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HomeMy WebLinkAbout4/20/2010 Minutes - Regular MeetingCITY OF DIAMOND BAR CITY COUNCIL STUDY SESSION APRIL 20, 2010 STUDY SESSION: M/Herrera called the Study Session to order at 5:18 p.m. in Room CC -8 of the South Coast Air Quality Management District/Government Center, 21865 Copley Dr., Diamond Bar, CA. Present: Council Members Ling -Ling Chang, Ron Everett, Jack Tanaka, Mayor Pro Tem Steve Tye and Mayor Carol Herrera. Staff Present: James DeStefano, City Manager; David Doyle, Assistant City Manager; Michael Jenkins, City Attorney; Bob Rose, Community Services Director; David Liu, Public Works Director; Greg Gubman, Community Development Director; Ken Desforges, IS Director; Ryan McLean, Assistant to the City Manager; Rick Yee, Sr. Civil Engineer; Marsha Roa, Public Information Manager; and, Tommye Cribbins, City Clerk. ► FISCAL YEAR 2010-11 COUNCIL GOALS AND OBJECTIVES — DISCUSSION AND ACTION. CM/DeStefano explained that when the draft budget for 2010-11 is brought to the Council for discussion budget implications related to the Council goals and objectives, including any new ones that may be added tonight will need to be incorporated in the document. Asst. to CM/McLean presented the staff report going through each item and asked for Council direction as to the Goals and Objectives still on the list and for any new ones to be considered. C/Everett asked what the status of the Diamond Canyon project and AERA as they relate to D.B.'s sphere of influence. M/Herrera stated that the two projects are not within the City's sphere of influence. CM/DeStefano explained that this goal was related to the Diamond Canyon/Crestline property which has been completed and that the AERA project was terminated approximately two years. C/Tanaka reiterated his desire for a Council Chamber at the new city hall in the event the Library chooses not to move into the new building. MPT/Tye felt that the need for a Council Chambers was not worth the cost when it would only be used a small percentage of the time. He stated that he would rather the space be used for senior programs. If purchase of the building is the right thing to do, the City should move forward and the first floor will take care of itself. He believed the City should utilize everything available and dedicating that amount of space and the millions of dollars that would be spent for equipment APRIL 20, 2010 PAGE 2 CC STUDY SESSION and the hiring of new employees to operate the equipment makes no sense when the current AQMD location can be rented at a nominal rate. CM/DeStefano stated that the AQMD would be discussing the City's proposal in a closed session in May. The proposal is to continue the 17- 18 year relationship utilizing the AQMD Auditorium and Hearing Board Room for these kinds of meetings on the same schedule and pace that has been utilized through the years. The City has offered to lease the space for $1000 a month which is $1000 more than what the City is paying now. M/Herrera asked for consensus because it would be futile to have staff go through the efforts to start cumulating information based on previous instructions. C/Everett said he felt the City needed to pursue the primary goal of having a library on the first floor and keep the current space for City meetings. M/Herrera said she would not want to spend the money for seldom used Council Chambers, as lovely as it would be, she believed there were other things the City needed to spend its money on. MPT/Tye concurred. C/Chang offered the following items for addition to the goals list: 1) Dog park 2) Public project partnerships (i.e. Petco sponsorship of the dog park) 3) Public safety commission/safety advisory committee/neighborhood watch committee 4) School liaison advisory committee C/Everett offered the following item: 1) Economic development commission/advisory committee. Council discussed acquisition of the windmill for historical purposes. C/Everett asked if eminent domain could be considered. CM/DeStefano said it was possible; however, the Council has not indicated a desire to pursue that option which is probably the only remaining option. M/Herrera said she had a conversation with a representative of the management company that represents the family and had requested to APRIL 20, 2010 PAGE 3 CC STUDY SESSION meet with the family but her request had been denied. The representative has refused to grant City access to the windmill. CM/DeStefano stated that every mayor for the past four years has worked hard to gain the attention of the family and to date there has been no success in getting that done. At the very minimum the