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HomeMy WebLinkAbout02/06/1995 B A K E R S F I E L D Patricia J. DeMond, Chair Irma Carson Kevin McDermott Staff: Gail E. Waiters AGENDA '~' '- BUDGET AND FINANCE COMMITTEE ~ Monday, February 6, 1995 12:15 p.m. City Manager's Conference Room Second Floor - City Hall 1501 Truxtun Avenue Bakersfield, CA 1. ROLL CALL 2. APPROVAL OF JANUARY 23, 1995 MINUTES 3. PRESENTATIONS 4. PUBLIC STATEMENTS 5. DEFERRED BUSINESS 6. NEW BUSINESS A. POLICY ON SEWER LINE REPAIRS - R. Rojas · B. DISCUSSION ONLY-- CONVENTION CENTER HVAC - R. Rojas 7. ADJOURNMENT GEW:jp FILE COPY BAKERSFIELD PUBLIC WORKS DEPARTMENT MEMORANDUM DATE: January 5, 1995 TO: ALAN TANDY, CITY MANAGER FROM: RAUL M. ROJAS, PUBLIC WORKS DIRECTOR~ SUBJECT: CONVENTION CENTER H.V.A.C. The Convention Center air conditioning system has surpassed its useful life and must be replaced. Last year a study was performed to determine if a Thermal Energy Storage (TES) system could be used since it would have qualified for a P.G.&E. rebate (part of the study was underwritten by P.G.&E.). The study was completed by John Mitchell in August which identified the following: NO. DESCRIPTION COST 1. Replace cooling towers (both the chiller and ice making) $ 340,000* 2. Replace main chillers $ 665,000* 3. Replace all air handlers $1,036,000 4. Thermal Energy Storage (TES) $ 473,000 Sub-Total $2,514,000 CaCL Repair $ 100,000 Engineering $ 275,000 Total $2,889,000 * Indicates items which require immediate attention. Several months ago, Honeywell approached us with a proposal to complete all of the necessary improvements to the Convention Center with a "Performance Based Contract". After much time and effort, Honeywell developed several budget estimates relative to the amount of work we wish to accomplish. These estimates were based on modifying the Mitchell study and are shown as follows: 1. Minimal improvements to get by $1,750,000'* 2. Medium improvements (includes some air handling) $2,050,000** 3. Full and complete improvements $2,300,000** ** Includes total package with engineering and project management. BAKERSFIELD Alan..'uandy, City Manager :/ Patricia J. DeMond, Chair Staff: Gail E. WaEers ,/ Irma Carson Kevin McDermott ':~, ' AGENDA SUMI~ARY REPORT BUDGET AND FINANCE COMMITrEE Monday,' January 23, 1995 12:15 p.m. City Manager's Conference Room 1. ROLL CALL Call to Order 12:26 p.m. Present: ·Patricia J. DeMond, Chair; Councilmember Irma Carson; and Councilmember Kevin McDermott 2. APPROVAL OF DECEMBER 5, 1994 MINUTES Approved as submitted. 3. PRESENTATIONS None 4. PUBLIC STATEMENTS None 5. DEFERRED BUSINESS A. AMBULANCE SERVICE RATES At the Committee's December 5, 1994 meeting staff was asked to draft a proposed ordinance that addressed the concerns of ambulance operators. The AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Monday, January 23, 1995 Page -2- Committee supported the changes proposed by staff in the ordinance and will recommend to Council that effective this year only, ambulance operators can apply for a rate change by April 1, 1995. Thereafter, any application for rate changes must be submitted by January 1 of each calendar year. Such requests will come before the Council during a noticed public hearing. Unless the matter is referred to Committee, the rate changes will be adopted at the public hearing. · Staff will present the draft ordinance to Council at' its February 8, 1995 Council meeting. 6. NEW BUSINESS A. ASSESSMENT DISTRICT NOTICING PROCEDURE Over the years, developers from the private sector have turned to the City for assistance when developing their financing packages. Representatives from Castle and Cooke gave testimony to the Committee regarding Assessment District 94-3 (Silver Creek, Brimhall North and Seven Oaks), which dealt with assessments for some property owners in a partially built-out neighborhood. Castle and Cooke deVeloped a. disclosure notice for review by the Committee. The Committee requested additional changes to the notification and asked that the notice be re- submitted for further review. A separate issue was raised by Castle and Cooke concerning City policy on the exclusion of spreading assessments to already built .homes. The issue was referred to staff and will be brought back to the Committee at their next meeting. B. AIRPARK GRANT The Committee reviewed staff's recommendation concerning an application for federal grant funds to provide additional safe space at the Airpark. Research completed by staff concerning the City's 10 percent match to FAA grants concluded that the match can be fulfilled by a donation by the land owner. The Committee has recommended that the Council approve staff's request to pursue the grant. C. POLICY ON SEWER LINE