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HomeMy WebLinkAboutRDA Min 2002-09-23 8-26-02 / 9-23-02 Seal Beach, California August 26, 2002 The Redevelopment Agency regular meeting scheduled for 6:45 p.m. was canceled due to the lack of business items for consideration. I Seal Beach, California September 23, 2002 The Redevelopment Agency of the City of Seal Beach met in regular session at 6:46 p.m. with Chairman Campbell calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Chairman Campbell Agencymembers Antos, Doane, Larson I' Absent: Agencymember Yost Agencymember Yost arrived at 6:54 p.m. Also present: Mr. Bahorski, Executive Director Mr. Barrow, City Attorney Mr. Whittenberg, Director of Development Services Mr. Danes, Director of Public Works/City Engineer Ms. Yeo, City Clerk APPROVAL OF AGENDA Larson moved, second by Doane, to approve the order of the agenda as presented. AYES: NOES: ABSENT: Antos, Campbell, Doane, Larson None Yost Motion carried I PUBLIC COMMENTS Chairman Campbell declared the Public Comment period to be open. Mr. Jim Caviola, Ocean Avenue, expressed appreciation for the consultant report, stated his intent had been to obtain the report on Friday so another person could review it yet 'it was not available, he did obtain it today, has read it, it is a good report, however, a concern is that it does not specifically say what the General Fund would gain by 9-23-02 I abolishing the Redevelopment Agency. Mr. Caviola claimed that based upon an opinion by a federal court judge it is not possible to expand the Agency area under current law, also he felt there was discrepancy relating to Surfside and the referenced Agency Implementation Plan for 2000/2005 where the report states that only limited construction has occurred in the Surfs ide Project Area, that no housing unit has been substantially rehabilitated, and claimed ~hat statement is not correct as Surfs ide has been completely rebuilt, therefore the report infers that Surfs ide is not obligated for low and moderate income housing in that there has not been substantial rehabilitated housing. Mr. Caviola stated again that his position is to disband the Redevelopment Agency. Ms. Joyce Parque, 6th Street, concurred that it is a good report, more time is needed to go over it. Ms. parque said they are still waiting for a copy of Unclassified Use Permit UUP-I-77, inquired if a copy of the Coastal Development Permit for the Trailer Park has been located, that was part of the question and answer session in April. There being no further comments, Chairman Campbell declared Public Comments to be closed. I CONSULTANT REPORT - DISSOLUTION OF REDEVELOPMENT AGENCY The Director of Development Services noted that requests for proposals were distributed in April, the Agency approved the scope of work and retained Keyser Marston Associates on May 28th, the consultant report has been provided the Council, Mr. Greg Soo-Hoo and Ms. Nichole Murphy were present to provide information from that document, most likely addressing the issues set forth in the Executive Summary. The Director pointed out that the report does not make a recommendation as to the dissolution of the Agency, that being a policy decision of the Agency once this report and any other input has been received, also, the Agency had asked the consulting team to contact the County regarding their willingness to accept the debt of the Agency and receive the tax increment funds, payoff the bond issues and use the funds in accordance with the provisions of redevelopment law, and as pointed out in the communication from Keyser Marston to date there has been no written communication from the County on that proposal, and suggested that any questions of the Agency can be referred to the Keyser Marston representatives. Agencymember Yost arrived at 6:54 p.m. I Mr. Greg Soo-Hoo, principal of Keyser Marston Associates, introduced Ms. Nichole Murphy, a partner of Murphy and Davis, a redevelopment law firm based in Sacramento. Mr. Soo-Hoo confirmed that their firm was retained by the City to analyze two items as they pertained to the dissolution alternatives of the Redevelopment Agency, the first was to provide an objective review of the legal parameters involved in a redevelopment agency dissolution as provided in California redevelopment law, the second area that they were to address was the identification of the various existing financial obligations of the Agency which would presumably be transferred to either the City or a third party entity such 9-23-02 as the County or a bond trustee, to be able to look at what those identified outstanding indebtedness obligations were and then be able to identify what the possible alternatives for assumption of those responsibilities could be, the intent of the report is to identify those two matters and address the issue of the County and its willingness to assume I responsibility for the tax allocation bond debt. Mr. Soo-Hoo mentioned that in July they had contacted Mr. Paul Lanning of the County Executive Office to analyze the situation and as the Director indicated as of their most recent transmittal to the Agency last week no written comment or response was received from the County Executive Office as to their interest or position or