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HomeMy WebLinkAboutcc min 1995/08/15 RDA MINUTES OF A JOINT MEETING OF THE CITY COUNCIL/REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Tuesday, August 15, 1995 Council Chambers 7:58 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL'. PRESENT: Agency/Councilmembers Alevy, Padilia, Rindone, and Mayor Horton. ABSENT: Agency/Councilmember Moot ALSO PRESENT: John D. Goss, Executive Director/City Manager; Bruce M. Boogaard, Legal Counsel/City Attorney; and Beverly A. Authelet, City Clerk. MSC (AlevyfHorton) to excuse Agency/Councilmember Moot since he was out of town on business and unable to get back to for the meeting. 2. APPROVAL OF M1NLrrF~: August 1, 1995 (joint meeting of the Redevelopment Agency/City Council); August 1, 1995 (Special joint meetlug of the Redevelopment Agency/City Council) MSC (!]orton/Psdilla) to approve the minutes. (Moot absen0 CONSENT CALENDAR (Item pulled: 4) BALANCE OF THE CONSENT CALENDAR OFFERED BY AGENCY/COUNCILMEMBER RINDONE, readin~ of the text was waived, passed, and approved 4-0-1 (Moot absent). 3. WRI'UrEN COMMUNICATIONS: There were none. 4. COUNCIL RESOLUTION 18001 AND AGENCY RESOLUTION 1466: APPROVING AMENDMENT TO A THREE-PARTY AGREEMENT BETWEEN Tt!E CITY OF CHULA VISTA, REDEVELOPMENT AGENCY, AND CHULA VISTA BAYFRONT CONSERVANCY TRUST FOR A LEASE, LOAN AND OPERATING AGREEMENT FOR THE CHULA VISTA NATURE CENTER - The agreement approved on 5/4/94 by the Agency/Council provided the City with specified controls and oversight of the Nature Center until the loans provided to the Bayfront Conservancy Trust had been repaid. The lease and loan parts of the Agreement expired in May 1995. Staff is recommending the lease and loan aspects of the Agreement be extended until the end of July 1997. Staff recommends approval of the resolutions. (Administration). Agency/Councilmember Padilia asked for clarification of the figures listed and sources of the revenues shown on page 4-9 of the staff report. He assumed that he was looking at previous loans as they were broken down on the spread sheet entitled, Advances for the End of FY 94/95. Deputy City Manager Thomson replied that was correct. Agency/Councilmember Padilia noted three entries of loan amounts to the Bayfront Couservancy Trust each of which indicates its a CIP advance to the Bayfront Conservancy Trust. If you look at the spreadsheet, on 6/13/94 a CIP Advance was made to the Bayfront Conservancy Trust from Fund 100. Is that General Fund? And Fund 415 is that the Bayfront Conservancy Trust fund with an amount listed? Mr. Thomson replied yes. There are two more CIP advances to the Bayfront Couservancy Trust. The second one is from fund 220. It was his understanding that is the sewer income fund. What is the sewer income fund? m 7 Minutes August 15, 1995 lxage 2 Mr. Thomson r~ponded that in this context when some work was being done on the road to the Nature Center, it was considered advisable for environmental purposes to go ahead and lay the sewer line even though we could not hook it up at the time. The work was done and booked us a loan even though it was a legitimate sewer fund expense. It was the feeling that if there was some possibility that the Bayfront Conservancy Trust could repay that amount at some future point, we wanted to book it as a loan. Director of Public Works, John Lippitt, stated that we have five sewer funds, 220 through 225. Each one has a different source of revenue. Fund 220, the Sewer Income Fund, is basically when people hook into a City sewer. They are required to pay a certain amount into this fund in order to connect into the systefa. This money can be used for extension of sewers and for paybacks to devdopers if they have advanced funds. Fund 221, Advance Fund, is for advance if we have sold some sewer capacity. We can use this fund for any sewer purpose. Fund 222 is when people join the system and pay about $2200 per connection. The primary purpose of this fund is for upgrades to the Metro sewer system and also major exteusions. Fund 225, General Sewer Service Fund, which is from monthly sewer collections. This goes to pay for the operation of the sewer system and our charges to the City of San Diego. Fund 226, Sewer Replacement Fund, which is also collected monthly from every household and ranges about seventy cents per month. This is used to repair and reline existing sewers as they wear out. Agency/Councilmember Padilia asked what the specific funding source was for 220? Mr. Lippitt responded that Fund 220 is when people pay to connect to the city sewer and they haven't installed the sewer themselves or they don't have a repayment agreement to pay someone else. Everyone has to pay to hook into the city sewer system. Agency/Councilmember Padilia stated that in other words the money would come from fees paid by people in all portions of the City. Mr. Lippitt stated yes. Agency/Councilmember Padilia asked if this particular sewer fund was cousideeed a trust account or a restricted fund? Mr. Lippitt responded that it was not a trust account. It has to be used for sewer purposes, and it can be used basically for any construction sewer purpose. What happened in this case, we installed a sewer in the roadway going to the Nature Interpretive Center. Because of environmental concerns, they did not want us to tear up