2003-09-16 APFA and CIC minutesMINUTES OF THE SPECIAL JOINT CITY COUNCIL,
ALAMEDA PUBLIC FINANCING AUTHORITY,
AND COMMUNITY IMPROVEMENT COMMISSION MEETING
TUESDAY- - SEPTEMBER 16, 2003- 7:25 P.M.
Mayor /Chair Johnson convened the Special Joint Meeting at 7 :56 p.m.
Councilmember /Board Member /Commissioner Matarrese led the Pledge of
Allegiance.
ROLL CALL - Present: Councilmembers /Board Members /Commissioners
Daysog, Gilmore, Kerr, Matarrese and
Mayor /Chair Johnson - 5.
Absent: None.
AGENDA ITEM
(03- 413CC /03- 002APFA /03- 046CIC) Joint Public Hearing:
(03 -002A) Resolution No. 03 -12, Authorizing the Purchase and Sale
of 2003 Tax Allocation Bonds of the Community Improvement
Commission of the City of Alameda and Approving Other Actions in
Connection Therewith." Adopted.
(03 -046A) Resolution No. 03 -115, "Authorizing the Issuance and Sale
To and Sale By the Alameda Public Financing Authority of Bonds
Relating to the Merged Improvement Areas, Approving an Indenture of
Trust for the Bonds and Approving Other Actions in Connection
Therewith." Adopted.
(03 -413A) Resolution No. 13630, "Approving the Issuance of 2003 Tax
Allocation Bonds of the Community Improvement Commission of the
City of Alameda (Merged Improvement Areas) and the Purchase and
Sale Thereof by the Alameda Public Financing Authority." Adopted.
Mayor /Chair Johnson opened the Public Hearing.
Proponents: Robb Ratto, Park Street Business Association; and
Sherri Stieg, West Alameda Business Association.
There being no further speakers, Mayor /Chair Johnson closed the
public portion of the Hearing.
Vice Mayor /Board Member /Commissioner Daysog stated that he is
concerned about the undertaking of a $50 Million bond issuance
without going through a public bidding process for the underwriter;
Charter Section 3 -15 requires bidding for public work improvements,
which is what the bonds will be used for.
Special Joint Meeting
Alameda City Council, Alameda Public Financing
Authority and Community Improvement Commission
September 16, 2003
The City Attorney /Legal Counsel stated Charter Section 3 -15
literally applies to public improvements and works; underwriting is
considered personal professional services, not a public work;
public work is defined by State law and specifically excludes
personal professional services; when the construction projects
commence, a public bidding process would be required; services are
outside the bid process and require a Request for Proposal, with
discretion to evaluate services.
Vice Mayor /Board Member /Commissioner Daysog inquired whether the
matter was of concern to others; noted the Library Bond went
through a bid process.
Councilmember /Board Member /Commissioner Kerr stated that she has
concern about financing the three Housing Authority projects, none
of which are inside the redevelopment area; the Housing Authority
has real estate it could use to refinance; the City's tax increment
money is getting heavily burdened; the State is taking money from
tax increment; tax increment should not be used as collateral for
the bonds; the proposal includes the Housing Authority entering
into a loan agreement with the Community Improvement Commission
(CIC) to pay for the bond; the State has made a vague promise to
repay tax increment money in 2006; inquired why the City would
enter into long -term bond financing for a three -year financing gap;
inquired why money should be borrowed locally to finance State
spending.
Mayor /Chair Johnson stated the staff report indicates that there
will be "funding for additional purposes;" inquired whether action
could be taken tonight and decisions on projects, such as the
Housing Authority, could be made at a later point.
The City Attorney /Legal: Counsel responded in the affirmative;
stated the action tonight is non - substantive; projects are not
being selected tonight, rather bonding capacity is being
considered; $50 million is being authorized; projects will be
selected through many hearings and a public process; selection of
projects is prohibited.
Councilmember /Board Member /Commissioner Kerr stated the Resolutions
includes "Whereas in order to refinance City advances and WECIP
obligations and to finance the Housing Authority Loan to offset the
ERAF transfers;" the items she objects to are specifically defined
and mentioned in the resolution.
Mayor /Chair Johnson inquired whether direction could be given to
revise the resolution.
Special Joint Meeting
Alameda City Council, Alameda Public Financing
Authority and Community Improvement Commission
September 16, 2003
The City Attorney /Legal Counsel responded in the affirmative;
stated the language could be changed to make it clear that it is
enabling legislation, rather than a specific action item.
Bond Counsel Chip Eady of Nixon Peabody LLP, stated the resolution
as draft does not restrict the use of bond proceeds or compel bond
proceeds to be used only for the mentioned purposes; at the time
the bonds are issued, there needs to be a set of reasonable
expectations as to how the bond proceeds might be issued; the
examples are intended to be illustrative, rather than exhaustive;
as the financing goes forward, the items are subject to change; the
bonds will not be sold until sometime in October and will not be
delivered to investors until late in October; there is still plenty
of time to make adjustments and adjustments can be made after the
bonds are issued as long as none of the bond covenants are violated
in the process regarding the tax exemption.
Mayor /Chair Johnson inquired whether the resolution language could
be changed; if there is concern about some of the uses of the bond
funds, the items could be taken out as illustrative examples.
Mr. Eady responded in the affirmative.
