Loading...
HomeMy WebLinkAbout08/16/2011 Minuutes - Regular MeetingCITY OF DIAMOND BAR CITY COUNCIL STUDY SESSION AUGUST 16, 2011 STUDY SESSION: M/Tye called the Study Session to order at, 5:30 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, Ron Everett, Carol Herrera, Jack Tanaka, Mayor Pro Tern Ling -Ling Chang and Mayor Tye. Staff Present: James DeStefano, City Manager; David Doyle, Assistant City Manager; Michael Jenkins, City Attorney; Glenn Steinbrink, Interim Finance Director; Bob Rose, Community Services Director; David Liu, Public Works Director; Ken Desforges, IS Director; Greg Gubman, Community Development Director; Ryan McLean, Assistant to the City Manager; Rick Yee, Senior Civil Engineer; Kimberly Young, Associate Engineer; Marsha Roa, Public Information Manager, and Tommye Cribbins, City Clerk. Also Present: Jim Fabian and Anna Racheva, Fieldman, Rolapp & Associates. DIAMOND BAR CENTER AND LIBRARYICITY HALL BUILDING FINANCING OPTIONS. CM/DeStefano stated that there are two financing matters staff is bringing to Council's attention tonight for which staff is requesting direction. The first matter is the Diamond Bar Center's Lease Revenue Bonds issued in 2002 and the possibility of turning the variable rate to a fixed-rate. The second matter concerns the City Hall/Library building which was purchased in 2010 using cash reserves as well as for the building improvements. The question is whether to use a financing option to backfill the cash reserves. Staff does not believe that a finance option is necessary for several reasons which will be discussed by Jim Fabian and Anna Racheva with Fieldman Rolapp who prepared the agenda material for tonight. Jim Fabian with Fieldman Rolapp stated that the Diamond Bar Center was built using funds from a 2002 variable rate lease revenue bond. Currently, there is approximately $12 million left on the bond and the existing Letter of Credit that the City has with Union Bank which is due to expire on December 18, 2011. When the City originated the bond it entered into an interest rate cap which will expire January 1, 2013. The variable rate has performed very well for the City. The interest rate is 1.77% and the all -in interest rate cost with the Letter of Credit, re -marketing fee and rate cap, has been 3.1 %. The 2002 decision to go with a variable rate instead of a fixed rate worked out to the City's advantage. The City purchased the new City Hall and Library Building using cash reserves and adopted a "reimbursement resolution" that would allow the AUGUST 16,2011 PAGE 2 CC STUDY SESSION City, should it choose to do so, borrow to reimburse the City for that cash outlay. The window of opportunity to exercise this option expires March 2012. At this point, the City needs to decide whether to reimburse itself for the cash outlay for the building purchase and remodeling or use those capital funds that were appropriated from the reserves and not reimburse the funds. In looking at the variable rate debt his firm considered the City's existing relationship with Union Bank, its relationship with Wells Fargo as well as contacting 11 additional banking institutions that provide Letters of Credit for cities that have variable rate debt. In considering the bids, there is a lot of variable rate data that governmental entities have entered into that have existing Letters of Credit that will also be expiring. In addition, there are a lot of new regulations that will be coming down the pike for governmental entities over the next couple of years that will have a bearing on variable rate debt and on the ability of banks to provide Letters of Credit, Bids were received from Union Bank to extend the Letter of Credit and from Wells Fargo to provide a new Letter of Credit, both of which would be on a variable rate basis. Alternative 2 would be to look at taking advantage of the existing interest rate market that exists at this time and consider converting the Letter of Credit to a fixed rate. The current fixed rate interest market appears to offer an advantage over continuing the variable rate by locking in a fixed rate in December to give the City the certainty of a fixed rate for the remainder of the bond period