HomeMy WebLinkAbout12/16/1981 - MINUTES ,v2,
CITY OF PALM SPRINGS
CITY COUNCIL MINUTES
DECEMBER 16, 1981
A Regular Meeting of the City Council was called to order by
Mayor Doyle, in the Council Chamber, 3200 Tahquitz-McCallum
Way, on Wednesday, December 16, 1981 , at 7:30 p.m.
ROLL CALL: Present: Councilmembers Field, Ortner, Rose and
Mayor Doyle
Absent: None
The meeting was opened with the salute to the Flag and an invoca-
tion by Councilmember Ortner.
COMMUNITY REDEVELOPMENT AGENCY : No business
APPROVAL OF MINUTES :
It was moved by Field, seconded by Rose and unanimously
carried, that the Minutes of November 18 and December 2,
1981 be approved.
PUBLIC HEARINGS:
1 . GENERAL PLAN STREET PLAN AMENDMENTS
Recommendation : That the Council amend the General Plan
Street Plan relating to Bogert Trail , Acanto Way, Toledo
Avenue, and unnamed major and secondary thoroughfares, all
in area south of the Palm Canyon Wash dike.
Director of Community Development reviewed his repori;,
dated December 16, 1981 , detailing the Planning Commission's
findings and recommendations, noting consideration to leave (101 )
on the plan the unnamed major thoroughfare until it is
determined whether it is needed to provide secondary access
for the Palm Hills area.
Mayor declared the hearing open; there being no appearances,
the hearing was closed.
Resolution 14079, amending the General Plan Street Plan,
as recommended, was presented; after which, it was moved
by Field, seconded by Ortner, and unanimously carried,
that Resolution 14079 be adopted.
2. ZONING CASE 5.0203 - CITY OF PALM SPRINGS
Recommendations : That the Council approve a change of
zone from W-R-1-C and R-1-C to W-R-1-AH and R-1-AH for
10 acres at the easterly extension of Escoba Drive, 200
feet east of Desert Way, W-R-1-C and R-1-C zones. (149)
Director of Community Development stated that the zone
change was initiated by the City in order to complete
the equestrian center, and provides large scale lots
which can be used for residents who might wish to keep
horses on the property; that interim use will be a plant
growing nursery; and that the interim use has been approved
by the Planning Commission, concurrently with the zone
change, under a conditional use permit.
Mayor declared the hearing open; there being no appearances,
the hearing was closed.
Council Minutes
12-16-81 Page 2
2. ZONING CASE 5.0203 (Continued)
City Clerk read title of ordinance, as described in the
above recommendation; after which, it was moved by CONT"D
Rose, seconded by Ortner, and unanimously carried, that (149)
further reading be waived and that the Ordinance be
introduced for first reading.
3. SCHOOL IMPACT MITIGATION FEE - APPEAL
Recommendation: That the Council consider appeal by
the School District from Planning Commission decision to determine
the cumulative impact of residential construction on the
District pursuant to the establishment of school impact
fees.
Mayor stated that pursuant to agreement by representatives
of the District and Board, there was discussion with the
Council concerning this item at the last study session.
In answer to questions by Council , Housing Administrator
stated that that staff has verified that the District
has a capacity of 90 seats (3 rooms with an average of
30 students per room) that are not being used; that the
fee would be assessed for any residential development,
whether single-family lot or new subdivision, at the time
of issuance of the building permit; that process relates (114)
to evaluating cumulative effect; and if an environmental
constraint was not previously noted and then comes to
light, it is permissable to go back and mitigate it.
In answer to questions by Council , City Attorney stated
that there is a provision in CEQA for assessment: of
cumulative impact of projects which, by themselves, might be
found not to have significant impact; that he has not
done in-depth research to determine whether such can be
attached to a building permit, which is a categorical
exemption under the guidelines; that it was his under-
standing the review in this case was the cumulative
impact of building; that the language of SB 201 relates
to single units; that a property cannot be subject to
a second environmental review, when the focus is only
on the issuance of a building permit; that the environmental
review by the Planning Department and Commission was a
review of the cumulative impact of all residential building,
and with the end result in mind that if that were found to
be the case, it would serve for the imposition of the fee
on all building, not as a specific mitigation of a specific
project, but mitigation of a cumulative impact; and that
he was not in a position, at this time, to state with
assurance that such a method could or could not be done
with impunity.
Mayor declared the hearing open.
