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HomeMy WebLinkAbout08/31/2005 B A K E R S F I E L D Mike Maggard, Chair Irma Carson · Harold Hanson Staff: John W. Stinson SPECIAL MEETING NOTICE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Wednesday, August 31,2005 - 4:00 p.m. City Manager's Conference Room, Suite 201 Second Floor - City Hall, 1501 Truxtun Avenue, Bakersfield, CA AGENDA 1. ROLL CALL 2. ADOPT AUGUST 22, 2005 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Staff report and Committee recommendation on the sale of'the City Farm B. Discussion and Committee recommendation on potential sale of the City Airport 5. COMMITTEE COMMENTS 6. ADJOURNMENT S:~JOHN\Council Committees\05Budget&Finance~bf05aug31agen,doc DRAFT B A K E R S F I E L D ~ ~ ~~ Mike Maggard, Chair Staff: John W. Stinson Irma Carson For: Alan Tandy, City Manager Harold Hanson AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Monday, August 22, 2005 · 10:00 a.m. City Manager's Conference Room - City Hall 1. ROLL CALL Called to Order at 10:05 a.m. Present: Councilmembers Mike Maggard, Chair; Harold Hanson; and Irma Carson 2. ADOPT JULY 11, 2005 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Review and Committee recommendation on Fire Station design Fire Chief Ron Fraze explained the fire station design was referred to the Committee by Committee Member Hanson to make sure the new fire station would be built in the most economical way possible. The station will be a four-person fire station with a police Substation located on E. White Lane east of Union Avenue. Ms. Kim Bobic, Project Manager for RRM Design Group, provided a brief overview of the building design work plan. The plan is to use durable, long-lasting quality materials, but keep the design very basic in order to deliver the project at the lowest possible cost. It was noted that in the last three or four years since the fire station was budgeted, construction costs and the cost of steel have continuing to rise. The plan at this time is to put the construction of the station out to bid in February 2006. The Central Police Satellite Office location is being leased, so there will be savings when the office is moved to the new location as part of the new Fire Station and the lease is eliminated. AGENDA SUMMARY REPORT BUDGET AND FINANGE GOMMITTEE MEETING Mondsy, August 2~, 2005 Pa~ -2 - Committee Member Carson requested a list of developers in the area that could be contacted that may contribute to the aesthetics on ,the outside of the station to make it attractive, similarly to how Castle and Cooke contributed to Fire Station No. 15 in the southwest to enhance the outside facade to fit in with the surrounding subdivisions. Committee Chair Maggard spoke about using prototype designs for fire stations in the future in order to save architectural fees. The Committee took no further action. 5. NEW BUSINESS A. Staff report and Committee recommendation on the request for funding from the Bakersfield Museum of Art Assistant City Manager John Stinson provided an overview of the memorandum and Council Policy on funding nonprofits; which was included in the Committee packet. The Bakersfield Museum had requested a contribution of $40,000. The historic contribution to the Museum before the State budget crisis was $25,000 per year. Staff recommended if'the Committee decides to fund a contribution to the Museum this fiscal year, it be in the amount of $25,000. Bernard Herman, Executive Director of the Bakersfield Museum of Art, spoke in appreciation of the City's support over the years and the value of the programs they provide to the children and the community. David Gordon, Bakersfield Museum of Art, expressed appreciation for the City's support in the past and explained the Museum's funding needs and programs. Committee Member Hanson spoke in support of supporting the arts and the Museum. Committee Chair Maggard expressed support for the Museum and suggested next year perhaps the Museum could request a contribution for a one-time special event at the Museum in addition to a contribution. Committee Member Carson spoke regarding the quality of the programs at the Museum and made a motion to fund a contribution to the Bakersfield Museum of Art for $25,000. The Committee unanimously agreed and requested staff to forward the Committee's recommendation to the Council. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING M(Snday, August 22, 2005 Page - 3 - B. Staff report and Committee recommendation on the sale of the City Farm City Manager Alan Tandy explained staff brought to him the concept that it may be possible to sell 1,280 surplus acres of City property commonly known as the 5,000 acre southeast farm, which could be an opportunity to generate funds without taxes or fees. It is premature to start talking about projects that might be funded if a gain is realized. This would be a very complex process, which may or may not be possible and the amount of proceeds available from such a sale is not known at this time. The City Manager provided an overview of the draft administrative report and memorandum of understanding included in the Committee packet. He explained staff has attempted to provide a format to present to the Committee and Council and a process for going through the procedures and the steps necessary to find out if there is opportunity for economic advantage through the sale of the surplus farmland. Staff is proposing a contingent purchase of the land by the Redevelopment Agency from the City. A unique opportunity exists for redevelopment of this property through a joint venture between the City and the Redevelopment Agency. This proposed venture will have a set of conditions as outline in the draft administrative report. The Redevelopment Agency will need to take the necessary steps to have the property legally entitled. Requests for proposals and developer qualifications will be sent to the 14' interested parties by the Redevelopment Agency. and a developer and development plan would need to be selected. The necessary steps, timing and the.process are very complex and will take a minimum of one year and perhaps longer. The City cannot just sell the farm property and move off of it. There will need to be a simultaneous offset of the impacts on the Wastewater Fund for taking the farmland. That will either require acquisition of replacement land or installation of tertiary treatment and will require authorization of the State Regulatory 'Agency. It may require plumbing to get the tertiary treated wastewater to a purchaser and requires a buyer for the treated wastewater. Whether the City goes with the land replacement or the treatment costs, there are significant factors and it may not be prof[ta§le, but staff felt it was worth exploring. The Committee requested changes to clarify the wording in the memorandum of understanding and to bring it back to the Committee. Committee Chair Maggard made a motion to set a special Committee meeting in order to place the sale of the surplus acreage of the City farm property, on the September 7th Council Agenda. With Council approval, this item could then be placed on the September 12th Redevelopment Agency agenda. The Committee unanimously approved the motion and requested staff to set the meeting. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Monday, August 22, 2005 Page - 4 - C. Staff report and Committee recommendation on potential sale of the City Airport This item was referred by Councilmember Carson due to recent interest in the airPort property and the potential for economic development. City Manager Alan Tandy provided an overview of the memorandum and information included in the Committee packet. On several occasions over the past several years the City has attempted to close the airport. These attempts were primarily for safety considerations. The airport is not traffic 'controlled and in the past there were complaints from Meadows Field regarding flights leaving the airport. On at least four occasions, the City petitioned the Federal Aviation Administration with requests to close the airport. Those requests were denied citing the condition that all of the State and Federal Grants received for the airport would have to be paid back. At the time of these requests, the economics were different and land values were non-existent to'cover repayment of the grants. Due to the appreciation of land values and new development interest in southeast Bakersfield, there have been inquiries regarding the possibility of buying the airport property. The airport covers 251.88 acres. If a buyer would be willing to pay the City for the costs for closing the airport, that would provide a different format to request a closure from the Federal Aviation Administration. The Federal Aviation Administration theoretically could waive the back debt, depreciate the back debt, or even with full reimbursement not-give permission to close the airPort in the interest of civil aviation. The current break even cost is $16,035,909. This figure includes the repayment of grants for a total of $12,835,909; the City's investment of funds for various projects of approximately $200,000; .and a current eStimated cost of $3,000,000 to relocate and buyout of lease holders at the airport. There may be another expense to consider. Contamination from a fueling facility exists on the property. The City met all environmental requirements and was allowed to cap the contaminated area with asphalt. Another type of development may require further remediation. The above costs are breakeven and do not include any profit for the City. There may be resistance to the City's selling the airport. The current tenants may not want 'the airport to close and cite the economic value of the airport to businesses. Also, there is a national group that opposes any closures of airports. