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Minutes 88-03-23 182 MINUTES OF AN ADJOURNED MEETING OF THE CYPRESS CITY COUNCIL HELD March 23. 1988 Mayor Margaret Arnold called the adjourned meeting of the Cypress City Council to order at 6:30 p.m. on Wednesday. March 23. 1988. in the Administrative Conference Room. 5275 Orange Avenue. Cypress. California. PRESENT: Councilmembers Coronado. Davis. Kanel. Mullen and Arnold . ABSENT: None Also present were City Manager/City Clerk Darrell Essex and City Attorney Jerry Patterson. CLOSED SESSION: Mayor Arnold called for a closed session at 6:31 p.m. during which time the pending litigation involving the Hollywood Park matter was discussed and Council advice was received by the City Attorney. COUNCILMAN CORONADO LEFT THE MEETING AT 7:47 P.M. RECESS: Mayor Arnold recessed the meeting at 7:59 p.m. to the Cypress School District Offices. 9470 Moody Street, Cypress. for a joint meeting with the Cypress Elementary School District"s Board of Trustees. The meeting reconvened at 8:15 p.m. with all Councilmembers present except Councilman Coronado. the City Manager/City Clerk. the City Attorney and staff members Eynon and Hurst. Board of Trustee Members Cornejo. Friedmann. McDougall. Southfield and Swain and Superintendent of Schools. William B. Calton. Wayne Wedin, Consultant. and Dave Larsen. Attorney for the Cypress School District were also present. CONSIDERATION OF SALE OF THE CYPRESS SCHOOL PROPERTY: Mr. Calton suggested that he and Mr. Essex address this topic jointly and he then made the following suggestions: the sale price be established at $2,255.000; 20% down or $451,000; 30 day escrow; base interest rate be the rate the County is paying at the time of sale. interest adjusted and paid on a quarterly basis. The City Manager stated that these suggested items were mutually agreed upon. Mr. Calton suggested a five year note. escrow closed by July 1; the next principle payment would be due the following July 1 with a provision calling for six months" notice that if the District needed additional monies. they could request a portion of the principle. He interjected an additional provision. which would require the approval of both parties. that if the payment on the principle wasn't needed, the money would be left in the account to continue generating interest. Councilman Davis noted that this would be a four year note as the first year payment is being made in advance. Mr. Wedin stated that theoretically there could be a balloon payment at the end if there was a mutual agreement not to apply money to the principle. four- fifths of the principle would be due at the termination of the loan. Councilman Mullen suggested discussing this matter in Executive Session on March 28. The City Manager expressed concern regarding the fixed interest rate to be paid. Mr. Wedin felt the City had a choice: either the money is borrowed, on which you would pay a fixed rate; or. you borrow the money from the District and be paying it back over a four year plus an escrow period. He stated that what is being said is that the interest rate on that loan won't go below a certain level and advised that decision has to be made whether the money is borrowed from the District or a lending institution. Mr. Essex declared that this concept is new tonight and has not been discussed before, so prior to commenting. he wished to review the matter. The Finance Director commented that his understanding is the interest would be adjusted quarterly. not three months after the close of escrow and thinks the County would release the percentage at the end of the quarter or end of the month. In answer to Mr. Calton. Mr. Essex responded that this item will be discussed in Executive Session during the March 28, 1988 City Council meeting on the price and terms of sale and assuming agreements can be made. he would place it on the Agenda for the April 11 City Council meeting. which would be an . 1 183 authorization to enter into an agreement. After further discussion. Mr. Calton summarized the dates: Council action on April 11. notification to the school board April 12. school board trustees meet April 12. hold hearing and the second board of trustees action first meeting in May. then go into escrow immediately following that meeting. CONSIDERATION OF AGREEMENT FOR SCHOOL FACILITIES. CYPRESS HOMES: Mr. Calton advised that they had been meeting with representatives from the City and the developer. Cypress Homes Inc.. working toward arriving at a written agreement in regard to providing for school facilities that would be needed to accommodate the students that are generated by the development. He further advised that there is going to be a public hearing on March 28 regarding the application for residential planned community on the tank farm site and the District wanted some type of agreement providing for those school facilities prior to that date. He commented that this topic was introduced at this joint meeting in hopes that the Council would give every consideration to the fact that the school district does not have the financial means to provide for the students that would be generated by that size development regardless of what kind of plan evolves. Mr. Larsen reported on the three areas of disagreement: 1) the developer"s request for a specific dollar cap; 2) that funding would be available to insure that the contract is completed without interruption; and 3) an opportunity for a successor agreement that addresses whatever development project is approved. After further discussion. Mr. Larsen suggested that maybe the development agreement could include a condition that they have a satisfactory arrangement with the school district as a condition to the development agreement. His preference is to have an agreement with the developer prior to the development plan going before the Council. Councilman Kanel suggested that the Board of Trustees have a representative at the public hearing March 28 and the City Attorney further emphasized that the School District does need to make its position known at the public hearing. CONSIDERATION OF AGREEMENT WITH THE CYPRESS REDEVELOPMENT AGENCY ON CIVIC CENTER REDEVELOPMENT PROJECT AMENDMENT NO.1: The City Manager informed the Council that they will be presented with a review of the discussions held between the staff and the school district on the tax increment process and the communications with various districts and governmental interests related to redevelopment. Mr. Wedin advised that he was providing a status report on the process at the staff level and it was felt that both parties should be apprised. He stated that the City"s Redevelopment Consultant. Brice Russell was asked by the Cypress School District to share with them the general parameters of the discussions with the high school district regarding redevelopment. Mr. Wedin then related that the high school had asked for 50% of their share of the tax increment. which is 12.7S of the total tax rate and the Cypress school district's share is about 28% and he further explained to the Council and Board of Trustees the current status of the discussions, the problems that have been encountered and that the discussions have not been concluded. The City Manager advised that if workable agreements are not reached with the taxing agencies. there will be no redevelopment and no one will receive any funds; however. the matter is still subject to further negotiations. He explained that this is a status report of the discussions and, hopefully. both boards will provide the direction to continue to meet and arrive at a solution that is in the best interests of the City and the Districts. ADJOURNMENT: Chairman Cornejo adjourned the joint meeting at 9:26 p.m. Mayor Arnold adjourned the City Council meeting at 9:26 p.m. JJ/;,~/ THE CITY OF CYPRESS ATTEST: {7 ~. /'0v1I-. t+~L. 7//~ CITY L:ER'K cJ it c1ty OF CYPRESS "