City was requesting a maintenance agreement absent the opportunity to own the structure and was denied that option as well. C/Everett suggested the City pursue and resolve the matter and possibly consider relocating it to the future City Hall location. M/Herrera agreed that the matter should be placed on a future agenda. Asst. to CM/Ryan asked for Council input regarding a dog park. C/Tanaka was concerned that a dog park would require a large space from one of the current facilities. C/Everett believed that a dog park was considered as part of the Parks Master Plan. CSD/Rose explained that a dog park did not score high in the survey. CM/DeStefano said that the Parks Master Plan would be forthcoming when the financing was available. M/Herrera suggested the Council could continue discussion about the dog park when the Parks Master Plan is brought forward. Council concurred. Council discussed public project partnerships. M/Herrera asked staff to share some current project partnerships. CM/DeStefano said staff would also share what other cities have done. MPT/Tye said he would not like to see the City "look" commercial. The City receives revenue from the soda machines under exclusive contract and no one knows about the revenues unless they have paid attention to the agenda when the item was approved; D.B. receives revenue from cell sites in the parks, etc. But he does not want to see commercial signs in the parks which is the outcome of public/private partnerships. C/Everett said he supports this item and believes the City needs to be creative. D.B. is a Tree City, possibly Boise Cascade or Weyerhaeuser might be interested in a joint venture. APRIL 20, 2010 PAGE 4 CC STUDY SESSION With respect to MPT/Tye's point C/Everett said he too was against commercial advertising but it would be nice to have partnership help on the Lighting and Landscape Districts. With respect to a public safety committee, M/Herrera explained that the City has such a committee comprised of the Mayor and Mayor Pro Tem who meet with both the Sheriff's captain and representatives of the Fire Department every few months. CM/DeStefano pointed out that the City also has a very active Neighborhood Watch program headed by Deputy Mark St. Amant and the DB/Walnut Sheriffs Station. ACM/Doyle suggested that staff talk with the Sheriffs Department to learn what they have done with other communities. He pointed out that there is a confidentiality agreement with Neighborhood Watch block captains and that the City is not allowed to know who those individuals are. Council discussed the School District Liaison proposal. M/Herrera stated that there are currently two City Council liaison committees — City Council to PUSD and City Council to WVUSD. She asked if the committee members could begin a dialogue on putting something together. C/Chang said she was thinking more along the lines of a grassroots effort and not on the Council level. MPT/Tye said he did not understand what the City's role would be in a grassroots effort. C/Chang said she saw the end result being establishment of a group that would show the residents that the City was making an effort to bring the community together because she has heard comments by residents that the focus is on WVUSD. CM/DeStefano suggested that during the liaison committee meetings the Council Members could suggest that this be a school district project and their responsibility to coordinate their community clubs, PTA's, etc. within their districts. The districts are very different in their administration philosophies and use of their resources and therefore felt that it would be very difficult to try and merge the two groups. M/Herrera pointed out that the WVUSD has or used to have a coordinating council that was made up of parents and representatives from each community club/school. Perhaps PUSD has the same type of thing. It APRIL 20, 2010 PAGE 5 CC STUDY SESSION seems that those organizations would be the ones to coordinate parents getting together with other parents exchanging ideas. C/Everett said the Diamond Bar Community Foundation has synergy and experience working with the schools and felt that that organization would offer the connection that C/Chang is seeking. At its last meeting PUSD took action to set up liaisons and already had two volunteers last Wednesday night. Economic Development opportunities: M/Herrera stated that the City has an Economic Development sub- committee. C/Everett said he was suggesting that the effort be at a more focused and committed level. He felt responsible and that the effort was failing because the City is not doing anything to foster economic development. MPT/Tye