Council Minutes
12-16-81 Page 3
3. SCHOOL DISTRICT IMPACT MITIGATION FEE (Continued)
Mike McCabe, President of the School Board, stated that,
since the passage of Proposition 13, the District has been
hamstrung regarding raising funds for building new classrooms;
that he believed the economy and growth in the community
would again rise and people with children will be attracted
to the community, and there will be no classrooms available;
that the District does not have funds to add new classrooms,
and can only use its funds for operating costs ; that the
Vista del Monte school is at capacity, yet is within the
area proposed for a great deal of new units, the nature
of which will attract young families ; that the statistics
will not change as a result of the District's master plan;
that it takes approximately one year for a school to be
completed, and there is a considerable lag time between
the time of arrival of the students and construction of a
school ; that before considering busing as an alternative, CONT'D
consideration should be given as to the impact that such (114)
an alternative has had on other cities; that he believed
the disadvantage of double sessions was apparent, and was
not a viable alternative; that there will not be a great
amount of grant funds available for these buildings; that
it is almost impossible to obtain voter approval for a
bond -issue; that the mitigation fee is the only means of
generating revenue for classrooms, and it can only be
used for constructing classrooms; that he believed other
cities in the Valley were waiting to see what Palm Springs
would do; and that he urged approval of the fee.
Ruth Licata, representing the League of Women Voters, read
a prepared statement, a copy of which is on file in the
Office of the City Clerk, urging delay until completion
of the District's master plan.
Larry Ruttan,School Superintendent, stated that the derision
was being appealed because the District cannot afford to
wait until completion of the master plan; that approval
was initially sought in March, 1981 , and since that time,
1 ,060 units have been approved, of which the fee was
imposed on 360; that it is not known what impact those
units will have on increased student population; and that
if action is not taken, it is possible that the funds
from the 360 units will be lost.
Robert Fey, 2000 Madrona, representing Board of Realtors Housing and
Local Government Committee and Riverside County Real Estate Council ,
several builders and himself, stated that the issue is Pacts and trends;
that no one is questioning that when the master plan is complete it
will reflect need, either greater or less than expected and builders
are willing to pay their fair share; that the question is with a growth
rate of less than 1% and the procedures used, the report does not
make a lot of sense; that the District is spending money to answer the
questions which it is attempting to address by the fee; that the
Eisner-Smith report was geared to SB 201 and covered one school ,
not the unified district; that he did not think it was intended to
imply CEQA, but rather SB 201 ; that original report was amended and
now reflects growth rate of 32 students per year, which goes along
with a growth rate of 2500 units; that the 212 capacity number used in
the report, which adds the 3 empty classrooms referred to by the
District, plus 129 spaces remaining in current rooms, does not
include 7-12 rooms used for non-educational purposes, and indicates
a capacity that could last beyond the year 2000; that the District
owns 90-100 acres of land which are not being used, although some
may be necessary in the future, the sale from one of which would
pay for a 600-student school , without mitigation fee; that the
District can apply for State or Federal grants, but only if it
has a master plan ; that a District policy statement in June, 1981 ,
:�CW
Council Minutes
12-16-81 Page 4
3. SCHOOL DISTRICT IMPACT MITIGATION FEE (Continued)
would result in 210-270 additional seats, and 600 additional if
6th grade were moved to the middle school ; that decision was
delayed at a recent Board meeting, pending completion of the
master plan; that there is no correlation in the District that
housing equals students, after which he recited increase/decrease
in student population compared to additional units constructed in
Desert Hot Springs and Rancho Mirage. He recited various calculations
relating to increased mortgage payments as a resu'It of the fee, and
formula used in establishing the $636 fee, which used 1978 housing
data against the 1981 population and ignored 1980 census data which
was available.
Rick Service, 1222 Mesquite Avenue, stated that 2,000 units
have been approved for the area north of Vista Chino, a
great number of which are designed for families; that although
the housing element was adopted, until now, developers were
not interested in helping to meet that element; that historical
trends do not reflect what exists and what will happen in the
future, i .e. , construction in the past ten years was not CONT'D
family housing; that the District is talking about: elementary (114)
schools, not middle or senior high; that there are 400 single-
family lots in Section 1 which can be built upon ; that the
issue also relates as to what extent growth should mitigate
its own impact; and that the developer pays the fee up front
and then recovers it from the buyer.
John Wessman, 72200 Clancy Lane, Rancho Mirage, stated that
he believed there needed to be more study as to what
constituted a fair fee; that a $700 fee is high when
applied to a 400 sq. ft. unit, and one which probably
would not be family-oriented; that everyone in the District
should have the same kind of fee imposed on the same type
of use; that he supports users paying the cost of services,
e.g. , people who have children should pay the cost of the
schools; that he felt there should be a joint meeting
between the Council and the School Board; that although
many units have been approved, it does not mean that all
will be built; and that he believed it was importaint to
plan ahead and provide the money, but did not think it
should be done hastily.
There being no further appearances, Mayor declared the hearing
closed.
In answer to question by Council , whether fees collected
in the City would remain in the City, Housing Administrator
stated that as a unified school district, the District can
utilize pool funds to meet District needs, e.g. , the entire
District contributed to the cost of constructing new school
in Rancho Mirage; that there needs to be uniformity in
application of the fee, and, if approved, it should be
conditioned upon other jurisdictions adopting the same fee.
