Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
City Council - Regular Meeting - Mar 4, 2013
&RXQFLO0HHWLQJ1R±0DUFK 3OHGJHRI$OOHJLDQFH $:LVKLQJWREHKHDUGZDV-RKQ.UXHVHOZKRZDVFRQFHUQHGDERXWWKHEDUJRLQJLQWR WKHEXLOGLQJ¶VEDVHPHQWQH[WWRKLVDQWLTXHEXVLQHVV+HLVFRQFHUQHGZLWKWKH LQFUHDVHLQQXPEHURIEDUVLQDVPDOODUHDRIGRZQWRZQDQGZKRZLOOEHUHVSRQVLEOH IRUGHEULVFOHDQXSIURPODWHQLJKWEDUDFWLYLW\ :LVKLQJWREHKHDUGZDV0DF+DPLOWRQ+HVROGWKHEXLOGLQJ0U.UXHVHOLV VSHDNLQJRIDQGDJUHHVWKHUHDUHPDQ\EDUVLQDVPDOODUHDGRZQWRZQEXWWKH SHUVRQZLOORZQWKLVEXLOGLQJDQGIHHOVWKH\ZLOOKDYHWKHEHVWLQWHUHVWRIWKHDUHD DQGZRUNZLWKRWKHURZQHUVWRNHHSWKLVDFOHDQDQGVDIHGRZQWRZQDUHD %$FWLQJ3UHVLGHQW6WDYHUFDOOHGWKHPHHWLQJWRRUGHUDWHVWHU*ROI &RXQWU\&OXE±-XQH *DPEOLQJ±3UHPLVH3HUPLW 2OPVWHG&RXQW\+RFNH\±3DSS\¶V3O DFH &RXQFLO0HHWLQJ1R±0DUFK 0LVFHOODQHRXV$FWLYLWLHV 0LFNH\¶V,ULVK6DORRQ±6W3DWULFN¶V'D\,ULVK)RRG±0DUFK &RXQFLO0HHWLQJ1R±0DUFK '6HHDWHQGRI'LWHPV '$GRSWHG5HVROXWLRQ1R &UXVKHG5RFN3HD*UDYHO3ODQW0L[HG%LWXPLQRXVDQG(PXOVLILHG$VSKDOW '6HHDWHQGRI'LWHPV '$GRSWHG5HVROXWLRQ1RH[HFXWLQJ6XSSOHPHQWDO$PHQGPHQWZLWK 0DMHVWLF+RPHV,QFIRU0RUULV+LOOV6HFRQG6XEGLYLVLRQGHVFULEHGDVSDUWRIWKH 1(ó1(ó6HFWLRQ7RZQVKLS &RXQFLO0HHWLQJ1R±0DUFK 'WKH&RXQFLOFDQGHFLGHKRZWKH\ZRXOGOLNH WRUHYLHZWKHLQIRUPDWLRQ '&RXQFLOPHPEHU:RMFLNWKDQNHGWKH53($DQGRWKHUHPSOR\HHJURXSVIRUZRUNLQJ ZLWKWKH&LW\DIWHUVRPHJURXSVDOUHDG\KDGDJUHHPHQWVLQSODFHEXWZHUHZLOOLQJ WRQHJRWLDWHWKHODERUDJUHHPHQWVDQGVWDWHGKHZRXOGEHZLOOLQJWRUHYLVLWLI QHHGHG&RXQFLOPHPEHUV:RMFLNPRYHG+UXVNDVHFRQGHGWRDGRSW5HVROXWLRQ1R DSSURYLQJWKH5RFKHVWHU3URIHVVLRQDO(PSOR\HHV¶$VVRFLDWLRQ &ROOHFWLYH%DUJDLQLQJ$JUHHPHQW$\HV 1D\V 0RWLRQFDUULHG &RXQFLO0HHWLQJ1R±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³5HSODFHPHQWDQG5HSDLURI3XEOLF6LGHZDONDW9DULRXV/RFDWLRQV:LWKLQ 5RFKHVWHU0LQQHVRWD´$\HV 1D\V 0RWLRQFDUULHG '0D\RU%UHGHKRZWKLVSURMHFWZLOODIIHFWWUDIILFGXULQJWKH&RXQW\)DLU 5LFKDUG)UHHVHVWDWHGWKHFLW\LVZRUNLQJZLWKWKH&RXQW\)DLU%RDUGDQG&RXQW\ 