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HomeMy WebLinkAboutCitizens' Advsry Cmte PA4 - 05/17/10PALM DESERT REDEVELOPMENT AGENCY CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES MAY 17, 2010 I. CALL TO ORDER Chairman Benford convened the eetin_g at 3:00 p.m. 7c a *, II. ROLL CALLiltq , (kt ��� . BY RD A Present. ON - K- .�1 Fred Benford, Chairman VERIFIED BY ll) I T Roberta Grubb, Vice Chair Terry Archer, Member Original on file with City C le, WL' Officc- Russell Campbell, Member Ron Crisp, Member Jane Daugherty, Member Robert Duncan, Member at 3:05 p.m. Phyllis Harkins, Member Kelly Litecky, Member Douglas Luhring, Member Staff Present: Martin Alvarez, Redevelopment Manager Lauri Aylaian, Director of Community Development Mark Greenwood, Director of Public Works Justin McCarthy, ACM for Redevelopment Hart Ponder, Code Compliance Manager Veronica Tapia, Redevelopment Accountant Catherine Walker, Senior Management Analyst John Wohlmuth, City Manager Guests: Richard Kelly, Councilmember Robert Spiegel, Councilmember Mari Schmidt, Planning Commissioner Lt. Andrew Shouse, Palm Desert Police K. Kaufmann, The Desert Sun CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES MAY 17, 2010 III. ORAL COMMUNICATIONS Mrs. Carol Benford, 42-880 Tennessee Avenue, communicated that Palm Desert Country Club is a private concern, and they are under no obligation to report to the Project Area No. 4 Committee or the City. At the same time the liability of the club is a major concern to thousands of residents. Mrs. Benford asked if a representative of the club would attend one of the Project Area No. 4 Committee meetings if they were assured it is only for them to provide a status update, and that no interrogation would take place. She asked if Mr. McCarthy or another representative from the City could schedule a meeting at their facility for the purpose of discussion or obtain an update. Councilman Spiegel inquired if there is a continuing problem with Palm Desert Country Club Golf course. Mr. Ash, 77-130 New York, interjected that they owe a lot of money and are not paying their bills. Mr. McCarthy stated that the ownership of the club made it pretty explicit that they were not going to attend anymore meetings, which they communicated to him. He mentioned that he made an inquiry as to the status, and that there has been no change that he could communicate to the Committee. Staff is making an inquiry through the City's legal counsel and their bankruptcy counsel to see if they could receive some definitive status of what their intentions are. That is where it stands at the moment. Chairman Benford asked Mr. Ash if he had any other facts. He responded that what he has heard is hearsay. IV. CONSENT CALENDAR A. APPROVAL OF THE MINUTES OF THE CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MEETING OF APRIL 19, 2010. Minutes of the meeting from April 19, 2010, were unanimously approved as submitted and carried by a 9-0 vote with Member Duncan ABSENT. V. UNFINISHED BUSINESS None GArda\Monica Loredo\Word\PA No. 4\Minutes\2010\M1nutes 5-17-10.docx 2 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES MAY 17, 2010 VI. NEW BUSINESS A. PALM DESERT COUNTRY CLUB UNDERGROUNDING (Presentation by Willdan Financial Services and Catherine Walker, Senior Management Analyst) Ms. Walker stated that as part of the undergrounding formation district, an engineer's report has to be completed. An engineer's report outlines potentially what each individual parcel assessment will be, and there is an overall evaluation in the process. She introduced Mr. Habib Isaac and Mr. Ken Taylor with Willdan Financial Services. Mr. Isaac informed that Committee that his background is in applied mathematics and has been working with public finance for the past seven and a half years. He introduced Mr. Taylor. He is one of their civil engineers with Willdan. He explained that they are going to present a very preliminary assessment of the utility undergrounding for Palm Desert Country Club. Also give some insight on the provisions that must be abided by and be in compliance with, as well as some of the estimates of the cost for the undergrounding and how it is going to be calculated. He continued with the presentation. Mr. Isaac stated that assessment districts were formed through the 1913 Act Streets and Highways Code. Proposition 218 was adopted in 1996 to the state constitution, which required additional provisions for approving and forming an assessment district. With Proposition 218, every single property owner would receive a notice and a ballot whether they support or oppose the assessment. Willdan, the assessment engineer was hired to determine the method of assessment based on Proposition 218, in particular, the special benefits to the properties within the proposed boundaries of improvements received. Mr. Isaac went through the following special benefits: Improved Safety, improved reliability, and improved neighborhood aesthetics. He explained Equivalent Benefit Units (EBU). A single-family residence is considered one benefit unit. He also provided EBU information for other types of properties such as multi -family (R20, commercial apartments, condominiums, non-residential, and vacant property). In regards to costs, the public improvement budget is the following: Hard