Concurrent City Council and Redevelopment Agency Meeting August 15, 2011

El Cerrito City Council Chamber · 1 hour 28 minutes · adjourned about 8:58 p.m. · 256 caption units

Council: Ann Chang, Mayor (presiding) · Bill Jones, Mayor Pro Tem · Janet Abelson · Rebecca Benassini · Greg Lyman

Staff: Lori Trevino, Redevelopment Manager · Hildy Mile (as captioned), Senior Project Manager for Housing · Karen Tiedeman, Redevelopment Agency Counsel

Meeting concurrently as the Council and Redevelopment Agency, members hear staff and counsel explain the state budget bills that suspend redevelopment and offer a choice: dissolve, or pay $1.84 million this year and about $460,000 a year after to opt in, all under a state Supreme Court stay. Staff estimate dissolution would cost the city $24 million over the plan's life and recommend opting in.

Mayor Pro Tem Bill Jones speaks of choosing “the best of the worst,” and Greg Lyman moves two resolutions, adopting an enforceable obligation payment schedule and electing to serve as successor agency, both unanimous, with staff told to prepare opt-in documents for September 19 while keeping dissolution open.

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SSignificantMMissing contextXCross-referenceCouncil action (in Contents)

Contents

11 sections
  1. 01Clean energy, Night Out, and the animals ordinance on holdX
  2. 02A new Stege general manager, consent and closed session
  3. 03Redevelopment: dissolve, or pay to opt in
  4. 04The lawsuit and the Supreme Court's stay
  5. 05The agency's finances and staff's recommendationX
  6. 06Questions: the timeline and the general fund
  7. 07Questions: the waterfall, the 35 percent and the formula
  8. 08SEIU, and Jones on "the best of the worst"M
  9. 09Lyman keeps both doors open, and two resolutions passS
  10. 10How much paperwork to prepareXX
  11. 11Plastic bags, the mayors and the legislators, and adjournment

01 Clean energy, Night Out, and the animals ordinance on hold captions 1–14

0:00:21folks ready all right I'm going to call this meeting to order thanks for your patience um can I have the roll call please councilmember Abelson here councilmember benicini here councilmember Lyman here mayor Pro tem Jones mayor Chang here thank you and with that could we have

0:00:45please the Pledge of Allegiance led by mayor Pro tem uh please join me pledge allegiance the United States of America and to the Republic for which it stands one nation under God indivisible with liberty and justice for all thank you um now we're on item two Council and

0:01:15staff Communications and from staff Council I have um one but I don't have quite open yet let's see I just want to mention that um I did um attend a meeting called seizing the opportunity expanding local clean energy markets in the green quarter was put on by the local

0:01:45government Commission on July 28th and we learned a lot about um green quarters and and Alternatives it was a really interesting meeting held in Oakland and I also attended the mayor's conference and um Let's see we um as everyone here probably knows the animal ordinance update was postponed

0:02:15due to other urgent matters that needed to be heard tonight so that will be done at a later date I don't know if we have a date specific for that yet no okay and um if you're interested in Hikes the El Cerrito Trail Trekkers will be presenting hikes throughout August

0:02:34through October and check our City website for details and um I'll leave it at that thank you oh and then we have the Alberta Street Fair on um key route Ashbury on Sunday August 28th from noon until 3.

0:02:55that should be really interesting and you can for example bring a lunch bring your bikes or skates and have fun as I understand it will be closing the street in that long quarter for the first time foreign thank you all I'll go next just to be brief um we all attended National Night

0:03:16Out and I'm sure council member Lyman may have more to say about this but what a great night we all had um I think all of us attended multiple multiple parties and each party I went to it just got better as the night wore on I think as people got more into the National Night

0:03:31Out mood so thanks so much for everybody's work and putting that on particularly the crime prevention committee and council member Lyman for all your public publicizing of the event um and just to follow up I wanted to also mention on the animal's ordinance I know there's a lot of talk about getting

0:03:45that resolved and in nearer in the nearer future rather than the later future and if it weren't for the really urgent matter having to do with budget and Redevelopment agency we would have definitely wanted to have done that tonight but we will do it very shortly

0:04:00so anybody out there who's still concerned about when the animal's ordinance is going to be solidified stay tuned um in the near future rather than the later future foreign yeah I I mentioned this last time I'll mention again it's tomorrow night um here in El Cerrito City Hall for four

0:04:19cities El Cerrito Richmond Albany and San Pablo in conjunction with the energy upgrade California and Contra Costa County are hosting a uh informational so you can learn how to get stimulus funding and PG e rebates to make your home more comfortable and efficient

0:04:36that's here City Hall Tuesday August 16th 7 to 8 30. Refreshments will be served at 6 30.

0:04:50um with that I also attended the meeting with Jana Abelson um on for the local government commissions green quarter and agree with the very great thanks so we keep growing the National Night Out parties and thanks to police for being there to support them so at this point with no further

Mayor Ann Chang called the concurrent meeting to order with Councilmembers Abelson, Benassini (captioned "benicini") and Lyman and Mayor Pro Tem Jones on the roll; the mayor pro tem led the pledge. A councilmember reported attending a Local Government Commission meeting on 28 July in Oakland, "seizing the opportunity expanding local clean energy markets in the green quarter" (as captioned), and the mayors' conference, and said the animal ordinance update had been postponed because of other urgent matters that needed to be heard that night, with no date yet. The same member announced El Cerrito Trail Trekkers hikes from August through October and a street fair captioned "Alberta Street Fair" on Key Route and Ashbury on Sunday 28 August, noon to 3, closing the street, as that member understood it, for the first time.

Another councilmember thanked everyone for National Night Out, where each party “just got better as the night wore on,” crediting the crime prevention committee and Councilmember Lyman for publicizing it, and told those concerned about the animals ordinance to stay tuned: without the urgent budget and redevelopment agency matter, the Council would have taken it up that night, and it would come “in the near future rather than the later future.” A third member repeated an announcement from the last meeting: El Cerrito, Richmond, Albany and San Pablo, with Energy Upgrade California and Contra Costa County, would host an information session at City Hall on Tuesday 16 August, 7 to 8:30, on stimulus funding and PG&E rebates for home efficiency, with refreshments at 6:30. Chang had also attended the green corridor (captioned "green quarter") meeting with Janet Abelson and thanked the police for supporting the growing number of Night Out parties.

Cross-referenceThe animals ordinance is introduced on 7 November 2011 and adopted on 21 November 2011.

02 A new Stege general manager, consent and closed session captions 15–19

0:05:12announcements from Council or staff we are moving on to oral Communications from the public item number three any speakers on items not on the agenda yes Al Miller good evening mayor chin and council members I'm here tonight as the Director of The Siege Sanitary District

0:05:35announcing that our general manager of almost 11 years Douglas Humphrey resigned for personal reasons on June 20 effective June 29th and we have hired to replace him Rex delizio who has been with Stage district for 14 years of the last two or three was in position of

0:05:57engineer and Deputy general manager but everything else will go on the same we'll miss Doug we thank him for his service he's really done a lot for the effectiveness and the efficiency of the district and we expect Rex will carry on thank you any other speakers no no other speakers

0:06:22no presentations tonight so we can move on to the adoption of the consent consent calendar is there a motion to adopt move adoption of the consent calendar items 5A through 5f second all those in favor please say aye aye aye any abstentions no's motion carries unanimously

0:06:48we are now onto with no public hearings on item six onto um policy matters and I should um actually neglected to report out from our closed session that we gave um direction to agency negotiators on properties so with that moving on to policy matters on the joint Redevelopment agency city

Al Miller, speaking as a director of the Stege Sanitary District (captioned "Siege"), announced that general manager Douglas Humphrey, there almost 11 years, had resigned for personal reasons on June 20, effective June 29, and that the district had hired Rex delizio (as captioned), with the district 14 years and lately its engineer and deputy general manager; everything else would go on the same. There were no other speakers and no presentations. The consent calendar, items 5A through 5F, passed unanimously. Chang then reported out of closed session that the Council had given direction to agency negotiators on properties.

Outcome CarriedunanimousConsent calendar (items 5A-5F) adopted unanimously.