said he is glad that C/Everett feels responsible but felt that the City is doing things to promote economic development. The City does not -- have the resources and does not have the tool of a Redevelopment Agency. C/Chang asked if staff could look at what other cities are doing to promote economic development. CM/DeStefano stated that he felt that staff would find that most of the economic development would be tied to redevelopment agencies. M/Herrera suggested that perhaps the goal could be to strengthen the economic development subcommittee with strategies. CM/DeStefano suggested that staff provide a report on what other agencies are doing and recommendations for determining what guidance the Council might like to give staff. No public comments were offered. ► DISCUSS FINANCING OPTIONS FOR ACQUISITION OF 21810 COPLEY DRIVE — DISCUSSION AND ACTION ACM/Doyle stated that one of the items on tonight's agenda is the adoption of a Resolution which would allow the City to reimburse itself for the cash purchase of the building. The resolution does not commit the City to doing anything — it merely leaves the door open for being able to reimburse itself should the Council choose to pursue public financing on the building. The resolution does not have to be done tonight. APRIL 20, 2010 PAGE 6 CC STUDY SESSION ACM/Doyle introduced James Fabian and Anna Racheva with Fieldman Rolapp the City's financial consultant for acquiring the property located at 21810 Copley Dr. C/Chang asked how much the costs would be during the first year of the public sale versus private placement. Ms. Racheva stated that upfront costs for a public sale would be $220,000 compared to about $1004125,000 for a pri vate sale which would be included in the financing and not a part of the out-of-pocket costs. C/Chang asked if the City would be financing what it put into the reserve fund. Both Ms. Racheva and Mr. Fabian responded affirmatively. As an example, if you financed the property for 20 years you would make payments for 19 years and the reserve funds would be used to pay out the 20" year. In addition, the City would generate interest income from those reserve funds which the City would keep. Mr. Fabian stated that the assumption for a private placement option would be that there would be no reserve funds. Ms. Racheva detailed the comparison using the graph on Page 8 of the Power Point presentation. C/Chang asked if the City was going to negotiate a prepayment option without penalty for the private option. Mr. Fabian said Yes. Typically, the City would attempt to have provisions for pre -payment options. C/Chang asked what would happen in the case of a public option if the City's credit rating were to go down. Mr. Fabian stated that the one debt that the City currently has is a variable rate debt so the City does not have an outstanding credit rating that is based upon specifics of D.B. To do a public offering the City would need to establish a credit rating based upon the facts and circumstances of D.B. The City has to make a decision about the best method of financing the purchase over a long period of time through either a public offering or a private type of placement. As part of this discussion it would be prudent to think about whether to establish an underlying credit rating. The City is entering into its third decade and based upon the fact that D.B. has a very solid General Fund Reserve in the bank and an overall pretty good financial health it might be time to establish a credit rating, which is something the City would have to undertake to do a public offering. APRIL 20, 2010 PAGE 7 CC STUDY SESSION ACM/Doyle said he was fairly confident that D.B. would get an exceptional rating given today's circumstances and should be very much ahead of the curve in terms of a credit rating. At the request of MPT/Tye Mr. Fabian expanded on the need to establish a credit profile. He reiterated that the City has a variable rate debt so the rating is tied to the liquidity provider — the letter of credit provider, and not based on the City's ability to repay a debt. In the case of this purchase, they have been assuming a fixed-rate instrument based upon the credit strength of the City. In the case of a public offering the finance provider would look at the City's existing revenues, expenditures, policies, procedures, reserve fund balance and do a credit assessment based on those factors. C/Everett asked who was responsible for or owned the reserve during the earlier years of the repayment period. Ms. Racheva responded that the reserves belong to the City and are detailed and managed by the trustee according to the City's direction. Mr. Fabian