Costs (constructions costs along public right-of-ways) $15,391,752 -Cost of Issuance (bond expenses) $ 208,200 -Financing Costs (underwriters, reserve funds, interest) $ 672,988 City Contribution-$12.000.000 Total (cost for public improvement) $ 4,272,940 GArda\Monica Loredo\Word\PA No. 4\Minutes\2010\Minutes 5-17-10.docx 3 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES MAY 17, 2010 Mr. McCarthy requested that Mr. Habib elaborate on the disposition of reserve funds at the end of the project. Mr. Habib explained that once you are at the end of the bond term, the reserve fund goes back to the property owners as a credit. The most streamlined way to do that is using the reserve fund to pay the last year or the last two years of the assessment payments. Mr. Habib stated that the City contribution could only be made for public improvement costs. He communicated the public improvement assessment, which is the following: -Public Improvement Budget $4,272,940.00 -Budget/Total EBUs = Assessment Rate per EBU $4,272,940 / 1,393.78 = $ 3,065.72 Single -Family Residence = $ 3,065.72 Chairman Benford inquired if an area is undergrounded, would they be assessed the same amount. Mr. Habib responded yes, but they would have a different on -site cost since the improvements are already undergrounded. The savings would be in the on -site costs, which would be zero. Mr. Habib summarized the private on -site assessments. The on -site improvement cost is the following: -Category 1 ($2,500): Not undergrounded or only partially undergrounded. -Category 2 ($0.00): Already undergrounded to the right-of-way. -Meter Upgrade ($1,500): Not included within categories above. Member Crisp asked if it is a meter or panel upgrade. Mr. Habib replied that it is a panel upgrade. Mr. Ash inquired who determines if you need a panel upgrade. Mr. Habib answered that field work would be needed to find out which panels need to be upgraded. Mr. Ash clarified that most people would need an upgrade. Mr. Habib said that was correct. It was noted that a panel upgrade is required by Southern California Edison not the City. GArda\Monica Loredo\Word\PA No. 4\Minutes\2010\Minutes 5-17-10.docx 4 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES MAY 17, 2010 Mr. Habib explained that the engineer's report will have the assessment broken down for each property owner so they know each component of their assessment. Chairman Benford inquired if someone were to ask him what the cost is going to be, what should he tell them. Mr. McCarthy suggested not saying anything until they come out with the actual assessment. Member Archer asked if it would be possible for property owners to do their own on -site work or have a license contractor do the work. Mr. Habib replied yes. Mr. Habib provided the following information on the on -site improvement budget: -Private On -site Cost -Financing Cost (8.5%) Total Budget $4,910,100 $ 917,911 $5,828,011 The on -site improvement with financing. is the following: -Category 1 (no meter/panel) $ 3,671 -Category 1 (w/meter/panel upgrade) $ 5,874 -Category 2 (meter only) $ 2,203 Mr. Ash suggested specifying the cost without the financing in case they want to pay cash. Mr. Habib responded that a notice will be sent to the property owners with the pre -payment amount that does not include financing. It is part of the proceedings. It was asked for how many years. Mr. Habib responded that it is currently proposed for a 30-year bond term. Following was the total budget: Public Improvements Private Improvements Cost of Issuance Financing Costs (8.5%) Subtotal -City Contribution Total $15,391, 752 $ 4,910,100 $ 208,200 $ 1,590,899 $22,100,951 $12,000,000 $10,100,951 GArda\Monica Loredo\Word\PA No. 4Mnutes\2010\Minutes 5-17-10.docx 5 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES MAY 17, 2010 Following is an example of the public assessment and private assessment for a single-family residence: Category 1 (if panel is needed) $8,939 -Category 1 (do not need panel upgrade) $6,737 -Category 2 (meter/panel only) $5,268 Mr. Ash asked how many units. Mr. Habib responded roughly 1,200 parcels in the undergrounding district. He noted that apartments are considered one parcel, and condominiums have individual parcel numbers. Members Archer and Crisp inquired what Category 2 (meter/panel only) for $5,268 means. Mr. Habib responded that it is for the $1,500 panel, plus the public improvements. Member Crisp commented that people are not going to know the breakdown. Mr. Habib indicated that the information could be provided in a notice. Member Harkins inquired if it is only going to be 1,200 homes in the assessment district. Mr. Habib replied yes. Vice Chair Grubb asked how the assessment would appear on the tax bill. Mr. Habib responded it would be identified as Palm Desert Country Club Assessment District. Vice Chair Grubb inquired if you can pay it off in two or three years. Mr. Habib answered that you would always have the option to pre -pay, but there is typically a penalty after bonds have been issued. He noted that you would still receive credit from the reserve fund. Member Archer stated that the poles and power lines are owned by the utilities. He asked if the utilities are sharing in any of the costs to underground. Mr. Habib replied no. It was mentioned that the