This facility is disabled accessible.  Auxiliary aids and services are available for individuals with speech, vision or hearing impairments (48 hour notice is required).  Please contact the ADA Coordinator at (818) 238-5021 voice or (818) 238-5035 TDD with questions or concerns.

 

                                                                      6:30 P.M.

 

 

INVOCATION:           Pastor Paul Clairville, Westminster Presbyterian Church.

The Courts have concluded that sectarian prayer as part of City Council meetings is not permitted under the Constitution.

 

FLAG SALUTE:

 

ROLL CALL:

 

JOINT MEETINGS WITH THE CITY COUNCIL:

 

1. PROFESSIONAL SERVICES AGREEMENT FOR DEVELOPMENT IMPACT FEE NEXUS STUDY:

 

At the December 17, 2002 Council meeting, during the annual review of the City�s Development Impact Fee Schedule, staff indicated to Council that a nexus study would be conducted to review and update the existing fees.  In February 2003, an in-house committee was formed with representatives from the various affected City departments, including: Community Development, Police, Fire, Library Services, Park, Recreation and Community Services, the City Attorney�s office, Information Technology, and Public Works.  The Committee met on several occasions to review the existing fees, evaluate the methodology used to develop fees during the first nexus study, conduct a preliminary assessment of the future needs of the City, and discuss options for proceeding with the study.

 

Generally speaking, Development Impact Fees allow cities to collect funds from new development projects for infrastructure and facilities relating to the impact of new development on those facilities.  In order to impose Development Impact Fees, a reasonable connection or nexus must exist between the new development and the improvement of a facility for which the fees are to be assessed.  In addition, it must also be determined that the projected improvements to be financed by the impact fees will benefit those required to pay them, and this fee must be proportionate to the amount of benefit received.

  

Given the very specialized nature of nexus studies, staff feels that the best method for facilitating the development of new fees would be to retain the services of a qualified consultant, one that is familiar with the intricacies of impact fees, the methodologies for calculating them, the applicable State law such as the Mitigation Fee Act (Assembly Bill 1600) that affects impact fees, and the procedures for implementing them.

 

In June 2003, a Request for Proposals (RFP) was sent to ten consulting firms.  Of the ten requests that were sent, the City received three proposals, three notifications of non-submittal, with no response from the remaining four firms.  Proposals were received from: Maximus; Gruen Gruen & Associates (GG&A); and Economic & Planning Systems, Inc. (EPS), and are summarized below. 

 

The EPS approach involves reviewing City data such as the Capital Improvement Program (CIP), General Plan, the existing fee structure, demographic information, and land use projections.  These documents will be used to develop land use assumptions and growth projections, future facility requirements and the accompanying cost estimates, the allocation methodology of the fees, and their economic impact.  Based on these findings, a new fee structure will be formed.  Lastly, EPS will prepare draft and final reports for review and final approval.

 

The approach outlined by Maximus involves a comprehensive review and analysis of City data.  Based on this analysis, Maximus will organize the development data and determine the needs and service levels of the community.  Future facilities and their costs will also be identified.  From this analysis, the new impact fee structure will be derived.  Lastly, Maximus will prepare draft and final reports, will aid staff in the implementation of the fees, and present the report to the Council, key stakeholders, and the public.

 

GG&A proposes to conduct a comprehensive review of the existing fee structure, research applicable State law, analyze available City data, and review the existing fee calculation methodology to develop recommendations for updating the existing fees.  A customized model that calculates updated impact fees will be developed, the appropriate metrics/indicators for model inputs will be tested, then crossed with the City�s growth forecasts, to arrive at the new fees.    GG&A plans to study impact fees imposed by neighboring communities, develop a credit system to avoid potential double payments, and research and recommend alternate funding sources. After preparing a draft report and presenting the draft study to Council, GG&A will modify and refine the report, and lastly, submit the final document.

 

Each of the proposals received demonstrated a great deal of expertise with, and interest in, this type of project.  The tasks outlined by each of the proposals generally met the intent of staff�s request.  However, after considerable review by the Nexus Study Committee and further interviews with EPS and Maximus, staff feels that EPS is the strongest candidate for the study.  Their proposal includes analyzing all types of community facility, utility, and public services fees common to other cities.  EPS intends to involve the public and key stakeholders in the process and has expressed flexibility and interest in pursuing fees such as technology development, or Geographic Information Systems (GIS) fees relatively uncommon to this process.  The firm has experience in conducting nexus studies and will determine the appropriate level of each fee by conducting an analysis of the future needs of public facilities based on growth projections, testing these fees to ensure that the market will support them, and ensuring that Burbank will remain competitive in attracting desired development.  From the soundness of their approach and the level of service that they would provide, to their background in economics, land use, local government and public infrastructure financing, for a cost not to exceed $50,000, staff feels that an agreement with EPS should be pursued for this study.

