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HomeMy WebLinkAbout06-13-2000 City Council MinutesMINUTES REGULAR CITY COUNCIL MEETING CITY OF LAKE ELSINORE 183 NORTH MAIN STREET LAKE ELSINORE, CALIFORNIA TUESDAY, JUNE 13, 2000 CALL TO ORDER The Regular City Council Meeting was called to order by Mayor Brinley at 7:05 p.m. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by City Treasurer Ferro. INVOCATION The Invocation was provided by Pastor Charles Aden, representing Shepard of Life Lutheran Church. ROLL CALL PRESENT: COUNCILMEMBERS: KELLEY, METZE, PAPE, SCHIFFNER, BRINLEY ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Watenpaugh, Assistant City Manager Best, City Attorney Leibold, Administrative Services Director Boone, Community Development Director Brady, Community Services Director Sapp, Fire Chief Seabert, Police Chief Walsh, City Engineer O'Donnell, Information/ Communications Manager Dennis, Public Works Manager Payne, Recreation & Tourism Manager Edelbrock, City Treasurer Ferro and City Clerk/ Human Resources Director Kasad. PRESENTATIONS a. Presentation -"Oliver" Production Cast. (F:142.1) Councilwoman Kelley highlighted the planned performances of Oliver at Temescal Canyon High School; and provided costs and scheduled performances. Cast members from the production provided a brief scene and music from the production. Councilwoman Kelley introduced the cast members, producer and director and noted that 120 students are participating in the actual production. She encouraged the public to attend a production and noted the quality of the students' work. PAGE TWO - CITY COUNCIL MINUTES - JUNE 139 2000 b. Presentation - Korn Memorial Scholarships. (F:56.2) City Manager Watenpaugh noted that this Scholarship was established for students entering the medical or nursing professions. He advised that this year there were two $1,000 winners being Robin Miller and John J. Taylor, both from Elsinore High School. He detailed the original establishment of the award and provided brief background information on each of the winners. Mayor Brinley read and presented Certificates of Recognition to Robin Miller and John Taylor. Robin Miller's mother accepted on her behalf; and John Taylor accepted his Certificate, thanking his parents for helping him through school and the City for the Korn Memorial Program. C. Presentation - Neighborhood Pride Awards. (F:56.1) Recreation & Tourism Manager Edelbrock introduced Mary Brown representing EVMWD. Ms. Brown detailed the Neighborhood Pride Award Program which has been a cooperative effort between the City and the Water District. She explained that awards are given for Mixed Use, Hardscape Design and Water Efficiency; and noted that this year's nominees were an exceptional group of residents. She thanked the City for sponsoring the program, invited increased participation and congratulated the winners. Recreation & Tourism Manager Edelbrock indicated that over 20 homes were nominated this year in six different zones. She introduced the five judges being Nan Simonson, Sharon Letz, Diane Gillum, Charlotte Fox and Rod Kihara; and expressed appreciation for their efforts. She presented the awards to the following residents: William & Tamara Vuist, 276 South Terra Cotta - 1" Prize Mixed Use in Neighborhood A Bill & Helen Monteleone, 29610 Nichols Street - 15` Prize Water Efficiency in Neighborhood C Edward & Willeta Graves, 16748 Gunnerson Street - I" Prize Mixed Use in Neighborhood C Henry & Virginia Valenzuela, 381 Avenue 11 - 1" Prize Water Efficient in Neighborhood D Antonio Sanchez, 220 East Peck Street - I" Prize Mixed Use in Neighborhood D Dan & Barb DeMartino, 29082 Tangerine - Grand Prize Winners PAGE THREE - CITY COUNCIL MINUTES - JUNE 139 2000 d. Proclamation - Juneteenth Celebration. (F: 122.1) Mayor Brinley read and presented the Proclamation to Debbie Crawford, representing Elsinore Valley Arts Network and Sonja Wilson, representing NAACP. Sonja Wilson noted the limited knowledge of the Juneteenth event and expressed appreciation for the cooperation of EVAN on this event. Debbie Crawford indicated that EVAN was honored to participate with the NAACP on this celebration and noted that it will also recognize Jazz Month. She announced that the Juneteenth event would be in City Park on June 17'' from 5 to 9 p.m. C. Proclamation - Amateur Radio Week. (F:122.1) Mayor Brinley read and presented this Proclamation to Don Foster. Mr. Foster thanked the City for this recognition, and noted that they are participating in an annual contest with other groups, in which they were in the top 10% nationwide last year. He also noted that there is an emergency radio in the emergency communication room of the City. f. Presentation - Acknowledgement of Certificate from Chamber of Commerce. (F:56.1) City Manager Watenpaugh acknowledged and thanked the Chamber for allowing the City to host the Chamber Mixer in May; which opened City Hall to the general public. He noted the benefits of that opportunity for the City and expressed hopes for participation with future events. He further noted that several people commented that it was their first time in City Hall. He thanked everyone for their participation. PUBLIC COMMENTS - AGENDIZED ITEMS Requests were received to address the following items and deferred to those discussions: Item Nos. 12, 31 and 32. CONSENT CALENDAR ITEMS The following items were pulled from the Consent Calendar for further discussion and consideration: Item Nos. Lb and 12. MOVED BY PAPE, SECONDED BY METZE AND CARRIED BY UNANIMOUS VOTE TO APPROVE THE BALANCE OF THE CONSENT CALENDAR AS PRESENTED. PAGE FOUR - CITY COUNCIL MINUTES - JUNE 13, 2000 The following Minutes were approved: a. Regular City Council Meeting - May 23, 2000. (F:44.4) 2. Ratified Warrant List for May 31, 2000. (F:12.3) Received and ordered filed the Investment Report for April, 2000. (F:12.5) 4. Approved Change of Date for regularly scheduled July 25`x' City Council/ Redevelopment Agency Meeting to July 24, 2000, at 7 p.m. (17:44.1) 5. Approved Contract with NBCE, Inc. for preliminary Design Work for the Central /Collier and Collier/Riverside Drive Traffic Signal System Installation Project; and authorized the City Manager to execute the contract in the amount of $29,975. (17:68.1)(X:162.4) 6. Approved 2000/2001 Traffic Marking and Striping Contract with P.C.I. Paving Contractors in the amount of $85,000. (17:68.1)(X:156.1) 7. Approved Renewal of Contract for Paving and Concrete Maintenance Work with Nelson Paving and Grading for one year. (17:68.1)(X:156.1) Adopted Resolution No. 2000 -14, in support of grant application for the Highway 74 Task Force California Office of Traffic Safety Grant. (F:84.8) RESOLUTION NO. 2000-14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA AUTHORIZING THE LAKE ELSINORE POLICE DEPARTMENT TO PARTICIPATE IN A MULTIAGENCY TRAFFIC SAFETY/ENFORCEMENT GRANT. 