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HomeMy WebLinkAboutRDA Minutes 1992-08-12 Chairman John R. Penna M I N U T E S Boardmembers: Jack Drago Redevelopment Agency ~ Joseph A. Fernekes Roberta Cerri Teglia Municipal Services Building --Robert Yee Community Room August 12, 1992 AGENDA ACTION TAKEN CALL TO ORDER: (Cassette No. 1) 7:09 p.m. Chairman Penna presiding. ROLL CALL: Boardmembers present: Drago, Fernekes, Teglia, Yee, and Penna. Boardmembers absent: None. AGENDA REVIEW AGENDA REVIEW Executive Director Armas stated that there were no changes to the Agenda. CONSENT CALENDAR CONSENT CALENDAR 1. Motion to approve Minutes of the Approved. Regular Meeting of 7/22/92. --2. Motion to confirm expense claims Approved in the amount of $2,819.45. of 8/12/92. 3. Motion to cancel the regular meeting So ordered. of 8/26/92. M/S Teglia/Fernekes - To approve the Consent Calendar. Carried by unanimous voice vote. ADMINISTRATIVE BUSINESS ADMINISTRATIVE BUSINESS 4. Resolution authorizing execution of Executive Director Armas related: that restated Owner Participation and S~ over a decade ago City entered into an Development Agreement with Homart agreement with the Agency and Homart Development Corporation. Development Co. related to planned impro- vements in what is now known as the A RESOLUTION AUTHORIZING EXECUTION Gateway Project; the agreement specified OF RESTATED OWNER PARTICIPATION AND individual responsibility with respect to DEVELOPMENT AGREEMENT WITH HOMART specific infrastructure improvements and DEVELOPMENT CORPORATION the financing of those improvements, and outlined a variety of development levels that would be determined acceptable to the City; the agreement has been modified eight times combined with the fact that the very first document was complex and lengthy; beginning a number of months ago staff has had a number of meetings 8/12/92 Page 1 149 AGENDA ACTION TAKEN Resolution - Continued. with Homart to streamline the document, and deal with the more significant question of the financial respon- sibilities of the City and Agency; with respect to Homart the agreement spe- cified a variety of provisions that related to financing improvements and advances made by the Developer to the City, as well as credits that were to accrue to the Developer with the activi- ties; this agreement is intended to become updated, streamlined, and to resolve the financial obligations; with approval of the agreement there will be some $12,000,000 owed Homart, and there were other items on the agenda that deal with the initial steps for provisions for bonds to enable us to fulfill that obli- gation; once that action is taken we can complete our obligations to Homart, and repay those bonds through tax increment that accrues on an annual basis. Boardmember Yee stated that he had a copy of the agreement that he did not believe the other members had because it was not in the packet. He stated that the Agency was dealing with interest to date after Oct. 31st on $12,000,000 and questioned how the interest rate of .0216% per day for this year had been calculated if the money is not paid. He further questioned how the 7.8% or 7.9% interest per year had been derived. Director of Finance Margolis stated that there were numerous provisions in the current agreement that specified dif- ferent interest rates for different com- ponents. She stated that the interest rate was a compilation, an averaging if we did not pay off at that time what the interest would accrue according to the original terms of the OPA. She stated that there were aspects in the agreement where the City was paying out 8.9%, some about 6%, and the weighted averaging comes out to that seven point something percent that is reflected in the number Boardmember Yee cited. 8/12/92 Page 2 150 AGENDA ACTION TAKEN --4. Resolution - Continued. Boardmember Yee stated that he was questioning if that was a negotiable interest rate in the agreement. Executive Director Armas stated that the agareement already stipulated the interest rates, and what it did was to simply say if in the event we don't complete our bond activity by Oct. 31st, then Homart is entitled to continue to earn interest and this converts to a day basis if the bonds are not sold. He stated that the City had the right to negotiate the rates only if the owner wants to do it, but short of that - no. Boardmember Yee stated that the answer he had received from staff was that through out the different amendments there are different interest rates and this is the weighted average. He stated that his question was can this percentage be changed to be lower because every percent we pay Homart we have that much less, and wondered if the percentage could be lower than what is shown in the agreement -- and he got the answer not really, I'm not sure. Executive Director Armas stated that the heading on the agreement reads Amended and Restated, and we have not gone into a negotiating position to reexamine the basis of the agreement but have streamlined it to reflect and synchro- nized the various methods without new terms. Boardmember Yee stated that the percen- tage should appear in the existing agreement. Executive Director Armas stated that the existing agreement does not convert it by day, but if we went through the exercise - yes, you would arrive at this. Boardmember Yee stated that the agreement stated that within 30 days after execu- .... tion of this agreement, $215,000 would be paid Homart on account of the claim on the assessment district -- he questioned what the $215,000 was for. 8/12/92 Page 3 AGENDA ACTION TAKEN . 151 --4. Resolution - Continued. Executive Director Armas stated that the Developer had filed a claim with the City back in 1987, and we have not been pro- cessing it and it is intended to indicate that we will settle those outstanding obligations within 30 days of the execu- tion of this agreement which stems from the original assessment district. Boardmember Yee stated that Homart made the claim years ago and the City did not pay then because we didn't have the money or we didn't pay, and again asked what the items were in the $215,000. Executive Director Armas stated that it was not a question of whether we have the money - the monies are not the City's per se, the monies are the Assessment District's. He stated that he had not brought with him a listing of the items that support the $215,000, but would verify that they are legitimate expenses. Finance Director Margolis stated that the list had been submitted and was in fact reviewed, but these particular items she could not state off the top of her head. She stated that in general they were cost incurred in terms of items