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HomeMy WebLinkAbout2008-10-23MINUTES REGULAR PALM DESERT REDEVELOPMENT AGENCY MEETING THURSDAY, OCTOBER 23, 2008 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Chairman Benson convened the meeting at 3:00 p.m. II. ROLL CALL Present: Member Cindy Finerty Member Jim Ferguson Member Richard S. Kelly Vice Chairman Robert A. Spiegel Chairman Jean M. Benson Also Present: Carlos L. Ortega, City Manager/RDA Executive Director Stephen P. Deitsch, Assistant City Attorney Sheila R. Gilligan, ACM for Community Services Homer Croy, ACM for Development Services Justin McCarthy, ACM for Redevelopment Stephen Y. Aryan, Assistant to the City Manager Rachelle D. Klassen, City Clerk Bo Chen, City Engineer Russell Grance, Director of Building & Safety Lauri Aylaian, Director of Community Development Patrick Conlon, Director of the Office of Energy Management Paul S. Gibson, Director of Finance/City Treasurer Janet M. Moore, Director of Housing David Yrigoyen, Director of Redevelopment & Housing Frankie Riddle, Director of Special Programs Steve Brooker, Battalion Chief, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Andrew Shouse, Asst. Chief, Palm Desert Police/Riverside Co. Sheriff's Dept. Grace L. Mendoza, Deputy City Clerk III. ADJOURN TO CLOSED SESSION Request for Closed Session: MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING OCTOBER 23, 2008 Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: 1) Property: 43-755 Kelsey Court (APN 634-241-034) Negotiating Parties: Agency: Justin McCarthy/Janet Moore/ Palm Desert Redevelopment Agency Property Owner: Harry and Joyce Planck Under Negotiation: x Price x Terms of Payment 2) Property: 73-196 Highway 111 (APN 627-071-041) Negotiating Parties: Agency: Justin McCarthy/Martin Alvarez/ Palm Desert Redevelopment Agency Property Owner: John Argyros Under Negotiation: x Price x Terms of Payment Upon a motion by Spiegel, second by Ferguson, and unanimous vote of the Agency Board, Chairman Benson adjourned the meeting to Closed Session at 3:04 p.m. She reconvened the meeting at 4:03 p.m. IV. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None V. AWARDS, PRESENTATIONS, AND APPOINTMENTS None VI. CONSENT CALENDAR A. MINUTES of the Regular Redevelopment Agency Meeting of October 9, 2008. Rec: Approve as presented. Approved 4-0-1 (Ferguson ABSTAINING). B. CLAIMS AND DEMANDS AGAINST THE AGENCY TREASURY - Warrant Nos. 85RDA, 89RDA, 91 RDA, 93RDA, 95RDA, 100RDA, 86-Housing, 92-Housing, 96-Housing, 101-Housing, 87HA, 97HA, 102HA. Rec: Approve as presented. 2 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING OCTOBER 23, 2008 Upon a motion by Spiegel, second by Finerty, and 5-0 vote of the City Council, with the exception of Ferguson ABSTAINING on Item A, the Consent Calendar was approved as presented. VII. CONSENT ITEMS HELD OVER None VIII. RESOLUTIONS A. RESOLUTION NO. 553 - A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY, APPROVING AS TO FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN IMPLEMENTATION AGREEMENT AND A LETTER AGREEMENT WITH THE COUNTY OF RIVERSIDE, AND APPROVING CERTAIN RELATED ACTIONS (RIVERSIDE COUNTY PALM DESERT FINANCING AUTHORITY LEASE REVENUE BONDS [COUNTY FACILITIES PROJECTS], 2008 SERIES A) (CONTRACT NOS. R28300A-B). Responding to question, Mr. Ortega explained that on the following day, the Joint Financing Authority would be considering authorization of $74 million in bonds to finance part of the Sheriff station and other County facilities; the Sheriff station alone was approximately $34 million. Because the Agency was providing the funds, a lease provision would be needed. The best avenue to obtaining the best interest rate was to have the Agency give the money to the County to build the facilities, have the County lease the facility to the Authority, and then use the lease payments received by the Agency to pay off the bonds, which was part of the Implementation Agreement. Member Ferguson moved to waive further reading and adopt Resolution No. 553. Motion was seconded by Finerty and carried by a 5-0 vote. IX. NEW BUSINESS A. REQUEST FOR APPROVAL OF INVESTMENT BY THE PALM DESERT REDEVELOPMENT AGENCY IN LIMITED OBLIGATION BONDS ISSUED BY THE CITY OF PALM DESERT RELATIVE TO THE CITY'S ENERGY INDEPENDENCE PROGRAM (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL). Mr. Ortega stated staff was recommending a temporary measure for the Energy Independence Program (EIP) because it wasn't the City's intention to provide long-term financing. He said staff would later be proposing alternative long-term financing to the Council. In the meantime, it could choose to add monies