9. Approved an Agreement for Professional Services with Economic Research Associates in an amount not to exceed $20,000, subject to approval of the final agreement by the City Attorney. (F:68.1) 10. Adopted Resolution No. 2000 -15 in Support of the Fair Competition Initiative. (F:96.1) RESOLUTION NO. 2000-15 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, IN SUPPORT OF "THE FAIR COMPETITION AND TAXPAYER SAVINGS ACT" INITIATIVE. 11. Adopted Resolution No. 2000 -17 setting the Appropriation Limits for Fiscal Year 2000 -01, at $26,908,315 (Proposition 4). (17:30.1) PAGE FIVE - CITY COUNCIL MINUTES - JUNE 139 2000 RESOLUTION NO. 2000-17 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ESTABLISHING THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2000 -2001 FOR THE CITY OF LAKE ELSINORE IN ACCORDANCE WITH THE PROVISIONS OF DIVISION 9 OF TITLE 1 OF THE CALIFORNIA GOVERNMENT CODE. 13. Approved Joining the Amicus Curiae Brief in the Educational Revenue Augmentation Fund (ERAF) Case. (F:52.1) PUBLIC HEARINGS None. BUSINESS ITEMS 31. 2000/01 Fiscal Year Budget - Resolution No. 2000 -17. (17:30.1) City Manager Watenpaugh indicated that he would present an executive summary of the 2000/2001 Budget. He stated that the General Fund had a total budget of $12,612,000. He noted that the revenues were projected to be $11,694,900 and for that reason staff was recommending a deficit budget of $917,000; and noted that he would explain that deficit at the end of this presentation. He explained that there were several additional items added to the budget this year; one being the Fire Station on the West End of the City, which represents the only new staff to be added, with all other staffing levels within the City to remain the same. He further explained that staff was proposing to contract to a concessionaire at the Campground to remove the cost of the Campground from the City's budget. He explained that the City, including Police and Fire contracts, has a staff of 104 employees, with approximately 18 to 27 part-time staff. He stated that the parks and recreation facilities have recently been returned to 100% operation; and noted the addition of acoustics at the Community Center, which would allow the Center to be used for more activities. He presented an overview of each department's budget as follows: Department City Council Planning Commission City Attorney City Clerk/Human Resources City Treasurer City Manager Emergency Services Administrative Services/Finance Risk Management Information Services Budget Amount 132,700 12,500 375,000 254,900 5,400 545,600 4,000 644,300 400,000 305,300 PAGE SIX - CITY COUNCIL MINUTES - JUNE 139 2000 Police Services 3,606,500 Fire Service 450,100 Comm. Dev./Planning 483,400 Comm. Dev.Bldg.- Safety 442,100 Comm. Dev. /Code Enforcement 182,600 Comm Dev./Weed Abatement 226,700 Comm. Dev. /GIS System --- - - - - -- Engineering 577,100 Public Works /Administrative 174,500 Public Works /Streets & Sidewalks 4031400 Public Works /Parks Maintenance 559,600 Public Works/Facilities Maintenance 294,700 Public Works/Vehicles 147,900 Comm. Services /Administrative 362,800 Comm. Services /Comm. Center 112,100 Comm. Services /Sr. Center 8000 Comm. Services/Parking- Environ 94,300 Comm. Services /Animal Control 75,000 TOTAL $10,952,500 Transfer CPI Casino Drive Improvement 260,000 Lease/Debt Service 1,100,000 Transfer Ldke Oper. & Maint. 300,000 TOTAL $12,612,500 He noted that in addition to the listed budget expenditures, staff proposed additional one -time budget expenditures as follows: Boat Launch repairs 70,000 Corporation Yard Completion 130,000 One Vehicle 35,000 Mandatory Housing Study 50,000 Low & Moderate Housing 150,000 Infrastructure Appraisal 100,000 Library Books (Mitigation Funds) 20,000 Parks & Trails Master Plan Update (Mitigation Funds) 40,000 TOTAL PROPOSED EXPENDITURES $ 1394979500 City Manger Watenpaugh explained that the reason he was recommending a deficit budget was because the City was on an incline in terms of development and will improve during the budget year. He noted that any settlements from lawsuits would be handled through the reserves and noted that it could have an impact on the General Operating Budget, however that will depend on how the suits would be settled. He noted that staff had projected a budget reserve of $3,417,300, subject to possible judgments or awards. He noted that the General Fund Budget as proposed would be deficit in the amount of $917,000. He noted that the budget for Lake Operations is $765,600 and includes the Lake Operation; Boat Launch PAGE SEVEN - CITY COUNCIL MINUTES - JUNE 139 2000 Operation; the Levy; and the Beachfronts. He stated that revenue for the Lake Operations Budget represents $465,600, therefore the $300,000 transfer from the General Fund will meet the operating deficit necessary to meet the operation needs of the Lake. He further noted that if the water quality continues to stay as it is, prior to the JPA's resolutions to water quality, the revenues would improve. City Manager Watenpaugh indicated that the campground was eliminated from the Lake Operations Budget, and noted a Study Session on June 15, to consider Concessionaires. He advised that the City -Wide Lighting and Landscaping Assessment District represents a revenue of $1,175,000, with expenditures for Street Lighting, $265,000; Traffic Signals, $51,000; Landscape for Streetscapes, $774,100; and Tree Trimming, $84,900, for total expenditures of $1,175,000. City Manager Watenpaugh detailed the Capital Projects for the coming year, which will include Street Maintenance Slurry Program, $100,000; Street Stripping and Restoration, $130,000; Street Maintenance for Curbs, Gutters, and Sidewalks, $134,000; San Jacinto River Mitigation Program, $15,000; Railroad Canyon Road Pavement Rehabilitation Program, $795,000; LSA Traffic Mitigation Study, $60,000; Franklin/Casino /Canyon Estates Connection, $380,000; Traffic Signals at Central /Collier and Collier/Riverside, $50,000; Lake Street Rehabilitation, $510,000; Outflow Channel Phase II, Pedestrian Way, $482,000; Summerhill Drive Approach Repairs, $60,000; Fire Station at McVicker Park, $1,300,000; Planning for McVicker Canyon State Park, $40,000; Boat Launch repairs, $70,000; Corporation Yard Completion, $130,000; One Vehicle, $35,000; Mandatory Housing Study, $50,000; Low & Moderate Housing, $150,000; Infrastructure Appraisal, $100,000; Library Books, $20,000; Parks & Trails Master Plan