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Home My WebLink AboutOB Minutes 12.19.17 @2:00MINUTES REGULAR MEETING Ca OVERSIGHT BOARD TO THE J O SUCCESSOR AGENCY TO THE FORMER C9LIFOR REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO CITY MANAGER CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA TUESDAY, DECEMBER 19, 2017 2:00 p.m. CALL TO ORDER TIME: 2:00 p.m. ROLL CALL PRESENT: Chairperson Neil Cullen, Shawnterra Moore (alternate for Vice Chair Michael Krause) (arrived at 2:21 p.m.), Members Mark Addiego, Reyna Farreles (arrived at 2:05 p.m.), Paul Scannell, Barbara Christensen, Adena Friedman ABSENT: Vice Chair Michael Krause PLEDGE OF ALLEGIANCE Board member Christensen. AGENDA REVIEW None. PUBLIC COMMENTS None. MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes from the meeting of September 19, 2017. MOTION Member Scannell moved and Member Addiego seconded a motion to approve the minutes from the meeting of September 19, 2017. The motion carried unanimously. 2. Report regarding a resolution approving the Recognized Obligation Payments Schedule (ROPS) for the period July 2018 through June 2019. (Karen Miller, Financial Services Manager) 2a. Resolution approving the Recognized Obligation Payments Schedule (ROPS) for the period July 2018 through June 2019, pursuant to Health and Safety Code Section 34177(1). Manager Miller presented the proposed ROPS for 2018 -2019. Assistant City Manager Lee introduced staff and consultants present for the project. She summarized the 2011 Disposition and Development Agreement, development phases, streets and utilities to the hub and Point, and development milestones. Assistant City Attorney Mattas discussed the cost obligations and anticipated cost overruns. He provided copies of the agreement recitals. Assistant City Manager Lee presented the key elements of the project. In response to Chair Cullen, Assistant City Manager Lee explained grading of the landfill. She explained cost obligations for Phase 1 C. In response to Member Scannell, Assistant City Attorney Mattas stated the Successor Agency was responsible for $18.4 million. City Manager Futrell introduced Shawnterra Moore, alternate for Vice Chair Michael Krause. Assistant City Manager Lee discussed the cost estimate for Phase 2C Cap Repair, landscape rendering in the construction plans, and nature preserve. Chair Cullen asked about the paved areas for vehicles. A member from the project team stated there were two lanes in each direction. Chair Cullen asked the location of the pedestrian right -of -ways. Assistant City Manager Lee discussed the 70% increase for the cost of the project due to eight years of construction cost escalation and project evolution. Board member Scannell asked if a change in concept was a cost overrun or a new project. Assistant City Attorney Mattas explained the process of going from conceptual plans to construction drawings. Assistant City Manager Lee explained the engineering cost drivers. She discussed the need to determine potential hazardous material. In response to Member Scannell, Assistant City Manager Lee stated construction was anticipated for two years. OVERSIGHT BOARD REGULAR MEETING DECEMBER 19, 2017 MINUTES PAGE 2 Assistant City Attorney Mattas stated the 2011 cost estimates were based on conceptual drawings. He explained that costs increased due to construction costs and moving from conceptual plans to construction drawings. Member Christensen discussed her experience with increased costs on the housing project at Skyline College. Assistant City Attorney Mattas stated the agreement contained the best numbers from the 2011 conceptual plans but the exhibit clearly anticipated increased costs with construction drawings. Member Scannell asked if the agreement intended the Redevelopment Agency to be responsible for all cost overruns. Assistant City Attorney Mattas explained that the costs were allocated between the Agency and developer and the Agency accepted the costs and cost escalations. In response to Member Christensen, Assistant City Attorney Mattas stated the property was conveyed to the Successor Agency then to OPD. He reviewed the agreement explaining the project was intended to be an Agency funded obligation. Assistant City Manager Lee discussed the estimated property taxes for Phases 1 - 4. City Manager Futrell explained why the RDA decided to invest in the underperforming, blighted property. Assistant City Manager Lee discussed