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HomeMy WebLinkAboutPA 4 Cmte - 10/19/09PALM DESERT REDEVELOPMENT AGENCY CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO.4 MINUTES OCTOBER 19, 2009 I. CALL TO ORDER Chairman Benford convened the meeting at 3:00 p.m. II. ROLL CALL Present: Fred Benford, Chairman Roberta Grubb, Vice Chair Russell Campbell, Member Jane Daugherty, Member Robert Duncan, Member Kelly Litecky, Member Javier Lopez, Member Douglas Luhring, Member �(I-CA BY RDA ON 1 9 U _C9 VERIFIED BY �- 'd�,�yt� l Original on file with City Clerk's Office Staff Present: Martin Alvarez, Redevelopment Manager Lauri Aylaian, Director of Community Development Mark Greenwood, P.E., Director of Public Works Shawn Kilpatrick, Code Compliance Officer Monica Loredo, Administrative Secretary Justin McCarthy, ACM for Redevelopment Ryan Stendell, Senior Management Analyst Veronica Tapia, Accountant Catherine Walker, Senior Management Analyst Guests: Richard Kelly, Councilmember Robert Spiegel, Councilmember Mari Schmidt, Planning Commissioner Lt. Andrew Shouse, Palm Desert Police Department ORAL COMMUNICATIONS None CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO.4 MINUTES OCTOBER 19, 2009 IV. CONSENT CALENDAR A. APPROVAL OF THE MINUTES OF THE CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MEETING OF AUGUST 17, 2009. Minutes of the meeting from August 17, 2009, were unanimously approved as submitted by the Committee with Member Ash ABSENT, B. APPROVAL OF THE MINUTES OF THE CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MEETING OF SEPTEMBER 21, 2009. Ms. Mari Schmidt, Planning Commissioner, commented that she had requested that Ms. Loredo add her name as a guest to the minutes. She was at the meeting. Minutes of the meeting from September 21, 2009, were unanimously approved by the Committee with Member Ash ABSENT. V. UNFINISHED BUSINESS None VI. NEW BUSINESS None VII. CONTINUED BUSINESS None Vill. OLD BUSINESS None IX. INFORMATIONAL ITEMS A. UPDATE ON PDCC UTILITY UNDERGROUNDING (Catherine Walker, Senior Management Analyst) Ms. Walker indicated that at the last Project Area No. 4 Committee meeting, the Committee requested that staff bring back a chronology of events that have unfolded with regards to the potential undergrounding GArda\Monica Loredo\Word\PA No. 4\Minutes\Minutes 10-19-09.docx 2 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES OCTOBER 19, 2009 project at Palm Desert Country Club, as well as a timeline of the project itself. She reported that in June 2006, the 2006 bond issuance included a neighborhood and arterial undergrounding in the amount of approximately $14 million. At the Project Area No. 4 meeting of March 2007, the Committee requested that the undergrounding project move forward, and asked what measures needed to be put in place to make the project move ahead. At that time there was some discussion in the meeting minutes as to the residents surveying themselves to make sure this is a project they wanted to move forward, and staff's response to that request was a preliminary cost estimate for each of the utilities that would be trenched. Ms. Walker stated that staff returned to the Committee with numbers for their review. The numbers appeared to be a little high because it included the construction. She explained that the estimate was based on various utility undergrounding throughout the City, and estimates that were provided by each of the entities. The estimates would provide potential individual costs per household. She noted that the Redevelopment Agency could contribute approximately 40% of the right-of-way costs, and that amount would be reflected in the 2001 and 2006 issuance. In terms of the Agency Board action in the 2007 informational item, the cost estimates associated with each of the various utilities was brought forward. In February 2008, there was a request for authorization of deposits for each of the utilities and Willdan, which was approved by the Agency Board. She noted that the engineering deposits are just under $1 million with the Agency Board committing to this funding so the preliminary engineering estimates could be completed. Ms. Walker reported that the results from the February Agency Board meeting were brought back to the Project Area No. 4 Committee, and there was some discussion on how the petition process would work. It was suggested that a neighborhood committee be established to facilitate the petition process. Ms. Walker added that Time Warner would be part of the assessment equation, and staff will be bringing it forward for City Council action because they will be requesting an engineering deposit. She noted that Verizon requested an additional $25,000 for their engineering deposit, which was approved by the Agency Board at the last meeting. Ms. Walker went through the timeline for each utility/contractor. If it moves forward, there will be a public hearing process that would take approximately two months. If approved, there is a one month period for pre -payment with the process to be complete in August 2010. Chairman Benford inquired how the individual assessment is based. Ms. Walker explained that each lot is given a benefit assessment that is G.