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Item No. 3 (continued) Mayor Stangel invited anyone else present who wished to speak to do so. No one wished to speak. M /S: Biagi /Bury to close the public hearing. Carried unanimously by voice vote, and public hearing closed at 9:27 p.m. City Manager Smith noted for the record that the need to maintain an efficient water system is a community problem; that a capital replacement and /or improvement program is essential tp protect an investment of approximately $64.7 million in the water system; that the recently voter approved Gann Initiative (Proposition 4) restricts the use of water revenues for other than water department purposes and, requires the system to be self- supporting through user fees; that in past years the water system was subsidized by the General Fund which is no longer possible in any case; and requested that the ramifications of not increasing water rates be considered. Discussion followed and Mr. Smith and Mr. Addiego replied to questions and commented regarding the possibility of spreading the proposed increase over a longer period or more evenly over the years suggested, and the capital expenditures needed. In response to question as to whether, since Council has been alerted to the potential of seismic problems relating to the water system, the City might have any liability in that regard if a serious earthquake should occur, City Attorney Schricker advised that the possibility of liability does exist. M /S: Britschgi /Biagi to refer the subject report back to staff so that staff can analyze the input both from the Council and the speakers here tonight and that the staff come back to Council with their future recommendations based on the comments they have heard. Carried unanimously by voice vote. MINUTE ORDER NO. 83 -73 ---------------------------------------------------------------------------------- (Council recessed from 9:40 to 9:48 p.m.) REPORTS OF BOARDS AND COMMISSIONS 4. Legislative Committee Report 83 -3 (301 -06) Vice Mayor Britschgi, Chairman of the Legislative Committee, presented the subject report and asked Councilmen Bury and Biagi, the other members of the Committee, to present parts of the report. Councilman Bury presented recommendations 1 and 4. Vice Mayor Britschgi presented recommendations 2, 5 and 8. Councilman Biagi presented recommendations 3, 6 and 7. Reg.Mtg. 5/16/83 Page 4 MINUTE BOOK NO. 44 Page No. 128