03 Redevelopment: dissolve, or pay to opt in captions 20–50

0:07:13council item for this regarding the state dissolution of the Redevelopment agency options for the voluntary Redevelopment program and necessary actions I believe there's a staff presentation foreign good evening mayor Chang and council members I'm Lori Trevino the

0:08:38Redevelopment manager and with me is Hildy mile the senior project manager for housing and later in the presentation Karen Tiedeman the Redevelopment agency Council will be joining with us we're here to give a presentation this evening on um the state budget legislation and how it

0:08:55affects the El Cerrito Redevelopment agency so this evening we're going to give you a little bit of background on the legislation and the litigation that um on that legislation and then talk about the financial impacts and what um the uh impact would be of eliminating the

0:09:12agency versus opting in and then giving you some recommendations so as of the end of the last fiscal year June 30th the Redevelopment agency activities were suspended and at this point the agency could either dissolve as of October 1st or choose to make an opt-in payment

0:09:33um the city could choose to make an opt-in payment to maintain its Redevelopment agency and it's those functions the legislation that was passed as part of the state budget there are two parts there's ab1x26 which is the dissolution Bill and it suspended all Redevelopment

0:09:50activities as of June 30th um the um under 80 26 the agency would be dissolved on October 1st if you don't opt in um and then there is a prescribed method of redistributing all of the agency's assets and revenues to other taxing agencies that serve this area the second

0:10:13piece of legislation was ab1x27 which is the opt-in bill and it provides for a new voluntary Redevelopment program the city council would need to adopt an ordinance agreeing to make annual payments um to to participate in that program um and in that case the Redevelopment

0:10:30Redevelopment agency would stay in business but there would be some restrictions that I'll go over with and go over in a moment so under a b uh 26 the agency's activities are suspended and the agency is required to adopt what's in called an enforceable obligation schedule before

0:10:51the end of this month and those obligations include our pass-through payments and our debt service and other contracts and employee compensation in order to pay those obligations that schedule needs to be adopted and the agency is then required to pay only those obligations through the end of the

0:11:09year and under the legislation any contracts between the city and the Redevelopment agency would be null um so then presuming that the agent the city chooses not to opt in the agency would be dissolved and the city would elect to um could elect to become the successor

0:11:29agency under the legislation the successor agency is charged with um adopting another payment schedule similar to the one that you're considering this evening and and um which would then be the payments that the successor agency would be allowed to make and also the city would have the right

0:11:49to retain the affordable housing assets and functions from the Redevelopment agency that excludes the fund balance that's currently held by the agency for um low and moderate income housing or the city could allow all of those assets and revenues to be transferred to the

0:12:07Housing Authority for the county the successor agency's activities would all be overseen by an oversight board they would um watch all the and approve all of the successor agency's actions including the disposal of the assets and the revenues termination of all the agreements there

0:12:30that are not recognized obligations on that schedule and they would um the successor agency would uh need to renegotiate any other agreements um that are in a way that's most advantageous to the taxing entities that would benefit from the dissolution so that would be the school district the

0:12:48city the county and all the small special um special agencies Special Districts and then from there this the successor agency would only be permitted to pay in any of the recognized obligations the oversight board is um uh constituted in a strange way um there it's a it's a board of seven

0:13:12members two of the members would be selected from by the Board of Supervisors one would be representing the largest special district in this area which in our case happens to be East Bay Regional Parks it could be a different agency in other areas a member is appointed by the Community College

0:13:28District the county and superintendent superintendent the County Board of Education and then the mayor has two appointees one of them is supposed to represent former employees and then subsequently um a few years down the road all of these boards are are subsumed into a

0:13:46county-wide oversight board the successor agency has to follow the priority for payments listed on slide 10 the first um obligation is for payment to the state in the county for its administration of this dissolution process Then followed by the pass-through payments to the other taxing entities

0:14:10any enforceable obligations like our bond debt or loan payments and then there's a small amount of administrative allowance for the successor agency and then anything that's left over would be redistributed to all the taxing entities and there's a slide the next slide shows

0:14:26you how that distribution would would fall essentially the school district the schools would get the primary uh the primary share followed by the community colleges and the city would get an additional 22 percent of that residual amount which we factored into our

0:14:44financial projections and then the county and Special Districts the city county and East Bay Regional excuse me um East Bay Regional Parks the county the school district and the Community College District all have contractual pass-through payments with us and those

0:15:01would stay in place um the ab201x27 is the voluntary Redevelopment program in order for the city to for the agency to participate in that program the city would need to to adopt an ordinance agreeing to make the required payments the city could enter into an agreement with the agency to provide the

0:15:24funds for the payments and the city would be required to assign all of those payments to the state um the agency's activity would be allowed after the second reading of the ordinance and the deadline for adopting that ordinance is November 1st now all that being said Karen's going to

0:15:44talk a moment in a moment about the um the litigation and this is there's a stay so that agencies are cities are not allowed to opt in at this point and we remain in suspension but for the purposes of this discussion we're assuming that this is still the timeline we're following

0:16:01thanks Mr Vino just a quick question on the ordinance that we need to adopt were we to go into this voluntary program is it specific enough where the payments can be predicted by the city or is there a chance that the way it's written it may be in the out years that a balloon

0:16:20that the state may need a balloon you know specify a balloon payment or something along those lines the formulas from uh 12 fiscal year 12 13 forward or according to a formula and it it's a very complicated formula but my reading of it is that there's no sort of

0:16:39you know balloon payment there's no X variable that could be you know times 10 times 100. no okay thank you okay um so IL Cerrito specifically the fiscal year 11 12 payment is 1.84 million dollars appeals are permitted for errors if um or if the agency's debt service has

0:17:04increased and just as an aside we did file an appeal today um based on the effect that we have had increased interest payments since 2009 so we'll see how that goes um the payments are due half in January and half in May and then only for the current fiscal year the agency is allowed to use its

0:17:28housing Set Side payment to make that opt-in payment if it desires to do so ongoing um the annual payment is estimated to be 460 000 in 1213 and that would then increase roughly according to the property tax base each year there are some other variables there that are

0:17:48could affect that um any new obligation that's added after September 30th would would trigger an additional payment to the school entities which we've estimated to be about 35 percent of any new obligation so essentially that sort of like a Sur tax on any new obligations that the agency

0:18:08would take on after September 30th um this there have been some agencies that have been trying to opt in in advance of September 30th so that they could take actions to create new obligations unfortunately under the stay it's essentially we wouldn't be able to take

Redevelopment manager Lori Trevino, with Hildy Mile (as captioned), senior project manager for housing, and agency counsel Karen Tiedeman, explained the state budget legislation for the joint Council and Agency item. AB1X 26 suspended all redevelopment activity as of June 30 and would dissolve the agency on October 1 unless the city opted in; the agency had to adopt an enforceable obligation payment schedule (pass-through payments, debt service, contracts, employee compensation) before the end of August, and contracts between the city and the agency would be void. On dissolution the city could become the successor agency and keep the housing assets and functions, though not the low and moderate income housing fund balance, or let them pass to the county Housing Authority. A seven-member oversight board (two Board of Supervisors appointees, East Bay Regional Parks as the largest special district, the community college district, the county superintendent of schools, and two mayoral appointees, one representing former employees) would approve everything, later folding into a countywide board. Payments would run first to the state and county for administering dissolution, then pass-throughs, enforceable obligations such as bond debt, a small administrative allowance, and a residual split among taxing entities, the schools taking the primary share and the city an additional 22 percent.

AB1X 27, the voluntary program, would let the agency continue if the Council adopted an ordinance by November 1 agreeing to annual payments, assigned to the state. A councilmember asked whether the payments could balloon in later years; the reply was that the formula is very complicated but, on that reading, has no balloon payment. El Cerrito's 2011-12 payment is $1.84 million, due half in January and half in May, payable this year from the housing set-aside; the agency had filed an appeal that day based on increased interest payments since 2009. Ongoing payments were estimated at $460,000 in 2012-13, rising roughly with the property tax base, and any new obligation after September 30 would trigger an extra payment to the schools estimated at about 35 percent, “sort of like a Sur tax.”