inclination to assume the debt, and in his last conversation with County staff they had indicated that it would require further legal counsel review on their part and asked that the Agency consider assisting in paying for some of that cost inasmuch as it is outside legal counsel. Mr. Soo-Hoo pointed out that the analysis is not intended to persuade or dissuade the City as to the decision of dissolution, as indicated in the cover letter to the Agency that decision is thought to be addressed on the broader question of has the Redevelopment Agency accomplished all of its stated goals and objectives in the Redevelopment Plan, would the City's General Fund be willing to assume some of the Agency's liabilities and obligations and at what cost to the City's General Fund revenues, and then, would the Redevelopment Agency by its dissolution with the City be I' willing to allow the County to essentially use the low and moderate income housing funds at its discretion throughout the City of Seal Beach, those being questions that are not addressed in the letter but are questions that need to be discussed on a much broader level amongst the City, Redevelopment Agency and the County. Mr. Soo-Hoo said he would first like to address the legal parameters that Ms. Murphy identified in the report as part of their research and review of California redevelopment law, by way of introduction Health and Safety Code 33141 makes some provisions for an agency dissolution or deactivation, restated in the report to read that 'agency deactivation may occur if the redevelopment agency has no outstanding bonded indebtedness, no unpaid loans, indebtedness or advances, and no legally binding contractual obligations with persons or entities other than the City, unless the City is willing to assume these obligations,' in addition, the redevelopment plans can not be terminated if there is no compliance with the obligations pertaining to replacement housing, inclusionary housing, or excess surplus housing funds. Mr. Soo-Hoo directed attention to the Executive Summary of I the report, said in their identification of the two redevelopment plans currently in place with the Redevelopment Agency, it is understood that the Surfside Project Area is currently not receiving any tax increment revenues however the Redevelopment Plan remains active and in effect, so what would have to happen is that the balance of funds represented by the housing set aside monies set of the Surfside Project would have to be transferred either to the City for its distribution and use or to the County Housing Authority, once I I I 9-23-02 the balance of housing set aside monies from the Surfside Project have been reallocated the Surfside Plan can be amended so that the Plan becomes essentially deactivated. With regard to the Riverfront project Area, because of the identified existing bonded indebtedness as well as other indebtedness obligations of the Project Area it is a more complicated matter. As is known the tax allocation bonds have been financed out of the Riverfront tax increment revenues and obligate the tax increment monies to the total of about $14 million in both principal and interest out into the future, those bonds do not terminate for a number of years so one of the key objec~ives that the Agency will have to fulfill is the way in which those principal and interest payments will have to somehow be satisfied in order for the deactivation of the Riverfront project Area to occur. There are several other smaller obligations related to some payments associated with Zoeter Place, it is lease revenue bond financing that took place, and with the Zoeter Place promissory note what happens is that there is income coming in for Zoeter Place and as a result of those lease payments the Agency is then servicing a note to repay back on that debt, the amount of outstanding principal and interest on the Zoeter Place note would be approximately $1 million so it is not much relative to the tax allocation bond debt. Tied in with the Zoeter property there is another obligation that the Redevelopment Agency assumed over the City's initial obligation which is Zoeter daycare facilities and at this juncture the Redevelopment Agency is making payments for the purchase of that property originally purchased by the City from the Los Alamitos Unified School District, so that would again be another obligation that would ultimately revert back to the City if the Redevelopment Agency were to dissolve itself. The fourth major obligation would then be to the City General Fund, there is approximately $363,000 in debt, including interest, that is to be paid back to the City General Fund, that would either have to be allowed or the City would have to forgive that debt of the Agency. The final item is an obligation of excess surplus penalties which were incurred by the Redevelopment Housing Fund and that is in an amount of approximately $688,000 from 2001 when the $688,000 of penalties were assessed to the Housing Fund, those have to be satisfied and according to the Agency Finance Department those are going to be satisfied out of net tax increment monies after debt service, after administration, after housing setaside, of about $70,000 per year. These are the obligations that he will walk