have to drive as far or could walk more if we had more retail here at home.
[00:30:45] Lisa Warren: And then there was something my brain and my throat are not working. There was something that Rhoda said initially that I was going to echo but sorry Rhoda, can't pull it out. No, thank you.
[00:31:48] City Clerk Kirsten Squarcia: Thank you Lisa. And now we will move to those members of the public requesting to speak virtually. There is one person requesting to speak. Call-in User 1, welcome.
[00:32:08] Call-in User 1: Hello councils and guests and residents. This is the matter actually was not enough minutes last time and was still emphasized because the mission of the city is to be transparency. And still issue because the requested meeting with the top city executive team, the manager attorneys and whatever associated councils request do need to coordinate with the city management office still not scheduled to this day after years. And what is that reason?
[00:33:31] Call-in User 1: Another thing we're talking about it, I think it's because this is the Huang family matter if some people follow it, we were targeted non-stop and persecution, prosecution and sanctions. For the very small error in the beginning and we even though we're not the one coining it, we still take the responsibility and follow the instructions. Unfortunately it was the retaliating from the person originally brought up and didn't want try to listen to the other parties and us. And so far the person is not anymore and we appreciate that time the other people try to work with us.
[00:34:55] Call-in User 1: But this was escalating so much and it's already years ago this thing is already some kind of so much prosecution and the property belonging was taken without notice and that's already lost everything like some the new attorney were talking about it. And even it's lost everything but the city still caught us as like political prisoners and that's completely out of norm. And we think, you know, nothing should be hold the people for that long and we still request the city and city council and take this matter seriously and give another thoughts on it and set a meeting with us. And thank you.
[00:35:50] City Clerk Kirsten Squarcia: Okay, thank you. And Mayor no additional requests to speak on this item.
[00:35:54] Mayor Kitty Moore: Okay. Thank you Madam City Clerk. We are now onto...
[00:35:58] Vice Mayor Liang-Fang "Liang" Chao: Yeah. Yeah. I would normally want the City Manager to answer but her throat... Can you... I think the City Manager has a shop local initiative for the holiday season that's on the city social media if you can check it out. And also the regarding business license, the City Manager already rolled out a new portal that's easier for the business to use. Yeah. If you want to add anything?
[00:37:15] City Manager Tina Kapoor: Hopefully you can hear me. Thank you Vice Mayor. There will be an item coming to council in the next couple of months on the business license item. Thank you.
[00:37:20] Vice Mayor Liang-Fang "Liang" Chao: And we are bringing them up to date with payments, right?
[00:37:28] Mayor Kitty Moore: Great. Thank you Vice Mayor and City Manager. And thank you Madam City Clerk. We are now onto consent. Have there been any items pulled from consent?
[00:37:37] City Clerk Kirsten Squarcia: No Mayor, no requests.
[00:37:40] Mayor Kitty Moore: Okay. So do we have any public comments for the consent calendar?
[00:37:46] City Clerk Kirsten Squarcia: I see one request from in Community Hall and one hand raised virtually. So that would bring us to about six minutes.
[00:37:56] Mayor Kitty Moore: Okay.
[00:37:57] City Clerk Kirsten Squarcia: Okay. First would be Rhoda Fry. Welcome Rhoda.
[00:38:08] Rhoda Fry: Hi, good evening. Some progress has been made with the ACFR, that's the city's annual report which is read by our investors. The city sells debt in the form of instruments that look like bonds but they're not, they're called certificates of participation. These certificates of participation and the whole mechanism has been grossly mismanaged since about 2013. And one of the things is when when the city when the city looked like it was going into financial straits, it should have notified the investors. And this did not happen. And I don't think that it's been very well stated in the ACFR.
[00:39:38] Rhoda Fry: The other thing is there's a new law that's that's come about that has to do with with transparency, we all love transparency, and that has to do with telling folks that we have these sales tax sharing agreements. And it is required that the city put it on their website. That's done. Yay. And it's required that the city tell the state. Yay. Not required to put it in the ACFR. Although I think it would be a good practice. Many cities already do. And instead the City of Cupertino refers to these as tax consultants tax consulting agreements which happen to be handled by a percentage.
[00:41:05] Rhoda Fry: Now tax consulting usually doesn't get charged via percentages. It just it doesn't make sense, it's not transparent. And and the other thing is I don't feel like the the decline in income is sufficiently described. The other thing that's happening is that we have extended by a year, and again this has not come to City Council which I think it should have, a sales tax sharing agreement with a company called Insight. It was supposed to sunset in 2025, that's what's been posted. However it was extended without coming to City Council.
[00:41:50] Rhoda Fry: And so given that it's only been by a year and in fact it wasn't even mentioned in the ACFR that we were going to potentially lose that because it had actually it was sunsetting in 2025. So that loss of income which is significant for our sales tax revenue, not as significant as the Apple agreement, but it be given it's a it's a it's a healthy percentage of our you know 5-10% of I'm guessing of our sales tax revenue. Can't tell what it is because everything we've got coming in is zeros right now from CDTFA. But anyway I'd like to see more transparency. Also mention the new Apple building. It's not so new anymore. So let's update it, make it good. Thank you.
[00:43:09] City Clerk Kirsten Squarcia: Thank you Rhoda. And now we will move to there is one person member of the public requesting to speak virtually, San Rao. Welcome.
[00:43:23] San Rao: Good evening Mayor and council members. I would have liked to see the ACFR item pulled from consent calendar. Unfortunately no council member took me up on my request to pull the ACFR item from consent calendar. Residents used to have the ability to pull items from consent calendar up until 2023 when the prior council majority changed the council procedures manual to require that council members are the only ones that can pull it by noon. You can still choose to pull consent calendar items based on a majority vote if you choose to so do so.
[00:44:02] San Rao: I do I do want to point out that residents that wish to pull a consent calendar item that cannot get a staff a council member to support that are are currently at a disadvantage. In a future council we may have five council members that do not agree with a faction of residents in the city and that would permanently silence that faction for two years from ever being able to pull consent calendar items. I urge you to look at the council procedures manual in a future agenda item. You did look at this previously but I believe you hesitated to make this one last change. I urge you to make that change in the interest of future councils where one side may have no voice at all other than being able to speak during public comments and oral comments.
Segment 2
[00:45:05] John Mortier: Okay, um. You can, um, TV five it up right now on my screen. If you could share my screen. Not that screen.
Segment 1
[00:45:22] San Rao: Now having said that I do want to go back to the ACFR item. I think the ACFR shows the city certainly in a positive condition in terms of revenue. Part of that is because of vacant positions that have been unfilled. I I do want to urge us to maintain fiscal discipline. I want to, I'm sure you have noticed that CUSD went through its COVID dollars that were spent in ongoing operational costs and when they ran out of those COVID dollars now they find that they're running a structural deficit of about 14 million and they're looking at deep cuts that is putting the community in shock. And I hope we learn some lessons from that. I hope we also learn some lessons from other county related fiscal mismanagement where we have a budget deficit situation as well.
Segment 2
[00:45:45] City Clerk Kirsten Squarcia: John, I think you need to connect. Are you connected? Is it on one of the presentation slide pages?
[00:45:57] John Mortier: It is not. No.
[00:46:00] City Clerk Kirsten Squarcia: So video, if you're able to share... It's actually not from that presentation. It's from John's laptop at his... where he's presenting from. So we may need a moment to actually if you, um, can move on.
[00:46:35] John Mortier: I apologize, Council.
[00:46:45] Councilmember J.R. Fruen: I could ask another question in the interim while you're doing that. Um, this particular project comes to us on a category 32, sorry, Class 32 infill exemption. Would it in your view also be eligible for, um, an exemption under AB 130?
Segment 1
[00:46:50] San Rao: I urge you to keep in mind that the Apple sales tax is not coming back. And if you look at where we stand on structural deficits, I think this starts to climb up to over 7 million by the time we get into 2033 or 2032. And and so overall, I urge you to resist the temptation to spend the dollars that you previously set aside in 2023 anticipating that there would be a clawback of the CDTFA funds that did not occur. While that clawback did not occur, those funds need to be used now to offset the fee increases that did occur in 2023 on residents to make up for the set aside that was done for paying CDTFA.
Segment 2
[00:47:08] John Mortier: It would. Due to its size, yes.
[00:47:12] Councilmember J.R. Fruen: Can you walk us through that?
[00:47:15] John Mortier: I would... I would defer to, um, Terri McCracken of PlaceWorks to walk through how this could... how this would qualify. Terri, if you... if you can?
[00:47:28] Terri McCracken: Yes, I'm waiting for my camera. Hi, thank you, Councilmembers. Yes, we did, um, we had already started the process for the Categorical Exemption, Class 32, when, um, the new AB 130 was passed into law. And as a... as a decision making point whether to continue with the Class 32 or pivot over to the AB 130, they... they both qualify. The project qualifies under both exemptions.
[00:48:08] Terri McCracken: So we did, um, complete kind of a preliminary checklist to take us through that process and I... I can walk you through that process. I'm trying to pull that up right now. Um. But essentially through the, um... I can't quite find it right now, I wasn't expecting this question, but the checklist questions, we have filled out four of these by now for the city, it's still relatively new, but it does meet the density standards, it does meet the location standards, it does meet all of the standards within the checklist.
Segment 1
[00:48:15] San Rao: So just to recap our history here, we set aside I believe over 56 million, could have been 74 million perhaps, to pay back CDTFA that did not eventually...
[00:48:27] City Clerk Kirsten Squarcia: Thank you San, that was your time. And Mayor, no additional requests to speak on this item.
[00:48:32] Mayor Kitty Moore: Okay thank you Madam City Clerk. I do want to mention that the Cupertino Public Facility Corp will hold a meeting in January going over some of the items which were mentioned by members of member of the public. Yes Vice Mayor.
[00:48:48] Vice Mayor Liang-Fang "Liang" Chao: I was raising my hand. I'd like to make a comment that the annual financial report, thank the staff for making publishing it before the six months ending of the fiscal year. We haven't done that for many years so this is the first year we have done that so really appreciate the effort. And I know the member of the public would like to pull some consent agenda items. And I would like to make it clear any item whether it's on a consent agenda or not fully satisfy Brown Act requirements when it's on the council agenda and the public has an opportunity to comment and council takes action in open public meeting.
Segment 2
[00:48:52] Terri McCracken: Um, there's a different requirement in that particular exemption where you do need to go through tribal consultation, which puts... put the project on a different schedule. And so at that point we opted to stay with the Class 32 exemption since the studies were already done and the project was underway.
[00:49:09] Councilmember J.R. Fruen: Got it. Is there any particular difference in benefit to the applicant other than the timeline given the need for tribal consultation?
[00:49:20] Terri McCracken: Um, I don't think there's any real other benefits to it other than the... it's a statu-torial [sic] exemption to go through AB 130. And so statutory exemptions tend to hold a little bit more teeth than a categorical exemption. And the statu-torial exemption also comes with a mandatory timeline to approve. It has a very strict timeline that has to be adhered to, um, with the completion of the tribal consultation. So the legislation tied those two things together.
Segment 1
[00:49:50] Vice Mayor Liang-Fang "Liang" Chao: And if your comments is regarding how we should budget, create city budget, that does not belong to the comment on the annual financial report. Therefore I didn't see a need to pull that. If you have substantive comments or suggestion on the recommended action, we might be should be taking a different recommended action, then if I agree I might consider pulling that. But I didn't see any of such comment. So yeah, thank you.
Segment 2
[00:49:50] Councilmember J.R. Fruen: Okay. Um, and then just to clarify as well, if Council were to, um, fail to approve an exemption for which a... a qualifying housing project is, um, eligible, that would be a violation of the HAA under AB 1633, correct?
[00:50:15] Terri McCracken: That is my understanding of the Housing Accountability Act, although I am a CEQA practitioner, there might be somebody more suited to answer that question.
[00:50:23] Councilmember J.R. Fruen: Okay. Um, and I will reserve the rest of my time. Thank you.
[00:50:25] John Mortier: Councilmember I do have the, uh, the condition up right now.
[00:50:30] Councilmember J.R. Fruen: Perfect. And so for the sake of clarification, everyone can see what the... the condition is, but in essence, this applicant won't be able to begin any kind of grading, foundation work, get any building permit issued unless this condition is satisfied.
Segment 1
[00:50:48] Mayor Kitty Moore: Okay. Thank you Vice Mayor. Do I have a motion to move the consent calendar items 2 through 9?
Segment 2
[00:50:52] John Mortier: That's correct.
[00:50:53] Councilmember J.R. Fruen: Okay. And... and that condition is? You can just walk us through it.
Segment 1
[00:50:54] Councilmember J.R. Fruen: So moved.
[00:50:55] Mayor Kitty Moore: And a second?
[00:50:56] Vice Mayor Liang-Fang "Liang" Chao: Second.
[00:50:58] Mayor Kitty Moore: Who was our first second?
Segment 2
[00:50:58] John Mortier: Sure. So, um, this is a condition that I worked, uh, directly with, um, Aaron Costa who is the oversight, um, staff member for... for DEH. Um, and so he was able to assist me in... in... um, putting this condition together. Essentially what it does is assure that, as you said, there's no ground disturbing activities such as grading, construction, um, foundation work, etcetera, until the Santa Clara County, um, Department of Environmental Health gives the... gives the clearance for this project to proceed.
Segment 1
[00:51:02] City Clerk Kirsten Squarcia: I have Vice Mayor Chao who I detected. Madam City Clerk, will you please conduct the roll call vote?
[00:51:10] City Clerk Kirsten Squarcia: Councilmember Fruen?
[00:51:11] Councilmember J.R. Fruen: Aye.
[00:51:12] City Clerk Kirsten Squarcia: Councilmember Mohan?
[00:51:13] Councilmember Sheila Mohan: Aye.
[00:51:14] City Clerk Kirsten Squarcia: Councilmember Wang?
[00:51:15] Councilmember R "Ray" Wang: Aye.
[00:51:16] City Clerk Kirsten Squarcia: Vice Mayor Chao?
[00:51:18] Vice Mayor Liang-Fang "Liang" Chao: Aye.
[00:51:19] City Clerk Kirsten Squarcia: Mayor Moore?
[00:51:20] Mayor Kitty Moore: Aye.
[00:51:21] City Clerk Kirsten Squarcia: Motion carries unanimously.
[00:51:25] Mayor Kitty Moore: Thank you. Next item is a public hearing. We will begin with item 10. Consideration of new residential development project consisting of 55 townhome condominium units and 10 ADUs housed within 10 three-story buildings and three continuous parcels totaling 2.72 acres located on the south side of Stevens Creek Boulevard at the present location of United Furniture. So I am now opening the public hearing and is there a staff presentation?
Segment 2
[00:51:45] John Mortier: Uh, and typically that would be up to them, at their discretion. And usually... usually and from what I understand from the DEH is that, um, that would mean that the... the levels of... of PCEs or whatever contaminants as a result for the dry cleaning being located on that site are... are within levels that are, uh, suitable for residential development. Um, so and there's various types of reporting and monitoring that can happen and this is all done from what I understand again on a case by case basis.
Segment 1
[00:52:05] City Clerk Kirsten Squarcia: Mayor, on behalf of the City Manager who is has lost her voice, I would introduce our Director of Community Development Ben Fu and our Senior Planner John Mortier.
[00:52:19] Mayor Kitty Moore: Thank you, welcome.
[00:52:20] John Mortier: Thank you Mayor, City Council, Cupertino public at large, John Mortier, I'm a Senior Planner with the Planning Division of the Community Development Department. I'm here to present this item as as read out by the Mayor from the subject on the agenda. No need to reread that out. And again the applicant is the Toll Brothers developers.
Segment 2
[00:52:24] John Mortier: Um, some sites, um, are able to, um, within six months clean their... clean their... clean their... clean their site. Sometimes it might take monitoring for a number of years, um, even after, uh, folks have gotten certificates of occupancy are living on site. Um, they have a monitoring program that goes through and continue testing as well. Um, and so, uh, the cities, um, in Santa Clara County rely on this agency to, um, to... to really guide us and... and be that oversight and... and function that well to... to ensure that, uh, the residents of that site are... are living on a... on an area that is, um, that they're protected.
Segment 1
[00:52:43] John Mortier: So a little background on what is known as United Furniture site, also goes by the Islewild Shopping Center but colloquially and you know mostly it's known by the United Furniture site to the community. As you can see by the site plan on the on the right of the presentation, this is surrounded on three sides by public rights of way with Stevens Creek Boulevard in the north, East Estates to the east and Richwood Drive to the south as well as a mix of uses which include the former Valco Mall to the north, the Marketplace shopping center to the west, single family homes to the south as well as a gas station and some other commercial small commercial uses to the east.
Segment 2
[00:52:45] Councilmember J.R. Fruen: Got it. Thank you. And then just very quickly, if there were no development on this site, the current owner would not be required to do this remediation work, correct?
[00:52:50] John Mortier: Correct.
[00:52:54] Councilmember J.R. Fruen: Okay.
[00:52:59] Mayor Kitty Moore: Vice Mayor?
[00:53:00] Vice Mayor Liang-Fang "Liang" Chao: Okay. So, I will focus on the fiscal impact analysis. Thank you for providing the report and the peer review in as a desk item. I hope such reports are provided for future projects in the agenda packet. Um, so I see that the... the existing retail on site is 91,000... 91,000 square foot. And, um, I know that there is really nothing we can do when the state law allow developers to just provide zero retail, but then I think we do need to know how much we are potentially losing.
Segment 1
[00:53:26] John Mortier: The site is approximately 2.68 net acres built out sometime within the 1960s. And again the anchor tenant of this site within recent years had been United Furniture. And it sits within the Heart of the City Specific Plan, particularly the eastern sub area.
Segment 2
[00:53:45] Vice Mayor Liang-Fang "Liang" Chao: The fiscal impact does say that the fi- fiscal impact will be neutral. So I haven't had time to go through it much, but just wondering, so this is assuming 95% occupancy at... but this shopping mall has been not as, I think, at a level that's operated as the one next door like, uh, Marketplace. So are we comparing with... do... did we compare with any historical fiscal data for the site?
Segment 1
[00:53:46] John Mortier: About the little background on the applications. The site was zoned in July 2024 and approved by HCD later that fall as a housing element site to have 65 to 80 dwelling units per acre. However, prior to this in February of 2024, Toll Brothers submitted SB 330 application which locked in the at the time the 25 dwelling units an acre density as well as other objective standards within the general plan as well as specific plan and zoning ordinance.
Segment 2
[00:54:19] John Mortier: So my understanding how the fiscal analysis was... was done, um, they ran four different scenarios on that site. That's why you have such a range within the, uh, fiscal impact. So we have a range of something that would be if the... if the... if the shopping center was completely operational would be a... basically a net positive of $100. And under current conditions, that... under that scenario, we see a net positive impact of this development as $28,000 to the general fund. So there were four different scenarios which was... which were run, um, by, uh, EPS on this.
