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HomeMy WebLinkAbout01-14-1997 City Council MinutesMINUTES REGULAR CITY COUNCIL MEETING CITY OF LAKE ELSINORE 183 NORTH MAIN STREET LAKE ELSINORE, CALIFORNIA TUESDAY, JANUARY 14, 1997 ~~,~*********~*~~*~*,~,~*,~**~*,~~*~*~~~~~~~,~~~~*,~,~*****,~*~*,~****~*,~ CALL TO ORDER The Regular Ciry Council Meeting was called to order by Mayor Pape at 7:02 p.m. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Boy Scout Troop 99, with Troop Leaders Tony Romero, Mr. Holland and Mr. Star, as part of their work on their citizenship badge. INVOCATION a. The Invocation was provided by Pastor Scott Christenson of First Lutheran Church. ~ ROLL CALL PRESENT: COUNCILMEMBERS: ALONGI, BRINLEY, KELLEY, METZE, PAPE ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Molendyk, Assistant City Manager Watenpaugh, City Attorney Harper, Administrative Services Director Boone, Community Development Director Leslie, Community Services Director Sapp, Police Chief Walsh Building and Safety Manager Russell and City Clerk Kasad. PRESENTATIONS None. PUBLIC COMM~NTS - AGENDIZED ITEMS Requests were received to address the following item and deferred to that discussion: Item No. 9. PAGE TWO - CITY COUNCIL MINUTES - JANUARY 14, 1997 CONSENT CALENDAR ITEMS City Manager Molendyk requested that Item No. 4 be continued. The following items were pulled from the Consent Calendar for fiuther discussion and consideration: Item Nos. 4, 5, 6, 7, 8 and 9. MOVED BY BRINLEY, SECONDED BY METZE AND CARRIED BY UNANIMOUS VOTE TO APPROVE THE BALANCE OF THE CONSENT CALENDAR AS PRESENTED, AND CONTINiJE ITEM NO. 4. 1. The following Minutes were approved: . (F:44.4) a. Adjourned Regular City CounciURedevelopment Agency Meeting - December 3, 1996. b. Joint Study Session with the Chamber of Commerce - December 5, 1996. c. Regular City Council Meeting - December 10, 1996. d. Adjourned Regular City Council Meeting - December 19, 1996. 2. Ratified Warrant List for December 26, 1996. (F:12.3) 3. Received and ordered filed the Investment Report for November, 1996. (F:12.5) 4. Continued the Stop Sign Controlled Intersection Lake Trail Circle at North Lake Drive - Resolution No. 97-1. (F:162.2) 5. Approved Contract for News & Information Center at Senior Center with Prime West Incorporated. (F:68.1)(X:144.3) PUBLIC HEARINGS 21. Amendment of Section 818.090 of the Lake Elsinore Municinal Code concernine Nuisance Abatement Costs - Ordinance No. 1025. (F: 32.4) City Manager Molendyk explained this item. Councilman Alongi questioned the committee members receipt of $100 and noted that Plauiung Commissioners sit on that Board, and further noted that he has asked this quesrion previously. Commwuty Development Director Leslie explained that the Commissioners are not paid for sitting on the Board, and the $100 is part of the admniistrative cost for staff time. PAGE THREE - CITY COUNCIL MINUTES - JANUARY 14, 1997 Councilman Alongi noted that the Code Enforcement Officer is being paid to do that job and suggested that it be called something different. He indicated that he doesn't mind the $100, but he does mind how it is listed. City Manager Molendyk concurred that the verbiage might need to be changed. Mayor Pro Tem Kelley stressed that this is a good change and will encourage abatement of e~sting nuisances. Mayor Pape opened the public hearing at 7:10 p.m., asking those person interested in this item to speak. Hearing no one, the public hearing was closed at 7:10 p.m. Mayor Pape commented that for 99% of the people this will have no effect because they don't have trash, abandoned cars, etc.; but stressed that it gives the City an opportunity to replace the cost for abatement. MOVED BY PAPE, SECONDED BY BRINLEY TO ADOPT ORDINANCE NO. 1025 UPON FIRST READING BY TITLE ONLY. Councilman Metze noted the actions which will occur prior to this process and stressed that this is intended to be a final action, after all other attempts to rectify the problem have been taken. ORDINANCE NO. 1025 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AMENDING SECTION 8.18.090 OF THE LAKE ELSINORE MUNICIPAL CODE CONCERNING NUISANCE ABATEMENT COSTS. UPON THE FOLLOWING ROLL CALL VOTE: AYES: COUNCILMEMBERS: ALONGI, BRINLEY, KELLEY, METZE, PAPE NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBER5: BUSINESS ITEMS 31. NONE NONE NONE with First Financial Groug Inc. (F:68.1)(X:134.10) City Attorney Harper indicated that based upon ongoing discussions with PAGE FOUR - CITY COUNCIL MINUTES - JANUARY 14, 1997 those involved, he would request continuance of this reading for two weeks. MOVED BY BRINLEY, SECONDED BY ALONGI AND CARRIED BY UNANIMOUS VOTE TO CONTINUE THIS ITEM FOR TWO WEEK5. 32. Reauested Committee & Task Force Annointrnents. (F:44.1)(X:108.8)(X:164.2)(X:76.3 ) City Manager Molendyk explained that this item is based on a letter received froin the League of California Cities requesting consideration of represenYatives; as well as appoinhnents for the Riverside County Habitat Conservation Agency and the E.V.M.W.D. Task Force for Reclaimed Water. He stated that these items are now before Council for consideration. Mayor Pape indicated that these items would be taken one at a time and called for voYunteers. MOVED BY PAPE, SECONDED BY METZE AND CARRIED BY UNANIMOUS VOTE TO APPOINT COUNCILWOMAN BRINLEY TO THE LEAGUE EMPLOYEE RELATIONS COMMITTEE; MAYOR PRO TEM KELLEX TO THE LEAGUE ENVIRONMENTAL QUALITY COMMITTEE; AND COUNCILMAN METZE TO THE LEAGUE HOUSING/COMMUNITY DEVELOPMENT COMMITTEE. Mayor Pape announced that he has been appointed to the State Wide League Committee for Public Safety. He explained that it meets five tunes a year and stated that he is looking forward to having the opportunity to give input on Public Safety issues State Wide. MOVED BY PAPE, SECONDED BY BRINLEY TO APPOINT COUNCILMAN METZE TO THE RIVERSIDE COUNTY HABITAT CONSERVATION AGENCY. Councilman Alongi stated that there is a letter from the Chairman of the Riverside County Habitat Conservation Committee which recommends that the Council leave the Agency Members as assigned due to the amount of uiformation reviewed in creation of the multi-species plan. He noted the time to catch up and explained that he has served a long time and wishes to remain on the Committee. Councilman Alongi