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HomeMy WebLinkAboutCC Minutes 2010-05-17SRCC Minutes (Regular) 05/17/2010 Page 1 IN THE COUNCIL CHAMBER OF THE CITY OF SAN RAFAEL. MONDAY, MAY 17, 2010 AT 8:00 P.M. Regular Meeting: San Rafael City Council Also Present: Ken Nordhoff, City Manager Robert F. Epstein, City Attorney Esther C. Beirne, City Clerk Members of the public may speak on Agenda items. OPEN SESSION — COUNCIL CHAMBERS — 7:00 PM Mayor Boro announced Closed Session item. CLOSED SESSION — CONFERENCE ROOM 201 — 7:00 PM Present: Albert J. Boro, Mayor Damon Connolly, Vice -Mayor Greg Brockbank, Councilmember Barbara Heller, Councilmember Marc Levine, Councilmember Absent: None Conference with Labor Negotiators— Government Code Section 54957.6(a) Negotiators: Jim Schutz, Leslie Loomis, Cindy Mosser, Robert Epstein, Ken Nordhoff Employee Organization(s): San Rafael Fire Chief Officers' Assn. San Rafael Firefighters' Assn. San Rafael Police Mid -Management Assn. San Rafael Police Association Western Council of Engineers Local I - Confidential SEIU Miscellaneous & Supervisory SEIU Child Care Unit Unrepresented Management Unrepresented Mid -Management Elected City Clerk and Elected Part -Time City Attorney City Attorney, Robert Epstein announced that no reportable action was taken. ORAL COMMUNICATIONS OF AN URGENCY NATURE: 8:10 PM Classic Car Show: - File 9-1 Barry Taranto, San Rafael resident, stated that the Classic Car Show in downtown San Rafael was a success and the best yet. The San Rafael Police Department did a great job of handling any issues and he looked forward to the Italian Street Painting Festival. Sutter Health: - File 9-1 Mr. Taranto reported having read in the newspaper that Sutter Health was exploring expanding outpatient services into property purchased in San Rafael, and he expressed concern at the possibility of locating medical services in a profit- making retail area. He hoped the passage of Measure C would be celebrated in June, together with expanded hours at the library. Councilmember Levine moved and Councilmember Heller seconded, to approve the Consent Calendar as follows: Any records relating to an agenda item, received by a majority or more of the Council less than 72 hours before the meeting, shall be available for inspection in the City Clerk's Office, Room 209, 1400 Fifth Avenue, and placed with other agenda -related materials on the table in front of the Council Chamber prior to the meeting. American Sign Language interpreters and assistive listening devices may be requested by calling (415) 485-3198 (TDD) or (415) 485- 3064 (voice) at least 72 hours in advance. Copies of documents are available in accessible formats upon request. Public transportation is available through Golden Gate Transit, Line 22 or 23. Paratransit is available by calling Whistlestop Wheels at (415) 454-0964. To allow individuals with environmental illness or multiple chemical sensitivity to attend the meeting/hearing, individuals are requested to refrain from wearing scented products. CC 05-17-2010 CONSENT CALENDAR: ALL MATTERS ON THE CONSENT CALENDAR ARE TO BE APPROVED BY ONE MOTION, UNLESS SEPARATE ACTION IS REQUIRED ON A PARTICULAR ITEM: Approval of Minutes of Regular City Council Meeting of May 3, 2010 (CC) Call for Applications to Fill Two Four -Year Terms on the Planning Commission, due to Expiration of Terms of Larry Paul and Viktoriya Wise - Terms to Expire End of June, 2014 (CC) — File 9-2-6 4. Call for Applications to Fill One Four -Year Term on the Design Review Board, due to Expiration of Term of Richard Olmsted — Term to Expire End of June, 2014 (CC) — File 9-2-39 Resolution of Appreciation to all Small Businesses in San Rafael and Designation of May 23 — 29 as small Business Week (CM) — File 102 Monthly Investment Report for Month Ending April, 2010 (Fin) — File 8-18 x 8-9 Resolution of Appreciation Recognizing Act of Bravery (MS) — File 102 Resolution Approving a Memorandum of Understanding (MOU) Side Letter Between the City of San Rafael and the San Rafael Firefighters' Association Regarding Administrative Duty For Fire Captains (MS) — File 7-8-2 10. Resolution Approving Subdivision Improvement Agreement for the Subdivision Entitled "Parcel Map — Being a Subdivision of the Lands of Phuong Van Nguyen and Tuan Tiet" (PW) — RECOMMENDED ACTION: APPROVAL OF THE FOLLOWING ACTION: Minutes approved as submitted. Approved staff recommendation: a) Called for applications to fill two four- year terms on the Planning Commission to the end of June, 2014; b) Set deadline for receipt of applications for Wednesday, June 9, 2010 at 12:00 noon in the City Clerk's Office, City Hall, Room 209; and c) Set date for interviews of applicants at a Special City Council meeting to be held on Monday, June 21, 2010, tentatively commencing at 6:30 p.m. Approved staff recommendation: a) Called for applications to fill one four- year term on the Design Review Board, to the end of June, 2014; b) Set deadline for receipt of applications for Wednesday, June 9, 2010 at 12:00 noon in the City Clerk's Office, City Hall, Room 209; and c) Set date for interviews of applicants at a Special City Council meeting to be held on Monday, June 21, 2010, tentatively commencing at 6:00 p.m. RESOLUTION NO. 12951 RESOLUTION OF APPRECIATION TO ALL SMALL BUSINESSES IN SAN RAFAEL AND DESIGNATION OF MAY 23-29,2010 AS SMALL BUSINESS WEEK Accepted Monthly Investment Report for month ending April, 2010, as presented. RESOLUTION NO. 12952 RESOLUTION OF APPRECIATION TO KIARA AND ISABELLE BARRY RECOGNIZING AN ACT OF BRAVERY RESOLUTION NO. 12953 RESOLUTION APPROVING A MEMORANDUM OF UNDERSTANDING (MOU) SIDE LETTER BETWEEN THE CITY OF SAN RAFAEL AND THE SAN RAFAEL FIREFIGHTERS' ASSOCIATION REGARDING ADMINISTRATIVE DUTY FOR FIRE CAPTAINS RESOLUTION NO. 12954 RESOLUTION APPROVING SUBDIVISION IMPROVEMENT AGREEMENT FOR THE CC 05-17-2010 File 5-1-363 11. Resolution Authorizing the Signing of a Below Market Rate Housing Agreement Between MC2 Capital Partners, LLC and the City of San Rafael re: 33 North (formerly 33 San Pablo) (RA) — File 229 x 13-16 SUBDIVISION ENTITLED "PARCEL MAP — BEING A SUBDIVISION OF THE LANDS OF PHUONG VAN NGUYEN AND TUAN TIET" RESOLUTION NO. 12955 RESOLUTION AUTHORIZING THE SIGNING OF A BELOW MARKET RATE HOUSING AGREEMENT BETWEEN MC2 CAPITAL PARTNERS, LLC AND THE CITY OF SAN RAFEL RE: 33 NORTH AKA 33 SAN PABLO 12. Resolution Authorizing Temporary Closure of Downtown City RESOLUTION NO. 12956 Streets for the San Rafael Mile on Sunday, June 6, 2010 from RESOLUTION AUTHORIZING TEMPORARY 6:00 a.m. — 10:00 a.m. (RA — File 11-19 CLOSURE OF DOWNTOWN CITY STREETS FOR THE SAN RAFAEL MILE ON SUNDAY, JUNE 6, 2010 FROM 6:00 a.m. TO 10:00 a.m. 13. Resolution Authorizing Temporary Closure of Downtown City Streets in Connection with the San Rafael Twilight Criterium on Saturday, July 10, 2010 from 12:00 Noon to 10:00 p.m. — Race Begins at 2:30 p.m. (RA) — File 11-19 14. Resolution Approving a Thirty Thousand Dollar ($30,000) Expenditure by the Redevelopment Agency of the City of San Rafael to Marin Housing for the Homelessness Prevention Program (Formerly Renters Rebate Program) and Making Findings and Approvals Pursuant to the California Redevelopment Law in Connection with the Utilization of Agency Low and Moderate Income Housing Funds Outside the Central San Rafael Redevelopment Project Area (RA) — File 229 x (SRRA) R173 15. Resolution Approving the Redevelopment Agency Grant of $40,000 to Ritter Center and Making Findings and Approvals Pursuant to the California Redevelopment Law in Connection with the Utilization of Agency Low and Moderate Income Housing Funds Outside the Central San Rafael Redevelopment Project Area (RA) — File 229 x (SRRA) R-392 x R-173 RESOLUTION NO. 12957 RESOLUTION AUTHORIZING THE TEMPORARY CLOSURE OF CITY STREETS FOR THE SAN RAFAEL TWILIGHT CRITERIUM ON SATURDAY, JULY 10, 2010 FROM 12:00 NOON TO 10:00 P.M. RESOLUTION NO. 12958 RESOLUTION APPROVING A THIRTY THOUSAND DOLLAR ($30,000) EXPENDITURE BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN RAFAEL TO MARIN HOUSING FOR THE HOMELESSNESS PREVENTION PROGRAM (FORMERLY RENTERS REBATE PROGRAM) AND MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA RESOLUTION NO. 12959 RESOLUTION APPROVING THE REDEVELOPMENT AGENCY GRANT OF $40,000 TO RITTER CENTER AND MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None CC 05-17-2010 The following item was removed from the Consent Calendar for discussion, at the request of staff. 