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HomeMy WebLinkAbout1993 - MINUTES - 12/8/1993 9 2 0 G CITY OF PALM SPRINGS CITY COUNCIL MINUTES DECEMBER 8, 1993 An Adjourned Regular Meeting of the City Council of the City of Palm Springs, California, was called to order by Mayor Maryanov, in the Council Chambers at 3200 Tahquitz Canyon Way, on Wednesday, December 8, 1993, at 7:30 p.m. Roll Call: Present: Councilrnembers Hodges, Lyons, Reller-Spurgin, Schlendorf and Mayor Maryanov Absent: None REPORT OF POSTING OF AGENDA: Assistant City Clerk reported that the agenda was posted in accordance with Council procedures on December 3, 1993. INTERAGENCY REPORTS: None ADDED STARTERS: City Manager requested Council consideration regarding adding items to the agenda regarding Airport lease property and Release of Warranty for Rough Grading for the expansion of the Municipal Golf Course. It was moved by Lyons, seconded by Reller-Spurgiin, and unanimously carried, that both matters be determined eligible 1'or consideration and added to the agenda. AS'I. AIRPORT PARK PLAZA-WAIVER OF PERSONAL GUARANTEE Director of Aviation stated that the contract is ready for escrow proceedings; thm Mr. Apostle will not sign the personal guarantee; that the City if in a difficult position, in that if the City insists on the personal guarantee, Mr. Apostle will forgo the contract; and that will result in the City being a recipient of bankruptcy proceedings; that Peacock-Radaker is currently in foreclosure proceedings on the property; that there are no other options available; that Mr. Apostle has made it clear that he will not sign, nor has ever signed a personal guarantee; that a financial report of the Apostle's holding has been reviewed, and that the assets are substantial. Councilmember Hodges questioned why the financial report was requested. City Attorney stated that for addled security the report was requested; that with the current tenant there is no legal process to seize any assets, or the knowledge of what assets are available; that the decision before the Council is whether the Council is willing to sacrifice the contract if the Apostle's are not: willing to sign the personal guarantee. Councilmember Lyons stated that if the Apostles did default; that City would be; in the same position. Councilmember Schlendorf questioned the status of the Apostle Trust; and added that if the lease was tied to the Trust, would it be more binding. Director of Aviation stated that the Apostle's could move the assets in the Trust; but that it could be time consuming and burdensome. Mayor questioned if the City could have a claim against the Trust. City Attorney stated that the Apostle's have no incentive to change the Trust; and that the lease will reference a guarantee to the Trust. Councilmember Hodges stated that if the lease is approved; there is no guarantee that the Apostle's will not default; that if the same thing happens again, the City will be in the same position. Councilmember Lyons concurred. Director of Aviation stated that the Apostle's have agreed to pay the past rent,,;; consent to an annual lease; and that the past due rent payments will be paid over ten years starting December 1, 1993. Mayor stated that there is a buyer for TOPA, and that the principal owed will be paid with interest. Council Minutes 12-8-93,Page 2 LEGISLATIVE ACTION: AS1 . AIRPORT PARK PLAZA (Cont'd) Councilmember Schlendorf questioned if it would be feasible to request an annual financial statement of the Apostle Trust.Mayor stated it is not unusual to request a personal guarantee. Councilmember Hodges questioned when escrow opened. Director of Aviation stated that escrow opened sixty days ago. Councilmember Hodges stated that escrow has been open awhile; drat staff should have informed the Council of this problem earlier; that other arrangements could have been pursued; and that now the Council is informed that escrow is to close tomorrow, and that action is needed. Director of Aviation stated that the problem did not arise until recently; that the Apostle representatives indicated that the personal guarantee would not be a problem; that if the Council does not approve the waiver; then the City will be a beneflcdary of the foreclosure proceedings; that eventually a new lessee will be obtained; that Mr. Apostle is willing to move forward with the lease, including picking up the back rents owed by Peacock-Radaker; except the personal guarantee. Councilmember Reller-Spurgin questioned the age of Mr. Apostle. Director of Aviation stated early 80's. Mayor questioned the ability to apply a minimum trust asset guarantee of capitalization of Trust; and the total of capital in the Trust. City Attorney stated that language could be addressed to be subject to the Attorney's final language. Mayor stated that a person does have the ability to close a Trust; but that a guarantee of capitalization could be used; and that in his opinion, the lease should go forward. Councilmember Reller-Spurgin stated that it is the Council responsibility to make decisions in the best interest of the City. City Attorney