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1999-05-12 Regular and Special CC MinutesMINUTES OF THE SPECIAL CITY COUNCIL MEETING WEDNESDAY- -MAY 12, 1999- -2:55 P.M. Mayor Appezzato convened the Special Meeting at 3:00 p.m. Roll Call - Present: Absent: Councilmembers Daysog, DeWitt, Johnson, Kerr and Mayor Appezzato - 5. None. (99-229) Recommendation to authorize the Mayor to discuss with the Navy a License extension and consideration of Grant of Easement for the Midway Shelter Site, and to include a letter to that effect if necessary. Mayor Appezzato requested the Council to approve the staff recommendation; stated no decision will be made without bringing the matter before the City Council. Councilmember Johnson moved approval of the staff recommendation. Councilmember Kerr seconded the motion, which carried by unanimous voice vote - 5. Adjournment There-being no further business before the City Council, Mayor Appezzato adjourned the Special Meeting at 3:03 p.m. spectful y submitted, Diane B. Felsch, CMC City Clerk The agenda for this meeting was posted in accordance with the Brown Act. Special Meeting Alameda City Council May 12, 1999 MINUTES OF THE SPECIAL JOINT CITY COUNCIL AND COMMUNITY IMPROVEMENT COMMISSION MEETING WEDNESDAY- -MAY 12, 1999- -3:00 P.M. Mayor/Chair Appezzato convened the Special Joint Work Session at 3:03 p.m. Roll Call - Present: Councilmembers/Commissioners Daysog, DeWitt, Johnson, Kerr and Mayor/Chair Appezzato - 5. Absent: None. (CC/99-230) Joint Work Session to consider financing and (CIC/99-18) contingency plans for the Alameda Point Project Area. The Deputy City Manager stated that in response to a request made by the City Manager, he and the Finance Director analyzed the issues related to funds disappearing at the end of Caretaker Agreement on September 30, 1999; introduced the team of experts: Bill Reynolds and Rich Morales, Vice Presidents, Evensen Dodge; Henry Gardner, President, Gardner, Underwood and Bacon; Jim Musbach and David Zehender, Economic Planning Systems (EPS), Paul Thimming and Brian Quint, Legal Counsel, Quint and Thimming. Consultants Henry Gardner and Bill Reynolds gave a presentation outlining: the purpose of the financing plan; the magnitude of budget deficits; the operation and maintenance Budget reduction process; Capital Improvements Budget reduction process; Bond financing goal and objectives; Bond financing options; advantages of Revenue Bonds; financing the operation and maintenance deficit; feasibility of issuing Lease secured Revenue Bonds; and recommendations. Following the presentation, Mayor Appezzato inquired whether staff envisions the City will successfully obtain additional funds from the Navy since title will not be assumed on October lst; stated impacts could be lessened by additional Navy funds. The Deputy City Manager stated there is an official request before the Navy to continue caretaker funding; local Navy staff indicated the Navy budget which was submitted to Congress does not include funding [for Alameda]; the purpose of the [proposed] plan is to have a backup; staff will pursue full continuation of the funding Special Joint Meeting Alameda City Council and Community Improvemen: Commission May 12, 1999 diligently; if the property is conveyed to the City before the end of the year, there will still be a financing shortfall during the first one and a half years. Mayor /Chair Appezzato suggested staff have a plan to present the City's needs to Congress; e.g. Congresswoman Barbara Lee. Councilmember /Commissioner Kerr inquired whether the City and the Navy are discussing caretaker funds; stated the City has minimum obligations to maintain the Navy's property under the master lease. The Deputy City Manager stated the City will continue conversations [with the Navy]; in response to the Mayor's suggestion, staff will indicate that funding must be continued; the request will be elevated as high as necessary. Councilmember /Commissioner Kerr further inquired whether the City is discussing the matter with either of the senators. The Deputy City Manager stated the City's congressional representatives have been informed; if the Council would like to have the representatives involved at this point, staff can proceed accordingly; representatives have monitored, assisted and encouraged the City to go through the channels; staff is trying to follow process. Councilmember /Commissioner Kerr stated maybe the City should not continue to go through channels; the process is lengthy; perhaps senators should be asked to assist. Mayor /Chair Appezzato stated that he hopes to see Congresswoman Lee soon and will press the issue. Councilmember /Commissioner Kerr stated the senators should be contacted; the congressional effort is not getting the City too far. Councilmember /Commissioner Johnson inquired whether Base closure caretaker funds ceased after the property was conveyed in other jurisdictions. The Deputy City Manager stated caretaker funds were cut -off prior to property conveyance at George Air Force Base in southern California; in other instances, caretaker funds have continued; cases of continued funding were presented to the