7. RESOLUTION AUTHORIZING AND APPROVING THE BORROWING OF FUNDS FOR FISCAL YEAR 2010- 2011 AND THE ISSUANCE AND SALE OF A 2010-2011 TAX AND REVENUE ANTICIPATION NOTE (FIN) — FILE 8-13-9 x 8-14 City Manager Ken Nordhoff stated staff requested the item be pulled from the Consent Calendar to abide by some due process in the Government Code. The staff report concerned the issuance of Taxable Revenue Anticipation Notes, a program the City had been involved in many times in years past. Staff was available for questions and public comment could be taken before action was taken. There being no comment from the audience, Councilmember Heller moved and Councilmember Levine seconded, to adopt the resolution: RESOLUTION NO. 12960 — RESOLUTION AUTHORIZING AND APPROVING THE BORROWING OF FUNDS FOR FISCAL YEAR 2010-2011 AND THE ISSUANCE AND SALE OF 2010-2011 TAX AND REVENUE ANTICIPATION NOTES IN AN AMOUNT NOT TO EXCEED $10,000,000 THEREFOR AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None SPECIAL PRESENTATIONS: 16. PRESENTATION OF RESOLUTION OF APPRECIATION (CM) — FILE 102 Mayor Boro invited Kiara and Isabelle Barry and their parents, Dr. Daniel Barry and Emily Barry, to the podium and for the benefit of the audience explained that the two girls did something very miraculous several weeks ago; he quoted from the resolution: "Whereas 10 -year old Kiara Barry took the American Red Cross' GuardStart junior lifeguard program and learned early life-saving skills, such as basic first aid, CPR and the stomach thrusts and back blows necessary to assist choking victims; and Whereas Kiara Barry recognized and responded to an emergency event witnessing her mother experiencing a choking incident; and Whereas, together Kiara Barry and her sister Isabelle responded to their mother's choking emergency and applied the lessons learned in the first aid class while remaining calm and in control; and Whereas, Kiara Barry accomplished a life saving act by performing the Heimlich maneuver on her mother to relieve her of the choking incident; and Whereas, Kiara and Isabelle demonstrated exemplary confidence and knowledge in assisting their mother; and Whereas, Kiara Barry performed an outstanding act of heroism and leadership as a youth member of our community, creating an example for adults; and Whereas, Kiara and Isabelle are role models for youth in our community and the City Council publicly acknowledges and thanks them for the tremendous effort in saving the life of their mother. Now, therefore, be it resolved, that the Mayor and City Council of the City of San Rafael hereby present Kiara and Isabelle Barry with this Resolution of Appreciation for their acts of heroism and leadership and encourage all San Rafael residents to take a life-saving first aid course with the American Red Cross. Knowing such skills can save a life, which could be the life of a loved one." Mayor Boro congratulated Kiara and Isabelle Barry. Dr. Daniel Barry reported calling home on a Wednesday evening and learning from his wife that Kiara performed the Heimlich Maneuver on discovering she (Mrs. Barry) could not breathe because of a piece of candy lodged in her throat. 4 CC 05-17-2010 He commented that a couple of seconds of thought could save a world, which was what his daughters Kiara and Isabelle did. Thanking Ariel Shakeshaft, Rafael Racquet Club, Dr. Barry stated that on commenting that she was their hero, Ms. Shakershaft stated that as a result of this incident she would continue the course annually despite its being difficult to run. Dr. Barry stated that both Kiara and Isabelle were heroes. Presenting the Barry family with materials to encourage their continued education in life-saving, including a free pass to Community Emergency Response Training (CERT), Fire Chief Christopher Gray explained that the Heimlich Maneuver was an abdominal thrust to induce coughing. Developing this maneuver in 1974, Dr. Heimlich was probably single-handedly responsible for saving over 100,000 lives. Believing the best call was one that did not have to be responded to, he explained this was because a life was saved and a tragedy averted through education and experience — in this case by a very young resident. Chief Gray stated he had a pledge to ensure that at some time in the future high schools included a CPR requirement before graduation. While it was powerful to understand First Aid, CPR and a simple life-saving maneuver, carrying them out was entirely different, and while some adults found it difficult to initiative such life- saving care, the Barry children had no hesitation. Thanking Kiara and Isabelle, Chief Gray expressed the hope that they would take advantage of future training. Mayor Boro presented the Barry family with City of San Rafael pins, Kiara and Isabelle with Webkinz toys and Mrs. Barry with flowers. 17. PRESENTATION OF RESOLUTION OF APPRECIATION FOR SMALL BUSINESS WEEK (CM) — FILE 102 Inviting representatives of the San Rafael Chamber of Commerce to the podium, Mayor Boro stated that the Resolution of Appreciation designated May 23 — 29, 2010 Small Business Week and quoted: "Whereas, Small Businesses make up an essential part of the economic health of the City of San Rafael; and Whereas, the City of San Rafael supports the San Rafael Chamber of Commerce Business Showcase, which functions as a highly successful resource for Small Businesses; and Whereas, Small Businesses create a strong local economy, provide employment opportunities, and provide the products and services that are necessary to residents and other businesses; and Whereas, Small Businesses generate vitality and add life to all San Rafael business centers; and Whereas, Small Businesses, the City of San Rafael, and the San Rafael Chamber of Commerce work together to promote and strengthen the community; and Whereas, the City of San Rafael and the San Rafael Chamber of Commerce want to recognize the contribution of Small Businesses to the community. Now, therefore, be it resolved, that the Mayor and City Council of the City of San Rafael designate May 23-29, 2010 as Small Business Week, support the Business Showcase on September 15, 2010, and express sincere appreciation for the contributions of all Small Businesses in the City of San Rafael." On behalf of the small businesses of San Rafael and the Chamber of Commerce, Don Maxon expressed thanks for the Resolution of Appreciation, noting the Business Showcase would take place on September 15, 2010. OTHER AGENDA ITEMS: 18. a) APRIL 2010 FIRE SERVICES STUDY FINAL REPORT FROM MATRIX CONSULTANT GROUP FOR THE CITY OF SAN RAFAEL AND THE MARINWOOD COMMUNITY SERVICES DISTRICT (FD) — FILE 4-10-130 x 9-3-31 Reporting that the Marinwood Community Services District Board accepted this report at their meeting of Tuesday, May 11, 2010, City Manager Ken Nordhoff explained that by way of orientation Fire Chief Gray would discuss Item a) and staff would respond to questions. CC 05-17-2010 Fire Chief Chris Gray stated that over a year ago San Rafael initiated a process in conjunction with Marinwood to provide a current evaluation of the contract that has existed for mutual benefit between the Marinwood Community Services District (CSD) and the City of San Rafael since 1973. He reported that the study had been completed