through with the Agency. Mr. Soo-Hoo noted that the gentleman before him had indicated what the obligations would be if the Agency were to dissolve itself and what the net benefit to the General Fund would be. Proceeding to speak in more detail about the Riverfront Redevelopment Project Area, Mr. Soo-Hoo said at present the gross tax increment dollars of about $1.1 million per year are being generated by the Riverfront Project, from that 9-23-02 twenty percent is placed in the setaside housing fund, the balance is used for a combination of uses whether that be the repayment of debt on the Tax Allocation Bonds, secured by revenues from Riverfront, as well as Agency administration and some of the other obligations mentioned. If the Agency were to terminate this Redevelopment Project Area, on a gross tax increment basis they estimated conservatively that it would be about $27 million that the Agency would forfeit from the current fiscal year until the Plan termination which is 2023/2024 fiscal, with that cumulative amount of $27 million a portion would be paid to the housing setaside fund, a portion would be paid to debt service obligations on the bonds, nevertheless, the issue is that conservatively, conservatively meaning in their initial projections they assumed a two percent growth reflecting Prop 13 increases every year off of the reported values of the project in 2001/02, escalated those every year by two percent, this did not assume any new development activities, transfers of ownership, simply Prop 13 increases at a maximum of two percent, and they cumulated the resulting gross tax increment amounts which is about $27 million. On page two of the Executive Summary it should be noted that approximately seventy percent of all of that money would revert back to the unified school districts, whether that be Los Alamitos Unified, the Coast Community College, or the State Educational Revenue Augmentation Fund, school district allocations of the $27 million would be about $13.1 million, State ERAF would be $5 million, the County taxing entities, the General Fund, Flood District, Water District, etc., would receive about $4.5 million, and the City General Fund would be $4.2 million for the period from now to 2023, therefor the largest diversion of tax increment dollars is the impact to the unified school districts. If the Agency were to dissolve itself one of the issues that relates to the $27 million is that the Agency would need to figure out a way to satisfy the outstanding debt obligation of the 2000 Tax Allocation Bonds, Series A and Series B, as mentioned earlier about $8.8 million of debt remains outstanding in principal and another $5 million in interest, those debt payment obligations when they come to their termination are approximately $14 million, that by far is the biggest obligation, for this Project Area to close itself down the $14 million obligation would somehow have to be satisfied. I I' Mr. Soo-Hoo stated that based upon Ms. Murphy's review of the bond documentation as well as their understanding of the legal parameters involved, the Agency can use tax increment financing in terms of the Tax Allocation bonds to service this debt, the Agency can also consider land sale proceeds. Thus they have indicated a strategy that if it were the desire of the Agency to payoff the Tax Allocation Bond debt, what it would theoretically do is deactivate the Redevelopment Plan possibly in 2003, under existing Redevelopment law it indicates that the Agency has an additional ten years after Plan termination to collect tax increment dollars, if the Agency were to receive those tax increment dollars and accumulate them in a revolving fund held by a bond trustee, the Agency would annually deposit all I 9-23-02 I of the tax increment it collect within the ten year time frame, the Agency would then have to include land sale proceeds or existing bond proceeds that have remained unspent in the Agency, a combination of those types of funds, those three funding sources, could theoretically satisfy the Tax Allocation Bond debt obligations until they terminate. Mr. Soo-Hoo said they had not worked out a cash flow analysis because they did not have enough information on what the potential land sale proceeds would be, it is known that approximately $3.3 million in outstanding bond debt remains, it would then require some very hard decisions of the Agency and City with respect to the intended use of the initial bond proceeds, because if you use the bond proceeds to pay down the debt service of future bonds the Agency/City will not be able to accomplish some of the capital improvement projects that were originally slated with the use of those proceeds. He offered that those are some of the considerations that have to be discussed and analyzed before the Agency actually makes this particular decision. As indicated, as the Agency continues to receive the tax increment dollars for ten years it would still need to continue to set aside the twenty percent of the collected dollars in the housing setaside fund and use those setaside monies within the City for low to moderate income housing purposes. Mr. Soo-Hoo said his understanding of the unspent bond proceeds is that there is approximately $3.3 million that they