Councilwoman Ortner stated that the Planning Commission
has, in the past, questioned whether schools and other
services would be adequate to accomodate the number of
units which were being approved, and received affirmative
responses; that to have the issue suddenly appear, is a
lack of foresight; that she appreciated the position of
the District, but believed there are other avenues to be
explored; and that a faster development of the master plan,
may result in alternatives that the District does riot now
have.
Council Minutes
12-16-81 Page 5
3. SCHOOL DISTRICT IMPACT MITIGATION FEE (Continued)
Councilman Rose stated that he favored any feasible action
which the Council could take to assist in this problem, which
came about by a great measure because of Proposition 13; that
he was hopeful a method within the law could be found; that
he would like to have seen a master plan sometime ago, but
recognized the reality that it would not be complete until
October, 1982; that he recognized a similar position for
the City in establishing drainage fees, and the criticism it
received for not having an updated plan before it; that he
previously expresstid amazement that SB 201 was not used three,
years ago, and the District should look to itself and inquire
why it did not do so and not cast aspersions on the Planning
Commission instead of facing that it could have and should
have made another decision; that he had serious concerns about
the use of CEQA for this purpose and has asked the District
for the basis of using this method; that the court case
cited by the District at the last study session only deals
with Government Code 65970 (SB 201 ) and not with CEQA; that
he understands that SB 201 is a less viable solution today
because of amendments thereto, but that was not the case in
its original version and of which the District could have
made use; that the District has not provided any basis For
using CEQA, other than that eighteen other districts are
doing so; that there must be some legal opinion that could
satisfy the Council that it is appropriate use of its power,
and he did not believe the Council could proceed without
that kind of assurance; that he did not think it essential D'
to wait for the master plan, but rather to know that it is CONT ONT
legally valid and correct; that without that assurance, he
was not prepared to vote for something which is questionably
valid and which the City Attorney cannot validate; and that
if the District cannot come up with the information, perhaps
the City Attorney should be instructed to do so.
Councilman Field stated that the Council is on record as
having approved the concept of the mitigation measure, and
he did not wish to take a different position; that there is
truth in all areas of the testimony, some of which are less
clear and more difficult and are being wrestled with; and
that he believed the Council should, through staff and a
District-wide special committee, further study these items
to bring them into sharper focus.
Mayor stated that he had concerns about using CEQA for
imposing the fee and legal ramifications relating thereto;
that he did not believe a vote was appropriate at this
time; that it would be appropriate to have further review
and input at least from the City Attorney, and communication
or opinion from the County Counsel that relates to using
CEQA for imposing the fee; that issues have been raised
which have not been clearly answered in toto, i .e. , land
surplus and availability of grant funds ; and that he
suggested that this matter be continued to the next meeting,
with instructions to the City Attorney to secure opinion
from the County Counsel , as well as opinion of his own,
and that the staff contact the School District to obtain precise
answers to the questions which have been raised, including
how the fee is imposed and its relationship to the size of
unit. He stated that he supports the concept of a fee,
and if these issues can be resolved, would vote in favor
of it.
Council Minutes
12-16-81 Page 6
3. SCHOOL DISTRICT IMPACT MITIGATION FEE (Continued)
City Manager stated that he could not speak to the issue
of the County Counsel 's opinion as to when that can be
provided, but that other staff work could be completed
by the next meeting.
Councilwoman Ortner questioned whether it would be possible
to have representatives of the various cities in the
District meet in a sub-committee -format to obtain their
input, which she felt was important since it is a unified
school district; and that she would support a motion to
continue this matter for two weeks, however, she did not CONT'D
think it would be enough time to obtain the information (114)
desired.
Mayor stated that if the major concerns can be addressed,
it may be possible to go along with a fee of some type,
and if two weeks is not sufficient, it may be necessary
to further continue the matter.
It was moved by Rose, seconded by Doyle, and unanimously
carried, that this matter be continued with staff and the
District requested to provide response to the issues raised
in the discussion.
Council Minutes
12-16-81 Page 7
PUBLIC COMMENTS :
a) Richard Smith, 1060 Olive Way, regarding Item 8, stated
that it was not unusual for the City to -contract for
such services and a precedent has been set in that the (112)
City has contracted for services relating to uniform
codes; that the service will be a benefit to the
development community and at no cost to City; that it
was he who approached the Building & Safety Director
and not the reverse; that, initially, he did not agree
to the non-exclusive agreement, but later agreed that
it would be questionable to have granted an exclusive
agreement; and that credentials and licensing are
required and those have been submitted to the Building
& Safety Director.