explained that there would typically be a fiscal agent or trustee agreement with an annual fee of roughly $3-$5,000. The agent or trustee would provide guidelines per the City's instructions on how to invest that reserve fund as part of the trustee services. The reserve fund is for the benefit of the bond holders. Ms. Racheva stated that in speaking with staff it was determined that the $600,000 annual debt service figure was a manageable, prudent amount that the City could afford based upon his firms investigation of the financial health of the City, looking at the future projected revenue streams over time, expenses overtime, etc. Fieldman Rollapp used that figure to back into what might be an appropriate amount of borrowing. Ms. Racheva said the City could afford to pay more but it may not be prudent to do so, based upon staffs level of comfort. Following discussion, Mayor Herrera asked if there were any public comments — No comments were offered on this item. ADJOURNMENT: With no further business to discuss, M/Herrera adjourned the Study Session at 6:23 p.m. TOMMYE RIBBINS, City Clerk APRIL 20, 2010 PAGE 8 CC STUDY SESSION The foregoing minutes are hereby approved this 4th day of M -Ly , 2010. r CAROL HERRERA, Mayor MINUTES OF THE CITY COUNCIL REGULAR MEETING OF THE CITY OF DIAMOND BAR APRIL 20, 2010 STUDY SESSION: 5:18 p.m., Room CC -8 ► FY 2010-11 City Council Goals and Objectives — Discussion and Action ► Financing Options for Acquisition of 21810 Copley Drive — Discussion and Action Public Comments: None Offered CALL TO ORDER: Mayor Herrera called the Regular City Council meeting to order at 6:33 p.m. in The Government Center/SCAQMD Auditorium, 21865 Copley Dr., Diamond Bar, CA. CM/DeStefano reported that during tonight's Study Session Council discussed the City's Goals for the upcoming Fiscal Year 2010-11 and directed staff to provide research on some of the new proposed goals. The City Council also reviewed financing options for the acquisition of 21810 Copley Drive with the City's technical consultants and received information that augmented staff's report. No specific actions were taken during the Study Session. PLEDGE OF ALLEGIANCE: Mayor Herrera led the Pledge of Allegiance. INVOCATION: None offered. ROLL CALL: Council Members Ling -Ling Chang, Ron Everett, Jack Tanaka, Mayor Pro Tem Steve Tye and Mayor Carol Herrera. Staff Present: James DeStefano, City Manager; David Doyle, Assistant City Manager; Michael Jenkins, City Attorney; Ken Desforges, IS Director; David Liu, Public Works Director; Bob Rose, Community Services Director; Linda Magnuson, Finance Director; Ryan McLean, Assistant to the City Manager; Greg Gubman, Community Development Director; Rick Yee, Sr. Civil Engineer; Marsha Roa, Public Information Manager, and Tommye Cribbins, City Clerk. APPROVAL OF AGENDA: As Presented. SPECIAL PRESENTATIONS, CERTIFICATES, PROCLAMATIONS 1.1 M/Herrera, assisted by Sherman Griffone with Friends of the - Library, presented Certificates of Recognition to Diamond Bar Students and Teacher Coordinators participating in the 2010 Inland Valley Regional Spelling Bee sponsored by the Diamond Bar Friends of the Library. APRIL 20, 2010 PAGE 2 CITY COUNCIL 2. CITY MANAGER REPORTS AND RECOMMENDATIONS: None Offered. - - 3. PUBLIC COMMENTS: Rainbow Yeung with the AQMD, thanked the City Council and staff for their continued support of AQMD programs and legislation and presented air quality CD's to the Council. She announced that AQMD is extending a six-month moratorium on penalties on permit applications which will help provide relief to small businesses and give them the opportunity to obtain all needed air-quality permits without incurring late fees and violations. The program began about two months ago and continues through August 4. She also announced that the lawn mower exchange program will be held in May with registration beginning tomorrow at 8:00 a.m. The AQMD will also be hosting an event at the LA Convention Center on May 27 for high school students focusing on clean air technologies and actions that students can take to help the region achieve clean air. AQMD provides reimbursement for substitute teachers, school buses and public transportation. AQMD has launched the nation's first fully featured application for a wide range of air quality information. The application can be downloaded and a short video is available at www.agmd.gov. Peggy Ibarra, representing Post 19 L.A. County Fire Explorers, 3325 W. Temple Ave., Pomona, thanked the City for its support to this organization. Ms. Ibarra announced that the group will be sponsoring a car show at CalPoly Pomona on May 15 and invited everyone to join them for the event. John Martin spoke in opposition to the Site "D" Specific Plan and wanted Council to make sure that all residents were notified about the project. 