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Council terminates agreement with PBID after organization loses nonprofit statusThe City Council Wednesday had to terminate its five-year agreement with the Downtown Property Based Improvement District because the organization lost its corporate nonprofit status last year. The PBID was created by the City in 2006 to provide public services in downtown Morgan Hill that go “above and beyond” the City’s basic level of service, according to City staff. These services are mostly infrastructure related and have included the purchase and installation of benches, maintenance of sidewalk planter boxes, installing holiday lighting on Monterey Road and banners and flags on light posts for special events. The district has been funded by the downtown property owners themselves - including the City - who assess a parcel tax on themselves to fund the downtown improvements. The district raised about $51,000 last year, but now that the Internal Revenue Service has revoked the PBID’s nonprofit status there will be no assessment for the 2013-14 fiscal year, according to City staff.Now the City will hire a certified public accountant to conduct an audit of the PBID’s remaining funds, and seek a different nonprofit to run the district and keep its planned activities going, City staff said. The City may legally only work with nonprofit corporations in the administration of PBIDs. The PBID lost its nonprofit status in 2012 due to an accounting error - an accountant hired by the PBID to manage its finances failed to file annual paperwork required in order to renew and preserve the nonprofit standing, according to PBID board member Majid Bahriny. “Now we are in the process of redoing that, and until we do we will have to put everything on hold,” Bahriny explained. The IRS also told the PBID that it owes back taxes for 2012 - the year it was not listed as a nonprofit - but Bahriny said they should be able to regain the status retroactively, which would lower or eliminate that tax burden. The downtown area has benefited significantly, at no cost, from the PBID, according to City staff. The City does not have the funds to continue the services the PBID has provided.“The PBID is a tremendous asset to the community,” Morgan Hill Economic Development Manager Edith Ramirez said. “It provides added services to this district that otherwise wouldn't be provided because the city couldn't afford to.” Council approves union contractsThe Council also voted to approve new two-year contracts with two of the three unions who represent City employees Wednesday. Both agreements require the individual employees represented by those unions to pick up more of the cost of their CalPERS retirement benefits, according to City staff. The agreements are with the 13-member Community Service Officers Association (which represents non-sworn public safety personnel), and the 80-member American Federation of State, County and Municipal Employees.Both contracts began retroactively on July 1. Both agreements give the employees a 2-percent raise for each of the two years, and require the employees to split the City’s share of annual CalPERS rate increases equally.The agreement with AFSCME also requires members of that group to pay their full employee’s share of CalPERS costs, which is 8 percent of their salaries. Until now, the City has paid 7 percent of that cost, asking the employees to only pay the remaining 1 percent.The AFSCME contract also gives those employees a 7 percent raise to compensate for their additional PERS contributions.The Council has already approved an agreement with the Police Officers Association.All three employee agreements strive to meet the Council’s and City Hall’s long-term goal of reducing the taxpayers’ burden for public employees’ retirement benefit costs, according to a City staff report.

