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HomeMy WebLinkAboutrda min 1975/05/13 REGULAR MEETING OF THE REDEVELOPMENT AGENCY OF IDE CITY OF CHULA VISTA Held Tuesday May 13, 1975 A regular meeting of the Redevelopment Agency of the City of Chula Vista, California was held on the above date, beginning at 7:50 p.m., in the Council Chamber, City Hall, 276 Fourth Avenue with the following Members present: Chairman Hamilton, Members Scott, Hobel, Hyde, Egdahl Members absent: None Staff present: Executive Director Cole, Assistant City Manager Asmus, City Attorney Lindberg, Special Attorney for the Rede- velopment Agency Reed, Director of Redevelopment Opera- tions Desrochers, Director of Public Works Robens APPROVAL OF MINUTES It was moved by Member Hobel, seconded by Member Egdahl and unanimously carried that the minutes of the meeting of May 6, 1975 be approved, copies having been sent each Member. BAY FRONT REDEVELOPMENT Mr. Terrance McCarty of Stone & Youngberg, PROJECT -FINANCING bond consultants to the Agency, said they have been working with staff for the past several months and have developed the frozen base assessed valuation of the project. The potential bond issue that will net the Redevelopment Agency for project expenditures is approximately $2,300,000 - this would be spent for various improvements, land acqui- sition expenditures approved by this body. The bond issue itself, taking into consideration the worst situation that could happen in the way of economy anæ'market conditiorts interèst rates, and biggest discounts would be $3,400,000. Funds for the payment of interest during the first year of issuance of bonds is $272,000. A debt service reserve that would take over the interest and principal until something could be done to refund the bond issue (2 years interest on the bonds) is $544,000. -59- Various costs of issuance (consultants\ fees, attorney's fees, puhlishing and mailings) is' $102,000 and a provision for maximum permiss- ible discount is 5% of the principal amount or $170,000. Mr, McCarty remarked that they are proposing a bond term of eO years that would be paid over the last 19 years of that bond ( the sum / /' of $272,000 would be used to pay interest in the first year). The debt service on an annual basis would be over $355,000 a year. From the numbers the consultants have obtained from the project as it is now will generate approximately $563,000 a year in additional tax income. Time table The time table would see a bond sale about the middle of August, The actual proceeds from the sale will be realized about the first of September. Consultant's job Stone & Youngberg will do everything possible to stimulate the market; talk to all who tradi- tionally bid on these bond issues and go to the rating agencies to try to get investment grade ratings on the bonds. City's obligation The bonds are not a debt of the City of Chula re bonds Vista in any way - the City's credit is not pledged - no new taxes levied to pay the bonds - bonds come in from the taxes already being levied on the increase in the assessed valuation - those are the funds used to payoff the bonds. Coastal Commission Member Hyde noted that the project will require approval approval by the (ù¡¡¡astal Commission which has not been done at this point. He questioned what effect it would have on the bond issue if the project had to modify in some way to meet the approval of the Coastal Commission. Mr. McCarty stated it would not effect the sec- urity for the first series of bonds since the payment of the bonds are not based on any new development in the project. The sources of re- payment are already there. Disclosure of all relative factors, however, will have to be made in the bond statement. -60- -.-------- Rating of bonds In answer to Member Scott\s question, Mr, McCarty stated that many Redevelopment agencies receive Triple B or Double A ratings. Conflict of interest Member Scott informed the Agency that the works for Merrill Lynch and hoped that a bid solici_ tation would not be sought from this firm be- cause of a possible conflict of interest. City Attorney Lindberg said he would examine this question and will report back on this. Attorney Reed said he has given some thought to Member Scott's position on this and with the 10% rule and the $1000 rule on comission's that come from a particular client, at this time, for a bond issue of this size, it would be his opinion that there is no conflict of interest situation. He will, however, be looking at this situation on a day-to-day basis. Motion for approval It was moved by Member Egdahl, seconded by Member Hobel and unanimously carried that the report and request be approved. MEMBERS 'COMMENTS Member Scott questioned the fact that the Redevelopment Agency meetings are scheduled in the middle of the Council meetings. He felt it was unappropriate to schedule this meeting prior to public hearings. Member Hyde felt the Redevelopment Agency meeting should be set after the close of the City Council meeting unless there is an exception such as having out-of-town speakers. Member Scott suggested that perhaps it would be advisable to have one meeting a month - outside the regular Tuesday evening Council meeting. ADJOURNMENT Chairman Hamilton adjourned the meeting at 8:12 p.m. /; vi' ',\Ú~ /2- ?;!é¿/ Secretary -61- <. .~...-. ------~--_..-