under budget, albeit not on time. The fruitful examination was led by Marinwood CSD with San Rafael providing as much support as possible to complete the study. Lengthy interviews were completed, data was evaluated and ultimately, the consultant provided several recommendations that included modifying the existing agreement, looking towards a regional fire authority and as an interim step, having the district contract with San Rafael to provide fire services. Chief Gray stated that the report was comprehensive, provided a good snapshot in time of the service currently being provided and what had been done historically, and he recommended acceptance. Councilmember Connolly moved and Councilmember Heller seconded, to accept the report. AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None b) ORAL PRESENTATION — MARINWOOD CSD AND CITY OF SAN RAFAEL WORKING GROUP DISCUSSIONS (CM/FD) — FILE 9-3-31 City Manager Ken Nordhoff stated that working in partnership with Marinwood staff believed that in conjunction with adopting the study, some of the recommendations and ideas should be explored further to determine what, if any, changes the two parties could make in terms of relationship, funding, service delivery, etc., going forward. A sub -committee, consisting of Mayor Boro, Vice -Mayor Connolly, Fire Commissioner Daniels, Fire Chief Gray and City Manager Ken Nordhoff had been meeting in a working group format with five counterparts, explaining the study and answering questions while recognizing several issues were moving simultaneously. The existing contract with Marinwood would lapse on June 30, 2010; therefore, while discussions were taking place it was recognized that perhaps a bridge agreement could be necessary. Noting a Paramedic Program had been in place in San Rafael since 1980 and that voters within the city limits of San Rafael, along with County Service Areas 13, 19 and the Marinwood CSD, had been approving a special tax in four-year cycles, Mr. Nordhoff explained that this tax would need to be renewed by the voters in November, 2010 to be ready for implementation in Fiscal Year 2011-2012. Mr. Nordhoff reported that the elements of a service agreement were being evaluated, together with costing, and the group continues to meet bi-weekly on refinements. Mr. Nordhoff stated that staff would need direction from the City Council regarding the bridge agreement, noting the existing contract had been in place for decades with varying levels of funding. Currently, San Rafael was funding a portion of the Marinwood CSD fire operations in the amount of $275,000 annually. A determination needed to be made on whether this should continue and for what duration, as staff believed something new would be presented to the City Council, presumably within the first six months of the coming fiscal year, which might have the contract sunset sooner. Mayor Boro stated he believed the meetings had been very positive and Mr. Nordhoff and Fire Chief Gray had generated something that surprised some members of the committee because of its spirit and what was being offered. He believed it was beneficial to those residing in Marinwood and the remainder of the service area. With a ways to go Marinwood would need to work with the Board and community, as would the sub -committee with the City Council. He suggested meetings be scheduled with residents, especially in the northern part of the City impacted and served by Marinwood, and believed discussions to date had been positive. Echoing Mayor Boro's comments, Councilmember Connolly stated he was very encouraged by both the tenor and substance of the discussions which had been very productive so far. New approaches were being evaluated that would be beneficial to both sides, as well as to the other service areas, while moving beyond some of the issues that vexed the communities in the past. Councilmember Connolly stated that in the meantime, there should be some type of bridge agreement for the next year. Mr. Nordhoff stated that among several items being worked on was to draft something for review at the meeting of May 26, 2010, to be formally ratified by both parties prior to year's end. Indicating she was pleased with the content of the report, Councilmember Heller questioned whether in the CC 05-17-2010 event a regional agency was formed whether San Rafael, with Marinwood, could be interested in having discussions with Larkspur. She believed smaller agencies combining services could benefit all citizens. Responding, Mr. Nordhoff stated there were underpinnings of that already in terms of the way the paramedic program was structured across the entities mentioned. In terms of regionalization he believed the thinking had not necessarily been limited to those organizations or agencies. Noting Chief Gray was an innovator he believed there was a deep willingness on his part to look in any direction for parties that should be part of a regionalization effort. Fire Chief Gray stated that tremendous opportunities were available within the County and around the borders of San Rafael and with the political will opportunities existed to both achieve greater efficiencies with service and ultimate savings. He noted a structure was in place with the current paramedic service being provided; it covered the County Service Areas as well as the Community Service District and San Rafael; therefore, it was just a matter of taking a first step with Marinwood and being successful. He indicated that costs would be involved and it was time-consuming to establish a Regional Fire Authority; however, advantage could be taken of some economies already in place where the City was providing services that would have to be duplicated under an Authority. Chief Gray stated that as readily admitted by the consultant it would likely take some time to move into that type of process, which was the reason for their suggestion as an interim step a contract for services from Marinwood to the City of San Rafael. Regarding shared governance, Councilmember Heller inquired whether San Rafael would have someone sit in ex -officio with Marinwood and vice versa. Mr. Nordhoff stated that in evaluating some interim solutions to longer-term regionalization, issues of governance and independence had been encountered, which would likely require an amendment of the current ordinance regarding the Fire Commission. However, having someone in another agency's capacity being part of that group, as well as sharing staff time and resource capability to attend meetings, public events, etc. were part of the discussions. He believed there was a need to ensure regular communication, face time and interaction as part of all the aspects. Concurring, Fire Chief Gray stated that familiar faces working together was the benefit of the current relationship, which was seamless, relatively transparent to residents and could be built upon. He hoped that the levels of service being provided could not only be duplicated but enhanced by providing additional services, which would be a tremendous advantage to both of the areas of the Northern San Rafael community, together with Marinwood and CSA 13. Councilmember Heller thanked Chief Gray and Mr. Nordhoff Charles Daniels, Chair, Fire Commission, stated he was very pleased to be a part of the group. Echoing the comments of Mayor Boro and Vice -Mayor Connolly, he stated that the tenor of the meetings had been great with cooperation from both sides meeting face-to-face. Having been involved in public safety in San Rafael and working with a number of Fire Chiefs, he believed it was time something like this was done. As a business person he believed it to be a win-win for both sides. Mr. Daniels believed the outcome would be good as the committee was doing an excellent job. Ron Marinoff, Marinwood Fire Commission representing County Service Area 13, stated there appeared