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HomeMy WebLinkAboutCC Minutes 1991-02-11SRRA' ZCC MINUTES (Special Joint Meet ) 2/11/91 Page 1 ,IN THE COUNCIL CHAMBERS OF THE CITY OF SAN RAFAEL, MONDAY, FEBRUARY 11, 1991 AT 6:00 PM Special Joint Meeting: San Rafael Redevelopment Agency/ San Rafael City Council Present: Lawrence E. Mulryan, Chairman/Mayor Albert J. Boro, Member/Councilmember Dorothy L. Breiner, Member/Councilmember Michael A. Shippey, Member/Councilmember Joan Thayer, Member/Councilmember Absent: None Also Present: Pamela J. Nicolai, Executive Director/City Manager Lee Rosenthal, Agency Attorney Jeanne M. Leoncini, Agency Secretary/City Clerk 1. APPROVAL OF FISCAL AGREEMENT WITH CITY OF SAN RAFAEL AND COUNTY OF MARIN RE TAX INCREMENT FINANCING FOR THE SAN RAFAEL REDEVELOPMENT AGENCY/APPROVAL OF FISCAL AGREEMENT WITH SAN RAFAEL REDEVELOPMENT AGENCY AND THE COUNTY OF MARIN RE TAX_ INCREMENT FINANCING FOR THE SAN RAFAEL REDEVELOPMENT AGENCY (ED/CM) - File R-5/6/7 x (SRCC) 4-16-7 SAN RAFAEL REDEVELOPMENT AGENCY A. Resolution Authorizing Execution of Fiscal Agreement. SAN RAFAEL CITY COUNCIL a. Resolution Authorizing Execution of Fiscal Agreement. Chairman/Mayor Mulryan called the meeting to order and asked for the staff report. Executive Director/City Manager Nicolai stated that these agreements documented what was discussed at the last Agency/Council meeting renewing the fiscal agreement or coming up with a new fiscal agreement with the County of Marin for what is termed "Redevelopment III". Included with the report was a list of the projects that staff is planning on funding through the Agency over the next 20+ years and the terms and conditions are exactly as discussed last week. She stated this was before them for their approval tonight. Chairman/Mayor Mulryan stated that this was basically an extension of the previous arrangements with the other agencies. The difference is that this is a long range plan, ranging 20 years or more in the future. Member/Councilmember Shippey asked if the City/County Library Project did not go ahead, would this agreement be null and void, and at what point would the process determine that. Ms. Nicolai indicated affirmatvely, and stated that the City will negotiate prior to knowing whether the City/County Library gets its grant application so that if it does not, they will be ready with a different arrangement and another agreement. The configuration of Redevelopment III will be slightly different if the Library project is not a component. She also stated that it would not be as favorable to the City if the Library project is not a component. Chairman/Mayor Mulryan stated to Member/Councilmember Shippey that one alternative which they might need to consider if the Library grant is not given to the City, is creating an entirely new Redevelopment Agency. He stated that the City does have increment capacity to do that and asked Agency Attorney Rosenthal to comment on this. Mr. Rosenthal stated that a new agreement could be forged or the Agency could look at other possible areas for inclusion in Redevelopment. Member/Councilmember Shippey stated that he wanted to point out that the City should be prepared for all alternatives. Member/Councilmember Thayer asked if the City has to re -negotiate, could a new agreement work to its advantage. Ms. Nicolai stated that any agreement would work to their advantage in that projects that currently are not fundable, will be fundable with the use of tax increment. This proposal includes the total drawdown of the available increment under the original plan of 1972. She stated that she thinks because the Library project happens to be a project of interest to the County, that this agreement is more favorable than one without that as a component, although it still will be favorable to San Rafael because the City needs to get some projects done. Use of the tax increment would still be possible, but it might not be to the same extent as in this agreement. Member/Councilmember Thayer stated that she was interested in an agreement with the County that was as fair as the previous agreement, but her fear is that there will be a whittling down process where the City will not get as much as it thought it would get if it has to start over. Ms. Nicolai stated that this package was more favorable than any other previous agreements. She stated that she expects that if the Library project is not a component, a new agreement SRRA/SRCC MINUTES (Special Joint Meeting) 2/11/91 Page 