4. RESPONSE TO PUBLIC COMMENTS: CM/DeStefano responding to Mr. Martin's request stated that the notice requirement pursuant to the City's Municipal Code for a project of 30 - acres is 1000 ft. surrounding the property boundary. In addition to that notice there is a requirement that signage be placed on the property as well as, notice published within local newspapers, all of which were done for the Planning Commission's Public Hearing that was conducted about a week ago. The Planning Commission will conduct additional discussion on Tuesday, April 27 in the AQMD Auditorium, and should the Planning Commission require additional time to consider and make recommendations to the City Council will schedule time accordingly. Once the Planning Commission has concluded its consideration and is ready to make its recommendation to the City Council, the Commission will take action and the City Council will then conduct its public hearing(s) on the matter approximately one month after the Planning Commission APRIL 20, 2010 PAGE 3 CITY COUNCIL concludes its process. MPT/Tye asked CM/DeStefano to elaborate on misinformation about the City's role as it relates to the School District. CM/DeStefano stated that the School District has owned the property in question for many decades. The School District determined the property to be surplus property several years ago and has had an interest in disposing of the property in order to generate additional revenue to be used for capital expenditures within the WVUSD boundaries. The School District has gone through a process with the City to develop a specific plan which is otherwise known as an overall master plan for the potential future land uses on the site. The City owns a very small piece of the property under consideration of about 1 acre directly at the corner of Brea Canyon Rd. and Diamond Bar Blvd. west of the flood control channel. Diamond Bar is therefore a co -applicant and intends to dispose of the property at the same time the School District disposes of their property in order to facilitate a future development of the acreage. The School District and the City are completely separate entities and operate independently of one another and operates under different rules. What is being requested at - this time is approval of an Environmental Impact Report, approval of the Specific Plan (master plan) and approval of new zoning and land use classification of the property. At this point it is requested that the project be half residential and half commercial and the entitlements that are being requested would serve as an umbrella approval for the site. Should those requested approvals be received, the site would then go out into the marketplace and be sold by the School District along with the City's piece and a purchaser would come back to the City for approval of specific development plans. At this time it is unknown as to the type of residential and type of commercial development that might be proposed and approved by the City. Anyone who might speculate on what the project might look like would not know the answer because there has been no specific project submitted to the City nor has the City considered any specific project. What is being considered is a maximum square footage of commercial and number of residential dwelling units. 5. SCHEDULE OF FUTURE EVENTS: 5.1 Parks and Recreation Commission Meeting — April 24, 2010 — 7:00 p.m., AQMD/Government Center Hearing Board Room, 21865 Copley Dr. 5.2 Neighborhood Meeting at Silver Tip Park — April 24, 20110 — 10:00 a.m., 900 Longview Drive at Summitridge Dr. 5.3 Planning Commission Meeting — April 27, 2010 — 7:00 p.m., AQMD/Government Center Auditorium, 21865 Copley Dr. APRIL 20, 2010 PAGE 4 CITY COUNCIL 5.4 City Council Meeting — May 4,` 2010 — 6:30 p.m., AQMD/Government Center Auditorium, 21865 Copley Dr. 6. CONSENT CALENDAR: C/Chang moved, C/Everett seconded, to approve the Consent Calendar as presented. Motion carried by the following Roll Call: AYES: COUNCIL MEMBERS: Chang, Everett, Tanaka, MPT/Tye, Herrera NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None 6.1 APPROVED CITY COUNCIL MINUTES — Regular Meeting of April 6, 2010 — As submitted. 6.2 RATIFIED CHECK REGISTER - Dated March 31, 2010 through April 14, 2010 totaling $432,606.69. 6.3 AWARDED CONTRACT TO LANCE SOLL & LUNGHARD, CPA FOR AUDITING SERVICES FOR FY 2009-2010 THROUGH 2011- 2012, WITH THE OPTION TO RENEW FOR AN ADDITIONAL TWO YEARS. 