In answer to question by Council , Mr. Smith stated
that it was his understanding that he would be an
agent of the City and would be doing calculations and
plan checks; that the agreement prohibits a conflict
of interest and in no way would he be associated with
the design work to meet the standards or doing anything
to imply that he represents a developer or architect;
and that he would not be generating work that he would
be checking nor be involved in new construction designing.
b) John Wessman, 72200 Clancy Lane, Rancho Mirage, stated
that regarding Items 10 and 11 , fees should be imposed
across a broad population; that the drainage fee is
narrowly applied; that 75% of the community is already (114)
developed, and he reiterated comments he has previously
made concerning the election for an assessment district;
that existing homes will be relieved of the fee until
a 50% addition or remodeling is applied for; and that
the County is looking at the higher impact of commercial
use on flooding.
c) Weldon Madlin, 2688 Julian Road, stated that he did not
believe enough time was spent in developing the Smith (112)
agreement (Item 8) ; that Mr. Smith would not be doing
the design work, but would be doing calculations on
the design and then would be able to do the plan check
on those; that he did not think the proposal would be
a cost saving to the City; and that he recommended that
the contract be denied, or the matter returned to the
staff with instruction to solicit input from people in
the field as to a means of checking plans that will
be satisfactory to everyone.
d) Sidney Griffin, N. Riverside Drive, stated that the traffic
problem on the street is well documented; that it has not
improved even though the car dealer at the west end has (130)
moved; that he favored a stop sign at Camino Real to
facilitate children crossing the street to access the
footbridge to cross the wash in order to get to school ;
and that he did not think a stop sign would inconvenience
anyone.
e) • Adelaide Ruff, 6 Primrose, read a statement (copy of which
is on file in the Office of the City Clerk) relating to (116)
historic statements concerning property rights and the
violation or infringement thereof; and stated that the
Anaheim case was settled for moving costs and was settled
out of court.
Council Minutes
12-16-81 Page 8
f) Mr. Knutson, regarding Item 5, stated that he disagreed
with the staff analysis of information presented; that
financing for the project was based on prior approvals, (116)
and the added financial burden for drainage fees places
a hardship on the project; that they have been working
with the engineer to produce a solution; and requested
that action on the item be continued in order to permit
developing a 10-year increment retention on site for
providing mitigation from a 100-year flood.
g) Mrs. James Martin, formerly Rancho Trailer Park, currently
74 Venice, read a prepared statement; (a copy of which is (116)
on file in the Office of the City Clerk) , recommending a
$2,000 payment to all relocatees in the park, who moved
since October, 1980.
h) Jim Stuart, 155 W. Hermosa, President of Citizen 's United,
read a prepared statement (a copy of which is on file in
the Office of the City Clerk) recommending that no further (83)
board/commission appointments be made by the Council until
after the April election; and that any incumbent Councilmember
desiring to run for Mayor, first resign from the unexpired
term as Councilmember, and a process for filling any vacancy
which might occur should such incumbent be elected mayor.
i ) Robert Fey, 2000 Madrona, commented on ratio of cost of
building fees to cost of new construction, stating that
such represents the largest-single cost in construction.
j) Mike Turner, Rancho Trailer Park, suggested that Mr. Wessman
subscribe to his own philosophy and if he desired to use (116)
the property, then he should reimburse those who have made
investments at the park.
k) Neel Fuji , 6 Ramon Circle, stated that the State Law does
not relate to age or financial ability to pay, and the (116)
Council should look at precedent established concerning
park closures, and not as staff has interpreted the law.
LEGISLATIVE ACTION:
4. TRACT 16544 -TIME EXTENSION
Recommendation : That the Council approve a 2-year time
extension for Tentative Tract Map 16544, for 98-unit condominium
project between Calle Encilia and Calle E1 Segundo, south of
Tahquitz-McCallum Way (Western Ventures) . Attorney for applicant (137)
has requested continuance to January 20, 1982.
It was moved by Field, seconded by Rose, and unanimously
carried, that this matter be continued to January 20, 1982,
as requested.
5. P.D. 89 & TRACT 15049 - TIME EXTENSION
Recommendation: That the Council approve a 1-year time
extension for Planned Development District 89 and Tentative (116 8t
Tract Map 15049, for industrial condominium project: on Ramon 137)
Road, between Crossley Road and San Luis Rey (G. Knutson) .
Applicant has requested continuance to January 6, 1982.
It was moved by Field, seconded by Ortner, and unanimously
carried, that this matter be continued to January 19, 1982,
as requested.
Council Minutes
12-16-81 Page 9
6. NORTH RIVERSIDE DRIVE/CAMINO REAL - STOP SIGN
Consideration of need for additional stop signs at Camino
Real and North Riverside Drive.