 

Based on the proposals received from the RFP process, the cost per study ranged from $50,000 to $112,955.  Should the Council support staff�s recommendation, the proposed resolution would authorize the City Manager to enter into a Professional Services Agreement  with EPS for an amount of up to $50,000, recommended to be funded from the Golden State Redevelopment Project Area, Unappropriated Fund Balance.  Any appropriation from the General Fund Unappropriated Fund Balance would have a negative impact on the Public Employees Retirement System and budget stabilization funds.  By utilizing Redevelopment Agency (Agency) funds, the General Fund will not be impacted.  In addition, the Agency would benefit from the study as it will provide additional funding sources for costs related to infrastructure improvements that are part of future redevelopment projects.

 

Recommendation:

 

1.         Adoption of proposed Redevelopment Agency resolution entitled:

            A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING A COOPERATION

            AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND THE CITY OF BURBANK AND AMENDING THE

            FISCAL YEAR 2003-2004 ANNUAL BUDGET IN THE AMOUNT OF $50,000 FOR THE PURPOSE OF FUNDING A

            NEXUS FEE STUDY.

 

2.        Adoption of proposed Council resolution entitled:

           A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING A COOPERATION AGREEMENT

           BETWEEN THE CITY OF BURBANK AND THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK, AND A

           PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF BURBANK AND ECONOMIC & PLANNING

           SYSTEMS, INC.

 

 

    2.   SECOND AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT WITH THE UNITED CEREBRAL PALSY FOUNDATION FOR AN INDEPENDENT LIVING FACILITY AT 600 SOUTH SAN FERNANDO BOULEVARD:

 

Staff is requesting that the Redevelopment Agency Board (Agency) and Council consider approval of the Second Amendment to the Disposition and Development Agreement (DDA) with the United Cerebral Palsy/Spastic Children�s Foundation of

Los Angeles and Ventura Counties (UCP). This would amend the Schedule of Performance and increase funding by the Agency to allow UCP to acquire and develop an independent living facility for very low-income persons with disabilities (Project) at the Agency-owned site at 600 South San Fernando Boulevard.  This action would amend the City�s Fiscal Year (FY) 2003-04 Consolidated Plan Annual Update.

 

This Project responds to an unmet housing need in the community, one that is most pressing to a specific segment of the population.  According to the 2000 Census, approximately 17 percent (17,200 persons) of Burbank residents have a disability.  Within this special needs population, the City�s 2003-2008 Consolidated Plan further finds that, �Many persons with disabilities have lower incomes since the disability may affect their ability to work.  Thus, persons with disabilities have a greater need for affordable housing as well as supportive services.�  It is this community need that makes this project so compelling; it addresses the affordable housing needs of very low-income disabled persons and provides an array of supportive services to those with developmental or physical disabilities.

 

Further, the proposed second amendment is consistent with the City and Agency affordable housing strategy outlined at the July 29, 2003 Study Session, as well as the recommendation by the Blue Ribbon Task Force on Affordable Housing (Task Force) regarding the importance of promoting affordable and accessible housing to special needs populations.  The housing strategy specifically quotes a Task Force finding by stating that, �the City is looking to encourage new construction of special needs housing through Agency financial assistance and site assembly, and integration of community-serving uses with housing (e.g., the Burbank Accessible Apartments project) that also provides needed support services to allow special needs populations to live independently.� The proposed amendment follows a protracted history associated with development of an independent living facility at 600 South San Fernando Boulevard, a site that presaged a recommendation posed by the Task Force encouraging residential development along corridors.  

 

On May 9, 2000, the Agency and Council approved entitlements and executed a DDA for the construction of a proposed 18-unit independent living facility restricted to very low-income (annual household income not exceeding 50 percent of median income for Los Angeles County), disabled households. The Project was designed as two and three-story multifamily apartment buildings comprised of four two-bedroom (inclusive of one manager�s unit) and 14 one-bedroom units.  Prior to Project approval, the Agency acquired a 0.4-acre development site at 600 South San Fernando Boulevard.  The Project was competitively positioned to receive an allocation during FY-2000-01 United States Housing and Urban Development (HUD) funding cycle for Federal Section 811 funds.  Although UCP was not awarded the anticipated HUD funds, it was concluded that the Section 811 allocation remained as the preferred way of financing construction of the Project and subsidizing rents.  Under the Section 811 Program, HUD advances funds to nonprofit organizations to develop and construct rental housing with supportive services (typically off-site) for very low-income persons with disabilities achieved through a double subsidy from HUD.  From a development standpoint, the nonprofit sponsor receives a capital advance to finance new construction of rental housing, funds that are interest-free and not repaid if the housing remains available to these special needs households for at least 40 years.  In addition, the Program provides annual operating subsidies to bridge the gap between the rental income and a project�s operating expenses.  In doing so, this allows UCP to accept very low-income households without affecting the financial feasibility of a project.

 

Accordingly, on May 8, 2001, the Council and Agency approved the First Amendment to the DDA specifically authorizing UCP to apply for another round of Section 811 funding by submitting a new (second) application and revised  Schedule of Performance in conformance with the timeline imposed by Section 811 funds application guidelines. UCP subsequently submitted a second application for Section 811 funds for the Burbank Accessible Apartments Project and, after a one-year delay, was notified by HUD in February 2002 that the Project was selected for a $2.15 million allocation.  UCP notified the Agency in early October 2002 that during preparation of the final HUD budget documents (Final Commitment Application, HUD Form 923013), a shortfall of $151,544 was discovered that would delay start-up of the Project.