Segment 1
[00:54:21] John Mortier: In July 31st of 2024, the development application was submitted for which you see tonight. The application is for a 55 unit townhome project with which includes within those 10 ADUs. 11 of those will be BMR units, six will be median income, five will be moderate income. The resulting density is well below the 25 dwelling units an acre at 20.52 dwelling units an acre approximately. And all that will be housed in 10 three-story buildings throughout the site which range between 2,020 square feet to 2,567 square feet. And those square footages and numbers include garage space as well. And because it's more than five net new dwelling units and has about 20% BMR units, it does qualify for density bonus.
Segment 2
[00:54:50] Vice Mayor Liang-Fang "Liang" Chao: What's the sales per square foot that's assumed for this shopping mall?
[00:54:55] John Mortier: I... I don't recall. For this model? I don't recall.
[00:55:05] Vice Mayor Liang-Fang "Liang" Chao: Um, thank you. Um. I had other questions on the environmental but I think Mayor probably knows more about that. I'll follow up on that later.
[00:55:20] Mayor Kitty Moore: Are you done for now?
[00:55:23] Vice Mayor Liang-Fang "Liang" Chao: Yeah. Okay. Yeah.
Segment 1
[00:55:24] John Mortier: So analysis of the six waivers that the applicant is asking for. They're asking for a waiver for side setbacks particularly on the western side. What would be required is about 20 feet 8 inches and what is proposed is about 10 feet from the building face. The rear setback along Richwood would normally require 62 feet 2 inch setback. What they're proposing is 9 feet from the building face.
Segment 2
[00:55:25] Mayor Kitty Moore: Um. Thank you for sharing the information about condition, um, seven. Uh. I was looking at the Cupertino Municipal Code, um, the Environmental Regulations chapter, and I'm wondering how, um, 17.04.050, the Standard Environmental Protection Permit Submittal Requirements, um, part B, Hazardous Materials Permit Requirements, um, that if a focused or other Phase 2 Environmental Site Assessment, um, as required pursuant to our Municipal Code 17.04.040 B1, identifies an unacceptable and potentially unacceptable health risk, the project applicant shall, uh, depending on the containment, contact either... I'm not going to read all these, but it includes the Certified Unified Program Agency, and the project applicant shall enter into a regula- regulatory agency oversight program with an appropriate regulatory agency or an established voluntary oversight program alternative with an appropriate regulatory agency as determined by the city and follow the regulatory agency's recommended response actions until the agency reaches a no further action determination prior to issuan- issuance of any permit for a project that allows ground disturbing activities.
Segment 1
[00:55:50] John Mortier: Building form, the building form particularly is only only for sides of development on Heart of the City where it's adjacent to single family. There's only one adjacent single family lot to the to the project. And so they are not terracing that building to the one and a half to one setback to height ratio as would be required normally in the Heart of the City Specific Plan for that one part of the one building on the southwest corner. The for for lot coverage what was required for typically R3 standards is 40%, what's proposed is 43%. They are eliminating the retail requirement for this mixed use development in that retail requirement is specifically within the Heart of the City Specific Plan. And the final waiver is for these the design standards for the common landscape and open space area which which detail out minimum lengths and widths of certain landscaping particularly for the central green.
Segment 2
[00:56:55] Mayor Kitty Moore: And where I have a problem with our code versus your condition is, you know, one, which... which it rules on this, I would say the Municipal Code. Um, but I don't know. Um, but in order to put in a, um, vapor extraction system underneath these future structures, you're... and you... they already have disturbed the ground because they have a... a vapor... um, soil vapor extraction system already there. Um. So they already did disturb the ground.
Segment 1
[00:57:02] John Mortier: The density bonus, the State Density Bonus Law does allow parking reductions per statute for any qualified density bonus project. So essentially density bonus law allows qualifying projects to provide a parking ratio of one parking space per studio to one bedroom, one and a half parking spaces per two to three bedroom unit, and two and a half parking spaces per four or more bedroom units. The requirement with the programming of this development would be 118 spaces. What they are providing is 119 spaces with two enclosed unit enclosed garages per unit and the nine additional in the common area.
Segment 2
[00:57:38] Mayor Kitty Moore: How... how can this... this, um, section of the code actually, uh, allow ever for there to be a... a... the vapor extraction system installed. Um, because this is saying you can't disturb the ground until you get a notice of no further action. You get that notice of no further action after you've installed the system, put the vapor barrier in, you've built it, and you've... few years go by, if it's a... you know, if there's a lot of contamination, and then the residential screening levels hopefully have dropped, um, and then... then they issue the no further action letter. Do I understand that process correctly?
Segment 1
[00:57:49] John Mortier: The architectural design, this is a rendering along Stevens Creek Boulevard and the corner of Stevens Creek Boulevard as well as I believe that's East Estates. I'm going to let the applicant discuss and his team and their team discuss the finer points of the programming as well as architectural materials and and design and what they what they proposed for the site.
[00:58:11] John Mortier: Environmental review. The city completed a categorical exemption memo which is attached to staff report and notice of exemption has been prepared to demonstrate compliance with CEQA. What the notice of exemption found that this project falls within the Class 32 CEQA exemption for infill development projects and the project itself will not result in any significant effects on the surrounding environment.
Segment 2
[00:58:20] John Mortier: So we do have our... from... from Placeworks we do have Kathy Fitzgerald who can probably answer the question about soil remediation issues. She was the one who peer reviewed, um, the phase one and the... and the... and the action letters. Um, but...
[00:58:35] Mayor Kitty Moore: Also to that point, our... our Municipal Code says that if you have a phase one that in- um, that... has the recom- the the recs, basically, then you move on to the phase two and then the phase two basically throws you into the section of the code that I'm mentioning here, which is how... how we got there. So somewhere there exists a phase two. I did find a phase two on the GeoTracker website, but I didn't find it in, um, the agenda packet. Um, so if someone could say because they're supposed to review both the phase one and the phase two. Did that happen?
Segment 1
[00:58:42] John Mortier: The project will be conditioned to comply with the environmental standards adopted by the city pursuant to 17.04 of the municipal code as well as additional condition of approval, condition 7 of the draft development permit resolution, which will require that the soil that the that the soil concentrations of for the for the pollutants with underneath the former dry cleaning on the site as is well within the satisfaction of the Santa Clara County Department of Environmental Health prior to issuance of any grading foundation or building permits. And we do have PlaceWorks on on Zoom to answer any CEQA questions that the council might have.
Segment 2
[00:59:13] John Mortier: It did happen. Again, Kathy can... can jump in, um, when... when asked, but you know, the... the... the applicant did peer review themselves their own phase twos from the prior phase twos that were done when this... when this had started. And so what, um, Kathy and her team had done at Placeworks was review those peer reviews as well, which included all those different types of studies. Um, as, um, as noted in the... in our communication offline, that there was multiple studies and... and soil remediation plans that were part of this, um, part of this communication between the DEH as well as the... the property owner. So all those were done. Um. I believe in... in consistent with... with the Municipal Code.
Segment 1
[00:59:27] John Mortier: The Planning Commission did hear this item on November 12, 2025 and they and this was recommended for approval by a 5-0 vote. And the resolution numbers as you see were right there. And the recommended action for Council mirroring that of the Planning Commission is to find the project exempt from CEQA as well as approving the the draft resolutions for the following permits.
[00:59:58] John Mortier: The next step is the City Council's decision will be final unless a request for reconsideration petition is filed in compliance with municipal code section 2.08.096 within 10 days of the notice of the council within 10 days of their decision. If the project is approved, the applicant may apply for building permits subject to condition 7 of the draft development permit resolution. And any questions? And that concludes actually that concludes my presentation. Any questions you may have.
Segment 2
[01:00:10] John Mortier: Now in terms of the no further action determination, um, this was... this was actually part of the original condition of approval, that language. Um, and then DEH purposely struck that out because even if their... you can get residential development built on a property even with slight soil contamination as long as they're under the residential levels that are appropriate. So technically there's... there would still be, um, action required, but at least those were... would be consistently, um, remediated through an action plan. Um, so if... if Kathy's available, um, are you able to explain the... the peer review process and what you looked at and as...
Segment 1
[01:00:24] Mayor Kitty Moore: All right. Thank you for the presentation. Council, will you first please indicate any ex parte communications which you may have had on the item? I did meet with the developer and have been shown their plan and I'll call on Council for time's sake. Councilmember Fruen, do you have any to indicate?
Segment 2
[01:00:40] Mayor Kitty Moore: Um. Pardon to interject, but, um, what I'm more interested in is how you... you know, how do you square the circle of our Municipal Code, this 040 050 B, um, that you... that you... you have to have the no further action determination prior to the issuance of any permit, uh, for a project that allows ground disturbing activities. So that... that's saying that you... you can't... you can't be... be doing your demolition and... and scraping the... the... the asphal- fault off and... and putting in the... the foundations, any of that until you have no further action.
Segment 1
[01:00:41] Councilmember J.R. Fruen: I have visited the site, I have not spoken with the applicant.
[01:00:44] Mayor Kitty Moore: Okay. Vice Mayor?
[01:00:45] Vice Mayor Liang-Fang "Liang" Chao: I have met with the applicant twice I think.
[01:00:48] Mayor Kitty Moore: All right. Thank you. Councilmember Mohan?
[01:00:51] Councilmember Sheila Mohan: No, I did not speak with anyone.
[01:00:53] Mayor Kitty Moore: And Councilmember Wang?
[01:00:54] Councilmember R "Ray" Wang: I have met with the applicant and I have visited the site several times and I've met with some of the neighbors.
[01:01:00] Mayor Kitty Moore: All right. Thank you. We'll first go to Council clarifying questions each for five minutes with rounds continued in order of Councilmember Fruen, Vice Mayor Chao, Councilmember Mohan, and then Councilmember Wang, and then myself, in order to simplify the question flow. If you have no question the first round, you'll be called on again to make sure that everyone has an opportunity to get their questions answered. Councilmember Fruen.
[01:01:23] Councilmember J.R. Fruen: I will retain my time but allow the next person to speak first.
[01:01:26] Mayor Kitty Moore: Okay. Vice Mayor?
[01:01:28] Vice Mayor Liang-Fang "Liang" Chao: I'm not ready.
[01:01:30] Mayor Kitty Moore: Okay. Councilmember Mohan?
[01:01:32] Councilmember Sheila Mohan: My question was about the environmental, the site cleanup. I know there was a lot of information that staff has provided on the soil, the decontamination and the mitigation proposed. So my one question was for now, is has all this been, is the trigger the fact that the dry cleaning establishment was once located there? Or is this something that we would do for any development regardless of whether there was a dry cleaning unit or not?
Segment 2
[01:01:38] Mayor Kitty Moore: And it's my understanding that DEH, which is probably why they struck it, um, in... in that condition is that... I think they have to go through a few perhaps years of, uh, extraction and monitoring, having those reports given to DEH and them approving it, and then they finally... you know, the report finally says, um, you're... you're meeting the residential screening levels, because like right now the highest is a thousand micrograms per cubic meter, the screening level is 15. So at some point, one would hope that it... this screen... that it meets that, um, screening level for residential and then... and then they issue the no further action. So, um, maybe this is more of a... a question for the attorney about what, um, what governs here? This condition that you've put or our Municipal Code?
Segment 1
[01:02:07] John Mortier: Well part of the application, thank you for the question Councilmember, but part of the application process is to submit a phase one. And if there's conclusions of phase one due to historical uses on site, that could trigger a phase two for soil samples to be studied. In this case, the dry cleaner had been known to be on site and the property owner prior to the application being submitted, at least a couple years before, had initiated contact with the Department of Environmental Health through the County to be the oversight agency as well as to review any type of site remediation.
Segment 2
[01:02:30] City Attorney Floy Andrews: My sense is that the state has enacted, um, under the HAA and other statutes, uh, mechanisms that allow for continuous remediation even after a project has been developed, which suggests that the Municipal Code conflicts with that. And I would say that state law would overrule the Municipal Code in that instance. So it's something that I think as a city we should re-look at, because I do see a clear conflict between having a statement in the Municipal Code that you must have a no further action letter when in fact you will continue to have remedial action even after the project has been built and inhabited.
Segment 1
[01:02:47] Councilmember Sheila Mohan: Can I just quick follow up. He started this two years ago, is that what you said?
[01:02:52] John Mortier: Approximately yes.
[01:02:53] Councilmember Sheila Mohan: What would be the reason for that?
[01:02:55] John Mortier: To clean the site essentially and to get it ready for for sale and development. And I can, the developer Toll Brothers, the applicant is here, they could probably describe better the the impetus of the story there prior to submitting the application. But it's my understanding is that the the property owner submitted the commenced the soil remediation prior to submittal just to get the property ready for sale.
[01:03:23] Councilmember Sheila Mohan: Thank you.
[01:03:24] Mayor Kitty Moore: Councilmember Wang?
[01:03:26] Councilmember R "Ray" Wang: I'll forgo any questions to the next round.
[01:03:30] Mayor Kitty Moore: Okay. Councilmember Fruen?
[01:03:33] Councilmember J.R. Fruen: I'll let the next person speak too. Actually if I can take that back, if we could throw Condition 7 up on the screen just so that we're all familiar with it and know what it asks of the applicant.
[01:03:44] John Mortier: Sure, give me a few seconds to pull it up if you don't mind.
Segment 2
[01:04:25] Mayor Kitty Moore: Exactly. And... and if... if, uh, the consultant could remind me about why you didn't go the AB 130 route? Because when I read that, um, there's a section in it, it says if a release of a hazardous substance is found to exist on the site, the release shall be removed or any effects of the release shall be mitigated to levels required by current federal and state statutory and regulatory standards before the local government issues a certificate of occupancy. So they... they... this one, to me, they got it right, um, because they're saying the certificate of occupancy part. So they're letting you continue on, um, and... and do the mitigation. So I thought... I thought that was interesting how that's written. So why did you not go the AB 130 route again? I know you mentioned it before and what were the advantages of the... the category 32 exemption, um, and I'm concerned that it actually doesn't pass the, um, unique circumstances standard. But we'll get to that.
[01:05:45] Terri McCracken: Do you want me to go ahead and respond to the AB 32 hazardous materials?
[01:05:50] Mayor Kitty Moore: Sure. Yes, go ahead.
[01:05:52] Terri McCracken: Okay. Um, we found that the two questions between the exceptions to the Class 32 Exemption and then the question regarding a hazardous waste site to be similar. They're both asking the same question: is the project... can not be located on a hazardous waste site pursuant to government code 65962.5, which is the Cortese List. And so it meets the same standard on both the Class 32 as well as the AB 130. So we didn't see a difference in meeting that standard for the application of the exemption.
[01:06:50] Mayor Kitty Moore: Okay. Um. And could we, uh, could you talk about, um, how you determined that it, uh, does not qualify for u- the like unique circumstances for this dry cleaner site? Because when... when I think about it, I think more in terms of, um, is this site, uh, different from the Staples site, the, um, the Beta Brothers site, Westport, um, Bianchi, uh, Dividend Homes, the Finch Project, um, at Finch and Stevens Creek Boulevard. I look at it tho- in terms... in those terms that it is unusual, um, to have a contaminated site with a dry cleaner on it, at least for our city. So, um, how are you looking at that?
[01:08:08] Terri McCracken: Okay. This is explained in the Categorical Exemption memo for anyone who's interested. It is under, um, section 4.3. It is one of the exceptions to the exemption that you have to meet. And the... the question is specific to an unusual circumstance. And neither the CEQA guidelines, CEQA statute provide any type of definition of unusual circumstances. However, the courts have given a definition of a two prong approach to deciding what is an unusual circumstance. So I can understand when we often as lay... lay terms, you know, we say well that's unusual or that's peculiar. So we do need to look to the courts, the CEQA guidelines and the statute to see how they have provided definitions of these terms.
[01:08:48] Terri McCracken: So in the way that you're describing it, I do see that it is different than the other sites, but it doesn't meet the standard for unusual circumstances under the way that CEQA interprets it. And the way that the courts have determined is you must have a two prong test. Uh, the first part of the test is determining do you have an unusual circumstance in the first place? And then if you do find one, you must find a fair argument that the proposed project itself would produce a significant impact due to that circumstance. And so as we've described in... in the MND... in the Categorical Exemption memo, is we do not... we did not find an unusual circumstance on this site in the fact that it had a dry cleaner on it for a couple of reasons.
[01:08:50] Mayor Kitty Moore: Okay. Thank you. Um, so I'm still not hearing, uh, a, um, a real resolution about the... the problem with our... what our Municipal Code has, but I've... I've used up two tranches of my time. Uh, Councilmember Mohan and then we'll go to Councilmember Wang.
[01:09:08] Councilmember Sheila Mohan: Uh, I'll wait for now and get back to you later.
[01:09:10] Mayor Kitty Moore: Councilmember Wang?
[01:09:10] Councilmember R "Ray" Wang: Yeah, just have two questions. I... I didn't necessarily see a traffic study to look at the impact for the townhomes that are going to be there. Uh, not sure if there's something that's going to put in its place. Uh, part of the reason, uh, is as we're adding, uh, residential units all across Stevens Creek, uh, I don't know if we're necessarily looking to see if the traffic impact and the mitigation. Uh, I do also note that there's, uh, eight parking spots. Uh, the good news is there's two spots for each of the 55 units. Uh, but for guest parking, uh, have we looked at the impact of the overflow to the neighbors?
[01:09:38] Terri McCracken: Um, we find that dry cleaners are part of the urban fabric. And so they're just part of the... a city's, you know, design and they're also heavily regulated in terms of their clean up. And so we found that not to be an unusual circumstance. We also described that we know that the city has a regulatory process as well as the state for cleaning up these sites. And so in that sense that they're not, um, unusual. And then the most important part of this, it's not the proposed project that is causing the impact or that is causing the contamination. And then when the project is not actually causing it, again, this is an existing condition on the ground that exists prior to and will exist, you know, if the project doesn't move forward, it will still be there. So the question is will the proposed project exacerbate the existing condition? And in that case, the proposed project, a residential development, would not exacerbate the... the... the contamination in the soil. Because the soil must be remediated prior to the construction or soil disturbance caused by the construction of the project.
[01:09:48] John Mortier: Yes. So the... for... for CEQA purposes this, um, this project screens out of vehicle miles traveled. Um, and then, you know, uh... uh... Placeworks can... can better, uh, get into that. But I... you know, a... a traffic impact analysis was done. And I believe the additional trips, um, during peak hours were about 15, um, during those times. And so the... so in... in the grand scheme of things it's... it's pretty minimal in terms of traffic impacts. But then again those traffic impacts are not really a CEQA issue. Um, so those have... those can't be mitigated.
[01:10:38] John Mortier: Um. In a sense in terms of spillover parking, uh, no on... no on-street parking spaces, uh, will be lost. Um. However, actually will be gained as, um, you know we are, uh... the... the applicant is actually reducing the amount of driveways going into the project site from I believe three or four to one. So, um, that gains actually on-street parking. But a parking analysis, um, outside of what's, uh, allowed with the density bonus law was not... was not completed. In terms of spillover into the neighborhoods.
[01:10:55] Councilmember R "Ray" Wang: Okay. Thank you.
[01:10:58] Mayor Kitty Moore: Councilmember Fruen?
[01:11:00] Councilmember J.R. Fruen: And quick follow-up to the City Attorney just so that I can get some clarity on the way it was described. You noted a conflict between our code and state law with respect to the provision that the Mayor was describing. Is that our understanding?
