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Home My WebLink About1997 11 19 CC MIN SS1997 11 19 CC MIN SS@˜}ûMIN SS NOV 19 1997à›[H'ê8 REGULAR STUDY SESSION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK CITY HALL, 14403 EAST PACIFIC AVENUE, WEDNESDAY, NOVEMBER 19,1997 The Study Session met in regular session in the Council Chamber at 6:00 p.m. ROLL CALL PRESENT: COUNCILMEMBERS LOZANO, MUSE, VAN CLEAVE AND MAYOR LOWEST ALSO PRESENT: City Attorney Olivas, City Manager Yeats, Acting Chief of Police Kies, Dir. of Community Development Cervantes, Dir. of Public Works Mousavi Dir. of Rec/Community Services Nunez, City Treasurer Montenegro, and City Clerk Gair 00- ORAL COMMUNICATION Mayor Lowes declared Oral Communications open and invited those wishing to speak on any subject to come forward. There were none. Mayor Lowes declared Oral Communications closed. 00- TOPIC OF DISCUSSION City Manager Yeats introduced the underwriters with E. J. Delarosa Company for AutoNation Financing Plan, Marilyn Garcia, Dean Flores, and Paul Rosenstiel. Dean Flores described the overall structure of financing that pertains to AutoNation. Delarosa Company is a major underwriter in California Bonds. Source one is HUD and EDA Loans that are available to the City. The amount of jobs that will be created by AutoNation will bring $6.25 million to the City. With the HUD 108 Loan, the City can also take in blight money, which will get the City close to $8 million. That's important, because it is new money, it is money that's not coming out of the City's budget. It's BIB] 37175-U01 MIN-U02 SS-U02 NOV-U02 19-U02 1997-U02 LG1-U03 LI1-U03 FO3433-U03 FO3437-U03 FO3477-U03 DO4152-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 MIN-U05 SS-U05 NOV-U05 19-U05 1997-U05 BIB] 37260-U01 1997-U02 11-U02 19-U02 CC-U02 MIN-U02 SS-U02 LG1-U03 LI1-U03 FO3433-U03 FO3437-U03 DO4152-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 CITY-U05 COUNCIL-U05 MINUTES-U05 1997 11 19 CC MIN SS@˜}ûMIN SS NOV 19 1997à›[H'ê8REGULAR STUDY SESSION OF THE CITY COUNCIL PAGE NO. 2 OF THE CITY OF BALDWIN PARK NOVEMBER 19, 1997 money that the City is eligible to apply for from a grant perspective. Financing is the primary source. The second source of financing: the County EDA Loan which is similar to the 108 Loan, which is another type of grant. Source two is the Tax Allocation Bonds. The bond market is at an all time low which is good timing for the City. The target date for the conceptual financing is January, 1998. Paul Rosenstiel, E. J. Delarosa Company, San Francisco Office, gave an overview about the Tax Allocation Bonds. First, there are bonds that are outstanding in the San Gabriel River Project Area. That debt could be refunded and the savings on the San Gabriel River Project bond issue be financed with today's interest. The firm is looking at moving that money, or loaning that money to the Sierra Vista Project Area for the AutoNation Project. Secondly, issue Tax Allocation Bonds in the Sierra Vista Project Area. Sierra Vista is subject to a pass through agreement with Los Angeles County, where a significant portion of the tax revenues that are collected go to Los Angeles County, but the County deferred the receipt of their share until Fiscal Year 2000-2001. The Agency then must pay Los Angeles County its share as well as repay Los Angeles County what has been deferred. The repayment to the County comes after repayment of debt service after any debt issued. The City could issue additional bonds against that money before Year 2000. City Manager Yeats stated that the legal work will begin by the second meeting in December. Council will receive preliminary reports and resolutions will need to be adopted. The market is right for the AutoNation project, and several debt financing tools can be used. The Director of Community Development will bring a report to Council on housing needs in the month of December. One thing that the City will need to look at is how to maximize the housing set aside funds that is required each year. Each project area gets to spend 80% for debt service from property tax revenues or increment revenues that is received from the County. 