Roll call of Councilmembers present: Joseph Franco, Rod De Boer, Douglas Sayers, Cheryl L. McDonald and Mayor Lino P. Callegari.

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1 SUSANVILLE CITY COUNCIL SUSANVILLE COMMUNITY DEVELOPMENT AGENCY SUSANVILLE MUNICIPAL ENERGY CORPORATION SUSANVILLE PUBLIC FINANCING AUTHORITY Regular Meeting Minutes January 18, :00 p.m. City Council Chambers 66 North Lassen Street Susanville CA Meeting was called to order at 6:00 p.m. by Mayor Callegari. Roll call of Councilmembers present: Joseph Franco, Rod De Boer, Douglas Sayers, Cheryl L. McDonald and Mayor Lino P. Callegari. Staff present: Robert Porfiri, City Administrator/Finance Director; Peter M. Talia, City Attorney; and Debra M. Magginetti, CMC/City Clerk. 1 APPROVAL OF AGENDA: Motion by Councilmember De Boer, second by Mayor pro tem Sayers to approve the agenda as posted; motion carried unanimously. 2 PUBLIC COMMENT REGARDING CLOSED SESSION ITEMS (if any): Mr. Porfiri provided an oral update on the status of any open labor negotiations. 3 CLOSED SESSION: At 6:02 p.m., the City Council recessed to Closed Session in the upstairs conference room to discuss the following: A PUBLIC EMPLOYEE PERFORMANCE EVALUATION pursuant to Government code 54957: 1 Title: City Administrator/Finance Director 2 Title: City Attorney B CONFERENCE WITH LEGAL COUNSEL Existing litigation pursuant to Government Code (a): 1 City of Susanville and County of Lassen vs. California Department of Corrections and Rehabilitation; California Department of Parole (AKA Division of Adult Parole Operations); and Does 1 through 20 inclusive, Lassen County Superior Court Case No United States District Court Case No. 2:10-CV MCE-GGH, Nancy Schwartz v. Lassen County, et al. 3 City vs. Brett Womack, Womack Construction and Does 1-5, Lassen County Court Case JC City vs Bob Russell, Theresa Russell and Does 1-5, Lassen County Court Case JC55270 C CONFERENCE WITH LABOR NEGOTIATOR (2011/2012) pursuant to Government Code : Agency Negotiator: Robert Porfiri Bargaining Unit: Public Works Unit D PUBLIC EMPLOYEE APPOINTMENT pursuant to Government Code 54957: 1 Title: Police Chief 2 Title: Golf Course Manager 4 RETURN TO OPEN SESSION: The City Council reconvened in open session in Chambers at 7:00 p.m min

2 Staff present: Robert Porfiri, City Administrator/Finance Director; Peter M. Talia, City Attorney; Debra M. Magginetti, CMC/City Clerk; Jeff Atkinson, Police Chief; Ted Friedline, Fire Chief; Jared Hancock, Senior Planner; Dan Newton, City Engineer; Craig Platt, Public Works Director; and Deborah Savage, Assistant to the City Administrator/Finance Director. Mayor Callegari led those assembled in the pledge of allegiance. Mr. Porfiri reported that the agenda had been approved as posted. Mr. Talia announced that no reportable action had been taken in closed session. Councilmember Franco offered the thought for the day. Proclamations, awards or presentations by the City Council: VFW Police Officer of the Year: Garrett Smith: Mayor Callegari presented a certificate acknowledging Officer Smith as the VFW police officer of the year. Eagle Scout Caleb Cervantes: Mayor Callegari read a proclamation recognizing Caleb Cervantes honor court and directed the Clerk to make it available to his family. Presentation of new Fire apparatus: Mayor Callegari invited everyone to go outside to view the new 1997 Seagraves pumper the Fire Department recently acquired. He recessed the meeting at 7:05 p.m. for this purpose. Mayor Callegari reconvened the meeting at 7:12 p.m. 5 BUSINESS FROM THE FLOOR: Mark Shaffer, fuels buyer for the HL Power hybrid geothermal/waste-wood power plant in Wendel, requested a letter of support from the City to expedite the movement of a PG&E contract amendment through the process. Councilmember Franco reported that he is very supportive of the project. Leo Guitierez, local property owner, remarked that in 1990, when Paul Bunyan Road was built by the County, he donated land to be used for the roadway, which was supposed to intersect with Numa Road. By constructing the roadway, a parcel was effectively divided. At the time, he had been told that the County would formally split the parcel to maintain the value of the divided parcels. For one reason or another, this wasn t done. Mr. Guitierez would like the City to prepare the parcel map for him. Jim Chapman, District 2 Supervisor, stated that he had been involved in the negotiations with the Guitierez family. He agrees with Mr. Guitierez that the parcel should be split at no cost to Mr. Guitierez. Mayor pro tem Sayers agreed that the matter should be resolved. Mayor Callegari thanked everyone for their comments. 6 CONSENT CALENDAR: Mayor Callegari reviewed the items on the Consent Calendar: A Waive the oral reading and approve minutes from City Council s November 16, December 7, and December 21, 2011 meetings B Approve vendor warrants numbered through for a total of $858,591.43, including $363, in payroll warrants C Receive and file Finance Director s reports 1 November, December, min