the road again. At such time as the sewer became available, the rest of the Bayfront could hook into it without tearing up the road again. This is considered like a sewer extension and is allowable under that fund. Agency/Councilmember Padilia stated that it was for the purpose of sewer construction for sewer purposes. If that is the case, how can we take funds from that account to loan it to help fund the operations of the Nature Interpretative Center. Mr. Lippitt responded that the purpose of that amount was to build a sewer in the road to get out to the Nature Center. Our interpretation was that it would be an allowable use. The normal process when you build sewers is to charge people as they hook up rather than creating a loan. In this case, we had a specific loan and chose to do it this way because it was in the redevelopment area and could charge them back. Agency/Councilmember Padilia asked in this particular case, was this excess CIP that was from an existing project? Mr. Lippitt replied that it was appropriated, but he would have to check. Agency/Councilmember Padilia stated it was his understanding that any type of restricted fund the loan has to be booked, but you also have to have a reasonable expectation that it be repaid. His concern is with the language in the staff report which indicates that we don't have that expectation. In this case, we have taken Minutes August 15, 1995 Page 3 almost $43,000 and loaned it. In the aggregate, looking at CIP advances alone on the spreadsheet, they total over $126,000 none of which we expect to get back or earn the interest that we would otherwise corn. Is this cotTeet? Mr. Thomson stated that it depends on what point in time you are referring to. In other words, when we first created this project, there was an expectation that the Bayfront development would have gone ahead much corlier and that the beneficial tax assessment district that was envisioned would have occurred ycors ago. The point we were trying to make in the staff report is that at this point this loan amount has become significant; $3.6 million if you include the City, the Agency, and the sewer fund. At the staff levd, it is hard for us to envision the Bayfront Couservancy Trust being able to repay that under the best of circumstances. We thought it was appropriate to alert Council of this. Agency/Councilmember Padilia asked how can we book a loan from this account, if we don't expect repayment? Finance Director, Robert Powell, stated that even though we are terming this a loan, this was really a construction project that was done in support of the Bayfront Couservancy Trust. The value of that project was then booked as a loan. Whether or not we recoup that money, he believed at this juncture, it was a valid expenditure of sewer funds. There is no question of legality of the expenditure of the funds. The loan itself is fully reserved on the City's books which mcons we are not spending those resources even though we have it booked as a loan receivable, we have that fully reserved indicating that we can't spend those resources because we do not have them and may never have them. Not to book the loan, it would get lost and never have the ability to recover it. It is simply like a place marker as far as accounting goes. Agency/Councilmember Alevy asked what was the difference between loans and advances? Mr. Thomson replied that loans are basically funds which have already been loaned as well as the interest accrued. Advances refer to monies we anticipate being loaned during FY 95/96 or thercofter. RESOLUTIONS 18001 AND 1466 Olq. ERED BY AGENCYICOUNCILMEMBER PADH,LA, reading oftexis ~ waived. Agency/Councilmember Rindone asked, "how much is enough?" Because of the delay of the development of the Bayfront project, we are looking at a total loan in excess of $3.6 million. Also, the staff report was very candid indicating that beyond that amount already loaned, the additional advance being proposed for operating for the Bayfront Conservancy Trust is about $375,000 annually. Are we willing as a Council to continue to fund this? This is like a sacred cow; its a project that we have all supported. In fact, he was the original citizen member on the Bayfront Conservancy Trust and continues to support the objectives that the Nature Interpretive Center sets forth. However, it does reach a point where it is legitimate that as policy makers that we begin to ask that question. If we don't have a reasonable expectation within the next three to five years of finding an alternative development on the Bayfront and come up with an assessment district or some other means to accommodate the annual operating deficit, then it becomes a substantial liability. Why raise the issue? He did not feel that the Council wanted to play ostrich and bury its head in the sand and ignore that we have a substantial debt which is not going to be repaid in the foreseeable future. We need to see what other alternatives we have. He will support the motion tonight, but he is going to ask staff to come back within six months to look at alternatives such as: using CDBG funds, scholarships, donations, grants, legislative actions because we cannot continue to pass through dollars with no prospect of a Bayfront project. He requested the maker of the motion, if he would be willing to include this in his motion to have