[01:11:15] City Attorney Floy Andrews: That is my understanding.
[01:11:18] Councilmember J.R. Fruen: Okay. And when there is a conflict between state law and the Municipal Code of a general law city, then state law would prevail under the doctrine of state law preemption, yes?
[01:11:28] City Attorney Floy Andrews: That's why I think we should update our code.
[01:11:30] Councilmember J.R. Fruen: Yeah. Okay. So that provision in... in essence as applied to this project would be void. Correct?
[01:11:35] City Attorney Floy Andrews: I... I wouldn't say it's void. I would say that the no further action letter language should still require that there be, um, an agency sign off on the remediation. So it wouldn't be like the city has just, um, um, turned its back on the requirement of cleaning up the site, uh, and cleaning it up to the oversight agency's, um, requirements. And so I would replace the language with something that said a sign off by the oversight agency.
[01:12:08] Councilmember J.R. Fruen: Yeah. I'm... I'm just saying that to the extent that the two conflict, ours is not enforceable.
[01:12:14] City Attorney Floy Andrews: Correct.
[01:12:15] Councilmember J.R. Fruen: Okay.
[01:12:20] Mayor Kitty Moore: Vice Mayor?
[01:12:20] Vice Mayor Liang-Fang "Liang" Chao: Okay. First, I should say that, um, although I am disappointed that the project would remove, um, all the retail, I do appreciate the project. It's really well designed 55 units. I like the fact that there are 10 ADUs. So that we get extra units and then the homeowners with the ADU have a way of generating income. So I like that concept. And I like the fact that you actually provided the... the same amount of parking as required, uh, even though by state law you can provide zero. And there are two parking spaces per unit, uh, nine guest parking. So, um, there... it's a good project.
[01:13:05] Vice Mayor Liang-Fang "Liang" Chao: And what I... but we are concerned is whether the project... there is... there was a one hour dry cleaner on site. So we are concerned whether... whether it's at all possible to clean up to the point where it's safe for residential use. Because it was a commercial use and then where most of the lot was parking lot. And now it's going to be occupied mostly by homes. Someone will be living in there. And what I have tried to ask is, is there any statement from Placeworks or any other consultant that gives assurance that there will be at a point possible to clean up the site for residential use.
[01:13:55] Vice Mayor Liang-Fang "Liang" Chao: But I... I asked... yeah, thank you to staff for the very nice prep... prep session. I really learned a lot there too. But still I'm... it's... it's... it feels like at this point it's still a very aspirational claim that it will likely be cleaned up and we will hopefully the county will provide some supervision, but likely the... this site will never get a no further action letter. There will be continued mitigation, vapor, um, and what they... they have that machine right now today, but it has never been cleaned up to the level that's safe for residential use to date. And whether there is a way to reach that or not, I couldn't get a clean answer on what, uh, would be necessary and whether that's even possible. So that I'm trying to see if we can get a written answer on that. Uh, rather... but... but I have only gotten pretty vague...
[01:15:20] John Mortier: I'll let, uh, Terri and or Kathy respond to that.
[01:15:25] Kathy Fitzgerald: Okay. Um. I... I can respond to that. Um, I'm a Senior Engineer with Placeworks and a Registered Civil Engineer in California with a doctorate from UCLA in Environmental Science and Engineering and I've been working in this field for the past 40 plus years. Um, so what they're doing at the site right now is called Soil Vapor Extraction where they're sucking vapors out of the ground, running it through a carbon filter system and releasing it to the environment. Um, they have decreased concentrations of PCE from about 30,000 micrograms per meter cubed now down to about 600 to 1,000 micrograms per meter cubed, but as the Mayor stated that the residential cleanup level is 15 micrograms per meter cubed. So they have a ways to go with the remediation system.
[01:16:25] Kathy Fitzgerald: And, um, DEH is also in agreement that they have additional work and should continue the SVE system. At some point in time, um, they will reach a point where the concentrations are no longer, um, decreasing and they've reached kind of a steady state situation. And at that point in time, they probably will still be above residential cleanup standards because it's... the residential standard is so low. But that doesn't mean that they can't develop the site. So what happens next is the next phase. And DEH, if, um, Toll Brothers wants to purchase the property, will require Toll Brothers to do what's called a... a property purchase agreement where they agree to install a, um, vapor intrusion mitigation system. And what that entails is installing, um, horizontal perforated pipes in the sub-slab setting, um, manifolding them up to a vertical riser above the roof line. They also have a sub-slab barrier which is, um, high density polyethylene, um, that's installed above the, uh, sub-slab venting area and then the concrete slab goes on top of that.
[01:17:32] Kathy Fitzgerald: And in order to do that, um, DEH will require smoke testing to make sure that the... there are no penetrations. They will have a deed restriction. They need a permit from Bay Area Air District. Um, they also need to prepare a soil management plan which will, um, prepare the workers who are working on construction of the site that they will not be exposed to, um, hazardous concentrations while they're working. And so that probably means, um, uh, personal protective equipment needs to be worn while they're doing the, um, vapor mitigation system. So, um, once they have this system in place, um, they go through what's called pre-occupancy verification monitoring. And they have... they do indoor air testing. Um, they... they have the HVAC system on and off. Um, they do sub-slab sampling to make sure that there are no, um, vapor intrusions into the, um, residential living space.
[01:18:45] Kathy Fitzgerald: Um, after that they have to undergo, um, five years of operation and maintenance monitoring under the, um, supervision of Department of Environmental Health. And if after that five years the concentrations, um, in the sub-slab and in the venting system are below residential ESLs, then the DEH will issue site closure, but they will still have deed restrictions to maintain the vapor mitigation system. So, um, when this question came up, um, yesterday, I... I went back and I looked on GeoTracker and, um, to see, there are 56 properties on GeoTracker within Santa Clara County that have residential development on their site with PCE concentrations, um, due to former dry cleaners or regional groundwater plumes. In some cases they have higher concentrations of PCE than we have had on the site currently. Um, and Toll Brothers in fact is doing a residential project in Milpitas right now and have already installed the vapor mitigation system and are in the process of doing post-occupancy monitoring. So in my opinion as a civil engineer and having done this for a number of years that this site can be developed for residential land use without health risks to the occupants.
[01:20:10] Mayor Kitty Moore: Okay. I just want to remind the Council that we're still on the question, um, portion, um, before we move to the public. Uh, did you have another question?
[01:20:15] Vice Mayor Liang-Fang "Liang" Chao: Yeah, thank you. But this opinion that you have, I think it's not written in the report that you have prepared, right? Is it written anywhere that your opinion is this site will eventually be able to be cleaned up to be safe for residential use?
[01:20:35] Kathy Fitzgerald: No, but I can provide that to you in a written statement with my stamp and seal on it.
[01:20:45] Vice Mayor Liang-Fang "Liang" Chao: Mm. Thank you.
[01:20:50] Mayor Kitty Moore: Okay. Um, thank you. Uh. So you can do a Category 32 Exemption on a site requiring mitigation, just to clarify that.
[01:21:00] Terri McCracken: No. The... the mitigation... that... that what's happening right now is cleanup of an existing condition. Mitigation under CEQA would be, um, the effect of the project on the environment. And that's where mitigation kicks in at the project level. This is cleanup of an existing condition. This is a... a... we always call this in my world, we call this like a plan... a very important planning issue, but not a very... but not a CEQA issue.
[01:21:35] Mayor Kitty Moore: So what is the... it's not called mitigation. It's called... Not under CEQA, yeah. It's called remediation? What do you...
[01:21:45] Terri McCracken: I think it's fair to call it mitigation. I just want to be clear that it is not a CEQA mitigation. It is... it's a mitigation or a remediation to ensure the occupants are safe.
[01:21:55] Mayor Kitty Moore: Understood. Um. And, you know, and I do... I... I've... I've followed the Pulte Homes project, um, and the... the documentation there and the 19333 Valco Parkway, uh, there and... and seen the progress of these documents that are... that they're processing. So I've... I've... so that I could kind of educate myself on what the process is. And I really appreciate, it was Kathy, right? That, uh, just provided that overview of how the process works. Um. I would... I'd love to have that... that summary, um, kept somewhere because we're probably going to hit this, uh, again in the future for other sites. Um. And while you're naming the number, um, there's even far more that, um, have not gone into having any cleanup whatsoever, um, that are just sitting there, they're contaminating, the soil vapors rising and... and there's been zero study whatsoever. Um. So next we move on to Councilmember Mohan and then Councilmember Wang.
[01:22:48] Councilmember Sheila Mohan: I'll... I'd like to wait till after the public comments.
[01:22:50] Mayor Kitty Moore: Okay. Councilmember Wang?
[01:22:51] Councilmember R "Ray" Wang: Uh, no, same both. Thank you.
[01:22:53] Mayor Kitty Moore: Okay. Um, remainder of Council, do you have any further questions or if then we were going to move on to the public, um, comments if you have anything? Are we ready? Okay. So... you okay? Okay, we're going to move on to public comments. Madam City Clerk, are there any members of the public who'd like to comment on this item?
[01:23:05] John Mortier: Through the Mayor, I'm... I'm sorry, Mayor. Um. Is... is this... is this the point where the... if the developer has a presentation? Do you want to hear that before public comments?
[01:23:20] Mayor Kitty Moore: Um, yes, please. Let's do that. Thank you.
[01:23:23] John Mortier: Sure.
[01:23:24] Mayor Kitty Moore: But then it... that might end up with another round of questions from Council before we head out, just to let you know. All right.
[01:23:35] John Mortier: Um. TV crew, I'll run the presentation so just you can share my screen. Hopefully it shares the right screen. There we go.
[01:23:40] City Clerk Kirsten Squarcia: And Mayor, the applicant has up to eight minutes to make their presentation.
[01:23:50] Nick Casla: Great, thank you. And I'll... I'll reserve some of my time at the end. I think you've all seen the project plans and have a good... I think there's some bigger questions that it sounds like a lot of you are asking. So I'll kind of run through briefly the presentation and open to have any questions. Um, we can start. Let's see what we have. Uh, Mayor Moore, Vice Mayor Chao, and members of the Council. My name is Nick Casla with Toll Brothers and I come here after working on this project with the city for probably two years. Which is probably two years before that of negotiations with the property owner. And then should this get approved tonight, um, you're looking at another several years to get to final map, the building permits, continuing the remediation. And we can get into that nuance that we talked about, um, if we want to about the... the remediation, I think the versus mitigation. And our land use attorney can really define the differences. I think you... sounds like you're understanding that better, but we're happy to answer those kind of questions.
[01:24:50] Nick Casla: Um. As I said, we started this project, yeah with the city probably two years ago. At the time the density was up to 25 dwelling units per acre. We looked at the current single family detached neighborhood that was around us and we looked at what was being proposed there which was going to be 300 units, 250, 300 units, and we thought doing a more robust townhouse project would fit more into the character of the community. Again the site was zone- the city had already had the zoning for up to 25 DUs to the acre. So we went that approach. To your point, uh, Vice Mayor, we tried to add as many accessory dwelling units as we could to at least beef some density up and provide more opportunities for folks to live within the community. We provided the 20% uh, affordable and met that requirement. You guys have an interesting nuance between the I think the median and the... the mean. Um. That all started again like two years ago. We got our application deemed complete about a year ago, right now actually, like al- almost to the day. And then we went on to um, you know do all the environmental work which took probably... we all sat about 260 additional comments from city staff and public works and fire and went through all of that over a... it's taken quite a long time. So we're very happy to be here tonight.
[01:26:05] Nick Casla: How much time do I have? I'll look at right there. Um, so we'll just run through some of the... some of the presentation. So I don't know if folks know about Toll Brothers. We build, we're out of I think we're in 26 different states. We're based out of Pennsylvania. We build around 500, 300 to 500 units a year in the Bay Area. We build condominiums, townhouses, single family detached, golf course communities, active adult. We build high rises in New Jersey. So we... we build everything. And to that point, in the South Bay where we're doing a lot of work, we build on a lot of sites that are exactly the same as what we're talking about tonight. So we have five, no, six different projects right now totaling over 500 units that are very similar, built on old dry cleaning sites. Um, we've gone through this process many, many times and we're very comfortable with it. We build the projects. We don't flip. We're not land developers. We're home builders. So and you can go look at any of these communities. You're welcome to look at them now or in the future and... and just see how the remediation works and the success we've had. Zero complaints. There's deed res- and after all the DEH stuff then our own CC&Rs within our because we're a HOA community, the CC&Rs then talk about what's allowed to be done on people's property.
[01:27:15] Nick Casla: There's a... a very lengthy deed restriction that's also part. And there's also annual reporting to DEH in addition to the reporting that has to go to the Department of Real Estate. And again, we've been doing this a very long time. Our competitors have also. To the point of there's the South Bay, there's a lot of sites that have certainly much worse contamination. Um, but we've been... the property owner is in the process of doing all the remediation and he's going to continue to do that. We're not going to go file for... you're not going to give us a building permit. You're not going to final map. You're not going to give us grading permits until, you know, the... the DEH part has... has been resolved. So we feel very comfortable with that. And then if we can flip through more... so, you know, again I just talked about we're building in a lot of different places. You've seen the site area. I'm trying to think if there's anything interesting here. Keep going. Landscape plan. Keep going. Yeah, so again, the site, um, we've identified exactly where the affordable units would be. That's those kind of pink circles. And then also our accessory dwelling units are kind of outlined, um, in blue, like a blue marker around it.
[01:28:08] Nick Casla: And again these accessory dwelling units, Cupertino is a very expensive place to live as I'm sure most of you do. So these ADUs are providing people a way to if you buy the main house for two and a half million dollars, whatever it's going to be, that you can help subsidize your mortgage with renting out the ADU, if that helps you. We've also seen a lot of people use them for children coming back or never moving away from the house. We've seen them for um, you know seniors if your parents want to move back in with you. And we think it'll be very successful here. We've, again trying to get the city more density on the site was one approach that we took. And we've... we're doing this. We're built this. You can go look at it if you want. They're very nice, you know, studio apartments essentially. Next slide. So here we'll just flip through. Here's the floor plans, which you all have in your packet. Here's the ADU plan. Again you can see there's a little kitchenette, there's a bathroom, there's a bedroom. Believe it or not to figure this out took us probably two years, two years ago, because there's a lot of building code stuff. A... there's a lot of brain power went into this. And I think our company was the first one with our architect's help to actually design this product that now a lot of our competitors are copying throughout the Bay Area. Next slide. Just floor plans. Keep going. The elevations again, we used as much glass. We wanted that modern feel. Uh, I know Stevens Creek is a very important road for the city and when you're driving by this we wanted to make sure that it was up to the standard that we thought Cupertino looked at. You know, we look at the Apple campus, we look at a lot of your other, you know, newer uh, projects. We just wanted to make sure we met that... that standard.
Segment 3
[01:30:00] John Mortier: Make sure that we didn't just meet that but we exceeded it. And this is, you know, our architect if you would like can certainly talk in lots of architectural terms about the architecture, but we're very proud of it. Next slide please.
[01:30:13] John Mortier: And then here's kind of the main shot of when you drive into the project. You know, this is the common open space. Our trail network all leads to this common open space. And we think it creates a nice community gathering point of view. And we've, yeah, as I said, it's been great working with staff, Public Works, Fire, all your other departments.
[01:30:35] John Mortier: And I have my land use attorney on. I want to reserve some time for her, if that's okay, if we could stop the clock. And I've only given her unfortunately a minute and 13 seconds, but Alicia, if you're there, did you have anything else to add?
[01:30:51] Alicia Guerra: Sure. Thank you so much and I don't know if anybody can hear me here but good evening Mayor, members of the City Council. I'm Alicia Guerra with Buchalter. I'm a land use and environmental attorney and actually have written environmental documents, prepared them, reviewed them and defended them in court.
[01:31:12] Alicia Guerra: And so I wanted to make a couple of comments related to the questions you've posed. One is, I believe that the way the project is structured, it is designed to avoid an impact, to respect the fact that the property owner is the one conducting the remediation of an existing condition. It's not a project impact.
[01:31:31] Alicia Guerra: That's the distinction between treating something as addressing an existing condition, not subject to CEQA, versus treating an impact requiring mitigation for a proposed project. But this project's not causing the impact due to remediation due to the existing conditions associated with environmental conditions.
[01:31:53] Alicia Guerra: And that's important because it harmonizes the requirements under your municipal code, where in your language, and I think my time is up here, perhaps I can answer some questions related to how your municipal code provision relates to this. If you'd like.
[01:32:15] Mayor Kitty Moore: Um, please do, uh if you can do it in about two minutes? That would be helpful. So, pardon, would you be clarifying the part of code that I was reading about the uh, you need the no further action letter, is that what you're...
[01:32:38] Alicia Guerra: Yes Mayor.
[01:32:39] Mayor Kitty Moore: Okay, thank you.
[01:32:40] Alicia Guerra: So, Mayor if I might clarify, that provision in subdivision B in that code section pertains to a proposed action that results in a condition that's unreasonable for public health and safety reasons, and necessitates the regulatory agency to engage in a regulatory oversight agreement.
[01:33:05] Alicia Guerra: Well the reason Toll Brothers as the applicant here is not subject to that requirement is that the property owner has already undertaken that remediation and is already proceeding under regulatory oversight with an agreement with that agency overseeing this, the County Department of Environmental Health.
[01:33:28] Alicia Guerra: So, that is not a permit requirement here. That is not mitigation required for this project because under CEQA, as Terri McCracken had indicated, that's an existing condition. And CEQA doesn't require that an applicant for a proposed project has... it doesn't have to evaluate the impacts of the environment on the project.
[01:33:59] Alicia Guerra: They evaluate the impacts just as the City has done here for the effects caused by the proposed project. And because this project is not going to proceed until the remediation is complete, there won't be an exacerbation of the existing environmental contamination such that there would be a conflict with the provision in your municipal code.
[01:34:24] Alicia Guerra: Hence, that's why you don't need a permit, and that's why your staff has done an amazing job with their recommended condition number 7, because that addresses exactly what the Department of Environmental Health requires when you do have to enter into have an ongoing land use covenant or deed restriction for any potential remaining residual contamination that may exceed the ESLs as Kathy had mentioned.
[01:35:02] Alicia Guerra: So it all works together, it's not actually in conflict because it's those other hazardous materials laws that govern the remediation of the existing condition. And the City here, with respect to the development of the housing project, is complying with what CEQA says, which is if the project doesn't cause a new or greater impact, where you've already studied the impacts under your prior CEQA documents, then you don't have to do another environmental impact report or another mitigated neg dec, but you can rely on an exemption.
[01:35:44] Alicia Guerra: And then to finally reconcile here, and then I'll stop giving everybody a CEQA exercise, CEQA lecture here, but to reconcile what your City Attorney said: This all works because under AB 1633 and under the Housing Accountability Act, public agencies are supposed to provide housing.
[01:36:08] Alicia Guerra: And if providing housing is results in a project that does not have any environmental impacts, that does not cause any new or greater environmental impacts, then the City under these housing laws is required by law to then proceed with an exemption.
[01:36:28] Alicia Guerra: And in this case, you actually can stack two different exemptions, which CEQA lets you do, kind of a belts and suspenders approach. And by law, you don't have to do more environmental review of a project that's not causing the impact. If anything, it's furthering the ability to address and to resolve the existing contamination.