1 SRRA ;CC MINUTES (Special Joint Meet J) 2/11/91 Page 2 with the County, if it is renegotiated, would be similar to the older agreements. Chairman/Mayor Mulryan stated that what Ms. Nicolai is looking at is the total increment capacity as compared to the previous agreements which have had set limits well below the increment level. He stated that they would have the ability, after public hearing, to go to bonding when necessary up to certain limits. Member/Councilmember Breiner asked staff if the City does not get the Library grant and if it needs to renegotiate, and proceeds with the project in terms of protection for the Canal area, will the City be able to proceed with these obligations. She was concerned about what would be done about the Storm Drain Mapping System. Ms. Nicolai stated that this does not directly relate to the core project, the Library project. She stated they would have to come up with an alternative mechanism for financing other than Redevelopment. Ms. Nicolai stated that if the Library project does not go through and the City has to renegotiate the project Ms. Breiner was referring to would be one of the projects at the top of the list, and that whatever they would have to draw down, it would be enough to fund our local share. The other option is to create an assessment district in the area that is benefited by that particular improvement, but her concern and argument with the County is that that particular area happens to be the affordable housing area as well. That particular neighborhood (the Canal area) would have a hard time coming up with the assessment. Ms. Breiner stated that the timing element was her main concern on this. Member/Councilmember Shippey stated that the one thing they would be giving up if they lose the Library project is time. He asked in general what that would cost them for having the contingent agreement. Ms. Nicolai stated that that was hard for her to answer; however, if they do not get the increment this year, this would have an impact. She stated they were hoping to sell bonds early on in the year, to fund the Andersen Drive project, as an example. She noted the project needs to be underway by June, 1992 in order to retain the SB 140 money, so it will be tight timewise. Agency Attorney Rosenthal stated that they will not lose any money, assuming they enter into an agreement with the County, because there is a cap already in the Redevelopment plan on the total amount of money they can receive. The end result of a delay would mean they would just receive the same amount of money later. Chairman/Mayor Mulryan asked if there was anyone wishing to address them on this item. Member/Councilmember Boro stated that he wanted to compliment the City Manager and the Redevelopment Agency Director for the excellent job done in negotiating with the County staff in the past several months. He stated he thinks it is a good agreement and hopes the Library project will be included. SAN RAFAEL REDEVELOPMENT AGENCY Member Boro moved and Member Shippey seconded, to adopt the resolution approving the Fiscal Agreement between the County of Marin and the San Rafael Redevelopment Agency. RESOLUTION NO. 91-3 - RESOLUTION OF THE SAN RAFAEL REDEVELOPMENT AGENCY APPROVING AN AGREEMENT WITH THE COUNTY OF MARIN AND THE CITY OF SAN RAFAEL TO PROVIDE FOR THE AGENCY TO RECEIVE ADDITIONAL TAX INCREMENT REVENUE AND FOR THE AGENCY TO MAKE CERTAIN PAYMENTS TO THE COUNTY (REDEVELOPMENT III) AYES: MEMBERS: Boro, Breiner, Shippey, Thayer & Chairman Mulryan NOES: MEMBERS: None ABSENT: MEMBERS: None SAN RAFAEL CITY COUNCIL Councilmember Breiner moved and Councilmember Thayer seconded, to adopt the resolution approving the Fiscal Agreement between the San Rafael Redevelopment Agency and the County of Marin. RESOLUTION NO. 8340 - RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING AN AGREEMENT WITH THE COUNTY OF MARIN AND THE SAN RAFAEL REDEVELOPMENT AGENCY TO PROVIDE FOR THE AGENCY TO RECEIVE ADDITIONAL TAX INCREMENT REVENUE AND FOR THE AGENCY TO MAKE CERTAIN PAYMENTS TO THE COUNTY (REDEVELOPMENT III) AYES: COUNCILMEMBERS: Boob, Breiner, Shippey, Thayer & Mayor Mulryan NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None SRRA/SRCC MINUTES (Special Joint Meeting) 2/11/91 Page 2 SRRA' RCC MINUTES (Special Joint Meet g) 2/11/91 Page 3 2. DISCUSSION OF MUNICIPAL SERVICES TAX (CM) - File 9-12 Mayor Mulryan asked staff for comments. City Manager Nicolai stated that Council requested staff to put together an Ordinance to be