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HomeMy WebLinkAboutrda min 1996/05/28 CC MINUTES OF A SPECIAL JOINT MEETING OF THE REDEVELOPMENT AGENCY/ CITY COUNCIL OF THE CITY OF CHULA VISTA Tue:,;day, May 28, 1996 Council Chambers 11:30 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Council Members Alcvy, Padilla, Rindone, and Acting Chair/Mayor Pro Tern Moot ABSENT: Chair/Mayor Horton ALSO PRESENT: John D. Goss, Director/City Manager; Brace M. Boogaard, Agency/City Attorney; and Beverly A. Authelet, City Clerk MSC (Moot/Alevy) to excuse Chair/Mayor Hortun's absence due to surgery, approved 4-0-1 with Horton absent. BUSINESS 2.A. RESOLUTION 18319 AUTHORIZING AND DIRECTING THE PREPARATION AND EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS, AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT IN CONNECTION VqlTH THE Oiq(ERING AND SALE OF CERTIFICATES OF PARTICIPATION RELATING THERETO, AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO--Certificates of Participation (COPs) were issued in 1987. Staff was directed in March 1996 to determine feasibility of refunding the COPs and it appears the City/Agency would benefit by an average savings of more than $50,000 per year on annual debt service payments as a result of refunding under current market conditions through the Association of Bay Area Governments Finance Corporation. Staff recommends approval of the resolutions. (Director of Finance/Treasurer) B. RESOLUTION 1501 AUTHORIZING, APPROVING AND DIRECTING EXECUTION OF CERTAIN DOCUMENTS AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO Robert Powell, Director of Finance, stated Council had directed him to authorize the hiring of a financial advisor and to study the feasibility of refinancing the 1987 Series B Certificates of Participation the Agency issued. Staff determined there would be significant savings from a refinancing at the present time and to achieve further savings that they be issued by an existing joint power authority, Association of Bay Area Governments, which would allow Chula Vista to join with two other cities and share the cost of issuance. That would result in the savings of $25,000 - $35,000. Member Rindone questioned how often COP's could be reissued. Mark Northcross, Public Finance Associates, replied the city was allowed one advance refunding over the life of the issue, if issued after 1986. It was a refunding ufa pre-1986 issue, therefore the city was allowed two advance refundings. 1987 was the first advance refunding and the present action would be the second and last. The city would be allowed as many current refundings as could be done. It was anticipated that the savings would be approximately $50,000/year. RESOLUTION 18319 AND 1501 OFFERED BY MEMBER RINDONE, reading of the text was waived, passed and approved 4-0-1 with Hnrfun absent. Minutes May 28, 1996 Page 2 3. REPORT AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 1995-- Presented for Council/Agency information and acceptance are the Audited Financial Statements and Management Letters 1bt the fiscal year ended 6/30/95 as prepared by the independent audit firm of Moreland & Associates. Also presented is staff's response to the Internal Control Management Letter. Staff recommends the Council/Agency accept the fiscal year 1994-95 Financial Statements, Management Letters, and staff response to the Management Letter on Internal Control. (Director of Finance) Member Rindone questioned why it took staff six months to bring the report to the Agency/Council. He noted that the date from Moreland and Associates was 12/15/95. Robert Powell, Director of Finance, responded that the statements were not received until approximately one month ago. Patricia Rives, Moreland and Associates, stated 12/1~J/95 was the last physical date of their field work. Due to the number of prior period adjustments it took them two months to prepare the reports. Staff then reviewed the reports and a consensus was reached with staff. Member Rindone stated the changes recommended were significant and he hoped that when there was such a concern regarding internal control that it be brought to the Agency/Council sooner. Mr. Powell stated staff had the draft internal control recommendations in November/Deazember and began implementing many of those before the reports were issued. There were also recommendations that were not considered as material by the auditors that were directed to him that had also been implemented. Member Rindone questioned the reason for not implementing the "check tog system". Mr. Powell responded that staff felt the purpose of the recommendation was to keep track of every check that was issued and that was the sole purpose for the log. Staff accomplished that purpose with the reconciliation system in place in which all checks were entered and tracked. Member Rindone questioned if there was a system for control of invoices in place. Mr. Powell replied that invoices were tracked, but he was unaware whether there was a log. Member Rindone questioned if the internal control of having someone independent to supervise journal entries had been implemented. Mr. Powell responded that had been implemented several months ago. MSC (Padilla/Alevy) to accept the fiscal year financial statements, management letters, and staff response to the management letter on inlernal control. Approved 4-0-1 with Hortun absent. 