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HomeMy WebLinkAbout2000 10 04 CC MIN JSS2000 10 04 CC MIN JSS;¢f4¦ÆCOUNCIL CHAMBER OCTOBER 4, 2000 14403 E. PACIFIC AVENUE WEDNESDAY BALDWIN PARK, CA 91706 6:00 P.M. The CITY COUNCIL. COMMUNITY REDEVELOPMENT AGENCY, HOUSING AUTHORITY, HOUSING COMMISSION AND the RECREATION AND COMMUNITY SERVICES COMMISSION of the City of Baldwin Park met in JOINT STUDY SESSION at the above time and place. ROLL CALL Present: Council/Agency/Authority Members: Linda Gair, Marlen Garcia, William Bill" Van Cleave. Mayor Pro Tem/Vice Chairman Ricardo Pacheco. Mayor/Chairman Manuel Lozano. Housing Commission Members: Lilly Lee Bailey, Cecelia Diaz, Gloria Gonzalez, Sally Weick, and Margarita R. Vargas. Absent: Patricia Graham and Blanca Solis. Recreation and Community Services Commission Members: Rafael Garcia. Irma Tarango. Rita P. Vasquez. Priscilla Veste. and Andrea Carrillo. Absent/excused: Martha Reyes, Absent: Ramona DeLaTorre Also Present: Dayle Keller. Chief Executive Officer/Executive Director; Arnold Alvarez-Glasman. City/Agency Attorney; Rick Forintos, Community Development Director; Shafique Nayier. Public Works Director; Manny Carrillo, Recreation and Community Services Director; Jose Sanchez, Interim Finance Director; Suzie Ruelas. Housing Specialist; and Rosemary M. Ramirez. Deputy City Clerk. CLOSED SESSION The Council/Agency recessed to Closed Session at 6:03 p.m. and reconvened at 6:35 p.m., with all members present. City Attorney Alvarez-Glasman reported the action as follows: CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION GC 54956.9 Name of Case: Franlkin McKinny vs. City of Baldwin Park Action: City Council authorized a settlement. No final action taken. Nothing further to report. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION GC 54956.9 Number of Cases: One(1) Action: City Council received briefing from legal counsel. No final action taken, nothing further to report. CONFERENCE WITH LABOR NEGOTIATOR GC 54957.6 Agency Negotiators: Jose Mesa, Personnel/Risk Manager, Jose Sanchez. Interim Finance Director, and Attorney Richard Kreisler BIB] 37642-U01 2000-U02 10-U02 04-U02 CC-U02 MIN-U02 JSS-U02 LI1-U03 FO3433-U03 FO3933-U03 DO9063-U03 C4-U03 MINUTES1-U03 1/21/2003-U04 ROBIN-U04 JOINT-U05 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL,-U06 CRA,-U06 HA,-U06 HOUSING-U06 COMMISSION,-U06 RECREATION-U06 &-U06 COMMUNITY-U06 SERVICES-U06 2000 10 04 CC MIN JSS;¢f4¦ÆStudy Session Minutes Octob^^, 2000 w Page 2 Employee Organizations): SEIU, Professional and Technical Employees; Confidential Employees; and General Management Employees' Association Action: Matter was not discussed. Continued to October 18, 2000. CONFERENCE WITH REAL PROPERTY NEGOTIATOR GC 54956.8 Property: 21.5 Acre site bounded by Big Dalton Avenue west) Merced Avenue on the North. Puente Avenue on the East. Garvey Avenue and the San Bernardino Interstate 10 Freeway south; Negotiating Parties: Agency negotiating with Lewis Investment Company. LLC; Agency Negotiators: Dayle Keller and Arnold Alvarez-Glasman; Under Negotiation: Terms and conditions of Disposition and Development Agreement Action: Direction was provided to staff with authorization to extend a purchase offer. No final action taken. Nothing further to report. REPORTS OF OFFICERS JOINT MEETING WITH HOUSING COMMISSION AND RECREATION AND COMMUNITY SERVICES COMMISSION MEMBERS REGARDING THE PROPOSED HOUSING AND URBAN DEVELOPMENT SECTION 108 LOAN APPLICATION AND AMENDMENTS TO THE CDBG ANNUAL ACTION PLAN Director Forintos presented the report, stating that this meeting was called for the purpose of providing information to the Council and Commission Members regarding a proposed amendment to the CDBG Annual Action Plan and to receive direction from the City Council with respect to selecting a funding source for the repayment of the Section 108 Loan Application associated with the development of the 24-acre site. On July 16. 