REPAIRS A citizen's concern necessitated staff's review of City policy regarding sewer line repairs. The City is not liable for breaks in laterals, however, staff understands the difficulty of doing repairs that occur between the curb and the main in a timety manner. In order to be of assistance to residents for these types of breaks, the BUDGET AND FINANCE COMMITTEE Monday, January 23, 1995 Page -3- City is offering the following alternative: a "discounted service" that will require the homeowner to pay a smaller fee to excavate the lateral problem, and to have it done in a timely manner by City forces. This discounted service does not, however, abdicate the homeowner's complete responsibility for the lateral breaks occurring between the curb and the main. The service will only be available to City residents, except for all agreements currently in place with the City. The Committee asked that staff bring a draft ordinance back to their next meeting. D, FIREWORKS ORDINANCE The City's fireworks ordinance has no provision for City growth. The current limit on permits is 50. In the past, this has been expanded to accommodate County permit holders when property has been annexed into the City. It is anticipated that four permits will need to be grandfathered in due to the recent annexation of Union #10. The Committee has asked staff to address the permit issue as it relates to growth and a possible lottery selection process. Staff will return to the Committee with a draft procedure at the Committee's earliest possible date. E, PROPOSED 1995 MEETING SCHEDULE The proposed schedule was approved by the Committee. 7. ADJOURNMENT The meeting was adjourned at 2:25 p.m. cc: Honorable Mayor and City Council GEW:jp BUDGET AND FINANCE COMMI'n'EE - 1995 ADOPTED MEETING SCHEDULE MONDAYS @ 12:15 PM COMMITTEE MEETING COUNCIL MEETING January 23 January 25 February 6 February 8 None February 22 None March 8 None* March 22 March 27 April 5 None April 19 April 24 May 3 None* May 17 None* June 14 None* June 28 July 10 July 19 None August 9 August 14 August 23 None September 13 September 18 September 27 None October 11 October 16 October 25 November 13 November 8 None November 29 December 4 December 13 *No meeting scheduled because of budget hearings/holidays. BAKERSFIELD PUBLIC WORKS DEPARTMENT MEMORANDUM TO: Budget and Finance Committee FROM: Raul M. Rojas. Public Works Director .... ~ DATE: January 20. 1995 SUBJECT: Benefit Spread Method Proposed by Castle '& Cooke for AD 94-3 (Silver Cree~Brimhall/Seven Oaks) On December 14. 1994. the council referred to this committee the review of the benefit spread method proposed by Castle & Cooke for the Assessment District No. 94-3 (Silver Creek/Brimhall/Seven Oaks). This method is a major departure from current City. policy and warrants the committee's close review, especially in light of the serious problems assessment districts are facing in other communities. ' Please find attached an outline of the current City. policy ragardina the spread of benefit assessments and the changes proposed by Castle & Cooke. ' AD95:',BENtiF1TC~MEM R..MR:jrkm0s xc: Reading File AD 94-3 File Marian P. Shaw Budget and Finance Committee January 23. 1995 Public Works Department Benefit Spread Methodology Review for Proposed Castle & Cooke Assessment District No. 94-3 I. Assessment Districts - General A. Assessment districts are formed to finance public improvements, usually through the sale of assessment bonds B. Debt service on these bonds are paid through a lien on the properties within the district - a yearly payment appears on the property tax bill C. The lien on individual property is not to exceed one-third of the assessed property value D. The amount of the lien on individual property is set forth in the Engineer's Report as required by law - the Engineer preparing the report "spreads" the total assessment to the various properties in proportion to the benefit received 1. {}10204(e) of Streets. and Highways (1913 Act) states that the report is to include "A proposed assessment of the total amount of the cost and expenses of the proposed improvement upon the several subdivisions of land in the district/n proportion to the estimated benefits to be received by each subdivision, respectively, from the improvement. E. The Assessment Engineer preparing the report is contracted to the City. The City and the Assessment Engineer are responsible for how the costs are spread, not the developer. II. History of Benefit Spread Policy A. Current policy 1. Very general in nature 2. No specific reference to benefit spread in policy - Department policy followed the provisions of State law 3. A change in policy was proposed and approved by this committee at the December 5. 