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HomeMy WebLinkAbout2011-01-17MINUTES SPECIAL JOINT MEETING OF THE PALM DESERT CITY COUNCIL AND PALM DESERT REDEVELOPMENT AGENCY MONDAY, JANUARY 17, 2011 — 2:00 P.M. CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER Mayor/Chairman Benson convened the meeting at 2:01 p.m. II. ROLL CALL Present: Councilmember/Member Cindy Finerty Councilmember/Member Jan C. Harnik Councilman/Member William R. Kroonen arrived at 2:02 p.m. Mayor Pro TemNice Chairman Robert A. Spiegel Mayor/Chairman Jean M. Benson Also Present: John M. Wohlmuth, City Manager/RDA Executive Director David J. Erwin, City Attorney Rachelle D. Klassen, City Clerk Lauri Aylaian, Director of Community Development Paul S. Gibson, Director of Finance/City Treasurer Janet M. Moore, Director of Housing David Hermann, Management Analyst Grace L. Mendoza, Deputy City Clerk III. ORAL COMMUNICATIONS None MINUTES SPECIAL JOINT MEETING OF THE PALM DESERT CITY COUNCIL AND PALM DESERT REDEVELOPMENT AGENCY VI. NEW BUSINESS JANUARY 17, 2011 A. REQUEST FOR ADOPTION OF RESOLUTIONS, APPROVING AGREEMENTS BETWEEN THE CITY OF PALM DESERT AND THE PALM DESERT REDEVELOPMENT AGENCY FOR THE PAYMENT BY THE AGENCY FOR THE VALUE OF THE LAND FOR AND THE COST OF INSTALLING AND CONSTRUCTING PUBLICLY OWNED IMPROVEMENTS, MAKING FINDINGS IN CONNECTION THEREWITH, AND FOR THE PAYMENT BY THE AGENCY OF ADMINISTRATIVE AND OVERHEAD EXPENSES (CONTRACT NO. R30550). Mr. Wohlmuth explained that on January 10, Governor Brown proposed a State Budget that includes, among other things, the elimination of Redevelopment. In the City's attempt to protect Redevelopment and the revenues, staff worked with both Redevelopment Agency Counsel and the City Attorney to draft the necessary documents here, which represent a way to protect the revenues and projects for the Redevelopment Agency. He said that according to the Governor's proposal, only those Redevelopment Funds that are committed or obligated will be protected; therefore, the subject request is a mechanism to attempt to obligate Redevelopment Funds. Most importantly if Redevelopment is eliminated, he said it was a mechanism providing a list of Palm Desert's Capital Improvement Projects to make them an obligation of the Redevelopment Agency to fund the City for those improvements. He reiterated that the Governor's Budget was just a quick look at taking away Redevelopment Funds. At this point, it is unclear what that actually means legally, technically, or financially. The City Council/Agency Board was being asked to approve an instrument that staff felt was a means of protecting those revenues and projects that the City has on its books, as well as protecting the land that the Redevelopment Agency has acquired over the years to complete those projects. Ms. Moore commented that while there wasn't a specific formal agreement in place previously, much of what was already being done by the City/Agency and a lot of the language in the subject Agreements were very similar. For instance, staff working for the Redevelopment Agency were City Employees loaned to the Agency, and there was no specific agreement that identified this policy that was allowed for reimbursing the City. The subject request formalizes those actions and represented staffs goal in asking for their approval at this meeting. Mr. Wohlmuth added that the requested actions did not obligate the City to complete the projects; they obligated the Redevelopment Agency to pay for the projects for the City. He called attention to the list of projects, some of which were out five years or more in the future, potentially, and have been prioritized in the Capital Improvements Budget, as well as the City's Redevelopment Plan for each one of the Project Areas. In the event that City Council changes priorities, at least for the time being, this action doesn't obligate the City to finish those projects. He 2 MINUTES SPECIAL JOINT MEETING OF THE PALM DESERT CITY COUNCIL AND PALM DESERT REDEVELOPMENT AGENCY JANUARY 17, 2011 said staff tried to be as detailed as possible with the list and to fine-tune it, with things such as Road Improvements, including starts and specific sections that need the improvements (e.g. sections of Monterey Avenue). Additionally, staff worked from the Redevelopment Plan List to prioritize projects, as well as identify where they will be completed. Some of the projects were underway, such as the Aquatic