Update, $40,000; for a total Capital Projects Budget of $4,600,000. He noted the projects that will carry forward because they have not yet been completed in the amount of $2.1 million. He noted that this will leave to $6.7 million to carry forward for Capital Project for Budget Year 2000/2001. Chris Hyland, 15191 Wavecrest, questioned the deficit and stated that she wished to inform the public that the City Council was contemplating a Park Assessment and stated her opposition to that action. She noted that homeowners are the people that will be assessed, and those that rent or lease would not be liable. She noted the refinancing of the Bond Debt for the Stadium and stated that she was in opposition to that action. She criticized the hiring of a Public Relations person and noted that she has not seen one article in the paper with his name on it. She noted the Library Fund and the money the City borrowed from it; and stated that she felt the people of the community had better start standing up, or they would be assessed a lot of money. City Manager Watenpaugh stated that the restructuring of the Bond had no bearing on the deficit budget. He noted that the restructuring of the Bond issue was to lower the interest rates and provide for additional funding to go into the reserves or provide services to the community. He noted that at the Budget Study Session, staff had proposed creating revenue sources, which PAGE EIGHT - CITY COUNCIL MINUTES - JUNE 13, 2000 were similar to what other communities have done. He explained that Proposition 218 allows for a Mailed Ballot to allow property owners to vote whether they wish to be assessed or not. He noted that the Council cannot create a tax or assessment, but rather it is up to the residents and property owners to determine if they wish the services such an assessment would provide. City Manager Watenpaugh stated that the City did borrow money from the Library Capital fund and it would be paid back. He explained the mitigation fees for the Library, and stressed that they are not Friends of the Library funds. He addressed the Public Information position and indicated that he felt that position was necessary and would be a benefit to the City. Mr. LaPere, 16867 Wells Street, stated that he understood that the Collier and Riverside Drive intersection was State Highway and that the State would pay the fees for the light signals at that location. City Manager Watenpaugh stated that he was correct, and staff had informed him that the State would pay for that signal. He noted that the funds would be reallocated in the Capital Budget. Mr. LaPere addressed the Bond issue and stated that he had been following the Federal Reserve for the last six months and they have gone up at least one quarter to one point each month and asked how the City would be saving money if the interest is escalating. City Manager Watenpaugh stated that what was being proposed was a variable rate, which would drop the interest rate from 7.2% to 4.5 %, based on the current rates. Councilman Schiffner stated that Council did a complete review at the Budget Study Session and he had no further questions. Mayor Pro Tern Pape noted that the Council had spent six hours reviewing the Budget at a Study Session. He noted the Executive Summary and asked what the Franklin/Canyon Estates Drive Connection in the amount of $380,000, was for. City Manager Watenpaugh stated that staff was directed to look at what it would cost to connect Canyon Estates Drive to Franklin Avenue, to relieve some of the traffic problems. He stated that the funds were for Planning, Engineering and construction. Mayor Pro Tern Pape stated that he wanted to note that this would reduce some of the congestion on Railroad Canyon Road. He indicated that the traffic signals that are to be installed by Cal -Trans on Central /Collier/Riverside would be a real help in mitigating traffic congestion as well. He noted that Lake Street would be paved in the coming year, as well as well as Railroad Canyon and Mission Trail. He noted that funds were allocated for McVicker Skate Park for planning and engineering, so that project could move forward. He further noted the money that has been allocated for slurry sealing and the Fire Station on the West End. He stated that there would be a lot of positive things going on in the coming year; and noted that the State might provide additional revenue as well. Councilwoman Kelley commented that Council spent an entire day in a Study Session going over the budget, which gave Council the opportunity to stress what they felt the community needed. She noted that the City's sales PAGE NINE - CITY COUNCIL MINUTES - JUNE 13, 2000 tax revenue is up 8% over last year and amounted to $3,900,000, which represents 34% of the revenue in the City's budget. She noted the importance of Franklin/Canyon Estates Drive and explained how important that project was to relieve congestion. She stated her excitement over the Fire Station. She commented on the McVicker Skate Board Park and explained that the City will be in partnership with Canyon Lake and the County of Riverside on that project. She stated that it was a goal of Council to repay the Library Fees and assured the public that would be done. She stated that the Bond Refinancing would help to address the deficit of the budget and allow more capital funds for some of the projects. Councilman Metze asked if the Capital Improvement Budget was status quo. City Manager Watenpaugh stated that with the exception of the Fire Station and the return of the park services, it was status quo. Councilman Metze asked the City Manager to explain the LSA Study. City Manager Watenpaugh stated that the LSA Study addresses the City's entire infrastructure system. He explained that it addresses street signs, roads and traffic mitigation. He noted that other communities, including the County, have fees that range from $830 per unit to over $1,000 per unit and currently the City charges $.03 a square foot. He stated that if the mitigation fee were enacted, it would eliminate the majority of the potholes and the older sections of the City would have maintenance dollars. Councilman Metze stated that he concurred with the rest of Council and noted that the annual reserves were a blessing and a good resource for emergencies. Mayor Brinley concurred with Council about the amount of time the Council spent in the Study Session for the Budget. She addressed the Library Fund and stated that there had been a misunderstanding that the Funds belonged to the Friends of the Library and asked the City Manager to address this. City Manager Watenpaugh explained that the Library Mitigation Fee was a