thereby avoiding this decision-making process every three years and facing the consequences of the uncertainty under the new banking regulations. Anna Racheva spoke about the uncertain economic conditions, the loss of the rate cap and how the 1.77% rate is dangerous for bonds at this time. Since the rate was established in 1989 the average interest rate has gone from 1.77% to 2.8%. Mr. Fabian stated that after reviewing the City's existing condition, budget stabilization, existing revenues and potential new revenues, it appears that it would be a better approach to adopt a "pay-as-you-go" strategy for the new Library/City Hall rather than incurring additional debt to replenish the reserves that would establish a debt -service obligation of approximately $800,000 per year. Staff is recommending that the City Council consider converting the variable rate debt into a fixed rate conversion and continue with the status quo on the Library/City Hall Building with use of cash reserves not being reimbursed or replenished through a financing option. The next step would be for his firm to work with CM/DeStefano and the City Council to come back with the legal documentation to do the fixed- AUGUST 16,2011 PAGE 3 CC STUDY SESSION rate conversion in October for approval and close the fixed-rate transaction in November. C/Everett asked if the City could use a rating agency other than Standard & Poor's: Mr. Fabian responded that there are three choices — Standard & Poor's, Moody's and Fitch and in looking at all three, Standard & Poor's does a very good job at looking at "local" government credit. D.B. has very high ratings in all criteria. D.B. needs only one rating for a $12 million transaction and his firm believes that Standard & Poor's, despite what is going on in the national economy and government, there is no Correlation between how they look at local government entities versus the national government. C/Herrera asked if the City would pay for the rating company to come to D.B. to conduct their research. Mr. Fabian responded that they have a fee structure based upon the dollar amount of bonds they are rating. The rating fee may be about $15,000. CM/DeStefano pointed out that even if the rating costs the City it will be a wise investment on the City's part because staff and the City Council will be able to take the rating company on a tour to show how well-managed D.B. is and how well the City shows there has been wise investment in infrastructure over the years. Mr. Fabian also pointed out that the City has invested in a new City Hall on a "pay-as-you-go" project which proves a good and prudent use of cash while the Diamond Bar Center was done with a bond issue eight years ago. C/Herrera said that while there is not a lot of commercial to support the City. Staff as well as, current and previous Council's have made prudent decisions which will bode well for the City and in light of that, she believed staffs recommendation is the way to move forward. MTTye agreed and asked for approval to convert the variable bonds to a fixed rate structure and not replenish the money for City Hall/Library building and improvements with a financing option. Council Members unanimously concurred. Public Comments: None Offered. AUGUST 16, 2011 PAGE 4 CC STUDY SESSION ADJOURNMENT: With no further business to come before the City Council, MITye adjourned the Study Session at 5:55 p.m. to the Regular City Council Meeting. TOMMYE CRIBBINS, City Clerk The foregoing minutes are hereby, approved this 20th_dayof September 2011, Steve Ty -e, Mayor MINUTES OF THE CITY COUNCIL REGULAR MEETING OF THE CITY OF DIAMOND BAR AUGUST 16,2011 STUDY SESSION: 5:30 p.m., Room CC -8 10 Diamond Bar Center and Library/City Hall Building Financing Options — Discussion and Action. Study Session recessed at 5:55 p.m. CALL TO ORDER: Mayor Tye called the Regular City Council meeting to order at 6:32 p.m. in The Government Center/Auditorium, 21865 Copley Dr., Diamond Bar, CA. CM/DeStefano stated that during tonight's Study Session Council discussed long term debt financing options for the Diamond Bar Center and the new Library/City Hall building. Following staff and consultant presentations, Council concluded