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HomeMy WebLinkAboutRDA Min 1991-10-07 9-23-71/10-7-91 WAIVER OF FULL READING Doane moved, second by Forsythe, to waive the reading in full of all resolutions and that consent to the waiver of reading shall be deemed to be given by all Councilmembers after reading of the title unless specific request is made at that time for the reading of such resolution. AYES: NOES: Doane, Forsythe, Hastings, Laszlo, Wilson None Motion carried I AGENCY MINUTES Forsythe moved, second by LaSZlo, to approve the minutes of the regular meeting of August 26, 1991 as presented. AYES: NOES: Doane, Forsythe, Hastings, Laszlo, Wilson None Motion carried ORAL COMMUNICATIONS There were no Oral communications. CLOSED SESSION No Closed Session was held. ADJOURNMENT Wilson moved, second by Forsythe, to adjourn the meeting until Monday, October 7th at 6:45 p.m. to consider certain financial matters. It was noted that the city council meeting would likewise be adjourned until that date to consider the same items. AYES: NOES: Doane, Forsythe, Hastings, Laszlo, Wilson None Motion carried I It was the order of the Chair, with consent of the Council, to adjourn the meeting at 7:09 p.m. Seal Beach, California October 7, 1991 ~. 'I ;;--~~ ~i' ....-""-C.. ' r ~~"', " " It; Fooorm \~,4 " .. . n'i! ~2. ;- "I:.:! tee 't~~. .:f.ti ~. ~ \ 't(,7 ~; ",,- """"",,", .." !f~:t '''1,0,,& .o.....o.on. /5r '11\ . .- ""'.'\;~~""'~' The Redevelopment Agency of the city of Seal Beach met in regular adjourned session at 6:58 p.m. with Chairman I Hastings calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Chairman Hastings Agencymembers Doane, Forsythe, Laszlo, Wilson Absent: None Also present: Mr. Bankston, Executive Director Mr. Barrow, Assistant city Attorney Ms. Yeo, Secretary 10-7-91 I WAIVER OF FULL READING Wilson moved, second by Forsythe, to waive the reading in full of all resolutions and that consent to the waiver of reading shall be deemed to be given by all Agencymembers after reading of the title unless specific request is made at that time for the reading of such resolution. AYES: NOES: Doane, Forsythe, Hastings, Laszlo, Wilson None Motion carried I RESOLUTION NUMBER 91-2 - AUTHORIZING SALE - 1991 SUBORDINATE LIEN TAX ALLOCATION BONDS Resolution Number 91-2 was presented to the Agency entitled "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING THE SALE OF NOT TO EXCEED $5,500,000 REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH (RIVERFRONT REDEVELOPMENT PROJECT) 1991 SUBORDINATE LIEN TAX ALLOCATION BONDS, SERIES A, APPROVING THE FORM OF A NOTICE OF INTENTION TO SELL BONDS, AN OFFICIAL NOTICE OF SALE, AN OFFICIAL BID FORM AND A PRELIMINARY OFFICIAL STATEMENT, AUTHORIZING EXECUTION OF AN INDENTURE OF TRUST AND AUTHORIZING OTHER OFFICIAL ACTIONS." By unanimous consent, full reading of Resolution Number 91-2 was waived. The Executive Director explained that approval of the proposed Resolution would authorize the refinancing of the 1978 $4,000,000 Riverfront Redevelopment Project Tax Allocation Bonds, the principal amount owing on the 1978 issue approximately $2.8 million at a current interest rate of 7 percent, escalating to 7.1 percent in two years for the remainder of the term of the Issue. He stated it is proposed to go to a competitive bid for the sale of the Bonds therefore the specific interest rate is not known at this time, however given the BBB+ rating from Standard and poors and the current bond market, an interest rate of 6.7 or 6.8 percent can reasonably be assumed. He noted that although the proposed Resolution authorizes an issue of not to exceed $5.5 million, the staff focus is on $4.86 million as what is anticipated, yet the interest rate at the time of bid will be a factor as to the amount of proceeds that will actually be realized. He explained that the 1991 issue will not only lower the average interest rate but will generate new monies to the Agency, and at a future meeting staff will be recommending that a portion of the proceeds be used to repay the Agency debt to the City and that the remainder be considered for the groin repair and extension. Mr. Bankston introduced Mr. Kitahata of Kelling, Northcross & Nobriga, Inc., financial advisors for the Issue, who was available to respond to questions. I In response to questions of the Agency members, the Executive Director explained that the Agency has met the payment schedule for the 1978 Issue, and made a comparison of the rate of reduction of the principal to that of a home mortgage where in the early years the payment basically satisfies the interest owed rather than any significant reduction of the principal, also clarified that the twenty- percent set-aside is not retroactive yet when refinancing and paying off the remainder the set-aside is applicable to the proceeds. With regard to the assessed valuation of the land uses of Riverfront Project Area as set forth on page fifteen of the Preliminary Official Statement, specifically a comparison of an apparent inequity between the unimproved Hellman property to the Seal Beach Trailer Park, the Executive Director explained that the County Tax Assessor establishes the property value and the property tax, the Agency realizing the benefit of the growth from the base assessment at the time the property was placed in the Project Area, and if there has been no change of ownership 10-7-91 the assessed value is limited to the annual two percent since passage of Proposition 13 and/or any improvements that may be part of a reassessment. He offered that an appeal of those values could be made to the Assessor however it is unlikely it