Director of Community Development stated that traffic
engineering standards and warrant criteria for installation
of stop signs has been given to the Council ; that it was
indicated at the last study session, that traffic has been
an object of concern and discussion over the last three
years , with a portion of the residents desiring the street
to be closed in order that commercial traffic from the west
would not travel through the residential neighborhood; that
other residents in the area felt that closure would unduly
burden their streets ; that result of the disagreement was that
the item be dropped at this time; that regarding stop sign
at the pedestrian walk where it crosses the wash via a
footbridge, warrant criteria and traffic engineering standards
cannot be met and staff does not recommend installation of
a sign; that there have been no accidents involving children
at this crossing in fourteen-plus years ; that the principal
of the elementary school indicated there had been no problems (130)
reported by parents of children using the crossing, but
instead concerns relating to children playing in the wash;
and that the ability to install the stop sign is within
the purview of the Council , regardless of whether it meets
criteria.
Councilwoman Ortner stated that children use the crossing
frequently, and her concern relates not to speed, but to
safety of the children ; that she feels strongly that a
stop sign is needed; and that if the Council chose to place
a sign at Camino Real and Laverne, she did not see why one
could not be placed at this location.
Mayor stated that in the LaVerne/Camino Real instance, it was
a matter of sight problems; that the request represented fifteen
people; and he would not be adverse to this location, if there
was a complaint from the people in the area, however, indication
from the school is that that is not a concern.
Councilman Field stated he understood Councilwoman Ortner 's
sensitivity to the issue; that the input from the community
has been varied; that he relied on the science which has
guided the Council in the past; and, although that science
has been questionable at times, until something better comes
along, he would not be in favor of making up the rules as
things go along.
In answer to question by Council , Director of Community
Development stated that there has been no input from the
parents of the children, and principal of the school was
solicited as any concerns voiced by parents, the response
being negative.
Councilwoman Ortner suggested that this matter be continued
to January 20, 1982, at which time she would present a
petition from parents and residents in the area.
Councilman Rose stated that he would like to hear testimony
and not just the presentation of a petition.
It was moved by Ortner, seconded by Rose, and unanimously
carried, that this matter be continued to January 20, 1982.
is,,
Council Minutes
12-16-81 Page 10
7. HOMEOWNERSHIP ASSISTANCE PROGRAM
Recommendation: That the Council accept 1525,000 grant
for the Homeownership Assistance Program and approve
a cooperation agreement with the County for program
administration.
Housing Administrator reviewed report of Director of
Community Development, dated December 16, 1981 , and (85)
in answer to questions by Council , stated that considera-
tion of applications is based on eligibility requirement,
using incomes below County median, adjusted to family
size; and that so far, seven applications have been filed.
Minute Order 3036, accepting the grant and approving the
agreement, as recommended, was presented; after which, it
was moved by Rose, seconded by Ortner, and unanimously
carried, that Minute Order 3036 be adopted.
8. CONTRACTUAL ENERGY PLAN CHECK
Recommendation : That the Council approve agreement with
Richard J. Smith, dba Energy Wise, for energy plan check
services.
Director of Community Development stated that the agree-
ment is non-exclusive; that the City would enter into such (112)
an agreement with others who met qualifications and were
willing to abide by conditions of the agreement; that there
was nothing in the letter received from Mr. Madlin that would
cause him to change his recommendation; and that he agreed
with Mr. Smith, that if there is any concern or question
on the part of the Council relating to the agreement, that
this matter be continued to the next meeting.
In answer to question by Council , Building & Safety Director
stated that the State Law only requires that the building
official ascertain that plans meet State requirements, not
that calculations must be done or plans must be checked,
likewise the building official must ascertain that a building
meets State law; that this same type of contractual arrange-
ment is done with ICBO for large-scale buildings ; that it can
be extended to ther firms; that an easy way to ascertain
meeting State law is to do the calculations, which is a
service Mr. Madlin has done in the Valley for many years;
State law has changed, and a complete set of calculations
is not needed to ascertain whether the design meets standards
of the Code; that there are other ways of ascertaining whether
the law has been met, which is basically what Mr. Smith will
be doing, and if that means calculations, then he will have
to do that; that he would be an agent of the City, ,just as
contractual plan checker is an agent; and that there will
be no dollars exchanged between the City and Mr. Smith -
developer pays the cost, and the process will be expedited.
In answer to question by Council , Building & Safety Director
affirmed that it would be a conflict if, in the case of Mr.
Madlin or Mr. Smith, calculations were made for a developer
and then via the agreement were approved by them.
Mayor stated that he believed legitimate issues were raised
and he believed those have been answered.
Minute Order 3037, approving the agreement, as recommended; was
presented; after which, it was moved by Field, seconded by
Rose, and unanimously carried, that Minute Order 3037 be adopted.
Council Minutes
12-16-81 Page 11
9. P.D. 131 - JOHN WESSMAN
Councilwoman Ortner stated that she would abstain from
discussion and voting.