3 D Receive and file Treasurer s reports: 1 November, December, 2011 E Receive and file Quarterly report of TOT (July through September, 2011) F Ratify Mayor s appointment of Teo Lovin to the full-time, regular position of Clerk Typist II (Public Works/APCD, 122/A)) G Ratify Mayor s emergency appointment of Nick McBride to the full-time, temporary position of Firefighter I (915/A) H Approve Resolution No , Approving and authorizing Mayor to execute agreement with Nichols Consulting for SB90 reimbursement I Approve Resolution No , Amending Resolution No and approving appointments to various boards, commissions and committees Councilmember De Boer requested the removal of item 3A for separate discussion. Motion by Councilmember De Boer, second by Mayor pro tem Sayers to approve the Consent Calendar, with the exception of 3A; motion carried unanimously. Councilmember De Boer disqualified himself from consideration of the minutes of the November 16, 2011 meeting, citing his absence from the meeting. Motion by Councilmember De Boer, second by Mayor pro tem Sayers to waive the oral reading and approve the minutes of the Council s December 7 and 21, 2011 meetings; motion carried unanimously. Motion by Councilmember Franco, second by Councilmember McDonald to waive the oral reading and approve the minutes of the Council s November 16, 2011 meeting; motion carried. Abstaining: De Boer. 7 PUBLIC HEARINGS: 7A Abatement/lien on 9 Upland Street (APN ) 1 Public Hearing: Solicit and consider comments relative to collection of abatement costs on property located at 9 Upland (APN ) 2 Action: Consider Resolution No , Approving report on assessment and lien against property located at 9 Upland (APN ) Mayor Callegari opened the public hearing at 7:24 p.m. and requested the staff report. Chief Friedline reported that pursuant to the provisions of Chapter 28 of the Susanville Municipal Code, staff caused the abatement of rubbish and fire hazards at the property located at 9 Upland Street at a cost of $875. To date, the property owner has not reimbursed the City for this cost. Karen Dowden, property owner, was notified of the public hearing. There were no public comments. Mayor Callegari closed the public hearing at 7:25 p.m. Motion by Councilmember De Boer, second by Councilmember McDonald to approve Resolution No ; motion carried unanimously min

4 7B Abatement/lien on 426 Pardee (APN ) 1 Public Hearing: Solicit and consider comments relative to collection of abatement costs on property located at 426 Pardee (APN ) 2 Action: Consider Resolution No , Approving report on assessment and lien against property located at 426 Pardee (APN ) Mayor Callegari opened the public hearing at 7:26 p.m. and requested the staff report. Chief Friedline reported that pursuant to the provisions of Chapter 8.28 of the Susanville Municipal Code, staff caused the abatement of rubbish and fire hazards of the property at 426 Pardee at a cost of $455. To date, the property owner has not reimbursed the City for this cost. David Herndon, owner of the property, has been notified of the hearing. There were no public comments. Mayor Callegari closed the public hearing at 7:27 p.m. Motion by Mayor pro tem Sayers, second by Councilmember McDonald to approve Resolution No ; motion carried unanimously. 8 COUNCIL DISCUSSION/ANNOUNCEMENTS: No comments. 9 NEW BUSINESS: 9A Consider Resolution No , Approving and accepting FY 2010/2011 audit: Mr. Porfiri reported that the City has received an unqualified opinion on the City s basic financial statements. He thanked staff, particularly those in Finance, for all their hard work with the audit. He introduced Derek Rampone, audit manager for Moss, Levy and Hartzheim. Mr. Rampone discussed the audit in general terms. He spoke about the following in more detail: Page 1: Unqualified audit opinion. Page 25: Fund statement balance, net assets Page 65: Budget vs actual; $355,000 positive, which is better than expected Pages 28-29: Proprietary funds, net assets Page 53: Notes to financial statements Motion by Councilmember De Boer, second by Mayor pro tem Sayers to approve Resolution No ; motion carried unanimously. Mayor Callegari announced that the RDA audit would be heard out of order. He recesseed the City Council meeting at 7:30 p.m. 10 SUSANVILLE COMMUNITY DEVELOPMENT AGENCY: The Susanville Community Development Agency convened at 7:30 p.m. with all members present. 10A Consider Resolution No. RDA , Approving and accepting FY 2010/2011 audit: Mr. Rampone reported that the RDA audit had also received an unqualified opinion. The $668,801 RDA debt may not be recoverable min