staff s effort to leverage money from outside sources. Manager Miller requested approval of the ROPS. Member Scannell discussed payments of costs outlined in the agreement. Assistant City Attorney Mattas stated the City was obligated to pay charges by BCDC and the Harbor District or if the City caused a cost increase to the project. He discussed Exhibit 3.4.1. In response to Chair Cullen, Assistant City Attorney Mattas discussed risk of not funding the obligations. In response to Chair Cullen, Counsel Labadie explained that the developer could seek a court order directing the successor agency to make the payments. Assistant City Attorney Mattas stated the Successor Agency could be responsible for court costs and legal obligations. Alternate Member Moore asked the balance of funds. Assistant City Attorney Mattas stated there be no reserves left but the taxing entities would start realizing the benefits. OVERSIGHT BOARD REGULAR MEETING DECEMBER 19, 2017 MINUTES PAGE 3 Chair Cullen asked if the $18 million would be paid in one year. Assistant City Manager Lee stated it would be paid over two years. Assistant City Manager Mattas pointed out the concern with entering into a contract with full value of $60 million when $60 million in funds were not committed. Member Christensen asked how much was received from RPTPF each year. Director Lee stated the RDA was receiving $30 million. Member Scannell expressed concern with continual overruns. Assistant City Attorney Mattas discussed the possibility of additional costs related to hazardous material removal. Member Addiego anticipated hazardous materials. Chair Cullen asked if there were additional costs in the subsequent phases. Assistant City Attorney Mattas discussed costs for future phases and stated Phase 3 and 4 were developer obligations. Chair Cullen asked what happened if only a portion of the obligation was spent. Assistant City Attorney Mattas explained the creation of an escrow account. He discussed prior funding over three to four years due to the project not being under construction. Member Christensen asked if there would be a decrease to the taxing entities that normally received RPTPF. Assistant City Attorney Mattas stated it would be reduced by $18 million and then would increase. Member Farreles asked when the property tax increase would occur. Assistant City Manager Lee anticipated a ten -year horizon to realize the remainder of the phases. Assistant City Attorney Mattas reminded the Board that Phase 1 D was sufficient to fully repay the taxing entities. In response to Chair Cullen, Assistant City Attorney Mattas explained the $20 million placeholder for potential hazardous materials. Manager Miller discussed the $1.2 million for soft management City staff costs. Assistant City Manager Lee distinguished between the soft management costs and project management costs. In response to Chair Cullen, Manager Miller clarified the use of administrative costs. She explained Line 14 as being specific to the Oyster Point Management costs. Member Christensen asked what other funds funded Line 14. Manager Miller stated other funds included rent and interest. In response to Chair Cullen, Manager Miller explained the requirement to spend other funds first. OVERSIGHT BOARD REGULAR MEETING DECEMBER 19, 2017 MINUTES PAGE 4 MOTION Member Addiego moved and Member Christensen seconded a motion to approve the resolution approving the Recognized Obligation Payments Schedule (ROPS) for the period July 2018 through June 2019, pursuant to Health and Safety Code Section 34177(1). The question was called and the motion carried 5 -2, Chair Cullen and Member Scannell dissenting. FUTURE AGENDA ITEMS Chair Cullen announced that, as of July 1, 2018, oversight boards would be consolidated. Counsel Labadie explained that the County would create a seven - member board. Chair Cullen requested staff bring back a report on the remaining redevelopment parcels. Director Greenwood stated staff could bring forward that report in January 2018. 636 El Camino Real Commercial Space. ADJOURNMENT Being no further business, Chair Cullen adjourned the meeting at 3:18 p.m. Submitted: Gabriel odriguez, Deputy Clerk Oversight Board for the Successor Agency to the South San Francisco Redevelopment Agency OVERSIGHT BOARD REGULAR MEETING MINUTES Approved: C` ZT Cullen, Chairpers n Oversight Board for the Successor Agency to the South San Francisco Redevelopment Agency DECEMBER 19, 2017 PAGE 5