Minutes 86-06-02114
MINUTES OF AN ADJOURNED REGULAR MEETING
OF THE CYPRESS CITY COUNCIL
HELD
June 2, 1986
The adjourned regular meeting of the Cypress City Council was called to order at 6:25 p.m.
on Monday, June 2, 1986, in the Administrative Conference Room of the Cypress City Hall,
5275 Orange Avenue, Cypress, California, by Mayor Otto Lacayo.
PRESENT: Councilmembers Coronado, Kanel, Mullen, Partin & Lacayo
ABSENT: None
Also present was Assistant City Manager David Barrett, City Attorney Mark Huebsch, and
staff members Beardsley, DeCarlo, Eynon, Hurst, Leonard and Lowenberg.
BUDGET WORKSHOP: The Department Heads reviewed their budgets for FY 1986/87
including their goals and objectives and charts on their operating budgets, departmental
organization, and trends in their operating budgets, personnel levels, and departmental
programs.
In regard to the Administration Department budget, Nancy Leonard reported that the City is
in compliance with the Fair Labor Standards Act which requires the City to place any new
employee hired on or after April 1, 1986 under the Medicare Program. The City pays 1.45%
of the employee's salary and the employee pays an equal share for Medicare. She reported
that the legislation also requires the City to provide an opportunity for terminated or
resigned employees to continue their health care coverage with the City if they pay the full
cost of the group rate.
Mr. Barrett reported that the increase in the Administration budget is primarily due to
community promotion, this year's election costs and City involvement in cable TV.
Mr. Hurst reviewed the Finance Department budget, noting it will increase less than 5 %.
Councilman Mullen discussed the budgeting of Recreation District maintenance expenditures
in both the City and District budgets and felt the budget documents should prominently
highlight the balancing revenues which the City receives from the District. Councilman
Partin asked if it was still advantageous to maintain the Park District as a separate entity
versus it becoming a City department. The Finance Director indicated that such a change
would result in a loss of special district augmentation funds.
Mrs. Eynon reviewed the Planning Department budget. She described their proposed
implementation of a land inventory computer program. She reported that the number of
plans reviewed increased from about 600 last year to about 850 this year and the number of
reports to the Council increased from 85 to about 130.
Mr. DeCarlo reviewed the Recreation & Park District budget. Mayor Lacayo requested that
staff prepare a report for future consideration on the senior citizen programs showing the
numbers of residents and non- residents who utilize Cypress' programs in comparison to
membership in senior programs offered by surrounding cities.
Mr. Beardsley reviewed the Public Works Department budget. Councilman Mullen reported
that the service station at the corner of Moody and Cerritos has stopped selling gas and he
asked if the underground tanks will be removed. He reported the property contains cars in
various stages of repair and is unsightly. Mr. Beardsley indicated staff would investigate the
property.
RECESS: Mayor Lacayo called a recess at 8:00 p.m. The meeting reconvened at 8:05 p.m.
with all Councilmembers present.
Chief Lowenberg reviewed the Police Department budget. He requested the Council's
approval to implement a policy to overfill authorized positions in the department which are
known to be long term, extended absences. In addition, the Chief noted the budget included
the addition of a motorcycle which would be discussed later on the agenda.
RECESS: Mayor Lacayo recessed the meeting at 8:32 p.m. to the City Council Chambers.
The meeting was called back to order at 8:34 p.m. in the City Council Chambers with all
Councilmembers present.
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CONSIDERATION OF SENIOR CITIZENS HOUSING: Mayor Lacayo recognized the following
persons who would be speaking on the senior housing project this evening: Mr. Brooks White,
housing consultant to NCR, Mr. John Glen, President of NCR, and Mr. Fred Roth, member of
the Affordable Development Corporation. The Mayor asked that staff present their reports.
The Planning Director summarized the goals of the City regarding the project. She reported
the City is interested in getting a major affordable senior housing project for the maximum
time period possible for its citizens and staff feels the interests of the seniors are best
served by having the City Council, rather than a non - profit corporation located in Ohio,
control the use of the site even after the HUD mortgage is paid off. Staff felt the Council is
directly responsible to the citizens and will reflect their desires past the first 40 years. She
stated the chronology report shows what the City has done in working towards getting the
housing project and shows their commitment to senior housing. Mrs. Eynon highlighted the
chronology and reviewed the benefit assessment which listed what NCR receives from HUD,
what NCR is requesting from the City, and what Cypress citizens receive. She stated staff
feels the goals of the affordable senior housing can be accomplished with local control. She
indicated staff needs to know whether there is a philosophical objection to what they are
proposing for the City.