brought before the Council on February 19th placing a ballot measure on the San Rafael ballot establishing a municipal services tax in the approximate amount of $75 per dwelling unit and 6.6� per square foot for commercial. She stated that she was bringing it back to the Council tonight because there will not be a full Council on the 19th and if they are going to proceed ahead with this, it is necessary that whatever action is taken has the full support of the Council. She stated they were presenting a draft of the Ordinance prepared by the City Attorney's Office over a fairly short period of time for the Council's reaction and feelings about either proceeding ahead and/or the specifics in the Ordinance so that if they were to proceed for the June ballot and come back to the next Council meeting on the 19th, staff would have plenty of time to incorporate any changes or corrections before Council has to take final action. Mayor Mulryan asked if there were any questions about the wording of the agreement. There was no response. He then stated that at the last meeting, Council had discussed possible dates on the ballot and efficiency audit. He stated they agreed to fund an audit, at least partially, of the departments of the City so there is no question about how revenues are being spent in the operating expenses of City Hall. He stated the question was whether to extend this to Police and Fire Departments, which have had some studies done recently. Councilmember Thayer clarified her negative vote during last week's meeting on the audit because of the Police and Fire Departments being excluded. She stated she voted negatively because she felt it was a condition precedent to have any audit done for the entire City, noting it is very important for the taxpayers to know how efficiently our funds have been used for each department. The studies which were going to be a substitute in part for this audit for the Police and Fire Departments were 9 and 13 years old and she did not feel that the taxpayers would be satisfied with an exemption of these two departments. She also stated that it was important to know about all the departments so appropriate cuts could be made before going for a ballot measure. She stated that even though the vote was broken down into two parts, the first on the tax itself, and secondly on the scope of the audit, she felt that the scope of the audit was a condition precedent before she could vote for the tax. She also stated that she felt it was too restrictive in that the funds might go into a capital improvement fund to the exclusion of any operating expenses which might put the City in a very tight situation later. She stated she was willing to concede on that part of her objection to the majority, however she was adamant that the audit cover all the departments. Mayor Mulyran stated that he would be willing to concede and staff could design an audit that would not overlap an previous work. He noted he was concerned that they not spend money on an audit that was not necessary for some departments. He then asked staff to design an audit that would cover all the bases. Ms. Nicolai stated affirmatively that that was no problem. She stated she did not intend to exclude those departments, but wanted the Council to consider those previous studies as still valid. Ms. Nicolai stated she intends to draft an RFP (Request for Proposals) that basically defines the scope of work which can be sent to various firms that do these kinds of audits to get proposals for this audit. Councilmember Boro stated his concern of time involved, noting he felt uncomfortable having the audit going on at the same time as the ballot measure, and stated that the audit is important, and the measure should not go to the ballot until it is done. He indicated the study should be completed, then reviewed with the Revenue Options Committee, as well as deciding if it should be a Municipal Services Tax or Utility Users Tax. Councilmember Boro also stated that he does not feel the City has formed a committee of citizens who are going to lead the effort, and to put this on the ballot next week and hopefully organize something between now and April just would not work, noting there is a need for organization in this matter. Mayor Mulryan stated that he agreed with this, noting that staff should go forward with the full audit and then get a time line to decide when to get the information to the community, and later on, on a ballot measure. Councilmember Shippey stated that