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
.
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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.
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THE CITY OF CYPRESS
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