\rda\Monica Loredo\Word\PA No. 4\Minutes\Minutes 10-19-09.docx J CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES OCTOBER 19, 2009 calculated. It depends on the utilities that are being undergrounded on the street the house is located and how close the house is to the benefit. Chairman Benford commented that he lives on Tennessee, which majority is undergrounded. He asked if that area would also be assessed for the rest of the area. Ms. Walker responded yes because a district would be formed. Chairman Benford asked if approved, how many years would the assessment be paid, and would it be per month. Ms. Walker replied that it would be rolled into the property taxes, and believes it is a 30-year term. Mr. McCarthy communicated that typically it is for 30 years. The intent is to identify the assessment, and then be able to convey the annual per lot cost so that the people can vote up or down. Member Daugherty mentioned that she remembers an additional fee for hooking up to the underground. Mr. McCarthy responded that is assumed into the assessment total. Chairman Benford clarified that the approval would require 70% to get on the ballot and 51 % for approval. Mr. McCarthy replied that in the past there was a policy of requiring a 70% advisory petition to even move into this stage. For a variety of reasons over many years, the community was never able to deliver that. Therefore, input from the Project Area No. 4 Committee and City Council was to put real numbers together, and take the information to the community based on construction documents so that the community could vote up or down. He said that it only takes 50 plus 1 to approve; however, the City Council has adopted a resolution where he believes they would like to see 70%. Chairman Benford asked what the incentive is of voting in favor of the undergrounding. Mr. McCarthy responded that staff cannot answer that question. Member Campbell commented that if it is voted down this time; the City may not help the next time around. Mr. McCarthy stated that has been the City's practice because you cannot guarantee the funds would be available. He affirmed that staff was directed and committed to get as close as possible to real numbers so that the public could make an informed decision based on the request of this body, the Agency Board, and the City Council. Ultimately, the property owners will be the final arbiters of what happens. GArda\Monica Loredo\Word\PA No. 4\MinutesUnutes 10-19-09.docx 4 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES OCTOBER 19, 2009 B. UPDATE ON REDEVELOPMENT BUDGET (Veronica Tapia, Accountant) Mr. McCarthy stated that there were two items to bring back to this meeting. One was the utility undergrounding timeline, and the other was an update on the Redevelopment Agency budget. Ms. Tapia noted that Ms. Walker is handing out a one-year snap shot of what the budget looks like for Project Area No. 4. She explained that the number one revenue for Project Area No. 4 is the tax increment revenue. Ms. Tapia defined tax increment as a finance mechanism that the Agency is committed to use to fund the redevelopment in the project area. It is established in the year the project area is created. The assessed valuation of all the properties in that project area are physically frozen so you come up with a base assessed valuation. She stated that for 1993 in Project Area 4, it was $587 million. For each subsequent year, the growth is considered relevant to the redevelopment that has occurred in that project area. For 2009-2010, the assessed valuation is now $1.8 billion, which is a difference of the $1.2 billion that works into the $12 million tax increment to the Redevelopment Agency. Ms. Tapia commented that $12.7 million seems like quite a substantial number, but it is a decrease from 2008- 2009. She stated that along with the revenue, there are obligations that the project area needs to meet. One of the major areas is the Housing Set -Aside requirement, which 20% of all tax increment dollars has to be set aside for improving or increasing affordable housing for low to moderate income families. Chairman Benford asked if the Housing Set -Aside is being used. Ms. Tapia replied yes. She noted that there are certain requirements that have to be met in regards to timing. Ms. Tapia continued with a list of additional requirements. She pointed out that the Supplemental Educational Revenue Augmentation Fund (SERAF) would be taking about $30 million from the Redevelopment Agency, which for Project Area No. 4 works out to approximately $4.5 million. She also mentioned that the Redevelopment Plan has to expressly identify a provision protecting financing. The Agency is required to include how projects would be funded over the period of the plan so the Agency is required to incur debt in order to facilitate those projects. Ms. Tapia commented that there are several types of debt such as: tax allocation bonds, contracts, obligations under Health & Safety Code 33445, and operation/administration of the Agency. She briefly explained tax allocation bonds. She stated that currently the Agency has $41.5 million in bonds for Project Area No. 4, and approximately $21 million is set aside GArda\Monica Loredo\Word\PA No. 4\Minutes\Minutes 10-19-09.docx 5 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES OCTOBER 19, 2009 for capital improvement projects. The annual debt service is approximately $2.5 million each year. Ms. Tapia noted that for 2009-2010, there was a beginning balance of $6.7 million. The reason that there is a beginning balance is because the Agency actively manages the cash flow for each of the project areas, and tries to ensure that funds are used to the best means. It was fortunate that there was a carryover because the Agency would not have had the ability to make the SERAF payment this year. The problem with not making a SERAF payment, the Agency would then be subjected to sanctions and possibly only receive tax increments equivalent to the debt that it has, and no projects would be able to get done. She mentioned that last year the California Redevelopment Association (CRA) filed a lawsuit against the State and was successful. The Agency did not have to pay any ERAF payment in 2008-2009. CRA is planning to do the same for 2009-2010; however, wording was changed by the State in order to mitigate the Agency's ability to do that. It remains to be seen whether or not CRA would be successful this year. Chairman Benford clarified that the Agency did not have to give funds back for SERAF. Ms Tapia responded that only for 2008-2009. Mr. McCarthy interjected that for 2009-2010, the Agency still has to budget and plan for the SERAF payment. At this time, the Agency is holding the funds in the event that the Agency may have to pay it. Chairman Benford inquired what services would be taken away due to the SERAF payment. Mr. McCarthy responded that this year, the Agency was able to maintain very sizable funds and bonds balances that the Agency was able to shift capital costs to bond funds. Chairman Benford asked if the Agency has surpluses that they could feed upon. Mr. McCarthy replied that it is coming from the $6.7 million carry over balance from previous years. He stated that in his opinion, the Agency cannot sustain another one like this. Do they shut down the Agency? He does not know. He hopes that the Agency prevails, and the fall back is a one-time only type of event. Ms. Tapia mentioned that after all the expenditures for 2009-2010 there is approximately $2.3 million in revenues. This would be great for flexibility, but the concern is if the lawsuit fails, the revenue would be accessible to the State in addition to any future revenues that they determine they would need. G:\rda\Monica Loredo\Word\PA No. 4\Minutes\Minutes 10-19-09.docx NJ CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES OCTOBER 19, 2009 Vice Chair Grubb inquired if bond funds could be helpful to bring back Palm Desert Country Club golf course. Mr. McCarthy responded that bonds were issued predicated on the uses intended. The Agency has to identify how those funds are going to be used. He explained that the problem with Palm Desert Country Club golf course is not a capital problem as much as it is an operating problem. He stated that you cannot use Redevelopment funds for operating or maintenance type of purposes. Councilmember Kelly interjected that there are two strict laws; you cannot use it for operations or for private parties. Mr. McCarthy added, as an example, that Redevelopment funds cannot be used for operations at Desert Willow. He explained that the only money that can be used is general fund money, which from staff's perspective would never be advisable. The Committee thanked Ms. Tapia for her presentation. C. UPDATE ON MISCELLANEOUS PROJECTS None X. REPORTS AND REMARKS A. COMMITTEE CHAIRPERSON/MEMBERS Chairman Benford commented that the Palm Desert Country Club Association, which he is not a member, did an excellent job of sending out notices to everyone on Palm Desert Country Club (PDCC) for their recent meeting. He asked the Committee how many attended the meeting. Ms. Phyllis Harkins, PDCC Association Manager, stated that she counted approximately 235 persons based on the number of chairs. Chairman Benford stated that it was a good meeting. He commented that after the meeting, his neighbor contacted the bank that is making the loan for the PDCC golf course, and was shocked to learn it was basically the Cho family who is behind the bank. He stated that if the bank is reluctant to give a loan to their people, does that say much about the management of PDCC golf course? Mr. McCarthy interjected that many people are not very happy with the outcome, but they have to be cautious and mindful of them receiving their loan and working their way out of this is the best outcome for everyone. GArda\Monica Loredo\Word\PA No. MMinutesUnutes 10-19-09.docx 7 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES OCTOBER 19, 2009 He stated that one of the things they have been sensitized to is trying not to engage in too much negative commentary, if they could avoid it. Chairman Benford commented that it is going to be a tough situation. He feels that come next May it will be the same situation all over again. B. AGENCY BOARD LIAISONS C. PLANNING COMMISSION LIAISON D. STAFF XI. ADJOURNMENT Upon motion by Member Campbell, seconded by Member Daugherty, the meeting was adjourned at 3:42 p.m. Monica Loredo, Recording Secretary G:\rda\Monica Loredo\Word\PA No. 4\Minutes\Minutes 10-19-09.docx