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEI:: MEETING Monday, August ~2, ~005 Page - 5 - Committee Member Carson exPlained this is a one-time opportunity to get out of a continuing debt and the need to continue to accept grants for a facility that has not been economically sound for the City. Also, the possible sale would provide an economic opportunity for the area to overcome one of the most blighted areas in the City. There are needs for schools, parks, affordable housing, sidewalks, and the opportunity for commercial mixed use to provide jobs in the area. She requested that the Committee and Council consider the possible sale and explore if it would be economically feasible and also to make sure any purchase covers the costs associated to relocate the current tenants. John Harmon, Harmon Rocket, and a tenant of the airport, spoke in support of the airport and the airport restaurant and in opposition to the closure of the airport. Christina Phillips, with Harmon Rocket Company, spoke in support of the restaurant and in opposition to the closure of the airport. Shane Ellis, Kern Charter Service, spoke in support of the airport and in opposition to its closure. Harry Hackney, an airPort tenant and caretaker, spoke in opposition to the closure' of the airport. Committee Member Hanson agreed that it would be worthwhile to explore the. possibility. But expressed there are many unknowns such as, how the Federal Aviation Administration will respond, what the purchase price should be, soil contamination and cleanup costs. Before the Committee makes a recommendation; there needs to be more facts available. Committee Chair Maggard was in support of exploring' the sale of the airport, but would like to explore the possibility of building a replacement airport farther out. Committee Member Carson made a motion that the Committee set a 45-day time frame for interested buyers to submit letters of intent to the City Manager with bona fide proposals acceptable, to the City Manager and come back to the Committee for further recommendation. The Committee unanimously approved. D. Staff report and Committee recommendation on the Independent Auditor's Report on Transportation Development Act Funds for Fiscal Years Ended June 30, 2004 and 2003 Assistant Public Works Director Jack LaRochelle explained the Transportation Development Act Funds covered in the audit are non-motorized vehicle funds such as for the bike path. These are Kern COG funds spent in the City. The audit had a clear opinion with no reservations or exceptions. AGENDA SUMMARY REPORT DRAFT BUDGET AND FINANCE COMMITTEE MEETING Monday, August 22, 2005 Page - 6 - Committee Member Hanson made a motion to accept the Auditor's Report. The Committee unanimously approved the motion. 6. COMMITTEE COMMENTS 7. ADJOURNMENT The meeting adjourned at 1:00 p.m. Attendance: Staff: City Manager Alan Tandy; Assistant City Manager John W. Stinson; Assistant City Manager Alan Christensen; City Attorney Ginny Gennaro; Finance Director Nelson Smith; Fire Chief Ron Fraze; Assistant Public Works Director Jack LaRbchelle; Economic Development Director Donna Kunz; Development Services Director Stan Grady; Assistant to the City Manager Darnell Haynes; Public Works Operations Manager Brad Underwood; Real Property Manager Don Anderson; Deputy Fire Chief Kirk Blair; ED/CD Business Manager Rhonda Barnhard; General Services Superintendent Steve Hollingsworth; Office Administrator/Public Relations Coordinator Rhonda Smiley; Police Captain Tim Taylor; and Wastewater Engineer II Art Chianello Others: Mark Howell, KuZZ/KCWR; James Burger, The Bakersfield Californian; Jim. Scott, Channel 17; TV cameraman; Harry Hackney, airport tenant; Shane E. Ellis, Kern Charter Service; Kim Bobic, RRM Design Group; Mike Scott, RRM Design Group; Rogers Branson, Bernard Herman, David Gordon, and Sheryl Barbich, Bakersfield Museum of Art; Christina Phillips, Harmon Rocket, LLC; and John Harmon, Harmon Rocket LLC cc: Honorable Mayor and City Council S:~JOHN\Council Com m ittees\O5Budget&Finance~bfO5aug22summary.doc ADMINISTRATIVE REPORT TO: Honorable Mayor and City Council ~'~,~, APPROVED FROM: Alan Tandy, City