HomeMy WebLinkAboutcc min 1991/10/17 M/NUTES OF A SPECIAL MEETING OF THE
CITY OF CHULA VISTA
Thursday, October 17, 1991 Council Conference Room
5:54 p.m. City Hall
1. CALL THE ROLL:
PRESENT: Councilmembers Grasser Horton, Malcolm, Moore, and Mayor Nader
ABSENT: Councilman Rindone
ALSO PRESENT: Chris Salomone, Community Development Director; David Gustafson,
Assistant Community Development Director; Fred Kassman, Redevelopment
Coordinator; and John Lippitt, Director of Public Works
2. APPROVAL OF MINUTES: None.
3. WRiI'FEN COMMUNICATIONS: None.
PUBLIC HFAR1NGS AND I1RI.~TED RESOLUTIONS AND ORDINANCES
None.
ACTION ITEMS
4. REPORT POLICY OF USE OF ASSESSMENT DISTRICTS FINANCING
(15727)
John Lippitt, Director of Public Works, reported that at the 8/6/91 Council meeting, Council requested a
report on the continued use of assessment district financing for the provision of infrastructure improvements
required of development. He noted that the City has used assessment districts to put in such things as
sewers, sidewalks, pipelines. There were surveys done and it was found the major problems were in traffic.
With those findings, conditions were put in with developers that they would have to put in facilities as
needed, i.e. four lanes, six lanes, etc., based on where the development was. It was found that the total
street improvements could be put in by using assessment district financing. The advantage of this is that
the City and public can have a major infrastructure put in ahead of the time it is needed. Also, this allows
the cost to be spread over a much larger area.
Mr. Lippitt noted that Council established a number of rules and policies for the use of tax exempt debt
which have proven successful and have served as an example for other agencies. These are:
· Improvements - only "backbone" infrastructure shall be included in assessment districts.
Local intrasubdivision facilities are not included.
· Lien ratio - value of property must equal at least three times the amount of bonds.
Minutes
October 17, 1991
Page 2
· Maximum tax - all County taxes, special taxes, and improvement assessment payments may
not exceed 2% of property value.
· Disclosure - in addition to the maximum payment each year, the purchaser must be given
the opportunity to pay off all debt at the time of escrow close (debt may also be paid off
at any time after the close of escrow).
· City codes - in addition to direct City costs, developers must pay the City an origination
charge equal to 1% of the proposed bonds.
Staffs recommendation was that Council accept the report and:
1. Adopt a formal policy requiring a minimum 3.5:1 lien to ratio;
2. Adopt a formal policy limiting the amount assessed to residential dwelling units such that
the aggregate total of all property taxes, special taxes, and annual debt service for
improvement special assessments does not exceed two percent (2%) of the sale price; and
3. Revise the existing policy to reduce the allowable improvements for assessment district
financing.
Neville Pearson, representing Otay Rio Business Park, noted they signed an agreement two years ago for this
assessment district and were 'put on hold" while the Otay Valley Road assessment district was formed. He
asked that Council grandfather the 3:1 for their particular assessment district.
Councilman Moore asked who would benefit from 3.5:1 ratio. Mr. Kady, financial advisor with Mr. Pearson,
responded that the loss is to developers who hope to achieve more financing. The gain is in terms of the
City's responsibility to be prudent. The City has no financial responsibility for the bonds that are being
issued; if one or two districts went bankrupt, it would not hurt the Cit-fs credit rating. The City has always
had a comfortable margin.
MSC (Malcolm/Moore) to accept the staff report with the exception that the policy stay at 3:1 ratio instead
of 3.5:1. Passed 4-0-1 with Councilman Rindone absent.
OTHER BUSINESS
4. CITY MANAGER'S REPORT(S): None.
5. MAYOR'S REPORT(S): None.
6. COUNCIL COMMENTS: None.
Minutes
October 17, 1991
Page 3
ADJOURNMENT
Adjourned at 6:45 p.m. to a closed session and then to the regular meeting of the City Council on October
22, 1991 at 6:00 p.m. in the Council Chambers.
Respectfully submitted,
BEVERLY A. AUTHELET, CMC, City Clerk
by: Alice Kemp, Recording Sec~ary