The City Attorney summarized key issues which have been under discussion. He reported the
first issue concerns control and use of the land and assurance of continued availablity of the
site for affordable senior housing after the HUD loan is repaid. He stated both parties have
said in negotiations that HUD guidelines will control for the 40 year period of the mortgage
but the question that arises at the end of' the 40 years is should the site be restricted to
senior housing, affordable senior housing, and what are appropriate control devices. He
reported both parties have discussed different mechanisms to ensure the continued
availability of affordable housing even after the HUD loan is paid off and staff's belief is that
the interests of the seniors are best served if control is maintained in the City Council since
they are the elected representatives closest to the voters. The City Attorney reported that
techniques other jurisdictions have used include a 55 year lease which results in an additional
period of time where property is used for senior housing. He reported one concern of staff is
that there have been rare instances where HUD has allowed the early prepayment of a
mortgage on a senior housing project.
The City Attorney reported the second issue concerns the request for direct City financial
assistance to NCR and in what amount. He stated that as a non - profit corporation NCR will
not pay taxes or in lieu taxes although the project will use municipal services. T-Ie stated that
in a way this constitutes a City subsidy since, by foregoing property taxes, other Cypress
taxpayers would absorb the services provided to users of this facility. He stated staff feels
that some justification should be shown for the expenditure of City funds on the development
since this is required of any City program. He indicated that if requests are made for
assistance on offsite improvements then staff needs detailed plans to evaluate the requests
and determine if they are justifiable. He reported that another issue relating to justification
of costs is why should the City absorb the costs at all. He stated there is no disagreement
concerning the reimbursable items which will be absorbed in the HUD mortgage but the
question is why should the City rather than NCR bear the costs of the non - reimbursable
items. The City Attorney reviewed NCR's financial position and stated their financial
statement indicates that on projects they have sponsored they maintain reserves for the
purpose of subsidizing their operations where there are shortfalls and to cover non -
reimbursable items. He reported there are other incidental issues such as whether the
construction should be competitively bid. Staff would require justification if this is not
done. The City Attorney stated these are economic issues and the City and NCR have
different opinions.
Councilman Kanel stated he was disturbed when certain residents were notified by NCR, in
Ohio that groundbreaking would not occur for a couple of years and he thought the
groundbreaking was scheduled for September or October of 1986. He asked why these issues
had not yet been resolved.
Councilman Coronado asked why 40 years was established and Mrs. Eynon reported that is the
term of the HUD loan and their assistance for Section 8 certificates. Councilman Coronado
asked about prepayment of the HUD loan and the City Attorney responded that the earlier
prepayment date would apply to the period of exclusive use for senior housing. Councilman
Coronado stated he thought the City would be reimbursed for expenditures for this project
and he recognized now that the City may spend funds which will not be reimbursed.
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Mrs. Grace Lachina asked if the City has received block grant monies that are to be used for
senior housing. The Planning Director reported that money is available for affordable senior
housing and it does not have to be spent on this project but can be spent to provide additional
senior housing for the City. Mrs. Lachina stated they were led to believe that this block
grant money would be used for their senior housing and she expressed concern that the money
would be withdrawn or transferred elsewhere. She indicated they have a deadline to meet or
they'll risk losing the grant and she asked that the funds be used now to get their project off
the ground.
The Plannning Director reported that about $390,000 of block grant funds are available and
the Council, by resolution, determined that up to $160,000 would be applied to this project if
necessary.
Mr. Brooks White, consultant for NCR of Cypress, reported their target date for
groundbreaking was mid - January 1987 but there has been no progress since the end of April
and the target date is now mid - February and they have until March 31, 1987 to close the loan
and break ground. He reported that HUD is becoming increasingly difficult to work with and
they may exercise their right to recapture their funds. Mr. White reviewed a report to the
Council dated June 2 which outlined unresolved questions the consultants have concerning the
project and requests by NCR. of Cypress including a waiver of filing fees and allocations of
block grant and Agency funds. Mr. White reported that since 1981 HUD has not paid for
amenities they consider luxuries, and block grant funds cannot be used for amenities such as
fireplaces, patios, and balconies. He stated NCR is willing to accept a "no frills" building but
they would prefer some architectural interest such as a tile roof and balconies. Mr. White
stated NCR and ADC are committed in perpetuity to low income senior housing on the site
and would not object if the DDA has no provision for deleting that deed restriction.
