05-17-1973 - Regular Meeting - MinutesMINUTES OF THE ADJOURNED REGULAR MEETING OF THE CITY COUNCIL
CITY OF WEST COVINA, CALIFORNIA
MAY 17, 1973.
The adjourned regular meeting of the City Council called to order at
4:30 P.M., in the West Covina Council Chambers by Mayor James Lloyd.
Pledge of Allegiance led by Councilman Ken Chappell.
• ROLL CALL
Present:
Mayor Lloyd; Councilmen: Young, Nichols,
Shearer, Chappell
Others Present: George Aiassa, City Manager
George Wakefield, City.Attorney
Lela Preston,. City Clerk
George Zimmerman, Public Services Director
Leonard Eliot, Controller
PROCLAMATIONS
DISABLED AMERICAN Mayor Lloyd: I have here a set of pro -
VETERANS' CERTIFICATES clamations which are to be
OF HONOR TO POW.'s delivered this evening. I
would like you to just glance over them and
if there are no objections we will so proclaim.
(No objections, so proclaimed.)
The next item I have here is a letter to
Dr. Snyder, who happens to be in the hospital with a broken arm and I
• dropped him a quick note. If approved I will send it on. (Council
approved)
EXECUTION OF LEASE Mayor Lloyd: We are actually here to con -
WITH PARKING AUTHORITY sider a Resolution,
FOR PUBLIC PARKING Mr. Wakefield?
STRUCTURE
RESOLUTION The City Attorney presented:
ADOPTED "A RESOLUTION OF THE CITY COUNCIL OF THE CITY
l OF WEST COVINA RELATING TO THE CONSTRUCTION OF
THE PUBLIC PARKING GARAGE WHICH IS AN INTEGRAL
PART OF PHASE I OF THE WEST COVINA CENTRAL
BUSINESS DISTRICT REDEVELOPMENT PROJECT."
Mr. Wakefield: Mr. Mayor and members of Council, just a word
of explanation. As you all know we have
reached the point where the developers and the
participants in the Redevelopment Project Phase I are about to have
their final meeting with respect to the REA, as it is referred to, which
is generally the Construction Agreement providing for the schedule of
construction and the ultimate maintenance of the facilities that consti-
tute the Phase I Redevelopment Project. In connection with the total
development there is one link in the chain which is unfinanced as of the
moment and that is the construction of the parking garage which is an
obligation of the Redevelopment Agency to fulfill the.requirements of the
• redevelopment plan..
That parking structure will contain approxi-
mately 2100 automobile parking spaces and will be built around the mall
of -the shopping center on the south side. The present plan for the
financing of the parking structure is that the parking authority which
was created at the same time the Redevelopment Agency was activated would
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CITY COUNCIL Page Two
RESOLUTION - Cont'd. 5/17/73
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•
enter into a lease with the City, the lease being adequate to permit
the Parking Authority to issue its bonds in the approximate amount of
seven million dollars to finance the construction of the parking
structure. The City in turn would have an agreement with the Re-
development Agency pursuant to which the Agency would pay to the City
the excess of the tax increments which may accrue to it over and above
those required to finance the Agency's bond indebtedness. It is
estimated that those tax revenues will be approximately sufficient to
meet the City's obligations under the lease between the City and the
Parking Authority. Now any deficit of course will become the obliga-
tion of the City and the original plan contemplated that deficit, if
any, would be financed from the increased sales tax revenue which accru
to the City by virtue of the construction of the total project.
So at this point in time the City Council is
being asked to indicate its intention to.proceed along the lines as
indicated and if ultimately necessary to take any other steps that
may be required to see that the Agency's obligations under the REA
are met and that the parking garage is constructed. The purpose of
this resolution is to really provide that assurance which is necessary
to induce the developer and the participates in the project to go forwa
now and execute the REA.
Motion by Councilman Young to waive further reading of the body of said
Resolution. Seconded by Councilman Shearer and carried.
Motion by Councilman Young to adopt said resolution. Seconded by
Councilman Shearer.
Councilman Shearer: A question. Mr. Wakefield, does this resoluti
if passed in anyway add any additional obligat
to the taxpayers of the City of West Covina, o
the City Council, or the Agency, that we don't already have?
Mr. Wakefield: No sir, it does not increase the obligation
which we have. It simply, as the Penney peopl
describe it, provides a missing link in the
chain for the financing of the ultimate project - but that missing link
is simply -the assurance that the money will be obtained either through
a bond issue or other sources so the parking structure can be built and
we already have the obligation through the Redevelopment Agency to buil,
a parking structure.
Councilman Shearer: So all we are really saying in the resolution
is that we are honest people and will keep our
word?
Mr. Wakefield: That is the sum and substance of it.
Councilman Chappell: How many years will we be paying to pay off
this parking structure?
Mr. Eliot: The proposed term would be 25 years, of course
depending on the market conditions at the time
25 years
we went out to bond but it is proposed to be
.
Councilman Chappell: I see a figure of $605,000 a year and another
figure of seven million and 25 years times
$605,000 is pretty high interest rate unless
I am misreading something.
Mr. Eliot: No, you have not misread it. Over a 25 year
loan it doesn't quite come out to doubling the
money as it does on a house but even at an
interest rate of 6% it could add five million dollars to the total cost
of the structure.
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CITY COUNCIL Page Three
RESOLUTION - Cont'd. 5/17/73
Mr. Aiassa: You are paying your highest amount in the first
few years and then the payment goes down as the
interest cost goes down.
Mr. Eliot: I would like to say the $605,000 is a maximum
figure that is based on 7% interest and our
market people tell us the interest rate will,
• probably be.closer to 6% and the payments will come out closer to
$550,000 rather than the $605,000; but you still pay a considerable
amount of interest on a 25 year loan on seven million dollars.
Motion carried on roll call vote as follows:
AYES: Young, Nichols, Shearer, Chappell, Lloyd
NOES: None
ABSENT: None
Mayor Lloyd: Is there any other business?
Councilman Shearer: Just a question on the proclamations.
I think it is fine but what is the signifi-
cance of the three gentlemen? Are they local
residents or members of this Post?
Mayor Lloyd: Members of the Post. This Post has been very
cooperative with the City, including the three
flags they have donated. They came to the
City and asked that it be done and in a cooperative spirit I had the Cil
Manager's office draw up the resolutions.
ADJOURNMENT
•
ATTEST:
CITY CLERK
•
Motion by Councilman Shearer, seconded by
Councilman Chappell and carried, to adjourn
meeting.
APPROVED:
MAYOR
MW