The discussion was brought to light by Mayor Pro Tem Curtis Wright and City Manager Brian Loventhal. Loventhal said the city's current ordinance defines what a floor area is, and within that definition counts 50 percent of a basement in a two-story structure in the total floor area of a residence. By the wording of this definition, Wright said, the ordinance favors single-story structures.

"Two-story structures are not in and of themselves bad," Wright said.

Wright said the ordinance, by including basements in overall floor areas, is prohibiting some Monte Sereno residents from making other changes to their homes.

"Basements should be basements," Wright said. "They can't be seen."

Mayor Erin Garner said the roots of the ordinance stem from trying to address some of the massive-home issues of the city. Councilman David Baxter, who has served on the city's site and architecture committee, said the ordinance encourages basements to discourage massive floor areas aboveground.

"People didn't want 'monster' houses built next to them," Garner said.

Garner added that a sprawling one-story structure with a large basement is better than a sprawling two-story house. But Wright said he thought the site and architecture committee should be preventing massive looming structures, rather than this ordinance addressing them.

"I understand what you were trying to do," Wright said. "I just don't think this ordinance does what you wanted it to do."

Councilman Mark Brodsky used the example that if he wanted to build a wine cellar in his basement, it could prevent him having any leftover floor area to improve his aboveground kitchen.

"This [ordinance] restricts me from my creativity," Brodsky said. Brodsky added that he would like to see where the 50 percent clause has actually reduced the mass of homes.

Loventhal claimed the ordinance has been beneficial because discussions have taken place between the city's planning staff and homeowners, who are now thinking more about how they design their spaces. Garner said the council will return to discussing this issue in 2004.

The council members also discussed state budget implications for the city's finances, specifically referring to the vehicle license fee. Loventhal recently submitted a letter to Gov. Arnold Schwarzenegger, Senator Bruce McPherson and Assemblyman Joe Simitian, urging them to support an upcoming bill. The bill would appropriate the VLF backfill for cities and counties to protect funding for police and fire protection, public health and other local services.

The city of Monte Sereno currently budgets $170,000 as VLF revenue, but Loventhal said the city has only received about $40,000 of that funding from the state thus far. So in its worst case, the city would suffer a loss of $130,000. But because the city has been running in a surplus budget, Loventhal said, this setback would not push the city's budget into deficit—at least for this year. Garner said he and Baxter plan to draft a long-term fiscal policy that would explain that the city always strives to maintain a surplus or balanced budget.

"In the event we do get VLF funding totally stripped, we are going to have to get creative going into next year," Garner said.