Director of Community Development reported that on December 2,
1981 , the Council referred the above case- back to the Planning
Commission to review levels of financial assistance for displaced
tenants, and to recommend a policy which could be applied
equally to the closure of any mobilehome park by private
development. He read Commission 's recommended standard
policy, as detailed in his report of December 16, 1981 ,
which basically provides that financial assistance is not
intended to compensate tenants for their entire loss, and
is to be limited to those households experiencing financial
hardship as defined by eligibility requirements for the HUD
Section 8 program, request assistance in writing and provide
at least two years of detailed income information.
Housing Administrator reviewed background information outlined
in said Director's report, noting that the Relocation Assistance
Act does not apply to private redevelopment.
In answer to questions by Council , City Attorney stated that
the law was not an urgency statute, and became effective in
January, 1981 ; that the policy recommended by the Planning
Commission fully complies with what is stated in Government
Code Section 65863.7, but that does not mean that is the only
policy which could be applied; that the authority is sufficiently
broad to adopt other policies that would also comply; that the
law does not refer to compensation to displaced mobilehome
residents foreconomic loss because of the move, but does
refer to a report on the impact of the closure of the park
because of the change in use and that such report shall (116)
address the availability of replacement space, and that in
considering the report, the Council was to require the developer
to take mitigation steps to find adequate replacement space,
but such requirement is a minimum requirement and does not
prevent the Council from imposing more stringent measures;
that it would not be out of the Council 's authority to
enact more stringent measures which could include such
things as compensation for economic loss, however, that
may be open to challenge, since the section addresses
the availability of replacement space, not economic loss.
Councilman Rose stated that he did not think it appropriate
for the sake of expediency or popularity, to impose the
fee, but that which is correct for the community must be
considered; that it would be onerous and a constraint on
the rights as American citizens to place conditions on
the right to transfer property; that perhaps the State law
does give such ability to place burden on property owners
to compensate for investments made; that his analysis of the
law is that comparable or better location should be made
available for people to move to after leaving the existing
location ; that tenants established their homes with the
understanding that they did not own the land and that it
was a lease situation; that if promises were made to the
tenants, then they should seek legal redress in the court
system, but it is not up to the Council to redress a civil
wrong; that suggestion of the law has been followed and
a replacement mobilehome park has been created, and one of
which the City can be proud; that the proposed policy will
be applied uniformly and there is nothing onerous about it;
and that he understood the problems of the tenants, however,
when one is forced to leave a lease situation, one does
not get compensated within the law for investments made
under such circumstances.
nDL/�
Council Minutes
12-16-81 Page 12
9. P.D. 131 (Continued)
Councilman Field stated that although it was not germaine,
it was a quandry as to why tenants who attended the last
Planning Commission meeting did not address the Commission;
that he believed the Council has acted judiciously:; and
that to do more would bebpyorrd'the venue of the Council .
Mayor stated that he subscribed to comments of Councilman
Rose, and that he did not believe the Council had a moral CONT'D
right to over-burden the developer; that he did not; think (114)
it proper to mandate compensation for investment loss in
these cases, and although the law may be interpreted to
do so, it was a shaky area and one which could be subject
to challenge in court; that the City has done much to find
replacement space for relocatees and the community has
spent one-half million to provide a park for people to
move to; that he believed the requirements of the law have
been met, and more of any developer in such a situation
would not be within intent of the law.
Resolution 14080 approving the policy as recommended and
Resolution 14081 reaffirming approval of the planned
development district, were presented; after which, it
was moved by Rose, seconded by Field, and unanimously
carried, that Resolutions 14080 and 14081 be adopted.
10. EXISTING PROPERTIES/DRAINAGE FEES
Recommendation: That the Council amend the Comprehensive
Fee Schedule to allow additions on existing properties of
up to 50% before a drainage fee is collected.
Director of Community Development reviewed his report,
dated December 16, 1981 , and noted that the change
relates to hard-surface area, rather than floor area. (114)
Resolution 14082, amending the fee schedule, as recommended,
was presented; after which, it was moved by Field, seconded
by Ortner, and unanimously carried, that Resolution 14082
be adopted.
11 . WAIVER OF DRAINAGE FEES
Recommendation: That the Council grant exemption from
payment of drainage fees projects which had received approval
by the Planning Commission, or had submitted for plan check,
with no previous condition that payment be required, provided (114)
building permit is taken within 90 days of the date upon
which the resolution establishing the fee was adopted.
Director of Community Development noted that the expiration
of the 90-day period would be January 28, 1982.
Resolution 14083, granting exemption as recommended, was
presented; after which, it was moved by Rose, seconded by
Ortner, and unanimously carried, that Resooution 14083 be
adopted.
Council Minutes
12-16-81 Page 13
CONSENT AGENDA :
12. Resolution 14084 granting easement to Southern California
Edison for service installed in conjunction with the 1978 (127)
Wastewater Treatment Plant expansion.
13. Minute Order 3038 authorizing extension of Agreement #1719,
with Virgil J. Needham, to perform contractual building (112)
inspection work, through June 30, 1982.
