7:35 pm:
Call to order of the Committee-of-the-Whole (CotW) by Co-Chair Barbara Chan:
Agenda Item 1: Elisa Tierney and El Cerrito Redevelopment Agency Presentation
ELT had not arrived yet so we went to Agenda Item 2.
Agenda Item 2: Status Report from the Financial Review Team (FRT)
Steve Magyary was on vacation, so George Amberg made the report:
Back to Agenda Item 1:
ELT passed out a printed version of her presentation entitled, "Services for the 21st Century, El Cerrito Redevelopment Agency Presentation" dated July 7, 1998.
She explained that the first two pages of this booklet were an outline of her presentation and that the remaining narative pages and charts contained the information she would be presenting.
She proceeded with her presentation with various CotW members asking question as we went along.
Linda B. asked if EC residential property values in the RDA Projec Area have gone down as a result of being a part of the RDA Project Area. ELT said we have seen no evidence of that.
Evelyn K. asked for a legal definition of "blight." ELT did not have it with her but will get it for us. This definition contains descriptions of both physical and economic blight and is very subjective. John H. asked, "Where is there blight in El Cerrito?"
ELT responded that one example is the high vacancy rate at the Plaza meets the definition of economic blight and the area now occupied by the Del Norte Project replaced an area contatining physical blight.
Peter L. asked if the definition for blight used by the City and the RDA are the same. The answer was no, the City defines blight as nuisance for its programs and the state defines blight for RDA purposes.
George A. has a neighbor/realtor who believes that the threat of Eminent Domain in the RDA Project Areas depresses sales and suggests that it be removed.
Linda B. asked why residential areas were included in the RDA Project Area originally.
ELT said she did not know since that policy was decided before she came to El Cerrito. Mayor Bartke added that, consistant with the City's General Plan of 1977, the RDA Project Area generally included San Pablo Ave and one block to the east and that any re-definition of the Project Area would be an RDA function.
Don W. explained that one reason for the large "bulbs" at the north and south ends of the RDA Project Area was to allow for expansion of the commercial/residential mix through redevelopment. He stated that the RDA Project Area should be coordinated with the General Plan and wants to discuss the redefinition of the RDA Project Areas.
Bea O. reminded us that 10 years ago the RDA had grandiose plans for the North Gateway Project that included an 8-story hotel!
M. Selph asked if any incremental tax increases on residential properties in the RDA Project Area going to the RDA.
ELT said yes, that all incremental tax increases on all properties in the RDA Project Area go to the RDA. That is how the RDA gets its funds.
George A. stated that most of the value increase is in land value. He said that both Emeryville, where 90% of the land in the city is in their RDA Project Area, and San Pablo are examples of RDAs using tax increment funding as an advantage.
George A. asked what the current percentage of the required "20% Set Aside for Affordable Housing" is for El Cerrito RDA.
ELT said we are at about 22%, so we have met our current requirements. She will bring the exact figures to our 7/21 meeting.
Thom S. asked if strategies such as grants and low-interest loans for low/moderate income residents to use for home purchase could be used to meet the 20% Set Aside requirements.
ELT said yes and referred to her booklet for the definition of low through moderate income levels. These are set by the federal and state governments.
Steve M. asked if the 20% Set Aside included low through moderate income levels?
ELT said yes and referred us to the RDA Project Area Housing Production section of her booklet. The income levels for a family of four range from $31,650 (very low) up to $75, 950 (moderate).
ELT advised that this year the RDA is passing through $8,000 to the City.
ELT explained that the RDA must prove to the state that debt exists to receive Tax Increment Revenue (TIR).
Steve M. asked when does RDA receive TIR from the state. Julie Brown said we get 55% in December, 45 % in April, and the "Supplemental" in June. This generally coincides with the county schedule for our paying our property taxes.
ELT identified three important dates for the RDA:
ELT said that RDA Staff "run the numbers" to verify a general ability to do so. Gerry R. said consultants did a detailed study as part of the refinancing done last fall. ELT will provide a copy of this report to the FRT.
Steve M. asked when is payoff time for existing RDA Bonds.
ELT said the refinancing had shortened the time to the years 2019 and 2017.
Linda B. asked if the RDA had any unused bonding capacity with the existing financial condition of the Agency.
ELT said there is none right now, but maybe some will be created later.
Linda B. by asking if the RDA could add increased bonding amount and still make pay off dates.
ELT said probably, but this has not been studied.Steve M. asked what bonds had been refinanced last fall.
