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HomeMy WebLinkAboutcc min 1995/09/05 RDA MINUTES OF A JOINT MEETING OF THE REDEVELOPMENT AGENCY/CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, September 5, 1995 Council Chambers 5:41 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Council Members Alevy, Moot, Rindone, and Chair/Mayor Hotton ABSENT: Agency/Council Member Padilia PRESENT: John D. Goss, Director/City Manager; Bmce M. Boogaard, Agency/Council Attorney; and Beverly A. Authelet, City Clerk MSC (Rindone/Horton) to excuse Agency/Council Member Padilia from the meeting of 9/05/95. Approved 4-0-1 with Padilia absent. 2. APPROVAL OF MINUTES: August 15, 1995 MSC (Alevy/Moot) to approve the minutes of August 15, 1995 as presented, approved 4-0-1 with Padilia absent. CONSENT CALENDAR (Item pulled: 4) 3. WRITTEN COMMUNICATIONS: None 4. REPORT AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 1994--Pursuant to City Charter Section 1017, an annual audit is performed of the City's financial records by an independent accounting firm. Staff recommends that Council and Agency accept the reports. (Director of Finance) Pulled from the Consent Calendar. Member Rindone questioned the reason for the change in the method of accounting for accrued interest expense on the inter-fund advances. Robert Powell, Finance Director, responded that he felt the prior presentation of showing the interest on loans between project areas overly clouded the financial statement. It showed all the interest even though the interest would not be repaid within the fiscal year as a current year obligation for the project areas. It therefore showed the deficits for the Agency as a whole in the $11 million range. Those interest expenses would not be paid until future years when property tax increment monies were received. Therefore, he decided that an alternative process, equally acceptable, would be preferable. He worked with the accounting firm to disclose the information in the notes of the financial statements rather than the current balance sheet. It was clearly a technical presentation issue. The accounting for the transaction was exactly the same. Member Rindone stated he was pleased, the Agency had been advocating a clearer balance sheet statement for the five project areas. Under the General Purpose Financial Report of the City of Chula Vista, page 5, there was a discussion of the excess of expenditures over revenues for the current year and a deficit of $18,406,000 and he requested an explanation of what that was. Mr. Powell replied that it was a memorandum only total of the fund types including the General Fund, special revenue funds, debt service, capital projects, and trust funds. In looking under the Debt Service Funds there was $18.5 million and then further in the report there was a $20 million positive. The excess of expenditures over revenues for the debt service funds was covered by a $20 million transfer in of debt proceeds. Minutes September 5, 1995 Page 2 Member Rindone questioned why the Pension Obligation, Principle Retirement Fund, and the interest and charges were so large for the one year. Mr. Powell stated there was $16 million for the Pension Obligation because it showed the total amount of the Pension Obligation bonds coming in as revenue or proceeds of the debt issuance. They also had to show that going out to pay for the unfunded liability to PERS. That was a one year "blip" and it was an unusual event. Member Rindone questioned if the proceeds from the sale of the bonds, Note J, of the $19,901,000 would offset that. Mr. Powell stated that was correct. It was more than just the Pension Obligation bonds. The Agency had issued a series of 1993 COP's during that year also for the parking structure in the Chula Vista Center. Mr. Goss clarified that Note J indicated that the payment of the Pension Obligation bonds was $16,049,201 and the proceeds of the bond issue would be $16,786,535. Member Rindone questioned if the excess of revenues over the expenditures of $2.6 million was the aggregate of all the five RDA funds. Mr. Powell stated it was the aggregate of the four project area operating funds, the four project area capital project funds, the tax allocation bond debt service fund, and two of the housing funds, i.e. Low/Mod Housing and CDBG Housing fund. Member Rindone stated the Agency had rexluested clarification of the shortfall of the aggregate of the expenditures for the RDA budgets and their expenditures. He questioned how the $2.6 million shortfall would be interpreted with the fund balance of $12 million. Mr. Powell stated it would be more accurate to review the line on page 3 of the report - Excess (Deficiency) of Revenue and Other Financing Sources Over Expenditures and Other Financing Uses" which was $3.8 million. That showed the difference between resources