were able to identify with the Agency finance staff of unspent proceeds today, $2.3 million of the $3.3 total is now slated for use for the West End Pump Station Replacement, as he understands, the money out of the existing bond proceeds then the money will have to come from some other funding source, most likely the City General Fund. The balance of $l million is also available for other various capital improvement projects, City Yard improvements, and other discretionary capital activities that the Agency may choose to pursue, again, as with the West End Pump Station some serious decisions have to be made as to whether the Agency will proceed or not proceed with these capital improvement projects and the use of the existing bond proceeds if the Agency was to pursue the dissolution scenario. I _I Another funding source they identified, as it related to the Tax Allocation Bonds, would be land sale proceeds, one of the options available to the Agency would be the sale of Zoeter Place, the existing tenant does not have the option to purchase that property until July through December 2004, but at that juncture when they elect and possibly pursue that option that may be another potential source of proceeds, not being appraisers their firm does not know what the appraised value of Zoeter Place would be, but potentially another funding source. Another property mentioned in the report is the police/Maintenance Yard facility, that again is an Agency owned property that could potentially be sold, there would be the dilemma however of selling that piece of land and finding a replacement property, the question would be would the City incur additional costs by trying to find another parcel in which to relocate the police/Maintenance Yard facility. Mr. Soo-Hoo said another caveat that they suggest is that legal 9-23-02 bond counsel should be retained as there are questions that are yet to be resolved related to bond arbitrage considerations, the fact that the City is not spending the proceeds within a set period of time and in fact depositing them into a fund that would then pay down future debt service, there may be some legal restrictions that need to be I explored further in this analysis as to whether or not under bond or federal tax laws are legally acceptable, so they would suggest that if the Agency were to consider this pursuit that the opinion of legal bond counsel be retained as to whether or not that would be an appropriate alternative for the Agency to pursue. Before moving on to some of the other debt obligations Mr. Soo-Hoo asked if there were any questions relating to the Tax Allocation Bond financing options. Agencymember Yost noted the comments relating to sale of several different resources, Zoeter Place is very emotional to a lot of people yet something he might think about as using as a resource, he would not sell City Hall or the Police Department or the Yard, but is there a way to separate those and have the time frame moved further out such that that could be repaid or is it still necessary to have bond counsel in order to do that. Mr. Soo-Hoo said the Agency would do well to retain legal bond counsel to ask that particular question, there are other funding sources that he had mentioned, one would be that the tity does have discretionary bond proceeds that are I available, at this juncture is approximately $3.3 million, that would pay for a portion of the remaining outstanding debt, it would not be enough however, the City would also need to rely on the only other funding source to secure bonds which would be tax increment revenues that would continue to be collected over the remaining ten years after dissolution. It must be kept in mind that Agency dissolution or the Project Area termination'can occur at any juncture in time that the Agency chooses to pursue that if that is the alternative that the Agency wants to go with, he used the year 2003 as an example if there was the need to proceed rather quickly, then after 2003 there would be an additional ten years of tax increment collection in order to accumulate into this fund. Agencymember Yost noted comments about the County taking over the property tax rolls, it seemed as if the comments reflected two different scenarios, one where the County would take over the Agency then use the tax increment money for low to moderate income housing and make that decision versus dissolving the Agency completely and going to the usual form of distribution in which case there would not be a twenty percent set aside, and inquired if those were two [ different scenarios. In response, Mr. Soo-Hoo explained that under current law-if the Agency gave its setaside money, just . the twenty percent, to be used by the County Housing Authority, they could legally receive those allocations and spend the funds appropriately, however the law, as it is understood, would still restrict the expenditure by the County Housing Authority to the City of Seal Beach, they can not spend it in another city, it must be within the legal boundaries of Seal Beach, the City is bound by redevelopment law for those expenditures whether it is the City, Agency, or 9-23-02 I the County Housing Authority. He stated that the second question related to an issue that arose early on when