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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 - 1 - CITY COUNCIL Page Two RESOLUTION - Cont'd. 5/17/73 • • 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. 2 - R ' 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