6.4 ADOPTED RESOLUTION NO. 2010-10: VACATING AN EASEMENT FOR SLOPE PURPOSES ON LOT 56 OF TRACT MAP NO. 23483 IN THE CITY OF DIAMOND BAR, CALIFORNIA. 6.5 ADOPTED RESOLUTION NO. 2010-11: APPROVING PROGRAM SUPPLEMENT AGREEMENT NO. 010-N TO ADMINISTER AGENCY -STATE AGREEMENT NO. 07-5455R FOR UTILIZATION OF FEDERAL FUNDS IN THE AMOUNT OF $125,000, FOR THE PATHFINDER MEDIAN PROJECT BETWEEN THE NORTHBOUND STATE ROUTE 57 ON/OFF RAMPS AND FERN HOLLOW DRIVE, 7. PUBLIC HEARINGS: None 8. COUNCIL CONSIDERATION: 8.1 CONSIDERATION OF FINANCING OPTIONS FOR THE ACQUISITION OF 21810 COPLEY DRIVE; AND, ADOPT RESOLUTION NO. 2010-12: REGARDING THE CITY'S INTENTION TO ISSUE TAX EXEMPT OBLIGATIONS. CM/DeStefano stated that at its last meeting, the City Council directed staff to move forward and purchase the building located at 21810 Copley Dr. for $9,917,000 for use as a new City Hall and APRIL 20, 2010 PAGE 5 CITY COUNCIL other public purposes including the possible relocation of the LA County Library and creation of a new library which would be significantly larger than the current facility. CM/DeStefano then introduced ACM/Doyle who led the presentation. ACM/Doyle reported that at its last meeting the City Council directed staff to pursue the purchase and acquisition of the building at 21810 Copley Dr. for a little more than $9.9 million. Staff anticipates that there is another $2 million in other associated costs which would include relocation, internal improvement construction, relocation of infrastructure, as well as, purchase of furniture, fixtures and equipment to operate a City Hall at the new location for a total project cost of about $11.9 million. During the past couple of weeks staff and Council have discussed different options for financing the project including an all cash purchase from the City's reserve funds as well as some type of financing mechanism such as private or public financing. The City engaged the services of Fieldman Rolapp to provide an analysis of the City's finances, to decide if the City could in fact afford the purchase; and, have in fact stated that the City could afford the purchase and look at different -- financing vehicles. ACM/Doyle stated that there is a resolution on the agenda for adoption. Should the Council decide to approve the resolution, it would authorize the sale of tax exempt bonds; however, the adoption of the resolution does not commit the City Council to issuing bonds; it merely allows that option to be considered. The resolution does not need to be passed tonight as the City has 60 days from close of escrow of the building to adopt the resolution. Jim Fabian and Anna Racheva, Fieldman Rolapp, provided the Council with a PowerPoint presentation on the cost of the acquisition of the building and financing options for financing the building should the City desire to do so. Mr. Fabian stated that one option is a 100 percent cash purchase for which the City has sufficient reserve. However, the City needs to carefully consider the use of its resources in lieu of the economic uncertainties, i.e., instability of State funding sources and the overall Federal economic atmosphere at this time. There seems to be some stability back in the capital and credit markets which is hopefully trickling down into revenues for cities and for D.B. There are still clouds in the financial community which need to be considered when utilizing cash reserves. Because it has taken a long time for the City to accumulate those reserves by using those reserves to purchase a building, once used are gone. Additionally, the loss of cash reserves is the loss of long-term interest earnings APRIL 20, 2010 PAGE 6 CITY COUNCIL in the General Fund reserves. Mr. Fabian stated that another financing alternative would be the use of traditional tax-exempt Municipal Bond Issue (Public Sale) with an assumed maturity of 20 -years (available up to a 30 -year term). If the City chooses the public sale alternative, the City would establish a credit profile with a company like Standard & Poor's that would evaluate the City's current fiscal condition, management and policies and provide an independent credit rating. This scenario would call out higher issuance costs including the need for a reserve fund (10% of the bond amount) that would be used as an offset against the annual debt service payments and to pay the last year of debt service. This type of transaction takes about 90 to 120 days to complete. Mr. Fabian talked about a financing alternative termed a Private Placement which would be a bank -supplied loan and typically has a 20 year maximum maturity. The bank loan would be a much more streamlined loan with a timeframe of about 