to the current fund, repay the Agency, or not approve this investment. He said the Program's response had been good, and 3 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING OCTOBER 23, 2008 approval of this item would allow for loan applications to continue to be processed. Responding to question, he said this request was for $5 million. Member/Councilman Ferguson stated that he, Pat Conlon, and Consultant Ted Flanigan questioned how much longer before another $5 million would be needed for the EIP. He said the Program had commitments through the first $2.5 million, with $1.2 million waiting in line, and another $1.4 million waiting on the approval of the second $5 million, which raised the question known all along that a larger financing entity would be needed. He said he was the keynote speaker at the Solar Santa Monica, Southern California Association of Cities Conference next week. He said even in the current economic market, enough interest had been garnered in AB 811 Energy Program that large institutional investors recognized the security of capital secured by tax liens on property, which was superior to prime lending. He said working with large regional pools of money like the Joint Powers Authority or people with a substantial reserve could help start funding other cities. He said Palm Desert was blessed because it had proven the EIP worked, and it was enormously successful; the first $2.5 million went in 19 days. He said each application was reviewed by Pat Conlon, and he too had looked at them. He said the Program was taking kilowatt hours off the grid and saving the residents tons of money. He was in favor of approving this investment for $5 million, recognizing it would only last until January 2009. In the meantime, he, Mr. Ortega, Pat Conlon, and others needed to beat the bushes to find a larger institutional lender. Mr. Ortega responded staff had a larger institutional lender in the works, which the City's financial consultant could describe this evening. He reiterated approval of this item would allow for the continued processing of loans for the Energy Independence Program. Vice Chairman/Mayor Pro Tem Spiegel said he would like to approve this item because he knew staff was working with two banks that had plenty of money. However, he personally preferred to have the banks be the carriers of the money and the City only secure the loans. Vice Chairman/Mayor Pro Tem Spiegel moved to, by Minute Motion: 1) Authorize the Agency Treasurer to invest lawfully available Agency funds in limited obligation improvement bonds, which may be issued by the City and secured by and payable from contractual assessments related to the City's Energy Independence Program. 2) Direct staff to cause the preparation of documentation necessary for the City Council to consider the issuance of limited obligation improvement bonds secured by and payable from contractual assessments related to the City's Energy Independence Program. 3) Authorize the City Manager and/or Executive Director to have necessary resolutions and documents prepared for consideration by the City Council and/or Agency Board for said purposes. Motion was seconded by Ferguson and carried by a 5-0 vote. 4 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING OCTOBER 23, 2008 X. CONTINUED BUSINESS None XI. OLD BUSINESS A. REQUEST FOR APPROVAL OF CONTRACT BETWEEN THE PALM DESERT REDEVELOPMENT AGENCY AND DESERTARC, ESTABLISHING A FACADE EASEMENT PURCHASE AGREEMENT IN CONSIDERATION FOR FINANCIAL ASSISTANCE IN AN AMOUNT NOT TO EXCEED $60,000 FOR THE INSTALLATION OF ENERGY -SAVING IMPROVEMENTS AT THE DESERTARC FACILITY LOCATED AT 73-255 COUNTRY CLUB DRIVE, PALM DESERT (CONTRACT NO. R27670). Member Ferguson asked what purpose did the easement serve. Mr. McCarthy explained that an easement was simply a vehicle to represent consideration to the Agency. He said staff attempted to use the more conventional approach similar to a parking easement, but that route created liability issues. Staff then decided to use the model used by the City, where an easement was provided for a period of 15 years, and DesertArc would agree to keep and maintain the improvements in place. He believed the staff report provided a physical legal description. Mr. Deitsch said the legal description to the facade of the facility was described in Section 2.2 of the Agreement. Responding to question, he said the proposed easement did burden the land with the requirements described by Mr. McCarthy, which was a little different from a road or access easement. Further responding, he said this easement was ensuring that the building would be kept attractive and well maintained for the