5 Director Sayers commented that $668,800 is a great loss. He asked if there is any way to recover the amount. Mr. Porfiri responded that if the City had an active RDA, the loss would be greater. Motion by Director Sayers, second by Director De Boer to approve Resolution No. RDA ; motion carried unanimously. Chairperson Callegari adjourned the RDA meeting at 7:40 p.m. and reconvened as the City Council. 9B Consider Resolution No , Approving budget for golf course (next season); establishing fees: Mr. Porfiri reported that on December 13, 2011 the Golf Committee met and reviewed the golf course performance for the last year. Two proposals for leasing the golf course were also analyzed. The Committee recommended that both proposals be rejected and that City staff should operate the golf course for one more season. The main goal for staff will be to run the golf course in the most efficient manner possible, minimizing the costs of operations and continuing to explore solutions for the long term. Staff recommends only one small increase in golf fees ($50-increase for season pass). All other fees remain the same. Councilmember Franco commented that the beginning of the last golf season was hampered by rain, snow and bad weather. This season may begin earlier. He is confident that staff can run the golf course within the proposed spending levels. Mayor Callegari thanked Councilmembers Franco and McDonald, who serve on the Golf Committee. Motion by Councilmember Franco, second by Councilmember McDonald to approve Resolution No ; motion carried unanimously. 9C June 5, 2012 General Municipal Election: 1 Consider Resolution No , Calling for the holding of a general municipal election to be held on Tuesday, June 5, 2012 for the election of certain officers as required by the provisions of the laws of the State of California relating to general law cities 2 Consider Resolution No , Requesting the Board of Supervisors of the County of Lassen to consolidate a general municipal election to be held on Tuesday, June 5, 2012 with the statewide primary election to be held pursuant to of the Elections Code 3 Consider Resolution No , Adopting regulations for candidates for elective office pertaining to Candidates Statements submitted to the voters at an election to be held on Tuesday, June 5, 2012 The Clerk reported that a general municipal election has been scheduled for Tuesday, June 5, Three Council seats will be up for the full term of four years. In order to begin the process, the three Resolutions submitted for Council review and action should be approved. Motion by Councilmember De Boer, second by Mayor pro tem Sayers to approve Resolution No ; motion carried unanimously. Motion by Councilmember De Boer, second by Councilmember McDonald to approve Resolution No ; motion carried unanimously min

6 Motion by Councilmember De Boer, second by Councilmember McDonald to approve Resolution No ; motion carried unanimously. The Clerk reported that the period for filing nomination papers is February 13 through March 9, SUSANVILLE MUNICIPAL ENERGY CORPORATION: No business. 12 CONTINUING BUSINESS: 12A Discussion/direction relative to Johnstonville Water System: Mr. Platt reported that staff has reviewed various studies and reports on the water system. The County has operated the service area since 1995 with only one customer (Caltrans). The system has limited opportunities for expansion in the near future. The new rates currently paid by Caltrans ($18,000 per year) appear to be sufficient to run the system in the black, but it is important to plan for modest expansion, perhaps to include the Susanville Municipal Airport and the County Office of Education. It would be prudent to install an additional well for redundancy as customers are added. Mayor pro tem Sayers left the meeting at 7:55 p.m. and returned at 7:58 p.m. Mr. Platt advised that it the City agrees to take this system, it is important to maintain reasonable expectations for growth. The City cannot govern land use, but will require some jurisdictional authority in this service area. At this time, it is unclear what type of authority the City could expect in the service area. At a minimum, the City will need some assurance that sizable new developments would be required to install and dedicate water improvements and that existing residents would not be permitted to drill new wells, but to connect to the water system in the event of a failed well, if they are within a reasonable distance from a system water main. The City has experienced water personnel in its Public Works department. These employees are well versed in water distribution and treatment, pressure zone management, radio telemetry, SCADA systems, engineering and multiple other aspects of operating a successful municipal water system. It is logical that the City would use these resources to operate the Johnstonville water system insofar as it provides value to the City. Staff believes that assuming the operation of the system will provide a value to the City by using the infrastructure as a means of providing fire protection at the Airport and serving other institutional facilities in the area to offset the cost of maintaining and operating the system. This will always be dependent on the City s ability to operate and grow the system incrementally and to offset the cost of operations and maintenance. To enhance this ability, the City should work with the County to institute policies, regulations and /or other mechanisms that the City can use to grow the system. If the City Council determines that it should move forward with the acquisition of the water system, the next step in the process will be to define the authority and boundaries of a new service. Staff will work with both the County Planning department and LAFCo to accomplish the task. Mr. Platt believes that the success of the project relies on setting the stage properly. Mr. Platt shared two concerns: 1 The storage tank (120,000 gallons) has an extremely slow circulation, which is expected of a water system that has only one customer. The problem is that bacteria breeds in the stagnant tank, resulting in the use of gallons of bleach to maintain potable water. 2 A generic float system serves the tank, which results in water freezing at the top of the tank. Estimated cost for a submersible transducer with telemetry is approximately $5, min