[01:36:53] Alicia Guerra: And I think one last thing I'll say about that as I think one of the council members raised the question about AB 1633. That also discourages cities from going and conducting further review of impacts caused by something that has nothing to do with the proposed project. Otherwise that creates other problems.
[01:37:17] Alicia Guerra: And so it really all does work together and your municipal code provisions are helpful here because they've informed the analysis and the condition of approval on this project to assure that there wouldn't be any environmental impacts associated with occupancy by future residents.
[01:37:45] Mayor Kitty Moore: Okay, thank you. Um, and so the time is concluded for...
[01:37:54] John Mortier: My consultant team is here if you have any questions for a civil engineer or environmental, anyone. They're all here, so thank you.
[01:38:00] Mayor Kitty Moore: Okay. All right. Thank you. Okay, so now we're going to move to public comment unless there's some questions from the council before we do that. Okay. Um, so Madam City Clerk, do we have any public comments?
[01:38:20] City Clerk Kirsten Squarcia: Yes Mayor, I have three requests to speak from in Community Hall. I see one request to speak virtually, that would be about 12 minutes.
[01:38:33] Mayor Kitty Moore: Okay, thank you.
[01:38:34] City Clerk Kirsten Squarcia: Okay, first we will start with Jennifer Griffin, followed by Rhoda Fry, followed by Lisa Warren. Anyone wishing to provide comments, please have your request submitted in the next nine minutes. Welcome Jennifer.
[01:38:57] Jennifer Griffin: Um, good evening City Council. I'm glad to see this very robust discussion of issues pertaining to this SB 330 project. Um, I'll just start out real quick. Um, I understand that I believe that there have been traffic studies made of these, we may need to make them public and that there is something called cumulative effect.
[01:39:21] Jennifer Griffin: We have five to six SB 330s and as they're presented, you may have cumulative issues that are coming up because of the amount of these projects. It'll... it's something we have studied before. I don't think it's been addressed here adequately.
[01:39:44] Jennifer Griffin: Um, I will start out and say that my brother worked at a um, circuit board company in 1975 in in the 70s in Mountain View. It is now a Superfund site. They were pouring acid into the basement when they were doing the etchings of the circuit boards. There is groundwater contamination in the Mountain View area.
[01:40:16] Jennifer Griffin: Um, two members of my family passed away from multiple myeloma in 2007. My stepfather passed away, who was a tank reliability engineer, and my brother passed in 2015 from multiple myeloma. Both of them are suspected to have been victims of the Fort Ord groundwater contamination area.
[01:40:46] Jennifer Griffin: My mother um, and my sister-in-law both registered um husband and husband's names with uh Fort Ord over the groundwater issues probably five to six years ago. My mother is now 93. Uh, my sister-in-law has never remarried.
[01:41:08] Jennifer Griffin: Um, it is suspected that because of the groundwater contamination at Fort Ord, that both we lost two family members because they were both on site at Fort Ord due to work commitments and my brother was in the National Guard and based at various times at Fort Ord. So you can understand the issues that we are concerned about with Cupertino.
[01:41:38] Jennifer Griffin: I worked at Tandem, there are Superfund sites along Tantau, the Kaiser Permanente building there and the um business next to it are so contaminated they never can have children, you can... nobody can live there. So, I was astounded to hear that this project had had a vapor barrier on site. I did not know that.
[01:42:08] Jennifer Griffin: Um, yes, we want to make sure that we clean up everything. I... I have some very serious issues with SB 130, AB 130. I think the Governor was fooled by whoever forced him to to sign it. We have to proceed carefully. Thank you.
[01:42:29] City Clerk Kirsten Squarcia: Thank you Jennifer. Next we have Rhoda Fry, followed by Lisa Warren. Welcome Rhoda.
[01:42:37] Rhoda Fry: Hi, good evening again. Really sad to see loss of uh retail there. I used to shop there, I used to live nearby and I could walk walk there and there was a fabric store there for a while, there was a grocery store and um, you know, it's we keep on talking about making our cities walkable, not having retail is really bad. It just takes the community, it means you don't have community.
[01:43:05] Rhoda Fry: And uh to Jennifer's point, yeah, the the enviro stuff is big and I don't have to tell our Mayor that, she's a she's taken all these classes at De Anza on environmental stuff. But one thing that you may not be aware of is that the last time that this was brought up, I happened to go out and I was out in the hallway, which is a wonderful place to talk with people and I love our new our, he's not so new anymore, but our new finance guy is awesome.
[01:43:43] Rhoda Fry: Um, anyway, um, I was talking with a gentleman who lives in the area and he was talking about a cancer cluster near um near the site. That there was uh quite a bit of breast cancer among uh just like a whole bunch of houses, it's like all of them, these homes, these people had breast cancer. And and and other cancers. So um anyway, I I kind of I know what the guy looked like, I kind of knew what he did for a living or had done, he retired but and and but I don't remember his name.
[01:44:25] Rhoda Fry: But that is that is something we need to worry about. Obviously we can we can do the soil testing. Um and you know we just don't want to get into this. I mean I've I've been on um I've been on uh conference calls uh with the Bay Area Air Quality Management District, which apparently has a new name right now, um and heard heard people talking who who live at Bayview and and you know they're really really awful stories. Just like what Jennifer was talking about.
[01:45:01] Rhoda Fry: We don't want to do this to our residents and you know, it's going to be harder to harder to build in our area, um but we need to be concerned about the long-term long-term health implications. And um I haven't looked at this project in a while, but I did remember seeing a letter from the developer saying, hey you know, this thing doesn't pencil out well if we don't have have uh retail.
[01:45:28] Rhoda Fry: But you know that's not our problem. Our problem is we want we we need to make our city a real city and part of that is having retail. Thank you.
[01:45:37] City Clerk Kirsten Squarcia: Thank you Rhoda. Next we have Lisa Warren. Welcome Lisa.
[01:45:44] Lisa Warren: Thank you. Um, so I'm gonna try to be brief because of my voice. I feel you Mayor. Um, so I'm just gonna say first that I'm disappointed that the waivers include significant setback changes and the lack of terracing.
[01:46:12] Lisa Warren: And I was at all but one Housing Element meeting through COVID and beyond and there was a big effort to make that particular site terraced for obvious reasons. Um, I'm just let's just say I'm disappointed. Not shocked, but disappointed.
[01:46:38] Lisa Warren: I also heard a representative saying that Toll Brothers has six projects currently that are displacing retail, displacing areas with dry cleaners, which means displacing retail. So it's a thing. I know it's a thing. I know it's not just Toll Brothers, but it really is a serious problem everywhere. And I wish we could figure out and enforce something to prevent that from happening. But as we know we can't.
[01:47:08] Lisa Warren: I am also concerned about the ADU thing. I I not that it's not a good idea, but if it's not useful in creating more affordable housing, then it is a bad idea. And I can tell you I was just had an ADU built in my backyard, you know, six feet from the back fence which I'm on a quarter acre and it's elevated even though it didn't need to be and it's 10-foot ceilings and it's this that and yeah it's the the maximum height it can be.
[01:47:43] Lisa Warren: I mean it could be a lot worse, I realize that. It's my neighbors that I already know, that's that, but it is finished but empty. No one living in it but I have to look at it. And I'm not sure if that will be remedied, but I do know that's happening.
[01:48:03] Lisa Warren: And I would like to know if the HOA language and the requirements for these ADUs will explicitly say they need to be under a certain level of cost for the tenants, so to speak, if they become tenants and not just owners. Will they ever, if the state allows, be able to be sold separately?
[01:48:28] Lisa Warren: I just think the rules need to be understood. And last but not least, dark sky and bird safe, are they subject to that?
[01:48:39] City Clerk Kirsten Squarcia: Thank you Lisa. And now we will move to the member of the public requesting to speak virtually, that is San Rao. Welcome San.
[01:48:49] San Rao: Good evening Mayor Moore and council members. I am the chair of the Planning Commission but speaking on behalf of myself only. I I'd like to just give you a sense of where we left off with the Planning Commission hearing. Uh we uh did our ex parte disclosures and a number of our commissioners did meet with neighbors on East Estates Drive including myself.
[01:49:14] San Rao: I had a chance to have lengthy conversations with the neighbors and in my conversations I did explore with them what they would like to see at that site. And I was surprised and uh interested to hear from the neighbors that they would in fact like to see the site improve from what it is right now.
[01:49:36] San Rao: The current state of that site is that the automotive shop across the street is parking a number of old cars on that site and a number of cars overflow onto the street as well right around the property. The site obviously from a retail perspective isn't uh giving the full potential of its heydays.
[01:49:59] San Rao: And when the discussion moved into the fact that the site is now zoned at R4 with I believe 65 to 80 du per acre and the fact that if this developer or applicant uh pulled out of this project this site would not be able to develop at the current proposed density but would instead be more comparable to a uh seven floor 300 plus unit multi-family apartment because we cannot downzone the site, when I had that scenario discussion with the neighbors on East Estates Drive unanimously what I heard back was we'd rather have homes than a high-rise.
[01:50:45] San Rao: And so there is uh there is that element of feedback. Uh we also went through this in great detail if you saw the Planning Commission meeting we went through this I believe for at least three hours or more and a big part of that was really diving deep into the environmental part.
[01:51:06] San Rao: And the key part here, which I think the attorney for the applicant clarified, is that the property is currently still I believe owned by the seller and the applicant does not transact and complete the sale until the seller completes the remediation. And what that means is the applicant is financially incentivized to hold the seller accountable for remediation because if they do not do that they then have a faulty site for which they will have to do future remediation which is cost that they take on instead of the seller.
[01:51:46] San Rao: Further, if there is contamination, they will need to deal with future liability risks. And so in these matters I would expect that the remediation is fully completed and verified before they transact. Likewise the County is responsible for environmental oversight in either case, whether that happens as a part of condition 7 or whether that happens as a part of holding off on approvals until the remediation is monitored for completion. So in either case...
[01:52:19] City Clerk Kirsten Squarcia: Thank you San, that is your time.
[01:52:22] Mayor Kitty Moore: Mayor, no additional requests to speak on this item.
[01:52:24] Mayor Kitty Moore: Thank you. Um, so I think I'd like to continue the the question um time. Uh, based on what I just heard, is um is that a true statement that remediation is going to be complete before the property is sold to uh Toll Brothers? Cause I don't understand how that can happen. Um because there's a very good chance that the soil vapor extraction that they're doing right now is not going to be able to get you to the 15 micrograms per cubic meter. Maybe Kathy wants to answer this?
[01:53:04] John Mortier: I mean our, I guess our, first of all our contract obligations with the seller I can't fully disclose what the agreement will be, but right now all the remediation is under his, he's the one that's working on it through the through DEH.
[01:53:14] Mayor Kitty Moore: Yes.
[01:53:15] John Mortier: And in of the six different projects we've done, we will make sure that we can by utilizing a VIMS system be able to build our project according to DEH standards. And should that not, but I we're on track I believe according to our environmental consultant whose that we that they're on track to get there.
[01:53:41] John Mortier: So they're but we're not and you're not going to issue me building permits, grading permits until I have that DEH sign off.
[01:53:45] Mayor Kitty Moore: Okay, perhaps uh PlaceWorks has someone that could answer this then. Um, because I I don't see it being fully remediated prior to you taking over the project and installing the soil vapor extraction system, the VIMS system and the vapor barrier. And um I think like like Kathy was saying, it could be a while before you get the no further action letter.
[01:54:14] John Mortier: But we will be installing those improvements.
[01:54:17] Mayor Kitty Moore: Right. So the statement that I just heard from the um the Planning Commission Chair was would not be correct. It's not going to be fully remediated before you purchase it. You're going to you're going to be continuing to work on it.
[01:54:30] John Mortier: Correct. I mean I guess our definition of remediation is once we've got sign off from DEH by utilizing our VIMS system...
[01:54:38] Mayor Kitty Moore: When they approve, when they approve your VIMS system.
[01:54:41] John Mortier: Correct.
[01:54:42] Mayor Kitty Moore: Correct. Okay. And that that is one of the issues that that I have. Um, now we're going to continue with if any other questions and then I'm going to be closing the public hearing. If there happen to be late questions from council after that I will be re-opening the public hearing and then closing it after those those questions happen. So this is your kind of last call if you have some questions.
[01:55:12] John Mortier: Actually our, to we had a follow up on that. Alicia Guerra wanted to say a comment to further my response.
[01:55:18] Mayor Kitty Moore: Please.
[01:55:19] Alicia Guerra: Okay. Thank you Mayor, members of the Council. I just wanted to clarify from a remediation standpoint, there is a distinction between active remediation and passive remediation. Toll Brothers when it acquires property, in this instance the seller is obligated to complete the active remediation. Do the the remediation, do the excavation, do the work that's necessary to get it to get the property to a point where they can transfer it to Toll Brothers.
[01:56:09] Alicia Guerra: Then Toll Brothers installs the VIMS system and those facilities where they can continue to manage the site in terms of continuing to to clean up the property to get to the point that Kathy had mentioned where you're continuing to address any residual contamination. That is more of a passive system.
[01:56:34] Alicia Guerra: So when Toll Brothers acquires these properties where there is still some regulatory oversight, then we negotiate with the Santa Clara County um Department of Environmental Health a deed restriction and then an agreement related to the property transfer that specifies all of the rules that will be implemented during that implementation of the VIMS system and then after that so that there's always ongoing monitoring until such time that that um DEH satisfies is satisfied that the monitoring demonstrates that there's no residual contamination.
[01:57:30] Alicia Guerra: And this is how it occurs on those 59 sites that I think Kathy had mentioned were in Santa Clara County as well as throughout the State of California and other jurisdictions. It's it it so that that's why I think sometimes maybe people are a little are confusing kind of this active remediation versus passive.
[01:57:54] Mayor Kitty Moore: Okay, thank you. Are there any other questions from the council members? Councilmember Fruen?
[01:58:13] Councilmember J.R. Fruen: Have you, this is for the applicant. Um, have you drafted your CC&Rs yet or do you have sort of standard language that you typically use for yours?
[01:58:34] John Mortier: Yes, so in our, I've got a copy of a, I have a copy of a deed restriction we've used for a project that's currently being lived in in uh Sunnyvale. So there's there there's the deed restriction and yeah the language just talks about within the deed restriction in addition to being in the CC&Rs, in addition being into the annual monitoring, um you know prohibited uses, soil management, prohibited activities. There's you know a list of numerous things that you can't do on the property.
[01:59:09] John Mortier: And then and because we have an HOA in addition to the deed restriction, we double down on what can occur within the property.
[01:59:16] Councilmember J.R. Fruen: Got it. One one of the things that seems to be rising in popularity as as more townhome developments are planned in areas that have historically had somewhat lower densities surrounding them is a requirement that you actually use your garage to park your car in it. Um is that something that you plan to include in yours?
[01:59:36] John Mortier: Yeah so we're we get very strict with our CC&Rs in our communities. Uh so we have you know, we have an HOA manager who does checks believe it or not to make sure people are utilizing their garages, which is one reason we didn't do tandem garages here. I mean our parking requirement was actually zero because of where the site is. Tandem garages we found people use the back part to make like my house like junk in it.
[02:00:05] John Mortier: And so by having a side by side garage it encourages that people actually use their garage for what it's intended for. And there's also a restriction within the community through the CC&Rs regarding parking, including the guest parking.
[02:00:15] Councilmember J.R. Fruen: Okay. All right. I just wanted to make sure that that was there because one of the the sort of consistent concerns from the community just in general is what the overflow parking situation might be. And and it looks like you've been very thoughtful about how this is all arranged. I even think that for the folks who are on Richwood it's a significant improvement in terms of what they're going to be looking at. They'll have some nice homes instead of a sound wall. So, yeah. Okay. Thank you.
[02:00:44] John Mortier: Thank you.
[02:00:45] Mayor Kitty Moore: All right. Thank you. Any further questions from the council? Vice Mayor?
[02:00:54] Vice Mayor Liang-Fang "Liang" Chao: So, just want to clarify so the CC&R, um because there the site might need continued mitigation monitoring. So the in the CC&R all the homeowners will bear the cost of this continued the mediation mediation?
[02:01:19] John Mortier: It'd be part yeah, part of the HOA right. Part of the yes, part of the fees. And then that again, that report, that annual report about what the all the HOA, you know you have an HOA I don't know if you live in an HOA or not, but it could be $200 a month or $500. That number has to include the VIMS that we're talking about ongoing and that gets reported to DEH, that also gets reported to the State Department of Real Estate. So you have that annual accounting in addition to the CC&Rs, in addition to the deed restriction for the environmental.
[02:02:02] Vice Mayor Liang-Fang "Liang" Chao: Okay. That is really good to know. Thank you.
[02:02:06] John Mortier: Thank you.
[02:02:08] Mayor Kitty Moore: Councilmember Mohan?
[02:02:09] Councilmember Sheila Mohan: Uh, I had a question on uh the the schematic that you presented. Uh I I saw a an entrance to the development on uh East Estates. Uh...
[02:02:36] John Mortier: Do you want to pull up a site plan real quick? I think we're going to pull up a site plan for you Councilmember.
[02:02:45] Councilmember Sheila Mohan: Uh, am am I right? Is that the entrance to the development? Ah, there it is.
[02:02:52] John Mortier: Correct. Correct. So the entrance is on East Estates. Um, we were you're probably looking at land plan number 50 that we've worked on over the last several years working with Public Works, working with Fire, working with Planning, working with Parks, working with City Staff. And when there was a there was a a feeling not to have an entry along Stevens Creek Boulevard because as that road gets faster then it's going to be more diff you're going to have queuing issues.
[02:03:36] John Mortier: So people are trying to go 35 miles per hour, call it 40 to 45 miles per hour. And then if they had to stop to enter the site directly that might cause some traffic issues. So your traffic folks weren't in favor of doing something there so we pulled the entry and exit onto East Estates.
[02:03:53] John Mortier: At East Estates then we had to ensure with the fire department because the fire needs to be able to go around there that we included hammerheads so this has gotten fire's approval on. And then that created issues that changed 10 other things about the project. But all the radius turns that you're seeing, the reason the widths are wider in some places and narrow in other places is because you need to have fire trucks, emergency access get through the project.
[02:04:28] Councilmember Sheila Mohan: Right. So that that was my question. Uh is it uh preferable to just have one entrance and one exit which which is the same thing or do uh developments like this have another way out?
[02:04:49] John Mortier: Typically on a 55 unit project it's really small, I mean not, I know it can be big for this probably the smallest project I've worked on. I'd say we're doing projects I think once you get to like a hundred and ten that's where you're going to want to look for multiple entrances or if there's a fire there's a grade issue for the driveway or if there's a fire requirement um that you need to meet then you might do two entrances but in this case you know the one entrance is what we've agreed to with staff that meets the fire code, meets the public works.
[02:05:31] John Mortier: Um and again with traffic I think you have a traffic study that should have been in your report or you've seen it. The traffic, the pre-existing condition of the traffic on this site was about the same or in some cases worse than it will be after the project's built.