MHPD arrestsAssault with a deadly weaponErick Garcia, 18, 9:05 p.m. July 12, on Vineyard Boulevard.DUIWilliam A. Capogeannis, 40, 12:35 a.m. July 6, on East Dunne Avenue.Enrico A. Stephenson, 42, 1:09 a.m. July 6, on Monterey Road. Al E. Silvas, 55, 12:21 a.m. July 9, at Tennant Station. Daniel T. Daly, 21, 10:13 a.m. July 13, at Olive Avenue and Watsonville Road. Cayetano Cruz, 46, 12:06 a.m. July 15, on West Dunne Avenue. Controlled substanceBrian K. Marx, 2:41 a.m. July 6, on Condit Road, for being under the influence. Bianka M. Carranza, 19, 1:35 a.m. July 8, at Main and Hale avenues, for being under the influence. Marisa Paduani, 31, 12:50 p.m. July 9, on Butterfield Boulevard, for being under the influence. Hector Valenzuela, 20, 2:10 a.m. July 12, at Main and Hale avenues, for being under the influence. Robert A. Frescas, 47, 4:34 a.m. July 12, at Monterey Road and Central Avenue, for possession of paraphernalia. Raul G. Peres, 36, 4:40 a.m. July 13, at Madrone Parkway and Monterey Road, for possession of narcotics. Petty theftKelly B. Nguyen Hien, 36, 6:07 p.m. July 6, on Cochrane Road. Destruction of jail propertyJuanita M. Gutierrez, 52, 12:32 a.m. July 7, on Monterey Road. BatteryRyan C. Rosen, 28, 12:49 a.m. July 7, on Monterey Road. Driving without a valid licenseAreli Lopez, 24, 11:21 p.m. July 8, at DeWitt and Dunne avenues. Jose C. Betancourt, 38, 1:01 p.m. July 10, at Monterey Road and East Dunne Avenue. Marianna Bravo, 28, 11 p.m. July 10, at Monterey Road and Vineyard Boulevard. Daniel T. Cocio, 21, 5:44 a.m. July 11, on Burnett Avenue, also on suspicion of DUI. Janet M. Barrett, 51, 10:16 a.m. July 11, at Monterey and Old Monterey roads. Robert Valle, 24, 3:23 p.m. July 13, at San Pedro Avenue and Church Street. Drunk in publicRyan C. Rosen, 28, 12 a.m. July 10, on East Dunne Avenue. LoiteringTrinidad Zamaripa, 38, 4:42 p.m. July 11, on Tilton Avenue. Michael A. Chavarria, 20, 4:42 p.m. July 11, on Tilton Avenue. Possession of stolen propertyMichelle M. Hollendung, 32, 4:42 p.m. July 11, on Tilton Avenue. WarrantDavid S. Cruz, 56, 8:04 p.m. July 11, at the Morgan Hill Police station, 16200 Vineyard Blvd. Craig C. Fox, 43, 9:59 p.m. July 14, on Vineyard Town Center Way.VandalismKathleen Marzano, 61, 9:28 p.m. July 13, on Depot Street. 

Fountain Blues Festival: The 33rd annual Fountain Blues Festival will be held from noon to 8 p.m. Saturday at St. James Park, North First and St. John streets, in San Jose. Advance tickets are $15 and available online at fountainbluesfestival.com, or $20 at the gate. Kids 12 and under free with adult.

The Morgan Hill City Council voted Wednesday to sign a “letter of intent” to purchase about 21 acres in the Southeast Quadrant to develop a public baseball and softball field complex. The proposal was met with some criticism from local residents and an environmental advocacy group who are wary of the City’s larger proposal to annex the majority of the 1,200-acre SEQ and control its future growth with land use and zoning. The agreement with the current property owner, NMSBPCSLDHB LP, is a “non-committal” agreement to purchase the property for about $5 million, according to Morgan Hill Program Administrator Anthony Eulo. The letter of intent establishes a 90-day “due diligence” period in which the City will “conduct...any and all inspections, measurements, investigations and tests” it needs to determine if the property is suitable for ball fields and related facilities.The vacant property is near the intersection of Condit Road and Tennant Avenue, and is bordered on the west and northwest side by the U.S. 101 northbound off-ramp, and on the south by Fisher Avenue.The four Council members present at Wednesday’s meeting (Councilman Rich Constantine was absent) voted to approve the agreement. The Council approved the letter of intent without discussion after midnight, near the end of a meeting that lasted almost six hours. Mayor Steve Tate said after the meeting that the Council has discussed the property as well as other parcels they have considered for ball fields several times over the past year in closed sessions, where real estate negotiations are permitted. The owners of nine different properties contacted the City last year to offer to sell their land for City sports field uses, and Tate said the one in the letter of intent best met the City’s needs. “That one fit the best in terms of how we could lay out the fields, the proximity to the freeway, and the whole notion of the Southeast Quadrant of having commercial and recreational near the freeway, and more permanent agriculture as you move to the east,” Tate said. “That’s still our vision, and we’re still pursuing it.”Gordon Jacoby, a representative of NMSBPCSLDHB