4. A. REPORT ON NATURE CENTER FUNDING--At its 8/15/95 meeting Council requested a report regarding alternatives other than loans from the City or Agency to finance operation and maintenance of the Nature Center, Staff recommends the Council/Agency accept the report. (Executive Director, Bayfront Conservancy Trust) B. RESOLUTION 18321 [1] RESCINDING COUNCIL RESOLUTION # 18188; [2] ACCEPTING A $100,000 GRANT FROM THE SAN DIEGO PORT DISTRICT'S CAPITAL IMPROVEMENT PROGRAM; [3] APPROVING THE AGREEMENT AND AUTHORIZING TItE MAYOR OF THE CITY OF CHULA VISTA TO EXECUTE AN AGREEMENT WITH THE SAN DIEGO UNIFIED PORT DISTRICT; AND [4] REAPPROPRIATING $100,000 TO CIP PROJECT #GG 155 FOR CONSTRUCTION OF A CIRCULATING SEAWATER SYSTEM AT THE CHULA VISTA NATURE CENTER--At its 1/23/96 meeting the Council Minutes May 28, 1996 Page 3 approved Resolution #18188 accepting the grant and approved the Agreement which included language which Port staff initially approved but the Port's Attorney subsequently responded that language was unacceptable. Staff recommends approval of the resolution. [4/5ths Vote Required] C. RESOLUTION 18322 and RESOLUTION 1502 AUTHORIZING THE MAYOR/CHAIRMAN TO EXECUTE TWO AGREEMENTS WITH THE CALIFORNIA STATE COASTAL CONSERVANCY TO PROTECT THE PUBLIC INTEREST IN THE SEAWATER SYSTEM, TO PROVIDE PUBLIC ACCESS AND TO QUALIFY THE BAYFRONT CONSERVANCY TRUST FOR LIMITED PUBLIC ENTITY TORT IMMUNITY--At its 12/5/95 meeting the Council approved a $400,000 grant from the State Coastal Conservancy for a flow-through seawater system. The Conservancy requires execution of two agreements to protect the public interest prior to release of the grant. Staff recommends approval of the resolution. RESOLUTION 18321, 18322, AND 1502 OFFERED BY MEMBER ALEVY, reading of the text was waived. Member Rindone stated he did not see any significant change recommended that would have a substantial impact on the on-going debt incurred by the BCT. He questioned if there were any other recommendations that were coming forth. Stephen Neudecker, Executive Director, responded that the development of the mid-bayfront had always been the idea of funding the long term operation and maintenance of the Nature Center. He felt the report outlined several steps taken in terms of revenue generation. Discussion had been held regarding the restructuring of the board and making them a separate fund raising arm of the BCT. They were looking at all different sources of revenue generation while in the past their fund raising strategies had been on specific programs and exhibits rather than general operating support. Member Rindone questioned if operational Jhnds were included in the grant applications ii''it would make the grants less competitive. Dr. Neudecker responded that with individual funders it did make a dift~mnce. Large tbundation grants usually allowed overhead support. Member Rindone questioned the $46,607 debt in sewer funds. Jim Thomson, Deputy City Manager, stated when the sewer line was laid it could have been paid for out of the sewer funds without being booked as a loan. It was a legitimate use of sewer funds. It was booked as a loan with the pogsibility of having it repaid. Member Rindone stated the total debt without interest was over $4 million and questioned if interest charges were being calculated. Dr. Neudeeker replied that all the interest charges were included, i.e. from 1988 through 1995. FY 1995/96 had not been booked. Member Padilla commended Dr. Neudecker on his etfurts. Staff was working with very little until them was a mid- bayfront project. Unless the Nature Center received large foundation grants and more t~e oriented presentations and programs, the onus was on the city. There was a difli:mnce between a general positive impact on the city and economic impacts on city government's budget. His concern was that there was an increasing need tbr city subsidy for the Center. It was important that the Agency/Council move fi~rward with realistic discussion on the mid- bayfront project. VOTE ON RESOLUTIONS: approved 4-0-1 with Hortnn absent. Minutes May 28, 1996 Page 4 5. RESOLUTION 1503 AUTHORIZING A WAIVER OF OUTSTANDING CONDITIONS TO CLOSE ESCROW UNDER 2.4a OF THE DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND BROADWAY VILLAGE BUSINESS HOMES, L.P., CONCERNING THE PROVISION OF EVIDENCE OF ACCEPTABLE CONSTRUCTION FINANCING--Staff has made the determination that San Diego National Bank's new, conditional loan conUmtment letter does not meet all of the requirements of Section 2.4a of the Disposition and Development Agreement. A waiver of outstanding conditions of the DDA will be necessary in order to close escrow. Staff recommends that the Agency adopt the resolution. (Community Development Director) Chris Salomone, Director of Conununity Development, stated it was anticipated that escrow could close as early as Friday and the city attorney's office had indicated that there was very little risk at that point based on the letters from the banking institution and the lenders letter of eminent approval of financing. RESOLUTION 1503 OFFERED BY MEMBER PADILLA, reading of the text was waived, passed and approved 4-0-1 with Horton absent. ORAL COMMUNICATIONS None OTHER BUSINESS 6. DIRECTOR'S/CITY MANAGER'S REPORT(S) - None 7. CHAIR'S/MAYOR'S REPORT(S) - None 8. AGENCY/COUNCIL MEMBER COMMENTS - None ADJOURNMENT ADJOURNMENT AT 11:50 P.M. to the Regular Redevelopment Agency Meeting on June 4, 1996 at 4:00 p.m., immediately following the City Council meeting, in the City Councit Chambers. Respectl~lly submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk by: ~'~ ' Vicki C. Soderquist, CMC, Del~aty City Clerk