2000, the City Council hired Mark Briggs & Associates. Inc.. to prepare a HDD Section 108 Loan Guarantee application to assist with the final land costs for the 24-acre site, Lewis Retail Project. It is important to note that Section 108 funding cannot be used to reimburse the housing fund for previous acquisitions therefore, repayment of the loan should come from acquisition funds to be advanced by Lewis. In addition, staff is recommending that the City apply to the U.S. Department of Commerce Economic Development Administration EDA) for matching grant funds to assist with the construction of this projects off-site improvements. Director Forintos further explained that the Section 108 Loan Guarantee program is a sub-part to the Community Development Block Grant CDBG) program. The City can apply for Section 108 funds as a participant in the CDBG program. While this is a non-competitive process, there are specific program requirements that must be complied with. Section 108 program was implemented to met CDBG applicant's needs where they were saving up several years worth of their annual CDBG allocations to fund significant sized projects. HUD developed the Section 108 program to allow eligible jurisdictions to borrow against their future years CDBG allocations. If the City selected the option of having the repayment come down from the revenues generated by the project, the repayment can be structured to cover the firs two years while the project is under construction and not generating any revenues. The Section 108 repayment would be interest only BIB] 37642-U01 2000-U02 10-U02 04-U02 CC-U02 MIN-U02 JSS-U02 LI1-U03 FO3433-U03 FO3933-U03 DO9063-U03 C4-U03 MINUTES1-U03 1/21/2003-U04 ROBIN-U04 JOINT-U05 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL,-U06 CRA,-U06 HA,-U06 HOUSING-U06 COMMISSION,-U06 RECREATION-U06 &-U06 COMMUNITY-U06 SERVICES-U06 2000 10 04 CC MIN JSS;¢f4¦Æ Octob^^. Study Session Minutes OctobeW. 2000 Page 3 for the first two years, with principal being paid over the remaining 18 years. The Section 108 funding request may include an amount of the first two years of capitalized interest. This scenario requires no expenditures by the City until the project is completed and generated tax revenues. While the underlining security for the loan is the City's Annual Allocation of CDBG funds, HDD requires that the city identify additional security for the loan. This is required in case Congress decides to do away with the CDBG program or if the city's annual allocation should fall below the amount needed for the repayment. HUD accepts a wide variety of collateral instruments. The most common is for the City/Agency to have a second deed of trust on the project property for the amount of the Section 108 Loan. While HUD will accept a second position, the combined debt on the property cannot exceed 80% of the loan to value ratio and the City will have to have an after value" appraisal done on the project. The City or Agency can use other collateral such as Agency tax increment, or other property owned by the City or Agency or any other income stream the City may identify such as hotel or motel generated Transient Occupancy Tax TOT). While the application must identify the additional security, the documentation substantiating the value of the collateral does not have to be provided until the City is ready to draw down the funds. Director Forintos further explained the Economic Development Administration Grant by stating that the other funding program that is available to the City would provide grant funds to pay for up to 50% of the off-site improvement costs for the project. The EDA, under the U.S. Department of Commerce, can provide up to $1 million in matching grant funds to jurisdictions that have unemployment levels and per capita income levels that exceed the national average. These Public Works Grants are competitive. The City exceeds the national average in both categories. Staff recently attended a one-day workshop hosted by the EDA at which time, a discussion took place with a local EDA Representative who indicated that the City should submit a Preliminary Application this would assure a position in the review process. EDA invites cities that have submitted Preliminary Applications to make presentation on their projects to the Regional Office staff, which is located in Seattle, WA. Once a city is invited to submit a Final Application, they can be 99% assured that they will be funded as long as they can meet all of the requirements. If the City immediately submits a Preliminary Application, and if it is approved, funding could be received as early as September, 2001 and certainly by December. 