14. Resolution 14085 declaring February 15-21 , 1982, as
"Living Desert Reserve" week. (74)
15. Minute Order 3039 awarding contract to Associated Engineers,
for project design and construction inspection and supervision (51 )
for Airport Fencing (ADAP 08) and reconstruction of Taxiway
T-3 (ADAP 11 ) .
16. Resolution 14086 granting easement and joint use agreement to
Southern California Edison Co. , to underground overhead electrical (147)
facilities between Tahquitz-McCallum Way and Baristo Road on the
west side of the Police Building.
17. Resolution 14087 approving one-year time extension for Tentative (137)
Tract Map 15493 for 56-lot single-family dwellings , on the east
side of S. Palm Canyon Drive, and south of Bogert Trail at the
south City Limits boundary line, DPD Development.
18. Resolution 14088 approving one-year time extension for Tentative (137)
Tract Map 16747 for a 74-unit condominium project on the NE corner
of N. Indian Avenue and Racquet Club Road, New World Developers, Inc.
19. Resolution 14089 approving one-year time extension for Tentative (137)
Tract Map 16496 for 14-unit condominium project at 260 W. Vista
Chino, D. Bogna and M. Blazevic.
20. Resolution 14090, 14091 , and 14092, approving claims and demands
and payroll warrants. (86)
It was moved by Field, seconded by Rose, and unanimously carried,
that Resolutions 14084 through 14092 and Minute Orders 3038
and 3039 be adopted.
21 . FINAL PARCEL MAP 17447
It was moved by Field, seconded by Ortner, and unanimously
carried, that Resolution 14093, approving Final Parcel Map (119)
17447 to combine property on the SE corner of Racquet Club
Road and Palm Canyon Drive, Morse Eng/Racquet Club Associates,
be adopted.
22. MORTGAGE REVENUE BONDS
City Manager stated that this issue developed late this
date, and if the Council did not desire to respond (85)
immediately, it may wish to consider an adjournment to
December 23.
Housing Administrator stated that given the bond market,
difficulties have been encountered in trying to develop
an acceptable plan; one problem relates to an A- bond rating,
which would provide an interest rate higher than the developer
can afford; and the other is development of an agreement with
a lender.
Council Minutes
12-16-81 Page 14
22. MORTGAGE REVENUE BONDS (Continued)
Mr. Chilton, Sr. Vice-President, Shearson/American Express, bond
underwriter, made the following comments :
a) Long-term interest rates have not dropped significantly
in the municipal bond market, as have short-term interest
rates.
b) Position, today, different than it was three months ago,
and in order to make the City bond issue work mathematically,
bond proceeds must be invested at a rate at least equal
to the interest cost, and with the precipitous climate
in short-term interest rates and long-term staying near
to what they were 2-3 months ago, a lending institution CONT'D
with a AA rating or better cannot be found which will (85)
take those proceeds and pay interest in an amount sufficient
to make the program work.
c) Quote obtained from First National Bank of Chicago, 12/15/81 ,
on a similar issue was 12.75%, today, looking at 12-13;%;
assuming on this particular issue, money can only be
invested at 12i% for coupon rates and bonds are at 13-13J%,
a gap is created.
d) Possible solution is that City fill that gap; if investment
agreement could be negotiated which would pay 12z% for the
money and the City could make up the difference to the
lender, assuming a difference would be 13J and 12J or
3/4% on the bond proceeds, then it would be possible to
make the program work as currently structured.
e) Scenario #1 (likely based on best estimates) : Assuming 3/4%
difference, based on draw-down schedules which builders
have presented to the City, it is expected that money needs
to be invested on, an average of 7 months; those schedules
show the last houses being financed in a 14 month period;
if average was 7 months, it would take approximately
$158,000 to make up difference between 1221 and 13J rate.
f) Scenario #2 (worst possible case) : No mortgages would ever
be placed and bonds would be issued and developers not complete
homes and, if completed, were not in the program and no
mortgage would ever be utilized from the bond pool ; from
rating and sound banking principles , that must be taken
into account; if that happened, exposure would be for
two year period on the pool ; in that time, it would cost
about $475,000.
g) It is reasonable to believe that the gap would be an
average of 7-8 months.
In answer to question by Council , Housing Administrator stated
that if bonds were not issued this year, then it will be
necessary to go back to the State and secure an allocation
next year; that procedures have not been developed for that
eventuality, although it probably would be successful , although
perhaps not as large of an allocation because of expected
competition; that conclusion has not yet been reached as
to how the City's up-front money would be repaid; and that
indication is being sought from the Council , whether it
desires staff to proceed with this methodology.
City Manager stated that understanding was that possibility of
City funding the gap, either in a lump sum or periodically,
would be subject to working out an agreement that would repay
the City for that cost.