would be successful, or that the issuance of building permits could be tracked to ensure reassessment. with regard to deletion of the Specific Plan reference for the Hellman property on page seventeen of the statement, staff explained that there is currently an application on file for that project yet is not being processed pending agreement of the applicant to provide funding for the environmental work. The Executive Director pointed out that the properties listed on pages sixteen and seventeen are contemplated projects based upon zoning that may be applicable to a specific property, and confirmed that listing the properties as such does enhance the bond sale. He noted that the bonds are printed in $5,000 increments. The Executive Director confirmed that Agency monies may be used for open space and recreation purposes where there is a general benefit to the City and Agency, which in this case would include the groin, that there will be an opinion forthcoming to that effect, explained there is a period of three years in which to expend the proceeds and staff will be looking to recommend proceeding with development of the necessary documents relative to the groin however that the funds be held until such time as the impact of the winter storms are known. He explained that the twenty percent set- aside that has not been met can not be satisfied in lieu of the debt obligation, and in this case the set-aside has been addressed in conjunction with the refinancing. The Assistant City Attorney noted there was no requirement for the twenty percent set-aside for the Riverfront Project until recent years, that when the law changed it recognized that Agencies had existing financial obligations that were entitled to be paid prior to the set-aside, and indicated that the amount is believed to be less than the $800,000 referenced. He explained that the Agency made certain findings as to its indebtedness upon the change of the law in 1984, the law changed again in 1989 where the legislature declared that even if debts existed the set-aside would become a deficit from that point on and in the future more than the twenty percent would be required to be set aside. The Executive Director clarified that in the case of refinancing, the tax increment will first pay the twenty percent set-aside, thereafter the 1986 and 1991 debt service will be paid, and confirmed that there is sufficient increment to do so. With regard to payment of a premium to call the 1978 Issue, Mr. Kitahata stated that as of March the percentage is one-half of a percent and there is an option to either payoff the 1978 bonds or wait an additional six months were a premium payment would not be necessary, that decision basically dependent upon the interest rates. He confirmed that the exact amount of saving by refinancing is not known at this time. staff indicated they could provide. the Agency with an accounting of the set-aside required and a plan of how it can be accomplished. The Executive Director again explained that upon sale of the Bonds the Agency will have the opportunity to determine whether or not to repay the debt owed the City, and the Council in turn can determine where those funds should be placed. I I I Laszlo moved, second by Doane, to adopt Resolution Number 91-2 as presented. AYES: NOES: Doane, Forsythe, Hastings, Laszlo, Wilson None Motion carried 10-7-91/10-28-91 I ORAL COMMUNICATIONS Chairman Hastings declared Oral Communications open. Mr. Bruce Stark, Seal Beach, charged that the Agency and Council are engaging in equity borrowing under the guise of refinancing, that one-half percent of the interest rate does not justify such action. He claimed Redevelopment Agencies have been a detriment to other cities, and suggested that the Agency should be done away with and its indebtedness paid as quickly as possible. Mr. Stark referred to the point that the valuation of the Hellman property is greater than that of the Trailer Park, to which he referred to the issuance of building permits, the valuation of the improvements, and alleged that the valuation of a property may not increase if those permits are not appropriately forwarded to the Assessor. Mr. Stark objected to the Bond refinancing. Ms. Reva Olson, Seal Beach, asked if there are costs involved with the refinancing in addition to the one- half percent, what the indebtedness is that is being refinanced, and what the proceeds will be. The Executive Director responded that the total costs associated with the reissue is approximately $105,000, that the remaining 1978 indebtedness is somewhat less than $2.8 million, and that the Issue would be authorized for not to exceed $5.5 million however $4.8 is anticipated depending upon the interest rates. Ms. Olson expressed her opinion that the exact refinancing costs should be known, that the Issue is extended for ten years therefore the Agency will be paying more, and said there does not appear to be much difference in the interest rate as it relates to refinancing costs. There being no further comments, Chairman Hastings declared Oral Communications closed. I ADJOURNMENT It was the order of the Chair, with consent of the Agency, to adjourn at 7:32 p.m. /~~--~,- o;--~~\ ~1:Il>!l!D "\9. ~ 1:", ~wn '\\ ~~ ~ ..j ~~~. Se ary Seal Beach, California October 28, 1991 I The Redevelopment Agency of the city of Seal Beach met in regular session at 6:49 p.m. with Chairman Hastings calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Chairman Hastings Agencymembers Doane, Forsythe, Laszlo Absent: Agencymember Wilson Also present: Mr. Bankston, Executive Director Mr. Barrow, Assistant City Attorney Mrs. Yeo, Secretary