Loading...
HomeMy WebLinkAbout03/11/1996 B A K E R S F I E L D Patricia J. DeMond, Chair Irma Carson Kevin McDermott Staff: Dolores Teubner AGENDA BUDGET AND FINANCE COMMITTEE Monday, March 11, 1996 12:15 p.m. City Manager's Conference Room Second Floor - City Hall, Suite 201 1501 Truxtun Avenue Bakersfield, CA 1. ROLL CALL 2. APPROVAL OF FEBRUARY 5, 1996 SPECIAL MEETING MINUTES 3. PRESENTATIONS 4. PUBLIC STATEMENTS 5. DEFERRED BUSINESS A. VALLEY COMMUNITIES WATER PROJECT- Bogart B. INDUSTRIAL DEVELOPMENT BONDS POLICY - Skousen 6. NEW BUSINESS A. ESTABLISHMENT OF CITY LOCAL ENFORCEMENT AGENCY - Rojas 7. ADJOURNMENT DBT:jp F LE C P¥ IJ A K E R $ F I E L D Alan L y,~,.City M~ff~age, r Irma Carson Staff: Dolores Teubner Kevin McDermott AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Monday, February 5, 1996 12:15 p.m. City Manager's Conference Room 1. ROLL CALL Call to Order at 12:22 p.m. Present: Councilmembers Patricia J. DeMond, Chair; Irma Carson and Kevin McDermott 2. APPROVAL OF THE NOVEMBER 13, 1995 MINUTES Approved as submitted. 3. PRESENTATIONS None 4. PUBLIC STATEMENTS None 5. DEFERRED BUSINESS A. APPROVAL OF MEETING SCHEDULE Approved. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Monday, February 5, 1996 Page -2- 6. NEW BUSINESS A. BINGO ORDINANCE 1. PROPOSED ORDINANCE REVISIONS Staff presented information on the proposed revisions to the Bingo Ordinance which were developed to streamline the regulations and cut out redundancy from the application process. The Committee agreed that these revisions were appropriate. 2. REQUEST FROM BAKERSFIELD HIGH SCHOOL BOOSTER CLUB A representative from the BHS Booster Club indicated that they would like to join with two other high school booster clubs to hold bingo at a single location. The Police Department had concerns about having multiple games at the same location. Staff indicated that this was legal under state law as long as the entities holding games were totally unrelated, each held a bingo permit and each entity held only one game Per week. Staff also indicated that the bingo game location must also be the location for the organization's administrative offices. It was indicated that the Booster Clubs could fulfill all of these requirements. The Committee was concerned that building landlords could potentially try to charge each tenant the maximum rent allowed under the ordinance and, therefore, less monies would be available for charitable causes. The committee asked staff to make further revisions to guard against the possibility of this happening and to also include a provision which clearly defined that the organizations must not be related in any way. The Committee requested a memo from staff which outlined the revisions pdor to consideration of the complete revised bingo ordinance on the February Council agenda. B. VALLEY COMMUNITIES WATER PROJECT Staff provided a chronology of events on this issue which is attached. VCl is asking for a $90,000 payment for environmental mitigation to the wastewater spreading site it is undertaking to fulfill a State Fish and Game Department requirement. They have asked the City for a revision in the current contract which would allow payment for such work even though the work is not yet completed. VCI indicated that the City should make a good faith effort and pay the funds because of all the funds that VCI has put into the wastewater spreading facility. The Committee was concerned because the original purpose for the trust monies was to pay for a reservoir which has never been built. Staff indicated that BUDGET AND FINANCE COMMITTEE Monday, February 5, 1996 Page -3- language could be drafted which would amend the contract so that VCI could receive the $90,000, but enable the City to withhold the $27 an acre-foot to VCI through the remainder of the agreement to 2005. The committee asked staff to draft the compromise proposal and bring it back to committee in March. C. CONTRACT PROCEDURES FOR SERVICES UNDER $10,000 Staff made a presentation on this item which would allow contracts under $20,000 to be approved with signature of the department head and the finance director only. The committee expressed concerns that there would be no minimum liability insurance requirements. They were not comfortable with leaving it up to the discretion of