3XEOLF:RUNVWRFRRUGLQDWHDFFHVVWRWKHIDLUJURXQGV 0D\RU%UHGHDVNHGLIWKHUHDUHDQ\SODQVIRUDSHGHVWULDQFURVVZDONDWWKHVRXWK HQWUDQFHWRWKHIDLUJURXQGV &RXQFLO0HHWLQJ1R±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³SXEOL FLQWHUHVW WRYDFDWH´0U6YHQE\VKDUHGWKDWWKH&LW\&KDUWHUVWDWHVWKDWWKH&LW\FDQQRW YDFDWHDSXEOLFZD\XQOHVVDFRPPRQFRXQFLOILQGVWKDWWRGRVRLVLQWKHSXEOLF¶V LQWHUHVW,QWKLVFDVHWKHDSSOLFDQWRZQVWKHVHYHQSURSHUWLHVDGMDFHQWWRWKHDOOH\ WKHSURSHUW\WRWKHHDVWLVVHUYHGE\WKHH[LVWLQJSRUWLRQRIWKHDOOH\WRUHPDLQDQG VW WKHUHLVDQRUWKVRXWKGHGLFDWHGDOOH\WKDWJRHVRXWWR6WUHHW6:0V0HDQV DVNHGLIWKHUHDUHDQ\SODQVIRUEHUPLQJDURXQGWKHSDUNLQJORWWRVKLHOGWKLVIURP QHLJKERUV0U7RLQWRQVWDWHGDODQGVFDSLQJSODQWKDWZLOOEHVXEPLWWHGWKDWZLOO SURYLGHVFUHHQLQJIRUWKHSDUNLQJORW &RXQFLO0HHWLQJ1R±0DUFK &RXQFLOPHPEHU:RMFLNDVNHGLIHYHU\SLHFHRISURSHUW\WKDWKDVDFFHVVZLOO PDLQWDLQSXEOLFDOOH\DFFHVV0U7RLQWRQVWDWHGWKH\ZLOOXSRQFRPSOHWLRQRIWKH SURMHFW0U:RMFLNDOVRDVNHGLIWKHSXEOLFDOOH\DFFHVVPHHWV3XEOLF:RUNV¶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±0DUFK QG :LVKLQJWREHKHDUGZDV-DFN+DZNLQVRZQHURI&DURXVHO)ORUDODOVRVWDWHGWKHVHDUHODUJHVHPLWUXFNV QGQG :LVKLQJWREHKHDUGZDV3HWHU3DVDOLVRZQHURI &RXQFLO0HHWLQJ1R±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¶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±0DUFK :LVKLQJWREHKHDUGZDV&KULV)ORRGUHVLGHQWRIWKH.XW]N\3DUNQHLJKERUKRRG 0U)ORRGDVNHGLILWZDVVWLOOWKHSROLF\RIWKH&LW\WRQRWDOORZRQHZD\DOOH\V 5LFKDUG)UHHVHIURP3XEOLF:RUNVVWDWHGKHLVXQDZDUHRIVXFKDSRVLWLRQWKDWWKH &RXQFLOKDVWDNHQ0U)ORRGDVNHGLIWKLVZDVQRWWKHSRVLWLRQWDNHQIRUWKH%¶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±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±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±0DUFK WK VWDWHGWKHFORVLQJRIIRI$YHQXHZDVDUHTXLUHPHQWE\01'RWWRDOORZWKH LQWHUFKDQJHWREHEXLOW :LVKLQJWREHKHDUGZDV&RQVWDQWLQH%DUEHVKRPHRZQHUZLWKSURSHUW\DGMDFHQWWR WK WKHFKXUFK0U%DUEHVVWDWHGWKHLUGULYHZD\H[LWVRQWR6WUHHW7KHZLGHQLQJ WK