7 He cautioned that the system is 17 years old, and some of the components are at the end their usable period. It appears that no maintenance has been done on the system since its installation. Councilmember Franco asked if the system had been scoped; Mr. Platt responded that this is an expensive procedure that has not been performed. Mayor pro tem Sayers asked why a back-up well would be needed. Mr. Platt explained that if the main well failed, there would be no water for the customers. This would be a problem if the system were even marginally expanded. Jim Chapman, District 2 Supervisor, stated that with only one customer, redundancy is not an issue. He stated that the County is now paying $30,000 per year in A87 costs. He advised that the water system is a good acquisition for the City, one that can be conveyed at no cost, as-is, and that the only condition that the County has with the transfer is that fire flow be provided to fire-fighting agencies. He believes that someday, the system will be a valuable asset for the City. Councilmember Franco commented that the Council had asked Mr. Platt for a full and accurate analysis of the system, and he has provided that. Mayor pro tem Sayers commented that he is supportive of taking the system on. Mr. Platt advised that because the system is outside the city limits and the City s sphere of influence, the City lacks police powers as well as any jurisdictional authority, unless this is granted by the County and LAFCo. He believes that the system can be transferred free and clear, without debt, to the City, that a new service area should be established, and a mechanism for growing the system should be included with the transfer. Mr. Talia added that a great deal of intellectual work remains to be done. Councilmember Franco commented that it s in the best interests of the community to take the system over. Mr. Chapman agreed, characterizing the system as an under-utilized asset. It was the consensus of the City Council to move forward with the acquisition. 13 CITY ADMINISTRATOR S REPORTS: 13A Streets/Snow/Golf budget update: 1 November, December, 2011 Mr. Porfiri and Mr. Platt reviewed the budgets. 13B Natural gas utility update: 1 November, December, 2011 Mr. Porfiri and Mr. Platt reviewed the utility s activities. 13C Standard and Poors City General Fund rating: Mr. Porfiri reported that in response to revenue shortfalls, California has begun to transfer certain state programs to local governments in what has been termed as the state s realignment plan. As part of this effort, the State Senate recently passed SB 89, which reallocates motor vehicle license fee revenues from general purpose allocation to cities and counties to law enforcement grant programs. Under the old program the City had pledged the VLF for payment of its 2002 lease revenue bonds. Since the State no longer pays VLF to the cities and as a consequence the min

8 money is not available to guarantee the payment on the debt, Standard & Poors reviewed the City s ability to meet its obligations and reassessed its credit-worthiness. This review was basically a review of the City s General Fund and the strength of its tax base and finances. The result of the review is a A rating with stable outlook for the City s General Fund. This is an exceptionally good rating particularly in these rough economic times. Councilmember Franco commented that this is reflective of the four years of significant improvement and positive progress for the City. Mr. Porfiri agreed and referred to the City s steadily increasing fund balance, in spite of the elimination of the City s day care program in D Work-in-progress schedule: Mr. Porfiri referred to the work-in-progress schedule, and asking for Council direction at a future date with respect to prioritizing projects that the entire Council may not be aware of. Mayor Callegari commented that he s asked staff to look into what it would take to bring a dialysis unit to Lassen County. Supervisor Chapman indicated that this is something he believes the Board of Supervisors would support. Councilmember Franco remarked that he s looking forward to seeing a plan for Susanville beautification, advising that the City must lead the way by cleaning up some of its own properties first. 14 COUNCIL ITEMS: 14A AB1234 travel reports: Mayor Callegari reported on his trip to Sacramento (City of Susanville and County of Lassen vs. California Department of Corrections and Rehabilitation; California Department of Parole (AKA Division of Adult Parole Operations); and Does 1 through 20 inclusive, Lassen County Superior Court Case No ) to argue the merits of the case before the Appeals court. Mayor pro tem Sayers commented that the streets in town are pretty rough. Mr. Platt reported that he will be bringing a streets improvement plan for consideration by the Council in the next few months. 15 ADJOURNMENT: Motion by Councilmember De Boer, second by Councilmember Franco to adjourn the meeting; motion carried unanimously. Meeting adjourned at 8:50 p.m. Respectfully submitted by Debra M. Magginetti, CMC/City Clerk Lino P. Callegari, Mayor Approved on February 15, min