stated that he did not want to see this become an issue by replacing him. Mayor Pape stated that it does not need to become an issue since he has tallced to the Chauman on the phone and he feels that she understands. Councilman Alongi explained that the Mayor had approached him prior to the meeting and informed him that he was going to replace him on the RCHCA because there were members on that Committee that had complained about him. He pointed out that either the Mayor is lying or the two people that told him are lying. He stated that he had called the Chaiiman, Mrs. Pierson and all of the Members except two and none of them had a problem with him; and PAGE FIVE - CITY COLTNCIL MINUTES - JANUARY 14, 1997 most found it very improper for the Mayor to talce action without calling the Chairman of the Board. Councilman Alongi stated that this action is a political maneuver and noted his work on the Committee and the things that he has helped to accomplish. He noted that Councilman Metze has already stated that he does not get along with Supervisor Buster and cooperation is essential between a11 members. He fiuther noted that tlus is a dangerous area with the Endangered Species Act, because there are over 200 more species which could be added; and this must be addressed properly or we will loose the coverage we ha~e gained to date. He explained that the Mayor is willing to disrupt the Agency and a11 the work that has been accomplished to date because he wishes to make his political movement and put it in the RCHCA. Councilman Alongi stressed the amount of time spent for the RCHCA and the hours required to read the necessary material. He questioned how anything will get done if our representative does not get along with Supervisor Buster. Iie stated that this is ludicrous and is unbecoming of the Mayor of the Community to appoint someone who is not going to cooperate with the other members of the Committee to accomplish what is best for the City. Mayor Pape stated that his main concern is doing what is best for this community and this is not intended as a personal attack. He explained that what goes on at the Committee Meetings is important and it is also important that the City have full representation. He furkher stated that he felt that Councilman Metze is fully qualified to read the material, ask questions, make a decision and carry it forward. He expressed concern that the City is not getting proper representation and our current representative does not have proper credibility with the public or the RCHCA Committee Members and has no accountability. He indicated that it an embarrassment to the City to have a representative removed from Council Meetings and found guilty on four different counts of FPPC violations: He noted that Councilman Alongi has lied in court and quoted the comments of the Judge. He stated that he is flat lying to the public and did lie as to why a witness could not attend the hearing and became quite agitated when the attorney disclosed this fact. Mayor Pape quoted the court transcripts. He noted a tape of an interview with FPPC and a videotape of a City Council Meeting. He pointed out that Councilman Alongi has stated that he knew he had a conflict of interest and would do it again. Mayor Pape stated that he feels that Councilman Alongi does lack some ability for telling the truth. Councilman Alongi noted that this was not from the Judge. Mayor Pape quoted the verdict from the Judge. He asked how the public can take someone seriously when that person has committed these types of violations. He stated that he feels that he needs to deal with this issue appropriately and that there should be adequate representation on this Committee. Councilman Alongi stated as always the Mayor is ignorant. Councilwoman Brinley called for the question. Councilman Alongi stressed that this is only the opinion of an Administrative Law Judge and he has not yet been found guilty. He suggested that the PAGE SIX - CITY COUNCIL MINUTES = JANUARY 14, 1997 Mayor lied about the opinion of two members of the Committee. He stated that there is no evidence in the transcript which remotely resembles any wrongdoing on his part regarding self-interest. He stressed that it is an opinion only and that he has filed a brief with the Court of Appeals. He noted that if he had to do it all over again and the prior Council were present, he would do it again due to his commitment to the community. Councilwoman Brinley again called for the question. Councilman Alongi indicated that no one has complained about his contributions to the RCHCA; and he feels that it is only the Mayor that has complained. Mayor Pape indicated that there were two Members of the Committee who have complained: He also noted that according to the FPPC the technical verbiage on the Judge's findings is that Mr. Alongi had been found in violation of four FPPC laws. THE FOREGOING MOTION CARRIED WITH A VOTE OF 4 TO 1 WITH ALONGI CASTING THE DISSENTING VOTE. Mayor Pape asked for appoints for Elsinore Va11ey Municipal Water District Reclaimed Water Task Force as follows: Mayor Pro Tem Kelley - No one at this time. Councilwoman Brinley - Karen Snider Mayor Pape - Pat Kilroy Councilman Alongi - Pete Dawson Councilman Metze - Bob Schiii'ner Mr. Dawson asked that another person be picked in his place, since he has been appointed to this committee by another agency. Councilman Alongi therefore appointed Chris Hyland. MAYOR PAPE CALLED FOR A CONSENSUS OF COUNCIL FOR THE ABOVE MENTIONED NAMES. ALL MEMBERS AGREED. MOVED BY BRINLEY, SECONDED BY METZE TO NOMINATE MAYOR PAPE AS COUNCIL REPRESENTATIVE TO THE EVMWD RECLAIMED WATER TASK FORCE. Councilman Alongi stated that he had been previously appointed at the last meeting and this would be removing him fiom the posirion. THE FOREGOING MOTION CARRIED WITH A VOTE OF 4 TO 1 WITH ALONGI CASTING THE DISSENTING VOTE. PAGE SEVEN - CITY COUNCIL MINUTES - JANUARY 14, 1997 6. Offer of Donation of Real Propertv. (F:48.1) City Manager Molendyk explained the location of tlus piece of property as offered by Mr. Ra1ph Floyd, and noted the initial contact with a former employee in 1993 which indicated an interest in the parcel. He further explained that staff has reviewed tlus item with Finance; and due to financial problems would recommend