20130703 Regular City Council Meeting - MinutesMINUTES OF THE SPECIAL CITY COUNCIL MEETING OF THE
CITY OF VERNON HELD TUESDAY, JULY 3, 2013, IN THE
COUNCIL CHAMBER OF THE CITY HALL LOCATED AT
4305 SANTA FE AVENUE, VERNON, CALIFORNIA
MEMBERS PRESENT: McCormick, Davis, Maisano, Ybarra, Martinez
MEMBERS ABSENT: None
The Special meeting of the City Council was called to order at
8:03 a.m. by Mayor McCormick. Councilmember Maisano led the
flag salute..
CHANGES TO THE AGENDA
Interim City Clerk Dana Reed announced that there are no changes
to the agenda.
PUBLIC COMMENT
Interim City Clerk Dana Reed announced that this was the time
allotted for public comment. Mayor McCormick inquired whether
anyone in the audience wished to address the City Council.
There was no response.
NEW BUSINESS
1. Resolution No. 2013-70 - A Resolution of the City Council
of the City of Vernon approving and authorizing the
Execution of an Amendment to the Loan Agreement by and
between the City of Vernon and Meta Housing Corporation.
Recommendation
(1) Find that approval of the proposed resolution amending
the loan agreement is exempt under the California
Environmental Quality Act ("CEQA") in accordance with
Section 15061(b)(3), the general rule that CEQA only
applies to projects that may have an effect on the
environment; and
(2) Find that there is a public purpose in amending the
Loan Agreement for the proposed housing development at
4675 52nd Street and that the City is not otherwise
prohibited from entering into the Loan Agreement by
Article 34, of the California Constitution; and
(3) Approve the resolution amending the Loan Agreement
between the City of Vernon and META Housing
Corporation.
Director of Community Service and Water Department Kevin Wilson
reported on the importance on receiving the tax credits
allocation for the housing project. Since it is an affordable
housing project, the rent will not cover the cost of
construction for the term of the project. The tax credits would
cover the difference and make it a profitable project.
Wilson reported that numerous cities competed for said credits,
Vernon had been unsuccessful. The project in the City of
Pasadena scored very high with a score of 54 and the City of El
Monte scored just below Pasadena, both are expected to apply for
the next round. Wilson opined that the City's best chance of
receiving the credits is to get ahead of the El Monte Project.
Special City Council Meeting Minutes
July 3, 2013
In working with the City's developer, META Housing Corporation
and Consultant John Goetz, it was determined that the City would
need a score of 47; this means a loan of additional $550,000 is
recommended. The total amount of the loan is increased from
$650,000 to $1.2 million. Wilson noted that the additional loan
amount would not be dispersed until next fiscal year.
City Administrator Mark Whitworth opined that by increasing the
amount it places the City in a good position to either receive
the credits or defend itself from critics. Whitworth advised
that the loan will be repaid over time. The concern of whether
the City can afford the additional contribution has been vetted
out with the Finance Director.
Director of Finance William Fox explained that funds budgeted
for fiscal year 2014-2015 will be used. The City will be
compensated on a year-to-year basis. He explained that certain
events, such as refinancing, will trigger a first return on
funds. The City Attorney's Department and staff considered and
incorporated every possibility to expedite repayment in the loan
agreement.
In addition, Wilson noted that the developer is required to
apply for other eligible funding sources to offset the loan.
In response to Councilmember Ybarra's concerns if the City does
not receive the tax credits, Wilson advised that the next
application round for said credits is March 2014. The project
will be delayed until this date.
In response to Councilmember Ybarra's inquiry on the feasibility
of increasing the total loan to $1.S million to ensure the
receipt of the tax credits, Fox advised that the more money the
City contributes the higher its score will be. Fox opined that
it would be best to contribute an additional $550,000 as it
would place the City in second place based on a spreadsheet
analysis of the known existing projects and factors.
Wilson advised that E1 Monte took action the previous night on
their housing project, and that the recommendation to increase
the loan is a reaction to their actions.
Both Mayor McCormick and Councilmember Ybarra opined that the
$1.2 million in total recommended by staff is too low, and the
City needs to be more aggressive. They recommend a total of
$1.5 million.
Fox explained that staff's recommendation should place the City
in a second place position.
Whitworth further added that in contemplating increasing the
amount from $1.2 to $1.5 million, the City would still not have
the number one position.
Councilmember Ybarra inquired on comfort level of the
recommendation.
In response, Chris Maffris of Meta Housing Corporation advised
that although it is hard to determine, factors influencing El
Monte's score have all been considered. He advised that the
City of El Monte will most likely not receive a score higher
than 46.
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Special City Council Meeting Minutes
July 3, 2013
McCormick and Ybarra expressed the importance of the project and
reasoned to add the extra $300,000 to the additional $550,000 to
make it a contribution of $850,000 to secure the project.
Interim City Clerk Dana Reed clarified that this would mean that
an additional $300,000 would not be available for Community
Benefit Fund projects.
After vetting through the options, Fox explained that by adding
the extra $300,000 to the additional suggested amount of
$550,000 it would bring the City's score to 49.663. The City
would still be less than the Pasadena project but in good
contention, making it difficult for other projects to surpass.
Good surveillance of other projects has been conducted.
Wilson noted that there may be a potential housing project in
Gardena, but that little information is available.
It was moved by Davis and seconded by Ybarra to approve
Resolution No. 2013-70 with amendments of additional funds of
$300,000 to the original suggested amount of $550,000 bringing
it to a total amount of $850,000 dollars. Motion carried, 5-0.
At 8:25 a.m., it was moved by Maisano and seconded by Martinez,
to adjourn the meeting in memory of the 19 firefighters who lost
their lives in the Arizona Fire.
ST:
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rim City Clerk
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W. Michael McCormick
Mayor
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