by directing CM/DeStefano to explore converting the City's 2002 variable rate bond for the Diamond Bar Center to a fixed-rate bond and determined that the Council's use of cash in 2010 to purchase the' library/city hall building was appropriate and that the City would not be seeking financing to reimburse the cash purchase. As a result, about mid-October, staff will present the City Council with documents moving the City toward a fixed-rate structure. PLEDGE OF ALLEGIANCE: Capt. Dave Haim led the Pledge of Allegiance. INVOCATION: Ahmad H. Sakr, PhD, Islamic Education Center gave the invocation. ROLL CALL: Council Members Ron Everett, Carol Herrera, Jack Tanaka, Mayor Pro Tern Ling -Ling Chang and Mayor Steve Tye. Staff Present: James DeStefano, City Manager; David Doyle, Assistant City Manager; Michael Jenkins, City Attorney; Ken Desforges, IS Director; Bob Rose, Community Services Director; David Liu, Public Works Director; Greg Gubman, Community Development Director; Ryan McLean, Assistant to the City Manager; Rick Yee, Senior Civil Engineer; Kimberly Young, Associate Engineer; Marsha Roa, Public Information Manager, and Tommye Cribbins, City Clerk. APPROVAL OF AGENDA: CM/DeStefano requested that the following items be removed from the Agenda: 6.2(a) Parks and Recreation Minutes be pulled and returned to the Parks and Recreation Commission for amending; Item 6.5 Award of Bid for Washington Park that all bids be rejected and direct staff to re -bid the project; and, Item 8.1(a) Urgency Ordinance — Withdraw from consideration. AUGUST 16,2011 PAGE 2 CITY COUNCIL 1 N 3 a 14 SPECIAL PRESENTATIONS, CERTIFICATES, PROCLAMATIONS: � 1.1 M/Tye, and the City Council presented a City Tile to Undersheriff Larry L. Waldie upon his retirement from the Los Angeles County Sheriffs Department after 44 years of service. 1.2 Presented Certificates of Recognition to members of the Diamond Bar Girls Softball All-Star Team (Under 8, 10 and 14 Divisions). CITY -MANAGER REPORTS AND RECOMMENDATIONS: None PUBLIC COMMENTS: Miss Diamond Bar 2011, Stephanie Turner and her Court presented a Plaque to the City Council in Appreciation for the City's continued support. RESPONSE TO PUBLIC COMMENTS: None SCHEDULE OF FUTURE EVENTS: 5.1 Concerts in the Park — August 17, 2011 — 6:30 to 8:00 p.m., Lights Premier (Tribute to Journey) — Sycamore Canyon Park, 22930 Golden Springs Drive. 5.2 Movies Under the Stars — August 17, 2011 — Toy Story 3 — Immediately following Concerts in the Park, Sycamore Canyon Park, 22930 Golden Springs Drive. 5.3 Planning Commission Meeting —August 23, 2011 — 7:00 p.m., SCAQMD/Government Center Auditorium, 21865 Copley Drive. 5.4 Parks and Recreation Commission Meeting — August 25, 2011 — 7:00 p.m., SCAQMD/Government Center Auditorium, 21865 Copley Drive. 5.5 City Council Meeting — September 6, 2011 — 6:30 p.m., SCAQMD/Government Center Auditorium, 21865 Copley Drive. 6. CONSENT CALENDAR: C/Herrera moved, MPT/Chang seconded, to approve the Consent Calendar as presented with the exception of 6.2(a) and 6.5 as requested by the City Manager. Motion carried by the following Roll Call: AYES: COUNCIL MEMBERS: Everett; Herrera, Tanaka, MPT/Chang, M/Tye NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None AUGUST 16,2011 PAGE 3 CITY COUNCIL 6.1. CITY COUNCIL MINUTES - Regular Meeting of August 2, 2011 — Approved as amended. 6.2 PARKS AND RECREATION COMMISSION MINUTES: (a) Study Session of May 12, 2011 — Pulled and returned to Parks and Recreation Commission to be amended. (b) Regular Meeting of May 26, 2011 — Received and filed. 6.3 RATIFIED CHECK REGISTER — Dated July 28, 2011 through August 10, 2011 totaling $1,147,999.77. 6.4 APPROVED ADJOURNING THE AUGUST 16, 2011 CITY COUNCIL MEETING TO SEPTEMBER 20, 2011. 6.5 REJECT THE BID PROTEST FROM RANCHO PACIFIC ENGINEERING, INC. AND AWARD CONTRACT TO AVI-CON, INC (dba CA CONSTRUCTION) OF THE CONSTRUCTION OF THE WASHINGTON PARK IN THE AMOUNT OF $508,919.50, PLUS A CONTINTENCY OF $50,892 (10%) FOR A TOTAL AUTHORIZATION OF $559,811.50 - Pulled and returned to staff for re -bid. 6.6 ADOPTED RESOLUTION NO. 2011-37: OPPOSING THE SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS (SCAG) PROPOSAL TO CONSTRUCT DEDICATED TRUCK ONLY LANES ALONG THE SAN JOSE CREEK FLOOD CONTROL CHANNEL AND STATE ROUTE 60 FREEWAY CORRIDOR. 