the staff. The committee suggested setting a minimum on the amount of liability insurance required which staff could exceed if the nature of the service being provided warranted it. The committee asked that the item be pulled from consideration for second reading on the February 7 Council agenda and be moved to February 21, in order to formulate a policy to deal with the issues in question. D. ICE RINK PROPOSAL The Finance Director presented information on the proposed issuance of tax exempt industrial development bonds for construction of a two-surface ice rink facility on White Lane which is being proposed by a company called Canlan. Representatives of the company were available at the committee meeting to answer questions. The Committee was concerned about insuring that the City's financial reputation would not be affected if a default occurred. Staff indicated that the City would have no legal or moral obligation to repay the bonds if Canlan defaults since the City is just a conduit for the bond issue. The Committee indicated that it was very important for the citizens of Bakersfield to understand that there would be no tax dollars involved in the project and that the City has not and will not play favorites among companies requesting the financing. Therefore, staff was directed to develop guidelines on City involvement' in Industrial Development Bonds and for determining what an eligible project is. The policy will be considered at the March Committee meeting and is tentatively scheduled for Council consideration at the March 20 Council meeting along with a Resolution of Intent to issue bonds for this project. 7. ADJOURNMENT The meeting was adjourned at 2:20 p.m. cc: Honorable Mayor and City Council BUDGET & FINANCE COMMITI'EE March 11, 1996 I-5 DISPOSAL SITE VALLEY COMMUNITIES, INC. RE: Request for release of trust fund monies to pay settlement agreement with U.S. Fish & Wildlife Service HIGHLIGHTS OF AMENDMENT TO AGREEMENT NO. 90-78: - Per recommended action of BUDGET & FINANCE COMMITTEE meeting held Feb. 5, 1996 Provides for release of $90,000 from impound trust funds to allow payment of environmental mitigation fees by V.C.I. to United States Fish and Wildlife Service. · This Settlement agreement between V.C.I. and U.S.F.&W.S. allows V.C.I. to manage, develop and farm the remaining 660 acres of I-5 disposal site lands located in Section 12 and Section I of Township 31 South, Range 25 east, M.D.B.&M. · In consideration for amending Agreement No. 90-78 with City, the amended language will allow the City to withhold the $27 per acre foot payable to V.C.I. if it becomes necessary for the City to rectify any non-compliance order issued by any federal, state or local regulatory agency. The annual payment to V.C.I. generated by the $27 per acre foot would provide approximately $210,000 annually to do any required remedial work throughout the remainder of the agreement to year 2005. · All other provisions of the agreement remain intact. IN SUMMARY.. Trust fund balance stood at $208,180 as of December 31, 1995. With the release of $90,000, balance will be approximately $118,180 (plus accrued interest). V.C.I. can then make tail-water return and/or storage reservoir improvements to the disposal site for direct reimbursement of the remaining trust fund monies or simply wait to receive the remaining trust fund balance over the next three years in accordance to the original agreement. C:BOGART-VCI-I-5/TRUST FUNDS/USF&WS DR/IF AMENDMENT TO AGREE~ NO. 90-78 - CONDZTZON~ CONSENT TO ~SZG~NT OF CITY AG~E~NT NO. 85-142, AS ~NDED THIS AMENDMENT TO AGREEMENT NO. 90-78 is made and entered into on , by and between the CITY OF BAKERSFIELD, a municipal corporation, hereinafter referred to as "City" and VALLEY COMMUNITIES, INC., a California corporation, 'hereinafter referred to as "VCI." R E C I T A L S WHEREAS, VCI desires the release of $90,000 from funds withheld by the City under Agreement No. 90-78 to pay certain claims, fees and costs to the United States Fish and Wildlife Service; and, WHEREAS, Agreement No. 90-78 does not allow for the release of said funds for such purposes; and, W~EREAS, VCI has requested the contract language be altered to allow for such a release; and, WHEREAS, the City desires additional protection from regulatory action and VCI is willing to give such protections in this amendment; and, WHEREAS, the City is willing to allow said release of funds under the terms and conditions set forth herein and VCI is willing to comply with said terms and conditions to achieve the release of the requested $90,000. NOW, THEREFORE, the City and VCI agree to amend Agreement No. 90-78 as follows: 1. RECITALS. The foregoing recitals are true and correct and fully incorporated herein by this reference. 