one -time fee that was paid for all new dwelling units and placed in a separate fund for improvements or development of a library. He noted that the funds could be used for books, new shelves, and the planning, design and building of a new library, but could not be used for operating expenses. He further explained that the City collects the funds and they are City funds, which are allocated by the City Council. Mayor Brinley noted that at the time the Friends of the Library was formed, the City allocated funds to address the new library location. She noted that staff was obligated to bring issues before Council for examination and exploration. She noted the discussion regarding parks and the amount of money expended from the General Funds to address parks. She stated that as the park system grows there will be more funds necessary to maintain them and Council was made aware of the need to look at future options to address parks. MOVED BY SCHIFFNER, SECONDED BY PAPE AND CARRIED BY UNANIMOUS VOTE TO ADOPT THE 2000 -2001 OPERATING BUDGET FOR THE CITY OF LAKE ELSINORE; THE LAKE PARK AND PAGE TEN - CITY COUNCIL MINUTES - .TUNE 139 2000 RECREATION FUND; THE LIGHTING AND LANDSCAPE MAINTENANCE DISTRICT AND THE CAPITAL IMPROVEMENT BUDGET AND ADOPT RESOLUTION NO. 2000-17 AS FOLLOWS: RESOLUTION NO. 2000-17 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING AND ADOPTING THE BUDGET FOR FISCAL YEAR 2000 -2001 AND APPROPRIATING THE FUNDS NECESSARY TO MEET THE EXPENDITURES SET FORTH THEREIN. 32. Recreation Authority - Bond Refinancing - Resolution No 2000 -16. (F:126.5) City Manager Watenpaugh stated that staff and the Financial Team were recommending that Council consider refinancing the Lake Elsinore Recreation Authority Bonds. He explained that this would provide a savings to the General Fund of $564,000. He further explained that instead of making a $1.1 million payment it would be $450,000 payment, due to a lower interest rate. Rod Gunn, Financial Advisor, explained that they brought to staff s attention that with the improved financial position of the City, they should look at refinancing the debt issued by the Lake Elsinore Recreational Authority. He noted the improvements and progress of the City; and stated that three things contribute to the improved financial status being: 1) the City's demonstrated ability to deal with tough financial decisions with assurance from staff that they will continue to monitor any changes in the City's financial position; 2) restructuring of the City's financial debt with the Redevelopment Agency being self - supporting, with no assistance from the City's General Fund; 3) the transfer of debt from the Stadium to the Lake allowed the' City to enter into the lease of the Stadium to relieve the City's budget of the Operation and Maintenance Cost on the Stadium. Mr. Gunn stated that this year's budget, although of some concern to him, is reasonable and the reserves have increased beyond what is required. He explained that what Council was being requested to additionally approve was a reimbursement agreement with the Redevelopment Agency, to reimburse the City for the interest payments they would be making, whether this proposed financing goes through or not. He further explained that the Stadium was a Redevelopment Agency project and the City had been carrying the debt, because the Agency couldn't afford it. He noted that as the Agency was recovering and new houses were built in the Project Area, the Agency could reimburse the City for those payments. He stated that in the Advisory Team's forecast the budget deficit should not continue. He explained that all of the discussed items were important to allow the Financial Team to approach some banks about banking relationship for a letter of credit. Mr. Gunn stated that what was being proposed was a variable rate debt. He explained that through the financing the City would offer to buy back anyone's bond every week. He further explained that by PAGE ELEVEN - CITY COUNCIL MINUTES - JUNE 139 2000 offering to buy bonds back every week the interest rate they carry is treated like a one -week note and is continually rolling as a one -week note. He noted that the Federal Reserve has taken steps to increase the Federal Funds Rate and the Municipal Market generally follows, however they do not necessarily track each other and each is a separate market. He noted that since 1992, the interest rates on this type of financing have been at a low of 1.4% to a high of 5.5 %. He further noted that at a ten year high there would still be significant savings over the current rate. Mr. Gunn explained that the average rate for this period of time was about 3.1 %. He noted that to that interest rate are added the Letter of Credit fees. He explained the function of the Letter of Credit and stated that it provides the liquidity necessary to buy the bonds back weekly if the bondholders choose to sell them back; and they give the bonds the "AAA" rating they need. He stated that there was no approval from a lending institution at this time, however it was expected by the end of the week. Mr. Gunn stated that he would be available for questions. Don Hunt, Bond Counsel, explained that the documents before the Council included resolutions for the City, Authority and Redevelopment Agency; approving a standard bond structure involving an indenture of trust that sets forth the terms of the contract with the bond holders; a site and facility lease, leasing the site to the Authority; and a lease agreement leasing it back to the City. He noted that this is a standard financing that cities engage in under state law; and includes an assignment agreement that signs over the revenues to the trustee on behalf of the bond holders; a bond purchase agreement; an escrow deposit and trust agreement to pay off the old bonds; and a marketing agreement that will provide for remarketing the bonds and set a new rate each week, based on the market conditions and remarketing of returned bonds. Mr. Hunt explained that this was a structure that had been widely used in California by cities and other public agencies. He noted that most public agencies use variable debt for at least part of their outstanding obligations because the interest rates are so attractive. He stated that he would also be available for questions. Edith Stafford, 29700 Hursh, questioned the statement of leasing and leasing back. She questioned the proper name for that type of financing. Rod Gunn stated that Municipal Fund financing is done through a lease. He stated that the term he felt she might be looking for was a Certificate of Participation, however this was not a Certificate of Participation; but