1'994 meeting, a) The overall value to lien ratio was changed to four to one, although individual properties could still be assessed at three to one. b) Again, no specific reference is made to benefit spread and Department policy is assumed to follow provisions of State law B. Typical Spread Methodology 1. The spread of improvement costs is based on the development requirements of the tract or other land subdivision. If a tract or other land subdivision does not requi~e an improvement to be constructed, bonded for or a cost contribution made in order to develop, it does not directly benefit from that improvement. 2.A.D. 93-1 (Northeast Sewer) 3.Earlier Districts III. Castle & Cooke Proposal~ A. First proposal presented June, 1994. Covered 1631 acres and $19.5 million in improvements 1. Many concerns with first proposal a) Schedule of improvements covered three years - too long for a single bond issue. b) District boundaries specifically excluded single lots not owned by Castle & Cooke, but included lots next door still owned by Castle & Cooke. c) Corporate decision was made requiring that all lots considered'to be a similar "product" would have the same assessment. Proposed fiat spread of improvements to achieve this goal. d) Corporate schedule required that the district be in place by the end of December, 1994. 2. Decision made to split district a) Gosford/White district given go-ahead. Small district, reasonable spread, needed to be fast-tracked. b) Castle & Cooke were to address concems of City when resubmitting remainder of proposed district. B. Second proposal submitted November, 1994. Covers 918 acres and will install $6.3 million in improvements 1. There are three Communities within the proposed district: a) Silver Creek (292 acres - $2.5 million of improvement costs) b) Brimhall North (148 acres - $1.2 million of improvement costs) c) Seven Oaks (478 acres - $2.62 million of improvement costs) 2. The improvements include: a) Arterial street improvements (Panama Lane. Calloway Drive and Buena Vista Road - $3.9 million) b) Collector street improvements (Harris Road, Verdugo R~ad, Old Farm Road, White Oak Drive, Camino Media - $2.4 million) 3. Concerns with second proposal a) No schedule of improvements has been submitted b) District boundaries exclude those areas (not single lots) within a community that Castle & Cooke no longer own: i) Seven Oaks excludes Tracts No. 5217, 5218, 5220, 5221, and 5291 as well as the proposed private golf course ii) Silver Creek excludes all tracts west of Wilderness Drive and north of Spring Creek Loop iii) Current proposal differs only in scope in the area covered c) Castle & Cooke has proposed a specific spread of benefit which will result in an equal assessment for comparable properties. i) The improvements within a community may not benefit each property equally - Castle & Cooke is willing to take the assessment in excess of benefit to their own property. Example: White Oak Drive is allocated to the m,ulti-family parcel at Ming and Buena Vista ii) The improvements within a community may directly benefit properties within the community but not within the district - Castle & Cooke is willing to take that portion of the cost properly allocated to the property outside the district onto the remaining property. Again, accepting an assessment in excess of the benefit received. Example: Buena Vista Road improvements in front of Tract No. 5217 and in front of the private golf course are allocated to the residential tract at the corner of Old River and White Lane. IV. Potential Problems' A. This method is not in conformance with assessment district law. It is recommended that a written legal opinion be obtained from the City's bond counsel prior to approving the method. Conversely, a Charter City ordinance may have to be passed to enable the City to pursue this method. .. B. City has hO.Control over subsequent property purchasers. Next property owner in the district may or may not be as secure as Castle & Cooke. C. Increased level of risk. The City is acting as a bank. using land as collateral on a development loan where some of the assessed property would not be improved by thc financed improvements. D. Gives the developer the ability to direct the benefit spread method - City loses control over land development infrastructure financing. E. This sets a precedent for other developers to use. The next developer may not be as solid as Castle & Cooke. F. The method of spread proposed by Castle & Cooke will assess the cost of improvements to lots, but the assessed lots will have no value added to them by the improvements that are being financed. This is simply "equity financing" and that concept, if approved, would be a major change in municipal financing policy for the City.