Cordell, the strongest advocate for campaign contribution and spending limits, and Morton, the sole opponent of the limits, both voted against sending the issue to a council subcommittee for review Monday night.
Cordell and Councilman Peter Drekmeier introduced the proposal, which would mandate a $350 cap on contributions a council candidate receives from an individual or organization, with an annual increase to match inflation. They also recommended developing a voluntary spending program that would reward candidates who agree to curb spending below an agreed-upon limit, such as $25,000.
Cordell said she hoped to preserve the "trust and integrity of city elections ... and level the playing field (for candidates)."
"This is not reacting to a problem that currently exists," Drekmeier said, contrasting it to government's usual reactive response to negative situations. In other communities, such as Sunnyvale and Menlo Park, however, donations have reached $100,000, some from developers or other sources that do business with the cities, they said.
"We want to keep things nice and clean here in Palo Alto," Drekmeier said.
But Morton, acknowledging his position wasn't politically correct, said setting limits implies Palo Altans aren't trustworthy and that the city harbors "dirty people."
"Why do we do things that don't need doing?" he asked.
While Morton voted no because he opposes limits, Cordell voted no because she wanted to pass a contribution limit Monday evening, in time for the November election, which will have four open council seats and for which candidates have already started forming committees and fundraising.
The rest of the council, however, concluded the issue was more nuanced and directed its Policy and Services Committee to analyze various options, even if limits would not be developed in time for the November 2007 election.
The committee doesn't meet again until the end of June and candidates begin filing papers on July 16, City Clerk Donna Rogers said.
City Attorney Gary Baum said there can be no limit on how much a candidate spends of his or her own money. He said he believes the $350 donation cap would be legal under current law and court rulings, however.
But Morton said that historically big spenders have not done well with voters in Palo Alto once the newspapers published the list of contributions.
The council previously had a campaign-spending limit that was suspended in 1999, Cordell said. The council suspended the limit because it was instructed the limit was illegal under court rulings, Councilwoman Dena Mossar said.
Mossar said she supported limits but feared implementing a policy Monday would be "rushing to judgment." She and others noted there has been a custom in Palo Alto that contributions be $250 or less.
Councilman John Barton emphasized that any regulations should address "in-kind" donations, such as yard signs or copy expenses that would be exempted under the original Cordell/Drekmeier motion.
In other business:
* The council unanimously approved a long-debated citywide transportation fee that would charge new developments $2,601 for each vehicle added to the road during the evening rush hour, according to Administrator Jon Abendschein.
The fee is expected to raise about $10 million by 2025 to fund a variety of traffic improvements, including upgrades to bicycle routes and amenities.
The council majority voted against a proposal by council members Bern Beecham and Judy Kleinberg to exempt all but the largest retailers from the fee.
* After raising concerns several weeks ago about doing business with Romic Environmental Corporation due to its poor environmental record, the council approved a contract with Clean Harbors Environmental Services to haul away "hazardous" ash from the city wastewater treatment plant's incinerator.
The ash now contains too much copper to use as a soil enhancement and must be disposed of as a hazardous waste, according to city staff.
City staff members do not know why the amount of copper has increased, but they are trying to determine the cause, a report states.
Councilman Drekmeier noted the increase in copper in the ash coincided with the shift from chlorine to chloramine in treating water by San Francisco's Hetch Hetchy water system a few years ago. He said if people believed chloramine was eroding the copper pipes in their homes they might be concerned. Some residents have maintained that chloramine causes skin or health-related reactions, and Assemblyman Ira Ruskin has introduced legislation to force an investigation into chloramine's effects.
* Congratulating the downtown's 3-year-old Business Improvement District for its recent achievements, including the spin-off of the Downtown Streets Team, the council unanimously authorized it to continue for another year. Only a weighted 8 percent of business owners voted against renewal of the district, according to Manager of Economic Development Susan Arpan.
A business improvement district is a mechanism for requiring businesses in a certain area to pay for services with a common benefit for the district. Each year, business owners have the opportunity to disband the district if more than half of owners weighted by fee cast a protest vote.
Annual assessments range from $50 to $500, depending on the business.