both forms of municipal financing are considered lease financing. Mr. Hunt explained that this particular financing structure was used throughout California and was recently upheld by the California Supreme Court as being a valid financing plan for California cities. Ron LaPere, 16867 Wells Street, noted the "AAA" rating of the bonds and indicated that over the last few years, the City had pulled itself up by its boot straps, faced the tough decisions that had to be made, and was in a position to do something constructive on behalf of the citizens of the PAGE TWELVE CITY COUNCIL MINUTES - JUNE 13, 2000 community. He commended the City Council for working out the problems that have faced the City. Dan Uhlry, 150 E. Lakeshore Drive, stated that he got the impression that Mr. Gunn was not totally in favor of the payment of the $1.4 million bond repayment versus a rebuy. He asked what it does to the term of the bond and how much it was going to cost the City in refinancing. He noted that the City has already invested three years in the current bond and asked what this would cost. Rod Gunn explained that the City was refinancing existing debt and not creating new debt for new money. He stated that the City was not going into new indebtedness. He noted that the transaction was similar to the people in the audience monitoring the market when new vehicles become available to them, they might finance their house to gain a lower interest rate. He further explained that basically that was the proposed action, to refinance debt to gain a lower interest rate. Mr. Gunn stated that the maturity of the Bond was being extended three years, but the total cost of the financing over the life of the bond, including the additional interest for the three additional years, would create a savings in the millions. He stated that he does not have actual numbers and it would only be a forecast because of the variable nature of the Bonds. Mayor Brinley clarified that the action would be beneficial to the City and would save the City money through the refinancing. Mr. Gunn confirmed and stated that he had no reluctance in bringing the refinancing issue to the City and he had no problem with the action. He stated that his comment related to this year's budget. He explained that Financial Advisors do not like to see a financial deficit. Councilman Metze clarified that the City would save over $1 million in the first two years, therefore over 20 years it would create savings of several million dollars. Mr. Gunn stated that it does result in significant savings. Councilman Metze noted that the $564,000 that will be saved on the payment would make the deficit that much less. City Manager Watenpaugh stated that the actual savings will not be known until the Bonds are sold, however it is possible that the deficit could be reduced to $353,000. Chris Hyland, 15191 Wavecrest Drive, stated that the City Council only knows how to add debt, not remove it. She stated that the stagnation of the City is caused by its debt; and indicated that there was no ability within the City to resolve the debt. She noted the amount of money that is paid to Rod Gunn and the amount that this refinancing would be costing the City. She further stated that the inability to pay the bond debt was created by the City's inability to defend against lawsuits which have cost the City. She questioned the total number of bond issues now outstanding; whether there was an interest rate cap on the bonds; whether the interest would be adjusted weekly; how much Mr. Gunn had been paid in commissions over the last few years and how much more he would get from this action; why over $5 million in RDA funds were used for the budget make -up, rather than for redevelopment purposes; why the Council wasn't finding ways to reduce PAGE THIRTEEN - CITY COUNCIL MINUTES - JUNE 13, 2000 debt, rather than adding to it; why Council hired Mark Dennis, bought a car for Assistant City Manager Best; why the Council believed that better financial conditions meant being able to refinance debt, rather than accumulate savings or be able to make payments. She stated that one of Council professes to be a financial consultant whose only qualifications seem to be that of bankrupt. She stated that the Mayor doesn't seem to know the difference between debt and surplus, nor even black or red. She noted that the Mayor knows her way around Washington DC and Sacramento. She cited the financial problems in Orange County. She suggested that a Certificate of Participation should go to the vote of the people. Rod Gunn reiterated that the Council would not be issuing Certificates of Participation; and stressed that through this action the City would be retiring debt. He explained that what the City had been doing was restructuring debt. Mayor Brinley stated that the previous bond debt would have had a domino affect and when one went they all would and therefore the effort has been to break them apart and make them stand on their own and resolve the problem rather than create more problems. Mr. Gunn concurred. He stated that there was not an interest rate cap and the interest rate was variable, however they would be fixing the rate until February, 2002. He stated that from that point on the bonds will be repriced weekly and that would be the vehicle that gets the City the lower interest rate. He noted that the Department of Water and Power issues massive amounts of variable rate debt because of their financial clout. He explained that most large cities that have the credit to issue this type of debt, issue at lease part of their debt in the variable rate mode. Mr. Gunn stated that in terms of massive City debt, this was the only debt of the City. Councilman Metze asked Mr. Gunn to explain that the Mello -Roos and CFD's were not the same thing as. Mr. Gunn noted that there were three types of debt: City debt, which was being discussed; RDA debt, of which there are several outstanding bonds which have been restructured and are paid from RDA funds in entirety; and the debt that has no obligation to the City or the Agency and is debt that's secured by special assessments or taxes on particular properties for improvements which are obligations of the property owners. Councilman Schiffner clarified that the only alternative other than the action proposed by this item would be to continue to pay a higher rate of interest on existing debt. Mr. Gunn concurred. Mayor Pro Tem Pape asked if the current bonds were redeemable without a premium. Mr. Hunt stated that they are payable on February 1, 2002. Mayor Pro Tem Pape asked if the proposed bond issue would be at a fixed rate until February, 2002 and then become