04 The lawsuit and the Supreme Court's stay captions 51–61

0:18:26on any new obligations if we wanted to to avoid this surcharge um on new obligations and so I'm not going to turn this over to Karen to talk about the litigation good evening um I think as Laurie has mentioned and I think most people know the California Redevelopment Association in the league

0:18:51of cities did file a lawsuit on challenging the constitutionality of both 26 and 27. excuse me they filed the lawsuit directly with the Supreme Court and requested that the Supreme Court take original jurisdiction on August 11th the Supreme Court did respond to cra's request for stay

0:19:15the good part of that response is that the court did agree to take jurisdiction of the case and the state actually did not challenge that they did Issue a stay which has caused a lot of confusion because effectively what they did was to stay all of 27 as best we can tell from

0:19:36what we can read of this day and to stay all of the disillusion provisions of 20 six but to not stay the suspension provisions of 26. so the F shot of that stay is that while the case is pending all Redevelopment agencies are effectively suspended and when we say suspended there's a bunch of actions

0:20:00that you can't take while we're waiting for this case to be resolved most of those actions involve incurring new debt taking on new obligations disposing of your assets with the idea being that they want to keep everything in place depending on how the litigation is going

0:20:16to get resolved um so as I said because the way the order was written there is a lot of confusion as to exactly what is State and exactly what people can do during this period it is still being discussed quite extensively and there may be a request for further clarification so at

0:20:38this point our best advice is that you are suspended um you know given that there are some things that you do still have to do which I think we're going to talk about a little bit later because of the way the stay was uh decided the other thing just to mention is the court did set a briefing schedule

0:20:57in its order on this day The Briefing schedule is very aggressive with all the briefs due by the end of September and they did make it very clear that they did not expect to give any extensions of time on the briefing schedule because their goal is to get the decision out on

0:21:15the case by January 15 2012 which would be the day of the first payment so they did take cra's request for a speedy resolution to Heart so possible outcomes of the litigation one outcome is that both laws are ruled constitutional in which case you would be faced with the decision of whether to

0:21:38opt in or not the other outcome and what CRA is obviously hoping for is the both laws are ruled unconstitutional in which case we can put this all behind us um and the sort of Split Decision outcome is uh one potential that 26 which is the suspension and dissolution

0:22:01act would be ruled constitutional but 27 which is the voluntary opt-in program would be ruled unconstitutional in which event all Redevelopment agencies would be dissolved so at this point we have no prognostication as to where where this litigation is going to go we'll be

Tiedeman said the California Redevelopment Association and the League of Cities had sued directly in the state Supreme Court, challenging both bills. On August 11 the court took jurisdiction, which the state did not challenge, and issued a stay that caused "a lot of confusion": as best counsel could tell, it stayed all of AB 27 and the dissolution provisions of AB 26 but not the suspension, so while the case is pending all agencies remain suspended, unable to incur debt, take on obligations or dispose of assets. Briefs were due by the end of September with no extensions, the court aiming to decide by January 15, 2012, the date of the first payment. Possible outcomes were both laws upheld, leaving the opt-in decision; both struck down, as CRA hoped; or AB 26 upheld and AB 27 struck, dissolving every agency. Counsel offered no prognostication.

05 The agency's finances and staff's recommendation captions 62–94

0:22:19waiting and we obviously will be keeping you up to date as we proceed so now we're going to jump to the financial impacts of this legislation first I want to give you a little bit of context um on the agencies fiscal environment first of all it's important to note that since fiscal year

0:22:472009 which is an important year under this legislation because it's the it's the year where all of these um all these payment determinations tie back to the assessed value of that year Statewide since that time the assessed values in El Cerrito have dropped nine

0:23:05percent which has resulted in an 11 drop in our tax increment Revenue we're actually better off than some cities particularly some of our neighbors um also in the prior years we have used all the reserves that we've had to pay eraf and serif transfers to the state

0:23:24and in several cases we've taken loans from our housing funds to pay those which we're now paying back um our previous Financial projections had assumed much more favorable market conditions which obviously we were on on a very different track up through 2008 and we assume this those more favorable

0:23:44favorable conditions both when um uh considering disposition of the agency's properties as well as projecting what new development would be in the Redevelopment project area um and last the agency did invest the remainder of its resources in City infrastructure and in affordable housing

0:24:08as you know we've done several pretty major projects over the last three to four years and so that's really limiting our resources for opting in um so then going on to our assets revenues and obligations we've broken this into three sections because they each have different

0:24:24um ramifications currently the municipal services or Corporation is holding um cash as well as the properties that were formerly agency properties and its revenues are through the lease payments from the Cerrito theater any in any grants that it receives from the

0:24:40Redevelopment agency and its obligations are its Property Maintenance the tenant improvements for the Cerrito theater and any Redevelopment implementation that it's been assigned through the cooperation agreement the Redevelopment Agency on the other hand for non-housing its assets are cash

0:24:57its revenues are tax increment and then as you know the obligations are our debt service center pass-through payments and loan repayments to the housing fund for the Redevelopment agency's Housing portions um the agency does retain the tradeway site and loan receivables from uh two

0:25:22projects the Idaho apartments and the Ohlone Gardens though those we don't anticipating anticipate seeing a significant income from because they're residual receipts loans um there is a ground interest lease uh ground lease interest on the El Cerrito Royale which again we don't anticipate

0:25:39would yield any proceeds and then um there is a loan on the books for from the agency's non-housing fund for the erf and serif loans obviously it receives it set aside from tax increment um and its obligations are Debt Service and its unfunded loans for Eden and rcd

0:25:58for their two housing projects um the properties um that are held by the MSC I wanted to just quickly go through remind you are the Mayfair block which is next the Del Norte BART station the Civic Center site which is um just on the other side of the police Building from here which is

0:26:16where the temporary City Hall was located there are three Parcels located on the East Shore triangle near the corner of Potrero and San Pablo um which uh are not contiguous and then there's the Cerrito theater and then also the Hill Street parcel um which is um

0:26:37was to be transferred from Safeway to the Redevelopment agency and was assigned to the MSC I wanted to just summarize our our condition um the bottom line really is that the agencies and the msc's existing cash reserves and res and revenues are not sufficient to fund the fiscal year 1112

0:27:00payment and the ongoing payments without some combination of actions um which would include liquidation of some of the MSC properties advances between the various agency funds to the extent we can do that and then multi-year cuts to projects and programs and Staffing

0:27:19and potentially to the general fund transfer and you can see some of the projects and programs that um could be considered for cuts and then the next table is a a summary of the fiscal impact to the general fund the under retaining the agency or allowing it to dissolve and we've given

0:27:45you both the current fiscal year and the fiscal impact over the life of the project area and this is a little bit complicated because you're really dealing with many many assumptions about the growth Trends and and all kinds of things so we've tried to be as conservative as

0:28:04possible in terms of the growth projections and making these doing this analysis basically if you uh by reducing the general fund cost allocation under elimination you would see an increase in the pass-through payments which would roughly cancel each other out but in the

0:28:27end the impact of dissolution is um is harder on the general fund than retaining the agency and we've modeled this to try to show you um that we would have to increase the general fund transfer if we were to retain the agency to try to maintain um an even impact

0:28:46and then the next slide is a analysis of the overall fiscal impact to the city both the Redevelopment agency and the general fund and so you can see we've added on um the Redevelopment funds for personnel and projects and programs and I did want to point out that there was an error

0:29:03rather significant one on the slides that were distributed in your packet for the projects and programs so you can see that the impact is nearly doubled [Applause] to 24 million dollars um so going on to our analysis of the differences between elimination and opting in

0:29:30under elimination the city and the Redevelopment agency um the city would have a general fund shortfall of about 588 thousand dollars in this current fiscal year over the life of the Redevelopment plan that the the impact on the overall City operating budget would be a loss of 24 million

0:29:50dollars the other the other um less tangible aspect of elimination is that the the city would really only be limited to paying back its bills the agency's bills and there would be no ability for the agency to facilitate development or control any of the property dispositions

0:30:08um going forward under elimination the city could retain the housing functions but would not receive any future incomes so it's a it's um it's kind of a catch-22 they're going to give you the property and not give you any money to do anything with it and it is really uncertain how the an

0:30:28oversight board would allow the successor agency to to handle its current obligations for the Ohlone Gardens Pro and tradeway projects hmm under elimination the MSC was actually designed when we originally set up that transaction to provide some protection for the for the city under

0:30:53um under Redevelopment elimination and so it um the cooperation agreement was set up so that you we could um the agency could transfer its Redevelopment implementation responsibilities to the MSC and create an obligation to finance those implementation activities

0:31:12so those actions could be challenged under elimination and the receipt of any future Revenue would rely upon the ability to defend that agreement if the city does decide to opt in we will be back to talk about what the role of the MSC would be going on under the opt-in scenario

0:31:34under the opt-in scenario there is significantly more funding both at the city and the agency both in the current year and ongoing the agency's Redevelopment Authority would be maintained the MSC would retain control the properties the agency could retain the housing program and the city and the

0:31:52agency would retain all the funds available for administration projects and programs though we do have to say that there would be reductions where we are projecting reductions in the out years just based on what we understand of the opt-in program and to be conservative

0:32:08based on the current financial situation so in conclusion um the staff is recommending that the best option would be to opt into the Redevelopment voluntary program because it would generate greater Financial Resources maintain the Redevelopment Authority and maintain the real estate

0:32:26all that being said at this point um the city's decision to opt in is all going to be contingent on the litigation so um when we come back in September should you want to do that it will be there will be some contingency built in um the we are assuming that pending that

0:32:50decision that that decision with the opt-in decision would still be need to make be made prior to the end of September so we're here we are asking for your feedback on any of these potential options um and that you adopt the resolution adopting the enforceable obligation

0:33:07payment schedule and um electing to service the successor agency to the Redevelopment agencies should you ultimately decide to opt in and to direct us to bring back those those opt-in documents for your consideration in September and if you have any questions we'd be

Since fiscal 2009, the base year for the legislation's payment formulas, El Cerrito's assessed values had dropped 9 percent and tax increment 11 (as captioned); the agency had used its reserves, and loans from its housing funds now being repaid, for ERAF and SERAF transfers to the state, and had invested its remaining resources in city infrastructure and affordable housing. Trevino listed the properties held by the Municipal Services Corporation: the Mayfair block next to the Del Norte BART station, the Civic Center site where the temporary City Hall stood, three noncontiguous parcels on the East Shore triangle near Potrero and San Pablo, the Cerrito Theater, and the Hill Street parcel to be transferred from Safeway. The agency retains the Tradeway site and residual-receipts loans on the Idaho Apartments and Ohlone Gardens, and owes unfunded loans to Eden and RCD for two housing projects. Existing cash and revenues could not fund the 2011-12 and ongoing payments without some mix of selling MSC properties, advances between funds, and multi-year cuts to projects, programs, staffing and potentially the general fund transfer.