a report come back within six months by staff searching other alternatives other than to continue to book loans. Agency/Councilmember Padilia felt the point regarding alternatives was well taken. He asked what were the parameters of our obligations in teems of financing? Agency/Councilmember Alevy asked if we had made a concerted effort to sit down with the two congressmen in our immediate arco to see if they would be willing to help us. He suggested that we start there. · T Minutes August 15, 1995 Page 4 City Manager Goss stated that the staff at Bayfront Couservancy Trust has been very successful in getting grants, but they are primarily for capital improvements not operations. He assured Council that each year when we do the budget, this is a very obvious issue as to how it impacts the General Fund and also the Redevelopment budget. We have looked at options such as charging at the door to pay for an improvement, which did not bring in the type of revenue because of the recession, to the possibility of the Port providing the money for Nature Interpretive Center operation since it is close to the tidelands. We would be happy to come back in six month to discuss some alternatives. Community Development Director, Chris Salomone, responded to the obligation that we have to fund this facility. It is an element of our Local Coastal Plan which was adopted on the existing Bayfront project which spoke to a funding source through that development. That is where we were until August 1994 when the development agreement negotiations broke off. Whether the Coastal Plan obligates ns, he would like to look into this. Agency/Councilmember Rindone stated that the purpose of the intent of the addendum to the motion was to be sure we have researched whether it is legislative, grants, foundation, Port. These alternatives need to be examined or re-examined. Agency/Councilmember Alevy asked what was the obligation of the Bayfront developer to this and what has his input been? Mr. Salomone stated that in the development agreement negotiations we were in the process of completing when the ownership changed, we were obligating the developer to take over the operations and the facility for the future. It was a very complicated development agreement, but it involved a lot of obligations for a lot of other facilities. There were discussions in that development agreement of recovering past costs. Mr. Thomson stated that the developer was also trying to put a limit on the amount of money. So there was some discussion about what that maximam amount of money would be. The developer was also trying to extend the starting point of when the assessment district would come into being such us at the grading permit stage or building permit or at the time of the DDA itself. Agency/Councilmember Alevy stated that this won't be something which we will have to continually vote on, but it will be part of an agreement that a developer will be paying these costs. Mr. Thomson replied that this has been staff's hope and expectation. VOTE ON RESOLUTIONS 18001 AND 1466: Approved 4-0-1 (Moot absent). 5. AGENCY RESOLUTION 1467: APPROVING FINAL RESIDENTIAL MOVING EXPENSE CLAIMS TOTALING $5,274.56 PURSUANT TO THE ADOPTED RELOCATION PLAN FOR TWO HOUSEHOLDS FORMERLY LOCATED AT 459 F STREET - In accordance with State law and the Purchase and Sale Agreement with the Adamo to purchase the property at 459 F Street as part of the Civic Center Expansion Project the City and Agency requires various relocation payments for households formerly residing at that location. Final Residential Moving Expense claims need to be processed for the tenant of Unit B and Mrs. Adamo, the former owner. Staff recommends approval of the resolutions. (Community Development Director) COUNCIL RESOLUTION 18002: AUTHORIZING THE EXPENDITURE OF $5,274.56 FROM THE CIVIC CENTER EXPANSION PROJECT (GG-130) FOR TWO FINAL RESIDENTIAL MOVING CLAIMS PURRSUANT TO THE ADOPTED RELOCATION PLAN FOR HOUSEHOLDS FORMERLY RESIDING AT 459 F STREET * * * End of Consent Calendar * * * Minutes August 15, 1995 Page 5 PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 6. PUBLIC HEARING: SALE OF AGENCY PROPERTY LOCATED AT 315 FOURIH AVENUE WITHIN THE TOWN CENTRE I REDEVELOPMENT PROJECT AREA TO THE CITY OF CHULA VlSTA, CALIFORNIA, WlTHOUT PUBLIC BIDDING - Staff informed the Agency at its 5/23/95 meeting the three proposals received for purchase of the building were unacceptable. The Agency directed staff to prepare a Purchase and Sale Agreement for Agency/Council review and approval. Continued from the August 1, 1995 meeting. Stoff n~mmm~ds ~ Inddk heati~ be timtinned to Sqganber 5, 1~95. MSC (Alevy/Padilla) to continue to September 5, 1995. (Moot absent) ORAL COMMUNICATIONS None ACTION 1TEMS None 7. DIRECTOR'S/CITY MANAGER'S REPORTS: Mr. Goss announced that the new Sports Authority will have their grand opening on Thursday, August 16, 1995 (where the Home Depot used to be). They will have a special guest, basketball star, Kareem Abdul-Jabar, from 6:00 p.n. 8. CHAIR'S/MAYOR'S REPORT: None 9. AGENCY/COUNCILMEMBER'S COMMENTS: None ADJOURNMENT Chair/Mayor Horton adjourned the meeting atg:30 p.m. to the next regular Redevelopment Agency meeting on September 5, 1995 at 4:00 p.m. immediately following the City Council meeting. Respectfully submitted, Beverly ~. Authelet, CMC/AAE City Clerk