[02:05:46] Councilmember Sheila Mohan: Okay. Okay. Uh just to for my recollection, is the current entrance on Stevens Creek or is it on East Estates? Uh I can't remember.
[02:06:01] John Mortier: So yeah. There's if you can, can you hear me? Still? The microphone kind of popped out. Do you have an aerial that we could look at real quick? I believe there's a few entrances that some neighbors were really upset on because people are using it to speed through to get to Stevens Creek instead of using the streets, which is a complaint that I've heard. So now that problem will no longer occur. Can you zoom in a little bit? You can go with three entrances. There's three entrances right now for parking.
[02:06:42] Councilmember Sheila Mohan: There are three entrances?
[02:06:44] John Mortier: I I believe there's actually two on Stevens Creek and two on East Estates currently. Yeah, cause one of those entrances on Stevens Creek is to the back alley so that that would account. Um and then there's another one main entrance and then two along um East Estates so we're there's a reduction from four to one.
[02:07:03] Councilmember Sheila Mohan: Right, so all those will go away.
[02:07:04] John Mortier: Correct. Which makes sense for a commercial project, they want as much parking as humanly possible and they want to get people to go there. This will be a new use thus lesser um entrance and egress.
[02:07:15] Councilmember Sheila Mohan: Right and earlier I did check with the staff the fire uh department's fine with it and and there's room for U-turns and big trucks and FedEx and Amazon trucks and so on?
[02:07:28] Councilmember J.R. Fruen: Correct and all as well as the the um trash management plan and the trash pickup too that would with the the hammerhead uh configuration of the of the site. I'll just pull up this one you can see if you can see my uh my little hand right there. These are basically for pulling and back out and what not.
[02:07:47] Councilmember Sheila Mohan: Okay. And my uh last question is about the trees. Uh is this the plan for for the...
[02:07:54] John Mortier: Yes so there's currently no trees out there on the site except for the commercial, there's a neighbor next to us is a giant commercial development, there's a Brazilian barbecue place, if you guys are familiar with it. So we he supports the project, I think you have a letter of his support in your packet. And by the way our only residential neighbor also supports us, Sean, he hasn't written a letter, I don't know if you received it yet.
[02:08:19] John Mortier: Um but the the there's a there's a line of there's like 30 trees that separate our project from the neighboring commercial property and we're preserving all of those trees between the two projects. But the site itself doesn't have any trees right now, it's just an asphalt parking lot. I think we're planting 70 89 trees are being planted on site.
[02:08:48] Councilmember Sheila Mohan: Okay so these are all new trees then?
[02:08:49] John Mortier: Correct.
[02:08:50] Councilmember Sheila Mohan: Okay. Thank you.
[02:08:51] John Mortier: Thank you.
[02:08:53] Mayor Kitty Moore: Vice Mayor?
[02:08:54] Vice Mayor Liang-Fang "Liang" Chao: Uh and where garbage disposal? Garbage uh where are they going to place their garbage cans?
[02:09:06] John Mortier: Inside, not along Stevens Creek Boulevard, within the development themselves in front of their units. Their and their garbage uh receptacles will be kept inside of their units before they bring them out for curb service.
[02:09:18] Vice Mayor Liang-Fang "Liang" Chao: And then the garbage big truck will go into the development? There is space for them to go in?
[02:09:25] John Mortier: Correct. Correct. Yeah.
[02:09:26] Vice Mayor Liang-Fang "Liang" Chao: Oh.
[02:09:27] John Mortier: Which is why we couldn't build more units there because we were trying to accommodate a roadway widths to accommodate tra uh trash and fire vehicles.
[02:09:37] Vice Mayor Liang-Fang "Liang" Chao: Okay. So they bring it out, they need to bring it in the next, right away. Would that block?
[02:09:41] John Mortier: That question comes up a lot by the way. And we actually have a company we hire now that we pay $20,000 to to do a full analysis of how the trash trucks are going to get through the subdivision because it's a major issue for cities.
[02:09:55] Vice Mayor Liang-Fang "Liang" Chao: Yes.
[02:09:56] John Mortier: Uh the CC&Rs will dictate, you know if you like living in a community that has lots of CC&Rs, this community will have a lot of CC&Rs, will dictate the length of time you are allowed to have your trash receptacles outside and to bring them back in so that there's not the effect of like me, I leave my trash cans out way too long. So this will not happen in an HOA community.
[02:10:18] Vice Mayor Liang-Fang "Liang" Chao: Okay. Thank you.
[02:10:19] John Mortier: It's a good question. Thank you.
[02:10:20] Mayor Kitty Moore: So I don't see Councilmember Wang at the moment to know if he has any questions before I close the public hearing. Councilmember Wang?
[02:10:29] Councilmember R "Ray" Wang: I'm good. Thank you very much for asking.
[02:10:31] Mayor Kitty Moore: All right. Thank you. So with that I'm going to close the public hearing. Thank you for all of the presentations. Um, would someone like to make a motion?
[02:10:43] Councilmember J.R. Fruen: I'll get us started with a motion to approve the staff recommendation.
[02:10:47] Councilmember R "Ray" Wang: I'll second that.
[02:10:48] Mayor Kitty Moore: Okay. Um, Councilmember Mohan, you you were ahead of Councilmember Wang for the second. Okay, so we have a motion and a second. Um, I'll go around if anyone would like to make some last comments. Councilmember Fruen?
[02:11:04] Councilmember J.R. Fruen: Sure. I just want to thank you for bringing a pretty thoughtful project forward. Um, you know on on the the side of you know what our Housing Element looks like, obviously I I wish that we could have gotten some more density out of this this space. These shouldn't sound like new comments to you based upon what you saw at the Planning Commission. I watched the the entire hearing so this this should seem um like nothing new.
[02:11:31] Councilmember J.R. Fruen: But I do think that you've spent a lot of time making sure that it it interfaces well with the immediate neighborhood. Um in hearing from some of those neighbors, all of the concerns that they had before appear to have evaporated. So um whatever you've done in the course of that, even if it was just educating them on what you were actually bringing forward and separating it from prior project applications that have occurred at that site, um it worked because there's nobody here saying this thing is going to destroy the neighborhood.
[02:12:02] Councilmember J.R. Fruen: Um, uh you know obviously we we all want to see more retail in general that is in the city, but at the same time we have to have retail that is going to be uh well activated and there is retail immediately next to this site. I think it will be um something that everyone in this project is going to go and and utilize on a fairly regular basis.
[02:12:28] Councilmember J.R. Fruen: The economic analysis that you've you've provided shows that it's actually a net positive to the city on an ongoing basis and that will be a lot more stable um because so much of it is property tax and that is uh something that is not going to change with the kind of um volatility that that sales tax does. So I I really appreciate what you've you've brought to us. Um like I said I wish that it it could be somewhat denser. Um and I'm I'm grateful that we will be getting to see uh the the the soil conditions remediated. If we don't have projects like this that that get us to that point then we just have contamination sitting in the soil forever. So, thank you.
[02:13:22] Mayor Kitty Moore: Vice Mayor?
[02:13:23] Vice Mayor Liang-Fang "Liang" Chao: So, yeah it's the same, I think because I think it's good to have townhome development. However, the site is ideal for higher density development because it's not next to a lot of single family homes. So I when I met with you I did ask whether it's possible to develop into three, four stories uh condos. Um but it's not the project you are interested in.
[02:13:58] Vice Mayor Liang-Fang "Liang" Chao: As a result, the City would be forced to upzone other sites to replace the units that we lose at this site unfortunately. Um because the state law just force us to. Um the state used a very very high growth demand forecast and that even I don't know if the market is there but we are required to upzone.
[02:14:29] Vice Mayor Liang-Fang "Liang" Chao: But it's a good site. However, I am disappointed that this uh is considered qualified for CEQA exemption. I understand uh from the meeting with staff that this site is, although it's on the GeoTracker site, it's not considered a site in the Cortese list. However, I do think it still qualifies for the significant impact on due to unusual circumstances.
Segment 4
[02:15:00] Mayor Kitty Moore: have something more packaged up uh in expectation for what types of questions we might be asking. I think that that'll really help. But ultimately our intent here is to always protect the workers that are going to be on the site and the future residents and I believe that we have done that and we put the right things in place in order to make sure that that happens. So this is a a very attractive looking project and uh I'm glad it's moving forward. Thank you. So Madam City Clerk, will you please conduct the roll call vote.
Segment 3
[02:15:02] Vice Mayor Liang-Fang "Liang" Chao: And I think your argument for that this is not unusual is insufficient and I asked the AI to did some analysis and compare the Berkeley case that you referred to and it doesn't apply. So I wish that this could be have been done with a negative declaration on so that we don't abuse the CEQA exemption process.
[02:15:30] Vice Mayor Liang-Fang "Liang" Chao: I know the outcome might be the same that you would need the requirement for the remediation might be the same, but it's important that we strictly follow the law. Unusual is unusual and it's not unusual to it's unusual to have a uh dry cleaner on a site. It's very different from all the other housing project and therefore we need to pay more attention on this kind of site and make sure we we ensure the safety of the future residents.
Segment 4
[02:15:33] City Clerk Kirsten Squarcia: Councilmember Fruen?
[02:15:34] Councilmember J.R. Fruen: Aye.
[02:15:35] City Clerk Kirsten Squarcia: Councilmember Mohan?
[02:15:36] Councilmember Sheila Mohan: Aye.
[02:15:37] City Clerk Kirsten Squarcia: Councilmember Wang?
[02:15:38] Councilmember R "Ray" Wang: Aye.
[02:15:39] City Clerk Kirsten Squarcia: Vice Mayor Chao?
[02:15:40] Vice Mayor Liang-Fang "Liang" Chao: Aye.
[02:15:41] City Clerk Kirsten Squarcia: Mayor Moore?
[02:15:42] Mayor Kitty Moore: Aye.
[02:15:42] City Clerk Kirsten Squarcia: The motion carries unanimously.
[02:15:44] Mayor Kitty Moore: Um we will take a five minute break.
[02:15:50] Mayor Kitty Moore: Okay. Welcome back and now we're on to the action calendar item 11. Item 11 subject is to determine the City Hall improvements project scope and resources, approve budget modification in the amount of 54 million and authorize design-build delivery methods. And do we have a presentation?
Segment 3
[02:16:06] Vice Mayor Liang-Fang "Liang" Chao: But it's good it seems that you guys are very experienced in doing that, but another developer might not be as experienced. Which is why we need to be sure we don't use the unusual circumstances um definition so loosely. Um that's my one uh objection for this process. Thank you.
Segment 4
[02:16:10] City Manager Tina Kapoor: Yes, Mayor. On behalf of the City Manager, I will introduce Director of Public Works Chad Mosley and Capital Improvement Programs Manager Susan Michael to provide the presentation.
[02:16:20] Chad Mosley: Uh, good evening Council, Chad Mosley, Director of Public Works, and I am really just gonna deflect this to Susan so she can present the information to you. So, take it away Susan.
[02:16:32] Susan Michael: Good evening. Can you hear me?
Segment 3
[02:16:36] Mayor Kitty Moore: Councilmember Mohan?
Segment 4
[02:16:38] Mayor Kitty Moore: Video could you cue the mic?
Segment 3
[02:16:39] Councilmember Sheila Mohan: Uh, just a comment that uh it's almost like a double-edged sword. Uh I like the development as it is and if I lived in that neighborhood I would certainly be happy that it is uh it is the density that it is and not more which uh uh which it could have been under different circumstances.
Segment 4
[02:16:43] Susan Michael: Okay. All right. We've got the other mic going. Thank you Council. Um, good evening Council, um, Mayor, Vice Mayor, and members of the public. Thank you for having us. I am Susan Michael, CIP Manager, and Chad Mosley, Director of Public Works is here to support this item.
[02:17:03] Susan Michael: The action tonight, it we're going to simplify it down to the action tonight is to approve the scope of the City Hall improvements project, to approve the budget of the project, and to approve the implementation of the design-build project delivery process for the project.
Segment 3
[02:17:07] Councilmember Sheila Mohan: Um so that's a good part. And in from the City's perspective of course it sets us back in terms of our RHNA numbers. We'll have to sort of make up for it somewhere else. Uh but that's for another day and another discussion. Thank you Mayor.
[02:17:23] Mayor Kitty Moore: Thank you. And Councilmember Wang?
[02:17:25] Councilmember R "Ray" Wang: I'm excited to see for sale housing. Uh Toll Brothers does does have a great reputation and I'm glad that you did work with the neighbors to resolve many of those issues. I think home ownership is important for our city and for our democracy. Uh we are losing retail and it's not a good thing overall. Um I disagree with the economic analysis, I think we could probably have done better on the retail side but overall I think this is a good project.
Segment 4
[02:17:25] Susan Michael: I wanted to mention that there is a project page on the public works um website page uh there's a CIP page and in there there's a list of projects. One of the projects is the City Hall project and there's 20 years of documents that are posted there, structural analysis, etc. There's a lot of good information there if you wish to look into it.
Segment 3
[02:17:47] Councilmember R "Ray" Wang: Uh we could have done more multi-use in that area. Uh I like the density. Uh I may disagree with some of my colleagues, I feel that Cupertino is a suburban enclave, it is not a uh dense or dense urban place. Uh but I'm still worried about the transition from active to passive mitigation uh so I hope the uh vapor levels come in okay. So thank you very much for presenting today.
Segment 4
[02:17:55] Susan Michael: The project purpose, uh the mission statement is to address the seismic deficiencies of the building, modernize the building, and ensure the continuity of the public services.
Segment 3
[02:18:04] Mayor Kitty Moore: All right. Thank you Councilmember Wang. I echo the entire council's comments. Um this has had some very complex environmental issues. Um thank you for the lengthy assistance um from staff and the consultants uh to educate us on this matter.
Segment 4
[02:18:10] Susan Michael: The background for the project, we just a little bit of background, the seismic issues for the City Hall were identified in 2005. Uh there were multiple structural analysis done in the following years. The most recent relevant Council direction came in 19 uh sorry 2022 and then the City Hall topic became um part of the City Work Program in 2025.
Segment 3
[02:18:23] Mayor Kitty Moore: Um as you heard, there are many different um bits of code and law that are being applied in this project with the tentative map and and with regards to CEQA what we have in our in municipal code. So thank you for for assisting us through this process.
[02:18:42] Mayor Kitty Moore: Um I look forward for what will be an attractive addition to um Cupertino. I do lament the loss of retail, um especially since we've had our loss of the tax revenue sharing agreement and our budget has been quite tightened.
Segment 4
[02:18:45] Susan Michael: And I also wanted to list the Council directions of the past couple years and that's what this is. So in November 2020 2022, um that was the one that we were asked to implement in the City Work Program of 2025. So that has been our that is our starting point today for the scope and the direction from Council is to go back to 2022 which said we will do a full renovation of City Hall including the essential services facility risk category 4 structural retrofit, full interior remodel, and move the EOC to City Hall Annex.
Segment 3
[02:18:58] Mayor Kitty Moore: Um I do hope that the consultant takes away um from this experience the the challenges of uh educating the whole council on the complex environmental issues with and all the new laws that have that have come about. And um when we see another project like this uh just you know remember how we went through this process and hopefully we can um
Segment 4
[02:19:33] Susan Michael: The scope overview. So there's been a good deal of detailed discussions about the scope that we've had in the past with Council with the City Hall subcommittee and with the community. Council's direction was to go back to what was decided upon in November 2022. So tonight we're asking Council to reaffirm that direction and that project scope includes a seismic retrofit specifically a risk category 4 seismic retrofit.
[02:20:04] Susan Michael: And I can explain a little bit about what a risk category 4 is. In the case of a major seismic event um a higher category risk category, in this case 4, would mean to preserve the building and keep it functional following such an event whereas in an if you were to upgrade the building to level 2 which is a lesser level which is more of an everyday um level of protection that is afforded to buildings then in the course of a major event the building would stand and it let everybody get out of the building safety but it wouldn't necessarily be functional after such an event. So that's the major difference.
[02:20:47] Susan Michael: So the rest of the scope is to maintain the existing footprint. We would reconfigure the interior. We would also be removing the roof because that's a heavy structural item and we would be replacing the windows and doors because of the Title 24 requirements but typically when you look at the building from the outside it would be very much the same building.
[02:21:08] Susan Michael: And then the third item is to not provide parking expansion with this scope. Um EV chargers chargers would be added because that's part of the building code that's been updated. So um but generally conceptually the parking situation would say to stay the same. And then the fourth aspect would be that we would be upgrading all infrastructure which is electrical, HVAC, MEP, data, and we would also be upgrading the accessibility to meet current codes.
[02:21:43] Susan Michael: So we're going to go into the cost estimates. Um the 2025 cost estimate has been upgraded to be a total project cost of 54.4 million and that breaks down into $40 million for construction costs which is hard costs and then another $14.4 million for soft costs, consultants, testing, permitting, etc. So that is just an over overview and we'll go into the detail here in a moment.
[02:22:21] Susan Michael: Uh the cost analysis. So if you uh the I wanted to go back to where we were we started in 2022 that was the next the last major discussion we had about the costs. Uh in 2022 those cost estimates which are Attachment D to the package um there was a process there that while it did include some markup for soft costs it didn't include thing all the things that the City would have to do to implement a project. So there were some things missing. So this 2025 cost estimate addresses that gap and includes all of the anticipated work efforts that would be necessary to complete the project.
[02:23:05] Susan Michael: And this talks about a little bit of that detail. You'll find a good deal of detail in Attachment C. Um so the first table on top here we're trying to show what was done in 2022 and in that case the direct construction costs were I can't get my cursor over there but the direct construction costs in 2022 were almost $21 million and then we had a process where we added a markup for soft costs and then we did uh proper escalation for those years so that it came out to be 29 million.
[02:23:52] Susan Michael: Um in this the 2025 version now if you were to use the same process you would have the $28.9 million direct construction costs marked up by the 25% escalated appropriately and then we would get to 36,000 36,000 36 million. Um however while that shows an apples to apples comparison it doesn't show the true overall cost because we still have soft costs that need to be included. So in that case the second table lines 3A, B, and C add up to the construction which is direct construction costs at 29 million, contingency at 10% 2.9 million, and then escalation is $8 million cost.
[02:24:43] Susan Michael: So then we have the soft costs which come out to be about 14.4 million and the soft costs of the consultants were the things that were included before and we are now including moving costs, HazMat remediation, utility hookups, um real estate for interim costs, that kind of thing. So we just wanted to give you a little bit of a sense of how we got to that number. Do you want to? Okay.
[02:25:15] Susan Michael: So in the service of trying to get accurate numbers and trying to figure out this you know coming to this large number we also asked our consultants uh to come up with uh projected expenditures by fiscal year. We did it actually every six month period to try and break down how the cash would flow. And so that first line is here we also then took that same projection and looked at it in terms of encumbrances uh which is how we typically come to council we need to encumber the architects contract for example so we also have that done by fiscal year. Um I give a little bit of detail here on how that might break down it's also like I say in attachment C to have a lot more detail um but we want to have Christina Alfaro talk about the funding and how we might take that cash flow breakdown and go to the next level.