stated that the direction of the Council is understood to be that a guarantee to the Trust would be acceptable to the Council; and that staff will proceed in that direction. AS2. RELEASE OF WARRANTY PERFORMANCE BOND FOR TERRA MOVES S, INC. GOLF COURSE EXPANSION ROUGH GRADING, CP93-27. City Engineer stated that the Council is requested to release Terra Movers, Inc., from their obligation to submit a Warranty Performance Bond subject to contract retention increase from ten percent (10%) to fifteen percent (15%), that securities are not being substituted for retention, and that the contract payment amount is reduced by the contractor in an amount equal to the cost of the Warranty Performance Bond; that the Council has several options available; that the bid can be rejected due to non-compliance, and awarded to the second lowest bidder; or the performance bond can be waived;that negotiations have been in progress with Terra Movers to increase the retention amount to 15%; and that the amount the City would pay the contractor is reduced in a like amount; that if the bid is found to be in default; the second bidder would be requested to fulfill the bonding and insLuance amounts, and the cost to the City would be increased in the amount of $295,601.; that Terra Movers bid proposal cut fill diagrams and method of completing the project seem to be generally in concurrence with the method proposed for the project; that difficulties are not expected to be encountered that will result in any change orders; that schedule of payment begins after thirty days of work; that the total contract work time is seventy-seven days of work; that the City will be able to determine within two weeks of their start whether or not the deadline will be achieved. Mayor questioned the difference in the amount of the two bids in being so large. Councilmember Hodges questioned if the reason that the Warranty Performance Bond cannot be obtained is the retention left on the table. O bouncil Minutes 12-08-93, Page 3 LEGISLATIVE ACTION: AS2. RELEASE OF WARRANTY BOND-TERRA MOVERS (Cont'd) City Attorney stated that staff has reviewed the background of Terra Movers; that the background check was favorable; that the local representative of the bonding company went through the proposal package and indicated that the insurance company could bond the bid and recommended to proceed; but that the main office of the Insurance Company is hesitant on the bonding issue; that it is a difficult situation; that it is not a normal process for the City to waive the bonding requirement; and that the problem may be worked out with the Insurance Company. Councilmember Schlendorf indicated that it is unusual for the bids to be as wide spread as these were; and added that the difference should not be in the compaction. City Engineer stated the price differential is in the hauling of the dirt, rolling and the compaction; that the proposal was compared with the City's estimate and was within limits; that the lines of the proposal met the City's requirements; and that the Golf Course Architect and prime contractor have agreed that the proposal as prepared) should be appropriate. Councilmember Schlendorf questioned if change orders can be used in the project. City Attorney stated that the contract does state a given price; that the only change orders would be those Council approved. City Manager clarified that the contract would be a guarantee of price; and that the retention should be for twenty percent of the contract. City Attorney stated that the contractor has declined the twenty percent and has countered with fifteen percent; and recommended that language be added to the contract relating to default by the contractor if the time frame for the contract is not met. Mayor stated that the twenty percent would be acceptable and that language change suggested by the City Attorney be incorporated into the contract. It was moved by Reller-Spurgin, seconded by Lyons, and carried by the following vote that the Warranty Performance Bond be waived, and that the contract be amended to show a twenty percent retention. AYES: Lyons, Reller-Spurgin, and Mayor Maryanov NOES: Hodges and Schlendorf ABSENT: None PUBLIC COMMENTS: None LEGISLATIVE ITEMS: 1. APPOINTMENTS At its meeting December 1,the Council continued consideration of the following appointments: Fire Services Consolidation Task Force City Manager reported that the Fire Safety Unit appointed Jaynes S. Shiner as principal representative, with Cameron Robbins as alternate. P.S. Civic Center Authority (2) Councilmember Hodges questioned the length of time that the current representatives have served on the Authority. City Manager stated that the information would be supplied by the next meeting and recommended continuing both matters to December '15, 1993. It was moved by Schlendorf, seconded by Reller-Spurgin, and unanimously carried that both matters be continued to December 15, 1993. Council Minutes 12- 8-93, Page 4 ADJOURNMENT There being no further business, Mayor declared the meeting adjourned. JUDITH SUMICH City Clerk By: PATRICIA A. SANDERS Assistant City Clerk