20% of those funds have to be used for housing replacement. The Rousing Bonds should be issued in February. The Bond Team and the staff will be working on both loan applications for HUD Section 108 Loans and for the County's EDA Loan. The Sierra Center has generated interest from other developers. In response to Councilmember Lozano, Mr. Rosenstiel stated that the revenues that are received in Sierra Vista, 49% of that is supposed to go to the County. The County deferred receipt of that money until Fiscal Year 2000-2001. After that time, the County is entitled to the 49%, in addition to which the Agency has to repay with interest the amount of money that was deferred. The deferral accumulates each year as a loan that the Agency owes to the County. But, the City gets to use the revenue first to repay the debt service on the bonds. If bonds are issued, basically that uses all the revenues, the City has use of all that money. City Manager Yeats stated that it is an opportunity to maximize the amount of outstanding debt, before the City has to start paying the County back that 49% of revenues. BIB] 37175-U01 MIN-U02 SS-U02 NOV-U02 19-U02 1997-U02 LG1-U03 LI1-U03 FO3433-U03 FO3437-U03 FO3477-U03 DO4152-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 MIN-U05 SS-U05 NOV-U05 19-U05 1997-U05 BIB] 37260-U01 1997-U02 11-U02 19-U02 CC-U02 MIN-U02 SS-U02 LG1-U03 LI1-U03 FO3433-U03 FO3437-U03 DO4152-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 CITY-U05 COUNCIL-U05 MINUTES-U05 1997 11 19 CC MIN SS@˜}ûMIN SS NOV 19 1997à›[H'ê8REGULAR STUDY SESSION OF THE CITY COUNCIL PAGE NO. 3 OF THE CITY OF BALDWIN PARK NOVEMBER 19,1997 In response to Mayor Lowes, Mr. Rosenstiel stated that the increase of the Consumer Price Index CPI) each year is the amount of interest that is charged for to the deferred amount owed to the County. City Manager Yeats stated that the high CPI was 1.8% last year. In response to Mayor pro tern Muse, Marilyn Garcia stated that housing set aside bonds, if law permitted, loan them temporarily to AutoNation project. That would only be done if it were legal and if the money would be paid back iron clad. An alternate structure is being pursued, that would have the housing set aside money issued for housing set aside bonds. Borrowing is limited based on how much property tax money is generated by the project areas. In response to Mayor pro tern Muse, Dean Flores stated that the likelihood of the City getting the 108 Loan is 90%. The City has never applied for a 108 Loan, and that is looked at as a plus from the HUD perspective. Banks do interim financing based on a HUD letter. The City has a strong application. City Manager Yeats stated that the City will pursue the housing issue, generating more money than is needed to do the project, so there would be a surplus. The City has done some very impressive projects. The City will begin to see the Sierra Center tax revenue in April. In response to Councilmember Van Cleave, City Manager Yeats stated that the City can only go by the actual tax revenue that is being received. The City has received additional tax dollars, because of the appraisal and the appeal process of Kaiser. Ultimately, that will be based on the business decisions that Kaiser Permanente makes, and the City cannot control that. Marilyn Garcia, stated that a bond investor takes a conservative approach when any uncertainty exists. The Kaiser situation will be studied and quantified. The financing will happen knowing what the true facts are and interpreting them in a way that is not overly optimistic. Mr. Rosensteel stated that financing is being built without relying on Kaiser, the City will rely on Sierra Center, AutoNation and other sources of revenue Mayor Lowes requested that staff keep Council informed as these bond issues progress. City Manager Yeats stated that in the near future a Closed Session item would be placed on the agenda pertaining to some actual project costs that involve acquisition and relocation. 00- BIB] 37175-U01 MIN-U02 SS-U02 NOV-U02 19-U02 1997-U02 LG1-U03 LI1-U03 FO3433-U03 FO3437-U03 FO3477-U03 DO4152-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 MIN-U05 SS-U05 NOV-U05 19-U05 1997-U05 BIB] 37260-U01 1997-U02 11-U02 19-U02 CC-U02 MIN-U02 SS-U02 LG1-U03 LI1-U03 FO3433-U03 FO3437-U03 DO4152-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 CITY-U05 COUNCIL-U05 MINUTES-U05 1997 11 19 CC MIN SS@˜}ûMIN SS NOV 19 1997à›[H'ê8REGULAR STUDY SESSION OF THE CITY COUNCIL PAGE NO. 4 OF THE CITY OF BALDWIN PARK NOVEMBER 19,1997 Mayor Lowes adjourned the Study Session at 6:35 p.m. There were objections. LINDA L. GAIR, CITY CLERK BETTY BRANEK, DEPUTY CITY CLERK BIB] 37175-U01 MIN-U02 SS-U02 NOV-U02 19-U02 1997-U02 LG1-U03 LI1-U03 FO3433-U03 FO3437-U03 FO3477-U03 DO4152-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 MIN-U05 SS-U05 NOV-U05 19-U05 1997-U05 BIB] 37260-U01 1997-U02 11-U02 19-U02 CC-U02 MIN-U02 SS-U02 LG1-U03 LI1-U03 FO3433-U03 FO3437-U03 DO4152-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 CITY-U05 COUNCIL-U05 MINUTES-U05