to be an agenda with three items, two of which were time -sensitive and one not so much. The most urgent item was the extension of the current JPA which would expire in 6 weeks, and the second was putting together the ballot measure for the paramedics, which had certain legal requirements and time deadlines. The third item related to the possible consolidation which would take more study, work and cooperation from everyone; however, it was not as time -sensitive as the first two items. From the standpoint of CSA 13 and his role on the Marinwood Fire Commission, Mr. Marinoff noted they were looking forward to working on the first two items rather expeditiously, and having a positive attitude to work with the City of San Rafael on the third item. Mayor Boro thanked Mr. Nordhoff, Fire Chief Gray and Mr. Daniels. Mr. Nordhoff stated staff would be working on a bridge agreement to be presented to the City Council next month; however, no formal action was required at this point. CC 05-17-2010 19. RESOLUTION APPROVING ACCEPTANCE AND USE OF FEDERAL JUSTICE ASSISTANCE GRANT FUNDS, IN PARTNERSHIP WITH THE COUNTY OF MARIN, IN THE AMOUNT OF $26,105 FOR INCREASED GANG ENFORCEMENT WITHIN THE CITY OF SAN RAFAEL AND THE UNINCORPORATED AREAS OF MARIN COUNTY (PD) — FILE 9-3-30 Lieutenant Dan Fink reported that the Police Department was notified some weeks ago of its eligibility for a further JAG (Justice Assistance Grant). One grant in the last twelve months had funded the Citizens' Police Academy with a further grant funding a SWAT Trailer, and while similar, the current grant was a joint project with Marin County Sheriff's Department and the City of San Rafael. San Rafael received the larger share of funds due to crime statistics and population. In discussing how the funds could be used cooperatively, Lieutenant Fink reported that it was decided to increase gang enforcement with Marin County and to continue gang enforcement at the Marin County Fair. The grant could be used over three years and it was anticipated spacing it out to conduct at least two or three operations annually. Councilmember Heller inquired as to how the funds could be expended. Indicating the use was flexible, Lieutenant Fink explained staff determined that high visibility gang enforcement really helped in quelling gang problems, especially during summer months. Initially, the grant would be used for overtime for extra staff, not only during the Marin County Fair, but also on high-profile nights such as Fridays and Saturdays. Councilmember Levine inquired whether it was expected to have six to nine operations over the three-year period and whether there would be opportunities for the City to receive more grants during that period of time. Lieutenant Fink explained that these grants were unpredictable and, while staff would prefer to space them out, activity would dictate. Gang sweeps in conjunction with Marin County would continue and these funds would help with this. Councilmember Levine inquired whether conducting operations with other agencies were coordinated. Lieutenant Fink confirmed that typically this consists of a Sheriff's Department and San Rafael Police Department Sergeant or Supervisor running teams of four to eight officers conducting probation searches, high-profile contacts in high gang areas, etc. Councilmember Levine expressed appreciation for the coordination between agencies. Councilmember Levine moved and Councilmember Heller seconded, to adopt the resolution: RESOLUTION NO. 12961 — RESOLUTION APPROVING USE AND ACCEPTANCE OF FEDERAL JUSTICE ASSISTANCE GRANT FUNDS IN THE AMOUNT OF $26,105.00 FOR INCREASED GANG ENFORCEMENT WITHIN THE CITY OF SAN RAFAEL AND THE UNINCORPORATED AREAS OF MARIN COUNTY AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None Mayor Boro thanked Chief of Police Odetto and Lieutenant Fink for seeking the grants. 20. RESOLUTION AUTHORIZING THE SALE OF PENSION OBLIGATION BONDS TO REFINANCE OUTSTANDING OBLIGATIONS OF THE CITY TO THE MARIN COUNTY EMPLOYEES' RETIREMENT ASSOCIATION, APPROVING THE FINAL FORM OF RELATED FINANCING DOCUMENTS AND APPROVING OFFICIAL ACTIONS (MS) — FILE 8-12-1 x 7-1-26 Assistant City Manager Jim Schutz commented that by now the City Council was very familiar with this topic and that of increased pension costs for Fiscal Year 2010-2011 and how Pension Obligation Bonds (POBs), either through normal cost financing or unfunded liability, would address this. Noting further meetings would be scheduled on longer-term approaches to pension cost control, he stated this evening's issue concerned the immediate issue of rising pension costs for Fiscal Year 2010-2011 and to some extent, a couple of years after that. CC 05-17-2010 Mr. Schutz reported that the most recent cost increases were due to the severe recession and investment losses at MCERA (Marin County Employees' Retirement Association) and the resulting toll on the City's assets there. Pension costs would increase in Fiscal Year 2010-2011 by approximately $2 million over the current year, which was a reason for the normal cost financing under discussion this evening. Providing background, Mr. Schutz reported that on March 1, 2010, an action was approved to start the process and begin a validation to issue POBs, which resulted in a favorable court judgment on May 10, 2010. On April 14, 2010 the MCERA Board took an action to amortize off for a longer period of time approximately half of the investment losses that would have impacted San Rafael in Fiscal Year 2010-2011, which caused the decline to $2 million. Mr. Schutz stated the issue under discussion this evening was a normal cost financing of approximately $4.2 million. He explained that the City would issue the debt and pay the $4.2 million to MCERA on approximately July 1, 2010, providing short-term relief. Funds remaining from the $4.2 million from the first year would be placed in a City Retirement System Fund and applied to Fiscal Year 2011-2012 and beyond, if possible. Mr. Schutz reported that the debt service payments could be structured to keep payments lower in the beginning as the City was attempting to emerge from the severe recession and the resolution would set in motion all the legal documents attached to the staff report. He noted Steve Melikian, Bond Counsel, Jones Hall, and Ralph Holmes, Underwriter, E.J. De La Rosa, were in attendance and could answer questions. Indicating that the resolution would approve the issuance of the bonds and the Indenture of Trust, Mr. Schutz explained that the Indenture was a document between the City and Union Bank that described every detail of the Bonds from when the funds came into the bank until the City made its last debt service payment. The resolution also authorized the Bond Purchase Agreement with E.J. De La Rosa since they would momentarily own the bonds before selling them to investors. It also approved a Preliminary Official Statement which detailed the sources and uses of the bond proceeds, security for the bonds, overview of the City and MCERA, risk factors - issues someone purchasing bonds would want to know about. Mr. Schutz stated that the resolution would also approve contracts with Jones Hall to act as Bond and Disclosure Counsel, and Northcross, Hill and Ach, who would act as the City's financial advisors -- Craig Hill from this firm had attended some study sessions. Should the City Council approve the resolution, staff and the financing team would begin immediately to secure an investment rating and finalize the official statement in June, with an attempt to close around July 1, 2010. Expanding on some of the details of the fiscal impact, Mr. Schutz reported that the bond would be approximately $4.2 million, i.e., one year's worth of normal cost, and it would cover the cost of issuance, estimated not to exceed $200,000. He explained that in generating the bond documents the agreed upon