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HomeMy WebLinkAbout2006-10-16 e-packet ~~1l sM (~~) v 0 C'4lIFOF-~\.'?o: SPECIAL MEETING CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO P.o. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: CITY MANAGER'S CONFERENCE ROOM SOUTH SAN FRANCISCO CITY HALL 400 GRAND AVENUE SOUTH SAN FRANCISCO, CALIFORNIA October 16, 2006 12:00 noon NOTICE IS HEREBY GIVEN, pursuant to Section 54956 ofthe Government Code ofthe State of California, the City Council ofthe City of South San Francisco will hold a Special Meeting on Monday, the 16th day of October, 2001, at 12:00 p.m. (noon), in the City Manager's Conference Room at 400 Grand Avenue, South San Francisco, California. Telephone conference locations shall also exist at 1250 San Carlos Ave, San Carlos, California and at 300 Lakeside Drive, Oakland, California. Members of the public may address the City Council at 400 Grand Avenue and at the teleconference locations. Purpose of the meeting: 1. Call to Order 2. Roll Call 3. Public Comments - comments are limited to items on the Special Meeting Agenda 4. Update and potential direction related to San Mateo County Harbor District municipal service review and sphere of influence review 5. Adjournment '& ~ (/tj~ ~p ;City Clerk .[}fjJUY {!i"} (!J~JtZJ CITY COUNCIL 2005-2006 DRAFT JOSEPH A. FERNEKES, MAYOR RICHARD A. GARBARINO, VICE MAYOR MARK N. ADDIEGO, COUNCILMEMBER PEDRO GONZALEZ, COUNCILMEMBER KARYL MATSUMOTO, COUNCILMEMBER BARRY M. NAGEL, CITY MANAGER October 16,2006 Martha Poyatos LAFCO Executive Director Local Agency Formation Commission 455 County Center--2nd Floor Redwood City, CA 94063 Re: San Mateo County Harbor District Municipal Services Review and Sphere of Influence Review Dear Ms. Poyatos: As you know, the City of South San Francisco owns the land at the Oyster Point site that is leased to the San Mateo County Harbor District (Harbor District) through a joint powers agreement. The City has several comments on the Municipal Services Review and the Sphere of Influence Review being considered by the Local Agency Formation Commission (LAFCO) at its October 18 meeting. The Oyster Point marina area is an important regional recreational asset. The marina area provides bay access, walking trails, boat berthing, fishing opportunities, and boat launch facilities that are available to outdoor enthusiasts from throughout the County and the Bay Area. As a regional asset, the Marina and all of its recreational facilities require a dedicated and stable revenue stream to supplement the berth and boat launch fees to enable the Harbor District to continue to maintain the breakwaters, channels, perform dredging, and provide other marina infrastructure improvements, as well as to maintain the park and trail facilities. The City of South San Francisco considers the marina area to be an integral component of the City and region's continued recreational and economic vitality. Because of its dramatic setting, the marina could also become a signature destination point for County residents. In addition, the marina is considered a strategic asset for the City and County for the following reasons: . Its proximity to the large East of Highway 101 biotech community, . Its potential for extended recreational use, and . Its importance to potentially addressing regional commuter alternatives (i.e. the existing proposal for construction of a ferry terminal). - - The City understands that the LAFCO proceedings on October 18 are to simply reaffirm the Harbor District's current sphere of influence, and that no change in the status of the Harbor District is formally being proposed at this time. However, if the Commission were to consider dissolution of the District, the City would be in opposition to the dissolution because of its regional importance and the need for the facilities to have access to a dedicated and reliable revenue stream. Sincerely, Barry M. Nagel City Manager Cc: City Council City Attorney Assistant City Manager Finance Director Chief Planner CITY OF SOUTH SAN FRANCISCO CITY ATTORNEY'S OFFICE INTEROFFICE MEMORANDUM DATE: October 13,2006 TO: Honorable Mayor and City Council FROM: Steven T. Mattas, City Attorney By: Peter Spoerl, Assistant City Attorney SUBJECT: Issues Related to LAFCO Recommendations Regarding San Mateo County Harbor District On Monday, October 16th, the City Council will hold a special meeting to discuss a possible response to the San Mateo County Local Agency Formation Commission's ("LAFCO") report and recommended determinations with respect to the San Mateo County Harbor District ("the District"). By memorandum dated October 11 th, 2006, our office provided the Council with a summary of the recently-issued report and its findings and recommendations. The purpose of this brief memorandum is to summarize, again, the report, and to provide the Council with staff's analysis of potential impacts on the City and District should LAFCO's recommendation be implemented. We have also included a draft the letter the Council may wish to direct be sent to LAFCO. SUMMARY Oyster Point is a public 600-berth marina serving predominantly recreational vessels. The District, an independent special district formed in 1933 to construct, maintain and administer harbor facilities within the County, manages harbor facilities at the Oyster Point Marina Park to State Harbors