he felt they were rushing into this and the fairness of the tax, noting they have moved precipitously to consider the Municipal Services Tax. He stated he endorsed Councilmember Boro's comment that they consider both types of taxes. He also stated that he would prefer avoiding portraying the two types of SRRA/SRCC MINUTES (Special Joint Meeting) 2/11/91 Page 3 SRRA/" CC MINUTES (Special Joint Meet ) 2/11/91 Page 4 taxes as a business versus residential tax. He asked Finance Director Coleman to address this issue, and also suggested that they form a committee to be prepared to move forward. Councilmember Breiner stated that until you know when it will be put on the ballot, it is hard to get a chairman and put the committee together. Mayor Mulryan then opened up the discussion to the public. Harry Winters, of the West End Neighborhood Association, stated that he agrees with the sequential treatment of the study, as agreed to by the Council. He noted if there will be an audit, which many on the committee felt would be necessary, it should be done before going to a ballot measure. He also stated that in regard to the parcel tax, there is no built in mechanism to recognize the lower income people who are not in a position to contribute additional taxes to the City, as there is in the Utility Tax. He requested that the Council come up with an equivalent method of disbursing the Parcel Tax. He then discussed the residential versus commercial tax. Mayor Mulryan stated that these were things that needed to be handed back to the committee. Traute Capdarest, of a Lincoln Avenue business, stated she does not object to the residential tax, noting that she felt the tax rate per square footage is unfair. She stated a business taking up a small space does not necessarily make less money than a retail business taking up a larger space, but they will be paying less taxes than the larger business space. She suggested assessing a fixed annual fee for each business or some reasonable formula based on business license fees, explaining that businesses paid taxes on the value of the office equipment or furniture. She also expressed concern about the present recession. Dirk Brinkerhoff, owner of H & L Commercial Real Estate, talked about businesses moving out of the area after learning of the new business license tax. He stated he agrees that an audit is necessary for the City, and after that is done, there is a real need for public relations work on this issue, and suggested an audit of needs and a third party assessment of where the City will be if these needs are not met. He felt the public should know where the tax money will be going and what will be done with it, and suggested putting into the Ordinance the destination of the money. Dwayne Sherman, General Manager of the Holiday Inn, stated that being new to the area, he was interested in this issue. He asked how current the numbers were on which the $771,000 is based. He stated concern about businesses going out of business because of this tax. He stated that from the hotel perspective, they already pay 10% of their occupancy revenue into the General Fund. They are also being hit with an 11% increase on taxes on alcohol. Councilmember Boro stated that he thought one of the things that should be done as a result of the possible action of the Council tonight, was to write a letter from the Mayor to the members of the Committee explaining some history, what the direction is and why things have been done, and discuss the audit that will be be done. He addressed the issues brought up by the Committee on the Municipal Services Tax. He stated that they dropped it from consideration because of the concern of the legality of it and there have apparently been several cases at the State level regarding this tax. He also asked that in the letter from the Mayor, he should indicate that they are looking for this Committee to provide leadership for whatever actions are taken. Councilmember Boro stated that after the audit is finished, they should discuss how to bring this to the public's attention, noting there is a great need for educating the public on this issue. Mayor Mulryan agreed that the City needed to put together a better public relations program for this issue. Councilmember Breiner stated that the Committee should review the fairness of both the Municipal Services Tax and the Utility Tax and the financial impact of both taxes. She also suggested comparing the existing businesses taxes in the different communities