variable with a rating of "AAA ". Mr. Hunt confirmed. Mayor Pro Tem Pape questioned the City's past rating. Mr. Hunt stated that, in the past, the City would not have been able to gain the rating that it is capable of today. Mayor Pro Tem Pape questioned the difference between a "Letter of Credit" and a "Confirming Letter of Credit ". Mr. Hunt explained that the structure as proposed would PAGE FOURTEEN - CITY COUNCIL MINUTES - JUNE 139 2000 be with a California Bank holding a Confirming Letter of Credit from the California State Teachers Retirement System, which has over $100 billion in assets and had credit enhanced bonds in over 100 bond issues for cities and counties throughout California. He noted that because they were a pension fund their bond ratings would not go down, but rather their assets increase each year and their investments are very successful. He noted that they are able to offer this program at a very competitive rate and provide the highest ratings possible. Mayor Pro Tem Pape asked if this was for the term of the bond. Mr. Hunt explained that a Letter of Credit was typically for a five -year period and then each year it must be renewed. He noted that the reason that they only do a five -year period was because of the rules the Federal Reserve puts on banks and it increases if it goes on beyond five - years. Mayor Pro Tem Pape clarified that when the bond reaches variable rate it is tied to the Municipal Market and does not tie to the Federal Reserve for housing rates. Mr. Hunt concurred and explained that there were a lot of companies, individuals and funds that needed to invest for a few days to a few weeks between other investments and payments, which creates a very strong market for seven day paper and the Municipal Money Market Funds invest in the variables as well. Mayor Pro Tem Pape noted the savings that the City will experience through this action would create considerable savings and reduce the deficit. He stated that even if the City had extra cash flow, it would not make sense for the City to not want to save an extra 1/2 million dollars per year. Mayor Brinley stated that this was part of the City's overall financial package. Councilman Schiffner stated that the City had two options, either approve the bond refinancing or turn it down and continue to pay a higher rate of interest; which would amount to 1/2 million dollars a year, which would be ridiculous. Councilman Metze concurred with Council and stated that Mr. LaPere hit the nail on the head. Councilwoman Kelley stated that she felt the Council would be silly not to approve this item. She reminded the public that when the current Council was elected, the City did not have the credit rating that it has today; could not have gotten the current credit rating; and through Council, staff, Mr. Gunn and Mr. Hunt the City has now reached the position it currently holds. She stated that it is easy to forget how far the City has come, however looking back at where the City was to where it is today, the City has made great advances. She gave credit to the Council for their willingness to stick to a strict financial plan. Mayor Brinley thanked Mr. Gunn for his efforts since 1995/96; and stated her pleasure with where the City is today and the accomplishment it has been able to make through the efforts of Mr. Gunn and Mr. Hunt. She expressed her appreciation. She noted the people that projected the City's failure and expressed pleasure with seeing the current status. She thanked Mr. LaPere for his comments. PAGE FIFTEEN - CITY COUNCIL MINUTES - JUNE 139 2000 MOVED BY KELLEY, SECONDED BY PAPE AND CARRIED BY UNANIMOUS VOTE TO ADOPT RESOLUTION 2000 -16 APPROVING THE ISSUANCE OF BONDS AND RELATED DOCUMENTS. RESOLUTION NO. 2000-16 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, APPROVING A SITE AND FACILITY LEASE, A LEASE AGREEMENT, A CONTINUING DISCLOSURE AGREEMENT, AMENDED AND RESTATED REIMBURSEMENT AGREEMENT, AN AGREEMENT REGARDING ADVANCES AND A BOND PURCHASE AGREEMENT; AND AUTHORIZING THE TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH. THE CITY COUNCIL MEETING WAS RECESSED AT 8:58 P.M. THE CITY COUNCIL MEETING RECONVENED AT 9:09 P.M. ITEMS PULLED FROM THE CONSENT CALENDAR Lb. Minutes - City Council Study Session - Ma 25, 2000. (F:44.4) City Manager Watenpaugh noted the need for a correction on page 15 of 16, in the first paragraph from ".....loan from the RDA to the City to ensure....." to "....loan from the City to the RDA to ensure...... ". He also noted that with regard to the "Mr." or "Mrs." titles they have been used in the past but could be changed if the Council prefers. MOVED BY SCHIFFNER, SECONDED BY PAPE AND CARRIED BY UNANIMOUS VOTE TO APPROVE THE MINUTES AS CORRECTED. 12. Request for Approval of Joint Project Funding Agreement by and among the County of Riverside, the City of Lake Elsinore and the Redevelopment Agency of the City of Lake Elsinore regarding Improvement of Mission Trail. (17:68.1)(X:156.2) City Manager Watenpaugh highlighted this item, and noted that it had been discovered that there was a need for the Redevelopment Agency to be part of the agreement, so this item was being brought back for reconfirmation of the Council direction. City Attorney Leibold concurred and noted that the previous draft agreement was for a 50 -50 split between the City and the County. She indicated that the scope of the project was the same, with the City committing $412,347 in CDBG funds and $150,000 from the City's General fund for right -of -way acquisition. She explained that the County will be the lead agency for the project and they are willing to front the additional costs, subject to assurances of repayment in the future. She recommended that the RDA participate to allow for assistance, since the project borders Project Area III. She stressed that it would help to improve PAGE SIXTEEN - CITY COUNCIL MINUTES - JUNE 139 2000 currently inadequate infrastructure. She clarified that the Agency would agree under the terms of the agreement to pay the balance of the City /Agency share over a period of seven years. She indicated that the only obligation was for repayment if development occurs that would require a developer to provide a fair share of the improvements. She noted that the cost to the City /Agency should be recouped over time by collection of impact fees and fair share payments. Chris Hyland, 15191 Wavecrest Drive indicated that she wanted this street paved, but requested reiteration of the RDA funding for this project, since it has no money. City Attorney Leibold clarified that payments for the RDA portion of the agreement would be at the end of the seven years. She noted that the City's