Manager DATE: August 26, 2005 ~,,~;~;~;:~ CITY M~G ER SUBJECT: ' Bakersfield RECOMMENDATION: Staff recommends approval of the Me~b~ndum of Understanding. BACKGROUND: The Ci~ has a unique oppo~uni~ to a~empt a gain on land long held in our ownership, which in our "hof~real estate market may have 'appreci~tbd in value. The purpose of this memorandum and the a~achedCOntract is to provide a legal means to explore the possibili~ of such a gain. It needs to be made, ~iear'~tthere is no ce~ain~ of a gain. While 14 groups have expressed some level of interest,~n0~ne~ have ye[~'Sben called uPon to offer guarantees. Aisc, the "offsef' costs to make the Wastewater,.Fund whole are pinned down. The recommended process will determine if the potential gain can be made real, The prope~ as pa~ of a 5,000-acre farm and is essentially raw land ~ .... t~ated wastewater ~is~Spread and fu~her treated through the growing of plants, old,~.it:Will be necessa~ to replace the lost mgd capaci~ either through a by providing an upgrade of the sewer plant to include te~ia~ in ~area in the southeast pa~-of town and is experiencing rapid The City ar~ desire to help stimulate the economy and encourage community development has determined that a unique opportunity exists for redevelopment of this property 'e between the City and the Redevelopment Agency. The venture would allow the City to s( ,rty to the Redevelopment Agency, generate enough funds to meet the current and future needs and also provide funds that could be used by the Redevelopment Agency for additional redbvelopment activities. The venture plan. calls for the Redevelopment Agency to purchase it from the City with certain conditions. These conditions are as follows:' S:~,dmin Rpts~00~CityFarm - draft 081905.doc 8/26/2005 8:40 AM AT:al ADMINISTRATIVE REPORT °.% The City will declare 'the property as surplus and sell the property, to the Redevelopment Agency, taking back a note. The sales price will be determined to be the cost of the necessary' sewer replacement land and any related costs associated with bringing required pipes to a new sewer farm spreading area, or the cost of tertiary treatment equipment for the sewer plant. The final sales price will also include the amount 'of any sewer funds that may be loaned to the Redevelopment Agency that would be needed by the Agency to properly zone and entitle the property such as engineering, planning and permitting costs in preparation for its, resale to a private developer. This pricing procedure assures that the City's sewer fund is made completely whole in the transaction ~,~ o:o The .... Redevelopment Agency wdl take the necessary steps, tg~?a~.=,~;~ the property entitled. A solicitation for developer qualifications and development ~ls will be conducted by the RedeVelopment Agency, and a developer and develo~ !:'~i~i~ian will be selected. The Redevelopment Agency will negotiate and sell the ,rt~,~:;~'ne 0~!~e, selected developers. °.% The Redevelopment Agency will pay the req price as out ~bove to the C~ty to · ~replenish the sewer fund immediately upon reS~ai'ei?bf all or part of th(J:=~i~i~d to a developer. Additional net proceeds generated from the sa!b~!'~ld be retained by the Re~,'~lopment Agency to be used for further redevelopment activitie~:i~!i!iiii?~vould also be~'~ssible for the ~ii~to "add" to the price by revenue-sharing the profit, if any is r~ii~ed. That,?i~:ussion can be I~:~open for the futu re. ,~?: :::.t~,, ;~,;:~,~,~, Community Redevelopment law does providefpr authority lency to operate outside the project area under certain circumstances. An agency,' at,,the request islative body of the community, may accept a conveyance of real property (located Within or outside:'bf~La~survey area) owned by a public entity and declared surplus by the public ent tY?d'r owned:l~ a Private e~iJ~?~ ' In the opinion of staff, it to start talking.abOut projeCts' that might be .funded if a gain is realized. Let us first see if so, what :amount is available. S:~Admin Rpts~005~CityFarm - draft 081905.doc 8/26/20058:40 AM AGREEMENT NO. MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING ("MOU")is made and entered into on , by and between the ClT~ OF BAKERSFIELD, a municipal corporation ("CITY" herein)· and the BAKERSFIELD 'REDEVELOPMENT AGENCY, a separate legal entity ("AGENCY" herein), and, R E C I T A ,L S WHEREAS, State of California RedeVelopment Law represents~ e process · created to assist local governments in revitalizing blighted :areas of communities; to stimulate the economy and to provide for affordable hOUsing opportunities; and WHEREAS, CITY currently has three redevelopment project areas; and WHEREAS, CITY is looking at the 'prospect of assisting development in order to stimulate the econ0my both inside and outside the redevelopment project areas, ' ~.