45 to 60 days to complete. This loan would also offer potentially lower up front issuance costs and likely not be a reserve fund requirement. In this instance, there may be less flexibility in terms of the call provisions and there would be no need to obtain an underlying credit rating because it would be done through the direct contract with the bank. Mr. Fabian referred Council to Page 8 of the presentation packet which offered a Comparison of Financing Alternatives. In speaking with staff and looking at the conservative revenue projects of the City it was determined that a $600,000 annual payment would be manageable to build into the annual base budget. Under the 20 year option the payment is at about $600,000 per year under both the public sale and private placement. Under the public sale the Net Average Annual Debt Service would be about $11,152,009 and under the private placement, about $11,580,938. He pointed out that there is an advantage to going to a public sale because the City would be able to take advantage of about $500,000 in reduced costs. In conclusion, the discussion focuses on utilizing $5 or $6 million of accumulated unrestricted General Fund reserves funds toward building acquisition costs, and relocation and tenant improvements, which would leave a financing amount of approximately $5.9 or $6.9 of remaining building acquisition costs funded via a public financing or private placement. The recommendation is to pursue a 20 -year public sale approach because this would provide the City with the lowest possible borrowing costs and the most flexible terms. APRIL 20, 2010 PAGE 7 CITY COUNCIL M/Herrera asked if the proposed interest rates indicated on Page 8 were fixed interest rates. Mr. Fabian responded that they are fixed interest rates. His firm assumed that since the City has an outstanding variable rate debt that in looking for the financing options for City Hall, they made the assumption that a fixed rate would be preferable so that the City could budget that fixed cost over the 20 -year term. These projected rates are the best guess at where the market is for a credit package the City would present based on assumptions. M/Herrera asked if it was possible the rate could be even lower. Mr. Fabian responded that there was. The market is an ever evolving dynamic market and that rates have been fluctuating. When his firm was engaged by the City in March rates were somewhat better, trended upward the end of March/first part of April and are now trending downward. This analysis was done in March and the rates will be what they are when the City makes its decision to move forward. MPT/Tye asked what would happen if the Reimbursement Resolution was not adopted within 60 days of the purchase/close of escrow on the building, and what would happen if the City did not exercise the option within 18 months? Bond Counsel Brian Forbath responded that the IRS guidelines are for the ability of the City to reimburse itself with tax exempt bond proceeds. If the City were to purchase the building and not adopt the Reimbursement Resolution within 60 days or, if the City adopted the Resolution within 60 days and did not issue bonds within 18 months it could not reimburse itself with the proceeds of taxes and bonds and accordingly, it could reimburse itself but it would be at a significantly higher interest rate than what was presented by Mr. Fabian today. C/Everett asked Mr. Forbath to again explain the implications of adopting the resolution and executing the bonds and what kind of significantly higher interest rates the City might face. Mr. Forbath explained that the Reimbursement Resolution is a non- binding resolution. Adoption of this tonight, for example, would not -- in any way obligate the City in any way to issue bonds. What it does is declare an intent that the City intends to reimburse itself with tax-exempt bond proceeds. This is a requirement the IRS has on issuing bonds for a capital expenditure that has already been spent. The requirements are that within 60 days of the actual APRIL 20, 2010 PAGE 8 CITY COUNCIL expenditure of cash the City needs to adopt a Reimbursement Resolution as soon as possible to protect itself. Within the 18 month period of the date of expenditure, the City Council would need to reimburse itself with the issued bonds. C/Everett asked what milestone is set by adoption of the resolution. Mr. Forbath responded that there is no benchmark. The requirement is that within 60 days of the date of expenditure so it would not matter whether the Council adopted the resolution tonight or at the next City Council meeting. M/Herrera asked if the date of expenditure is