7. PUBLIC HEARING(S): None B. COUNCIL CONSIDERATION: 8.1 (a) Withdrawn from consideration — No Action Required. 8.1 (b) APPROVE FOR FIRST READING BY TITLE ONLY, WAIVE FULL READING OF ORDINANCE 05 (2011): AN ORDINANCE DETERMINING THAT THE CITY AND THE DIAMOND BAR REDEVELOPMENT AGENCY WILL COMPLY WITH THE VOLUNTARY ALTERNATIVE REDEVELOPMENT PROGRAM PURSUANT TO PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE IN ORDER TO PERMIT THE CONTINUED EXISTENCE AND OPERATION OF THE DIAMOND BAR REDEVELOPMENT AGENCY. AUGUST 16,2011 PAGE 4 CITY COUNCIL CA/Jenkins explained that for some time, the City has had a Redevelopment Agency; however, the Agency has been dormant by virtue of litigation some years ago that invalidated the City's Redevelopment Project Areas. As a consequence, the Redevelopment Agency has served in a passive role only as a partner with the City in the City of D.B.'s Public Financing Authority. Both the Agency and the City are parties to the Joint Powers Agreement that established the PFA. The State of California Legislature passed, and the Governor signed, two bills that had dramatic effects on redevelopment agencies throughout the State and these bills obviously affect other redevelopment agencies that are more active than D.B. The first bill provided that all redevelopment agencies would expire in October 2011. The second bill provided that if redevelopment agencies took certain actions they could avoid expiration by paying a sum of money to the State of California to be used to support State activities and functions. As a result, redevelopment agencies were given a choice and between now and October redevelopment agencies throughout the State will be trying to decide what to do. Further complicating this issue is the fact that the League of California Cities and the California Redevelopment Association sued the State challenging the constitutionality of both these bills; a lawsuit which is currently pending in the California Supreme Court. Last week the California Supreme Court issued a "stay" of most but not all of these two bills making it a very complicated landscape in which to navigate. Tonight staff is asking the City Council to consider that because the City's Redevelopment Agency has no revenues or assets, it can, if it chooses to "stay alive" and owe no money to the State by taking such action. If the agency were to simply go out of existence in October there is a procedure in one of the two bills that would require a successor agency to step into the shoes of the Redevelopment Agency for whatever purpose it has. In this case, the only function of the Redevelopment Agency is to serve as a party to the Financing Authority which would mean that a successor agency would consist of persons outside D.B. to step in as a party to the City's Public Financing Authority. In discussing this matter with CM/DeStefano and staff, the conclusion was that it would be preferable to the City for the Redevelopment Agency to remain in existence so as to prevent a successor agency from being a party to the Public Financing Authority (The successor agency would include a majority of members that would be appointed by the County and other agencies and include only two in - the -minority persons from D.B.). Consequently, staff prepared the necessary ordinance for the City to keep the Agency alive so that it could continue to serve in this very narrow function as a party to the Public Financing Authority which changes nothing else. In light of the fact that the Supreme Court has issued a "stay," staff modified the ordinance not to take effect unless the "stay" is lifted. It is likely that the outcome of the statues will not be known until February or March 2012 when the Supreme Court makes its decision. Until that time, redevelopment agencies are generally in a state of limbo. Indeed, the Supreme Court's "stay" has AUGUST 16,2011 PAGE 5 CITY COUNCIL eliminated the urgency of adopting 8.1 (a). Staff recommends; however, that the City Council introduce this Ordinance for First Reading and barring any unforeseen changes, staff will bring the