Councilmember /Board Member /Commissioner Kerr stated that her
objections are not to slow down the redevelopment in the business
districts, rather to preserve the tax increment to allow the
business districts' projects to go forward.
Councilmember /Board Member /Commissioner Matarrese stated that he
concurs with Councilmember /Board Member /Commissioner Kerr's
concerns; the City needs to move forward with the illustrative
language removed from the resolutions; the bonds need to be sold to
allow the City to start moving on the theater and other projects.
Mayor /Chair Johnson noted Bridgeside shopping center is included,
too.
Vice Mayor /Board Member / Ccmmissioner Daysog inquired whether there
is concern about bidding out the bond service.
Mayor /Chair Johnson stated the matter should be reviewed in the
future; the City needs to move forward on the matter; inquired
whether there is urgency to take action on the bonds, in terms of
the projects.
The Finance Director stated the City has been working on the
project for two years; the project is complex; competitive sale of
bonds is used for single purpose bonds, such as the library bond;
Special Joint Meeting
Alameda City Council, Alameda Public Financing
Authority and Community Improvement Commission
September 16, 2003
the bond is complex and is more amenable to a negotiated sale
agreement; the underwriters have worked with the City since Marina
Village was formed; the company's idea allowed the City to get to
the point of issuing the bonds.
Mayor /Chair Johnson inquired how the City would pay the
underwriter, to which the Finance Director responded with bond
proceeds.
Vice Mayor /Board Member /Commissioner Daysog inquired how much the
underwriter would be paid, to which the Finance Director responded
1.250 of the bond issue.
The Finance Director stated the City ensures that it is getting a
competitive price by providing comparable pricing of other issues
that are being priced at the same time the City is going to the
market.
Vice Mayor /Board Member /Commissioner Daysog stated since the
company provided good service to the City in the past, if the City
went through the competitive process, it would prove the company
should be selected.
Mayor /Chair Johnson stated the issue should be addressed; requested
the Council be provided briefing on the matter, including options;
stated Council should provide guidelines before [selection of bond
underwriter], not after the fact.
Councilmember /Board Member /Commissioner Gilmore inquired whether
the timing is critical and whether the decision could be postponed.
The Finance Director stated an action is needed to refund Catellus
bonds coming before Council in October; there are timelines that
need to be met.
Mayor /Chair Johnson inquired whether the matter could be considered
before the Catellus bond issue to give direction on whether it
should go through a competitive bid process; inquired how long the
competitive bidding process takes; Council needs a briefing on the
process at the next Council meeting before dealing with the
Catellus project bonds.
The Finance Director stated that she would provide information on
negotiated sale versus a competitive sale process.
The Acting City Manager /Executive Director stated staff would place
the matter on the October 7 agenda.
Special Joint Meeting
Alameda City Council, Alameda Public Financing
Authority and Community Improvement Commission
September 16, 2003
Councilmember /Board Member /Commissioner Matarrese inquired what the
impact of delaying would be on the theater, Bridgeside and parking
structure projects
The Development Services Director stated the staff is in active
negotiations on all the projects; delay of one meeting would not
have a severe negative impact; delay of a month or two would create
problems; noted interest rates are low and might go up.
Mayor /Chair Johnson inquired how going through a competitive
bidding process would impact the timeframe.
The Finance Director stated there would be significant delay; bonds
would probably not be able to be issued until the first of the year
if a bidding process were used.
Councilmember /Board Member /Commissioner Matarrese stated approval
needs to move forward tonight; the City has waited long enough for
the theater and parking structure; other projects, such as
Bridgeside, are at critical points; the question of how the City
gets the best price needs to be addressed for future bond sales.
Mayor /Chair Johnson concurred with Councilmember /Board Member/
Commissioner Matarrese; requested the briefing be scheduled as soon
as possible; stated projects should not be impeded.
Councilmember /Board Member /Commissioner Matarrese moved approval of
the staff recommendation to issue the bonds with the illustrative
language removed from the resolutions.
The City Attorney /Legal Counsel inquired whether illustrative
language is being removed to restrict the scope of the bonds or to
merely allow flexibility in the future to make the decision.
Mayor /Chair Johnson and Councilmember /Board Member /Commissioner
Matarrese responded to allow flexibility.
The City Attorney /Legal Counsel stated staff understands that the
Council /Commission /Authority is allowing for maximum flexibility in
order to accommodate future demands and needs.
Councilmember /Board Member /Commissioner Kerr seconded the motion,
which carried by the following voice vote: Ayes: Councilmember/
Board Member /Commissioners Gilmore, Kerr, Matarrese and Mayor /Chair
Johnson - 4. Noes: Vice Mayor /Board Member /Commissioner Daysog -
1.
Special Joint Meeting
Alameda City Council, Alameda Public Financing
Authority and Community Improvement Commission
September 16, 2003
ADJOURNMENT
There being no further business, Mayor /Chair Johnson adjourned the
Special Joint Meeting at 8:22 p.m.
Respectfully submitted,
Lara Weis iger, C'ty Clerk
Secretary, Alame a Public Financing
Authority and Community Improvement
Commission
The agenda for this meeting was posted in accordance with the Brown
Act.
Special Joint Meeting
Alameda City Council, Alameda Public Financing
Authority and Community Improvement Commission
September 16, 2003