the date of escrow closing and Mr. Fabian responded affirmatively. M/Herrera asked for verification that if escrow closed June 1, 2010 the City Council would have to adopt the resolution within 60 days of that date? Mr. Forbath responded "yes." There was no one present who wished to speak on this item. C/Tanaka said he would favor adopting the Resolution this evening to keep the City's options open and make certain the date does not slip by the Council. C/Tanaka moved to adopt Resolution 2010-12. MPT/Tye seconded the motion. Motion carried by the following Roll Call vote: AYES: COUNCIL MEMBERS: Chang, Everett, Tanaka, MPT/Tye M/Herrera NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None 9. COUNCIL SUBCOMMITTEE REPORTS/COUNCIL MEMBER COMMENTS: C/Everett said he was delighted to see so many participants at the April 10th dedication ceremony and reception for the Sycamore Canyon Trail. On Sunday he attended the 17th Ann ual Friends of the Library Wine Soiree. On the next Tuesday he and M/Herrera with CM/DeStefano hosting, conducted a tour of the 21810 Copley Dr. building for the some of the Friends of the Library and Library Manager. He thanked staff for the 21St City Birthday Party and for 21 wonderful years. PUSD lost two very long-term employees — George Perry and Greg Shaw and offered his prayers and support to the Perry and Shaw families. APRIL 20, 2010 PAGE 9 CITY COUNCIL C/Tanaka participated in the Sycamore Canyon Park Trail rededication, The Friends of the Library Wine Soiree and both he and C/Everett attended the PUSD Board Meeting last week and that the 21St City Birthday party was a wonderful celebration. He thanked staff and the many volunteers and participants and thanked Miss Diamond Bar and her court for attending many of the City's programs. C/Chang met with the California League of Cities representative Jennifer Quan to discuss measures that prohibit the State from raiding local government transit and transportation funds. The League passed a resolution at their last meeting in support of this ballot measure and she personally collected a few signatures before the deadline in support of the measure. She along with her colleagues attended the Wine Soiree, a fabulous event with a great turnout this year. Both she and M/Herrera met with the Chinese delegation through CalPoly' Pomona. The individuals wanted to learn more about local government and had many questions about the intricacies of local government. She also attended an earthquake preparedness presentation by Deputy St. Amant for the seniors along with C/Everett and C/Tanaka. She had fun reading to kids at the Diamond Bar Library in celebration of National Library Week and thanked staff for a great 21St Annual City Birthday celebration. MPT/Tye said it was his privilege to represent the City and Council at the Vector Control meeting on April 8. There has been a lot of rain so it is likely there will be a lot of mosquito's which means the possibility of West Nile Virus this year. He congratulated all of the volunteers that make D.B. such a great place to live and the Friends of the Library on a great Wine Soiree and terrific Spelling Bee. M/Herrera said that in listening to her colleagues tonight she is even more aware of how fortunate everyone is who lives in such a great City and how fortunate the residents are that D.B. is economically stable and can continue to offer programs and events to the residents such as the trail dedication, the City's Birthday Party and other events. She agreed that the City is made even greater by the volunteerism of its youth and adults. She thanked staff members who worked very hard to put together the Birthday Party which is an event that the residents appreciate and look forward to attending. This year the event honored Congressman Gary Miller who was one of the founding fathers of the City of D.B. He served on the Municipal Advisory Council before D.B. became a City, was elected to the City Council, was Mayor in 1992, became an Assemblyman in 1995, and became a Congressman in 1998. How fortunate to boast such fine residents as Congressman Miller and Senator Bob Huff who was also a former Council Member and Mayor who was elected to the State Assembly in 2004 and to the State Senate in 2008. How fortunate that these individuals as well as, current Council Members are so dedicated to the City and its residents. APRIL 20, 2010 PAGE 10 CITY COUNCIL ADJOURNMENT: With no further business to conduct, M/Herrera adjourned the Regular City Council meeting at 7:52 p.m. i TOMMYE CRIBBINS, CITY CLERK The foregoing minutes are hereby approved this 4th day of Mai 2010. WAVU---", CAROL HERRERA, MAYOR