2. AMENDMENTS. Paragraph 3, 4 and 5 of Agreement No. 90-78 are hereby amended to read as follows: "(a) Inasmuch as it is anticipated that the construction of additional storage facilities at the disposal site will be required within the next five years, and furthermore to provide a fund of cash for reimbursement to the City for any work done by the City pursuant to paragraph 5 of this agreement, VCI agrees that the sums specified in Exhibit "A" shall be withheld, 25 percent from each quarterly payment from funds otherwise payable to VCI by the City pursuant to paragraph 3 of Agreement - Page 1 of 5 Pages - No. 85-142. Said funds shall be deposited in a federally insured savings account or certificate of deposit in a financial institution at an office or branch within the City of Bakersfield. All interest on said funds shall accrue in the accounts in which the funds are deposited. VCI shall have the right to name the institutions in which such accounts are carried and not more than $100,000, plus accrued interest, shall be carried in any one institution, except as set forth in paragraph 3(c). Except as set forth below, the funds in said accounts shall be used only for reimbursement of VCI's costs in constructing wastewater storage facilities or tail-water return systems or to reimburse the City's costs incurred pursuant to paragraph 5, below. VCI's expenditures for such purposes shall only be reimbursable from such withheld funds and accrued interest if the improvements made by VCI were pursuant to and in accordance with the plans approved in advance in writing by the City. The City shall not unreasonably withhold its approval of any such plans. "Within 30 days of the sixth anniversary date of this agreement, and each such date thereafter until the balance of all accounts established pursuant hereto, including principal and interest, have been returned to VCI, City shall make to VCI payments as set forth in Exhibit "A." "The foregoing notwithstanding, upon completion to City's reasonable satisfaction on the disposal site of a reservoir with a capacity of not less than 1,000 acre feet with an impermeable lining, any balance withheld by City in any such account shall be paid to VCI or any bond or letter of credit returned to VCI. "(b) VCI shall be paid $90,000 of said withheld funds to pay certain claims, costs and fees to the United States Fish and Wildlife Service. Said funds shall not be paid until VCI provides to the City adequate documentation that the $90,000 has in fact been paid to and accepted by the United States Fish and Wildlife Service in full settlement of all claims against VCI. "(c) In lieu of the withholding provided for in subparagraph b of paragraph 2, above, VCI may elect to post and post with the City a performance bond(s) or irrevocable letters of credit, payable upon demand by and to the City. Any such performance bond shall reference this agreement and shall specifically be to pay all AM]~FDMENT TO AGREEMENT NO. 9078 - CONDITIONAL CONSENT TO ASSIO~ OP CITY AO~ NO. 85-142, AS AIvIENDED AORI(ADD)\VCI.mmd -Febma~, 26, 1996 - Page 2 of 5 Pages - capital and operating costs incurred by the City in meeting requirements of any and all regulatory agencies, pursuant to paragraph 5, below. Such bond or bonds shall be in the annual amount specified in Exhibit "A." Should VCI not be able to obtain a repiacement performance bond for any year after the first year, VCI shall deposit with the City all sums that would be held by the City cumulatively through that year, including interest which would have been accrued, assuming an eight percent investment rate, pursuant to paragraph (b) of paragraph 2, above, and the City may withhold any funds otherwise due VCI pursuant to paragraph 3 of the agreement up to such cumulative amount if such funds are not otherwise deposited with the