they were retained which was if the County was willing to pursue assumption of the Tax Allocation Bond debt the only scenario that he could understand where the County potentially could do that would be in which the County Redevelopment Agency assumes the responsibility of the Agency's debt service, the County would continue to collect the tax increment that would otherwise go to the Redevelopment Agency in Seal Beach, and they in turn would pay the debt service, the County Redevelopment Agency would be responsible for the Tax Allocation Bond debt, the problem is that the County is not sure that legally they can even do that under existing redevelopment law as well as under the covenants set forth in the bond documents when the 2000 bonds were issued so they have deferred decisions until there is a legal opinion and further review and research can be conducted on that matter, it has been about three months since he initially contacted the County on this matter, and he has not been successful even as of last week to get an official commitment one way or another from them. Agencymember Yost inquired as to any type of time frame where an answer could be anticipated for clarification. Mr. Soo-Hoo said as he mentioned earlier one of the proposals is that they would ask the City to pay for some of their legal costs to help defray the outside legal opinion that they would need to get, that was according to conversation with the County Executive Office, therefore if the Agency wants to pursue this further the County would be willing to talk provided that to a degree the Agency or City is willing to help pay for some of their legal expenses, again, that is because they retain outside legal counsel when it comes to redevelopment matters. .1 I] Agencymember Yost asked if the Surfside Redevelopment Agency could be dissolved independently from the Riverfront Redevelopment Agency. Mr. Soo-Hoo responded that the answer would be yes provided that the various parameters of both indebtedness as well as satisfaction of the Housing Element, inclusionary housing and excess surplus funds are satisfied, they can be done separately. Chairman Campbell asked if there is an up or down side to dissolving the Surfside Redevelopment Agency. Mr. Soo-Hoo stated that if there are no other redevelopment projects, programs, or activities that the Agency wishes to pursue in Surfside then it would actually be a neutral issue because the Agency is not collecting any tax increment and there are really no outstanding indebtedness obligations incurred by the Surfs ide Plan therefore at this juncture it would be neutral, the dollars would just revert back to the affected taxing entities in the County, the school districts and the City. Mr. Soo-Hoo stated that the Zoeter place promissory note, as he had mentioned, represents a lease note repayment in which income is received by the Agency, that income in turn is used to service the debt, in theory that would actually be neutral in terms of impact to the City General Fund, however, if the Agency were to dissolve itself and if the Zoeter Place properties were to be sold there would be a potential loss of 9-23-02 future revenues obviously because the lease income would no longer come in, the debt obligation on Zoeter Place's promissory note would be satisfied of course by the sale however any excess income in excess of the debt service would no longer be realized by the City, they estimated that, if the property were sold at the lessees option in 2004 the City I or Agency would actually forfeit about $5.8 million in cumulative income potentially. The Zoeter Place promissory _. note is again one of the neutral issues in which the City and the Redevelopment Agency would not be fiscally hurt if the City were to incur the responsibility of paying the promissory note, tied in with that is the Zoeter daycare facilities, this again is where the City acquired the property from Los Alamitos Unified, the annual payments made by the Redevelopment Agency are approximately $146,000 per year, presumably then if the City were to assume that responsibility back the General Fund would be responsible for that debt payment obligation. Another option was addressed whereby the Agency could exercise its purchase option to acquire the property and of course the lease would then terminate and the responsibility of making debt payments to the Unified School District would cease, the Agency could then theoretically take that property and sell it again to another third party, and as mentioned in the staff memo there are some considerations because theoretically the City could lose the use of the facility as daycare, again, that would be a consideration before making a decision in that direction. I- Mr. Soo-Hoo mentioned again the General Fund loan obligation, his understanding is that the original incurrence of the City General Fund was to cover Redevelopment Agency debt early in the Redevelopment Project Area formation, with interest payments that cumulative is now about $363,000 that is owed back to the City General Fund and it would either need to be repaid from available tax increments or would need to be forgiven by the General Fund if the City Council were to provide such forgiveness, again, the reason is