Navy. Councilmember / Commissioner Johnson inquired the reason funding continued in some cases and not others, to which the Deputy City Manager responded negotiations are case by case. Special Joint Meeting Alameda City Council and Community Improvement Comrr.ission May 12, 1999 Mayor/Chair Appezzato stated when the City of Alameda's case is presented to Washington D.C., the letter should be addressed to the President and both senators, Congresswoman Lee, the Secretary of Defense and other pertinent officials; the City can argue federal funds are required as long as the Base is federal property. The Deputy City Manager stated before the end of the month, local remedies will be exhausted and staff will be at Washington. Mayor/Chair Appezzato stated the letter can be crafted to be firm, without being offensive. In response to Vice Mayor/Commissioner Daysog's inquiry regarding the use of different economic scenarios to estimate rental income, the Deputy City Manager stated the business plan was deliberately conservative on the revenue side. Councilmember/Commissioner DeWitt stated the City's goal is to have lease revenue which will pay for operation costs. The Deputy City Manager stated the lease revenue stream is not adequate to cover the current level of operations, maintenance and capital improvements for the first two years; eventually, leases will cover operation costs. Councilmember/Commissioner Johnson inquired whether capital improvement projects which are being deferred will impact redevelopment. Consultant David Zehender outlined improvements which would be deferred; stated projects selected for deferment will not impact development. Councilmember/Commissioner Kerr stated East Bay Municipal Utilities District (EBMUD) will only send water through the existing water mains for a limited time. Consultant David Zehender stated water upgrades required by EBMUD were not deferred. Councilmember/Commissioner Kerr inquired whether the Tidelands Trust would impact lease revenues; stated unexpected contamination might lower the amount of allowable development and clean-up might be more costly than expected. The Deputy City Manager stated nothing has been included in the revenue stream which would be jeopardized by remediation or Tideland Trust issues; speculative revenue projections were not used. Special Joint Meeting Alameda City Council and Community Improvement Commission May 12, 1999 In response to Mayor/Chair Appezzato's inquiry whether the federal government is responsible for toxic clean-up, the Deputy City Manager responded in the affirmative. Vice Mayor/Commissioner Daysog inquired whether revenue from the Fleet Industrial Supply Center (FISC) and East Housing were included in estimates. The Deputy City Manager responded revenues from FISC and East Housing were kept separate. Councilmember/Commissioner DeWitt stated the recommended approach is to: 1) eliminate capital improvement projects which have no impact; 2) reduce operation and maintenance cost by $i Million; and 3) pursue revenue bond financing. The Deputy City Manager stated staff would like conceptual approval of the recommendation; there is a three month process to authorize action. Councilmember/Commissioner DeWitt stated Council needs to decide whether or not the "no impact" method and revenue bond financing will be followed. Councilmember/Commissioner DeWitt moved approval of the staff recommendation(s). Vice Mayor/Commissioner Daysog seconded the motion. Under discussion, Mayor/Chair Appezzato stated there are the seven recommendations [1) reduce annual operating costs by $1.0 Million ("No Impact" Level); 2) defer $3.9 Million of Capital Projects; 3) issue a series of revenue bonds secured solely by leases; 4) ARRA pays for City-wide projects with bond proceeds; 5) City pays ARRA back by covering operation and maintenance deficit; 6) reserve future tax increment for developer incentives and/or future projects; and 7) consider issuing variable demand noted for 1999 series]. Mayor/Chair Appezzato stated no council action is needed; by accepting the Report, Council is blessing the staff recommendation; the City is moving forward by consensus; the matter will come back for action. The City Manager stated staff would like conceptual direction by Council's acceptance of the Report. Mayor/Chair Appezzato stated the motion and second is to accept the Report; accepting the Report, provides conceptual approval. Special Joint Meeting Alameda City Council and Community Improvement Commission May 12, 1999 Following Mayor /Chair Appezzato's and the City Manager's comments, Councilmember /Commissioner DeWitt [amended the previous motion] moved acceptance of the Report; Vice Mayor /Commissioner Daysog seconded the motion, as amended; motion carried by unanimous voice vote - 5 Adjournment There being no further business, Mayor /Chair Appezzato adjourned the Work Session at 4 :18 p.m. Respectfully submitted, Di=ne B. Felsch, CMC City Clerk; Secretary, Community Improvement Commission The agenda for this meeting was posted in accordance with the Brown Act. Special Joint Meeting Alameda City Council and Community Improvement Commission May 12, 1999