City by VCI. Should VCI fail to make all deposits required pursuant to this subparagraph within ten (10) days of notice from the City to do so, such failure shall be deemed a material breach of this agreement. "(d) In the event sufficient monies are not provided to the City through the escrow for the sale of the disposal site to VCI for the call of all outstanding bonds of Assessment District 86-3, then in addition to funds withheld pursuant to any other provision hereof, the City may withhold sufficient funds each year to pay all real property taxes and assessments against the disposal site, such funds to be released to VCI upon receipt by the City of written evidence that all such taxes and assessments, including any special district taxes and assessments, have been paid. "(e) VCI agrees that in the event any regulatory agency, federal, state or local, notifies VCI of any deficiency in operations or facilities concerning the disposal site, the City shall immediately withhold funds payable to VCI for wastewater disposal, or otherwise, under paragraph 3 of Agreement No. 85-142 (which was assigned to VCI in Agreement No. 90-78). The amount of such funds withheld shall be no less than one and one-half (1 1/2) times the estimated cost of correcting whatever deficiency the regulatory agency has given notice of. The City shall also withhold funds for any damages the City may suffer as a result of said deficiency. The estimated cost of correction, and the estimated damages, shall be set at the City's sole discretion. Failure to notify the City of such deficiency notice shall be deemed a material breach of this agreement. AlVl]~qDMENT TO A~ENT NO. 90-78 - CONDITIONAL CONSENT TO ASSI~ OF CITY AOREEMI~',,'T NO. 8~-142, AS AMENDED AORI(ADD)\VCI.mmd -February 26, 1996 - Page 3 of 5 Pages - "4. That VCI shall provide written notice to the Director of Public Works of the City within three business days of receipt of any written communication from any federal, state or local regulatory agency of any deficiency in operations or facilities concerning the disposal site, including a copy of such communication. The written notice may be received by the City from either VCI or from the aforesaid federal, state or local regulatory agency, but is shall be the responsibility of VCI to confirm that the City has in fact received said written notice within the aforesaid notification period. The parties agree that if such notice is not given as provided herein, it would be extremely difficult, if not impossible, to ascertain the actual damages sustained by the City, and liquidated damages in the amount of $500 per calendar day is a fair and reasonable estimate of such damages. That sum is not to be construed in any sense as a penalty. "5. That the City may enter upon and operate the disposal site and make necessary improvements, all at VCI's expense, should VCI's performance or non- performance in managing the disposal site lead to threatened regulatory agency action which might jeopardize the City's legal ability to discharge treated effluent to that site or to issue building or sewer connection permits for any structure that would be served by the City Wastewater Treatment Plant No. 3; provided, however, that the City shall have first given written notice to VCI of the threatened action of the regulatory agency and shall have given VCI the opportunity to take action to address such matters to the satisfaction of the regulatory agency; provided, further, that the City may immediately enter and take all necessary corrective action if such action has not been completed by VCI within 30 days prior to any deadline set by any such agency, or upon such deadline if the deadline falls within 30 days of the date of City's notice to VCI. The City shall give VCI three days written notice of its intent to withdraw funds held pursuant to subparagraph 3(a), or to withhold funds pursuant to paragraph 3(e), above, to reimbursement the City for its costs incurred under this subparagraph." A~IvlENT TO AO~ NO. 90-78 - CONDITIONAL CONSI~,'T TO AS~I~ OF CITY A~ NO. 85-142, AS AklENDED AGRI(ADD)\VCI.amd -February 26, 1996 - Page 4 of 5 Pages - 3. EFFECT OF AMENDMENT. Except as amended herein, Agreement No. 90-78 shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Agreement 90-78 to be