Correcting a significant error in the packet slides, Trevino said elimination would leave a general fund shortfall of about $588,000 this year and cost the city's operating budget $24 million over the life of the plan, with no ability to facilitate development or control property dispositions. The city could keep housing functions but with no future income: “it's kind of a catch-22 they're going to give you the property and not give you any money to do anything with it.” The MSC's cooperation agreement, designed to protect the city if redevelopment ended, could be challenged. Opting in would keep far more money, redevelopment authority, the housing program and MSC control of the properties. Staff recommended opting in, contingent on the litigation, and asked the Council to adopt the payment schedule, elect to serve as successor agency, and direct staff to bring opt-in documents in September.

Cross-referenceThe Hill Street parcel is assigned to PDC for $1.85 million through the Municipal Services Corporation on 17 October 2011.

06 Questions: the timeline and the general fund captions 95–127

0:33:24happy to answer them I'm happy to start with a couple questions um thanks very much for the presentation so detailed um and I really wanted to go back to slide 25 and 26 where we're looking at all of the key tables that relate to the general fund and the overall Revenue impact to the city

0:33:47um so just to clarify this this slide to make sure it's all it's all clear when we look at the 2011 to 20 2012 columns if we retain the agency then the agency would continue would make payments to the general fund of 1.2 million dollars which we're allowed to make under

0:34:05Redevelopment law and then we'd get our pass through and I understand that total and if we dissolved uh what is the general fund cost allocation at that point then you mean the 250 yeah that's right um under the legislation where there was on the Tierra the the Cascade of money

0:34:24the fourth line was an allowance for Administration by the successor agency and that's the maximum allowance for okay for administration understood and then the next row down is a higher amount of the pass-through payments would go to the city that's right okay

0:34:38perfect thank you and on the next slide um slide number 26 on the retain column can you just kind of take us through a couple of these rows the cost allocation to the general fund we just talked about that um pass-through payments to the city understand that one but the the

0:34:59remaining rows can we just kind of describe those a little bit more the Redevelopment Personnel line is maintaining the current Staffing over the life of the project area three three staff people the projects and programs are basically maintaining the same level of

0:35:19activity as we are today with some minor increases um but then there under the projections there is a residual amount of cash left over at the end of the of the Redevelopment plan which we've rolled back in so in essence we've projected out um expenses that are less than we

0:35:40believe the tax increment would ultimately grow to be but to be conservative we didn't we've rolled them back in okay that remain in cash now the 631 thousand dollars that's in the dissolve column that's the amount um under the cooperation agreement for the current year to go from the agency

0:35:59to the MSC we felt like that's the minimum that we that really the maximum that we could believe that the MSC would receive okay yeah that was the number I was curious about all right thank you um I'm first trying to understand something about the process that I am

0:36:19having a little trouble with there are various dates by which we have to do certain things depending on what happens relative to um the um what was written in the law um 26 and 27 and also depending on what happens with the court decision could you just sort of outline that those

0:36:43dates well there is a slide on with a timeline um which one is that it's the last slide 20 34 34.

0:36:53and this isn't exactly the dates that are in the legislation but um we're proposing that this evening you would adopt the um enforceable obligation schedule and designate the city is the success successor agency that has to be done by the end of this month the um the eight with the stay

0:37:16we're assuming that regardless of the stay that we're going to follow the timelines that are in the legislation um to ensure that we've maintained all of our options and yes I will understand and this goes well this goes back and and Karen may wish to comment on this more but

0:37:34if we don't adopt the enforceable obligations payment schedule before the end of August depending on how the litigation goes that could leave us exposed not to be able to make payments on our obligations during this suspension period so that really preserves our options under any

0:37:52scenario designation of the city as successor agency is designed to preserve our options again we won't be able to come out of suspension should we should you choose to go that route until the court rules but if you want to go that route there's no harm at this point we think in going

0:38:15forward with at least stating that intent so you're still preserving your options at this point but we might uh we can if we decide to adopt this resolution tonight then we could later decide either to continue the Redevelopment agency or or not okay it's not okay this is not a

0:38:40decision to opt in okay and then that decision to opt in is it it it's an ordinance so it takes two readings okay so is the SEC when is the first the first reading is September 19th yeah okay and the second reading is October 3rd okay um now I think I understand it okay

0:39:04thank you is it true that the two different uh resolutions that we're considering tonight um for example if we knew we were going to opt in we wouldn't necessarily take the action on it as a successor identifying ourselves as a successor because that's that's the course of of

0:39:21you know red dissolution and certainly you know adopting the res the resolution about the enforceable obligations is more organized towards an opt-in option so these these two both resolutions to together keep our options open they're they're not we're not picking a specific path the reason

0:39:43you would want to choose to be the successor agency is that if you don't um another agency will be has the right to choose to be the successor agency so this is just a way of backstop for that I just wanted to add the most confusing part of the Court stay because what the court did not say was a

0:40:06provision that says if you don't uh 60 days after the effective date of the legislation you cannot pay any bills unless they're listed on an enforceable obligation payment schedule what they did say apparently is all of the language about what's in that schedule how it gets adopted all of that

0:40:27so this is um somewhat of an excess of caution because we do want you to be able to continue to pay your bills while this court case is going on so the enforceable obligation payment schedule is really geared towards dissolution it's part of the dissolution bill but in this interim period where

0:40:48we're all in this quandary because the court didn't give us very clear direction we think it's necessary to keep you functioning you know going back to one of your slides and I apologize for which one it is but it it's where you showed the cost to the city if we dissolved in fiscal

0:41:06year 11 12.

0:41:08um slide 25.

0:41:12um you know this can you help me understand because right now we are I mean I look through the the budget the annual budget and chapter 10 is the RDA and it says in here under chapter 10 on in table 10.3 it talks about transfers to the general fund of 1.2 million one million

0:41:37234 381 dollars um this says that there would be a if we dissolved there would be 774 000 instead of 1.2 million is that what that says so there would still be some money that would go to the general fund but it certainly is short a substantial amount what what

0:41:59numbers assume is that the annual ongoing Administration payment that the successor agency would receive potentially should the agency choose to dissolve that that would go to the city general fund to essentially administer the shutdown costs if you will of the agency

0:42:19ministering essentially all the agency the successor agency would just be administering payment of debts for the rest of the life of the plan and so this assumes that there's no RDA staff that you need to retain in order to do that that's simply a payment to the general fund to keep the successor

0:42:38agency doing its work which is minimal the pass-through payments to the city increased slightly because you're taking the cash that the Redevelopment agency would have received and would have invested back into the community and instead those are going to distribute it

0:42:54amongst the remaining tax Humanities which includes the city so the city does get a share of that pass-through money so there's an increase there over what you would see should you retain the agency so that is that 774 000. so if the city elected to continue doing the

0:43:11services and functions of the RDA there would be no Revenue to cover those those services and and in essence what I'm seeing here is that we not only would we not no longer be able to uh promote some of the services that the RDA does there may be some other services that we would have to curtail

0:43:32to reflect the change in in Revenue correct you would you would see a reduction in that overhead payment which would affect other city services so it's not this it's not like the RDA you know if we decide to dissolve the RDA and absorb those functions within the city

A councilmember walked through slides 25 and 26: retaining the agency, it would pay the general fund $1.2 million plus pass-throughs; dissolving, the general fund would get a $250 (as captioned) administrative allowance and a larger pass-through, and the $631,000 in the dissolve column is the current year's amount under the cooperation agreement from the agency to the MSC, which staff saw as the maximum the MSC could expect. The retain column assumes the current three redevelopment staff and roughly the current level of projects. Another councilmember asked for the dates: the payment schedule and successor designation must be adopted by the end of August to preserve every option, and staff said this was “not a decision to opt in”; an opt-in ordinance would have its first reading on September 19 and second on October 3. Staff explained that choosing to be successor agency is a backstop, since otherwise another agency may claim the role, and counsel described the payment schedule as part of the dissolution bill that the stay left unclear, adopted out of caution so the agency can keep paying its bills.

