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Council Meeting Date: February 2, 2004 Department I umber: ED 04-03
CITY OF HUNTINGTO-N-BEACH
REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION
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SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL L
MEMBERS/REDEVELOPMENT AGENCY MEMBERS ,.., c=----_
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SUBMITTED BY: RAY SILVER, City Administrator/Executive Director G2l -,j Ln ri :
PREPARED BY: DAVID C. BIGGS, Director of Economic Development/Deputy- „I)
Executive Director D
CLAY MARTIN, Director of Administrative Services ,9
SUBJECT: Approve Redevelopment Agency/City Financial Modifications �us'N0-
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Statement of Issue,Funding Source, Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue: On September 2, 2003, and December 15, 2003, the
Council/Redevelopment Agency conducted study sessions on Redevelopment Agency
Financial Issues. The recommended actions in this Request for Council/Redevelopment
Agency Action begin to implement the direction outlined in the study sessions.
Funding Source: The recommended actions and policy direction being affirmed do not
result in any expenditures. There will be a number of budget modifications and changes in
the balance sheet of the City and Redevelopment Agency as a result of the recommended
actions. These will be reflected in the FY 2003-04 Financial Statement once completed.
Recommended Action: Motion to:
City Council:
1. Approve:. a debt credit for the Redevelopment Agency applied against General Fund
debt for the following:
$39,210 for Ocean View Estates coach rental income;
$92,854 for Ocean View Estates coach sales proceeds;
$2,886,474 for Business Development expenses from FY 91/92 to FY 00/01.
2. Approve a transfer from the Ocean View Estates Fund to the Redevelopment Agency in
the amount of$197,095 from coach sales proceeds.
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REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION
MEETING DATE: February 2, 2004 DEPARTMENT ID NUMBER: ED 04-03
3. Reclassify the $4,339,304 in General Fund overhead charges to the Redevelopment
Agency for FY 89/90 and FY 90/91, together with annual accounting charges, as the
overhead charges appropriate for the period of 1982 to 2003.
4. Authorize acceptance of the deed by the City for Shank House parcels.
Redevelopment Agency: Motion to:
1. Approve the following modifications to the Redevelopment Agency's 2003-04 Budget:
Appropriate $324,057 as General Fund Overhead Charge;
Eliminate $102,830 Accounting Charge;
Reduce Revenue by $705,000 for Hilton TOT shift to General Fund;
Reduce General Fund Debt Repayment by $926,227.
2. Adopt Resolution No. SLW , electing to remit to the City of Huntington Beach
Transient Occupancy Tax Revenues for the Waterfront Beach Hilton allocated to the
Redevelopment Agency pursuant to Redevelopment Agency Ordinance Nos. 1 and 2.
3. Authorize the Agency Chairperson and Agency Clerk to execute deeds from the Agency
to the City for the Shank House parcels and send to the County for recordation after the
City Clerk has affixed the acceptance Certificate of the City.
Alternative Action(s): Modify or delete individual items under the recommended
actions pursuant to Council/Agency direction.
Analysis: On September 2, 2003, the City Council/Redevelopment Agency conducted a
study session on Redevelopment Agency Financial Issues. The materials prepared for this
study session were designed to answer historic questions regarding Redevelopment Agency
finances and how they related to the City. This package included background information of
Redevelopment Agency debt, short-term cash flows, a long-term debt analysis, and
supporting materials. Policy Issues and Questions for City Council/Redevelopment Agency
consideration were outlined in a memorandum dated August 18, 2003 (copy attached).
Based on current information, it is expected that the Redevelopment Agency will be able to
fully repay its debt to the General Fund and all other City funds during the life of the Merged
Redevelopment Project Area. This information also raised a number of issues associated
with the need to manage the repayment of the Agency's debt to ensure that the City and
Redevelopment Agency are able to take the maximize advantage of the tax increment
revenues to be generated by the Merged Redevelopment Project Area given the $850 million
cap on tax increment.
On December 15, 2003, a second study session was held with the City
Council/Redevelopment to review possible responses/actions related to the policy
issues/questions raised at the September 2, 2003 study session. Given the increased
G:\David\RCAS\financialactions.doc -2- 1/13/2004 1:48 PM
REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION
MEETING DATE: February 2, 2004 DEPARTMENT ID NUMBER: ED 04-03
likelihood that the Redevelopment Agency will be able to repay all debt and accrued interest,
many of the previously identified alternatives which would have reduced the overall Agency
debt were not recommended. At the December 15th study session, staff outlined its
recommendations for each of these policy issues/questions in a memorandum of the same
date (copy attached).