~..., .-~:,,. , ~ WHEREAS;'ClTY and AGENCY deSire to work together in the facilitation toward furtherlt'eVitalization in ali redevelopment project areas; and WHEREAS, CITY provides wastewater facilities for the purpose of treating, reclaiming, and utilizing wastewater and its by-products in accordance with federal, state, and local reqUirements; and WHEREAS, among the wastewater facilities owned by the CITY is Wastewater Treatment Plant No. 2, (herein WWTP #2) which is approximately 5000 acres in size and located adjacent to the Southeast Redevelopment Project Area (the "Project Area"); and S:~Edcd'~Agts\05-06 Ag~Sewe~FnrmMOU.8-26-05.doc August 26, 2005. - Page 1 of 6 Pages - WHEREAS, WWTP #2 has a current capacity and is certified for 25 million gallons a day (mgd) to meet current and future wastewater demands; and WHEREAS, reconfiguration of WWTP #2, though the deletion of approximately 1280 acres and the replacement· of future capacity, will promo!e the redevelopment of the Project Area by allowing for synergistic uses of urban develoPment, both inside 'and outside the Project Area; and WHEREAS, the AGENCY has the authorityl under Health & Safety,~ode section 33396, to receive land outside a redevelopment ~ project area, includingii~i~u~plus 'land conveyed to it by the CITY, and to cause the subSequent disposition and development of such land; and WHEREAS, the CITY and AGENCY are alSo empowered to divide the proceeds of any such'dispOsition of land in a manner:which serves the interests of the parties; and WHEREAS, it is the' desireOfCl~ to and AGENCY to sell, as surplus property, a portion of WWTP #2 to a private developer(s), for WWTP #2 to be fully restored to its 25 mgd;: and for CITY and· AGENCY to realize a profit, if any, resulting from the sale of the "ProPerbl"; and WHEREAS,~it··is the desire of CITY and AGENCY that subsequent legal documents prepared in order to accomPlish the objectives or'this MOU shall accurately reflect the intent of this MOU.' · '~ S:~Edcd~grs\05-4)6 A~s~Sc'werFa'mMOU.$-26-05.doc August 26, 2005 - Page 2 of 6 Pages - NOW, THEREFORE, incorporating the above recitals herein, CITY and AGENCY have reached the following understanding: 1. . CONVEYANCE OF PROPERTY TO AGENCY. Subject to the conditions set forth below, CITY shall convey to the AGENCY no more than 1280 acres of WWTP #2 (all or a portion of which is herein referred to as the ,'property") as the CITY reasonably determines to be surplus, in accordance with Bakersfield Municipal Code Section 3.20.125. The Property is designated and described in the Legal Description, attached hereto as Exhibit ·"A," and as shown on the map attached hereto as "Exhibit 2. DISPOSITION OF THE PROPERTy'By THE AGENCY. UPon receipt of the Property, the AGENCY shall take such steps as necessary to cause the entitlement and di,~position of the Property on the iprivate market, for the purposes of development of commercial and residential uses thereon. The dispositioh of the Property by the AGENCY shall be at a purchase price agreed upon bY both CITY and AGENCY. To the extent necessary or,desirable;:~, CITY and AGENCY may agree to dispose of the · Property to one or more Private buyers. ':, ,, 3...' ALLOCATION OF PROCEEDS FROM DISPOSITION OF THE PROPERTY.. Upon receipt of proceeds from the sale of the Property by the AGENCY, AGENCY Shall pay to CITY the .. ~mount determined to be the purchase price of the Property as determined by CITY,. at its' sole discretion. The profits, if any, generated by the sale of the PrOperty may be shared; however, CITY reserves the right to retain all or a portion of any profits ·generated by the sale of the Property. AGENCY may use any remaining amount to assist its redevelopment activities in any existing redevelopment project. S:~Edcd~Agrs\0$ -06 Ag~s~S~'we~FannMOU.8-26-05 .doc August 26, 2005 - Page 3 of 6 Pages - 4: . REPLACEMENT OF TREATMENT CAPACITY. Upon receipt by the CITY of the amount agreed as the Purchase Price between the CITY and AGENCY, CITY shall takes such steps as reasonably necessary to replace the wastewater treatment capacity caused by the conveyance of the Property to the AGENCY, and the Property's subsequent disposition to the private market. ":": 5. CONDITIONS TO SALE AND PURCHASE'OF:THE PROPERTY. CITY and AGENCY shall only enter into a Purchase and Sale Agreem~fi~.upon the following terms and conditions: 5.1. Environmental Review. The:, prOposed conve¢~ance of the Property to the AGENCY, and its subsequent dispoSition to the private sector for commercial and residential develoPment, shall be firSt?,subjected to appropriate review environmental ___._... $.2. Determination that the Property is Surplus. The CITY I~ reasonably determines that the Property to be.conveyed to the AGENCY qualifies as ,. surplus under the Bakersfield Municipal. Code. 5.3. purchase PriCe., The purchase price for the Property.shall include all funds~necessary to reimburse~ CITY for monies and services advanced-in the implementation.: of this MOU, including, but not limited to, ensuring that WWTP #2 has capac!ty to treat up to 25 mgd of wastewater. 