Loading...
HomeMy WebLinkAboutrda min 1993/05/18 ~ OF A REGULAR MEETING OF THE RF2)~PMF2qT AGENCY OF THE CITY OF CHULA VISTA Tuesday, May 18, 1993 Council Chambers 11:10 p.m. Public Services Building GALL TO ORDER 1. ROLL CALL: PRESENT: Member Horton, Fox, Moore, Rindone, and Chairman Nader ALSO PRESENT: John D. Goss; Director; Bruce M. Boogaard, Agency Attorney; and Beverly A. Authelet, City Clerk 2. APPROVAL OF MINUTES: February16,1993; February 23,1993; Apri120,1993 and May l l, 1993 MSC (Moore/Fox) to approved the minute~ of February 16, February 23, April 20, and May 11, 1993 as presented. Approved unanimously with f~hairmail Nader abstaining on the rain,Ires of Peblxlary 16 and February 23, 199a. CONSENT CAT.RNDAR 3. WRi'l-fl/g COMMUNICATIONS: None. * * * END OF CONSENT C,,~.T.T~]~D~ * * * PUBLIC HEARINGS 4. PUBLIC HEAR1NG REGARDING THE SALE OF SPA(~ THREE AT ORANGE TREE MOBIle-HOME PARK -- In November 1987, Orange Tree Mobilehome Park converted to resident ownership. At that time 29 homeowners did not wish to purchase or were unable to purchase their spaces. In order to accomplish the acquisition, the Agency agreed to purchase the spaces for those 29 residents and rent the space to the homeowner. The Agency's desire is to sell those spaces as new home buyers move into the park. A new home buyer wishes to purchase Space Three from the Agency. The Agency's policy is to sell the space at the appraised value of the property. Staff recommends approval of the resolution. (Community Development Director) RESOLUTION 1326 APPROVING THE SALE OF SPACE NUMBER 3 AT ORANGE IRF. E MOBII~J-IOME PARK AND AUTHORIZING THE COMMUNITY DEVFJ~PMENT DIRECTOR TO EXECUTE A PURCHASE AGI~.~MENT AND ESCROW INSTRUCTIONS Member Moore questioned the amount originally paid for the site. Alisa Rogers, Community Development Specialist, responded that the Agency paid approximately $25,000 for the site. The current loan outstanding was approximately $21,000. Minutes May 18, 1993 Page 2 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. RESOLUTION 1326 OFFERED BY MEMBER MOORE, reading of the text wa~ waived, pa~ed and approved tmanlmou~ly. OJ~L COMMUNICATIONS None ACTION ITEMS 5. RESOLUTION 1327 APPROVING THE COUNTY OF SAN DIEOO REFUNDING OFVARIOUS DEBT INCLUDING SOUTH BAY REGIONAL CEN'rF2{ FINAN~.'o THROUGH THE P. ED~PMENT AGENCY OF THE uilY OF CHULA VISTA AND AUTHORIZING THE EXECU'I13/E DIRECTOR TO EXECUTE THE NOTICE OF REDEMPTION - On June 7, 1979 the Agency approved Resolution 177 authorizing the issuance of the Agency's South Bay Regional Center 1979 Lease Revenue Bonds in the amount of $51 million for construction of the satellite court facility. Due to currently favorable interest rates the County is requesting to refinance the bonds to achieve a cost savings in annual lease payments. There is no financial impact to the Redevelopment Agency or the City. Staff recommends approval of the resolution. (County of San Diego, Director of Finance, and Community Development Director) .Chair Nader had questioned in the past whether the item would eventually require a vote by the Agency and it was his understanding that it would not. Lyman Christopher, Director of Finance, responded that at the time of Chair Nader's question he did not have the background information. There had been discussion between the County and the City he was unaware of. The question was whether or not the Redevelopment Agency would have to approve any refunding of the Agency bonds by the County. His response at that time was that if the County was going to use the Redevelopment Agency to refund the bonds, then yes the Agency would be involved in the approval process. If there was going to be a different corporation/entity used by the County to refund the bonds, issue new bonds, or call the existing bonds, he then expressed doubt that Agency had any influence or approval authority of that refunding. It was now his understanding that the County was using a separate entity. In terms of whether or not the approval of the RDA was needed, he would defer to the Bond Counsel or County Counsel. Agency Attorney Boogaard stated he had not closely examined the item but if the Agency did not call the bonds, as authorized by the resolution, the large pool of money would be sitting with the trustee, the County would be absolved of responsibility, and the bond holders would not be paid off. It could possibly expose them to an arbitrage situation where the interest earnings exceeded certain limitations by the federal government. He had been advised that there was a substantial amount of local participation in the underwriting effort, i.e. 650/6 of the underwriting action was handled by companies that had sU'ong representation locally. Twenty-five percent of the action was to minority and women owned businesses. · Peggy Goldstein, 1600 Pacific Highway, San Diego, CA, representing San Diego County, stated the Gounty had a very strong local preference policy. There were three criteria that qualified a company for local preference: 1) County business certificate; 2) employees in the County; and 3) actual physical offices in the Gounty. By that criteria, 65% of the bonds would be sold by underwriters that would meet the Minutes May 18, 1993 Page 3 criteria for local preference. There were no companies based in San Diego County, two companies were based in California which accounted for 20% and 20% was minority representation. Chair Nader questioned whether there was competitive bidding. Ms. Goldstein stated an RFQ had been issued and approximately forty responses were received. Local preference would not be taken if price or quality were to be sacrificed; Chair Nader questioned what would have been sacrificed ff the business had gone to firms located within the state. Ms. Goldstein responded that it was price and/or inability to underwrite the deal. It was an extremely competitive process. Member Horton questioned whether one of the two California finns could have been the lead agency. Ms. Goldstein stated the deal was split between six firms. Two f'mns had 25% of the work, two other firms had 15% each, and two FUTaS had 10% each. Chair Nader stated the SDG&E bond sale was over $250,000 and questioned whether staff had information as to whether that firm was unable to do the job. Mr. Christopher responded that staff had not been in contact with the firm that did the SDG&E bond sale in relation to the proposal before the Agency. Chair Nader stated they were a California based firm and