coming in and resources going out for that year. Member Rindone stated that the actual shortfall was not $2.6 million but $3.8 million. Mr. Powell stated that was correct. Member Rindone stated that in 1995/96 there was a shift of approximately $2 million and questioned if the Agency could anticipate that the shortfall figure of $3.8 million would be cut by approximately $2 million. Mr. Powell responded that it was a simplistic comparison but a reasonable figure. The financial statement was for 1993/94 and not 1994/95. Mr. Goss stated in reviewing the present budget and last years budget and discounting and not taldng into consideration any property sales, it appeared to staff that the RDA budget was roughly $2.5 million out of balance. It was his conclusion that the $2 million shift would bring that gap to approximately $300,000 to $500,000. Member Rindone stated it was important was to recognize that there was a problem and the Agency had recognized that. Step two was to realize the size of the problem and he felt that was what the Agency was attempting to do at the present time. The final step would be to ensure that there was a plan to address the issue. As of the year ending June 30, 1994, the aggregate shortfall of the RDA was $3,803,000 for that fiscal year. Things were being done in the short run, i.e. sale of property, to mitigate the size of the deficit, but it would still be an annual occurrence without other new healthy projects on line. MS (Rindone/A!evy) to accept the audit and financial statement report for the fiscal year ending June 30, 1994. Member Rindone questioned if the same firm would do the audit for FY 1994/95. Minutes September 5, 1995 Page 3 Mr. Powell responded that auditors were changed every 3-5 years. Council had awarded a new contract to Moreland & Associates beginning FY 1994/95. They were currently doing audit work at the present time. VOTE ON MOTION: approved 4-0-1 with Padilia absent. * * END OF CONSENT CALENDAR * * PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 5. PUBLIC HEARING ADDENDUM TO THE 1993 UPDATE OF THE PUBLIC FACILITIES DEVELOPMENT IMPACT FEE, WITH NO CHANGE IN THE FEE AMOUNT--On 5/23/95, Council determined that the El Dorado office building, 315 Fourth Avenue (a facility proximate to the Civic Center and capable of meeting the City's interim office space needs) is currently available for purchase at a reasonable price. Council directed staff to pursue the City purchase of the building as part of the Civic Center DIF. The purchase is anticipated to be an interim step in the implementation of the Civic Center Master Plan and is not expected to affect the end cost of the project. The proposed addendum to the Public Facilities DIF will not impact the level of fees assessed. Staff recommends approval of the resolution. (Deputy City Manager Krempl and Senior Management Assistant Young) Continued from the meetinl~ of 8/15/95 RESOLUTION 18028 APPROVING AN ADDENDUM TO THE 1993 UPDATE OF THE PUBLIC FACILITIES DEVELOPMENT IMPACT FEE, WITH NO CHANGE IN THE FEE AMOUNT This being the time and place as advertised, the public hearing was declared open. ® Craig Benedetto, 6336 Greenwich Drive, San Diego, CA, representing the Building Industry Association, stated they were concerned when they heard that DIF fees would be used to purchase the building. McMillin, EastLake, and Baldwin had also expressed concern in written commentary to staff and council. There were two real issues: 1) a change regarding needs in the DIF Master Plan they would recommend that council do a comprehensive review of the DIF Master Plan and the needs of the city; and 2) the appraisal being less than what the city proposed to purchase the building for which they felt was too much. The RDA was in trouble, they had paid too much for the building and needed to "dump" it. When there was an appraisal the offer was never for the amount of the appraisal. According to the staff report the building could be sold in 5 - 7 years and if that was the case they recommended that the RDA institute a bidding process for the building with the city entering into that process for a fair and reasonable bid. There being no further public testimony, the public heating was declared closed. Councilmember Alevy questioned if the DIF funds were specifically paid tbr the Civic Center project or if they were generic funds paid by developers. George Krempl, Deputy City Manager, responded that the funds were collected from developers specifically for the Civic Center. They were consistent in terms of the overall Master Plan for the Civic Center. The fee was not being increased and would remain the same. The Master Plan needed to be updated periodically, but staff was proposing to spend the money for a purpose as intended. Councilmember Alevy stated he had not seen the Master Plan and it was his understanding