RI6WUHHWDQGWKHPHGLDQEHLQJSODFHGWKHUHSUHYHQWVDZHVWHUO\H[LWRXWRIWKH %DUEHV¶GULYHZD\)URPWKHHDVWWKH%DUEHV HVZLOOEHXQDEOHWRWXUQLQWRWKHLU GULYHZD\ZLWKRXWSDVVLQJWKHGULYHZD\DQGPDNLQJD8WXUQDWWKHQH[WURDG7KH RWKHURSWLRQZRXOGEHIRUWKH%DUEHVHVWRGULYHWKURXJKWZRPLOHVRIUHVLGHQWLDO WK DUHDEHKLQGWKHPRIIRI6WUHHW0U%DUEHVVWDWHGWKDWWKHFKXUFK¶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¶VUHTXHVWEXWWKHUHDUHRWKHU LQWHUHVWVWKDWQHHGWREHFRQVLGHUHG &RXQFLOPHPEHUV6Q\GHUPRYHG:RMFLNVHFRQGHGWRDSSURYH2IILFLDO6WUHHW0DS &RXQFLO0HHWLQJ1R±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¶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±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¶V +RVSLWDODIWHUWKHUHFHQWDQQRXQFHPHQWRI0D\R¶VDPELWLRXVJURZWKSODQ0U +DPLOWRQDVNHGWKH&RXQFLOWRVXSSRUWWKHXQDQLPRXVUHFRPPHQGDWLRQRIWKH 3ODQQLQJ&RPPLVVLRQE\GHQ\LQJWKHFKDQJHRISODQDQGGRZQ]RQLQJ :LVKLQJWREHKHDUGZDV+HUPDQ+RUPHO0U+RUPHOVWDWHGKHSXUFKDVHGDKRPH LQWKLVQHLJKERUKRRGDQGZRXOGOLNHWRFRQWLQXHOLYLQJWKHUH0U+RUPHOUHTXHVWV WKDWWKH&RXQFLODSSURYHWKH]RQLQJFKDQJHWR5DQG5; &RXQFLO0HHWLQJ1R±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±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±0DUFK WK PDNLQJVXUHDQG6WUHHWDUHQRWDIIHFWHGDQGWKDWWKHSURFHVVEHWZHHQ WKH+DPLOWRQ-XGLVFKJURXSDQGWKHQHLJKERUVFRQWLQXH &RXQFLOPHPEHU:RMFLNVWDWHGKHLVDSSUHFLDWLYHRIERWKVLGHVRIWKLVLVVXHZRUNLQJ WRJHWKHULQJRRGIDLWKDQGWKHSURJUHVVWKDWKDVEHHQPDGHDQGGRHVQRWZDQWWR KLQGHUWKLVSURJUHVV0U:RMFLNVWDWHGMXVWDVWKH&RXQFLOZDVQRWZLOOLQJWR FKDQJHWKH]RQLQJEHFDXVHRIWKHSHQGLQJSURMHFWKHDOVRGRHVQRWWKLQNWKH\ VKRXOGEHZLOOLQJWRFKDQJHWKHXQGHUO\LQJ/DQG8VH3ODQ0U:RMFLNLVLQIDYRURI VXSSRUWLQJWKHVWDII¶VUHFRPPHQGDWLRQSDUWLFXODU O\LGHQWLI\LQJWKHORZGHQVLW\DUHD WKWK 0U:RMFLNVWDWHGKHLVXQFHUWDLQRQKRZWRKDQGOHWKHò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±0DUFK (LOGHUEDFNVHFRQGHG WRDGMRXUQWKHPHHWLQJ$\HV 1D\V 0RWLRQFDUULHG BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 'HSXW\&LW\&OHUN