Councilmember Greg Lyman noted that budget table 10.3 shows transfers of $1,234,381 to the general fund, against $774,000 if dissolved. Staff said the smaller figure assumes only an administration payment for winding down debts, with no redevelopment staff, plus a slightly larger pass-through. Lyman concluded that if the city absorbed the agency's functions there would be no money to pay for them, and other services might have to be curtailed; staff agreed, since the overhead payment would fall.

07 Questions: the waterfall, the 35 percent and the formula captions 128–168

0:43:51there would be no money to pay for those functions within the city without finding some other Revenue source correct I have a few questions here um excuse me along the lines that Greg was talking about I could you explain to me and is there a limit or a formula that they use to

0:44:20reimburse the state and the county for administrative costs which is the actually surprised me it's the number one priority payment and uh is there any detail on that or is this in the air like most stuff the count he already gets an administrative fee which in our case is about fifty

0:44:41thousand dollars a year and I don't believe that the legislation um specifies any change in that but that's a that is a a number that the Board of Supervisors adopts every year and is really within their control already okay um Karen may remember I think there is a

0:44:59number for what goes to the state and we all get a share of it uh there is a number for the State and it's a total of five hundred thousand dollars and y'all get a little piece of it for the county if you dissolve the county sort of administers all these payments and so

0:45:18the county is able to First pay itself and there is not a limit on that and the county also is obligated for dissolving agencies to conduct an audit of those agencies that has to be completed by March of 2012 and they are entitled to charge the agency for the cost of that

0:45:39audit so whether they use an outside auditor or internal Auditors they charge the actual costs so that's a big number we don't know what the numbers are going to be that's an unknown who from the county is in charge of all this the county auditor controller and then I see that the agency if there

0:46:02is priority four so what happens if there's no money by the time we get the priority four who picks up the agency in the administrative costs they're actually bursts waterfall if there's a shortage of money if you might be surprised to hear that your admin is the first thing that goes

0:46:21so if you can't make all of your obligations pay all of the enforceable obligations out of the tax increment or what used to be tax increment you basically go in reverse order of the waterfall so the admin would go then certain obligations get paid first and eventually they will dip into some

0:46:42of the taxing agency payments but not significantly them okay thanks for I don't know if that's clearing it up or not but thank you for the information [Laughter] um payment to the city for the property tax we would normally get I guess that's a pass-through to to the city correct

0:47:08um is that a first priority or last priority what did they come in with everything else existing pass-through payment is um is top priority the additional pass-through payment falls into that remainder distributed to the taxing entities right the original one is a top priority we

0:47:29would get that okay great that's one for our team uh the pass-throughs when we get down if there is some extra money and they they're passing through we cities get 22 percent the school district gets 44 Etc um is that basically the same percentage that's going out now or is that a

0:47:52different totally different well it's it's um all of the tech taxing taxing entities shares of the pass-through payments have been adjusted over time because of the eraf programs right so what we've done is combined the eraf shifts amounts that come out of the pass-through payments

0:48:16into the school district in the community college numbers so 35 percent of the tax and increment would go to the school directly of the remainder would go to school directly and the difference between the 35 and the 44 on on slide 11 would go into the e-ref fund which the county then redistributes

0:48:38among school districts according to whatever that state formula is which is why we didn't put School District at schools right the legislation itself and I don't know if this is part of your question but the ab1x26 and ab1x27 doesn't change the distribution of the

0:48:54pot it just changed how much gets put into the pot okay good all right thanks for that clarification I noticed and I believe this is in the opt-in um if the city assigns All rights to receive funds from the agency to the state which is something that's not done

0:49:14now correct I think I asked this couple meetings ago um so now they've taken care of that loophole correct yes um this is there are so many troubling parts of this legislation um what the often legislation says is when the city opts in um the city is also assigning to the

0:49:37state any payments that the city receives from the Redevelopment agency in the event that the city fails to make the remittance payments no okay the tricky part about all this is if you opt in and then you fail to make your remittance payments you are dissolved your Redevelopment

0:49:59agency is dissolved you go back under a b26 and under ab26 all but a handful of types of agreements between your city and your agency or null and void and you don't have the types of agreements that are not null and void so we don't really know what the point of

0:50:20this language was and whether it has for some agencies it does have an implication for agencies that don't have the two types of agreements that survive dissolution we don't know that it has any implication and we're not quite sure what they were trying to get at with it

0:50:36so it may have been somebody's brilliant idea that didn't get quite implemented in a way that's going to work okay thank you appreciate it the one that stood out to me on the opt-in you alluded to it a little bit in the in the presentation was there's a trigger for the new obligation of 35

0:50:57percent of the obligation payment that goes to the school districts or schools or school districts is this on top of the is it a one-time payment or is it like an issuance cost on a on a bond issuance so we'd have to we'd have to we'd have to provide coverage for our debt service

0:51:18you know to to make a payment to the school district you know equal to 35 percent of our Debt Service am I saying that right Karen it's not one time it's based on your annual Debt Service it's based on the any new debt obligations incurred after October 1st 2011.

0:51:43um and it it's factored based on the annual Debt Service on those obligations so you will pay it each year that those debt obligations are outstanding but you pay it on just what you paid that year so it's not the total debt so but it's it's quite Hefty right and

0:52:01do you know the thinking behind this uh um I don't have if I knew what the legislature was doing to not be here probably I know I'm sorry to ask this I know we think the intent was to and if agencies are going to continue and to continue to incur debt that means they will continue to collect

0:52:22tax increment and so the idea seems to be to provide some method of holding schools harmless from that continued tax increment collection so as you issue new debt you continue to obligate the tax increment the schools get a piece of that to make up for the fact that your

0:52:41agency is continuing on okay thanks I appreciate that and uh last question an under agency elimination the city will not receive loan repayments is that correct is that under the housing I I'm sorry I didn't have a slide it's it's on the housing he'll do it it the

0:53:10slide was corrected today to say the SE wrap and Erath loan repayments Yes actually we're talking about there it is um sorry in the event that the the city be dissolved and the city took on the housing obligations we would keep their real estate assets we would not be

0:53:31entitled to receive any of the the payments that the non-housing side of the agency is making back to the housing fund to pay off the Seraph and eraf that would just go to the to be distributed back to the taxing entities we wouldn't receive any of that to actually

0:53:46Implement any of our housing projects we would receive the land and no additional funds thank you very much so thank you for the great presentation to finally get a chance to hear all the details the Gory details behind all this um and just for the sake of clarification or clear communication of

0:54:11the source of the what are 1.84 million payment obligation if we were to opt in how how this state comes up with that and and making that transparent there's a there's a formula in the legislation basically it um it it takes um your tax increment and Nets out The Debt Service and pass-through

0:54:35payments for the for the year um 0809 and then it does the same thing without netting those things out and then it averages those two results and that's where we got the number um that's where the state got the number the problem is that it's based on data from 2008 nine

0:54:56and there that's part of the appeal process it's demonstrating that your tax increment has dropped and or your um your interest in debt service has increased so that you can appeal that number by adjusting the net your net tax you're still doing an average of yes what we

0:55:16the net a net number and a gross number um and then I don't just for the sake of entertaining the possibility but um the potential for what is the potential that 26 could be deemed unconstitutional in 26th seven is constitutional I know that's just another iteration on

0:55:39um so the dissolution is unconstitutional but opt-in is constitutional yeah um I don't think that is much of a possibility because if 26 is unconstitutional there's no point of 27 it only like nobody would make their payments because they don't have to because they'd still be alive

0:55:59so I don't think that is a big possibility it's the reverse that people are concerned about and the cra's argument on the reverse is the legislature couldn't pass 26 alone as we all saw in March when they were one vote short so you can't separate the two thank you

0:56:20any further questions yeah sorry mayor one more clarification on what we're being asked to do tonight um so we have the two resolutions before us one to serve as the one to State our intent to serve as a successor agency and the other to adopt and approve our enforceable obligations payment schedule

0:56:37and in addition staff is looking for direction from us to begin to prepare opt-in documents so the two resolutions I understand are made are um are are intended to keep all of our options open and then the next set of things that we would discuss is whether or not to give you direction to

0:56:57prepare opt-in pay opt-in documents which would then seem to bring us down the road of opting in my question is if are we then kind of on a stable Road at that point or are there many documents to be prepared to dissolve that if we decide at a future meaning that we do

