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City Desk: Nov 12, 2014

Friday Night Study Session Covers Electric Rate Hikes, Draft Preservation Ordinance, New Development Plans

Last Friday evening the Santa Clara City Council held a study session, with a jam-packed agenda that included several potential “lightening rod” issues. The Friday meeting and its lengthy agenda apparently caught the Council by surprise. Before discussing any of the 11 agenda items, the anomaly of a Friday night meeting itself came under scrutiny.

“We had three months of very, very short Council meetings, ” said Council Member Lisa Gillmor. “So Mr. Mayor, I’m wondering why we’re even here tonight and why we weren’t hearing these items at a regular Council meeting where we can discuss, take action and get the public’s input.

“People expect us to do business during business hours during the week, on Tuesday evenings,” she continued. “We’ve had half hour- … [and] hour-long Council meetings, very short, no business on the agenda, and tonight here we are with 10 really important things … What’s the purpose of this and why can’t it be at a Tuesday night meeting?”

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“This is similar to the development review sessions we’ve had, as an early review,” answered Mayor Jamie Matthews. “They’ll all come forward at a regular agendized meeting. This is not dissimilar to our goal-setting sessions … it’s an opportunity for Council Members to provide input on some concepts … staff has indicated they are ready to go.” The study sessions were providing, he said, more – not fewer – opportunities for input.

“I agree with all that,” said Gillmor. “But it should take place on a Tuesday evening. I hope you appreciate that the perception out there is bad … Three days after an election we have really important [discussion] on a Friday evening.”

“So noted,” replied Matthews. “Let’s move forward … rather than berate what hasn’t happened.”

5% Electric Rate Hike Proposed

Silicon Valley Power (SVP), Santa Clara’s city-owned electric utiloity, is asking for a five percent rate increase, effective Jan. 1, 2015 – $2 to $3 for residential customers – because costs are up while revenue is down. By comparison, PG&E’s rates increased 6.9 percent in 2014 (PG&E had asked for an 18 percent rate hike), 4.6 percent in 2015, and 5 percent in 2016. SVP’s rates increased 5 percent in 2014, after three years without an increase.

The current drought is one cost driver: the City is getting only about half the normal amount of hydroelectric power (9 percent). To cover the shortfall, SVP must buy more power from the market, adding $9 million in costs. Other cost increases include higher transmission cost and lower revenue than forecast.

To cover the shortfall, SVP used $10 million from its Rate Stabilization Fund (RSF), and another $15 million will be needed this fiscal year to close the gap.

Maintaing the RSF in one factor – along with cash flow and City willingness to raise rates for financial stability – that supports SVP’s A+ bond rating. Right now the RSF is $87 million. The 2014 target was $120 million.

SVP’s bonds pay for electric generation investments; protecting Santa Clara from power crises like that of 2000 – with its rolling blackouts and spiking prices – by making Santa Clara self-sufficient in power. Plus, these investments replace reliance fossil fuel power plants with renewable power generation. The interest rate difference between ‘A’ and ‘B’ bonds can be five points or more, so a higher electric rates potentially save millions in interest.

SVP projects that the rate increase will increase SVP revenue about $7 million this fiscal year, $16 million in FY 2016, and restore the RSF to $120 million by June 2019. The utility is also implementing additional cost reduction efforts to accelerate this, according to the agenda report. The Council will vote on the increase at the Nov. 18 meeting.

General Plan Update Due in 2015

In 2015, Santa Clara will update its 2010 General Plan. A lot of the revisions result from new state requirements, according the City Planning Director Kevin Riley. “The goals and policies are essentially unchanged.”

There are also some new opportunities for housing, said Riley. The City needs to add at least 4,000 new units of housing, which is well within Santa Clara’s current plans. Amendments include formal adoption of “reasonable accommodations” for disabilities, “proactive” transitional and supportive housing zoning that will allow these uses in any part of the city, emergency homeless shelters as a permitted use in industrial areas, and density bonuses.

Affordable housing incentives are also going to be considered in the coming year. “Cities are beginning to look at economic development impact fees for affordable housing,” explained City Manager Julio Fuentes. Find the 2010 General Plan at santaclaraca.gov/index.aspx?page=1263. The amendments will come to the Council for approval on Dec. 8.

Development Fee Credits

The Council discussed the threshold for crediting back 50 percent of development fees for including open space in developments. “The best way to get park space is to build it into the development,” observed resident Kevin Park. ” I’ve heard [developers] come in an say ‘we’ve got landscaped sidewalks.’ … Those don’t count as open space. There is no way children are going to play on those sidewalks … It has to be usable open space. [It’s not just] plants or you’re not building something there. It has to be usable open space … And if we don’t plan the pace into our projects, where are we going to get it?”

To watch the meeting and read the agenda reports, visit tinyurl.com/nov7ccplanning.

Saratoga Ave. Development Decision Slated for Nov. 18 Meeting

At its Nov. 18 meeting, the Council will vote on the development proposal for 166-170 Saratoga Ave. (corner of Saratoga and San Tomas). The proposal for 33 townhouses on the 1.74-acre parcel first came to the Council last August. Currently, there are two single-family homes and the remnant of an orchard in the parcel, which is the last remaining piece of the original 1841Quito Ranch land grant. For more background, visit tinyurl.com/baytosaratoga.

Also on the agenda for Nov. 18, is approval of Phase II of Irvine’s Santa Clara Square retail/office development (Bowers and Augustine). But probably the one thing that will excite Santa Clarans is that Irvine has signed Whole Foods as a tenant for the phase I, expected to be completed in the fall of 2015.

The draft historic preservation ordinance could also come before the Council on Nov. 18.

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