Center, but he said it was included on the list in order to protect the Redevelopment expenditure. He recalled for the City Council/Agency Board that there was currently a construction contract on the Aquatic Center, it was nearly 50% complete; but it was included on the subject list as a precautionary measure to protect funds designated for this purpose from the Governor taking them away. Mayor Pro TemNice Chairman Spiegel observed that the Exhibit to the subject Agreement included well over $100 million worth of projects listed. He asked if the money would be saved if the City Council/Agency Board approved the subject Resolutions, even if Redevelopment was eliminated. Mr. Wohlmuth answered that it was an attempt to protect the Redevelopment Funds, it was not a guarantee. He said there had been many rumors since January 10, some indicating that the Legislature might roll back to January 10 or January 1 any commitment the City or Agency had to obligate those funds. The actions being requested here provided a level of attempted protection. Councilmember/Member Finerty noted that Redevelopment had taken a loan from the General Fund and wondered if it had been repaid. Messrs. Wohlmuth and Gibson responded that was the next item to be considered on the agenda, Resolution No. 580. Councilmember/Member Finerty asked if the City/Agency would be aggressively fighting the Governor's proposal, because it needed to be considered as a larger issue. In the latest The Economist Magazine, she said it points out that there are unrealistic expectations on the rate of return on investments for pensions and that there are unfunded pension liabilities that were producing a non -sustainable system Statewide — it is more than a Redevelopment issue. She stated that there were many issues that the Governor should look at, and simply attempting to raid Redevelopment was a "Band -aid" approach; the spending had to stop. Without knowing precisely what direction its attorneys were advising or if there would be a class-action lawsuit, she hoped Palm Desert would be aggressive about advocating for changes to be made at the State level that were far more critical before raiding local funds. Additionally, she noted the Governor's Budget also says that counties and cities are supposed to take on more responsibilities; meanwhile, the State was taking away local funds needed to carry out such responsibilities, yet Sacramento didn't know how to deny any bill that comes along. 3 MINUTES SPECIAL JOINT MEETING OF THE PALM DESERT CITY COUNCIL AND PALM DESERT REDEVELOPMENT AGENCY JANUARY 17, 2011 Mr. Wohlmuth responded that many of the items in the Governor's Budget didn't make sense. First, the aforementioned proposal to realign some services back to the County was reminiscent of the State's action back in 1993, sending Public Health, Social Services, and Mental Health Programs down to the County level with the limited amount of available funding. To date, that funding is not nearly enough to carry out those Programs, and there are concerns with another such realignment, in addition to it having to be approved by the voters because it includes a Sales Tax increase. He commented that there were many, many questions about the Governor's Budget Proposal; including, for Redevelopment, two potential Constitutional Amendments that require State voter action, meaning there was a lot of uncertainty. With regard to the advocacy or lobbying efforts, the California Redevelopment Association (CRA) has begun a lobbying effort; staff will get more information as it becomes available. He added that Councilmembers Harnik and Kroonen were traveling to Sacramento this week for the League of California Cities' New Mayors and Council Members Academy, and plans have been made for them to meet with Coachella Valley Legislators. He believed Palm Desert would strongly pursue advocacy, both from the City and from the development community; the State was taking all economic development tools away from local government — Redevelopment, and according to the Governor's Budget Proposal, including Enterprise Zones. He noted that a lot of the State's economic development happens at local levels, with the Governor now planning to strip those opportunities from the State of California, which hasn't exactly done a yeoman's job at economic development to this point. Mayor/Chairman Benson believed that as the issue progresses, it's very important for the City to