that the property remain on the tax rolls. He clarified that this request was initiated prior to present situation and the owner did ha~e an understanding that the City might be interested. He noted the past interest in obtaining properties when they are of benefit to the taxpayers and in Country Club Heights some have be acquired to facilitate future development on buildable parcels. He commented that the Council could choose to redirect the policy. Mayor Pro Tem Kelley noted that since the City has already accepted two from Country Club Heights in the last year, she would like the Council to consider giving direction to staff. She also suggested that with the confusion this one should be accepted and the policy reviewed prior to future actions. Councilwoman Brinley suggested that there was a moral obligation, as owner acted in good faith, but got put aside. She suggested that the Council should honor the 1993 agreement. Councilman Alongi indicated that he recalled this property and noted that this property is unbuildable and only taking on more liability. He stressed that there are no good opportunities to build on this properly. He indicated that this acrion would be asking the taacpayers to take on delinquent taxes, the Council did not act officially and Ray Wood had no authority to accept properly for the City. He suggested that the Council leave it alone and see what happens. Mayor Pape noted that he is concerned with the $1400 in delinquent back taxes. Councilman Alongi suggested letting the State take it for delinquent taxes, down the Road; and the City will get it from the State anyway. City Attorney Harper indicated that as a practical matter Councilman Alongi is correct; if the City takes the property for taxes, it will be offered to the City for purchase. He noted that the down side is that we would pay something either way. Councilwoman Brinley noted that it would be more than the current $1,400, and stressed that she could not see any reason to leave the owner hanging. She suggested that it was a matter of honor at this point. Mayor Pro Tem Kelley suggested clarification of the policy. City Attorney Harper noted that past policy has been to acquire property for the City. MOVED BY BRINLEY TO ACGEPT THE PROPERTY WITH A NEW POLICY TO NOT ACCEPT ANY ADDTTIONAL PROPERTIES UNLESS IT BENEFITS THE LAKE, THE PARKS OR THE STREETS. MOTION PAGE EIGHT - CITY COUNCIL MINUTES -.JANUARY 14, 1997 DIED FOR LACK OF A SECOND. Councilman Alongi questioned why the Council would be willing to pay the taxes. He stressed th2t'it would be better to let the State take it over and the City obtain it from them. He stressed that this would be using good talc dollars to buy something unnecessary. MOVED BY ALONGI TO DENY THIS REQUEST. MOTION DIED FOR LACK OF A SECOND. MOVED BY KELLEY TO STUDY THIS WITH REGARD TO ACQUIRING A PROPERTY AND POSTPONE A DECISION UNTIL AFTER A STUDY SESSION. MOTION DIED FOR LACK OF A SECOND. Councilwoman Brinley suggested that this be the last piece we accept, and not accept anymore unless they are of benefit to the City. She stressed the need to make a decision, as the man has been waiting for quite a while. She fiuther stressed that this was in compliance with policy at the time the man submitted the request. She indicated that staff now knows not to accept any more donated property unless it would be beneficial. She suggested making a~ motion and moving forward. Councilman Alongi stressed that this is an offer without any money. He indicated that the City Attorney does not know anykhing about what the State does with property. He stressed that no offer was made to the owner, but he is willing to give it up for nothing, because it is worth nothing. He stressed the need to spend money on something worthwhile. MOVED BY KELLEY, SECONDED BY ALONGI AND CARRIED BY A VOTE OF 3 TO 2 WITH BRINLEY & METZE CASTING THE DISSENTING VOTE TO APPROVE STAFF RECOMMENDATIONS AND NOT ACCEPT-THIS DONATION OF REAL PROPERTY. 7. Presentation of Fiscal Year 1995-96 Annual Audit & Financial Re o~rt. (F24.1) City Manager Molendyk recommended that this item be received and ordered filed. Councilman Alongi asked Aduiinistrative Services Director Boone about page 2 of 3, second paragraph on General Fund expenditures, and requested clarification that this was not including the Stadium costs. Administrative Services Director Boone explained that the previous year the i General Fund paid costs for the Stadium; and compared to this year that would show reductions. Councilman Alongi questioned where that money went. Mr. Boone clarified that it was part of the $1.3 million in increased reserve funds for that yeaz. Councilman Alongi noted the figures with regard to reserves. Mr. Boone clarified the reserves as of June 30, 1996. PAGE NINE - CITY COLTNCIL MINUTES - JANUARY 14, 1997 MOVED BY BRINLEY, SECONDED BY KELLEY AND CARRIED BY UNANIMOUS VOTE TO RECEIVE AND FILE THE 1995-96 ANNUAL AUDIT AND FINANCIAL REPORT AS PRESENTED. Investrnent Policv and Reportin~ Requirements for Calendar Year 1997. (F:12.5)(X:120.1) City Manager Molendyk explained that this new policy is making changes to fit the new State requirements and tighten up the regulations, as a result of what happened in Orange County. Mayor Pape noted that the City has been using the LAIF inveshnent fund for years; and it is one of the least risky funds for investment of the reserves. MOVED BY PAPE, SECONDED BY BRINLEY AND CARRIED BY UNANIMOUS VOTE TO ADOPT THE INVESTMENT POLICY AS PRESENTED FOR CALENDAR YEAR 1997. 