2001. In regards to EDA policy issues. Director Forintos stated that under the program a City could borrow up to five times their annual CDBG allocation, which in this case would be $9 million. The City can take up to 20 years to repay the loan. The underlying security for the loan is the City's Annual CDBG allocation. The interest rate on the loan is established when HUD collects all of the Section 108's nationwide, and every 12 to 16 months, sells them on the open market. These receive a good interest rate be due to the Federal Governments backing. HUD has established a procedure for those applicants who require their funds prior to the sale. They have an Agreement with a financial institution that provides the funds and applies an interest rate based on 20 basis points over LIBOR rates. This loan" is taken out when the Section 108's are sold. Historically, it has taken HUD six to eight months to process and approve Section 108 requests. Once it is approved, the City has up to a year in which to draw down the funds. There is no financial obligation to the City until a draw down of funds takes place. BIB] 37642-U01 2000-U02 10-U02 04-U02 CC-U02 MIN-U02 JSS-U02 LI1-U03 FO3433-U03 FO3933-U03 DO9063-U03 C4-U03 MINUTES1-U03 1/21/2003-U04 ROBIN-U04 JOINT-U05 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL,-U06 CRA,-U06 HA,-U06 HOUSING-U06 COMMISSION,-U06 RECREATION-U06 &-U06 COMMUNITY-U06 SERVICES-U06 2000 10 04 CC MIN JSS;¢f4¦ÆStudy Session Minutes OctobeW. 2000 OctolJW. Page 4 In response to Recreation and Community Services Commissioner Sally Weick's inquiries, Attorney Alvarez-Glasman explained that off- site improvements are defined as curb. gutter, storm drain and incidentals that are outside of the property pad. Attorney Alvarez-Glasman also explained that an amendment would have to be made to the Annual Action Plan, by identifying the funding source for the repayment of this loan. With regards to whether or not public services would be affected by this amendment, Director Forintos stated that those services would not be affected this fiscal year. Director Nayier stated that recommended funding sources for this year are CDBG streets and sidewalks and if the Council so desires, the teen center. Additional years would need to be studied and recommendations made to identify those areas of repayment at that time. Director Nayier also stated that other grants have been applied for which will supplement the reduction therefore, public works projects will not be affected. Upon question from Mayor/Member Pro Tern Pacheco. Director Forintos indicated that the funding source could be identified entirely to one fund. Upon question from Commissioner Lilly Bailey regarding HUD's future existence. Attorney Alvarez- Glasman stated that there is no indication nor are there any plans to dissolve HUD. Councilwoman Gair requested that in the future, staff conduct meetings with the commission to educate them on the process and allow them sufficient amount of time to understand and review the process. After lengthy discussion, Director Forintos confirmed that as part of the application process, the City must identify the source of repayment. A motion was made to identify the source of repayment as CDBG to be the funding source and Sales tax was identified as the additional source. MOTION: Mayor Pro Tern Pacheco SECOND: Councilwoman Gair Motion carried) ADJOURN There being no other matters before the Council/Agency, the meeting was adjourned at 7:00 p.m. Approved as presented by the Council, Agency and Authority at their meeting held November 1, 2000. / Jt^u, /zL/^ u. l^<^-r^-7 Rosemary M.lRamfrdz. Deputy City Clerk Suzie Rirelas, Housing Commission Secretary Jose Sanchez.AuthoriJLfgeccCTarvBeverly Plantico./^ecreation & Community Services Secret. BIB] 37642-U01 2000-U02 10-U02 04-U02 CC-U02 MIN-U02 JSS-U02 LI1-U03 FO3433-U03 FO3933-U03 DO9063-U03 C4-U03 MINUTES1-U03 1/21/2003-U04 ROBIN-U04 JOINT-U05 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL,-U06 CRA,-U06 HA,-U06 HOUSING-U06 COMMISSION,-U06 RECREATION-U06 &-U06 COMMUNITY-U06 SERVICES-U06