[02:26:19] Christina Alfaro: Good evening. Oops. If I can get there. I think the microphone's on. Hear me okay? Um so what I wanted to do is just take a few moments of your time to kind of describe the forecast that you're seeing uh in front of you as it was described in the staff report. And so really uh the gist of this slide is that the City can afford to pay for this project in cash. Uh the staff report recommends using the For Future Use Reserve uh that Council may recall is the money the Council set aside um at the conclusion of the CDTFA uh settlement agreement um for dollars in dispute that the City was able to retain.
[02:26:59] Christina Alfaro: Now where you will see primarily a hit to our forecast is really related to potential interest earnings for holding on to these dollars. This is actually an improved forecast since the last time you saw it in proposed which took a couple moments to cover why that is. It's really related to us having closed the fiscal year with the Council having approved our annual comprehensive financial report earlier this evening. Those numbers are finalized. We've updated our forecast. That's really causing the bulk of a kind of a rosier picture than we had before. This includes all the negotiated contract increases um through first quarter adjustments as well. Um and so really the big takeaway here is should the Council choose to proceed to move forward with the City Hall as priced we believe the forecast would be able to pay for this on a cash basis.
[02:27:48] Christina Alfaro: Um I do want to point out as we discussed as part of first quarter uh the forecast currently does not include any potential adverse impacts uh due to the negotiation of the law enforcement contract. Um those would be we still to date do not have any new information or updated information on that. Once we do we would need to update the forecast uh for those numbers. Thank you.
[02:28:10] Susan Michael: Thank you Director. So due to the overall costs being incredibly substantial we wanted to develop some options for your consideration. The first option would be to proceed with the full renovation scope but however only financially commit to the schematic design. So a $2.5 million Option A that would allow us to hire the bridging architect and the construction manager to um be contracted to work to explore cost and scoping options before we commit to the bigger design-build process.
[02:28:57] Susan Michael: Um the second option would be to reduce the scope to uh commit to the project overall but to eliminate spatial and interior improvements that are not code required. So that would be any workplace improvements. So typically the lobby would stay the way it is I don't think we would address the Council chamber that basically would use the space that is as it is and that would reduce it by about 8.2 million. And it's worth mentioning under Option B another possible reduction of scope would be to um not renovate to the higher level of seismic risk category. So instead of doing risk category 4 we could do risk category 2 and we estimate that that's a $2.5 million savings.
[02:29:51] Susan Michael: Um so Option C is the recommended action for tonight proceed with the full renovation and um yeah. And then the next page show the options D and E from the staff report. This page shows where you could add facilities and some rough costs um but a slight disclaimer is that we've not fully vetted these numbers with our cost professionals so this is a stab in the dark at what it would cost. The full renovation which is Option C plus a parking garage or some kind of surface parking expansion we estimated to be about a $2.5 million addition to the project. And then Option E would be essentially going back to the 2015 Civic Center master plan where we put in a new facility with underground parking. We estimate that that is about a $110 million project at this time.
[02:30:59] Susan Michael: Um and I'll quickly go through schedule. We believe this to be a five-year project that we would spend the first two years in the design process and essentially the next three years would be the design-build procurement and building and construction. So um we would hope to be moving in in summer of 2023 sorry 2030. And so as you know this project will require a substantial project budget as we mentioned and Christina explained that we could effectively plan for it over a five-year period to um maximize our investments. We also wanted to reiterate as we mentioned in April to the Council during the CIP proposal that we uh went through that if we were to add this project we would need to add a full-time employee position to the CIP division. This would be a full-time project a full-time job to manage the project internally. So we would be coming back to Council to request that with the budget process in April May June.
[02:32:12] Susan Michael: And the other uh one other procedural aspects of tonight's item is that we'd ask to for approval to proceed with the design-build process. Oops. Going the wrong way. There we are. We are required to have Council's approval before proceeding with design-build, state law. Um having an integrated design and construction team will benefit this project so that we can investigate investigate construction efficiencies early in the process. Um we've talked about design-build recently with other projects so didn't want to go into a great amount of details but we do believe it would be good for this project.
[02:33:00] Susan Michael: And the next steps our first uh order of business would be to do an RFP RFQ RFQ RFP and uh develop the contract for the bridging architect and hopefully we'd be coming back to Council with that in spring summer April May and then we would proceed with the initial design phases. Uh we'd hope to do two touch points with Council one near the end of the fiscal the calendar year in December 2026 and then come back after we've had some time to uh respond to comments come back a few months later with the final design review. Um before we finished the bridging documents we'd hopefully also then work on awarding the construction management contract which be substantial and also help us with the um construction processes and kind of doing the cost estimates and eventually then we'd be working in the summer of 2027 to award a design-build entity once we had the bridging documents finalized.
[02:34:13] Susan Michael: So I just wanted to let you know that we will be coming back to Council many times. So once again the title the subject and action and that's in the staff report and we are available for questions. Thank you very much.
[02:34:23] Mayor Kitty Moore: Thank you very much for the report and all the extensive materials on this item. Uh do we have some questions from the Council? I can start with Councilmember Fruen if you...
[02:34:43] Councilmember J.R. Fruen: I guess just very quickly, when you break out the soft costs, what do you rely on for determining move out for the folks who are in the building right now and what sort of rental you might have to make in in the area in order to be able to continue to serve the public?
[02:35:04] Susan Michael: So uh thank you for your question Councilmember. We in Attachment C we did have a line item of um interim workplace rental and or build of $1.5 million and we have initially started to look at that. We would of course leverage the Annex the City Hall Annex as much as possible um and then after that we would work with the City Manager to come up with a scheme that is appropriate for business operations at the time. But we've also tried to identify in our portfolio of possibilities that we could move into and also working with our uh economic uh development manager to identify what are the costs of those types of solutions. So we're definitely looking at the reality of that at this point.
[02:35:54] Councilmember J.R. Fruen: Okay. And that includes rental cost of another building? Okay. Yes.
[02:35:58] Mayor Kitty Moore: Thank you. Vice Mayor?
[02:36:04] Vice Mayor Liang-Fang "Liang" Chao: So can you bring up the slide that with the 2025 cost analysis comparison where it's about the soft costs or I can share I'll just share what I the screenshot I have.
[02:36:25] Susan Michael: Yep.
[02:36:26] Vice Mayor Liang-Fang "Liang" Chao: Okay. So sounds like on the original estimate was about $26 million and then with um the increase in construction costs only brings it up to about $29 million now right? 3A. So the construction costs didn't increase that much but now we are looking at $54 million total because we have um we have these wait we have uh 3B 3C 3D 3E these are costs that were not included in the original estimate. Is that correct?
[02:37:20] Susan Michael: So thank you um Vice Mayor. The 2022 costs did have some markup to address the need to think about soft costs and also had a 5% escalation per year for um the passage of time and the cost of things raising um but I believe what we found or what we tried to address was that it that wasn't sufficient that didn't cover all of the costs. So we went back and we said yes we have a direct construction cost which is higher than it was estimated back in 2022. So it's 29 million. We also need to account for a 10% contingency which I don't think that was accounted for. And the other major thing is the escalation. We didn't we we had a 5% escalation in this case we have a higher ends up being more like a 20% if um you look at the Attachment C.
[02:38:18] Vice Mayor Liang-Fang "Liang" Chao: What's the escalation? What's escalation?
[02:38:20] Susan Michael: It is um when you start a project it costs a certain amount. This is a five-year project so three years from now those costs will have risen. That's the escalation that you're trying to account for. And the construction industry has formulas for addressing that. Typically it's been a five-year escalation every year. 5%. 5%. Um and that's how you kind of start with accounting. When we went back and looked at it there was for example a 20%...
[02:38:57] Chad Mosley: 21% ECI.
[02:38:58] Susan Michael: 21% increase over the last three years since this was done. So it it varies from year to year.
[02:39:05] Vice Mayor Liang-Fang "Liang" Chao: So item basically 3B, 3C, 3D, 3E are the cost of whatever option we do we will bear it will be about this much as about almost $30 million that's on top of the original estimate?
[02:39:30] Susan Michael: Yes. If we reduce the overall project in theory the cost of the consultants would reduce but maybe not proportionately. We'd have to reinvestigate that if we were to go with one of the options for example.
[02:39:45] Vice Mayor Liang-Fang "Liang" Chao: Okay. And okay I'll pass on.
[02:39:53] Mayor Kitty Moore: Councilmember Mohan?
[02:40:00] Councilmember Sheila Mohan: So um when uh Director Alfaro made her uh presentation um one of the solutions I'm not sure it's a solution but one of the suggestions was that we have 64.5 million in reserves and if we wanted to use all cash this could get done. Uh as we all know that's not going to happen. I mean I can't even imagine just pulling out 65 or 50 million out of that uh reserves and and spending it on this. Um and uh maybe this is a question directed to staff, when other cities build facilities like this City Hall I I'm I only know Sunnyvale which has done something in the recent years. Didn't they do a combination of various things to finance it and not just one?
[02:41:03] Christina Alfaro: Uh thank you for the uh question uh Councilmember Mohan. So some of the cities that recently have gone out to build new city halls have done uh generally a combination of some cash um but also um issuing certificates of participation which is basically where you uh put up an asset and then take um funds out for it. The City currently has certificates of participation that are due um uh for the term to expire in 2030. These are non-callable which means we can't go in and refinance the debt. And then perhaps if we can put the forecast slide back up, if we were to go out for this debt given um the forecast that we have listed up here even if you pulled out the three years where we're significantly red because we're showing using cash, um I don't believe we'd have the capacity even with this forecast without the Sheriff in it to be able to show that we could fund an additional debt on top of the one that we currently have.
[02:41:59] Councilmember Sheila Mohan: Um except that debt will be paid off in 2030.
[02:42:03] Christina Alfaro: In 2030.
[02:42:04] Councilmember Sheila Mohan: So at that time we could uh but that that's still five years away.
[02:42:09] Christina Alfaro: Yep so at that point you could go out for additional debt. You wouldn't have that debt payment of about $2.7 million annually as well so that would uh sunset once we're completed paying off that debt. Uh but right now looking at the financial forecast because those are currently not callable so you'd have to carry those through 2030 and then in addition to that take on additional debt plus the uh the bulk of the buildings and the um or the the major buildings in the city are already tied up with those certificates of participation. So again it's a it's a lease model so you'd have to put up other buildings to um uh to shore up the debt that we're taking out.
[02:42:46] Councilmember Sheila Mohan: Correct. Okay so um so that avenue is closed off then for for now.
[02:42:51] Christina Alfaro: At this moment yes.
[02:42:53] Councilmember Sheila Mohan: So if should we wait at so we wouldn't be able to do uh like a prepayment?
[02:43:00] Christina Alfaro: No that when we uh issued that debt that was one of the caveats uh to to receive the rates that we received.
[02:43:06] Councilmember Sheila Mohan: Okay. Thank you. I'll hold my questions for now Mayor.
[02:43:11] Mayor Kitty Moore: Okay. Thank you. Uh Councilmember Wang?
[02:43:14] Councilmember R "Ray" Wang: Uh thank you. Nice presentation uh and from staff. I do want to address some questions that the public have been asking. Um have we not considered a seismic retrofit? Um its studies are shown that it's cheaper than building uh for every $13 per dollar uh is is what we've been told from some folks. And if we've gone down this path have we done any calculations to look at seismic uh retro seismic comparisons or to at least do a comparison with other cities like an ASC uh ASCE 41-23 and a FEMA P-58 or an ATC 40?
[02:44:05] Chad Mosley: Yeah and I can respond to that briefly. Um you know we have uh analyzed this structure for ASCE 41 as well as ASCE uh 07-05. Um we've had structural engineers look at this numerous times. Um so the the you know the building has been evaluated. It has been uh designated as you know structurally or I should say seismically uh deficient. Um you know with respect to comparisons to other cities uh we have not done those comparisons. I know there were some concerns over uh why are we looking at a category 4 as opposed to a category 2. Um and staff's response basically is this is a you know this is our primary uh civic facility and we do think it's important that in a seismic event that uh City services can be provided to residents. Um it's possible some residents will be coming in with emergency uh building permits and we want to make sure that we have facilities available to serve them. Um but that is a Council decision that's not a code decision. If we decide we want to go with a category uh 2 building um and save uh $2.5 million um you know that would be a Council decision and if the building was not habitable after uh an emergency we'd have to come up with other options. Um the the you know part of the problem with that is is we'll be looking to provide our own space while residents are also trying to get their places up and running. So this is more about focusing on the residents going with the category 4.
[02:45:42] Councilmember R "Ray" Wang: Okay. And uh what how much would you think a a study for a seismic retrofit comparison among other buildings would be?
[02:45:51] Chad Mosley: I'm I am not sure. I am not sure. Um yeah that could be a large or could be relatively easy um it really depends on what kind of data other cities have on their buildings and I don't know what they have so.
[02:46:09] Councilmember R "Ray" Wang: Okay. Thank you.
[02:46:14] Mayor Kitty Moore: Okay. Thank you. Um I think I'll... Thank you for the presentation. I and I served on the City Hall Subcommittee back in gosh 2022 with Councilmember um John Willey and we went uh through you you provided extensive amounts of information about that project. I think it was over five or six meetings that we met and uh a lot of lot of materials there and at the time um we concluded um it was actually Councilmember Willey who was wondering where else the EOC could possibly be located and that was when the decision was um looked into to have it at the Tori Annex and then that frees up uh the whole upper uh Council chambers on the main floor and then um I hope everybody's had a chance to tour the entire all the whole Council the entire building um to see in particular the situation with HVAC in the downstairs area and I don't know if you're still considering moving the um permitting over to the Tori Annex. I think that was considered. Okay. So that also is a uh area of space that would be um relocated and freed up. So um.
[02:47:35] Chad Mosley: Mayor if I may. Um the moving of the building services was an interim solution. It would be moving during the construction to provide those forward services and then once construction at City Hall was completed we would move those services back to City Hall and the Annex would be then basically focused on EO as an EOC.
[02:47:54] Mayor Kitty Moore: Okay. But the but the design plan for the Annex has multiple offices around the perimeter. I would think that because the the emergency operations staff is not large that you would be you'd be having there's room for lots of other people to be working there.
[02:48:15] Susan Michael: If I may the uh interim solution is something that we're very clear about that there would business services the permit services would happen out of the Annex. The long-term plan for how we use the Annex has yet to be determined and it's been designed to be flexible to allow for multiple options.
[02:48:34] Mayor Kitty Moore: Great. Um excellent. Uh with regards to the financing when I'm looking at the chart um the encumbrance projections um is it possible that the um appropriations um could be made now and then because I'm seeing fiscal year 27-28 having the um the about looks like maybe 44 million in in that year. Um sometimes these projects take longer than we expect and is there a potential that this takes takes us into an area where you can qualify for issuing this the certificates of participation um because it's you know kind of taken so long that you can then do that? Um I think 2030 we may be qualifying again possibly?
[02:49:28] Christina Alfaro: Yeah. Or or should the question be is you know should we look at some other funding strategies but for now we want to do the appropriations um and then we'll we can move that money back. Yes. So you are able to move that back. We can move the forecast accordingly how you would like to see where you think the expenses are going to um hit so we would be able to do that. I think um we'd just have to discuss expenses that may have already occurred. Um we may not be able to finance because those costs have already been uh paid for it. We may be able to roll it into the finance that still may be a possibility but in terms of our forecast based on what we hear from Council the direction direction we hear from Council what Public Works tells us to work here's where we're going to have the bigger expenses we've built this model based off of uh projections for Public Works based on the current um schedule they have before you but all of that is fluid. We we can move it around.
[02:50:23] Mayor Kitty Moore: Okay. All right. Thank you. Um Council do you have any further questions before we open it up? Couple. Okay. Uh Councilmember Fruen?
[02:50:32] Councilmember J.R. Fruen: So I I hate to make you do squats Director Alfaro but I um if we could put up the slide on the three well the principle three different options.
[02:50:50] Councilmember J.R. Fruen: So if we were to move forward with Option C, are you able what are you still able to do financially with the money that we have at hand? Are you able to continue to invest it at present? At what point does it become unusable for interest for example?
[02:51:10] Christina Alfaro: So at a certain point it would get to a a level where we would have to um so we have enough cash on hand our unfunded our unassigned um fund balance is pretty hefty as you know. We have healthy balances both in our um Chandler account which is our more longer term investments we'd want to be careful to pull out of those as generally we assume we hold investments to to maturity. Uh but for the money we have in LAIF um uh which is the local area investment fund it's pretty it's pretty liquid we can get to it within a day. We'd want to kind of burn through some of those dollars first we'd make it pretty accessible. So it's pretty kind of fluid. We're not going to be um it's really more based on the construction schedule one of the major payments that are due. That's what we'd be programming to go out with our new cash flow policy um and process that we have in place. We actually do that on a weekly basis cash coming in cash going out and we're able to figure out um how much cash to keep in our checking account versus how much to transfer out. So I think given our new process we could be pretty fluid in it and I guess to fully answer the question it's when we know the payments are coming when the cash needs to leave the city is when we would program the cash going out.
[02:52:18] Councilmember J.R. Fruen: Okay. So if by contrast we proceeded with Option A but wound up reconfirming Option C in the course of that, would there be any difference any meaningful difference to how that would impact the way that you choose to invest those funds and?
[02:52:35] Christina Alfaro: No. Again we have pooled cash which means all the cash and all the different funds goes into one um one big pool and then we kind of allocate uh investment earnings based on how much um cash was in each of the other funds when we push it back. And so if we were to go with the 54 and a half versus the 2.5 again it's all based on when the expenses are coming in. So there really wouldn't be much of a difference. The only difference you would see is you would see the For Future Use Reserve. We'd actually allocate that into the capital reserve fund. So you'd see that uh being reduced from the general fund being moved to the capital fund but effectively when it comes to investments there would be no change. We'd still have access to those funds until the point in which they're spent.
[02:53:18] Councilmember J.R. Fruen: Okay. And then for sort of the the big cost that we know is is coming down the pike that that doesn't seem to be particularly certain at present the the Sheriff's contract. Um based upon what you've built into the forecast have you taken a particularly conservative view of that? Should we be expecting that number to expand contract?
[02:53:43] Christina Alfaro: Uh I'm gonna defer to this I know the City Manager doesn't have a voice so I haven't been involved uh fully in negotiations. I know we're waiting for numbers from the county and so sorry Tina I know you're but I'm gonna punt that over to her.
[02:53:58] City Manager Tina Kapoor: Um I don't have the numbers from the county yet Councilmember but um we are conservatively projecting what we think could be the number.
[02:54:07] Councilmember J.R. Fruen: Okay. All right. That that makes me feel a little bit better. Um and I I think I'm done with the questions for you so I'll turn the the last one to um uh the the rest of the team. What is it fair to describe Option A as sort of putting our foot in the pool to see if we want to go down Option C?
[02:54:31] Chad Mosley: Yeah Option A is kind of Option C point zero one.
[02:54:37] Councilmember J.R. Fruen: Okay. All right. So we we might conceivably just be right back where we are now in a couple of months time after going through all of the the schematic design and so forth.
[02:54:52] Chad Mosley: Correct. We think with Option A we can potentially refine some of the numbers down a little further um so that we have a slightly more dialed in costs but it's going to be in this we're basically going to be in the same place yes.