9. Official Statement for Lake Elsinore Recreation Authoritv. (F:133.7) City Manager Molendyk noted that this item has been discussed in a Study Session and indicated that the new figure is $14,602,000. IIe stated that Mr. Gunn is present to answer any questions. Mayor Pape called upon the persons who had requested to speak on this item. Mr. John Seepe, 15631 Half Moon Drive, noted the limited amount of funds that homeowners have available for taxes and the fact that if the homeowners are going to be responsible for the bonds on the Lake then other things will have to be ignored. He requested that the City spend funds fiugally and again reminded Council that if the property owner is expected to accept the burden, there are only so many tax dollars that they can spend and other things will have to give way such as parks and education. Leroy Tucker, 3532 Cherry Blossom Lane, indicated that the Stadium has been a problem for the last three years and asked if Council has considered ~ selling the Stadium. He noted that it has been proved that the Stadium cannot ~, be run on a profit and asked that Council seriously consider their decision ' 1 since this will affect future Councils for the next 40 years, just as the original ` decision was not yours, your decision will not be other Councils, but will . affect them. He suggested that the voters should be allowed to decide if the Stadium should be sold or not. Nita Van Heist, questioned the wisdom of this Council in repeating history. She noted that the previous Council was heli-bent on having this Stadium questioned their decision. She stated that now this Council is considering a 40 year commitment for $44 million along with putting the Lake in jeopardy. ~ She noted the responses of past Councilmembers and pointed out that one of ' the bond advisors in under investigation by the Securities Exchange PAGE TEN - CITY COUNCIL MINUTES - JANUARY 14, 1997 Commission. She cited the Red Lion and stated that she called their firm and tallced to their attorney and he informed her that there is no future plans for building in the area and never has been. Edith Stafford, stated that she was mad as hell and doesn't plan to take it anymore as to how the officials manage the City and the finances of the Ciry. She called upon the residents to look at the fact that they are being snowed. She stated that it is not in legal terms, but it is fluff and stuff. Ms. Stafford explained that the City has done nothing to demonstrate that they are capable of paying the bond. She noted that the previous Council is in trouble if the people want to do something about it. She stated that the citizens of Lake Elsinore have a Class Action Case due to what has happened and what is about to happen. She called upon the citizens of the City to see through the mumbo jumbo. She fiuther stated that somebody is benefiting from tlus besides the City of Lake Elsinore because no one in theu right mind would put this City in this type of financial position, unless someone is benefitting. She stressed that she sees through this action. Ms. Stafford stated that she is not in favor of the authority Council gives itself. Dick Knapp, City Treasurer, stated that he is totally against this action. He concurred with giving the Stadium back to the bank. He noted that he has attended a lot of ineetings and gave an overview of the different facts that are presented. He stated that he has been fed false information as the City Treasurer. He fiuther stated that this issue deserves another month or two of consideration. Mr. Knapp stated his concem regarding the cost and indicated that the cost includes a$300,000 prepayment penalty for paying off the $10,000,000 too early; the Bond Counsel fee of 2.95% of whatever the City borrows which wili be approximately $400,000; and the Underwriters Discount of 2.5% interest which is approximately $340,000. He fiirther stated that in consideration of the cost which is in excess of $1,000,000 just to package the loan, the City would be better off to give the Stadium back to the bank.--He stated that for the record, he is totally against this action. Ron Gunn, Financial Advisor, indicated that there are bonds outstanding and the City is obligated to make payment on those bonds. He explained that if the bond payment is not meant there is a mechanism in the Bond Issue which states that should the owners of the bond default that the State would be notified and the State would intercept Motor Vehicle In Lieu Fees. He stated - that it is inaccurate to suggest giving the Stadium back to the bank, since the bank would own the Stadium and the payments on the Bond would still be made by the City. He noted that this Council is faced with the reality of ~' eacisting bonds and that the City at this time cannot afford to make payment. He noted that what they are now attempting to do is negotiate for a lower ~ interest rate. Mr. Gunn noted that the principle amount is greater, but the interest rate will be approximately two to two and one half percent lower than what the City is currently paying. He explained that what the City is trying to accomplish is to issue new bonds to buy time so the City can afford to make payments. He noted that the new issue will buy the City three years to malce PAGE ELEVEN - CITY COUNCIL MINUTES - JANUARY 14, 1997 additional cuts and if history repeats itself, revenues should increase during that period of time as well. He fuither explained that there is nothing in the bond for new projects since a more conservative approach was taken in this issue. He explained that the issue is for $14,6 million and noted that the final ~, size is based on the pricing of the bonds. He stated that given the current circumstances he would recommend that the City proceed. Councilwoman Brinley asked if Mr. Gunn would address the statement that this action would be too risky. Mr. Gunn explained that bonds are either unrated or have various quality ratings and this bond is an unrated issue. He noted that there is some risk for the investors and this document addresses this issue. He fiuther noted that it give the City's financial position and attempts to quantify that risk for investors. He further explained that on the City side this is a reasonable course and will continue to be reasonable if the payments are make as the City continues to proceed as it has done in the last year. He noted that the City's Budget will be balanced as of June 30. Councilwoman Kelley asked that the Vehicle Fees in connection to the Bond be explained. Mr. Gunn explained that the State estunate for the DMV Fees is appro~mately $912,000 for this fiscal year. Ae further explained that the Bond Service debt, over the next three years, will be $1,050,000 with about a $100,000 difference. Councilwoman Kelley asked Mr. Gunn to explain how the debt is transferred from the Stadium, making the Stadium free of that debt. Mr. Gunn explained that the reason for this asset transfer financing from the Stadium to the Lake is to a11ow the ability to issue tax exempt bonds. He noted that the Lake