covered by the assessment district and incurred prior to the formation of the district. Boardmember Yee stated that he was uncom- fortable approving the agreement without- knowing what we are approving, and would not vote on the item. Executive Director Armas stated that the Agency could approve the agreement, and cause us to come back to you at the next meeting with a list of those items. He stated that this indicated that the payment would occur 30 days following execution of this agreement, so there would be time. Chairman Penna commented that it would be 8/12/92 Page 4 AGENDA ACT'ION TAKEN 152 Resolution - Continued. setting up an escrow account and staff would come back and explain the charges, and if there is a dispute in the charges we could correct them. He asked if that was what Boardmember Yee was seeking - and accuracy of the reporting. Boardmember Yee reiterated his concern over approving $215,000 without substan- tiation of the charges, and questioned the urgency of approving it today. Executive Director Armas stated that following his review of this with the Council and Agency a few weeks ago there was not an indication of this, and he had proceeded on a schedule to proceed with the bonds in order to cap the costs and make sure there are sufficient funds for the bonds. Boardmember Yee stated that as long as he had a list submitted for him to look at that he concurred with, then he did not have a problem - but without that, he was not sure. Chairman Penna agreed that no one wanted to pay a pig in a poke. Boardmember Teglia questioned if the list was available at City Hall, and if so could a staff member go and get it. Executive Director Armas stated no, it was not available because it would have to be assembled. Boardmember Teglia stated that usually on items like this the paperwork was volumi- nous, and if anyone on Council wanted further verification they can call and get it before the meeting, rather than hold this up. Boardmember Yee explained that all of the Board had to make a living and did not have that kind of time. He stated that it sounded logical that one could get that information before the meeting, but he had come into town on Monday and was 8/12/92 Page 5 AGENDA ACTION TAKEN - 153 4. Resolution - Continued. supposed to know everything here, and be alert enough to make decisions -- so don't tell me that I can't come to a meeting and ask questions. He stated that he was sick and tired of people telling him he should get all the infor- mation before the meeting -- if that is the case then just go ahead and approve everything. He stated that if he was going to make a right decision he should have the right to ask questions here or any other place as a Councilperson. He stated that he did not want to criti- cize Boardmember Teglia, and hoped he would not have to make these comments again. Boardmember Teglia stated that he did have the right, but she was saying that he could come into City Hall as late as 4:30 p.m. and ask for information for this meeting. Boardmember Yee stated that he had seen Boardmember Teglia at 5:00 p.m. after he had seen the City Clerk at 4:30 because this resolution says this' agreement is on file in the Clerk's Office. He con- tinued, the Clerk said she did not have the agreement, and to check with the Manager or the Attorney because she did not receive the agreement until after it was executed. He stated that he had found a copy of the agreement in the Manager's Office, had read it over dinner instead of talking with his family, and had questions which he had voiced tonight. Chairman Penna stated that he appreciated what Boardmember Yee was saying because he too was short on time. Executive Director Armas stated that he would have the information on the 1.4% at the next meeting, as well as the substan- tiation of the $215,000. Boardmember Drago stated he appreciated Boardmember Yee's questions because this 8/12/92 Page 6 AGENDA ACTION TAKEN - 154 --4. Resolution - Continued. was the type of dialogue that helps us to make intelligent decisions. He also questioned the urgency on acting on this tonight, and if it was acted on tonight - how could it be undone next time if we are not satisfied with the information received in the next 30 days. Executive Director Armas offered an alternative: approve this subject to satisfactory approval of the list for 5.1.4 and that section is a conditional approval. Boardmember Yee questioned if the urgency was because of the bond sales. Executive Director Armas stated that it was a combination of the bond sales and getting the clock to stop ticking on the increased interest costs, and there is a limit on what kind of funds are available to the Agency to issue bonds. He stated that the annual tax increment was reaching the maximum with the $12,000,000 figure that is in the agreement. M/S Yee/Fernekes - To adopt the Resolution subject to substantiation of costs. RESOLUTION NO. 4-92 Carried by unanimous voice vote. Executive Director Armas stated that as he understood it the same condition would apply while acting on the item as City Council. 5. Resolution authorizing agreement Finance Director Margolis stated that one with Bartle Wells Assoc. in connec- of the first orders of business for the tion with the issuance of tax allo- issuance of tax allocation bonds is to cation bonds; and resolution author- appoint the financial advisor to review izing budget amendment for $30,000. the options and lead the process in deve- S~O~ loping the process for the bonds. She A RESOLUTION AUTHORIZING THE recommended that Bartle Wells Assoc. be EXECUTIVE DIRECTOR TO EXECUTE AGREE- hired because of their involvement in the MENT BETWEEN BARTLE WELLS ASSOCIATES Gateway Redevelopment since its incep- AND THE REDEVELOPMENT AGENCY OF THE tion, as well as their handling of the CITY OF SOUTH SAN FRANCISCO bonds for the WQCP. 8/12/92 Page 7 5. Resolutions - Continued. M/S Yee/Fernekes - To adopt the Resolutions. A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN RESOLUTION NO. 5-92 FRANCISCO APPROVING BUDGET AMENDMENT 93-2 TO THE 1992-1993 OPERATING RESOLUTION NO. 6-92 BUDGET Carried by unanimous voice vote. GOOD AND WELFARE GOOD AND WELFARE No one chose to speak. CLOSED SESSION CLOSED SESSION 6. Closed Session for the purpose of The Agency chose not to hold a Closed the discussion of personnel mat- Session. ters, labor relations, property negotiations and litigation. M/S Fernekes/Yee - To adjourn the meeting. Carried by unanimous voice vote. ADJOURNMENT Time of adjournment was 7:35 p.m. RESPECTFULLY SUBMITTED, ,A~]~ROVLU ..... ~ Barbara A. Battaya, Cler~ irman Redevelopment Agency ~v~o~ ~ancisco City of South San Francisco 8/12/92 Page 8