that the last time Council had reviewed it was 1993. Mr. Krempl stated itwas done periodically on a comprehensive basis. Various facilities were reviewed and the fees were adjusted accordingly for the various subcomponents as well as the total fee. Councilmember Alevy stated the funds would not be taken away from necessary services that other types of DIF funds paid for. Minutes September 5, 1995 Page 4 Mr. Krempl responded that there were two different funds, i.e. those funds specifically restricted to pay for collection, i.e. fire station, etc. and Council had granted staff flexibility to be able to pool funds because of changing priorities. In the case of the Civic Center, there was approximately $700,000 in the old DIF fund that could only be expended for Civic Center expansion. The city had collected more than enough money that would be earmarked for Civic Center purposes in the pooled account. The city tracked exactly what proportion of the fee was paid by the developer for each particular function. Because the City had accumulated enough funds in that particular account staff did not need to use the flexibility granted by Council to priioritize projects for funding. Councilmember Alevy questioned if it was staff's intent to purchase the building as a "stop gap" for the next 5 - 7 years. Mr. Krempl responded that was the anticipation, but it may end up as a permanent facility for the Civic Center, staff wanted to retain that option. Councilmember Alevy stated the purchase price of $1. 175 million was the appraised value of the building and the highest bid was $1 million. He questioned the rationale for paying more than the highest bid. Mr. Krempl replied that staff felt the city needed to go with the appraised value of the building as a measurement. Mr. Goss stated there was a feeling that the offers made wer~ probably under the market value of the building at the time. Councilmember Rindone questioned who would be responsible for the shortfall if the building sold below the $1.175 million paid. Mr. Krempl responded the rents from the building would go into the DIF and it was staft"s belief that over the 5 - 7 year period the rents would exceed the price of the building, therefore, staff did not feel there would be a shortfall. There would be additional money in the DIF and at the time the council made that decision the DIF could be lowered with the developer being charged less or the DIF could be reconstituted through an amendment of the Master Plan because of future needs. Mr. Boogaard stated the risk of market slide was on the DIF and it would also bear the benefit of tenant rents and interest accrued on tenant rents. The DIF would also bear the benefit of appreciation. The amendment stated that despite a long term need there was a temporary shortage of Civic Center office space that was being satisfied by the amendment to the DIF. Growth was required by the DIF to bear its share of temporary Civic Center capacity and that growth was immediate and not in 20 years when the full DIF might materialize. Since the city was treating the building as an asset of the DIF it was a duty of the growth, i.e. the development community to bear the temporary, as well as the long term, Civic Center capacity requirement. Councilmember Alevy questioned what the rental income was per month and how it related to debt service. Miguel Tapia, Community Development Specialist, responded that the current gross income was approximately $14,000/month. Chds Salomone, Director of Community Development, stated the $14,000/month was approximate to what a normal market sales price for the building would be. The appraisal was based on the income that it produced. The building had been used for a number of uses and in particular South Bay Community Services rented approximately 5,000 sq. ft. for many years and only in recent months had the RDA realized the full level of revenue from the building. RESOLUTION 18028 OI"I,'ERED BY COUNCILMEMBER ALEVY, reading of the text was waived, passed and approved 4-0-1 with Padilia absent. 6. PUBLIC HEARING SALE OF AGENCY PROPERTY LOCATED AT 315 FOURTH AVENUE WITHIN THE TOWN CENTRE I REDEVELOPMENT PROJECT AREA TO THE CITY OF CHULA VISTA, CALIFORNIA, WITHOUT PUBLIC BIDDING--Staff informed the Agency at its 5/23/95 meeting the Minutes September 5, 1995 Page 5 three proposals received for purchase of the building were unacceptable. The Agency directed shaft to prepare a Purchase and Sale Agreement for Agency/Council review and approval. Staff recommends approval of the resolutions. (Community Development Director) Continued from the meetinK of 8/15/95 A. RESOLUTION 1458 APPROVING SALE OF CERTAIN PROPERTY LOCATED AT 315 FOURTH AVENUE WITHIN THE TOWN CENTRE I REDEVELOPMENT PROJECT AREA TO THE CITY OF CHULA VISTA, CALIFORNIA WITHOUT PUBLIC BIDDING, APPROVING PURCHASE AND SALE AGREEMENT WITH THE CITY OF CHULA VISTA, CALIFORNIA, AND AUTHORIZING THE CHAIRMAN TO EXECUTE SAME B. RESOLUTION 17926 APPROVING THE PURCHASE OF CERTAIN PROPERTY LOCATED AT 315 FOURTH AVENUE WITHIN THE TOWN CENTRE I REDEVELOPMENT PROJECT AREA FROM THE REDEVELOPMENT AGENCY, APPROVING A PURCHASE AND SALE AGREEMENT WITH THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, CALIFORNIA, AND AUTHORIZING THE MAYOR TO EXECUTE SAME This being the time and place as advertised, the public hearing was declared open. There being no public testimony, the public hearing was declared closed. RESOLUTIONS 1458 AND 17926 OFFERED BY CHAIR/MAYOR HORTON, reading of the text was waived, passed and approved 4-0-1 with Padilia absent. 