contribution of CDBG funds and right -of -way acquisition funds had already been made. Mrs. Hyland indicated that this project was long overdue. MOVED BY SCHIFFNER, SECONDED BY KELLEY AND CARRIED BY UNANIMOUS VOTE TO ADOPT RESOLUTION NO. 2000-189 APPROVING THE AGREEMENT. RESOLUTION NO. 2000-18 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVING AND AUTHORIZING THE CITY'S EXECUTION OF A JOINT PROJECT FUNDING AGREEMENT BY AND AMONG THE CITY, THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, AND THE COUNTY OF RIVERSIDE AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH. PUBLIC COMMENTS - NON - AGENDIZED ITEMS Irving Kasow, 32000 Riverside Drive, questioned the order of the Agenda. He stated his objection to opening City Council Meetings with Sectarian Invocations and cited other religious faiths within the Valley; and asked when the last time was that they were asked to open a City Council Meeting in their faiths. He questioned the last time a Mormon presented an invocation. He commended Mayor Pro Tern Pape for his attitude regarding invocations; and asked if Mayor Pro Tern Pape would approve of an invocation presented by a Wicca Priestess. He suggested that prayer be done prior to the City Council Meeting. Frank Sandoval, Pastor of Vineyard Christian Fellowship, noted that the founding of the United States was based on the Christian faith. He stated that in Christian belief it is necessary to call upon Jesus as part of prayer. He asked that Council continue with the Invocation as it is. Jack Warford, Pastor of the Pt Southern Baptist Church, stated that it really did not matter if the Invocation portion of the Agenda is removed, because he and hi: congregation are going to pray for the City anyway. He stated that he believes in PAGE SEVENTEEN - CITY COUNCIL MINUTES - JUNE 13, 2000 recent times the City has been better because of prayer. He noted that Jesus and the use of his name is important to his faith. He offered blessings to the City and Council. Jim Hilbrant, Pastor of the Elsinore Christian Center, noted the National Day of Prayer on May 0 ,2000. He concurred that the City was a better place because of prayer. He read a proclamation of prayer. Joyce Horak, 1102 Buchanan, spoke in favor of the Invocation at City Council Meetings and stated that it was a Constitutional right. She stated that lawlessness began when God was taken out; and stated that she felt that was the beginning of the lack of respect for one another. Susan Makshanoff, 28655 Red Gum Drive, noted the condition of the City a few short years ago and stated that she felt part of the improvement was the power of prayer. She gave examples of the power of prayer; and encouraged the City to continue the invocations. Donna Franson, 7 Villa Valtelena, noted that citizens salute the flag and in the salute it states "Under God ". She stated that in the four years that she had been attending City Council Meetings there had been different Pastors, Preachers, Ministers and Priests from Lake Elsinore leading the Invocation with no preference shown to any religion. She stated that she felt that one freedom can not be counteracted to grant freedom to another. She asked that Council keep the Invocations. Debra Crawford, President of the Elsinore Valley Arts Network, thanked Minnie Brown for all her efforts on the Juneteenth event and stated that the event would be held on June 17, from 5:00 p.m. to 9:00 p.m. at City Park on Main Street. She stated that for any questions she could be contacted at (909) 678 -5924. Michael Heggins, 31500 Grape Street, stated that he would like to open a non- profit business for a 12 step program in Lake Elsinore, however when he approached the Planning Department he found that it was going to cost $5,000 for a Conditional Use Permit. He noted that he could open a motel or hotel without those charges, or even adult entertainment. He stated that he does not know why Lake Elsinore would want to do this, since all he wants to do is help people. Barbara Anderson, President of Black Art & Cultural Club, noted the scholarships awarded by this organization. She stated that their picnic/barbecue to raise money for those scholarships will be held on June 24, starting at 12:00 p.m. in Murrieta. She addressed the Library Funds and stated that she was aware that the money in the fund was not private money. She noted the money the City owes to the Fund and stated that it should be paid back irrespective of any lawsuit. She noted the deficit and stated that she does not see any chance for improvement in the next several years; and she felt that the money should be returned to the Library Fund either in part or whole, as well as all of the interest, as soon as possible. Rex Day, 31634 Somerset Circle, commended the people who spoke in favor of PAGE EIGHTEEN - CITY COUNCIL MINUTES - JUNE 139 2000 the invocation. He stated that there was a Town Hall Meeting in Tuscany Hills approximately a year ago and the slope on Summerhill was discussed. He stated that it was his understanding that the City would address the slope in October, 1999. He stated that since that time nothing has been done. He stated that a bond was recalled from Sun Ridge Homes and he understood it was to be approximately $1,000,000. He questioned the status of that project. Dan Uhlry, 150 Lakeshore Drive, representing the Three Lakes Sheriffs Mounted Posse, stated that they are sponsoring a pancake breakfast/car wash on June 21 & June 24 at the Lake Elsinore Elks Lodge at 7:30 a.m. to raise money for the rodeo. He stated that they are selling tickets for a Law Enforcement Appreciation Night, July 22, at the Storm Baseball game, $5 per ticket. He noted that ticket information can be obtained at (909) 506 -3686. He gave an overview of the progress in the planning of the rodeo. Dick Sharman, 19700 Sharon Street, Perris, concurred with Mr. Higgins, and stated his frustration in trying to get a building for a non - profit 12 step program. He stated that he felt that the City was not sympathetic to the needs of the people he was trying to help. He stated that he had examined his motives and it was totally to help. He requested help in resolving this problem. Barbara Cady, Vice President of Friends of the Library, noted that June 14, is flag day and gave some facts about the United States Flag. She stated that she had a flag for each member of the Council. Bill Tucker, 740 Acacia, reported that there was a great turn out for the Fishing Derby which included 90 children. He stated that there is going to be a "Whiskers" coloring contest which would be in the Press Enterprise on June 13 and June 14. He asked that all the children in the community