that these are loans or advances incurred by the Redevelopment Agency. Chairman Campbell made reference to page nine of the report for the purpose of clarification, the last paragraph, relating to the repayment of the $1 million bridge loan to the City, to which she stated that as yet Linc has not received the funds. Agencymember Yost made reference to page five, paragraph H-5 of the Summary, his understanding being that there was the $1 million bridge loan and the other $1 million was a grant. Chairman Campbell said she believed that the $1 million was the bridge loan and there was $900,000 of closing costs for the Trailer Park. Mr. Soo-Hoo 1_ stated that was not clear to them upon review of the documents, it appeared there was the $1 million bridge loan and another $1 million loan on a bridge loan basis, that is something that probably needs to be further clarified with the Agency finance staff as to whether it is actually a loan or a grant. Chairman Campbell explained that the Trailer Park was like any other closing, in this case the residents of the Park did not have the money for the closing costs, the bonds that they could qualify were maxed at six and a half, that is where the MPROP brought them up to the purchase price 9-23-02 and the Agency paid the closing costs, it was an acceptable use for that money. Mr. Soo-Hoo said if it was in fact a grant then it would not be repaid back to the housing fund, the only element would be the $1 million bridge loan. I Mr. Soo-Hoo said he wished to bring some closure to their initial presentation by dealing with the excess surplus, as mentioned previously $668,000 of excess surplus penalties were assessed as a result of the excess identified in 2001 of June, his understanding that the plan for repayment of that penalty is coming out of available tax increment revenues for the next ten years at $70,000, at this juncture there are, to their knowledge, no other excess issues that are surrounding this Project however the $668,000 would have to be obligated or committed prior to the Redevelopment Plan closing itself down. One of the things outlined in the staff memo is that if the Agency were to pursue these considerations the obligations would have to revert back to the City General Fund, particularly the funding of the West End Pump Station as well as the improvements to the City Yard, this is something that can not be fully addressed in just one session of the Agency but it is something that should be seriously considered because as he understands it these improvements are necessary in order for the replacement to take place of the Pump Station in particular. I Agencymember Antos said he wished to pose a question, it may be a reason for the recommendation to retain a bond counsel, the bonds are to be paid off over a period of time with principal and interest involved, is it known if there are prepayment penalties, if there was a proposal to pay them off today would all of the interest over the long period of time be due, or is there a way to pay them off early. Mr. Soo-Hoo said at the time the Agency issued the bonds there were likely some redemption provisions set forth and agreed to when the bonds were issued, there are specific provisions as to when the Agency could, at the earliest, make provision for repayment, his understanding is, and he can confirm, that it would be 2004, if that is the case the City can not really take action in terms of repayment of the early retirement of the bonds until that time actually transpires, at that juncture a decision can then be made as to whether or not the Agency chooses to fully retire the bonds, the proposal that their firm is setting forth is simply saying that everything is status quo, that the Agency continues to receive the tax increment regardless of the effectiveness of the Redevelopment Plan, with the combination of the use of unspent proceeds, possibly land sale proceeds, and the tax increment monies there should be enough monies available to be able to retire the bonds at their appropriate time, obligations, and periods. I With regard to Zoeter Place the Executive Director said he has reviewed the Zoeter Place documents, an issue has been raised as to how the Rodi Family Trust issue of purchase rights came about, and clarified that it started about August of 1995, well before City Manager Till was involved, the issue at hand was the option to purchase provision and why it 9-23-02 was in the document, review of the records indicate that it was put forth because it would help the Rodi Family to finance the property, that has been made an issue a number of times and there needs to be a clear record of how it occurred. Agencymember Yost inquired if they do actually have a first right of refusal. The Executive Director I confirmed that they do, the consultant is correct that the time period is June through December of 2004. Agencymember Yost then asked if it is possible to sell the site prior to that period of time. Chairman Campbell offered that there could be legal repercussions as you could not take his right to purchase from him. The Executive Director offered that someone could look at that issue. Ms. Murphy pointed out that the City could sell the property but it would be subject to the Rodi Trust