0:57:16intend to dissolve would we then be behind the ball in terms of having those documents prepared I'm just trying to figure out how how much of a path we're getting on by giving you direction to prepare the opt-in documents I can't think of any but I'm going to ask Karen

0:57:33um yeah if you were to dissolve and setting aside This Day based on the actions that you would take tonight if you approve these resolutions The Next Step would be that the successor agency is supposed to begin preparation of what's called a recognized obligation payment schedule

0:57:52which is supposed to be completed by November 1st in draft form and then that would go to this the oversight board for approval and that's what governs future payments after January 1st of 2012 so that's really the next step if you were to dissolve and all of that of course is

Taking up "the lines that Greg was talking about", a councilmember asked how the state and county are reimbursed. Staff said the county already charges about $50,000 a year, set by the Board of Supervisors; the state's figure is a total of $500,000; and for dissolving agencies the county auditor-controller pays itself first, without limit, and must complete an audit by March 2012 at actual cost. If money runs short, the waterfall runs in reverse and administration goes first. Existing pass-throughs are top priority; additional ones fall in the residual, where 35 percent goes to the schools directly and the rest of the 44 percent shown goes to the ERAF fund, and the bills change how much goes into the pot, not its distribution. Asked about the opt-in requirement that the city assign to the state its right to receive agency payments, which the member thought had been asked a couple of meetings earlier, the answer was that a city that opts in and misses a payment is dissolved, and since most city-agency agreements then become void, the purpose of that language was unclear: “it may have been somebody's brilliant idea that didn't get quite implemented in a way that's going to work.”

Another councilmember asked about the 35 percent charge on new obligations; counsel said it is not one-time but based on annual debt service on obligations incurred after October 1, 2011, paid each year they are outstanding, apparently to hold schools harmless from continued tax increment collection. Under elimination the city, keeping the housing real estate, would receive none of the non-housing side's SERAF and ERAF loan repayments to the housing fund. A third member asked how the $1.84 million was derived: the state averaged 2008-09 tax increment net of debt service and pass-throughs with the gross figure, which the appeal challenges. Counsel did not think AB 26 falling while AB 27 stood was much of a possibility, since no one would pay; the concern was the reverse, and CRA argued the two could not be separated because the legislature had been one vote short of passing 26 alone in March. A councilmember confirmed that the two resolutions keep options open; counsel said either way the city was on track, the next dissolution step being a recognized obligation payment schedule, in draft by November 1, for the oversight board.

08 SEIU, and Jones on "the best of the worst" captions 169–194

0:58:15kind of on hold for the moment so I think either way you're on track no matter which route you take okay thank you oh so with that I'll take uh comments from the public is there any speakers one speaker Brian Lee thank you mayor Chang and the city council I'm Brian Lee I'm the field

0:58:41representative for SEIU Local 1021 I have been in contact with you via email and I sent off a letter earlier today I'm addressing the Council on behalf of the approximately 40 members who are employed by the city of El Cerrito the El Cerrito chapter of SEIU has not yet

0:58:58adopted a position on the possible retention or dissolution of the El Cerrito Redevelopment agency however the members of the chapter are deeply concerned with safeguarding the current level of services that are provided to the residents of El Cerrito it was due

0:59:13to this concern for the welfare of the residents that the union endorsed and lent its support to measure R in large part due to the hard work of not only our Union but other unions and union members who phone banked and walked precincts as well as provided monetary

0:59:29support from Roger R the city expects to receive 1.5 million dollars of measure R funds for the next physical year we hope that these funds are safeguarded for their original purpose which was to preserve the services for the residents of El Cerrito the adult Cerrito chapter in the union

0:59:46would like to discuss the impacts of this possible decision to either retain or dissolve this agency would have on the level of services provided to the city I have sent letters to you directly via email and a hard copy will be coming later if you wish to arrange such a

1:00:02meeting with the elected representatives of SEIU for the El Cerrito chapter I would encourage you to contact me thank you any further speakers no other speaker cards okay more discussion or a motion to adopt resolution um I have some comments um all right first of all I want to

1:00:35appreciate the time and effort that's put in to the study of the issue in preparation for this very important presentation it's my opinion that our staff and legal advisors understand the ramifications of this issue and the specific details of the legislation a whole lot better than the

1:00:53Sacramento people who wrote supported and now trying to implement the legislation and I include our state representatives in that category um I have previously expressed my thoughts a couple times um on on the poor development of the of the legislation so I'm not going to go

1:01:15there tonight uh it's the way I'm looking at it here tonight is discuss what we do to answer the legislative options available to the agency also recognizing that in the future legislation may require a change of our decisions that we make in September and making the decisions one of the

1:01:39toughest areas when when you get down to decision making not only in the public sector but also in the private sector is when the only solutions are issues that are bad or worse than bad or Dumb and Dumber um that's one of these times we must choose the best of the worst

1:02:01for the community in my opinion given our role as decision makers in my I think our choice is fairly our choices are fairly straightforward do we do we pay the extortion fee forced Upon Us by the governor and the state legislature and keep the agency operating with new

1:02:25restrictive terms and conditions and keep the agency's asset in place for the community or do we end over 40 45 years of Redevelopment operations and turn it over to the state for disposal of our community assets and that's what's hanging over our head either pay the money or you lose

1:02:52given our economic climate it comes down to what is the best of the worst financial situation for our community and the agency and if the operating terms and conditions placed on the agency will make sense for El Cerrito we've been asked for feedback so I'd like to suggest this right now I I have

1:03:16a feeling I'm leaning towards paying the extortion fee and hoping the state supreme court overturns the legislation however um I'm still not comfortable in understanding the very restrictive terms and conditions by which the Redevelopment agency can develop projects in the future and I need to

1:03:35look at that more we we talked primarily tonight about financial implications but um according to our state legislators they are also limiting what we can do with the money and how we can develop it and although I was expecting some reform in that area I want to make sure that it's not too

1:03:57restricted to the point where we can't do anything um the quad there is one thing I I forgot to ask about and that is so I want to know is it necessary to put a clause in the resolution that if the legislation is overturned by the Supreme Court that the actions to accept

1:04:22to pay the fee and agree to the terms and condition of the legislation will be rescinded and it can it be by the agency in the city uh I'd like to make sure I believe in the slide presentation there there was a reference to that that we could do that but I just want to make sure that

1:04:44that Clause is in and actually if we can do it and I would have trouble uh going forward if we could not do that or we could not put that clause in and um whatever decision we have we have to come up with a resolution so I would suggest that we also have a companion

1:05:05resolution that covers the following that the agency in the city does not endorse the Redevelopment legislation proposed by the governor and passed by the legislators we took these actions under protest and undue distress the new regulations and payment requirements are intentionally punitive

1:05:26and create for the benefit of the state and not for our communities I'd also hope that we could have some language in there that this legislation is against the wishes of the people who passed prop 22.

1:05:40and that the city is in and the agency is in full support of the lawsuit challenging the legislation and when we make the final decisions in September or October whenever we finalize this uh that we send off our results to the usual people cities of Contra Costa County the mayor's

1:06:02conference our state representatives and the Governor State Controller League of California cities California Redevelopment Association and other entities are officials that need to be notified councilmember Jones just a point of clarification those last six things that

1:06:17you read off starting with a cancellation Clause essentially those are all things that you would like to see in in the ordinance that we are in the resolution associated with the ordinance that we might be adopting in September the Clause I would like in the in the basic resolution that we pass

1:06:38whether to opt-in or or dissolve the other ones I'm suggesting a second resolution that covers our disagreement if the council so chooses thank you I'm a little confused what you're suggesting and here's what I'm confused about are you suggesting that you're wanting us to vote on

1:07:02something related to that tonight or another time no this is under feedback so I'm giving staff and and you're saying at another date you want us to do that do it when we take up the resolution September 19th whether we dissolve or opt in the September 19th okay we're considering

Brian Lee, field representative for SEIU Local 1021, spoke for the approximately 40 city employees in the union's El Cerrito chapter, which had not taken a position on retaining or dissolving the agency but was deeply concerned with safeguarding services. The union had supported Measure R; the city expected 1.5 million dollars of Measure R funds next fiscal year, and Lee hoped they would be safeguarded for preserving services. Lee had sent letters and invited the Council to meet with the chapter's elected representatives on the decision's effect on services.

Mayor Pro Tem Bill Jones said staff and legal advisors understood the legislation better than the Sacramento people who wrote it, state representatives included, and that when the only options are bad or worse, “we must choose the best of the worst.” The choice was whether to pay what Jones called the “extortion fee” and keep the agency under restrictive terms or end 40 to 45 years of redevelopment. Jones said: “I'm leaning towards paying the extortion fee and hoping the state supreme court overturns the legislation,” but wanted to study the limits on future projects, and asked whether the resolution could include a clause rescinding the payment and terms if the court overturned the legislation, saying Jones would have trouble going forward without it. Jones also proposed a companion resolution stating that “we took these actions under protest and undue distress,” that “the new regulations and payment requirements are intentionally punitive,” that the legislation is against the wishes of those who passed Proposition 22, and that the city supports the lawsuit, to be sent to Contra Costa cities, the mayors' conference, state representatives, the Governor, the State Controller, the League and CRA. Asked by two members, Jones clarified this was feedback for the resolutions on September 19, not a vote that night.