The specific actions being recommended as part of this item conform to those outlined on
December 15, 2003, with one exception. One policy issue where there were two alternatives
outlined is being deferred to be addressed in a future Request for Council Action and that
relates to Ocean View Estates and the net income from its operation prior to. 2001-02. In
addition, further research resulted in a determination that the Downtown Paseo Parcels have
already been conveyed from the Redevelopment Agency to the City.
Environmental Status: N/A
Attachment(s):
City Clerk's
Page Number No. Description
1. Redevelopment Agency Resolution No 2 A .
2. Grant Deeds for the Shank House Parcels.
3. Memorandum dated December 15, 2003 with attachments.
RCA Author: D. Biggs, ext. 5909
G:\David\RCAS\financialactions.doc -3- 1/21/2004 4:21 PM
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RECORDING REQUESTED B%fc" .',;,;.. .1 r,� „ "�r"-
City of Huntington Beach . ,,„ r C•r Y 6�/(o//tJ4-4-- /� ,4 � /y L.L3"
Real Estate Services Division Recorded in Official Records. County of Orange
P.O. Box 190 / 2000 Main Street Tom Daly, Clerk-Recorder
Huntington Beach, CA 92648 111111 II Hill II!1 II11IIII III!1IIII!II I1IMINO FEE
WHEN RECORDED MAIL TO: 2004000116696 09:33am 02117104
Connie Brockway, City Clerk 213 109 Got 3
City of Huntington Beach o.00 o.00 o.00 0 00 0.00 0.00 0.00 0.00
P.O. Box 190/ 2000 Main Street
Huntington Beach, CA 92648
APN(s): 024I147O08&024-U147-29 AREA GRANT DEED DOCUMENTARY TRANSFER TAX$ EXEMPT
Location: 5th Street&Walnut Avenue Signature of Declarant or Agent determining tax
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
HUNTINGTON BEACH REDEVELOPMENT AGENCY, A PUBLIC BODY, CORPORATE AND POLITIC
hereby GRANT(S) to THE Li i Y OF HUNTINGTON BEACH, a municipal corporation, the real property in
the City of Huntington Beach, County of Orange, State of California, described as follows:
See Exhibit"A"for legal description
Dated: Fe6/'uG� y 5—, 2004
/ ATTEST:
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CATHY GREEN, hair City Clerk //yeirc ' (/� -/
Redevelopment Agency
DEED CERTIFICATION-CITY OF HUNTINGTON BEACH APPROVED AS TO FORM BY THE OFFICE OF CITY ATTORNEY
This is to certify that the interest in real property conveyed by the Deed 414,11--)e
dated Fe-BAL L,(Y - , 2004, from the HUNTINGTON BEACH By:REDEVELOPMENT AGENCY, A PUBLIC BODY, CORPORATE AND Assistant/DCputy City Attorney
POLITIC to the CITY OF HUNTINGTON BEACH is hereby accepted by
the undersigned officer or agent on behalf of the City Council of the This document is solely for the official business of the City of
City of Huntington Beach pursuant to the authority conferred by Huntington Beach, as contemplated under Government Code Sec.
Resolution No. 3537 of the City Council of the City of Huntington Beach
adopted on August 7, 1972, and the grantee consents to the 6103 and should be recorded free of charge.
recordation thereof by its duty authorized officer.
Tax Exempt Government Agency
CITY OF HUNTINGTON BEACH Dated: ,S//5/� LI I Y OF HUNTINGTON BEACH
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bonnie Brockway, City Clerk
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BY;
TT CONNIE BROCKWAY, CMC
CONNIE BROCKWAY,CMC CITY CLERK/ A_9�-iGy e/E?,',t'
c .I Y CLERK/ 1�7��, -
MAIL TAX STATEMENTS TO PARTY SHOWN ON THE FOLLOWING LINE
Connie Brockway, City Clerk City of Huntington Beach P.O. Box 190/2000 Main Street Huntington Beach, CA 92648
•
Project Name: APN(s): 024-147-08&024-147-29
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
State of Cal i Po n
County of OV'QI1FQ
542,
On i&12. c��hl aOybefore me,JC el! L d / S e And personally
Date Name& e of Officer Le,Jane Doe Notary Public)
appeared/1 GOfh G /e n MLA alA !' Eli 2 �beM ,
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, ig�r(s) ! €f�
Etar personally known to me -OR- �� • to be the
person(s) whose name(s) i are ubscribed to the within
instrument and ackno I_•g o me that he/sh:(P- ecuted
the same in his/he 'their :uthorized capacity(ies), .nd that by
his/he'i/Wsignature s on the instrument the person(s), or the
entity u••n behalf of which the person(s) acted, executed the
instrument.
e, KELLY'LOUISE MANDIC
Commission # 1372899 W ESS m hand and o cial seal..
