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HomeMy WebLinkAboutMinutes 1982-11-08Mayor Roberta Cerri Teglia Vice Mayor Mark N. Addiego Council: Ronald G. Acosta Emanuele N. Damonte Gus Nicolopulos MINUTES CITY COUNCIL City Council Conference Room November 8, 1982 NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, that the City Council of the City of South San Francisco will hold a Special Meeting on Monday, the 8th day of November, 1982, at 4:30 p.m., in the City Council Conference Room, City Hall, 400 Grand Avenue, South San Francisco, California. Purpose of the meeting: 1. Validation proceedings for Gateway Assessment District Bond issue. Da ted: Closed Session for the discussion of labor relations. November 5, 1982 A G E N D A SPECIAL MEETING CALL TO ORDER: 1. Validation proceedings for Gateway Assessment District Bond Issue. ACTION TAKEN SPECIAL MEETING 4:43 p.m. Mayor Teglia presiding. Council present: Acosta, Nicolopulos, Addiego, Damonte and Teglia. Council absent: None. City Manager Birkelo stated that the Bond Counsel had informed Staff that a recent Court decision has placed a cloud over the Assessment Bond pro- ceedings that were under way. He stated that tonight's meeting had been called for Council to decide whether to proceed with the validation suit to remove that cloud prior to the sale of the bonds. He stated that Ken Jones, Esq., the Bond Counsel, would explain the validation proceedings in detail. 11/8/82 Page 1 AGENDA 1. Validation proceedings - Cont. ACTION TAKEN Ken Jones, Esq., stated that the lawsuit referred to was a decision by the Court of Appeals of the State of California, First Appellate District Division Three, involving the City Council of the City of San Jose vs. Ken South the Director of Finance in San Jose. He stated that the bottom line opinion is that a benefit assessment district created by the City Council of San Jose for the Maintenance of local improvements is an ad valorum tax within the meaning of Proposition 13. He continued, that the decision concerned Counsel in that the Court cited the cases on which the City has been relying since Proposition 13 to enable the Counsel to opine without question that special assessments were not subject to the limitations of Proposition 13 because they are to be distinguished from ad valorum tax and that the holdings were substantially to the effect that ad valorum tax is what people were talking about when they put tax limits on local entities and special assessments were exempt. He stated that there had been nothing in the history of special assessments in this State that he was aware of which distinguished between special assessments and maintenance and special assessments for capital improvements. He stated that in all cases they had been treated as separate and distinct from ad valorum taxes. He stated that now an Appellate Court has opined that a benefit assessment, which is what the City was involved with in Gateway, is "ad valorum tax". He cited various Appellate Court cases, in Placer County, Solvang and Fresno, that were contrary to the San Jose decision. He stated that the end result would be a petition to the Supreme Court to resolve the matter on a statewide level. He stated that based on all of these things his law firm had advised the City Clerk to refuse to follow Council 11/8/82 Page 2 AGENDA 1. Validation proceedings - Cont. ACTION TAKEN direction in the matter of filing the assessment map so that the City Attorney could in turn ask you to file a lawsuit to resolve the matter. He stated that yesterday he had been told that the Court, Division Three, had denied a petition for rehearing of this case which left the process in the situation just described - with a conflict and an undoubted necessity for going to Supreme Court. He stated that he had returned from San Jose, which is where this case originated, and the City Attorney had advised me that this very Court has again changed its mind and has granted a petition for rehearing. He stated that he did not know the exact legal effect of having granted that petition, however his office was reviewing the matter right now. He continued, that it was probable that the granting of the petition, from the very Court that decided this opinion, to look at it again - there might not be anything there and the City would be entitled to conduct itself. He stated that if that was true then perhaps the City was able to proceed with the understanding that drastic action would not have to be taken. He stated that the probilities that the Court will align with the other three decisions - then there would not be a conflict and could proceed with the path being followed. He asked Council to proceed to direct this mandate but subject to Counsel review of the effect of the granting of the petition. He stated that if it was at all possible Counsel will withdraw the advise given to the City Clerk