Ordinance back for Second Reading and adoption at the September 20 City Council meeting. C/Herrera moved, C/Everett seconded, to Approve for First Reading by Title Only, Waive Full Reading of Ordinance 05(2011). Motion carried by the following Roll Call vote: AYES: COUNCIL MEMBERS: Everett Herrera, Tanaka, MPT/Chang, M/Tye NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None 9. COUNCIL SUBCOMMITTEE REPORTSICOUNCIL MEMBER COMMENTS: C/Tanaka stated that during the past weeks he has enjoyed the Concerts in the Park and Movies under the Stars and tomorrow is the last concert and movie for the season. On Thursday, August 4 he attended the League of California Cities LA Division Installation Dinner Meeting at the Cerritos Performing Arts Center; On Wednesday, August 10 the LA County Jr. Fair Board met and held new student orientation; and, last Saturday was the D.B. Baseball League's end of season awards and picnic. C/Everett said he has enjoyed the summer and hoped residents had as well. Mickey McKitrick has been involved with the baseball program for 30 years. Ted Owens hired Mickey into the business and was at the celebration along with C/Herrera and C/Tanaka. He encouraged residents to join in the Concerts in the Park and Movies under the Stars. He spoke about the Guide Dogs for the Blind training program in D.B. and acknowledged the reopening of schools and encouraged everyone to be safe and watch for students. C/Herrera said she was sorry not to be able to attend the League of Cities installation and congratulated MPT/Chang on being installed as Second Vice President for the League of Cities, LA County Division. She thanked the Diamond Bar Foundation for its contribution and support by adding an extra Concert in the Park to the series which is very well attended and provides free entertainment to residents and others. She attended the Diamond Bar Recreation Baseball picnic on Saturday and thanked staff for having so many game booths for the kids. Parents appreciate these types of programs and stated that she was amazed of the number of participants that come from other cities. AUGUST 16,2011 PAGE 6 CITY COUNCIL MPT/Chang invited residents to follow her on Facebook and Twitter. She encouraged everyone to download the iphone/ipad app "My Diamond Bar." One can report graffiti directly to the City with the application. She thanked the Diamond Bar Community Foundation and its Chairwoman Jody Roberto for their continuing support of Concerts in the Park. The Foundation has been doing this for a number of years and residents should not miss the opportun4 to attend tomorrow night's events. She has attended most of the events and has enjoyed participating. She is proud that D.B. is able to offer these types of events at no cost. She also commended the Foundation for taking on the publication of The Windmill. The Foundation deserves a lot of credit for improving the publication and the community notification process. She thanked C/Herrera for her comments about her position with the League of Cities and felt it would be a very interesting year. MrTye congratulated Undersheriff Waldie. He thanked D.B. staff for everything they do and all of the recognition they receive. Once again, D.B. is well over the State's mandatory minimum for diversion of waste. Officials were pleased to announce that D.B. has one of the highest diversion rates in the San Gabriel Valley and remains in the top tier in Southern California and how D.B. will be used as a template for other cities working to improve their diversion figures and as a guide to develop public/private partnerships. He congratulated Anna Landis who was recognized as \/VVUSD teacher of the Year. He thanked the all -volunteer Diamond Bar Community Foundation and asked interested parties to please consider getting involved with the Foundation. C/Tanaka announced that the Diamond Bar Day at the County Fair would be held on Thursday, September 15. ADJOURNMENT: With no further business to conduct, MPT/Chang adjourned the Regular City Council meeting at 7:25 p.m. to September 20, 2011. TOMMA CRIBBINS, CITY CLERK The foregoing minutes are hereby approved this20th day of September 2011. �Jt_d� -1-1 STEVC:INE, MAYQ(k