utility company does not care if you underground or not. Following is the Annual Assessment (30 yrs @ 8.5%) Single -Family Residence: -Category 1 (no meter/panel) -Category 1 (w/meter/panel) $882 $677 GArda\Monica Loredo\Word\PA No. 4\Minutes\2010\Minutes 5-17-10.docx 6 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES MAY 17, 2010 -Category 2 (w/meter/panel) $540 Member Harkins inquired if the $882 reflects the 20 percent contingency. Mr. Habib answered yes. Member Harkins asked if it could potentially be lower. Mr. Habib answered yes. He noted that when they do estimates, they lean on the high end. If you come up short, you would have to go back to the property owners. Chairman Benford inquired about the date for the assessment district. Mr. McCarthy explained that after reviewing the agenda, staff realized that the motion or action that was taken was not actionable at that time. Therefore, it was added as a recommended motion at this meeting to refer it to the City Council, if recommended by the Committee. The recommendation would be to direct staff submit the information to the community and solicit a petition whereby if they got to the 70 percent that they would then proceed to balloting. He noted that balloting would most likely occur in January. Mr. Habib briefly explained the balloting process. Mr. Ash voiced people need to know more information to sell the idea. Councilmember Kelly interjected that the City cannot do that. Mr. Ash responded that the City can't, but that the homeowners can. Mr. Habib stated that as the assessment engineer and based on provisions of Proposition 318, it is illegal to do an analysis of how your property value increases to show the benefit or why the assessment is what it is. Ms. Schmidt inquired about the percentage of disapproval. Mr. Habib responded that it is 50 percent of when you tabulate the ballots based on the assessment amount. If 50 percent of ballots returned vote no, then there is a majority protest. Member Archer asked about the petition to create the assessment district, does it have to be signed by the residents, and is it limited to the 1,200 residents. Mr. McCarthy replied that it only could be the potential assessees. Member Grubb asked if Palm Desert Country Club is in favor of the undergrounding. Ms. Walker responded that as they mentioned before they would need to do some outreach, but the City is limited to what they can and cannot do. It would have to come from the residents in the assessment district. G:\rda\Monica Loredo\Word\PA No. 4\Minutes\2010\Minutes 5-17-10.docx 7 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES MAY 17, 2010 Mr. McCarthy interjected that after having a town meeting and knowing that they would not be able to get everyone to the meeting, they could get a sense of what the receptivity is from the participants who are there. The timing of balloting was briefly discussed. Chairman Benford asked how the City would get word out to 1,200 people. Mr. McCarthy answered that they would either do a mailing or ask the association to assist. Member Harkins commented that the association Board would have to direct her to seek legal counsel to find out what legal position the association can take in this. According to Mr. Habib, there are 1,200 homes, and there are only 1,051 homes in the association. She noted that the HOA would have to be careful on how it spends money on non - homeowner issues. Mr. McCarthy stated that if the Committee would like staff to proceed, the Committee would then have a motion that covers it. Staff would then take that recommendation to the City Council and see if the Council concurs. Member Crisp motioned to recommend to the City Council for the balloting to be differed until a petition representing 70 percent in favor is tender to the City by properties in the undergrounding district. Member Duncan seconded the motion and carried by a 9-1 vote with Member Archer voting NO. VII. CONTINUED BUSINESS None Vlll. OLD BUSINESS None IX. INFORMATIONAL ITEMS None X. REPORTS AND REMARKS A. COMMITTEE CHAIRPERSON/MEMBERS Member Duncan communicated that he has been ill for some time, and it is not getting better very rapidly. As a result, he feels he not making a G:\rda\Monica Loredo\Word\PA No. 4\Minutes\2010\Minutes 5-17-10.docx 8 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO.4 MINUTES MAY 17, 2010 commitment and contribution to the Committee that he promised to do when he first came on. Consequently, he is delivering a letter of resignation. He has appreciated being part of the Committee and knowing all of the members, and thanked the group for the opportunity. The Committee thanked Member Duncan. Member Crisp mentioned that he was walking on the sidewalk, and noticed that there was no sidewalk by California Villas. He inquired why there was no sidewalk. Mr. McCarthy responded that he would check on it. Member Crisp also noted that it seems that the Palm Desert Golf Course is going to close again. He hopes that staff would have some idea on how to deal with it. B. AGENCY BOARD LIAISONS C. PLANNING COMMISSION LIAISON D. STAFF XI. ADJOURNMENT Upon a unanimous motion by the Project Area No. 4 Committee, the meeting was adjourned at 4:04 p.m. Monica Loredo, Recording Secretary GArda\Monica Loredo\Word\PA No. 4\Minutes\2010\Minutes 5-17-10.docx 9