Notary Public - California.D `% �
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� ' My CommOran Exepires SepCounty 1,2006 Signature of Notary
OPTIONAL
Though the data below is not required by law,it may prove valuable to persons relying on the document and could prevent fraudulent
removal and reattachment of this form to another document
Description of Attached Document
Title or Type of Document & V" Deed Shone Hoc' c
Document Date: Number of Pages
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Seller(s)
Signer's Name Signer's Name
❑ Individual ❑ Individual
❑ Corporate Officer ❑ Corporate Officer
Title(s): Title(s):
❑ Partner ❑ Limited ❑ General ❑ Partner ❑ Limited ❑ General
❑ Attorney-in-Fact Right Thumbprint of ❑ Attorney-in-Fact Right Thumbprint of
Signer Signer
❑ Trustee ❑ Trustee
❑ Guardian or Conservator ❑ Guardian or Conservator
❑ Other El Other
Signer Is Representing: Signer Is Representing:
EXHIBIT "A"
Parcel 1: Lots 2 and 4 of Block 204 in the Huntington Beach
tract, as per map recorded in Book 3, Page 36, of Miscellaneous
Maps, in the Office of the County Recorder of Orange County,
California. Except therefrom the southeasterly 44 feet.
Parcel 2: Lot 6 of Block 204 in the Huntington Beach tract,
as per map recorded in Book 3, Page 36, of Miscellaneous
Maps, in the Office of the County Recorder of Orange County,
California. Except therefrom the southeasterly 44 feet.
Parcel 3: The southwesterly 3 feet of the southeasterly 48
feet of Lot 8 of Block 204 in the Huntington Beach tract, as per
map recorded in Book 3, Page 36, of Miscellaneous Maps, in the
Office of the County Recorder of Orange County, California.
Except therefrom the southeasterly 44 feet.
Excepting and reserving all oil, hydrocarbon substances and
minerals of every kind and character lying more than 500 feet
below the surface of said land, together with the right to drill
into, through, and to use and occupy all parts of said land lying
more than 500 feet below the.surface thereof for any and all
purposes incidental to the exploration for and production of oil,
gas, hydrocarbon substances or minerals from said land or
other lands but without, however, any right to use either the
surface of said land or any portion of said land within 500 feet
of the surface for any purpose or purposes whatsoever.
(12) February 2, 2004 - Council/Agency Agenda - Page 12
E-8. (City Council) Approve Three On-Call Professional Services Contracts for
Independent Inspection and Testing with (1.) P. A. and Associates; (2.) AESCO
Technologies; and (3.) Harrington Geotechnical Engineering, Inc. (600.10) —
Approve and authorize the Mayor and City Clerk to execute: (1.) Professional Services
Contract between the City of Huntington Beach and P.A. &Associates, Inc. for On-Call
Testing and Inspection Services not to exceed $350,000; (2.) Professional Services
Contract between the City of Huntington Beach and AESCO Technologies for On-Call
Testing and Inspection Services not to exceed $350,000; and (3.) Professional Services
Contract between the City of Huntington Beach and Harrington Geotechnical
Engineering, Inc. for On-Call Testing and Inspection Services not to exceed $350,000.
Submitted by the Public Works Director. Funding Source: Available within budgeted
capital improvement projects.
Approved 4-0-2-1 (Cook out of room, Houchen absent, Green abstain)
E-9. (City Council) Authorize Appropriation and Create Business Unit for the Police
Department's Property and Evidence Unit (320.10) — 1. Establish a new business
unit and approve the expenditure of those funds to pay for equipment upgrades and
related costs within the Police Department; and 2. Appropriate $30,000 from the
unreserved, undesignated General Fund Balance. Submitted by the Chief of Police.
Funding Source: As stated above. The funds will be directly offset from cash and funds
from auctioned property held in the Property and Evidence Unit.
Approved 5-0-2 (Cook out of room, Houchen absent)
E-10. (City Council) Approve Cooperative Agreement between the City and the Orange
County Sanitation District for Preparation of Phase II of is Fats, Oils and Grease
(FOG) Control Study (600.25) —Authorize the Mayor and City Clerk to execute the
Agreement with the Orange County Sanitation District for preparation of Phase II of the
FOG Control Study. Submitted by the Public Works Director. Funding Source: The
City's fair share cost of $20,341 is available from the Sewer Service Fund account.