participate. Edith Stafford, 29700 Hursh, addressed the entire City Council and stated that no matter how stupid or ignorant a citizen appears when addressing Council, the Council should not put them down. She stated that it was their job to listen to the citizens complaints and comments; and asked why Council was spending more tax dollars in appeal of lawsuits when the City cannot win. She asked that the Council just settle and stop spending more tax dollars, when they cannot win. Chris Hyland, 15191 Wavecrest Drive, stated that the public should click into Elsinoremagazine.com. She stated that it is very informative. She reminded the public that they need to sign the initiative petition and invited people to call her for more information. CITY MANAGER COMMENTS No comments. CITY ATTORNEY COMMENTS Announced the four matters of Closed Session discussion as listed on the Agenda. PAGE NINETEEN - CITY COUNCIL MINUTES JUNE 13, 2000 COMMITTEE REPORTS None. CITY COUNCIL COMMENTS Councilwoman Kelley commented on the following: 1) Reminded everyone to go see the production of Oliver and attend the Juneteenth celebration. 2) Noted that Friday will be the Graduation ceremonies for both High Schools at the Diamond, and congratulated the graduates. 3) Indicated that the Cops for Kids fundraiser was a great success for a very good cause. 4) Announced the upcoming Elsinore Valley Arts Network summer concert series and noted that advertising was now on sale and recommended that interested parties contact an EVAN member. Councilman Metze had no comments. Councilman Schiffner commented on the following: 1) Noted that it was interesting to have covered two important subjects including the budget and the issue of prayer at Council meetings, and more people were present for the prayer issue. He indicated that he was thankful for all the prayers on Council's behalf. 2) Indicated that he took exception to the comments regarding the City's Planning and Zoning Codes and indicated that they were not specific to the City of Lake Elsinore. He noted that similar codes exist in other cities, as well as the County areas. He indicated that any organization willing to comply with the regulations was welcome to the community. 3) Indicated that with regard to the refinancing, the City staff and Council have stuck to a plan of paying the bills; and noted that the council doesn't have the ability to arbitrarily raise the taxes or ask for more money. He indicated that the only real options were to increase revenues or save on ongoing expenses such as interest. He took exception to the criticism on this issue. Mayor Pro Tem. Pape commented on the following: 1) Congratulated the Cops for Kids organizers and noted that they held a great event last Friday evening. He noted their start on a shoestring, and indicated that they are now pretty well financed to provide PAGE TWENTY - CITY COUNCIL MINUTES - JUNE 139 2000 assistance. 2) Advised that he participated as a judge at the Chili Cook -off in Tuscany Hills; and noted that the Chili was all very good and some was very hot. 3) Thanked the speakers in support of the existing Invocation format for their comments. He noted that the matter had been weighing heavily on his heart; and he was contacted by an attorney from a group of Christian attorneys who was willing to assist the City on a pro bono basis. He noted that those attorneys felt the City was on pretty solid ground based on the First Amendment rights of the people providing the invocations. He encouraged the newspapers to exercise equal representation on this issue; and noted the historical meaning of separation of church and state. He further noted that the founding father meant that the government should not impose a religion on the citizens, but stressed that the citizenry had the absolute right to participate in the religion of their choice. He again thanked the speakers for their comments and prayers; and noted that prayer does work. Mayor Brinley commented on the following: 1) Clarified that the Mormon Church has provided the Invocation in the past. She commented that she has been the recipient of many prayers, good thoughts and caring at a very difficult time; and stressed the importance of prayer. She noted that the Flag is saluted under God. 2) Congratulated the Chamber of Commerce on another successful Mini Grand Prix, and commended Tom Thomas for his contributions. 3) Thanked City staff for their efforts to make the fishing derby a success, noting that it was a great program and went very well. She expressed hopes for another event next year. 4) Reiterated the announcement of the Sheriff s posse pancake breakfast on June 246 at 7:30 a.m. at the Elks Lodge. 5) Concurred with Mayor Pro Tem. Pape that the Chili cookoff in Tuscany Hills was great. She also noted that the pies were very good and detailed some of the dishes presented. 6) Addressed Rick Bouslog and noted the Council's efforts to keep Tuscany Hills informed. She noted that there have been several questions and requests from Tuscany Hills and noted that the City Manager generally responds in writing; and encouraged Mr. Bouslog to meet with Mr. Watenpaugh. PAGE TWENTY -ONE - CITY COUNCIL MINUTES - JUNE 139 2000 7) Announced upcoming events as follow: Little League Tournament of Champions - June 17 - 24. Classic Car Show - June 24`f' at 5 p.m. Downtown Open Air Market with Chili Cookoff in City Park - - July 2 °d 4' of July Festival & Fireworks at the Diamond Girls Softball All Start Tournament July 7 - 9 at Tuscany Hills Park CLOSED SESSION A. CONFERENCE WITH LEGAL COUNSEL -- EXISTING LITIGATION (Subdivision (a) of section 54956.9) Williams v. City of Lake Elsinore (4 lb Appellate Case # E024487); Williams and Hassan v. City of Lake Elsinore (4t" Appellate District Case # E025201) B. CONFERENCE WITH LEGAL COUNSEL -- ANTICIPATED LITIGATION Significant exposure to litigation pursuant to subdivision (b) of section 54956.9: (2 potential cases) C. CONFERENCE WITH LEGAL COUNSEL -- ANTICIPATED LITIGATION Initiation of litigation pursuant to subdivision (c) of Section 54956.9: (1 potential case) THE CITY COUNCIL MEETING WAS ADJOURNED TO CLOSED SESSION AT 10:16 P.M. FOR DISCUSSION OF THE ABOVE LISTED ITEMS. THE CITY COUNCIL MEETING RECONVENED AT 10:27 P.M. City Attorney Leibold suggested that due to the volume of Closed Session items, that they be continued to a Special Meeting to be scheduled for Thursday, June 15, 2000 at 3:30 p.m. or as soon thereafter as possible. ADJOURNMENT MOVED BY BRINLEY, SECONDED BY PAPE AND CARRIED BY UNANIMOUS VOTE TO ADJOURN THE REGULAR CITY COUNCIL MEETING AT 10:30 P.M. �" CITY OF ATTEST: VICKI KASAD, CMC, CITY CLERK CITY OF LAKE ELSINORE