allows the City to issue Ta~c Exempt Bonds at 7 1/4% interest rate. He further explained that the difference in the interest rate almost pays for the first three years. The La1ce is not at risk and noted that it is in the Official Bond Statement that bond owners do not have the right to take the City's property as well as any use restrictions on the Lake would continue. He fiuther explained that the only thing that a bond holder could do is take over the City's leases and attempt to renegotiate them. He noted that it is not a viable option, but bondholders would have it. Councilwoman Brinley questioned if this reorganization would make the Bond Pool stronger since each bond would stand on its own. Mr. Gunn stated that it does make the Bond Pool stronger. Councilman Alongi asked if the Banlc held a grant deed or deed of trust on the Stadium. Mr. Gunn stated that they did. Councilman Alongi conf'urned that they held the DMV Fees as security. Mr. Gunn stated that they have both. Councilman Alongi asked if the Bank can exercise both rights and keep the Stadium as well as the DMV Fees. Mr. Gunn stated that the Bank of ~ Sumitomo stated that if the City did not pay the Bond fees that they would take the DMV Fees but did not make comment regarding the Stadium. Councilman Alongi stated that the reason they did not comment on the Stadium is because they hold a Grant Deed and they can do one or the other but not both. F3e noted that the Bank of Sumitomo could talce our DMV Fees and the City could still sell the Stadium. Mr. Gunn stated that he felt that PAGE TWELVE - CITY COUNCIL MINUTES - JANUARY 14, 1997 City Attorney Harper should address this, since the DMV Fees would not fu11y satisfy the debt. City Attorney Harper noted that the only way that the City could market the Stadium is with the agreement of the Bank of Sumitomo. Councilman Alongi clarified that they could not exercise both rights. City Attorney Harper stated that Councilman Alongi was conect, but the City could not market the Stadium without agreement from the Bank. Councilman Alongi stated again that they can only have one or the other. City Attomey Harper stated that Counciiman Alongi is not correct. He noted that the Bank of Sumitomo has security which exceeds the amount of the debt. He explained that the security is the sum of the DMV Fees and the real property and just because the City makes the payment through another source doesn't mean that they release the rights to the Stadium so the City could sell it, since that was the whole purpose of the Bank requiring a condition on the loan, that they held both. City Attorney Harper explained that tlus financing will get rid of that trust deed and then the Stadium will be free and clear. Councilman Alongi stated that he has had several people read the agreement with the Bank of Sumitomo and it does not even allude to the fact that if the Bank decides to take the DMV Fees that they take the Stadium as well. He noted that the City does have to make up the difference, but this will not include the Stadium. He further noted that if it can be shown to him where it states that the bank has both then he will be better able to understand the statements. City Attorney Harper stated that Councilman Alongi misunderstand him and explained that if the DMV Fees were $10,000,000 in one year then Counciiman Alongi would be right, but they are not therefore the bank does retain a hold on the Stadium. He further explained that it means that the City cannot sell the Stadium unless the bank tells us we can and if the City stopped making the bond payments, the Sate will intercept the DMV Fees and pass that money to the trustee which is the bank. Councilman Alongi stated that Mr. Gunn is the expert being paid for by the City and information was released to the newspaper which stated the amount of the bond would be $13,055,000 and then he met with the Finance Director this morning~,and the amount is $14,600,000. IIe questioned who reviewed the document and missed the typographical error. He fiuther stated that he does not know who or what to believe anymore and questioned the actual figures. He stressed that the community is paying large dollars to get out of this mess and yet it seems that we are getting further into the mess. Councilman Alongi stated that the City needs to trim its budget by whatever means it takes to make the bond payment, since he doesn't like to gamble on the future. He explained that the City cannot depend on future development and noted that the City must make hard decisions such as reducing the amount of City employees if needed. Councilwoman Brinley stated that this has nothing to do with the employees, but rather that Council needs to be responsible and listen to the expert and meet the obligations to save the City. She stated that the City could cut staff and we would still loose the Stadium and the DMV Fees and still have a City going nowhere quickly. Councilman Metze asked when the Sumitomo loan is due. Mr. Gunn stated that the current loan is seif-amortized. Councilman Metze stressed that the City must take action. Councilman Alongi stated that he does agree that the PAGE TAIRTEEN - CITY COUNCIL MINUTES - JANUARY 14, 1997 City must refinance, but he feels that the City should refinance the $10,000,000 and make cuts for the rest. He noted that if the tax dollars start to come in then the City can look forward and do other refinancing. He stated that he will not take part in putting the Community four and one-half million dollars furkher in debt. City Manager Molendyk stated that Council has had Study Sessions and gone over the entire issue and he does not understand the comments that some of the Council make in a public meeting. He explained that the staff and Council have been through this and Council has indicated their full support to move into the refinancing because there isn't enough money to make sufficient cuts without getting into main Public Safety Services and it was the fuil Council's decision to move into the refinancing because we felt that we were bare boned and it was in the best interests of the community to protect services. City Manager Molendyk stated that he wanted the community to understand what is being proposed in letting Sumitomo take the DMV Fees and paying the difference