number was "not to exceed $5 million" as the Finance Department was still working on identifying the final normal cost number. He anticipated the figure being approximately $4.4 million between the normal cost and cost of issuance. Mr. Schutz reported that the interest rate would be determined at the time of sale; however, the current market rates for a twenty-year bond were approximately 6.3%, and 6.6% for thirty years. Similar to picking a "not to exceed" number for the total bond amount, it was decided that the average interest rate would not exceed 7.5%; however, a lower rate was anticipated. Mr. Schutz reported that the Bond proceeds would be paid back over a period of time, beginning with interest -only payments for 5 years, and stepping up through the remainder of the term. The actual term would be decided prior to the sale; however, it would not be longer than 30 years. He commented that the figures of $5 million, 7.5% and thirty years were the maximum numbers in the Bond documents being presented to the City Council for approval. Mr. Schutz stated that when the general parameters were in place staff's preference was to follow the model used by San Rafael in other bond issuances or refundings where staff was directed to work with the financial advisor and underwriter for the specific details. Indicating current thinking was for a thirty-year bond, he explained that too short a period would not afford much time before interest only payments for five years ran out, resulting in subsequent considerably higher annual payments amortized over a shorter period of time. Staff therefore, believed that a thirty- year bond made the most sense, limiting the City to having five years of interest only payments, to ensure being in a position to pay the principal. He explained that thirty years with a five-year interest only would start the debt service at approximately $275,000 annually, increasing to approximately $350,000 annually for the remainder of the term. With regard to paying the Bond back early, Mr. Schutz stated that calling the Bond would invoke a higher interest CC 05-17-2010 rate and, although the idea of retiring the bond early was appealing, he believed the premium would be significant. In the future, should the City have the ability to make early contributions, he believed it made more sense to target higher interest rate bearing debts having no penalties for early repayment. Should the resolution be approved tonight, Mr. Schutz stated that staff would begin working with the rating agencies and commence finalizing the official statement for June or early July, 2010. Councilmember Heller inquired whether this would be the final occasion on which the issue would be before the City Council, should the resolution be adopted. Mr. Schutz confirmed that two actions were required from the City Council: 1) Validation Action which commenced in March, 2010; and 2) Direct staff to issue the debt. Regarding Aggregate Debt Service, Mayor Boro stated it appeared as though the Radio Authority debt service went to 2021. Mr. Schutz stated the ending period was June 30, 2022. Mr. Nordhoff confirmed that San Rafael was part of a recently completed refinancing for the Marin Emergency Radio Authority (MERA), which would cease in year 2022. Regarding the relatively high 7.5% interest rate, Mayor Boro inquired whether other similar type bonds had been evaluated and why 7% might not be a better figure. While 7.5% was a reasonable upper limit, Mr. Nordhoff stated he was not suggesting it would be executed, were the market to be in that place in the time schedule referred to; however, there needed to be a ceiling. He believed a buffer of approximately 100 or 120 basis points above current market trends to be an approximation when such deals were structured. Mr. Schutz confirmed that 7.5% was a very conservative figure and higher than that anticipated. Ralph Holmes, E.J. De La Rosa, stated 7.5% was an outside parameter and did not come about in a scientific manner necessarily. Given the current market it was decided to assume 100 basis points to afford lots of room. Mayor Boro inquired as to the outside parameter of Pension Obligation Bonds being sold currently, especially for AA rated as San Rafael was. Reporting not a lot of Pension Obligation Bond action in recent times, Mr. Holmes noted the City of Pacifica did one in the last two weeks — their long bond was approximately 6.85% or 6.90%. In pricing the bonds different market comparables and spreads would be evaluated as to how the rates were set. He reiterated that the 7.5% rate was not especially scientific but rather afforded space and was not constraining. Realizing it was not the same as a 30 -year fixed rate mortgage for a homeowner, Councilmember Brockbank stated he assumed the rates roughly tracked each other and inquired whether the POB process was similar to locking in an interest rate for a home loan borrower. Mr. Holmes explained that the rate on the Bond is set at the moment the price is set. Favoring a shorter number of years; however, understanding the advantages and flexibility with thirty years, Councilmember Brockbank expressed surprise that the monthly payments were not much lower over thirty years and that a lot more interest was being paid. Recalling previous discussions regarding early repayment, he now learned there would be a significant penalty in the form of 40 basis points in the interest rate. In the event more funds than anticipated became available, and the Bond could not be paid off, he inquired: • Whether it was premature to decide at this point whether paying off unfunded liability would save more than the extra funds being expended over thirty years instead of fifteen; or • Should interest rates rise and the City had funds available to invest, could the interest earned on the extra investment be more than the amount being paid over thirty years instead of fifteen. Mr. Nordhoff stated funds could be set aside to be used when appropriate. Regarding discretionary funds he indicated he could provide a laundry list of overdue and dilapidated infrastructure. Staff could provide a list one hundred times whatever discretionary money the City Council could foresee having in the next two or three years 10 CC 05-17-2010 at their disposal. Mr. Nordhoff stated staff needed to structurally begin to build unfunded liabilities into the financial model, budgeting habits, etc. Should discretionary funds become available, staff would seek direction from the City Council. Councilmember Levine stated he was surprised by the prepayment penalty, noting he had conversations with staff today where he was under the impression there was no such penalty. He requested an explanation as to why there was one and whether there were types of loans or bonds the City should consider that might not have prepayment penalties and could still be advantageous. Mr. Holmes explained this centered on the difference between a ten-year call as opposed to a make whole call in the taxable markets, noting municipal bonds and tax-exempt bonds typically had a ten-year call. In the taxable market, bonds are priced off a treasury curve and a make whole call basically removes any advantage of prepaying the bonds, which from an economic perspective makes them non -callable. Therefore, under that structure, while bonds could be prepaid, the advantage of doing a refunding was not available. Councilmember Levine stated he was puzzled by why the City Council was misinformed about almost half a point difference in a prepayment penalty. Indicating it was not intended to be misinformation, Mr. Holmes explained the expectation was that it was a make whole call which perhaps was not communicated accurately. Mr. Schutz stated he recalled from study sessions hearing the financial advisor stating that the bonds could be repaid early. From discussions today, he