5.4. Continuation of Services. Prior to any conveyance of the Property by the CITY to the AGENCY, the parties Shall take such steps as necessary to ensure the continuation of wastewater treatment services to those persons and entities currently being served. ~- S :~Edcd~grs\05 -0~ Ag~ewo'FarmMOU.8-26-05 .doc August 26, 2005 - Page 4 of 6 Pages - 6. COOPERATION. CITY and AGENCY shall act in good faith and cooperate in the facilitation and implementation of the understandings stated herein. Such cooperation shall include, but is not limited to, the advancement (and subsequent reimbursement) of funds for environmental review, engineering and other planning efforts necessary to fulfill the terms of this MOU, the determination of the Purchase Price, and the timely performance of any actions contemplated by this MOU. 7. TIME IS OF THE ESSENCE. 'It is the intent of CITY and AGENCY that the actions contemplated in this MOU shall occur as qUiCkly as reasonably possible, in compliance with applicable law. If and when further documents (i.e:'~!EF~?, Purchase Contract, etc) are authorized to fulfill the intent of this MOU, those'"~'~m~nts shall accurately reflect the intent of this MOU. 8. TERMINATION, This MOU can-be terminated by.the mutual consent of CITY and AGENCY. ...~ 9. ASSIGNMENT. This MemOrandum of Understanding reflects the intent and understanding 'of the Ci~: of Bakersfield and the Bakersfield Redevelopment AGENCY only, This MOU shall not be assigned by any party. 10. NON-INTEREST..No officer or employee 0f the CITY or AGENCY shall hold anY.interest in this MOu, or in':~nY subsequent disposition of the Property. 11. GOVERNING LAW. The laws of the State of Califomia will govern the validity of this Ag'~eementl its interpretation and performance. An~ litigation arising in any way from this Agreement shall be brought in Kern County, California. 12. NO THIRD PARTY BENEFICIARIES; NO COMMISSIONS. There are no third party beneficiaries to this MOU, nor to the actions contemplated by this Agreement. The cOnveyance of the Property by the CITY, if it should occur, stiall occur without the use or engagement of any_broker, agent, or finder. S:~Edcd',Agrs\05-06 Agrs~SewcrFan'aMOU.$-26-05.doc August 26, 2005 - Page 5 of 6 Pages - IN WITNESS WHEREOF, the parties hereto have caused this Memorandum of Understanding to be executed, the day and year first wdtten above. "CITY" "AGENCY" · CITY OF BAKERSFIELD , BAKERSFIELD .REDEVELOPMENT AGENCY By: By: HARVEY L. HALL DON L:COHEN Mayor Chair '':~::~ "' APPROVED AS T° FORM: APPROVED AS TO VIRGINIA GENNARO VIRGINIA GENNARO City Attorney General. Counsel By: ~i!i,~?:!i~: .: By: VIRGINIA GENNARO ~,' ~.';::~,?i: .VIRGINIA:GENNARO City Attorney ~' ,, i:::.:?;~ :~,, Generai~Counsel APPROVED AS TO CONTENTi APPROVED AS TO CONTENT: By: -. '-::'. ",~,'. =,-' ,.,,,.. By: DONNAL. KUNZ =?, '; .... ~i.~:,: DONNA L. KUNZ EcOnomic Development Director Deputy Executive Director COUNTERSIGNED: : COUNTERSIGNED: By: ':~:: By: NELSON SMITH NELSON SMITH. Finance Director Finance O~cer Attachments: Exhibit "A," legal description Exhibit "B," Assessor's Parcel Map S:~Edcd~Agrs\05-06 Agrs\Sewe~FarmMOU.8-26-05.doc August 26, 200~ - Page 6 of 6 Pages - Bakersfield Municipal Airport (L45) General Information Usage - General Aviation · Property purchased beginning in 1985 with most recent purchase in 1997. · Federal Grants funds received through 2005 equals $ 9,978,309.00, State Grant Funds received is approximately $185,000.00 with City matching funds being $2,672,600.00 for a total of $12,835,909.00. · The City has invested other funds for various projects totaling approximately $200,000.00. · The City estimates current relocation costs to be $3,000,000.00 · The current total break even cost is $13,163,309.00 and with City investments th~ break even cost is $16,035,909.00. · Size- 251.88 Acres · Runway- 4000' x 75' · Based Aircraft- Approx. 