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