Council Minutes
12-16-81 Page 15
22. MORTGAGE REVENUE BONDS (Continued)
Housing Administrator stated that intent of staff is to, provide
repayment to the City, with interest; that the bond allocation
is good only until December 31 , 1981 ; that if the Council
desires to proceed along these lines, such indication would
be taken by Mr. Chilton to the rating agency, and documentation
would be presented for final Council action December 23, 1981 ;
that the program is intended to target 664 units (Desert
Dorado, Harmony Homes, Afcom/Fredricks) to provide 30-year
permanent mortgages below current market rates ; that alterna-
tives are being explored as to how and at what point repayment
would be made to the City; that if the $158,000 up front
money began to develop into a larger sum, the better course
might be to call the bonds, which the City has the ability
to do, and even though the exposure might be present, the
worst situation would not be permitted to occur; that Standard
and Poors looks at the economic diversity of the community in
making the rating, and in not having a broader base, there is
a hesitancy in giving a better rating; additionally, the issue
deals with mortgage revenue bonds and. looking at different
players - the investment agreement and how far the proceeds
can be carried; and that with insurance and assistance by
the City, it is hoped that the rating will increase to AA. CONT'D
(85)
Mr. Chilton stated that demographics, diversity of economy,
concentration of the project, and portfolio of lender, are
some of the things considered in giving the rating; that
Standard & Poors has always penalized the concentration
factor in California; if it .is possible. for the .City .to.give
an insurance:policy which-. insures 100% of-the -princioal_ of each
loan,and.eash. flow`ketween 30-60 day delinquency period, the
bond rating by Standard & Poors would improve; annual delinquency
percentage in the western United States is 2-3%; and he could
not state assuredly that an AA rating would be given.
In answer to question by Council concerning repayment and
whether additional cost to the developer will be added to
the price of the homes, City Manager stated that the law
prohibits developer from paying the $158,000 directly; that
price of homes will not exceed those approved by the Council ;
and that there may be some pressure on the developer's profit,
but he understood that it would be marginal and could be
handled.
Housing Administrator stated that price of the homes should
not increase, and that repayment by the developer would be
as are other financing mechanisms; and that the developers
have taken into account their ultimate exposure and what
is needed in terms of profits, and the prices approved by
the Council should not be exceeded.
Mayor stated that he would be willing to allocate up to
$160,000, under condition that staff come back with proposal
for a repayment mechanism.
Mr. Chilton stated that he liked the concept of month-by-month,
and since there is not a firm investment agreement with an
AA rated institution, the best method might be to work
with the bond attorney in developing that approach, determining
the amount of the gap, and not getting locked into specific
amounts, but approving the concept.
City Manager stated that he concurred with recommendation that
the City fund the gap, and preferred that it be paid on a
month-by-month basis, with condition that whatever that amount
might be, it would be repaid to the City.
Council Minutes
12-16-81 Page 16
22. MORTGAGE REVENUE BONDS (Continued)
It was moved by Field, seconded by Rose, and carried by the
following vote, that the Council expresses its intent to
fill the gap, as above discussed, subject to the City being
compensated for this gap.
AYES: Field, Rose and Doyle
NO: Ortner CONT'D
ABSENT: None (85)
Councilwoman Ortner stated that she was not in favor of the
action because of lack of a specific amount of funding.
City Manager stated that the action expresses the Council 's
intent; that budget allocation will be presented to the
Council at a later date, as well as specific actions relating
to the issuance of the bonds on December 23, 1981 .
23. COMMISSION APPOINTMENTS
It was moved by Field, seconded by Ortner, and unanimously
carried, that Ken Irwin be appointed to fill the unexpired (50)
term of James Shaw on the CVB Board, ending June 30, 1982.
REPORTS & REQUESTS:
24. CITY COUNCIL reports or requests
a) Councilman Rose stated that a recent news comment regarding
the Personnel Board, indicated some problem in getting
the members together; that discussion with the Personnel
Manager indicated that was a misleading conclusion; and
suggested that if there are any such problems, that it
be brought to the attention of the Council .
City Manager stated that he has reviewed the difficulties
in getting the board together and found that the reasons
did not relate to any single group or factor and he did
not believe it was a problem.
b) Councilman Rose requested that City Attorney develope
informational material to be given to candidates seeking
election, regarding political signs.
c) Mayor expressed concern and need for more accurate news
reporting concerning the Desert Water Agency water
conservation ordinance. He stated that it was recognized
that there could be problems with the ordinance, and the
unlikelihood of its enforcement as written; that the Council
met with one member of the DWA Board and expressed its
concerns which were relayed to the remainder of the Board;
and that news reporting which painted the City as "the bad
guy" was uncalled for.
25. PUBLIC reports or requests - None
26. STAFF reports or requests - None
ADJOURNMENT
There being no further business at 11 :20 p.m. , Mayor declared the
meeting adjourned to Wednesday, December 23, 1981 , at 3 p.m. , in
the Large Conference Room, City
JUDITH SUMICH
City Clerk