throughout the County to be sure that they are comparing the same thing which would help to justify their direction. Councilmember Thayer stated that she would like to see staff look at how to address some of the inequities that are inherent in both of the taxes. She stated concern about the businesses that have a large square footage, but a low profit margin. Ms. Nicolai stated that because San Rafael is a commercial hub with a high volume of traffic, there are high costs for repaving streets, fire and police services. She stated that they probably have a disproportionate amount of, the General Fund SRRA/SRCC MINUTES (Special Joint Meeting) 2/11/91 Page 4 SRRA 'CC MINUTES (Special Joint Meet j) 2/11/91 Page 5 being funded by sales tax, which is commercial heavy, so a balance is needed to make sure where the equity is coming from for the services rendered, instead of profit margins or square footage. High retail use does create an impact and the need for this money is higher. Councilmember Boro moved and Councilmember Shippey seconded, to convey the directions brought up in this meeting to the Revenue Options Committee. AYES: COUNCILMEMBERS: Boro, Breiner, Shippey, Thayer & Mayor Mulryan NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ADD ITEMS I. FIRE AT SAN RAFAEL JOE'S RESTAURANT - File 9-3-31 Mayor Mulryan stated that a good example of the services currently being provided by the City of San Rafael was shown at the recent fire at San Rafael Joe's Restaurant. The Fire Chief and two Division Chiefs responded, and it was declared a four alarm fire immediately. The first unit was there in two minutes, the second unit was there in three minutes, and the third unit was there in four minutes. He congratulated the Fire Department on their fast response, noting it could have been a much greater disaster without that fast service. II. CITY/COUNTY LIBRARY PROJECT - File 4-13-79 x 9-3-61 x (SRRA) R-294 Councilmember Shippey asked if the Mayor would write a letter on behalf of the Council to the State Legislature on this subject. Mayor Mulryan stated he would be in Sacramento tomorrow and would get in touch with anyone who they felt would help. Ms. Nicolai stated that the main person in the Legislature to contact was Senator Barry Keene, noting he was one of the sponsors of the original legislation and is also on the Committee that will be reviewing the grant. Mayor Mulryan indicated he will try to meet with Senator Keene tomorrow. III. USE OF FALKIRK CULTURAL CENTER FOR FILM MADE BY UNIVERSAL STUDIOS - File 9-3-84 City Manager Nicolai stated they have received a request from Universal Studios to lease Falkirk for a film. She stated they specifically need to use the Menzies Parking Lot to set up trailers at night, noting there was concern about the impact on the surrounding neighborhood and the problems it might cause. She also stated that this could be a substantial revenue maker for Falkirk Cultural Center. Mayor Mulryan asked how substantial the revenue would be. Library Director Stratford stated they would make approximately $12,000 in one week, which is the equivalent of three months' worth of rentals for Falkirk. He stated the biggest impact would be outside and using the parking lot in the middle of the night. He stated the trailers that would be parked in this lot would be the wardrobe, prop and actors' trailers which would not include noisy generators. He stated that Universal offered to work with the neighbors on this project. Councilmember Shippey asked if they could make use of the City lot. Ms. Nicolai stated they were considering which lot to use, depending on the best advantage to the neighbors. Elissa Giambastiani, of the San Rafael Chamber of Commerce, stated she supported this as a way of making revenue for the City. She suggested talking to Novato who just went through a very lengthy filming situation, and offered her assistance. Dirk Brinkerhoff, of the San Rafael Chamber of Commerce, suggested using the Elks' lot in order to make more revenue. Ms. Nicolai stated they were already using that lot. He asked what the impact would be on the city services such as Police. Ms. Nicolai stated they will pay for any extra services above and beyond the regular fee. There being no further business, the meeting was adjourned at 7:00 P.M. JEANNE M b=CIg, *�CiitlerkjAgency Secretary APPROVED THIS DAY OF , 1991 MAYOR OF THE CITY OF SAN RAFAEL CHAIRMAN, SAN RAFAEL REDEVELOPMENT AGENCY SRRA/SRCC MINUTES (Special Joint Meeting) 2/11/91 Page 5