Missing contextThe captions in this section record no answer to Jones's question whether a rescission clause could be included.

09 Lyman keeps both doors open, and two resolutions pass captions 195–213

1:07:23resolutions tonight right no I I meant September the 19th okay right no that was the just in my question um can you bring up slide 33 please that's that is the slide I think that that we're all addressing um there's four things up here I'm certainly going to address three of them

1:07:41um to provide feedback on potential options for opting into the voluntary Redevelopment program um although I share Mr council member Jones's uh opinion about the state legislature I'm going to not provide you feedback on that I'm not certain which way I'm going

1:08:01to choose so I'm going to actually ask that you also begin preparing the documents necessary for dissolution um and have those um available for our adoption in October if necessary um the the way I see it is we're going to keep all options open and uh if I you know I'm going to ask Miss Tidman if

1:08:24this is correct but we could opt in in September and in October we can uh adopt our obligations as well and keep both of our options open and until we write that check January 15th we really have both options open to us in that little twist that you're assigning all your payments

1:08:56once you opt in and if you fail to make the payment I mean if we hear anything different any other different interpretations of how that might come out we would certainly advise you before you adopted an ordinance but but if we don't make the payment on January 15th

1:09:12then the the obligations that we adopt in October before the November first deadline would govern would they would not yes so yes so my request is that we continue to pursue both options uh because that gives us the most amount of time to understand the ramifications that we're we're

1:09:34making our decision on now I will just add that if you adopted an opt-in in ordinance and then didn't make your payment in January the legislation says you're dissolved but then you have 60 days to do all those things that you would have done if you were dissolving

1:09:50so you don't necessarily have to do it now if you're doing the opt-in ordinance but but obligations right it's really if you did the opt-in in October and once again we're setting aside to stay in the litigation and then in January you didn't or couldn't make the payment you would then

1:10:10have 60 days to do a recognized obligation payment schedule sort all of this out so I'm not sure you need to do that right now once you've adopted the opt-in ordinance that of course if you don't adopt the opt-in ordinance then you do need to do it right I'm I'm I'm going to go down

1:10:32the line here I will uh move on both the resolutions this evening and I would like to direct staff to prepare the opt-in documents because uh fiscally I I can the presentation tonight shows us that the opt-in really is the best financial long-term thing for the city

1:10:55um but as we go forward and discover things over the next 30 60 days we may not have an option to opt in because of cash flow and other option actions so I'd like to keep both of our options open at this point so I hear you made motion on both resolutions I'm more than

1:11:20delighted to make both motions on both resolutions at this time if that's uh if the mayor is willing to take that or we could continue having a dialogue identify what you're talking about the go ahead and just say you just said the resolution yeah the first the the

1:11:39mill two button bullets are adopt resolution so I'm more than willing to move them at this one I'm not sure what our uh audience at home sees oh yeah certainly it's a resolution it's a resolution approving an enforceable obligation payment schedule and a resolution electing to serve as the

1:11:56successor agency to the Redevelopment agency if we dissolve those are the resolutions I'm talking about and I can move them if if so if if the council would be patient enough to do that or we can continue discussing I'll move um I move resolution of El Cerrito Redevelopment agency approving and

1:12:15adopting the enforceable obligation payment schedule pursuant to part 1.8 of the Redevelopment law second the resolution so at this point any further discussion on on the first one no okay so all those in favor please say aye aye aye the motion was unanimous and I will move resolution of the city

1:12:41of El Cerrito to express its intent to service the successor agency of the El Cerrito Redevelopment agency pursuant to health and safety code section 34171 J and section 34173 [Music] second I'm sorry there's two attachments aren't I was assuming that when you did that

1:13:04you were moving those two these are there are two in the in our packet there are two proposed resolutions I thought you just we just voted on them you voted on one just one oh I thought we voted on two I thought I heard you do two I'm reading them one at a time so I've read this I'm

1:13:23moving the second one at this time okay foreign was there a second okay so all those in favor of the successor agency resolution please say I I and that motion was also unanimous so any post you miss comments uh please oh okay I was gonna say so my understanding is that at this time what

1:13:56we want to do is to direct staff to prepare opt-in documents and final strategy to retain the agency understanding that if it turns out not to be in our best interest as a city then we will not do that I mean not we will prepare the documents that we in fact might not choose that path correct

Lyman, sharing Jones's opinion of the legislature but undecided, asked staff also to prepare dissolution documents for possible adoption in October, keeping all options open until the January 15 check is written. Tiedeman said that if the city opted in and then did not pay in January it would be dissolved but would have 60 days to prepare a recognized obligation payment schedule, so those papers need not be done now unless the city declined to opt in. Lyman said the presentation showed “the opt-in really is the best financial long-term thing for the city,” but cash flow might rule it out within 30 to 60 days, and moved both resolutions.

The Agency resolution approving and adopting the enforceable obligation payment schedule under part 1.8 of the redevelopment law passed unanimously. After brief confusion over whether both had been voted, Lyman moved the city resolution expressing intent to serve as successor agency under Health and Safety Code sections 34171(j) and 34173, which also passed unanimously. A councilmember then summarized the remaining direction: prepare opt-in documents and a final strategy to retain the agency, understanding the city might not choose that path.

SignificantBoth resolutions were described by staff as preserving every option; the opt-in decision itself was left for an ordinance with readings set for September 19 and October 3.

Outcome CarriedunanimousEnforceable obligation payment schedule and successor agency resolutions adopted unanimously.

10 How much paperwork to prepare captions 214–231

1:14:17um depending on what happens in the immediate future correct it and I and I think councilmember Jones and I have given our our opinion on that so we can continue yeah yeah thank you I would be happy to go next um I appreciate all the comments that have been made so far and I was

1:14:38particularly interested in council member lyman's suggestion that we want to continue to keep all of our options open as this is a complicated and evolving issue and as much as we're all keeping on top of everything new information is continuing to come out so keeping our options open is so vital at

1:14:53this point um and I appreciate council's comment relating to the dissolution documents not being required until 60 days after the payment is needed because the staff is doing so much work on on all of these things it would be great if we could ensure that we're not making them do

1:15:09work that's not neces that turns out to not be necessary um so I am happy to support the idea that we direct staff to prepare the opt-in documents with the idea that we're going to continue to study these issues and keep our options open and if the case may be that we are

1:15:25not able or do not decide to make a payment on January 15th then we're still able to go down the road of disillusion dissolving the the agency and kind of keeping keeping staff working on things that are that are vital in keeping our options open and understanding the

1:15:43impacts to the city um and not doubling up on work that we don't need to do at this point so that's my opinion on that I actually would make exception to that I think we need to be sure we can go any of the pass that it might we need to be ready to do almost anything within this group of

1:16:00uh options so that I would actually encourage staff to do whatever it is and I think that they have been to date making sure that we're covered no matter what because if we're you know we just want to make sure that um what way it whatever way it turns out is in the best interest of our city I

1:16:24think that really is is the important thing and um we don't know yet all of the details so I don't know how I think it's important to be prepared and I'm just suggesting right and I don't I don't know if we're disagreeing I think that we're on the same page no I think we are disagreeing

1:16:40because you said unnecessary and I I think that something that they will do will be unnecessary because they weren't able to predict because they don't have a crystal ball in front of them so I think that they need to be well prepared and I think that they are doing that and

1:16:56I want to thank them actually for all of the very time consuming and work that they have been doing and I think at many hours of the day and night because I've seen them up there working when we've had our night meetings and um so I appreciate very much the work that staff

1:17:14has been putting in to this very grueling effort may I may I make a potential recommendation of a compromise um in that the recognizable obligation payment schedule is something I'm assuming that you would be preparing just because it's part of our potential decision or comparison uh

1:17:36actions you're going to need to make that you may not have to do the paperwork to to do resolutions and such to adopt it until February but it strikes me that that would be something the recognizable obligation payment schedule is something that that you'll be preparing

1:17:53you know in the October time frame anyway just so that we understand what the choices are so the compromise would be to not necessarily do all the paperwork that would moving into into action but at least prepare a um the recognize the recognition obligation payment schedule so that we are we are

1:18:14familiar with what that long-term obligation would be if we did dissolve and and just to be clear the difference between the result the resolution we just adopted um adopting the enforceable obligation payment schedule different than the recognized obligation schedule is it the