[02:55:12] Councilmember J.R. Fruen: Okay. All right. And then just just to underscore one last point the the if if we were to drop this building down to you know risk category 2 we're really only looking at a cost savings of 2.5 million.
[02:55:26] Chad Mosley: That's correct.
[02:55:27] Councilmember J.R. Fruen: Okay.
[02:55:28] Mayor Kitty Moore: Vice Mayor?
[02:55:30] Vice Mayor Liang-Fang "Liang" Chao: Um I wish to understand the financing option a little more. Back in 2015 when the Council initially adopted the Civic Center Master Plan that project estimated to be $70 million at the time um and then I remember in the August 2015 meeting the Council had an agenda item that they are moving to debt financing. So at the time we also we still we were still paying off the the li the loan for the library building. So how come they are able to consider debt financing at the time and we cannot consider that? Is is it because of our less uh satisfactory financial situation now?
[02:56:29] Christina Alfaro: Yeah I just want to say I think Chad is getting me back for first quarter on this meeting. Um but to answer your question um as a reminder uh uh we refinanced the debt in 2020. So back in 2015 we still had uh the debt that was originally refinanced I believe we financed the first time in 2012. That was callable so we could have gone in and refinanced taken out more money to pay for these costs within the structure of that those certificates of participation. When we refinanced in 2020 that is when the they became uncallable for the last uh basically the last 10 years of the debt that we had remaining.
[02:57:18] Vice Mayor Liang-Fang "Liang" Chao: Okay so but we are paying 2 and .75 annually for this debt. Because of that we cannot um just get another another another loan for the building?
[02:57:34] Christina Alfaro: So there are really two issues at play. The the the main issue uh is really related to for this um financing mechanism you have to put up collateral there has to be some building that's a um that's um that's how this financing is structured. Effectively the major buildings within the City are already locked up in the current the last refinancing that we did within the current debt. So um when the library and Community Hall were build uh um sorry I'm speaking off my head here but I believe uh Quinlan was one of the major buildings we can't actually we couldn't put up the new buildings because we were building the new buildings. So effectively that's not available for us to say we're going to put this up essentially as collateral against this debt. And so that's really one of the major issues. So in 2015 we could have refinanced put the same buildings back up and reissued the debt. In current times we don't have that ability one. Secondly if again the forecast doesn't really show that we have the capacity to issue new debt. So what we could do we could try to do is say hey are there any look at the rest of the assets in the City is there anything else that we could put up that would be of significant value to cover the additional debt you'd still run into the issue that does the forecast show that we have the ability to pay this new payment.
[02:59:00] Vice Mayor Liang-Fang "Liang" Chao: Mhm. Yeah. So we found the seismic issue since 20 2005. So we kind of kicked it down the road for 20 years now. Feels like we have to do it but feels like $54 million in cash is a lot of money. So just trying to explore. We see DeAnza College or the school district they have bond measure. I think I asked the question probably prep prep session. Um because other public agencies issue bond measure to help pay for this kind of capital project and Cupertino has never done that. I believe other cities like uh Santa Clara, Milpitas they do use bond measure to pay for the new city hall.
Segment 5
[03:00:00] Vice Mayor Liang-Fang "Liang" Chao: ...to pay for their capital improvements. I understand, bond measure, if you are doing a bond measure for City Hall, likely people won't support that. If you do a bond measure for a park or a nice art building, swimming, aquatic center, likely people will support that. So, yeah, just one, but I think we have to talk about it.
[03:00:35] City Manager Tina Kapoor: You are correct, Vice Mayor. Generally bond measures that go to the voters, so you're not putting up kind of one of the city's existing properties as collateral, right, go to the voters and the voters have to pass it and it's actually a higher margin that they have to pass it by, so I think the two-quarter vote is what they have to pass it by. Historically, and what we heard back in 2015 as well from the consultants that were there, is City Halls on their own don't pass. Community centers, police stations, fire stations, libraries, if you could package it with something else, you might have a better chance, but if it's just a City Hall on its own, then generally voters aren't willing to vote to pass that bond to be able to finance just a City Hall. I will say other cities in the past when redevelopment money was available, that was a mechanism that a lot of other City Halls throughout the state were actually rebuilt during that time using those funds, but those are no longer available. But I did want to point it out for other City Halls that may have been built during that time.
[03:01:39] Vice Mayor Liang-Fang "Liang" Chao: Is it any possibility to get grant funding for seismic upgrade?
[03:01:44] City Manager Tina Kapoor: We've asked this as well, and generally that's not something that grant funding is available for.
[03:01:51] Chad Mosley: We do continue to monitor grant opportunities though, and we have a grants management analyst who will be helping us with that as well, so we'll keep an eye on.
[03:02:01] Vice Mayor Liang-Fang "Liang" Chao: Thank you.
[03:02:04] Mayor Kitty Moore: Great. Councilmember Mohan, do you have any further questions or will we?
[03:02:08] Councilmember Sheila Mohan: I can wait till after public comments if that's where you're going.
[03:02:13] Mayor Kitty Moore: Yes, that is. Thank you. So now we're going to open it up for public comment. Madam City Clerk, are there any members of the public wishing to comment?
[03:02:20] City Clerk Kirsten Squarcia: Yes, Mayor. I have two requests from in Community Hall. I have five requests virtually, so that will take us to about 30 minutes... 35? I think I'm tired tonight. 21 minutes. Thank you. So we have Jean Bedord followed by Rhoda Fry. Welcome Jean.
[03:02:57] Jean Bedord: Is this the right height? That's fine. Good evening, Mayor Moore, congratulations, Vice Mayor Chao, Councilmembers, and staff. My name is Jean Bedord and I'm a long-time Cupertino resident. I'm glad that you're finally doing something about City Hall. As Vice Mayor Chao has indicated, we've spent 20 years kicking the can down the road. I am speaking tonight to address the total cost of this project. Susan Michael has done an outstanding job on this proposal. However, I'd like to see the big picture. First of all, what's going to happen with the Torre Avenue building? I realize it was an interim solution, but, you know, we need to have some sort of how does it fit in. That has an estimated cost of $7 million to renovate. Secondly, what's the plan for relocation of staff? They cannot work in a construction zone. And I think this should be a high priority because that's going to be the first step. I urge the staff to investigate the buy versus lease options because this is a time where commercial real estate is not doing well and it's an opportunity, keeping in mind that a buying opportunity means the city has an asset at the end of the period rather than lease payments, which are sunk costs. Now, the last thing I have to do, the last question for you is that as a resident, I would like to see some community benefits. You're spending $54 million and guess what? We still have the same old building. And the architecture is dated and it doesn't really fit in with the two other buildings around Civic Plaza. So I would like to see you add in something that is truly a community benefit. The parking is the obvious one because I hear so many complaints about being able to find parking. So my ask for you is to provide the bigger picture so that we have a better idea of what all will be happening. Thank you for the opportunity to speak.
[03:05:53] City Clerk Kirsten Squarcia: Thank you, Jean. Next we have Rhoda Fry. Welcome Rhoda.
[03:06:00] Rhoda Fry: Hi. We, uh, I don't know, a little over a year ago we kind of went down this path of speculative real estate investments. Um, I don't think we should be buying a building because it's a good deal right now to house employees during construction. I do agree with Ms. Bedord regarding looking at things holistically. What's going on with City Hall? What's going on with Torre? And oh by the way, what about the boots on the ground folks, the folks at the public facilities building? And I haven't been there, but I'm sure that we might hear about if it needs anything because those are the folks that are going to be needing to help out if we have a problem. I'm just, as I was sitting here, I thought about another idea was if we are going to do something with Torre and we should be looking at this in a holistic way, I'd almost think about using the bottom floor at City Hall as extension parking for city employees so we'd have, it would free up more parking and then we wouldn't need to build new parking and then the rest, then we could split people up at Torre. I don't know whether that's possible. I haven't looked at the numbers, but anyway, thinking about that. The other thing that concerns me is the financing. Given the city's financial situation, I don't know how easy it would actually be to float bonds at this point. And then moving forward to the cost of the sheriffs escalating and other costs as well, but as we add more residents with this, I want to say I'm going to say draconian housing plan that we have to adhere to, we're going to be needing to add sheriffs and how is that going to get paid for? It is not going to get 100% paid for or even close to paid for with the real estate tax revenue. We're going to need to get that from somewhere. So we really need to anticipate more expenses per resident. And finally, I'm concerned about how just spending down our reserves, has that actually been properly noticed on the agenda? You know, if we're going to move forward with a project, we have to figure out where the money is going to come from and have we really delved deep into that topic? Finally, way back when, I remember we were going to do, I'm just going to call it something easy, super-duper seismic at Torre, basic seismic at City Hall, and call it a day. So I'm kind of surprised to see it going in this other direction. Maybe we would have EOC at City Hall. I don't know, but good luck. You got tough decisions to make.
[03:09:03] City Clerk Kirsten Squarcia: Thank you, Rhoda. And now we will move to those members of the public requesting to speak virtually. There are five. San Rao, David Y, Ram Sripathi are the first three. Welcome, San.
[03:09:22] San Rao: Good evening, Mayor Moore and Councilmembers, speaking on behalf of myself only as a resident. I urge you to take absolutely no action tonight. I am dismayed and shocked that this is an action calendar item. Why is this not a study session item? Why is this not community outreach before you move forward? 54 million is a lot of money. I sent in written comments on this item. I would like us to understand firstly, how we are going to use our staff in the event of an event such as this. Is this a readiness question? Is this a life safety question? Why do we need to have this item prioritized over readiness of the service yard for public works field workers that are actually going to be needed to be operational and ready to go to clear fallen trees and anything else that may have occurred? I would like you to come back with attachments for the ACES 41 results specifically when it was conducted, what those results are, and whether it shows Tier 1 or Tier 2. And if it is Tier 2, is it for life safety, immediate occupancy, or collapse prevention? You cannot be approving 54 million without spending the time needed to get public input and the time needed to see those results. I am shocked at how this agenda was set. And if this came from the City Manager, I am shocked that the City Manager would attempt to move this forward to action calendar without multiple study sessions. This is just appalling. And I hear talk from staff that a bond measure would not pass. Listen to the voters. If it doesn't pass, don't do it. Please don't try to push things through if voters do not want to see it. This is really amazing that you're willing to go with a 54 million vote in one session here. Secondly, there are other cities in the same situation. They have gone through this. You do not need a consultant to do a study session for that. Let's get staff to come back with what those other cities have done and let's understand what was spent. There are several cities that had City Halls built between the 60s and the 70s. We need to do the frugal option. We need to do the minimal option. We do not need a remodel. We do not need an MEP refresh. We can have the CUD director waive code that is part of anything non-essential. Let's have detailed study sessions, community outreach, and at any rate, move nothing forward today. I also want to say discussion of how you spend budget dollars is not on the agenda and any discussion of that is a Brown Act violation. And I asked at me and Ruse to please ensure that only item on the agenda is discussed. We were told during the ACFR that we are not going to talk about reserves and budget spending, and now here we are talking about how to spend dollars. Thank you.
[03:12:25] City Clerk Kirsten Squarcia: Thank you, San. Next we have David Y followed by Ram Sripathi followed by Lisa Warren. Welcome, David.
[03:12:36] David Y: Good evening. 54 million dollars for a City Hall is wildly out of scale. It was originally budgeted closer to 7 million. It's an eight-fold increase that is just not normal. So please do the minimum possible and do not let this happen under your watch. Thank you.
[03:12:58] City Clerk Kirsten Squarcia: Thank you, David. Next we have Ram Sripathi followed by Lisa Warren followed by Tracy Castle-Sheron. Welcome, Ram.
[03:13:09] Ram Sripathi: Okay. Hello? Can you hear me? Yes. Okay. Good evening and I guess it's kind of late and I don't want to hold you guys too long. Thanks for staying up so long. When I just got to know about this 54 million expenditure, it's kind of shocking to me that no one, anywhere, no one knows about this expenditure. So my request to the City Council is to basically hold multiple study sessions as everyone was mentioning and then come to a decision. And also we don't know what the situation, what the reserve situation with the city is also. If we spend 54 million, how much is left in case of, you know, a few bad years? We know the economy is also pretty, I mean, there's a lot of AI spending, but then there's not really good, the economy is not so strong. So I would hope that we don't spend all our money now and, you know, keep money for a rainy day and hopefully when the economy is stronger we can build and maybe in the meanwhile we find interim solutions that work for everybody. And that's all I have to say. Thank you.
[03:14:23] City Clerk Kirsten Squarcia: Thank you, Ram. Next we have Lisa Warren followed by Tracy Castle-Sheron followed by, and Tracy will be our last speaker. Welcome, Lisa.
[03:14:32] Lisa Warren: Thank you. Um, thank you once again to Susan Michael and Chad for doing this again. First I want to say I'm so frustrated that we had a good plan three years ago that got totally and irresponsibly ditched. And so here we are. We still have a problem we've had for a long time. It's a safety problem. Is there a better way to do things? Do we spend money now that would cost more later to not do it all at once? Speaking of the level two and level four and other things probably. You know, who knows? These are people on staff trying to do their best to inform the best they can and try to pick up pieces that got left behind in a really shitty way. Never should have happened. Sorry. Three years ago. So yeah, the cost has gone up. Surprise. What hasn't? So at least now it sounds like we have a better estimate of what the number is. Do I have a strong opinion one way or the other of what, how to move forward right now? How much time do we have to, I won't say waste because it wouldn't be waste, how much time do we have to tolerate to get this dialed in more to something that everyone's comfortable with? Because things aren't going to get cheaper and things aren't going to get safer. So I'm not sure what I'm trying to say, but I'm guessing that my thoughts are similar to many people's that might be listening or would be listening. We gotta do something and you have very professional staff in our CIP department to give us good information. And so I'm glad that your decision will be based on that and I know you'll all ask great questions that you may not have already asked. But it's a tough thing. But it's unfortunate that we're here again after there was a plan in place that we could be halfway done at less cost. That's it.
[03:17:13] City Clerk Kirsten Squarcia: Thank you, Lisa. And our final speaker is Tracy Castle-Sheron. Welcome, Tracy.
[03:17:23] Tracy Castle-Sheron: Good evening. Thank you so much staff for the report. So my comments are echoing a lot of what you've heard previously. 54 million dollars to upgrade a City Hall in which 120 employees work. And we're looking at an 18 million dollar deficit by 2030. Even if we can technically fund this proposal in its entirety, what is the opportunity cost? What other work and projects that serve more of the community would we be forgoing by doing this? And so I go back to what is the goal. According to the background in the staff report, the original problem statement was a seismic retrofit. Then you have the second problem statement around mechanical, electrical, plumbing. Are both of these priorities or is it just seismic retrofit? Because the picture changes pretty substantially depending on what you're actually trying to do. But you know, assuming your goal is seismic and maybe some mechanical, electrical, and plumbing, I see other costs here that don't quite seem related. So you've got $14 million in soft costs. And then there's $1 million in audio visual equipment. Is this related and necessary to a seismic retrofit? Can it be separated out? I understand that we have a pretty sizable IT budget. So should IT costs be part of this? You've got $1.9 million for furniture and equipment. And again, is this part of seismic? Is it not? How do we take down these costs? Because again, this is a relatively small city. 3 million dollars for consultants. Is there a way to bring this number down? Is there a way to solicit multiple bids? And then, you know, in Attachment C, there's some interesting separation of costs where you've got planning and then you've got other planning, you've got construction costs and you've got other construction costs. You know, if the public can get more clarity on what is being proposed here, that would be helpful. I was also interested in the permitting fees. Is the city charging itself? How does the permitting fees work and can that be cut down? There's a lot of money going towards permitting fees. So, you know, I guess I would just ask, this is reminiscent of the Memorial Park project where a simple park renovation somehow turned into 80 million dollars and now you have a seismic retrofit that is multiples of what it was supposed to be. So I just ask please if you can find a way to make this back into the reasonable project that it was. Thank you very much.
[03:19:54] Mayor Kitty Moore: Thank you, Tracy. Mayor, no additional requests to speak on this item.
[03:19:59] Mayor Kitty Moore: Thank you, Madam City Clerk. I have a quick question with regards to how the... there's a request to see if we could just do the seismic retrofit, and I know that things, once you start down that path, it starts opening up other issues. So could you explain how that happens?
[03:20:28] Susan Michael: Thank you, Mayor. So if you go in to do a project based on the cost and the scope of the project, you are required to meet other building code requirements. And in this case, if a seismic upgrade is an $8 million project, that would require that the building be 100% accessible, it meets the building codes for accessibility 100%. It also would require upgrades of the HVAC and other Title 24 energy requirements. So by doing an $8 million seismic retrofit, we are required by law, by code, to do the other things. That is to say that is a... there's a certain level of renovation that is mandated by code. We are adding on some discretionary things, which is to renovate the interior of the building so that it's more efficient and updated. That would, for community benefit, would result in some community meeting rooms, for example, which we don't have at this point. And so that would... there's going to be benefit and it's also going to make sense that if you're going to put all this money into a project that you would have something that would look and feel new at the end of it as well. So hopefully I answered your question.
[03:21:55] Mayor Kitty Moore: Yes, you did. Thank you. Any questions from the Council? Vice Mayor?
[03:21:59] Vice Mayor Liang-Fang "Liang" Chao: Okay. Yeah, you mentioned about community benefits. Okay, first the minimum project is seismic retrofit, but then the HVAC, there are some things that's very outdated currently in the City Hall, so those have to be replaced. And then some discretionary things is the discretionary thing is the interior design. That's about $1 or $2 million dollars, right? So if we don't do that, we... if we do that, we actually would be able to create this community benefits, which would be extra meeting room for the community because right now we have basically two very small meeting rooms. So with $1 or $2 million dollars, we can create more community benefit on top of this seismic retrofit.
[03:23:49] Susan Michael: Thank you, Vice Mayor. Generally that is correct. I would say that the discretionary cost is more like 8 million, not 1.2 million. And it's all kind of amorphous right now.
[03:24:02] Vice Mayor Liang-Fang "Liang" Chao: That's between Option B and C, right?
[03:24:06] Susan Michael: Between B and C, it's 8.2 million. Yeah.
[03:24:09] Vice Mayor Liang-Fang "Liang" Chao: So the discretionary, with Option C, includes some discretionary.
[03:24:15] Susan Michael: Yes, it does.
[03:24:16] Vice Mayor Liang-Fang "Liang" Chao: Those would create more community benefit. We can choose not to do that, then the City Hall will just not have any interior upgrade.
[03:24:29] Chad Mosley: Correct. Yes.
[03:24:30] Vice Mayor Liang-Fang "Liang" Chao: Okay. And so there was a question of how does the Annex fit in in the picture and where the staff would work during the construction. That's about one year of time?
[03:24:49] Susan Michael: The Annex is more than a year away, but we will be completed with the Annex before construction begins on the City Hall. The plan is that staff would move into the Annex. We can take 30 to 35 people for the Annex and then after that we would work on different ways to seat staff, take care of the working conditions in the interim solution. That's, we could rent spaces, we can create spaces in buildings that we already have, we can leverage telework. There's many options to consider and we've started to look into them frankly.