executed the day and year first' above written. CITY OF BAKERSFIELD ("City") V~L~,~Y COMMUNITIES, INC. ("VCI") By: By: BOB PRICE Title: Mayor APPROVED AS TO FORM: JUDY K. SKOUSEN City Attorney By: ALAN D. DANIEL Assistant City Attorney COUNTERSIGNED: By: ~REC, ORY KLIMKO Finance Director ADD:laa AMEND~ TO AGREEMENT NO. 90-78 - CONDITIONAL CONSENT TO ASSIG~ OF CITY AGREEMENT NO. 85-142, AS AMENDED AGRI(ADD)\VCI.amd -February 26, 1996 - Page 5 of 5 Pages - MEMORANDUM March 7, 1996 TO: BUDGET & FINANCE COMMITTEE Patricia DeMond, Chair Irma Carson Kevin McDermott FROM: ROBERT M. SHERFY, Chief Assistant City Attorney SUBJECT: CITY'S POLICY ON SPONSORSHIP OF INDUSTRIAL DEVELOPMENT BONDS (IDBs) Attached for your review and consideration is a proposed policy resolution setting forth the City's policy on sponsorship of IDBs. The proposed resolution was drafted by our office with assistance and input from the City Manager, Finance Director, and bond counsel. In the past, the City has sponsored IDBs for construction of health care facilities. I understand that the City is currently in the process of considering sponsorship of IDBs for construction of an ice skating center. If the City Council wishes to move ahead with this or any other non-health-care project involving IDBs, our current enabling ordinance (BMC Chapter 3.60) will have to be amended. I am working with our bond counsel on drafting the appropriate revisions for the Council's consideration. Attachment cc(w/attachment): Alan Tandy, City Manager Judy Skousen, City Attorney Gregory Klimko, Finance Director s: \rms\memos\council. idb THIS MEMORANDUM IS EXEMPT FROM DISCLOSURE AND IS PROTECTED BY THE ATTORNEY--CLIENT AND ATTORNEY WORK PRODUCT PRIVILEGES. RESOLUTION NO. A POLICY RESOLUTION SETTING FORTH THE CITY'S POLICY ON SPONSORSHIP OF INDUSTRIAL DEVELOPMENT BONDS (IDBs) WHEREAS, from time to time the City of Bakersfield is approached by developers or non-profit Organizations and is asked to sponsor IDBs; and WHEREAS, the City Council wishes to establish a policy that sets forth the terms and conditions under which the City will sponsor IDBs; NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Bakersfield as follows: Subject to the review and approval of each IDB proposal, it is the policy of the City of Bakersfield to sponsor IDBs for those projects and in those financing situations that meet the following terms and conditions: 1. IDBs will be issued to construct facilities which serve a legitimate public purpose (e.g., health care facilities, sports/recreation facilities, and related facilities, all of which are open to use by or benefit the general public). 2. IDBs may also be issued to construct facilities which benefit the general public and create jobs or for pollution control where the proposed enterprise or service to be provided is inadequate or non-existent in the coh~munity. 3. IDBs will be available to all like projects meeting the goals, terms and conditions of this policy. 4. IDBs will only be issued where the project under consideration and participants in that project comply with all applicable laws and regulations adopted in and pursuant to the Internal Revenue Code. 5. For each project, the City will impose a fee of Ten Thousand Dollars ($10,000.00) plus 2/10 of 1% of the principal amount of the bonds issued, but not greater than the maximum amount permitted under applicable federal tax law. 6. IDBs shall not be secured by the general taxing power of the City of Bakersfield, the County of Kern, the State of California or any political subdivision of the State; and neither the City, the County, the State, or any political subdivision of the State shall pledge its full faith and credit for the payment of the IDBs. 7. Ail projects funded by IDBs shall be self- supporting and must cover the debt service on the bonds or similar securities and be rated at least BBB or equivalent by a national rating agency. o0o I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Council of the City of Bakersfield at a regular meeting thereof held on , by the following vote: CITY CLERK and EX OFFICIO of the Council of the City of Bakersfield APPROVED BOB PRICE MAYOR APPROVED AS TO FORM: JUDY K. SKOUSEN City Attorney By: ROBERT M. SHERFY Chief Assistant City Attorney RMS: rb S: \RMS\RESO\IDBS.296