Mr. John Glen, President of NCR of Ohio, stressed that residents of Cypress will benefit
from the project, not NCR of Ohio. In regard to non - payment of property tax, he reported
that in California HUD will not deal with local non - profit groups who want to assess in lieu
taxes. Mr. Glen addressed staff's concern regarding land ownership after 40 years and stated
they would have no problem with a deed restriction stating that the building and land must be
used in perpetuity for senior housing. He stated HUD and NCR are not interested in leasing
the property from the City for 40 years, and NCR thought they had an option on the
property. Mr. Glen updated the fact sheet on NCR which had been provided to the Council.
Mr. Glen responded to statements made in staff's presentation. He stated he was unaware of
any 202 loan on which HUD permitted prepayment. He discussed NCR's financial position
and stated they are not a rich corporation but they survive on the management fees they
receive from their projects. Mr. Glen reported on the formation of NCR. He stated they are
willing to stipulate to any time period that the project will be for senior housing. He
reported that NCR does not put any money into projects.
Mayor Lacayo indicated his desire would be that at the end of 40 years the land would be
owned by the City and would continue as an affordable senior housing project and the rents
could be lowered to meet overhead and management expenses only. He asked if NCR would
agree, after 40 years, to continue receiving their management fee and charge rents equal to
the overhead. Mr. Glen stated it would not work that way and that no one can take the
money out of a non - profit corporation. He stated the rents could be lowered at the end of 40
years but he questioned the mechanics of the Mayor's suggestion. Mr. Glen stated he thought
NCR had a commitment from the City for the property and that he was frustrated the
project has not moved along.
Responding to Council questions, Mr. Glen stated NCR has not had any lease type
arrangements. He stated that NCR of Cypress would have title to the property. He reported
HUD requires that reserves be put into the project to pay for maintenance and there is no
fund built up. Mr. Glen stated that after 40 years there would be no subsidy and rents would
probably increase. Ne stated there will be a Section 8 contract for 20 years for the property
and he doubted that it would be renewed. He stated they are willing to accept a deed
restriction that the property must be used for senior housing. The Mayor asked if NCR. would
agree to a rent formula, after the loan is paid, based on overhead, management and
maintenance costs. Mr. Glen indicated that rent increases would be an economic necessity.
The Mayor asked what the increase would be based on and whether funds would he used to
bail out other failing NCR projects. Mr. Glen stated that among NCR's 75 existing
corporations, there is no transfer of funds from one corporation to another, and he indicated
that funds coming from Cypress' project would remain committed to Cypress.
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Mr. Reed Flory, consultant to NCR, stated he hoped there would be more discussion of the
issues brought up tonight. He reviewed other housing projects he is involved in and reported
that all received substantial block grant commitments. He offered to assist the City in
obtaining additional funds from the County for alternate low income housing projects. Mr.
Flory reported that all Federal housing programs are being questioned as to continued
funding, and this year's 202 allocations have not been made. He indicated that HUD is trying
to identify projects where they might recapture funds to use to pay off other kinds of long
standing debt. He stated the March 30 deadline is a very real one for groundbreaking on
Cypress' project.
Councilman Kanel requested that staff prepare a report for the next Council meeting on the
housing issues. Councilman Coronado indicated he supported the expenditure of the block
grant funds but was concerned over spending other City money that will not be reimbursed.
He stated he was concerned about turning over the property when HUD is paid off and that
he wanted the senior housing to always be available. Mr. Glen stated this also was the
purpose of NCR.
Mr. Fred Roth, member of the Affordable Development Corporation, stated he was glad
there were only two issues remaining and that they were explained tonight. He stated NCR's
agreement to maintain senior housing in perpetuity for as long as it's needed and to keep
funds from Cypress' project for the exclusive use of the seniors in Cypress are two items they
have discussed for the past six years.
The Council continued this item to the June 9 meeting and requested a further report from
staff.
RECESS: The Mayor recessed the meeting at 10:05 p.m. The meeting was called back to
order at 10:22 p.m. in the Administrative Conference Room with all Councilmembers
present.