1:18:33recognized obligation schedule is kind of a variation of the enforceable obligation schedule is that correct the eops is only effective under suspension right and the rops is only effective under dissolution okay but the schedules in terms of their content are very

1:18:51similar similar okay great that makes perfect sense to me yeah my understanding is ones for six months and one's forever forever or until the obligations are gone right exactly so it's extending out those that six month schedule through the life of the agency or through the life of the obligations

1:19:07that's right okay that makes sense to me I completely agree steps and and given that there that we are covering our bases which is meeting the intent of the comment that I'm hearing fundamentally so okay so thank you for that um unfortunate I mean we're just making

1:19:37do with with what we can and um it's definitely an unfortunate time to to be in this position we're not alone but it's we're just doing what we can so thank you very much for all of your time okay so at this point we're on to item number eight Council liaison and assignments

A councilmember welcomed Lyman's suggestion to keep options open and counsel's point that dissolution documents are not required until 60 days after a missed payment, and supported directing staff to prepare opt-in documents without doubling up on work that might prove unnecessary. Another member took exception: staff should be ready for any path, since some work will inevitably prove unnecessary because “they don't have a crystal ball in front of them,” and thanked staff for long hours on the effort. A third member proposed a compromise: prepare the recognized obligation payment schedule in the October time frame anyway, without the adopting paperwork, so the Council understands the long-term obligations under dissolution. Staff said the enforceable schedule applies only under suspension and the recognized one only under dissolution, with similar content; as a member put it, “ones for six months and one's forever.” A member agreed that the bases were covered, and Chang called it an unfortunate time to be in this position, one the city was not alone in.

Cross-referenceThe city opts in to the voluntary alternative program, with its payment due 15 January 2012, per 19 December 2011; after a state Supreme Court ruling of 29 December 2011 the agency is dissolved on 1 February 2012, per 17 January 2012.
Cross-referenceThe successor agency's initial draft recognized obligation payment schedule is presented on 21 February 2012.

11 Plastic bags, the mayors and the legislators, and adjournment captions 232–256

1:20:10and and at our last meeting I gave a very very brief update of the waste uh the West County Integrated Waste Management Authority meeting that I went to on behalf of councilmember Jones in July and I'd like to expand that just slightly so that everyone is aware of

1:20:30how the city of El Cerrito and our staff is contributing to the development of the plastic band ordinance that is out there um as council member Abelson probably can tell us the environmental equality committee has probably considered the plastic ban and actually as a result is

1:20:55developed some of the plastic band ordinance that the larger Authority would like to make a uniform or as close to a uniform ordinance that all the member cities can adopt in the West County so there's a similar ordinance so that once in our case one side of San Pablo Avenue has

1:21:17the same ordinance as the other side of San Pablo Avenue and we're not creating a a difference in the the how the plastic band ordinances the cut what the customer sees is they walk from the Richmond side of San Pablo Avenue to the El Cerrito side of San Pablo Avenue So

1:21:33to that end both Richmond and El Cerrito have been have been a very active staff and The Authority board did ask that the staff members from both cities participate with the agency staff members to develop an ordinance and bring forward an ordinance in for the September meeting of the

1:21:53authority in addition to that the director of The Authority will be bringing the ordinance to us so that they can ultimately gauge how much each member City supports the ordinance and will adopt the ordinance in its I want to call it generic but it in its form that would be

1:22:14very very similar between all the cities and so I did want to make sure that you guys knew that that is something that the um the authority is working on and I think we all support it there was some discussion about how it would be funded there are some costs associated with its environmental review

1:22:35and those costs it would be wonderful if some of the people that benefit from those costs in this case for example the landfill operator has costs associated with picking wind blown litter and most of the wind blown litter is is plastic bags the county certainly benefits from

1:22:54the member cities helping move this ordinance forward so it would be wonderful if the county participated in the cost the actual funding of the environmental review estimated to be about twenty thousand dollars was not determined at that meeting but staff uh what the

1:23:10authority staff was uh directed to continue working on the ordinance um so that we can at least have an ordinance that people are considering but the environmental review for that ordinance was not authorized and that it will be taken up at the next meeting yeah

1:23:30this is uh council member Abelson had indicated uh there was a mayor's conference meeting that we attended that was yes I stood in for the for the mayor on that one and uh the Crux of it and it was the longest meeting that I've attended and I've attended these things

1:23:51off and on for four or five years and Janet longer than that but it was on Redevelopment but it was also on intrusion of the state and their legislation into Municipal Affairs and the two members of the legislature were there Nancy Skinner our state representative and Mark deshonier our

1:24:16state uh senator and there was 19 Mayors at the table and there was plenty of opinions actually focus more on more on the representatives uh that were there and the legislation that they were representing you have to understand that both Representatives voted for the

1:24:38Redevelopment change that the governor proposed and all 19 cities were not in favor of the legislation so it made from some interesting dialogue um I think both Representatives tried to make the case that all right the legislations passed but we made every effort to clean up and take care of the

1:25:00cities and I think I'm accurate in saying that the cities didn't buy off on that so um it was an interesting meeting it was civil it it was civil nobody got up bang the bang the table or through cream pies at each other but I think the message was delivered and

1:25:23after the Redevelopment I think the issue is this this thing about intrusion into Municipal Affairs is not going to go away with the cities that was probably uh the there was expression on that probably just as much on that as there was on Redevelopment so anyway we'll see what happens

1:25:48and we are hosting on September 1st we're hosting the we have the privilege of Hosting all 19 Mayors in Contra Costa County for the monthly meeting so we're looking all looking forward to that thank you um the uh the Environmental Quality committee did meet and I think you may have given it more

1:26:13credit than it um is is due in in stating what it's been doing but um one of the things that's been doing relative to um the plastic bag issue is looking at the possibility of um showing a film called bag it which is about the use of plastic bags and um I saw it in its entirety and it's

1:26:38it's got a lot of humor and um I'm not sure that if data's been finalized yet but the hope would be to show it at the Cerrito theater if that can work out excuse me and I think it'll show um a lot of background and insight into the in the whole issue of plastic bags and

1:27:00the problems it creates for the environment neither of my committees met in the only news I think everybody knows about is about elevation 66 opening or intending to open on September 1st so we're really excited about that but I don't have anything to report from our boards other

1:27:17than that news and the West County Mayors met and Pinole finally switched over after six months in El Cerrito and essentially discussed the the resolution of the Supreme Court acting in favor of Manhattan Beach and hopefully um resulting in overall reduced costs

1:27:38for ears on the plastic band ordinance um and then the and thank you mayor Pro tem mayor mayor for Tom Jones for for standing in on the mayor's conference but I definitely will be in attendance as we are hosting next time um and then the um as you heard the I reported last time

1:28:01on the the arts and culture commission who decided to send the artists back to redo the art along San Pablo Avenue and they'll be coming back with a monochrome metallic design but essentially similar themes along the stretch of the Avenue and will be didn't have the regular

1:28:24meeting as a result of the public hearings so that's coming up on Wednesday and the human relations commission also unfortunately couldn't make it um but I hope to make the next one and let you know what's going on I believe that is it we are now adjourning the concurrent city council

1:28:43and Redevelopment agency meeting the next scheduled meeting is September 19th at 7 30 here at City Hall so good night thanks

A councilmember expanded on a July meeting of the West County Integrated Waste Management Authority attended on behalf of Jones: the Authority wants a uniform plastic bag ordinance across member cities, so both sides of San Pablo Avenue, Richmond and El Cerrito, match; staff from both cities would help draft one for the Authority's September meeting, to be brought to each council. The environmental review, estimated at about twenty thousand dollars, was not authorized or funded; the member hoped the landfill operator and the county, which benefit, would share the cost.

Jones, standing in for the mayor at the mayors' conference, called it the longest such meeting Jones had attended in four or five years: Nancy Skinner, "our state representative", and state senator Mark deshonier (as captioned), who had both voted for the governor's redevelopment change, faced 19 mayors whose cities opposed it; the meeting stayed civil, but Jones thought the cities did not accept the legislators' case, and the issue of state intrusion into municipal affairs drew as much comment as redevelopment. El Cerrito would host all 19 mayors on September 1. A councilmember said the Environmental Quality Committee hoped to show the film Bag It at the Cerrito Theater. Another had no committee news beyond Elevation 66 intending to open on September 1. The West County Mayors had discussed a Supreme Court ruling in favor of Manhattan Beach, hoped to reduce environmental review costs for the bag ordinance. Chang thanked Jones, said the Arts and Culture Commission had sent the San Pablo Avenue artists back to return with a monochrome metallic design on similar themes, and adjourned the concurrent meeting; the next was September 19 at 7:30.