[03:25:32] Vice Mayor Liang-Fang "Liang" Chao: So there is a question of why should we even do the upgrade for City Hall, why don't we do seismic retrofit for the other buildings, service... other city facilities? Are they... do they have similar type of seismic deficiencies?
[03:25:54] Chad Mosley: And I can add a little bit of flavor to that. There were some concerns about the service center where our maintenance workers are because they are a first responder group. But I mean, to a certain extent, keep in mind all city council or all city staff are first responders. But to go back to that facility, it's a single-story wood structure and they function inherently different than a two-story concrete building and the concern of total collapse for that building is much reduced compared to the City Hall.
[03:26:32] Vice Mayor Liang-Fang "Liang" Chao: Okay. But I think there is some retrofit being planned for the service building too, right?
[03:26:39] Chad Mosley: There was discussion a number of years ago to enhance the service center to turn it into an EOC, but those ideas kind of took a side seat.
[03:26:55] Vice Mayor Liang-Fang "Liang" Chao: Not EOC, but I kind of remember in the potential CIP list there is some enhancement being planned also for the service center.
[03:27:06] Susan Michael: There were multiple projects around 2018, I think it was, that were looking at upgrading the buildings at the service center. I can't say why that those didn't proceed, but it never went any past planning.
[03:27:24] Vice Mayor Liang-Fang "Liang" Chao: So those are still on the list of future projects? Okay. There's a question of why don't we buy a building rather than renovate. If we buy a building, are we going to sell this one? I don't know. If we buy a building, that building also needs to be renovated. Then we will... the City Hall will be far away from the library. So I think that's a totally different question. Yeah. Okay, that's all.
[03:28:30] Mayor Kitty Moore: Councilmember Mohan?
[03:28:33] Councilmember Sheila Mohan: So after listening to all these discussions and sort of keeping in mind that this project has been postponed for 20 years at least, I think we should move forward. And I also understand that 54 million is not to be paid for by the one-time funds that we have. But I'm also looking at the five-year scope of the project and for to do the schematic design it would cost about 2.5 million and that's really the step one. But I'm also thinking that you would have to go out to bid, right? These are your estimates. So there's a good chance that some of these numbers will come down?
[03:30:23] Chad Mosley: We think that the estimates are pretty solid, but yes, there's a potential that they could come in lower. There's a potential that they'd come in higher too. We do believe that our estimates are relatively conservative, so we would hope they would come in lower, but we can't guarantee that, right? These are very solid estimates.
[03:30:46] Councilmember Sheila Mohan: Right. And if it comes higher, we would have the option of trimming down some of the costs to get it to where we want it to be.
[03:30:58] Chad Mosley: Yeah, within reason, right? We have that discretionary $8 million dollars.
[03:31:04] Susan Michael: For all contracts, they're substantial, we, consultants and contractors, we competitively... we conduct a competitive process for cost and scope.
[03:31:17] Councilmember Sheila Mohan: Right. So my suggestion would be to fund the schematic design for the next year. We're not really committing $50 million dollars or $40 million dollars or anything like that at this point, although we should have a fair sense of wanting to have this project go through. I mean, it's not just a 2.5 million for a consultant study and have it sit on the shelf for another decade or so. So I think if we all want this to move forward, we have to at least go to first base. And in this case, that would be the schematic design cost that we will have to put in with the assumption that over the next few years, things could change. Maybe our revenues will increase. Maybe not. But we will have many choices where we can move forward or pull back. But if we don't move forward at this point with a fairly reasonable, I mean, cost, we won't get anywhere and we will be just debating this forever and ever.
[03:33:28] Mayor Kitty Moore: Thank you. Thank you.
[03:33:30] City Attorney Floy Andrews: Mayor? I'd like to note that it's 10:25 and if you would like to hear the other minor items on the agenda, you should extend the meeting, otherwise this will be our last item.
[03:33:42] Mayor Kitty Moore: And we're able to complete this item?
[03:33:44] City Attorney Floy Andrews: Yes, you are. As long as you do so before 11, in which case we would have to extend the meeting at that time.
[03:33:49] Mayor Kitty Moore: Does the council have an appetite for extending the meeting at this time or shall we just continue on to complete this item?
[03:33:59] Councilmember R "Ray" Wang: Doing a voice poll. I don't have any more time on the other end of this, so I'd like to end at 11 if possible.
[03:34:09] Mayor Kitty Moore: So does that mean we are just going to continue this one item?
[03:34:12] City Attorney Floy Andrews: Correct. That's fine.
[03:34:14] Councilmember Sheila Mohan: Oh, what else is there? There's nothing else, Mayor.
[03:34:20] Mayor Kitty Moore: We're going to talk about the...
[03:34:21] Councilmember Sheila Mohan: Is there an item 12?
[03:34:22] Mayor Kitty Moore: No, we do have future agenda items and reports if anyone wanted to be adding at that point.
[03:34:27] Councilmember Sheila Mohan: No, let's just do this one.
[03:34:28] Mayor Kitty Moore: So is it necessary to continue this? Do we have to make any motion or do we just continue this one?
[03:34:37] City Attorney Floy Andrews: No, you just keep going. I'm just giving you the heads up.
[03:34:40] Mayor Kitty Moore: Very good. I do want to mention the 2022 Civil Grand Jury report. I'm going to quote it. And again, remember I was on the City Hall subcommittee going over all of these issues and there is a very extensive webpage on it, but to quote this Civil Grand Jury report about Cupertino: "City staff voiced concern that their workplace, City Hall, had not been renovated and seismically improved. Although the 2015 City Council allocated funds for the renovation, the monies were subsequently redirected to expand the city library. Certain staff regard the present City Council's unwillingness to fund the renovation as confirmation that their health and safety concerns are not a priority." And actually back after Councilmember Willie and myself had served on that subcommittee, we brought it to the Council and we approved that the 27 or 28 million dollar plan to do the renovation at that time. It went away. We're looking at it back again. I wish given the price that we had back then that, you know, time is money. So, Vice Mayor.
[03:36:38] Vice Mayor Liang-Fang "Liang" Chao: Thank you. So just for the record, I, the City Council had extensive discussion on the City Hall project back in 2022 and earlier in 2015 for a new City Hall. But in 2022, there was extensive discussion about how do we do a reduced cost option that so we focused on renovating only and the subcommittee was formed. And for the public member who were not involved with the council meeting back in 2022, you might be surprised, but then please check the meeting record. And I think the staff for the City Hall web page on the site that has a lot of documents. However, I think it would be beneficial if the list of dates of council meetings where the item is considered is also listed and the item, the description of each item, that would be helpful for the member of the public who haven't been following the item. And then I am, I'm sharing right now, oh sorry, this is the wrong... so there was a question about the agenda title for this one that how come we are looking at spending $54 million dollars. The agenda for this item is "determine City Hall projects scope, resources and consider approve budget modification in the amount of $54 million dollars". So it's clear in the agenda we are considering potentially allocating $54 million dollars for the project and potentially authorizing design delivery. So I think that's clear. I feel the price tag is very high and the Civil Grand Jury report, oddly it came out after the council was actively considering renovating the City Hall and spending dollar to make sure we have a safe... for the safety of the employee, and then we get criticized for not doing it. And then the City Council in 2023 decided to pursue a new City Hall again and we wasted two years doing that and then we find out that's not feasible and then we are going back. We keep going back and forth, back and forth, new, old, new, old, it's the price tag keep going up. I think we have to bite the, this is just going to be costing that much. And I would rather that we choose Option C where we would start with of course C.01 step with the design service. But then this make sure we allocate the full amount so that we don't spend it elsewhere in any other things because if we don't allocate, it's very easily next year we might spend it on something else. Then two years down the line we might find out, oh, we don't have money. And in case we might have other revenue source or financing option later, of course we can then use that other source of funding for the City Hall project, but I think it's better we just move for Option C for now.
[03:39:30] Mayor Kitty Moore: I believe I'm hearing Option C, Option C, Option C. I see that Councilmember Wang has his hand raised. Yes?
[03:39:42] Councilmember R "Ray" Wang: I do, I do. And I do have one question for staff before I jump into my comments. I have a question about the rules and the guidelines for Title 24 and retrofit standards. My understanding is if our focus is solely on seismic safety improvements, we can have exception to certain requirements if we don't have changes in occupancy and standards or intensify the hazard potential. Is that correct?
[03:40:22] Susan Michael: Thank you, Councilmember. There are some exceptions, but it doesn't extend to an $8 million project. I think that's a lower threshold.
[03:40:37] Councilmember R "Ray" Wang: Is it the value of the project or is it the scope of the seismic retrofit?
[03:40:43] Susan Michael: It's both. So we would be impacting 100% of the building. It's not like we're doing one corner of it. I feel like I'm getting into detail that we'd have to substantiate better by going through the code, but we have investigated this and we don't really have a loophole to avoid doing this work.
[03:41:08] Councilmember R "Ray" Wang: I'm not looking for a loophole, I'm looking for something that's more fiscally viable, but thank you for that response. Maybe we can delve a little bit deeper into that back to a point from the residents about having a study session because we are spending $54 million. I'll jump into my comments. Look, I know I ran on resident focused and fiscal accountability and I'm definitely feeling this from the residents in the comments. But I do want to acknowledge staff, they have put a lot of work into this many times, many false starts. But I believe we have three priorities here that we think are very important here. One, we have to have an EOC in good shape and use some of that building for construction to staff folks, I'm glad that we addressed that. Two, addressing the safety of employees is important, but we also have to be fiscally responsible. So I'd feel more comfortable with a comparative retrofit study. Pick your favorite one if you want to use an ASCE 41-23, that's fine. And I'd like to know if the retrofits could be 1/5th or 1/10th or 1/13th the cost of new construction. And I'd like to know what the retrofit costs are for Risk Level 2 versus Risk Level 4. Also from my understanding, if the focus is solely on seismic improvements, I want to make sure we explored whether we can get exemptions to some of these Title 24 standards that require the ADA issue, that require changes in... that don't have any impact because we're not changing occupancy standards or intensifying the hazard potential. And I'd like to know if we could get a statement on that at least. I also want to know what we need just if it's an MPE upgrade. That stuff is pretty old, thank you for letting me see it. It is pretty old and you probably do need an upgrade there, but maybe we do that after the seismic upgrade. And then of course, I think community benefits would be good to consider. It would be nice to see if there's a PPP out there as well that we could explore. I know that's a very low probability. And last of all, we now have an idle funds policy thanks to Mayor Moore and other individuals and it's important to invest the capital to cover some of the funding for activities. So we don't really want to spend down that capital, but we also need to get our finances to revenue positive first so we can get the participation bonds and fund that if this is going to be five years out. So you may fund some of it from some of the cash we have now and fund it from different areas. So I see possibilities there, but at this point I will not be supporting a move forward until we answer some of these questions, which are questions that could have been answered in a study session for the public. So thank you.
[03:43:21] Mayor Kitty Moore: Councilmember Fruen, did you want to weigh in?
[03:43:24] Councilmember J.R. Fruen: Just a couple of points and quick clarification. Was there, you know, back in 2022 there were some figures that were presented as potential costs and I recall there being one that was famously labeled as $7 million for the seismic retrofit. But what I'm understanding, and I want to make sure is clear for the public, is that that $7 million is just that piece, but it is not possible to actually just do that piece alone. The doing so triggers other build-out requirements in order to comply with code, correct?
[03:44:02] Susan Michael: That is correct.
[03:44:03] Councilmember J.R. Fruen: Okay. All right. So it was never actually possible to do just a seismic retrofit at $7 million.
[03:44:08] Susan Michael: That is correct.
[03:44:09] Councilmember J.R. Fruen: Okay. All right. And then, you know, your briefings were very helpful to us. It sounds like you also managed to do a lot of refinement of what costs really were compared to what they looked like in 2022. But in addition to that, in 2022, we never considered things like soft costs in any of those cost estimates, correct?
[03:44:28] Susan Michael: Correct. It wasn't fully considered.
[03:44:30] Councilmember J.R. Fruen: Okay. So there's just a bit of an apples to oranges comparison that I think is unfortunately permeating a lot of the discussion. I think that's unfortunate. You know, I do have a quick question for Councilmember Wang. If you know you aren't comfortable with Option C tonight, would you be comfortable with Option A, which at least gets our feet wet in that direction?
[03:44:57] Councilmember R "Ray" Wang: That's a great question. I just hope that as a council, if we were spending this much money, we would at least create a study session for the public. That's all. That was my only thing because we espouse transparency and we espouse, you know, that participation and maybe that's a great way to clear out all the conversations and maybe if I'm misled in terms of what was required for a retrofit, it's a great time to do that there. I'm not trying to delay the project from that point of view. I'm trying to make sure that the public is with us if we're spending $54 million. Even if we're spending 2.6 to get to 54 million, it's the same process. So thank you.
Segment 6
[03:45:00] Chad Mosley: That's what this Option A would be is we would get in, we would do those studies, really kind of refine this down and get a cost at the end that's tight. I mean, not that this isn't tight, but I'm talking getting it really tight.
[03:45:15] Mayor Kitty Moore: Is it a wood frame roof by the way that has the clay tile over it?
[03:45:23] Staff: It's a mix of wood and steel. There's some steel elements. There's some wood. It's a mix.
[03:45:29] Chad Mosley: I know there is wood but...
[03:45:30] Mayor Kitty Moore: Okay. And have you made some consideration for how to bring natural light in with some modifications of the existing roof?
Segment 5
[03:45:35] Councilmember J.R. Fruen: Yeah, I certainly appreciate the point. I also appreciate the point that the Vice Mayor is raising about, you know, we've had a lot of this study before in 2022. We did a lot of outreach at the time. There was a lot of consideration then and maybe it's now past time to really get the ball rolling. So yeah, I'm torn on the issue, but I appreciate you giving it some second thought.
Segment 6
[03:45:40] Staff: Yes. Right now there's HVAC on the roof and we'd have to find another place for that, but that— I want light in the building, so yes.
[03:45:59] Mayor Kitty Moore: Okay, good. And I really, with Tori, I really did like the graphic images of the interior opening that all up. So I'm hoping something like that can happen. The center part of Community Hall, the lobby is very, very large and there's one employee there. And then you have the very large Council Chambers. So to me, going short of just doing a seismic retrofit, beefing up the walls in the downstairs for instance, changing the roof, it leaves all the potential of reworking the interior space off the table. So I don't think that's the way to go at all because there is so much that can be done with what's there. I really like the idea also that you're saying about redoing the windows. I think that's really important. So is it, if you go with Option A, is it stalling off the future of the project?
Segment 5
[03:46:02] Mayor Kitty Moore: So what would the difference be between going with Option A and Option C?
[03:46:10] Chad Mosley: I think with Option A, it allows us to get in, study it a little bit more. It's like I said, it's Option C.01, so we're moving towards Option C, but we're only allocating $2.5 million dollars. We get in, study a little deeper, see if there's any way to... there are some of the seismic upgrades that are considered that need a little more additional review and upon that additional review may be able to pulled out. So that's what this first step allows us to do.
Segment 6
[03:47:00] Staff: I don't think so. There's a couple of ways to look at it. Option A, we hire a bridging architect, we hire a construction manager, we start to do layouts, we can get better pricing because we've started to actually have things that are concrete to talk about right now, or conceptual. But with some drawings and specifications, we can actually get better pricing, we can look at the actual structural work. For example, we're talking about taking off the roof because it's too heavy. What are the cost implications of that? What are the scope implications of that? So we get that team together earlier to figure out what efficiencies we can gather. So it just starts the ball rolling so that we can ask better questions, we have a better budget. So then the next step after we hire those two consultants would be to get better cost estimates and we seek further commitments to go for permit. So in some ways Option A is a pay-as-you-go option. And the downside is there isn't a long-term commitment to the project, so there may be processes along the way that derail it.
[03:48:10] Mayor Kitty Moore: I see. So I do think that the public from the moment this building started back in '65 with the public choice to put the clay tile roof which was heavier on top, that there's been a lot of public debate about it that is not always been in the best interest of the structure. And it was very, very sad about the '87/'88 retrofit not being up to the code at that time. And that was discovered, I believe in around '05. It was known that that issue has been here. And so it's 20 years. Yeah. 20 years that this has been talked about and all these different plans and it's time that we actually prove that we care about the health and safety and welfare of our employees and really do something about it. Would somebody like to make a motion?
[03:49:05] Vice Mayor Liang-Fang "Liang" Chao: Okay. So I'll make a motion for... is... so we are going with Option A. That's the staff recommendation. But it doesn't say A, B, C. So what's the recommendation for...?
[03:49:22] Councilmember J.R. Fruen: As a point of information, I think the staff recommendation is actually Option C.
[03:49:30] Vice Mayor Liang-Fang "Liang" Chao: Option C, yeah. Yeah. I think so. Actually, I had a question. So if we go with Option A, can we continue to keep the 64, 54 million in reserve? And because my concern is we would go spend it. So we can... if we continue to do that, then we can do Option A. So how would you recommend we modify the recommendation for Option A?
[03:50:05] Chad Mosley: I think... excuse me Mayor. I think if we... when it comes to the recommended action, we want that direction for one, which I think everybody's on board. For Section 2, we could modify that to appropriate $2.5 million. Do we need the design build at this point in time? Yeah, we need the design build at this point in time also. So basically you could modify Section 2 to just have funding at $2.5 million.
[03:50:30] Vice Mayor Liang-Fang "Liang" Chao: Section 1 would be the same.
[03:50:33] Chad Mosley: Section 1 would be the same.
[03:50:35] Vice Mayor Liang-Fang "Liang" Chao: Yeah.
[03:50:45] Mayor Kitty Moore: You could perhaps clarify by saying we're moving forward with Option 1 and the recommended action will be modified Item 2 to 2.5 million from 54 million.
[03:50:58] Vice Mayor Liang-Fang "Liang" Chao: Right. Okay. So moved.
[03:51:02] Mayor Kitty Moore: Second. Madam City Clerk, will you please conduct the roll call vote?
[03:51:09] City Clerk Kirsten Squarcia: Yes, Mayor. Councilmember Fruen?
[03:51:10] Councilmember J.R. Fruen: Aye.
[03:51:11] City Clerk Kirsten Squarcia: Councilmember Mohan?
[03:51:12] Councilmember Sheila Mohan: Aye.
[03:51:13] City Clerk Kirsten Squarcia: Councilmember Wang?
[03:51:15] Councilmember R "Ray" Wang: No.
[03:51:16] City Clerk Kirsten Squarcia: I actually missed that. Was that a Yes?
[03:51:18] Councilmember R "Ray" Wang: No. That was a No.
[03:51:21] City Clerk Kirsten Squarcia: Okay. Nay. Vice Mayor Chao?
[03:51:24] Vice Mayor Liang-Fang "Liang" Chao: Aye.
[03:51:25] City Clerk Kirsten Squarcia: Mayor Moore?
[03:51:26] Mayor Kitty Moore: Aye.
[03:51:27] City Clerk Kirsten Squarcia: The motion carries with Wang voting No.
[03:51:29] Mayor Kitty Moore: All right. Thank you very much. Thank you all for coming out this evening. Please have a safe and enjoyable, happy New Year, and we will see you all in 2026. Thank you and good night. This meeting is adjourned.
[03:51:48] City Clerk Kirsten Squarcia: Excellent. Thank you.