ELT answered the outstanding balance of the 1990 and 1991 bonds.
Steve M. then asked where the $605,000 gain came from.
ELT explained that most of it came from changing the reserve amount to a surety bond to serve as guarantee for the bonds.
Steve M. Asked if the RDA was prevented by law from having a reserve.
ELT said no, it was the financial condition of the RDA that precluded a reserve. A desirable condition would be to have one year funding requirements in reserve.
Steve M. asked that if this is so, why do we not have a reserve.
Gerry R. said that the policy of the RDA was to use the money to do projects rather than set up a reserve.
Anne D. asked if RDA projects in El Cerrito are required to be large or could they be small, saying that Target Area Policy 3b in the booklet seems to require large.
ELT responded that the projects could be small, but that RDA policy currently favored large. Gerry R. reminded us that Target Area Policies only apply to Target Area, which actually make up a small portion of the Redevelopment Area.
Grant R., referring to the page in the booklet titled, "El Cerrito Redevelopment Agency Accomplishments (As of April, 1998)", asked that we be provided a complete report on all projects that the RDA participated in so that we can evaluate whether we agree that they are "accomplishments" or not.
George A. asked for the percent of current TIRs that comes from projects the RDA has participated in.
Bea O. asked for a chart (like the ones in the booklet showing the change in assessed valuation over time for each Project Area) without any influence of redevelopment (id. est., showing change due to inflation and other non-RDA factors).
Gerry R. reminded us that "assessed valuation" does not always reflect "property values."
ELT said that, within certain complicating factors that she would identify, she will try.
A general discussion on "assessed value plots" requested, RDA job creation figures, and Sales Tax increments, if any, resulting from RDA Projects followed. ELT stated that the RDA has statistics for each business in EC and their trends over time. This is "confidential" information when connected to an individual business, but that information on categories, such as "all drug stores in EC", or "all hardware stores in EC" can be released as long as there is more than one store in the desired category. The RDA receives quarterly reports from the county.
Steve P. said that redevelopment is used by other cities to rejuvenate a geographiocal area like the Fourth Street district of Berkeley and then asked if EC could learn anything from this tactic. He said he thought "geographical tracking" would be especially valuable in tracking future performance and benefits of redevelopment in EC.
M. Selph asked what the "gaps" meant in the Assesed Value versus Time charts in the booklet (see the chart for Del Norte Market Place, TA3).
ELT said the gaps were caused by the county changing property parcel numbers when property changed hands. At the time these charts were created, staff did not know how to track needed values through these changes. Now they do, so she will "fill in the gaps."
Since not all of the "Expenditure Preparation Worksheets" had readily understandable names to go with the Account "70" and "72" numbers, ELT will provide a cross reference list of all of these numbers and an easily recognizable narrative name. "70" are capital accounts projects and "72" are affordable housing projects.
This ended ELT's presentation for the night. She will be back to the 7/21 meeting to finish her presentation and answer questions.
9:50 pm (about)
Agenda Item 3: Discussion of getting the Agency to reconsider actions taken with the $605,000 resulting from refinancing RD bonds
George A. said that on 6/22 the RDA decided what to do with the $605,000 realized when refinancing their bonds last fall. One of the actions was to pay off the Atchison, Topeka & Santa Fe 10% Right of Way Note. Also at this time, the City Manager stated that , since these were proceeds from a capital asset, they should go into a capital reserve. George went on to say that the greatest need for the City was to increase funding in its General Fund. The capital reserve requirement may keep these funds from the general fund.
Steve M. also pointed out that since this AT&SF loan is a 10% loan and the remainder of the City loans to the RDA are now at 3%, paying off the 10% note, while benefitting the RDA, will prevent the City from realizing about $20,000 per year in interest that it would have received had the RDA repaid a portion of the 3% loan.
Because of the late hour, and the fact that the FRT is already reviewing this debt subject, it was agreed that the FRT should discuss this item at its 7/14 meeting and bring a recommendation back to the CotW at the 7/21 meeting for CotW discussion and action.
10:00 pm (about)
Meeting was adjourned.
Next meeting will be held at 7:30 pm at the El Cerrito Open House Senior Center. Agenda items will include completion of the RDA Presentation by ELT and a status report from the FRT, including a recommendation on reconsidering RDA actions taken with the $605,000 resulting from refinancing RD bonds.
List of Attendees at 7/73 meeting of the Services for the 21st Century Committee-of-the-Whole (City staff and elected officials are indicated by job title in parentheses):
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