believed they could be repaid early; however, it was not as advantageous as paying a premium in order to get the ten-year call feature. Mr. Schutz stated he understood that when the financial advisor stated they could be paid back early, there were a couple of different tiers of details — one tier was that it would cost more money to pay it back early and the other would not. There were no economic advantages under the first option; it could still be done, albeit it would be expensive. Councilmember Levine stated he believed this detail was an essential element of the deal and was something that caused him to lose some confidence in the deliberation of the entire process. Mr. Schutz stated that, should the City Council believe a ten-year call was necessary in order to prepay, staff could set up that transaction. Although everyone liked the idea of trying to pay the debt back early, he believed the interest rate on this would be lower than where there was ten or twenty times more debt in other areas having higher interest rates. While the idea was attractive to try to pay it back early, Mr. Schutz stated he could not imagine a situation of wanting to pay it back early; however, should it be important to the City Council, it could be structured in that way. Mayor Boro confirmed the only outstanding City debt he was aware of were the MERA and Parking Structure bonds. Mr. Schutz stated he was referring to the unfunded liabilities for pension and retiree healthcare. Expressing concern over the 7.5% interest rate, Mayor Boro noted the five-year treasury this morning was 3.45%, and he inquired as to the relationship based on treasury — was it five, ten or thirty year treasury. Mr. Holmes confirmed it was the thirty year. As to the relationship between a 7.5% and a thirty year, Mayor Boro inquired how high the treasury had to go to get it to a 7.5%. Mr. Holmes explained that the bonds were priced on a spread to the treasury — probably 160 — 180 basis points to the thirty-year treasury. Roughly, there would be a 100 basis point run up in treasuries — 1 %. Mr. Nordhoff confirmed for Mayor Boro that the thirty-year treasury currently was in the high 5%, which went to Mr. Holmes' point that the spread between the 30 -year treasury at 5.8% or 5.9%, adding in 160 basis points arrived at 7.5%. Mayor Boro confirmed that the set date would be related to the thirty-year treasury. Mr. Nordhoff stated that any number of local, state, national or international events influence the markets, sometimes favorably and sometimes less so. A preliminary pricing call was set for June 1, 2010 which would 11 CC 05-17-2010 provide an early read on world events with thirty-year treasuries, etc., and would provide a sense of what the pricing structure would look like. Mr. Holmes explained that the day before the pricing there would be a call with the trading desk and underwriter. City staff and the financial advisor would be on the telephone and there would be discussion on different comparables in the market place and try to generate an accurate and fair spread to the treasury. The following day the Bonds would be sold in the marketplace to investors based on a spread to the treasury. Mayor Boro suggested that, on the sell date should the treasury thirty-year note be 6%, the spread would be 7%. Mr. Holmes stated this would depend on where the market and the spreads were and while his expectation was the 7% neighborhood, it could be less. Mayor Boro stated that the figures showed a calculation based on the highest rate at 6.3%; therefore, the total payment over 30 years at 6.3% was much less than at 7.5%. It did not show the worst case. Councilmember Connolly inquired whether the rate was fixed. Mr. Nordhoff stated staff was attempting to provide current market based illustrations or what was anticipated in the next two or three weeks. Mayor Boro noted an upper limit of 7.5% was being set; therefore, it would be nice to see what 7.5% would be worth. Mr. Nordhoff stated that typically these financings had not included this level of detail and he was glad the City Council had spent a lot of time on the issue; however, there were parameters and conditions and a reliance on a combination of consulting expertise and staff to figure out whether to move forward or not. Should June 1 not work for any number of reasons, there could be a reason not to move forward, and while he did not anticipate this he was being realistic. Mr. Nordhoff stated it was no different than the Tax and Revenue Anticipation Notes approved this evening, although not fraught with as much difficulty or complexity. He indicated that, if the data did not make sense when put together, it might not be worth pursuing. Responding to Councilmember Levine's concerns, Mr. Nordhoff stated he did not disclose or rightfully get into the complexities of the pricing of the calls. However, any callable bond had something priced into it from the bondholder's perspective who wanted to know they could hold on to what they were buying for the duration of the bond. Therefore, should the City grant itself permission to get out early, a premium needed to be paid. Mr. Nordhoff apologized for not more substantively disclosing this along the way. Indicating he had an issue with the term, particularly the 30 -year recommendation, Councilmember Connolly stated that fundamentally the way he viewed what the City was trying to do was to solve a short-term cash issue, basically covering the normal cost portion of the pension liability for the City over the course of a few years. He believed this had to be balanced against the repayment term and questioned the solving of a two to three year temporary issue by saddling the City with 30 -year bonds. Councilmember Connolly indicated he would very strongly look more towards a shorter time period, recalling he suggested 15 years at the study session. Mr. Schutz stated that the 15 -year financing would start with interest only at $252,000 increasing to $500,000 in year 6. He believed the decision centered on how much better things would be in six years as opposed to ten or fifteen years. Councilmember Connolly noted the City was also answerable to the public on a fundamental level. Mr. Schutz stated he was not implying it would be a mistake to do either one, rather from staff's perspective it seemed responsible to make it a shorter period of time; however, it was also responsible to make the payments manageable. Looking ahead to year 25, Councilmember Connolly believed a new councilmember could have questions. Councilmember Levine stated he was hearing that the cost of the money was cheaper than other debt; however, four -tenths of a point in interest would be charged to repay earlier. He indicated he had been interested in giving the City the flexibility needed by taking the 30 -year term and pay it off in seven, twelve or fifteen years. Now that he understood there would be a practically half-point penalty, it did not appear to be a good idea. He suggested perhaps finding a way to package other debt and pay it off more quickly to make up for the interest being charged 12 CC 05-17-2010 at this time. Councilmember Levine inquired as to what other debt could be repaid early so that in year 25 or 29 the thought would not be that this City Council did everything that was wrong with California in 2010, passing on all the mistakes of that era. Mr. Schutz confirmed that the number under discussion was $4 million with probably $200 million in other unfunded liabilities between pensions and health care. Staff continuously looked at ways to pay debt off early; however, the opportunity had not presented itself recently, noting the myriad of items funds could be allocated to. Councilmember Levine stated he had hoped this evening, with consensus, to give the City as much flexibility as necessary while also approving a twelve or fifteen -year