100 · Revenue- Approx. $120,000 + $10,000 State Grant · Operating Expense - Approx. $126,000 · Existing Facilities FBO - Office 1,800 sq. ft. and Hangar 13,300 sq. ft. Hangar/Office - Office 1,250 sq. ft. and Hangar 4,500 sq. ft. (approx.) Shop - 2,400 sq. ft. Restaurant (Under Construction) Office/Shop - 3,200 sq. ft. Hexagonal Hangar- 6 planes T-Hangar - 17 planes Community Hangar - (8/- planes) Shade Structures Various Owner Hangars. Various Land Leases for Owner Constructed Hangars Above Ground 12,000 gallon Fueling Facility · Contamination from a fueling facility exists on the property. The City met all environmental requirements and was allowed to cap the contaminated area with asphalt. Another type of development may require further cleanup efforts. City/FAA Correspondence- From March 29, 2000 through January 13, 2003 the City of Bakersfield corresponded with the FAA six times to inquire about airspace modifications and closure of the airport (L45). The City based the inquiry on safety concerns arising from two near misses between general aviation aircraft and commercial aircraft flying into Meadows Field. While the FAA took the City's concerns seriously they did not see the need for either airspace modifications or closure of the airport as federal criteria was not met. In the various correspondences the FAA has s.tated such things as: · · "The (FAA) mission does not includ'e the promotion of airport closures. Before agreeing to close an airport, the FAA would have to clearly determine that the airport no longer serves the purpose for which it was created, the closure would not prevent achievement of the purpose for Which the airport was first created, and the loss of the airport will actually protect and advance the civil aviation interests of the United States." · "L45 remains an integral part of the airspace and airport.system." · "With 40,000 operations and more than 100 based aircraft, the L45 is an extremely important airport, not only for the Bakersfield area and the state of California, but also for the national transportation system." Closure Requirements - · City must be released from the federal obligations agreed to when accepting the federal grant funds. · A formal request providing sufficient justification for a release from the City's obligations requiring it to operate a public airport shall be submitted to the FAA. This shall be done on the City's behalf by any party interested in pursuing purchase of the airport property. · The release request shall be a complete and comprehensive package detailing the justification for closure that will permit the FAA to carefully evaluate the City's justification for a release of all its federal airport obligations. · Guidelines for the release request can be found in Title 14 Code of Federal Regulations Part 155 and FAA Order 5190.6A Chapter 7. Financial Considerations - · FAA Grants funds in the amount of $9,978,309.00 shall be.reimbursed. However, the land "must be disposed of at fair market value and the federal portion of the proceeds must be deposited in the Trust Fund," and "the amount of the sale proceeds that is proportionate to the federal share of grants awarded to L45 must be returned to the Trust Fund." It is possible that the FAA may require the City to reimburse a larger amount based upon the sale and a percentage of City verses FAA investment. In addition, approximately $185,000 in State Grant funds shall be reimbursed. · The City estimates a cost of $3,000,000.00 to relocate the existing tenants at the airport. An additional $500,000 will likely bk requi, red upon completion of the restaurant construction. · The current total break even cost is $13,163,309.00 and with City investments the break even cost is $16,035,909.00. FAA. Contacts (Western Pacific Region) - · Mark McClardy, Manager Airports Division (310) 725-3600 · Tony Garcia, Compliance Specialist (310) 725-3634 · John Milligan, Supervisor- Standards Section (SoCal) (310) 725-3621 Summary of Leases - · 12 Owner Hangars ($50/mo.) · 6 ~Tie-Downs ($40/mo.) · 7 Community Hangar ($100/mo.) 17 T-Hangar ($160/mo.) · 6 Hex-Hangar ($180/mo.) · 5 Shadeport-Watts ($65/mo.) · 4 Shadeport-Quad ($75/mo.) · 1 Gate Lease ($50/mo.) · 16 Ground Lease (varies up to $60/mo.) · 8 Commercial Leases ($3,519.09/mo.) · Restaurant Ground Lease Federal Grants- Year Federal Grants City Funds Total 85-86 $2,000,000 $ 540,000 $ 2,540,000 86-87 $1,481,77.6 $ .0 $ 1,481,776 '87-88 $ 424,719 $ 50,000 $ 474,719 88-89 $ 211,559 $ 483,030 .$ 694,589 .89-90 $1,944,238 $ 0 $ 1,944,238 90-91 $1,726,752 $ 0 $ 1,726,752 91-92 $ 807,421 $ 435,500 $ 1,242,~21 92-93 $ 187,699 '$ 881,470 $ 1,069,169 93-94 $ 252,449 $ 0 $ 252,449 94-95 $ 130,598 $ 265,000 $ 395,598 95-96 $ 17,862 $ 0 $ 17,862 96-97 $ 617,236 $ 0 $ 617,236 02-03 * $ 176,000 $ 17,600 $ 193,600 Totals $9,978,309 $2,672,600 $'12,650,909 · Contract awarded August 17, 2005