stated number of years. Mr. McCarthy noted the easement would maintain the maintenance of the improvements described in the Agreement. Responding to question, Mr. McCarthy clarified the City was paying $60,000 for energy saving improvements that were negotiated; new air conditioners and other improvements that will be reviewed and funded upon installation. He said this item was discussed a few months ago, but it was now at the implementation point. Mr. Deitsch stated another example commonly used similar to the proposed Facade Easement Purchase Agreement would be where the federal government created a tax credit for certain historical preservation. If the City had a historical structure certified for that purpose and maintained it, a historical easement would be recorded against the property for such 5 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING OCTOBER 23, 2008 maintenance, and also be entitled to a tax credit under limited circumstances by the Internal Revenue Service (IRS). In this case, it was not a historical structure, but it was maintaining an improvement. Member Ferguson asked if the improvements were listed in the Agreement. Senior Management Analyst Catherine Walker replied that after an evaluation by Southern California Edison (SCE), a number of energy efficiency improvements were outlined, and DesertArc already implemented a number of them as listed on Exhibit B of the Agreement. She said the Agency could reimburse DesertArc for some of the work already performed based on the initial list provided by Edison. Responding to question, she confirmed the Office of Energy Management evaluated Edison's list and agreed they were energy efficient improvements. Vice Chairman Spiegel stated he was familiar with facade enhancement and the subject request was not. He said bringing equipment to DesertArc, which would help it function more efficiently was not facade enhancement and thought it should be called something else. Mr. McCarthy responded the legal team was comfortable using a model previously used by the Agency. He said the program could be renamed if that would be helpful, but it did meet the legal requirement to accomplish its goal. He asked the Council to keep in mind that $40,000 worth of improvements were already installed, and the remaining $20,000 would be evaluated by staff and the Office of Energy Management to ensure energy savings was achieved. Further responding, he said it was the Agency's intent that all improvements be energy related; most improvements were air conditioners, but there were also physical improvements to the entry way that would achieve energy savings. Member Ferguson asked if the program could be changed to Energy Enhancement Program. Mr. McCarthy replied it could. Mr. Deitsch was reluctant to agree to change the provision in the Agreement that created the Facade Easement, which was prepared by Richards, Watson & Gershon. He was familiar with Redevelopment Law, and he said it would be difficult, if not unlawful, to make a payment of Redevelopment Funds for purposes of machinery and equipment. He believed RDA Counsel created a clever solution/agreement to make it possible, which was why he would advise the Council not to tinker with the Agreement or its language. Member Ferguson wondered why $60,000 couldn't be provided through the City's grants. 6 MINUTES PALM DESERT REDEVELOPMENT AGENCY MEETING OCTOBER 23, 2008 Mr. Ortega responded funds were already given to DesertArc from the grant fund, and this request was for additional funds. Further responding, he said Community Block Development Grants (CBDG) funds were for brick and mortar -type of improvements. Member Kelly moved to, by Minute Motion: 1) Approve the subject Facade Easement Purchase Agreement allowing for financial assistance in an amount not to exceed $60,000 for the installation of energy -saving improvements at DesertArc; 2) authorize the Executive Director to approve additional energy efficient equipment and/or improvements; 3) appropriate funds for same to Account No. 851-4627-466-4001. Motion was seconded by Spiegel and carried by a 5-0 vote. XII. PUBLIC HEARINGS None XIII. REPORTS, REMARKS, AND AGENCY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None B. AGENCY COUNSEL Mr. Deitsch stated that the Agency Board met in Closed Session earlier today and took no reportable action. C. CHAIRMAN AND MEMBERS OF THE AGENCY None XIV. ADJOURNMENT On a motion by Spiegel, second by Ferguson, and unanimous vote of the Agency Board, Chairman Benson adjourned the meeting at 7:07 p.m. ATTEST: RA EL E D. KLASSEN; $ECRETAR if g / 2,7„1A_ l," rarlAt&r" ;JEAN- 6. BEN , CHAIRMAN PALM DESERT REDEVELOPMENT AGE CY 7