7. PUBLIC HEARING TO CONSIDER GRANTING A SPECIAL LAND USE PERMIT TO ALLOW A USED CAR LOT AND AN AUTOMOTIVE SERVICE CENTER AT 801 BROADWAY WITHIN THE SOUTIBVEST REDEVELOPMENT PROJECT AREA IN CHULA VISTA -- The applicant proposes to use the site for the establishment of an RV Parts Store, a Used Car Lot and an automotive service center. The lot and automotive service center require a Conditional Use Permit (Special Land Use Permit when located within the redevelopment areas. Staff recommends approval of the resolution. (Community Development Director) RESOLUTION 1468 MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL LAND USE PERMIT TO ALLOW A USED CAR LOT AND AN AUTOMOTIVE SERVICE CENTER AT 801 BROADWAY WITHIN THE SOUTHVVEST REDEVELOPMENT PROJECT AREA IN CHULA VISTA Fred Kassman, Redevelopment Coordinator, informed Council that the Southwest Project Area Committee did not have a quorum and therefore, had not reviewed the item. Several members of the neighborhood did attend the proposed meeting of the Southwest PAC to voice their concerns. Staff felt many of their concerns related directly to the previous owner/business. Mr. Courtney was lifoposing a slightly different use and staff felt with appropriate conditions on the CUP it would alleviate the neighbors concerns. Chair Hotton questioned if concerns regarding noise related directly to the use of a loudspeaker system used on car lots. Mr. Kassman responded that was correct along with some of the machinery used in the auto repair shop and the contractors heavy equipment. The used car sales would be at the front of the property and there would be auto repair at the rear of the property. It was his understanding they would not utilize a sound system. This being the time and place as advertised, the public hearing was declared open. · Dorothy Breininger, 790 Ash Avenue, Chula Vista, CA, stated staff had been presented with a petition at the 8/28/95 meeting which was signed by residents in the area opposed to the project. She expressed concern over pollution, noise impacts, safety concerns regarding the additional driveways on "K" Street in a residential area, increase in traffic and congestion, and the addition of a neon sign in a residential area. She requested that a large brick wall be erected to mitigate noise and visual impacts and that the sign not be erected on "K" Street. She noted that there were several used car lots with 100 ft. of the area. Minutes September 5, 1995 Page 6 ® Jesus Monzon, 797 Ash Avenue, Chula Vista, CA, stated he was an architect and expressed his concern regarding noise, landscaping, parking, and graffiti. He felt the project could be mitigated with design requirements which he had been told the proposed owner had agreed to do. He recommended that landscaping be installed to mitigate the noise, the large sign be installed closer to Broadway with a monument sign install where the original sign was proposed, and the removal of the entrance at the middle of the site. He wanted to have an opportunity to meet with the Design Review Committee or Mr. Courtney to discuss such modifications. He felt Mr. Courthey would be a good neighbor. · Jim Courtney, 5718 Winners Circle, San Diego, CA, representing Courtney Tire, stated he shared some of the neighbors concerns and was willing to work with them. He had already agreed to delete one of the driveways and erecting a block wall with landscaping on the outside to help prevent graffiti. There being no further public testimony, the public hearing was declared closed. Member Alevy stated he had met with Mr. Courtney and assured the community that the project would be reviewed by the Design Review Committee. He felt Mr. Courtney would be a good neighbor. Broadway was a major commercial thoroughfare, "K" Street was a major cross thoroughfare, and it was a busy intersection. The city was concerned that the neighborhood retain its integrity and he felt they would be happier with their new neighbor than they were with their old neighbor. He felt it was a good project for the city. RESOLUTION 1468 OFFERED BY MEMBER ALEVY, reading of the text was waived. Chair Hotton