he was concerned that there appeared there was an unquestioned assumption that if you were not based in New York you weren't able to handle the business and there was a sacrifice in quality if the profits were kept in California. As far as he was aware, the City's experience was that the assumption was incorrect. In this particular case, he felt he and others had put the County on notice that they would be questioned on a result that was based solely on that assumption, which he felt was the case. Therefore, he had difficulty in deciding. Ms. Goldstein stated Morgan Stanley was the lead and the office that would be handling the sale was based in San Francisco, not New York. She stated all underwriters were incorporated in Delaware. The County had a stringent standard regarding retail retention so that any of the firms working for the County were required to demonstrate how they were actually going to the retail market in San Diego and selling bonds. William Smith, 1600 Pacific Highway, San Diego, GA, County Counsel, requested that the Bond Counsel describe the structure of the deal and what action was before the Agency. Dan Deshon, O'Melveny & Myers Bond Counsel, representing San Diego County, stated the Chula Vista portion of the refunding was one of five portions being refunded in the master refunding project. In the technical sense, the bonds in question were bonds that were issued by the Agency and therefore, a for formal Notice of Redemption needed to be sent out. The real security for the bonds was the lease with the County of San Diego. The Agency had no financial obligation for the bonds. The County did have, at any point in time, the authority to pre-pay its lease obligation thereby absalving the County of any obligation for the bonds; presenting the Agency's trustee a pot of money which under both the existing bond documents as well as current tax law could only be used for one purpose, which was to redeem the bonds. Agency Attorney Boogaard questioned whether the underwriter had been selected and if there was anything that could be done to change that decision. Minutes May 18, 1993 Page 4 Mr. Deshon felt an important consideration was that the deal had to close by the end of May. From a practical standpoint they were assuming action that evening and would be pricing immediately and would be doing everything they possibly could to close at the end of the week. Chair Nader stated he had put them on notice in his letter of 4/27/93, that it would be an issue but they had proceed and now it was on the agenda in May when they needed to close at the end of the May. He had not been given any of the comparative materials supplied in the RFQ's. Mr. Smith stated when the County received the Agency's letter the selection process was virtually completed at that time. It had not gone to the SanCal Board formally but the selection process had gone through. It was his understanding the Selection Committee did consider all the proposals and evaluate them on various criteria, including local presence and California. All of the firms involved had substantial California offices, employed Californians, and paid taxes to California. The resolution could be misleading as the County did not need the Agency to approve the Counters refunding. The County did need the executive director of the Agency to sent a Notice of Redemption on the already existing bonds once the County had completed their bond issue. They were not asking the Agency to approve the selection process followed by the County. Member Horton questioned what would happen if the Agency did not pass the resolution. Mr. Smith responded that it could present a true problem for the County. Agency Attorney Boogaard requested clarification. It was his understanding from the presentation by Mr. Deshon that the County would be relieved of a problem. Mr. Deshon stated it presented a two-fold problem, i.e. a potential problem for the Agency. The County would be absolved of their obligation under the lease, the Agency would have a pool of money and the Agency would still be responsible for the bonds. There was potential arbin'age ramifications, the money would have to be monitored and it would have to be yield restricted in the light. If they were not followed the outstanding Agency bonds could become taxable. There were also tax ramifications for the County due to the nature of the refunding the County was doing the money had to be used to call the Agency bonds at the earliest possible call date, which was July 1st, which required a mailing of a Notice of Redemption by June 1st or the County's new bonds would become taxable. Member Moore stated he was concerned that there was a partnership to consU'uct the Southbay Regional Center and it was a win/win situation and should continue to be so. He was upset that the agencies were not communicating with each other. He would not be surprised if the information presented by Ms. Goldstein had been presented to staff and staff had represented to the County that the recommendation to the Agency would be a "slam dunk". Member Rindone stated he was not pleased with the recent actions of the County on several issues. The County and City had worked well together in the past but were not working well now and he hoped that message would be taken back. He felt the agencies needed each other and needed to maintain the relationship they had in the past. The Agency was in a situation where they had to vote for the resolution as it would serve no purpose not to and would create additional costs to the taxpayers. RESOLUTION 1327 OFP'I/RF_,D BY MEMBER FOX, reading of the text wa~ waived, pa.~,ed and approved 4--1 with Nader opposed. OTHER BUSINESS Minutes May 18, 1993 Page 5 6. DIRECTOR Schedule of Meetings. 7. CHAIRMAN'S REPORT - None 8. MEMBERS' COMMFa'qTS - None AIXIOImNMENT The Redevelopment Agency recessed at 11:35 p.m. and reconvened in Closed Session at 12:20 a.m. to discuss: Instructions to negotiate/property acquisition for Midbayfront (William Barkett, owner, parcel bounded by Chula Vista Nature Interpretive Center to the north; Bay Boulevard to the east; San Diego Bay to the west; and 'F' Street to the south) pursuant to Government Code Section 54956.8. ADJOURNMENT AT 12:30 A.M. to a joint special meeting of the Redevelopment Agency/City Council on Tuesday, May 25, 1993 at 6:00 p.m., Council Chambers, Public Services Building. Respectfully submitted, BEVERLY A. AUTHELET, CMC, City Clerk by: Vicki C. Soderquist, Deputy City Clerk