payment plan to pay off the debt more aggressively, giving the City the freedom in a bad year not to make those aggressive payments or make a larger payment in a future year. Councilmember Levine stated that because providing the City that flexibility had a greater cost than had been explained he did not consider it a good idea with this debt. He indicated he did not wish to create problems for those succeeding him. Mr. Schutz explained there were a couple of ways to do this. Shorter term financing could be chosen by opting for 20 years and addressing it over a shorter period of time — this ability was included in the way the staff report was written. Another option would be to evaluate a 20 or 25 year period and accelerate payments annually. The parameter could be set this evening not to go beyond 20 years, which the resolution would permit, or the City Council could direct staff to begin with 30 years and generate something taking the same payment over a shorter period of time. Mr. Nordhoff reported that Mr. Melikian, Jones Hall, stated that on larger deals sometimes A&B series had call provisions and some did not. Some of the overall issuance was packaged in different ways for different reasons. While this could be done in this instance, Mr. Nordhoff believed the flexibility because of the size of the issue was somewhat limited. However, it was worth exploring to figure out whether some mixing and matching of elements could be done. Councilmember Heller stated that from her fifteen years experience on the City Council she did not agree that the entire funding mechanism and structure of local government would change for the better. Looking at Sacramento and across the nation she believed San Rafael would not have the luxury of paying the debt off. Should extra money be available it could be allocated to a new MERA system or earthquake -safe facility and she considered this a third debt to be paid off slowly. Returning to Councilmember Levine's comments concerning what else could be bundled together, Mr. Nordhoff stated staff could certainly evaluate where those possibilities existed. Councilmember Brockbank stated he agreed with Councilmembers Connolly and Levine in that he was a lot more comfortable with 15 years than 30 years. While it was difficult to justify taking out a "loan" costing $2.8 million over the course of 15 years, $5.7 million over the course of 30 years at a higher interest rate was much more difficult. Noting Mr. Schutz appropriately indicated that with 15 years payments rose after five years from approximately $250,000 to $500,00 and then rising by approximately $20,000 annually, as opposed to 30 years, which remained consistent for the final 25 years, Councilmember Brockbank suggested that adding approximately $20,000 annually to the budget was not a huge amount. Agreeing there had been two unprecedented bad years, he stated that for every bad year, excluding the last two, there were probably nine good ones. He added that he would be a lot more comfortable burdening future years and City Councils for fifteen rather than thirty years. For those reasons he indicated he was leaning towards 15 years even with its slight disadvantages. Referring to tables on Structuring Scenarios for the Bond Debt Service, Mayor Boro requested clarification. Mr. Nordhoff explained that the debt service was inclusive of the principal and interest; therefore, the amount to be paid on a $4 million borrowing that put $4.2 million net into the Marin County Retirement System was $7.2 million in this structure over 15 years. Reiterating Mr. Schutz's comments, Mr. Nordhoff stated that, should the City Council's direction be for 15 years, staff would figure this out and execute that directive. Indicating he looks at a lot of bonds, Mayor Boro stated he had not seen junk bonds at 7.5% and was troubled at an outside parameter so high. On issuing the last Redevelopment bonds, he reported having been informed through a third party that De La Rosa did a wonderful job and the interest paid was so low it could hardly be offered to anyone. 13 CC 05-17-2010 Mr. Nordhoff pointed out that Redevelopment bonds were issued tax-exempt whereas these were taxable Mayor Boro indicated he was not comparing the numbers, rather the return. He explained that some 100% tax free bonds yielded more money because of poor credit ratings; however, with San Rafael's credit rating the return was exceptional from a City point of view. Mr. Nordhoff stated staff was hopeful for a similar outcome in this instance because of the credit rating San Rafael could bring to the market. Should a maximum of 7.0% be set, Mr. Schutz inquired whether this would affect a July 1, 2010 financing. Mr. Holmes stated it would not make him uncomfortable comparing what had happened over the past year; however, he could not predict interest rates. He believed that if the City Council wanted to change the number they should do so. Commenting that underwriters typically tried to be as conservative as possible, Mr. Schutz suggested that based on the response should the City Council wish to change the upper limit to 7%, this could be done. He noted 7.5% was intentionally very high. Concurring that 7.5% made him uncomfortable, Councilmember Brockbank stated he realized the estimate was conservative and the odds were high that it would be much lower; however, moving to 7.0% presented a slim chance of not going out. He reiterated that he would be a lot more comfortable even in the knowledge that there was a slim risk of not going out as a result. Mr. Holmes stated the document could be changed to 7.0%. Councilmember Connolly stated that in this event he would like to see a 15 -year term at the outside. Concurring, Councilmember Brockbank questioned whether the resolution needed to be modified. Mr. Nordhoff stated that amendments could be made to the resolution regarding the rate and term should the City Council so desire. Mr. Epstein suggested Mayor Boro invite public comment before working on the resolution and calling for a motion. Kevin Moore stated this appeared to be covering a recurring debt. He indicated that a 30 -year loan to him meant capital improvements such as mortgage etc., and a 30 -year loan for a short-term recurring debt did not make sense; therefore, he supported a shorter term. Should the City have extra money he believed it should be allocated to other higher loans and he inquired as to the value of the other debt at 7.5%. Mr. Schutz clarified that he was referring to all the unfunded liability the City had in MCERA for pensions, as well as unfunded liability for retiree healthcare, which totaled approximately $200 million. Mr. Moore indicated he liked the idea of getting the cap down to 7.0%; however, he did not understand paying 4% for a payoff clause that probably would not be used. He reiterated that in his opinion 30 years was for capital improvements. Nick Caoas inquired whether paying back other debt early without a premium would counteract the 30 year term of the bond. Mr. Schutz stated that the normal cost financing and the total unfunded liability in the pension system were closely related. He believed Mr. Capas' suggestion was to pay back more of the unfunded liability not having a cost in an intentional way instead of paying back the bond which did have a cost. He believed the City Council could do this. Mayor Boro clarified that in year 2021 on a 15 -year debt, payments would be $600,000 per year, the 20 -year payment would be $525,000 annually and $352,000 for 30 years. He questioned how realistic it would be for San Rafael to pay $600,000 in 2021 in debt service. Mr. Nordhoff stated this would be a roughly 1 % off -the -top check written to the bond holders out of the City's General Fund. Noting the number was substantial he did not suggest it was simple or easy and argued that, should the City Council