to seek a lawsuit which had not been done lightly as it involves a possible adverse decision from the Court; and would be disadvan- tageous to the developers and the City. Discussion followed by Council on the alternatives outlined by Ken Jones, Esq. 11/8/82 Page 3 AGENDA 1. Validation proceedings - Cont. ACTION TAKEN Ken Jones, Esq., stated that a change should be made on the Resolution before adoption in item 1, change Herman Fitzgerald special legal counsel, to read "Robert K. Rogers, City Attorney, in conjunction with Herman Fitzgerald Counsel for the Redevelopment Agency." He gave Council a time frame for the Court action - if the Council took a position tonight based on the petition not being reheard, the City Attorney Rogers and Attorney Fitzgerald would file a petition with the Court for a writ of mandate tomarrow morning. He stated that the consequences of that are that the Court would set a return date (11/24/82) which gives the City Clerk, as represented by our firm, the opportunity to prepare an answer to this petition in support of her position. He stated that the Court would then hear both sides and decide which way to go. He stated that a decision should be reached by 12/1/82, to give the Clerk time to give proper legal notice, hold a Public Hearing and award the public contract and sell the bonds on 12/15/82 - which would mean a two-week delay in the schedule. Mr. John Aguillar, Homart Development, expressed concern in meeting the time schedule for receipt of bids and the award of the contract after meeting with the bond underwriters and dis- cussing the two-week delay. Ken Jones, Esq., stated that his advice was to proceed with the bids, arrange the sale of the bonds and proceed with construction as if there were no problems and a two week delay. City Manager Birkelo stated that the bid opening had been set back by one week from the 11/10/82 date to 11/17/82. M/S Nicolopulos/Damonte - To adopt the Resolution with section 1. changed to read "Robert K. Rogers, City Attorney 11/8/82 Page 4 AGENDA 1. Validation proceedings - Cont. ACTION TAKEN in conjunction with Herman Fitzgerald, Counsel for the Redevelopment Agency." RESOLUTION NO. 138-82 Carried by unanimous roll call vote. Mr. George Homolka, Woolsey & Hamm, stated that the dates had been changed in the bids and the time had been changed in which to be valid. He stated that there was a cushion as long as the Boundary Map was filed and he questioned whether the project could fall back to a September 8th date. Mr. Gaffney spoke on the following: the flexibility that had been written into the time schedule; getting the lowest bonds and placing the bonds before the underwriters; changing times for assessment bonds; the Federal law being changed to require regis- tration of bonds effective 1983; that because of the volume of the bonds there would only be one bid out of three or four considerations and the need for the City to proceed immediately; the importance of watching the bond market and picking the best bid; that Burt Wilson was not included because the firm wanted to be named underwriters and would not be competitive. Councilman Nicolopulos questioned the ability to sell the bonds in today's economic market. Mr. Gaffney replied that because of the strong developer the sale of bonds was greatly enhanced, however the market would affect the interest rate. Mr. Poletti questioned who would quaranty the bonds. Mr. Gaffney stated that the property owners in the Assessment District would guaranty the bonds, i.e., Homart and Genentech. City Manager Birkelo stated that for clarification perhaps when the bonds were sold there should be a reserve 11/8/82 Page 5 AGENDA ACTION TAKEN 139 Validation proceedings - Cont. RECESS: RECONVENED: CLOSED SESSION: RECALL TO ORDER: ADJOURNMENT: RESPECTFULLY SUBMITTED, City of South San Francisco fund to give the City backing in delin- quencies and that Council should note the change in procedure for the record as other than that originally noted. Mayor Teglia stated that it was so noted. Mayor Teglia declared a recess for the purpose of hearing Good and Welfare under the Redevelopment Agency at 5:20 p.m. Mayor Teglia reconvened the meeting at 5:45 p.m., all Council present. Council adjourned to a Closed Session at 5:46 p.m. to discuss labor relations. The meeting was recalled to order at 7:15 p.m., all Council present, no action taken. M/S Addiego/Damonte - That the meeting be adjourned. Carried by unanimous voice vote. Time of adjournment 7:16 p.m. APPROVED: ---R~l~erta Cerri Teglia, ~C'ity of South San Franc~co The entries of this Council meeting show the action taken by the City Council to dispose of an item. Oral presentations, arguments, and comments are recorded on tape. The tape and documents related to the items are on file in the office of the City Clerk and are available for inspection, review and copying. 11/8/82 Page 6