and Navigation Code Sections 6000 et seq. and operates at locations in South San Francisco and Half Moon Bay. The Oyster Point MarinaJPark is operated via a Joint Power Agreement ("JPA") with the City. In its report, a required study intended to provide an analysis of cost-effectiveness and local accountability, LAFCO assesses the District's operational structure and financial management. Based on its analysis, LAFCO staff has provided the Commission with options that include maintaining the current Harbor District management structure and dissolution of the Harbor District pursuant to LAFCO procedures with the County identified as the successor agency. Under the latter scenario, the County would assume the District's responsibility for management, operation, and maintenance of Oyster Point MarinaJPark under the JP A. When the JP A terminates, this responsibility shall revert to the City. A noticed public hearing is scheduled for October 18, 2006 to provide for comment from the SUBJECT: PAGE: October 13,2006 Honorable Mayor and City Council Steven T. Mattas, City Attorney By: Peter Spoerl LAFCO Recommendations Re: Harbor District 2 DATE: TO: FROM: Harbor District and affected agencies and parties. We understand from LAFCO staff that no final determination will be made at the LAFCO meeting regarding dissolution and that such action would occur only after a separate formal public process that would have to begin with a request for dissolution. Discussion The property at the Oyster Point facility is owned in fee by the City. Occupancy and conditions of use at the site are governed by a number of ground leases and operating agreements between the City, the District, and individual lessors and operators. The proposed dissolution of the District would have no effect on any of these underlying Agreements. Where such Agreements are between the City/Harbor District and lessors, the proposed change in administration (to have the County administer and operate Oyster Point) would have no effect on the terms of the underlying leases. The Agreements between the District and Oyster Point Village Associates (King Ventures) contain express provisions binding all successors and assigns to the terms and conditions of the leases. As of June of 2005, the District had $19,451,746.00 in long-term debt, which was consolidated in an Agreement assigning rents and leases ("consolidated loan Agreement") between the District and the State Department of Boating and Waterways. Under the terms of the consolidated loan Agreement, the District continues annual debt service payments according to a predetermined schedule. Under the terms of the loan agreement, the rents, profits, royalties, income and any other benefit derived from leases serve as security for the underlying debt obligation. In the event of dissolution of the Harbor District pursuant to LAFCO-initiated proceedings, the District's debt obligations would inure to the successor agency, ie. the County. In neither case would the City incur repayment obligations on outstanding District debt. The most significant impact of the proposed dissolution of the District and transfer of administrative and operational duties to the County would be in the area of property tax revenues. The District is a special district that receives property taxes paid by parcels throughout the County. In 2004-05, the District received $2.7 million in property taxes, and the District has budgeted $3.1 million for 2006-07. If the District were to be dissolved, the property taxes currently going to the District would have to be reallocated. Although it is not clear that this is the situation, if property tax revenues secure the District's State loans, then those property taxes would go to the successor agency for the purposes of paying down those loans. If those property taxes are not legally pledged to the loan repayments, LAFCO staff has stated that they still believe the property taxes would be applied to paying down the debt under terms of the Knox Hertzberg Act. Once the debt is eventually paid off, according to LAFCO staff, it isn't clear what the disposition of those property taxes would be. One possibility is that the District's former property taxes could get reallocated to all taxing LAFCO _ Harbor District Recommendation Special Meeting Memo (405-001) SUBJECT: PAGE: October 13, 20u6 Honorable Mayor and City Council Steven T. Mattas, City Attorney By: Peter Spoerl LAFCO Recommendations Re: Harbor District 3 DATE: TO: FROM: entities within the County. That is, because the taxes were collected countywide, they could be redistributed to other cities, school districts, and special districts throughout the county, as well as to the County of San Mateo. At this point, LAFCO has not indicated that it intends to pursue dissolution proceedings. Based on information provided to the City, however, and the possible loss of a dedicated revenue stream for the District, should LAFCO determine to initiate dissolution proceedings, staff would recommend that the City Council express its opposition to dissolution via letter. This report was prepared with assistance from the City Manager office, Finance and Planning staff. Barry M. Nagel, City Manager Marty Van Duyn, Asst. City Manager Jim Steele, Director of Finance Susy Kalkin, Chief Planner LAFCO _ Harbor District Recommendation Special Meeting Memo (405-001)