be predisposed to a 15 -year term, staff would need flexibility. Mr. Nordhoff stated that staff would intentionally make decisions now in anticipation of paying $600,000 in debt service in the future, should that be the 14 CC 05-17-2010 direction. Councilmember Brockbank stated a previous speaker commented that 30 -year bonds were usually for capital improvements, which was often, but not exclusively true. Noting MCERA usually anticipates a 7.75 % gain annually, he reported they lost approximately 20% last year, resulting in 27% less than anticipated earnings. San Rafael was taking that one-time extraordinary loss and smoothing it out over 15 or 30 years. Mr. Nordhoff proposed the following language revision in the resolution. Page 2 - Section 2 — Sale of 2010 Bonds amended to read: "The amount of Underwriter's discount shall not exceed 1.20% of the par amount of the 2010 bonds, the weighted average rate of interest on the 2010 Bonds shall not exceed 7% per annum and the 2010 Bonds shall have a maturity date of not later than July 1, 2025." Councilmember Brockbank moved and Councilmember Connolly seconded, to adopt the resolution as amended: RESOLUTION NO. 12962 — RESOLUTION AUTHORIZING THE SALE OF PENSION OBLIGATION BONDS TO REFINANCE OUTSTANDING OBLIGATIONS OF THE CITY TO THE MARIN COUNTY EMPLOYEES' RETIREMENT ASSOCIATION, APPROVING THE FINAL FORM OF RELATED FINANCING DOCUMENTS AND APPROVING OFFICIAL ACTIONS (as amended) Mayor Boro expressed concern about the 15 -year term having a steep jump in payments from year 5 to year 6. Mr. Nordhoff stated that, should those be the parameters staff had to work within, it could be graduated. Staff would evaluate all opportunities possible to be as flexible as possible with other debt, noting the front years would be very consistent with current assumptions, as against the back end of the deal. Councilmember Levine noted from Section 5 of the resolution that Counsel and the Financial Advisor were named and he clarified that Jones Hall was Bond Counsel and Northcross, Hill & Ach, Financial Advisors. Underwriters were E.J. De La Rosa, as specified in Section 2 of the resolution. Councilmember Levine stated he did not believe, whether advertently or inadvertently, that the City Council was informed about the four -tenths of a point prepayment. Seeing that Northcross, Hill & Ach was named in the resolution he indicated he would like to have Council discussion regarding whether the City was well served and well informed, and was bound to work with this firm, as it was a point of concern for him. Sharing Councilmember Levine's concern, Councilmember Brockbank stated he was persuaded by Mr. Schutz's statement that the odds of the City's paying off the Bonds early were very slim, as there was a long laundry list of things to do. He was thus reassured that the omission was not a big deal breaker for him in whether or not the City Council moved forward. Considering it a miscommunication, he indicated he had no reason to believe it was deliberate, flawed or cast great doubt on the financial advisors. AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None CITY MANAGER'S REPORT: 21. None COUNCILMEMBER REPORTS: (including AB 1234 Reports on Meetings and Conferences Attended at City Expense) 22. Marin Telecommunications Aqencv: - File 4-13-101 x 9-1 Reporting on his attendance at the Marin Telecommunications Agency (MTA) meeting last week held at the Community Media Center of Marin (CMCM), Councilmember Levine stated that in the Technical and Finance Policy Committee meeting the issue of the cost of the bandwidth CMCM pays for, which they would then use to broadcast Council meetings was approximately $18,000. MTA would like to use franchise fees to pay for this and requested that the issue be discussed with the various City and Town Councils. Councilmember Levine indicated he informed them they should price it and charge accordingly, running it like a business. Councilmember Levine confirmed for Mayor Boro that the cost was $18,000 total -- San Rafael's share would be approximately one quarter. 15 CC 05-17-2010 Mayor Boro noted the San Rafael City Council meetings were not currently being broadcast. Councilmember Levine stated he raised that point. Mayor Boro commented that it had been a mistake to let the funds go to the MTA, rather they should have gone to the cities with each city paying what it was obligated to. Mr. Nordhoff explained that when the by-laws were written and the MTA was formed, one of the actions was that when a new agreement was struck with a new cable franchise provider, the collection and disbursement of franchise fees would come to the MTA and then roll back to the cities. Therefore, the authority associated with the control of those funds went away from local councils to the new appointed board. He believed the only way this would change, because of how the by-laws were written, was by a super -majority or unanimous amendment. Councilmember Heller reported that Marin County indicated they would not vote to change and this made the difference. Mr. Nordhoff inquired whether Councilmember Levine needed staff to take some action. Councilmember Levine indicated he did not understand the process where MTA would be deciding how to pay. He stated he understood the franchise fee went to the City from MTA and the City decided how to use it, noting every city would make that decision on its own, separate from the MTA Board. Mr. Nordhoff stated there needed to be further conversation outside of this meeting. He reported that the ultimate control and distribution of cable franchise fees for every city in Marin, exclusive of Novato and Marin County, was now under the control of the MTA. Practically speaking, nothing had changed — funds were collected and costs associated with running the MTA came off the top from franchise fees, with the net distributed. He did not see any diminution in the last ten years of money to the General Fund. Should the board choose, there was an ability to spend $18,000 on whatever it wished and from whatever source. Mr. Nordhoff confirmed for Mayor Boro that the money would go to the MTA who would distribute the City's share, noting the first cut was at the discretion of the MTA, which resulted in less money being passed back. He confirmed for Mayor Boro that when the entity was formed the thought was that there would be some administrative ease rather than having a cable franchise provider calculating the funds and disbursing them. This was contained in the enabling documents of the MTA. Councilmember Heller clarified for Mayor Boro that the MTA Board could change the agreement; however, in the past when the subject was broached by former Councilmember Miller, the County indicated they would not vote to change it. She noted Supervisor Adams was the Marin County representative. Mr. Epstein recalled this topic arising two to three years ago and suggested that, should there be further inquiry from Councilmember Levine or other members of the City Council, staff could report back. Mayor Boro recalled that as a Charter City, San Rafael could go it alone should it so choose, and he requested that this be reevaluated. Mr. Nordhoff suggested that in discussions of work plans and budget proposals for next year, with City Council direction, issues such as this could be measured against a lot of other ideas. Councilmember Heller noted that when the contract ended the City would be under a state rather than Comcast agreement for franchise fees. Mr. Nordhoff noted a shelf life for franchise fees, partly because of state action, the contract, and because competitors now in place were not bound by the same rules as Comcast. There being no further business, Mayor Boro adjourned the City Council meeting at 10:13 p.m. ESTHER C. BEIRNE, City Clerk APPROVED THIS DAY OF 2010 MAYOR OF THE CITY OF SAN RAFAEL 16 CC 05-17-2010