stay in contact with the League of California Cities to see what they're doing. She said the State's actions will affect all cities, while the City never sees its representative to the League. Therefore, it's important City staff or the Gonsalves firm make contact there. Mayor Pro TemNice Chairman Spiegel said he reviewed his mail earlier today and noticed an epistle had just been received from the League, which was actively involved with both Redevelopment issues and Enterprise Zones in seeking the Governor's relenting on his Proposal. Councilmember/Member Harnik asked if the funds for the Aquatic Center were guaranteed. Mr. Wohlmuth replied that the City/Agency was contractually obligated with the $10 million listed for the Aquatic Center. Construction for the Center was awarded at approximately $7.8 million; those funds have been obligated. However, since the technicalities of the Governor's Budget were still unknown, it was listed on the subject documents. In reading the Governor's Budget, he felt the intent was to protect funds that were contractually obligated, which he believed included 4 MINUTES SPECIAL JOINT MEETING OF THE PALM DESERT CITY COUNCIL AND PALM DESERT REDEVELOPMENT AGENCY JANUARY 17, 2011 contracts that were already let or purchases that have already been encumbered, as well as the bond proceeds out there to fund the projects. But the City's/Agency's attorneys have questions, because Palm Desert has $130 million of bond proceeds. Responding to question about the total value of the Palm Desert Redevelopment Agency today, he said there was $130 million of bond proceeds and $59 million in cash. Mayor Pro Tem/Vice Chairman Spiegel said that while he was doubtful that the Governor would be able to eliminate Redevelopment, he asked how it would impact Palm Desert's Low- and Moderate -income Housing. Mr. Wohlmuth answered that the Governor's Proposal suggested that the City's Housing Program would be shifted to a Housing Authority. He said Ms. Moore has looked at that issue and believed that meant the Riverside County Housing Authority. Ms. Moore confirmed that it was Riverside County. However, since Palm Desert has a Housing Authority, staff was looking at the viability of taking actions to make it a Public Housing Authority. She added that it would change a few things with regard to Federal vs. Local Government control; but it would make Palm Desert eligible to apply for programs, such as Section 8 Rental Housing Assistance, etc. She cautioned that there may already be a declaration in the law that specifies the County as the Public Housing Authority; if so, then there really would be nothing for Palm Desert to do. Although, she said the Governor's Budget proposes to take the balance in the Low- and Moderate -income Housing Fund and transfer it to the County. In further response, she said it was still unknown if, then, the City would also be relieved of the Housing production requirements. She said the Governor's Proposal was still very generic; she presumed that those would be transferred to the County, but they will remain in the jurisdictional territory that they are presently. In response to Councilmember/Member Finerty's observation that the money would be transferred from the City to the County, with the City still being required to build without funds to do so, Ms. Moore answered that the City is not required to build the housing; it was required to be in the City or what the State Department of Finance has determined that the City of Palm Desert needs. Therefore, the requirement would be transferred to the County, which through its methods of development would work to put projects in Palm Desert to meet those numbers. Further, she believed the 20% Set -aside Funds would go to the County. Mr. Wohlmuth added that if Redevelopment was eliminated, Palm Desert wouldn't have either the 80% or the 20%. He surmised that existing funds in the 20% Set - aside would be transferred to the County for it to provide that money to Low- and Moderate -income Programs/Homes in Palm Desert. 