will result in cutting major public safety if that course of acfion is taken. He further stated that the same people are going to gripe about everything. He explained that the $900,000, which is from the DMV goes into the General Fund and provides services and if the City were to default or to utilize that $900,000 in some other manner it will be $900,000 in additional service cuts. He noted that after some of the debt the City has, as well as the $336,000 the tax assessor took away from the City an additional $1,000,000 would have a major impact on services. City Manager Molendyk stated that what he doesn't understand is that the Council has had Study Sessions; they have reached this point with Mr. Gunn; and they had agreed that this was in the best interests of the community. He asked why this discussion was occurring now. Mayor Pape concurred with City Manager Molendyk and stated his dislike for political grandstanding. He noted that this action is similaz to a couple who buy a house and then the recession occurs and one of the couple loose their job and now the house sits empty because the couple lost the house due to their loss in income. He explained that the City now finds itself in a similar situation because of a greatly reduced income due to the reevaluation of property t~es and reduced income from the State due to economic factors. Mayor Pape stressed that tlus action is giving the City three years to recover from our current economic situation and the payments will be the same as it is now. He stressed that this is a sensible option which our expert has suggested and gives us the opportunity to recover. Mr. Gunn commented on the $4,000,000 increase and indicated that there is interest due and owing on the bonds and that must be paid and this is being absorbed by the new bond. He explained that there aze three major components to this issue which are the interest due; the reserve payment for the last payment; and the payment of interest for three years as well as the cost of issuance of the bonds. He stressed that half of it is reserve funds and the rest is funds due. PAGE FOURTEEN - CITY CQUNCIL MINUTES - JANUARY 14, 1997 Councilman Metze questioned the reduced interest and its impact on the over a11 debt. Mr. Gunn stated that it would not over the period of time set and will remain roughly equal. He clarified the fact that the bond is for 35 years. Councilman Alongi expressed appreciation for Mr. Gunn's efforts, but does not agree with this type of financing. Mr. Gunn stated that he felt that tlus was something that this City Council would not even consider if they were to start from scratch today, however this is not the case and the Council does have $10,000,000 debt that the City cannot afford and now Council is hying to work it out. MOVED BY BRINLEY, SECONDED BY PAPE TO APPROVE THE FINAL OFFICIAL STATEMENT FOR THE LAKE ELSINORE RECREATION AUTHORIT'Y SALE OF $14,610,000 IN REVENUE BONDS. Councilman Metze compared this to a home purchase. THE FOREGOING MOTION CARRIED BY A VOTE OF 4 TO 1 WITH ALONGI CASTING THE DISSENTING VOTE. PUBLIC COMMENTS - NON-AGENDIZED ITEMS John Seepe, 15631 Half Moon, noted the pins and business cards with sail boats on the City sea1. He also noted the Press Enterprise had an article regarding water quality and funds from the State. He commented that Lake use fees would be discussed in the near future and stressed the importance of addressing them. He detailed the current rates and noted the impact on canoes. He indicated that the payment at another local lake is only $15 for an annual permit. Mariana Mohylyn, 305 W. Sumner, commented on the plight of the homeless in this season. She also commented on the Lake and indicated that what is happening is a change of title, and the residents will be tied to the payments. She questioned the morals demonstrated for the young people. Edith Stafford, commented on the expert advisors, and indicated that the Council may need to believe them, but she does not. She addressed Councilman Metze and indicated if she decides to mortgage house, that is her decision, but in this case the Council is making that decision for her, and it is not a cut and dry situa6on. She questioned why points were not brought out, and indicated that the information at the Study Session was presented on the blind side off camera, because the Council doesn't want the general public to know about more bond issues. She indicated that an expert will say anything he is paid to say. She addressed the City Manager and indicated if he was managing properly and not being bombarded by the Council, the City would not be in the mess it is in. She indicated that he is driven by what the City Council wants him to do, but he is allowing them to run the City. CITY MANAGER COMMENTS No Comments. PAGE FIFTEEN - CITY COUNCIL MINUTES - JANUARY 14, 1997 CITY COUNCIL COMMENTS Mayor Pro Tem Keliey commented on the foliowing: ,, 1) Thanlced the Scout Troop for displaying the colors. She noted that they are working on their Citizenship badge and will be looking at the budget. She commended the group on their efforts. 2) Noted the Carl Love column interviewing new residents, and clarified that a cut in police services has not been considered, as police services aze a top priority for the City. Councilman Alongi commented on the following: 1) Noted the letter from Lakeview Inn, and indicated that it is not the City's fault that the Rodeo was lost. He indicated that City staff could have done a great job with it, but stressed that no one can count on one entity to keep a business afloat. 2) Noted a problem with the traffic light at Lakeshore/Chaney and indicated that there was a problem with the equipment and staff is working to get that corrected. 3) Noted an official petition regarding a grand jury investigation, indicated that he knows nothing about it, and encouraged people not to call him about it. 4) Expressed apologies to Chamber of Commerce and Save the Lake Committee. He noted that they have spent a lot of time promoting the Lake, and were not asked to participate in an important meeting with Assemblyman Thompson. He noted that it would have been nice to hear from those groups, and apologized that they were not included. 