option to purchase. Agencymember Antos made reference to the staff report in which it stated the City Yard was built in the 1960's, the property was purchased about 1976 so the Yard and Police Station could not have been built before that time, that needs to be corrected. Councilman Antos said before decisions are made he had some questions. In reference to page six of the Executive Summary he noted that the Agency has been penalized $668,000 for having excess monies in its housing fund as of June, 2001, on page five it states that the Agency and Linc provide a grant for rental assistance to the Trailer Park for a period of twenty years to the maximum I of $180,000 per year, his question is if that money could be from the housing setaside, if it could then how could the Agency would be penalized if $180,000 is being used per year to preserve low and moderate income housing within the City. The City Attorney pointed out that the City is no longer being penalized, the penalty was set in 2001, and the way that staff has determined to come up with the money to pay the penalty is the $180,000 per year, that is how the penalty established in 2001 is being satisfied. Agencymember Antos offered that before the Agency can make any final decisions on this matter as far as how to proceed, more needs to be known about the ramifications for payoff of any bonds, an appraisal of the Zoeter property, specifically the commercial frontage, the value needs to be known given the option in 2004 or go forward to purchase it, if sold then the ramifications would be known on any payoffs and if there would be any money left over to do some of the other capital projects, these things need to be known before any rational decision can be made. Agencymember Larson said in his opinion this needs to be studied much more before any decision is made, there are a lot of figures, some are I puzzling, he would want to know what the net cost to the City General Fund will be, example would be that if the Agency is dissolved then General Fund money would be needed for the pump station, they have measured that from the reserves yet when the budget was adopted it was known that the reserves 'would be gone by next year, if the Pump Station was funded that would be from a non-existent reserve, then there would be the issue of raising money where the Council no longer has a legal way to raise more money. Agencymember Larson said he would like to analyze this more, ask questions, and determine 9-23-02 I what the net result will be when this is done, the other side of the issue is the County, assuming the County Redevelopment Agency could take over the Agency obligations, as was suggested by a member of the audience, if they were to do that then the Redevelopment Agency of the County, far away from Seal Beach, would be making the decisions on low cost housing in this City, the residents find it easy to make their wishes known at Council meetings but if decisions are being made elsewhere it will not be easy, he would like those answers before anything is done. He reminded that the city has had an Agency for many years, if the determination is to dissolve the Agency then it needs to be known what it is going to cost, if it is going to cost General Fund money that will take away from those things that it is known that General Fund money will need to be spent on like Police, Fire, Lifeguards, recreation, parks, streets, sidewalks, etc., his feeling is that then it has to be looked at to see if it is something that the city really wants to do. Agencymember Larson said under other laws, as he understands them, the City would still need to provide low to moderate cost housing whether there is a Redevelopment Agency or not. I Agencymember Larson said he would move that this matter be continued for a month at least. Agencymember Yost agreed, seconded the motion, possibly obtain some opinions, also see what options are available from the County, not just in terms of them taking over the Redevelopment Agency but also exploring the option of them absorbing the debt service in return for the tax formula being reinstated on those properties. I Chairman Campbell asked where the money is coming from for the consultants and future bond counsel to pursue this issue further, she does not want General Fund money spent. The response was that it will be Redevelopment Agency money. Being a numbers person, Chairman Campbell said in looking at the numbers she can not get optimistic, nor was she optimistic going in as she met with the Finance Director, looked at the numbers and determined that there was no way that this could be done, she would not support pursuing it, this should be a receive and file item. She stated she would not object to dissolving the Surfside Project but as far as the Riverfront Redevelopment Agency is concerned there will be a significant loss of revenue, what is the General Fund going to gain, it will be nothing, now it needs to be determined how all of this is going to be paid for, she objects to spending any more money pursuing this, she can not see how it can be done. Agencymember Larson said his first reaction was that maybe that is true but there is considerable money that has gone into this and he would like to know for sure. Agencymember Yost requested that the motion to do additional study and continue the Riverfront Project item for a month be amended to pursue the dissolution of the Surfside Redevelopment Project as a matter of good faith provided that that would not have any negative financial repercussions. Agencymember Larson accepted the amendment. 