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1999-08-17 ARRA MinutesAPPROVED NUTES OF THE SPECIAL JOINT MEETING OF THE CITY COUNCIL, ALAMEDA REUSE AND REDEVELOPMENT, COMMUNITY IMPROVMENT COMMISON AND HOUSING AUTHORITY BOARD OF COMMISSIONERS Tuesday, August 17, 1999 The meeting convened at 7:47 pm with Chair Appezzato presiding. ROLL CALL 1. Present: 2 Chair Ralph Appezzato, Mayor, City of Alameda Sandre Swanson, Vice Chair, Ninth Congressional District for Barbara Lee Mark Friedman, alternate to Wilma Chan, Alameda County Board of Supervisors, District 3 Tony Daysog, Councilmember, City of Alameda Albert DeWitt, Councilmember, City of Alameda Beverly Johnson, Councilmember, City of Alameda Barbara Kerr, Councilmember, City of Alameda Absent: Jay Leonhardy, alternate to Jerry Brown, Mayor, City of Oakland Kathleen Ornelas, alternate to Shelia Young, Mayor, City of San Leandro 2. PUBLIC COMMENT ON AGENDA ITEM Richard Neveln, 1328 Park Street, expressed it is important to have adequate funds to build projects and provide good planning for the formal Naval Air Station. Starting off with this bond is a good first step in financing and something worthwhile for the ARRA to do. People all over the region are taking notice of the good things that are happening at Alameda Point. 3. ACTION ITEMS 3 -A. Report and recommendation from the Deputy City Manager to adopt a Resolution Approving an assignment agreement and approved related documents and officials actions by and between ARRA and the City of Alameda in connection with the issuance by the Alameda Public Financing Authority of its revenue bonds to finance the acquisition, construction, installation and equipping of various capital improvements to Alameda Point (the former Alameda Naval Air Station) and to finance the acquisition, construction, installation and equipping of various capital improvements for the City of Alameda and approving related documents and official actions. Deputy City Manger David Berger stated on May 12, 1999, staff presented to the Council a financing plan for the implementation of the Alameda Point project in the early years, following 1 cessation of Caretaker payments from the Navy which is scheduled to end on September 30, 1999. This plan was presented to Council by the financing teams of Evensen Dodge and Gardner and Associates. Council was given four alternatives and selected one which they wanted staff to proceed with. Deputy Berger indicated at that meeting, staff could get credit enhancement, which is a lease - backed revenue bond and they have an offer from Union Bank of California, backed by the Teachers' Retirement System of California, for a letter of credit, along with a AAA rating on this bond issue. The minimum bond proceeds would be $6 million, as was stated in the report. Chair Appezzato asked the City Finance Director, Zenda James, if she supports this action. Zenda James stated that she was part of the financing team that put this plan together. She indicated that the report given to the Board was signed by both she and Deputy Berger. Member Kerr asked Deputy Berger if the ARRA vote is simply to approve the assignment of rents to enable the financing, not to approve the financing itself? Deputy Berger responded that was correct. The Board is signing the lease revenues to the financing authority through the City Council. Member Kerr asked is this an assignment of revenues. Deputy Berger responded yes, this is the action that is in front of the ARRA this evening. 4. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT) None. 5. COMMUNICATIONS FROM THE GOVERNING BODY Member Daysog stated there are a certain amount of dollars needed to pay for services at the base and with the Cooperative Agreement sunsetting, there needs to be a way to generate the dollars. We can produce bonds that pay for some of the infrastructure on the base and in turn the ARRA, from that revenue, would pay for infrastructure. As ARRA money comes to pay for capital things for historical Alameda, the service dollars that go to the base are replenished. Member Daysog clarified that when we speak of Alameda, we are talking about the service operating budget and capital budget. Henry Gardner of Gardner, Underwood and Bacon, voiced to the Board that what they are doing by this transaction is providing funding for two primary purposes: maintain the current operations at the base and finance the early capital projects at the base. In order to make that happen, two other entities have been brought into the process. One is the City of Alameda which the bond will be funding a portion of their capital projects, which is the reason the Public Financing Authority is involved and they will be the issuer. This will allow staff to continue 2 with the development activities at the base, necessary capital projects, makes no reliance of any kind on the general fund and protects the City's funds. Member Daysog stated the City now has a limited budget for services and now the City is going to being paying for services on the base. Henry Gardner reiterated to Member Daysog that the City of Alameda is spending no money for this purpose. The City's general fund is in no way involved in the financing of anything at Alameda Point. However, the City has to be involved in this financing, in order to achieve the purpose of the bond. Member Daysog asked Mr. Gardner about police funding. Henry Gardner responded that this funding will allow for funding of those positions. It will allow staff to maintain the police and fire services that are currently on the base. Member Daysog asked Mr. Gardner will the City be able to maintain the level of services on historic Alameda, since they will now be covering a greater part of Alameda, resulting in loss of time for historic Alameda. Will the dollars from the ARRA free up historic Alameda into the capital side and will it also replenish the lost dollars? Henry Gardner stated this financing does not rely on general fund support in any way and does not obligate the City in any way for this financing. Member Johnson asked Mr. Gardner can they say they are not putting the general fund at risk. Henry Gardner stated that they are not putting the general fund at risk. The general fund is not in any way obligated for this financing. Chair Appezzato stated they have three choices: they can do nothing for Alameda Point; tell the Navy they do not want they property and can do what they want with it; or they can continue to move forward and believe they are going to be successful in developing Alameda Point and repay the bonds with the success they achieve at the base, without impact to the general fund. Alternate Member Friedman motioned recommendation of staff's report for financing of Alameda Point. Motioned was seconded by Member Daysog. Motion passed unanimously. Discussion. Member DeWitt stated part of the problem we are facing is that the Navy has decided to cut the money for Caretaker funds they had been giving to us. The City is hopeful that someday soon the Navy will turn the base over to them or either allow the base to be transferred to the City at no cost. If they do that soon, that will help in these type of transactions. Member DeWitt stated he knows the federal government is working on legislation that will transfer bases to the various 3 communities, possibly at no cost. Chair Appezzato stated if the base were conveyed to the City tomorrow at no cost, they would still have to do what they are doing, regardless if the Navy is paying certain fees. There have been letters sent to congressional representatives for support for continuance of cooperative funds. There is legislation sponsored by the President and Secretary of Defense to pass the property on at no -cost to the City of Alameda. 6. ADJOURNMENT The meeting was adjourned at 8:05 p.m. espectfu ly submitted, ut etia Akil ARRA Secretary 4