The Public Works Director reviewed the 1986/87 City Capital Projects. In response to
questions from Councilman Coronado, Mr. Beardsley reported that public improvements
adjacent to the east side of the Tank Farm are not included in the capital projects but street
widening will occur with future redevelopment of the property. In regard to parkway
projects, Mr. Beardsley reported that, according to a recent inventory, there are over 200
empty treewells City -wide and the City will begin replacing these trees. He reported the
City has been discouraging the former practice where residents replaced their own parkway
trees.
Councilman Partin complained about the fact that there are no Oak trees in Cypress and
suggested that some be planted in Oak Knoll Park.
Mr. DeCarlo reviewed the District Capital Projects. Councilman Kanel reported that some
developers in the Business Park are being asked to provide employee recreational areas. The
Planning Director reported that staff will be presenting a revised Open Space Element to the
Council which suggests that employee recreation areas he made available in the Business
Park.
Mr. Hurst reviewed a chart showing 1986/87 estimated revenues by source. Councilman
Kanel suggested that the City investigate the point of sale of City businesses to capitalize on
sales tax revenues.
Mayor Lacayo reviewed plans for the Community Forum circular seating /presentation area
which he suggested be developed in the grass area between the Council Chambers and
Library. Staff estimated the cost at $141,000. Mayor Lacayo stated he would like
community organizations to be involved with the project and he felt residents would support
a project which beautifies and gives identity to the City. He recommended that the Council
make a presentation on the proposal at a breakfast meeting with representatives from the
Chamber and non - profit organizations and determine if they support this expenditure.
The Council agreed to schedule a breakfast meeting with the organizations to review the
proposal..
Mr. Barrett reviewed a report on City donations which were made to other agencies this
fiscal year. He reported that for 1986/87, staff budgeted $24,000 to the Chamber of
Commerce, $24,000 to Straight Talk Clinic, and $4,000 to various agencies.
The Council discussed funding of the Chamber of Commerce and agreed to schedule a
workshop meeting with the Board to discuss this issue. Mayor Lacayo stated he would make
arrangements for a breakfast meeting to be held on a weekday.
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In regard to City donations, Mayor Lacayo suggested that the Council establish a dollar limit
and criteria for approving donations and a procedure which organizations can follow to apply
for contributions. He suggested the formation of a two member Council committee to screen
requests and make recommendations to the Council. Councilman Mullen stated donation
requests should not be approved as off agenda items.
The Council requested that Mr. Barrett prepare a policy statement on City donations.
Mr. Beardsley reviewed a report dated June 2 describing two optional plans for improving the
Stanton Channel bicycle trail.
The City Council approved Plan B, at a cost of $38,000, which included the following work:
(1) between Holder and Knott widen the trail to full width and overlay the existing pavement
with a new surface; (2) between Valley View and Holder defer asphalt overlay and include this
portion in the slurry seal program to be done in approximately one year, and paint an 8" wide
reflectorized, continuous white line along both sides of the trail.
Mr. Hurst reviewed a report from the Administrative Coordinating Team describing the
City's computer modification needs and staff's recommendations for a Police System,
Recreation System, and City -wide Office Automation System. He indicated that funding for
this program is not included in the new budget but is available in the current year's reserves.
Mayor Lacayo expressed support for the program and recommended that staff investigate
purchasing the Prime hardware on the open market to get the best price.
The Council requested that staff prepare a report for the June 23 meeting outlining what
appropriations are needed, specifications of the equipment to be purchased, and the
recommended methods of acquisition.
In regard to the Police Chief's request for maintaining sufficient staffing levels, the Council
approved the recommendation that a policy be developed to permit the filling of authorized
positions that are known to be long term, extended absenses, and that each case or situation
be reviewed and evaluated on its merits supported by a justification report from the Police
Chief to the City Manager for his authorization.
Chief Lowenberg presented a report dated April 29 describing his request to establish a
Traffic Bureau within the Operations Division to exclusively address the issue of traffic
safety, accident investigation, and traffic law enforcement. He recommended that the
Bureau be staffed by two Police Officers from the existing patrol force and that one of the
officers be assigned motorcycle patrol. He recommended that the motorcycle officer be
approved on a trial basis.
The Council expressed support for the proposal and approval of the motorcycle patrol on a
trial basis during daytime hours only. Emphasis on high visibility of the motorcycle patrol
over citations was requested.
ADJOURNMENT: Mayor Lacayo adjourned the meeting at 11:38 p.m.
MAYOR OF THE CITY OF CYPRESS
ATTEST:
CITY CLERK OF THE CITY OF CYPRESS