5 MINUTES SPECIAL JOINT MEETING OF THE PALM DESERT CITY COUNCIL AND PALM DESERT REDEVELOPMENT AGENCY JANUARY 17, 2011 Upon Mayor/Chairman Benson's asking if such building would be done to Palm Desert standards, Ms. Moore said it would have to go through the same process as any other development in the City. Mayor/Chairman Benson remarked that was one of the reasons Palm Desert incorporated in 1973; the County's building standards were so terrible, residents didn't want it in this area. She said the City wouldn't want to go backwards and revert to lower standards. Ms. Aylaian noted that staff was concerned since the City did not have an adopted Housing Element that conforms with the State's requirements, the City may lose jurisdiction over land use decisions, particularly high -density housing projects. So while it was for a different reason, it did come back to the lack of an adopted Housing Element. In other words, there was now potential of the County coming in and building a project, and the City would lose its only leverage to impose regulations/standards without an adopted Housing Element. Answering question regarding this discussion at the recent City Council Retreat, she affirmed that the City was waiting for the last submitted version of the Housing Element to come back from the State with its comments. Mayor Pro TemNice Chairman Spiegel said he was most disturbed by the fact that the Governor declares more responsibility would be given to the cities, but all he's done is take it away and not done anything for cities. He felt it was very irresponsible. Councilmember/Member Finerty agreed. Councilman/Member Kroonen observed that the City has been around blocks like this a number of times over the last decades — it wasn't the first time there was a major shake-up, reflecting back on what everyone felt with passage of Proposition 13, which was major. However, he cautioned not going into a stage of panic, instead going into a stage of reality — being alert, on guard, sure that we have the right connections with the City's representative organizations. He assured his colleagues that he and Councilmember/Member Harnik would be talking long and hard to Palm Desert's representatives in Sacramento when they meet Wednesday morning, as well as doing a lot of listening at the League Academy. Responding to comment, Councilmember/Member Harnik replied that they would be meeting with both Republican representatives, along with an opportunity to work with 80th District Assemblyman Manuel Perez. Councilman/Member Kroonen said he recognized the need to communicate with both parties' representatives at the State level. He believed greater communication between the party lines was beginning in the Coachella Valley. 6 MINUTES SPECIAL JOINT MEETING OF THE PALM DESERT CITY COUNCIL AND PALM DESERT REDEVELOPMENT AGENCY JANUARY 17, 2011 Responding to request, he said he would provide a comprehensive report about the trip at the January 27 City Council Meeting. Mayor Pro Tem/Vice Chairman Spiegel moved to: 1) By Minute Motion, find that the Advance and Reimbursement Agreement for the public improvements does not constitute a project pursuant to the California Environmental Quality Act (CEQA); 2) waive further reading and adopt: a) City Council Resolution No. 2011 - 3, approving an agreement with the Palm Desert Redevelopment Agency for the payment by the Agency for the value of the land for and the cost of installing and constructing publicly owned improvements, making findings in connection therewith, and approving an agreement with the Agency for the payment by the Agency of Administrative and Overhead Expenses; b) Redevelopment Agency Resolution No. 579, approving an agreement with the City of Palm Desert for the payment by the Agency for the value of the land for and the cost of installing and constructing publicly owned improvements, making findings in connection therewith, and approving an agreement with the City for the payment by the Agency of Administrative and Overhead Expenses. Motion was seconded by Finerty and carried by 5-0 vote. B. RESOLUTION NO. 580 - A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY, AMENDING ITS RESOLUTION NOS. 275, 288, 305, 340, 376, 384, 424, AND 448 WITH RESPECT TO THE REPAYMENT OF CITY LOANS AND ADVANCES. Councilmember/Member Finerty moved to waive further reading and adopt Resolution No. 580. Motion was seconded by Kroonen and carried by 5-0 vote. Councilmembers/Members strongly urged the repayment action take place as soon as possible. VII. ADJOURNMENT On a motion by Spiegel, second by Finerty, and 5-0 vote of the City Council/Agency Board, Mayor/Chairman Benson adjourned the meeting at 2:24 p.m. ,el>1•-•-- #1- N ATTEST: RA HELLE D. KLASSEN, C I Y CLERK/SECRtTARY CITY OF PALM DESERT, CALIFORNIA/ PALM DESERT REDEVELOPMENT AGENCY BENSON. MAYOR/CHAIRMAN 7