stated the resolution was offered with the understanding that Mr. Courtney would be meeting with the residents to make sure that all their concerns were addressed. Member Moot felt one of the problems with the procedure was that re/development projects did not go through the [ Planning Commission where so many of the items were discussed and worked out with the residents of the area before the item came before the council. Because of Mr. Courtney's reputation he was comfortable that the issues would be worked out, but he did not feel it was an appropriate procedure. He hoped that at some point the RDA would rethink the procedure. The PAC that was to review the project did not have a quorum and never met. At the Planning Commission level there was healthy discussion between the owner of the property and the residents in the area. The process should be reconsidered. Member Rindone stated a list of conditions had been included in the report for issuance of the special permit and questioned if that had already occurred. Mr. Kassman responded that the conditions were attached to the resolution approving the conditional use permit. Therefore, they would be memorialized when the resolution was passed. The applicant would have to abide by the conditions. Member Rindone felt that was important and concurred with Member Moot's concerns regarding the process. He felt that should be brought back for Agency review before other issues arose. He noted that one of the conditions was a 6 ~. wall on "K" Street along with landscaping, lighting, and signage plans and circulation controls. He felt that would mitigate the issues raised by the residents. VOTE ON MOTION: approved 4-0-1 with Padilia absent. ORAL COMMUNICATIONS ® Bill Ayers, 44 East Mankato Street, Chula Vista, CA, Veterans representative for the County Board of Supervisors, informed the Agency that AB940 was being held up. They had alerted the veterans in the community [~'~ along with all state and local representatives. Minutes September 5, 1995 Page 7 ACTION ITEMS None Submitted. ITEMS PULLED FROM THE CONSENT CALENDAR Item pulled: 4. The minutes will reflect the published agenda order. OTHER BUSINESS 8. DIRECTOR'S/CITY MANAGER'S REPORT(S) · Mr. Goss clarified that the Civic Center Master Plan had not been updated in 1993. It was adopted in concept in 1989, adopted in 1990, and in 1992 or 1993 the DIF that related to the Civic Center Master Plan and its implementation was approved or updated. Some parts of the Master Plan had been implemented, i.e. expansion of the parking lot, city attomey's office expansion, and changes made in the mayor/council offices. Even though the El Dorado building would be used on an interim basis to house excess staff another step was to move the community development department into the old county health department building as an interim step. Ultimately, they would be housed in the Civic Center annex which was yet to be built. It had been five years since the Master Plan had been adopted by the Council and he felt there should be a presentation to the Council on what it was, what steps had been taken, and what was contemplated in the future. 9. CHAIR'S/MAYOR'S REPORTfS) - None 10. AGENCY/COUNCIL MEMBER COMMENTS Agency/Council Member Rindone · Councilmember Rindone stated council had received a memorandum dated 8/28/95 from the Budget Manager regarding the seasonal gardener salary classification and he requested that it be brought back to council for consideration. He did not have a clear understanding that council was impacting those positions. It appeared to him that by reducing the salaries by more than 20% it would exacerbate the current problem of excessive turn- over in the positions. ADJOURNMENT ADJOURNMENT AT 6:46 P.M. to the Regular Redevelopment Agency Meeting on September 19, 1995 at 6:00 p.m., innnediately following the City Council meeting, in the City Council Chambers. CLOSED SESSION The Agency met in Closed Session at 6:53 p.m., reconvened at 9:15 p.m., and adjourned at 9:15 p.m. 11. CONFERENCE WITH REAL PROPERTY NEGOTIATOR Give Instructions to Negotiators pursuant to Government Code Section 54956.8 a. Proposed sale of property: Parcel #s 563-350-13 and 566-131-01). Negotiating Party: Chris Salomone, Redevelopment Agency and Batty Silverton, Pacific Mallbu Development Corporation and Steve and Les Warner of Warnet Properties Price and Payment Terms. Minutes September 5, 1995 Page 8 b. Property: School District property next to Community Hospital Medical Center Negotiating parties: John D. Goss, City Manager and Robert Griego, Sweetwater Unified High School District Under negotiation: Price and Payment Terms. 12. REPORT OF ACTIONS TAKEN IN CLOSED SESSION - No reportable actions were taken in Closed Session. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk Vic'ki C. Soderquist, CMC, ~,y City Clerk