9-23-02 Agencymember Doane mentioned that there are some small bungalows in Surfside that would qualify for low to moderate housing rehabilitation. Chairman Campbell suggested that possibly the Surfs ide Project should be held up until the housing stock can be looked at. With that the amendment to the original motion was removed. The original motion was restated, that the Riverfront Redevelopment Project issue be continued for approximately one month, and separately, that the issue of the Surfside Project Area be looked into with a report back to the Agency. The Executive Director inquired if the motion would include retaining the necessary consultants to work with the County and look further at dissolution, the response was yes. As a point of clarification the issues to be looked at further would be can the bonds be called, paid off early, is there an arbitrage problem. Added to that list was the value of the Zoeter property, and to that it was pointed out that that will require the hiring of an appraiser, etc. I AYES: NOES: Antos, Doane, Larson, Yost Campbell Motion carried Chairman Campbell clarified that her no vote was for the reason that she is against spending any more money because she does not see that it will be positive. Chairman Campbell stated that there are other issues regarding the Redevelopment Agency that she would like to pursue, recently there were two letters to the editor in the local paper, she would like to clear up some of the comments, basically the Agency members were accused of being crooks, the Agency was referred to as being a slush fund for developers, investors, consultants, etc., a comment was that Seal Beach is the only one left for redevelopment to ravage, the response was that there is no desire to ravage Seal Beach, it was said the members of the Agency should be investigated, question was for what, and stated that the referenced letters contained a lot of erroneous statements. A member of the audience responded that there are people who think the members of the Agency are crooks because of the Trailer Park by stating that the residents would own the Park, that should have been in writing, a slush fund is money that does not go into the City coffers, the tax increment is taxpayer money, that money should be going to the City General Fund, people voted for Prop 218 and would be outraged if they knew that their tax dollars were not being voted on, and claimed to not be the author of the letters. I APPROVAL OF MINUTES Yost moved, second by Larson, to approve the minutes of the April 22nd and May 28th, 2002 minutes. I AYES: NOES: Antos, Campbell, Doane, Larson, Yost None Motion carried For the record, Agencymember Antos indicated his intended abstention from voting on the April 22nd minutes. 9-23-02 I GRANT OF EASEMENT - SOUTHERN CALIFORNIA EDISON - UNDERGROUND UTILITY DISTRICT Yost moved, second by Larson, to approve the Grant of Easement across the property owned by the Redevelopment Agency (Police Station facility) for the Underground Utility District project on Seal Beach Boulevard from Adolfo Lopez Drive to Electric Avenue. AYES: NOES: Antos, Campbell, Doane, Larson, Yost None Motion carried I HOME IMPROVEMENT GRANT/LOAN PROGRAM PROCEDURES Agencymember Antos requested that this item be held over for thirty days for review inasmuch as he only received the item this date. Agencymember Yost asked if there is an urgent time frame for action on this item. The Director of Development Services responded that there is no mandated time frame however there are people in the community who are anxious to make application under the rehabilitation/ loan programs that this item covers so that they can commence improving their residences, postponed action would merely delay them another thirty days. The agenda item is merely the forms and letters that would be sent to people as an application is being processed which is within the criteria that the Agency has already approved for the loan programs, this does not change the programs rather it shows the procedures that the consultant will use during application processing, work with the contractor, there are forms for the necessary grant deed and loan documents, it is one of the implementation tools that will be used internally to manage the program. Agencymember Yost asked if Agencymember Antos would be willing to approve the documents and then bring it back if there are questions so that staff can process applications more expediently, to that the response was yes. Yost moved, second by Larson, to receive and file the Home Improvement Grant/Loan Program Procedures, establishing program procedures for the different housing programs structured to assist the low to moderate income residents of the City of Seal Beach. AYES: NOES: Antos, Campbell, Doane, Larson, Yost None Motion carried ADJOURNMENT It was the order of adjourn the meeting the Chair, with consent of the Council to at 7:51 p.m. .1 t.~~fo~