1999-05-12 Special CIC MinutesMINUTES 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 1st; 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 Improvement 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 Commission
May 12, 1999
67
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 $1 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
C,3 0
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,
D ne B. Felsch, CMC
City Clerk;
Secretary,
Commission
Community Improvement
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