Approved 5-0-2 (Cook out of room, Houchen absent)
E-11. (City Council/Redevelopment Agency) Approve City and Redevelopment Agency
Financial Modifications for Fiscal Years 1991-92 to 2000-01 (Relative to Ocean
View Estates Rental Coaches and Shank House Parcels) and Adopt Agency
Resolution No. 348 Remitting Transient Occupancy Tax (TOT) Revenues for the
Waterfront Beach Hilton (Robert Mayer Corporation) to the Redevelopment
Agency (310.30) — City Council Actions: 1. Approve a debt credit for the
Redevelopment Agency applied against General Fund debt for the following: $39,210
for Ocean View Estates coach rental income; $92,854 for Ocean View Estates coach
sales proceeds; and $2,886,474 for Business Development expenses from FY 91/92 to
FY 00/01; and 2. Approve a transfer from the Ocean View Estates Fund to the
Redevelopment Agency in the amount of$197,095 from coach sales proceeds; 3.
Reclassify the $4,339,304 in General Fund overhead charges to the Redevelopment
Agency for FY 89/90 and FY 90/91, together with annual accounting charges, as the
overhead charges appropriate for the period of 1982 to 2003; and 4. Authorize
acceptance of the deed by the City for Shank House parcels.
(13) February 2, 2004 - Council/Agency Agenda - Page 13
Redevelopment Agency Actions: 1. Approve the following modifications to the
Redevelopment Agency's 2003-04 Budget: Appropriate $324,057 as General Fund
Overhead Charge; Eliminate $102,830 Accounting Charge; Reduce Revenue by
$705,000 for Hilton TOT shift to General Fund; and Reduce General Fund Debt
Repayment by $926,227; and 2. Adopt Agency Resolution No. 348 — "A Resolution of
the Redevelopment Agency of the City of Huntington Beach Electing to Remit to the City
of Huntington Beach Transient Occupancy Tax Revenues for the Waterfront Beach
Hilton Allocated to the Redevelopment Agency Pursuant to Redevelopment Agency
Ordinance Nos. 1 and 2,"and 3. Authorize the Agency Chairperson and the Agency
Clerk to execute the Grant Deed from the Agency to the City for the Shank House
parcels and send to the County for recordation after the City Clerk has affixed the
acceptance certificate of the City. Submitted by the Administrative Services Director and
the Economic Development Director. Funding Source: The recommended actions and
policy direction being affirmed do not result in any expenditures. There will be a number
of budget modifications and changes in the balance sheet of the City and
Redevelopment Agency as a result of the recommended actions. These will be reflected
in the FY 2003-2004 Financial Statement once completed.
Approved 5-0-2 (Cook out of room, Houchen absent)
E-12. (City Council) Authorize Appropriation and Create Business Unit for the Police
Department's State Narcotics Forfeiture Account (320.10) — 1. Establish a new
State Narcotic Forfeiture expense business unit and approve the expenditure of those
funds to pay for costs within the Police Department; and 2. Appropriate $250,000 from
the Narcotics Forfeiture Fund to the newly established expense account. Submitted by
the Chief of Police. Funding Source: As stated above.
Police Chief reported on the reason for establishing the new Business Unit.
Approved 5-0-2 (Cook out of room, Houchen absent)
E-13. (City Council) Authorize Appropriation of Funds to Pay Attorney's Fees in
Connection with the Settlement in Howard Jarvis Taxpayers Association„ et al.,
versus City of Huntington Beach, et al. OCSC Case No. 81870, Court of Appeal,
Fourth District, Case No. G029292 (Property Tax Refund Claims) (320.45) —
Appropriate $250,000 from Fund 707, the Employees' Rate Contingency fund (identified
as impounded property tax override revenue from FY 2000-01) to fund the agreement.
Submitted by the City Attorney. Funding Source: Sufficient funds (not-to-exceed
$250,000) exist as part of the $2.2 million property tax override revenue that was
impounded in FY 2000-01. Because it is unlikely city will be required to expend the
impounded $2.2 million dollars as part of processing or paying refund claims before it is
able to issue a judgment or refunding bond to cover the total cost of the refunds, staff is
recommending that the City Council appropriate the impounded moneys to fund refund-
processing costs. (Refer to Agenda Items E-14 and E-15.)
Amended to add after the word, "agreement"— "entered into with the Howard
Jarvis Taxpayers Association for their Attorney's fees in the litigation, Howard
Jarvis Taxpayers Association, et al vs. City of Huntington Beach, et al, OCSC Case
No. 818780; Court of Appeal, Fourth District, Case No. G029292".
Approved 6-0-1 (Houchen absent)