5) Addressed a Library Meeting in Temecula and noted his understanding and recognition of his responsibility to the Community. He noted that no one from the Council was at that meeting with Murrieta and Temecula. He indicated that it was very interesting to hear what those residents had to say about La1ce Eisinore. He noted that the other Councilmembers were not at that meeting, but question his ability to serve the community. 6) Announced that his January 30th program will start with an EVMWD representative discussing reclaimed water for two or three segments, with the last including call-ins. He reminded the community of his program on January 30 at 7 p.m on Channel3 7) Addressed the Mayor's comments on the FPPC, and indicated that he takes comments out of context. He stressed that as a citizen the system exists for due process, and until he reaches the end of the process, PAGE SIXTEEN - CITY COUNCIL MINUTES - JANUARY 14,1997 there is no final decision. He indicated that the Mayor was out of line mentioning those things at the table, and stressed the time spent on the RCHCA committee obtaining information. He indicated that he was not primarily there for the City, but as part of a team with the other cities, hying to create a program to benefit all of the ciries. He suggested that the Mayor will need to tallc to an attorney soon. 8) Noted a memo that recently reminded him of the use of a city vehicle, and indicated that it was now appropriate to reimburse the City for its use. He indicated that it is still city business, and there was never a statement that he misused or abused that use. He stressed that he would do so again to do something for the community. He commented that he wished the Mayor was as aggressive in collecting the $18,000 owed by former Mayor Washburn, and questioned where the Mayor was then. He commented that this is harassment and he is willing to take this to the highest level. He further commented that the Mayor is a back stabber and he does not know how to put a team together. He suggested that action be delayed until he goes through the whole process. 9) Extended sympathies to Captain Wa1sh on the loss of the two depuries, and noted the tragedy of violence in the communities today. He indicated that it is a shame that we cannot do our jobs without feaz of those things happening. He stressed that the weapon was a killing weapon, and not for sports; and commented that they have a right to have a weapon for hunting but not that type of weapon. He indicated that he understands the feelings that never go away, and nothing will ever replace the emptiness. He noted that he will comment on the Press Enterprise on his program and further noted that he knew one of the officers. . Councilwoman Brinley commented on the following: 1) Expressed congratulations to Tom Thomas and the newly installed Chamber of Commerce Board of Directors, on theu installation. She indicated that it was a nice event and Tammy Fruin did a fantastic job of decorating the room. She expressed hopes that with Mr. Thomas as president there would be a means to find a long and working relationship between the City and the Board. 2) Noted Mr. Seepe's comments regarding the Press Enterprise, and stressed the impact of an 820 square mile watershed area on the Lake. She noted that until the problems are solved upstream, the Lake problems can't be completely solved. She noted the political nature of this discussion due to the other entities and their impacts on the situation. She stressed the contributing factors and expressed hope that the committee would have input on the Lake in the future. 3) .'Thanked the Boy Scouts for theu participation at this meeting, and PAGE SEVENTEEN - CITY COLTNCIL MINUTES - JANUARY 14, 1997 encouraged their efforts to learn about the community and their civic duties. 4) Extended sympathies to the families and friends of the slain officers, and sent thoughts and prayers to them a11. She requested that Chief , Wa1sh extend the sympathies of the Council. She expressed support ~' for law enforcement officers on a job well done. 5) Noted that no one likes to rehash things, but there comes a time when it must be done. She indicated that when someone helps a community, they don't have to tell people about it, and everyone needs help at times. She noted the last show by Councilman Alongi and indicated that it would be nice not to have their problems spread over T. V. She indicated that Mr. Alongi distorts issues and stressed the intricacy of information on bonds. She noted that Councilman Alongi participated in the meetings and agreed with what needed to be done and the difficult position of the City; but then took the political way out and voted against the program. She stressed that the Council has taken the initiative and the lead with cutbacks and facing more cutbacks to balance the budget. She stressed that they are trying to make a good faith effort and are being attacked on their integrity. She noted that Mayor Pro Tem Kelley has attended library meetings for over two years; and she personally has attended for over a year to search for funding. She questioned where Mr. Alongi has been for the last two years on this issue, and suggested that it was no big deal that he attended one meeting. She noted that it was the same with the Kids on Track Program; and suggested if he made a profit it could have been used for that program. She noted comments by the Judge that Mr. Alongi made money, and noted that it was not donated to tYus type of cause. She noted that everybody expects the Council to be professional and not respond to Mr. Alongi, but explained that when your integrity starts to be impacted, it is important to speak up. She indicated that she will not allow Mr. Alongi to cast aspersions on her integrity. Councilman Metze commented on the following: 1) Congratulated the staff on the financial report for 1994-95, which received an award for Outstanding Financial Reporting. 2) Addressed Edith Stafford and indicated that City Manager Molendyk works for the City Council and he will carry out their actions, and he has no choice. He stressed that the City Manager and the City Attorney work d'uectly for the Council. He noted past comments at a public hearing when Council was making decisions, and Mr. Molendyk indicated that he was not being left with money to run the Stadium. He stressed that the Council made the decision to proceed anyway, and it is not appropriate to blame the City Manager. 