LP and a longtime Morgan Hill developer, addressed the Council Wednesday before the vote. Even though some of the criticism of the proposal said the purchase was “premature,” Jacoby noted that the property has been publicly labeled as a possible future site for sports and commercial uses for several years - since the City first unveiled its plans to annex and regulate about 760 acres in the SEQ. It will likely be several months before the City begins to design, plan and build the sports facilities which include six baseball/softball fields on the property. The property will require an environmental study if the City decides to go through with the purchase, according to City staff. The City will use money from the park impact fund to finance the property purchase, according to City staff. City staff and the Council began looking for property for new ball fields last year, and received proposals from the owners of nine different properties in and around the City who were willing to sell their land. New ball fields have been part of the City’s long-term parks and recreation plans for several years.Plus, the City’s focus on the SEQ plans has centered around promoting sports and athletics-related uses in the area, which already houses the Outdoor Sports Complex and the Aquatics Center. “We are doing this, in part, because we like baseball,” Jacoby told the Council Wednesday. “We know you’re trying to brand the area, and we believe in that. We know you have families, and kids that want a chance at some time to be able to be the Mariano Rivera out there, and have people excited.” The property is part of a larger, 26-acre parcel, according to the letter of intent. The letter gives NMSBPCSLDHB the right to lease the five to six acres that is not part of the ball fields site from the city, and to eventually repurchase those acres from the City for $1. NMSBPCSLDHB plans to develop those five to six acres for future commercial uses.“This very project on our property, in 2009 or 2010, was described (by authorities) as being half ball fields and half commercial,” Jacoby told the Council. The Committee for Green Foothills sent the Council a letter prior to Wednesday’s meeting opposing the property purchase and ball field plans. Developing sports fields is inconsistent with the City’s own General Plan, displays a “predetermined outcome” to the City’s long-brewing SEQ proposal and is an unwise use of the City’s precious resources, according to the letter from CFG Environmental Advocate Julie Hutcheson. In 2010, the County agency tasked with approving annexations cited a number of concerns with the SEQ project, the letter noted. And the City is having difficulty convincing the County to permit another proposed annexation of about 67 acres south of south of Watsonville Road, according to the letter. That proposal has been on the agenda of the last two meetings of the County’s Local Agency Formation Commission’s board of directors, but a decision has been delayed each time. It is next scheduled for consideration by the LAFCO board in October. Plus, the proposal to purchase the property for ball fields contradicts recent public input about the City’s current plan to update the General Plan, the CFG letter says. “Since the property in this (letter) is located in the SEQ, and listed as prime farmland...that is presently being farmed, entering into this (agreement) would put the Council at odds with expressed community desires for the City’s future,” the letter says. Also opposed to the proposal is Morgan Hill resident and former Councilman Mark Grzan, who sent the Council three letters detailing his concerns. Grzan also said the proposal violates the General Plan and it would build over prime agricultural land. And he thinks the purchase is not the best use of the City’s money. The property, as well as the entirety of the SEQ, is currently in the land-use jurisdiction of Santa Clara County. The City is preparing a draft environmental study of the SEQ, which will be available for public review by next month, according to City staff.“The staff report indicates that there would be recreational and economic benefit, however there is neither data nor analysis provided to indicate how this project was to meet recreational needs, nor does it state its economic benefit,” one of Grzan’s letters to the Council states. Vice Mayor Gordon Siebert said after the meeting that keeping the property agricultural is a noble motive, but it’s “not likely” even if the City doesn’t end up using it for ball fields. “The City is trying to secure it as open space park land, in perpetuity,” Siebert said. “The alternative is it would be sold for development purposes. We’re trying to do the better alternative.”