3) Addressed Councilman Alongi's show and comments regarding the PAGE EIGHTEEN - CITY COUNCIL MINUTES - JANUARY 14, 1997 parks. He explained that Councilman Alongi stated tthat the maintenance costs for the parks is $80,000 a year. He noted that Swick Matich runs $48,000 a yeaz to maintain; $80,600 to do McVicker Park; and $64,000 a year for Terra Cotta Park. He indicated that Mr. Alongi was leading the public to believe it is possible to close one park and maintain a11 of the others for that price. He expressed sympathy for not Seniors receiving breaks on theu CR & R bills. He indicated that the Senior Center is now supported wholly by C.D.B.G. funds. He stressed that Councilman Alongi did everything possible to cut the funding to the Senior Center. He stressed that people need to be aware of what is politically correct at the time. He noted situations when the citizens have come out in force and asked Council not to approve specific projects and the Council on 4 to 1 votes gave the residents what they wanted. He noted the USA Project and the level of opposition and the Council vote. He questioned how anyone can say the Council does not care. He stressed the need to know where Mr. Alongi is coming from. He stressed that the F.P.P.C. found Mr. Alongi in violation, the judge found him in violation; and whether he appeals or not he was found in violation. He questioned where it would stop; and whether this was the person the community wanted representing them. He emphasized that the residents should keep in mind that Mr. Alongi is the only person who could ever profit from a decision made at the Council table. Mayor Pape commented on the following: 1) Wished City Manager Molendyk a Happy Birthday. 2) Congratulated the new Chamber Board, and noted that it was a very enjoyable event with a very positive group of people. 3) Expressed special thanks to Assemblyman Thompson, and noted that he met with him in November to brainstorm solutions on water quality, and at that time volunteered to chair a meeting in town with various resources. He expressed appreciation for those efforts. He explained that the Assemblyman wili put together a blue ribbon panel to review reports and studies and make specific recommendations on what to do to fix the Lake. He stressed the interest in raising funds to have a long term solution to the water quality problem in the Lake. 4) Reminded the community that if they blow leaves in the street they run in the gutter and then into the Lake, and stressed the importance of putting green materials in the green container and to never dump oil in the gutter. 5) Noted that he met with representatives of the Wildomar MAC and it was a very positive meeting; and they found some common ground and they will meet agaui next month. He stressed the need to tear down the walls which have been built with misinformation. PAGE NINETEEN - CITY COUNCIL MINUTES - JANUARY 14, 1997 6) Addressed a letter to the Editor in the Californian with regard to Lake Eisinore. He noted comments discussed with the Wildomar MAC and stressed that the Code Enforcement and Building Standards are more stringent in the City than in the County areas. 7) Commented on the traffic signal at Dexter/Highway 74; and noted a letter from the Department of Transportation, they have taken action as well on an interim solution. He noted that they are making pavement widening and striping improvements to alleviate some of the delay to be completed this month. He acknowledged the large amount of correspondence on the situation. Ae noted that he and Mrs. Kelley would be meeting Supervisor Buster tomorrow and will discuss this matter with him. 8) Noted attempts to correct misinformation and misunderstanding; and explained the upcoming survey to determine what is important to the residents and what they are willing to pay for, and what services they want. He noted efforts to put together a committee of residents and business people to meet and receive the information and discuss altemate recommendations for more citizen input. 9) Noted misinformation being put out over the airways about Paradise Chevrolet coming to town. He stressed that they were not g,iven favoritism or shown special treatment in the process. I3e :~iso not~ci a letter written over his signature to GFI and stressed t:1~at ther~ °vvas support for this activity at the Council Meeting on Bec~mber i9th. ii~ noted that Councilman Alongi either intended to misl~ad with his comments or he did not irnow what he was voting on. He :r.di_'~a.te;i that with regard to the City car memo, it was sent after a discussion with the City Attorney. Mr. Harper clarified that if Mr. Alongi was not found to have a conflict it was City business, but if there was a conflict that would not be the case. Mr. Harper also couiinued that Councilman Alongi was correct that he was entitled to go through the appellate process before being found guilty. City Attorney Harper noted for the press that he was disappointed in the comments by the City Treasurer which implied that his fee was $400,000, as Mr. Knapp knows that this is not the case. He indicated that he has been with the City since 1984 with only one increase in hourly fees. He noted that he felt because of economics it was inappropriate to raise fees. He noted that right now he charges the lowest hourly rate in Riverside County. He explained that the $400,000 includes all costs of issuance, but his fee is about 2.5% of the 2.5%. He noted that he would expect an apology as early as tomorrow. CLOSED SESSION a. Joint Closed Session with the Redevelopment Agency - Pending Litigation - Lake Elsinore Associates - Case No. 200767. b. Pending Litigation - Spectrum Group. PAGE TWENTY - CITY COUNCIL MINUTES - JANUARY 14, 1997 THE REGULAR CITY COUNCIL MEETING WAS ADJOURNED TO CLOSED SESSION AT 9: 26 P.M. TO DISCUSS THE ABOVE MENTIONED ITEMS. THE CITY COUNCIL MEETING RECONVENED AT 9:50 P.M. NO ACTION TAKEN. ADJOURNMENT MOVED BY METZE, SECONDED BY BRINLEY AND CARRIED BY UNANIMOUS VOTE TO ADJOURN THE REGULAR CITY COUNCIL MEETING AT 9:51 P.M. GU~ VIN W. ~ MAYOR ~ CITY OF LAKE ELSINORE ATTEST: `/ ~ ~ C ~ SE3D, CITY CLERK ~rTY OF I,~ttE ELSINORE