 

Absent further Agency financial participation, UCP and Agency staff have, over the ensuing months, continued reviewing options to bridge the funding gap.  As a starting point, UCP�s Attorney has indicated receipt of notification from HUD that the Project�s fund reservation of $2.14 million has been extended through October 30, 2003, and that UCP has been exploring additional funding sources for the Project as well as reviewing project soft and hard costs to see if there are any further savings that may be recognized.  An additional $100,000 in new funding sources has been secured from an Ahmundson Foundation grant and UCP has committed $250,000 of its funds to the Project in addition to applying for an Affordable Housing Program (AHP) grant from the Federal Reserve Bank. However, the AHP program is competitive and there is no assurance the Project will be funded.  

 

In addition to these new sources, the DDA stipulates that the Agency is to convey the Site, previously purchased with $560,000 in Agency Low Moderate-Income Housing Funds, at no cost to UCP, which constitutes the reuse value.  In turn, the City will provide up to $750,000 in HOME Investment Partnership Program funds to defray assemblage (e.g., relocation payments, abatement and demolition) and UCP�s construction costs, making the total warranted assistance $1,310,000.  Further more, certain construction items have been value engineered in an effort to reduce costs, while ensuring that any alterations remain in substantial conformance to the approved plans, and the choice of building materials, building and the Agency-approved landscape plan remains intact.

 

While the Agency could terminate the DDA because the Developer is in default for not closing escrow by the outside date, the need for special housing warrants providing UCP with another time extension.  UCP was selected because of its unique qualifications in developing and operating disabled housing primarily financed with Section 811 funds that would allow the Project to be affordable to very low-income disabled households. 

 

Recommendation:

 

            1.        Adoption of proposed Redevelopment Agency resolution entitled:

                       A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING THE SECOND

                       AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE AGENCY, THE CITY OF

                       BURBANK AND UNITED CEREBRAL PALSY/SPASTIC CHILDREN�S FOUNDATION OF LOS ANGELES AND

                       VENTURA COUNTIES.

 

              2.      Adoption of proposed Council resolution entitled:

          A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING THE SECOND AMENDMENT TO

          DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF

          BURBANK, THE CITY OF BURBANK AND UNITED CEREBRAL PALSY/SPASTIC CHILDREN�S FOUNDATION OF LOS

          ANGELES AND VENTURA COUNTIES.

 

 

CONSENT CALENDAR:  (Items 3 and 4)

 

The following items may be enacted by one motion.  There will be no separate discussion on these items unless a Commissioner so requests, in which event the item will be removed from the consent calendar and considered in its normal sequence on the agenda. A roll call vote is required for the consent calendar.

 

         3.      MINUTES:

 

            Approval of minutes for the regular meetings of May 27, June 3, June 10, June 17, June 24, July 15, July 22, July 29 and August 19, 2003.

 

            Recommendation:

 

            Approve as submitted.

 

 

           4.       REVISION TO THE SECOND SUPPLEMENTAL INDENTURE OF THE TRUST RELATING TO THE ISSUANCE OF UP TO $23 MILLION IN BURBANK PUBLIC FINANCING AUTHORITY, REVENUE BONDS 2003 SERIES C (CITY CENTRE REDEVELOPMENT PROJECT):

 

The purpose of this report is to request approval of a revision to the Second Supplemental Indenture of Trust related to the issuance of up to $23 million in Burbank Public Financing Authority(Authority), Revenue Bonds 2003 Series C (City Centre Redevelopment Project), previously approved by the Redevelopment Agency (Agency), relating to the issuance of up to $23 million in Burbank Public Financing Authority, Revenue Bonds 2003 Series C (City Centre Redevelopment Project) adding a provision indemnifying Financial Security Assurance (FSA), which is a standard requirement in connection with amendments that do not relate to the credit risk assumed by FSA as insurer of bonds such as the Agency Bonds, as defined hereafter.   

 

On August 19, 2003, the Agency and the Authority, authorized the issuance of up to $23 million in Burbank Public Financing Authority, Revenue Bonds 2003 Series C (City Centre Redevelopment Project) (Authority Bonds), the proceeds of which will be used to purchase, in lieu of redemption, the Agency�s 1993 City Centre Bonds (Agency Bonds). Also on August 19, 2003, the Agency authorized the execution of various documents required in connection with the issuance of the Authority Bonds and the purchase in lieu of redemption of the Agency Bonds, including a second supplemental indenture, by and between the Agency and the Trustee, amending and supplementing the Agency Indenture (the Second Supplemental Indenture). Subsequent to Agency and the Authority approval, the Agency requested the consent of FSA to the amendment of the Agency Indenture by the Second Supplemental Indenture of Trust, which consent is required by the terms of the Agency Indenture. FSA is the bond insurer of the Agency Bonds. FSA requires indemnification, which is standard practice for that company in connection with amendments that do not relate to the credit risk assumed by FSA as insurer of bonds such as the Agency Bonds. The Agency has not encountered this requirement in the past from other bond insurers, however, this is standard practice by FSA.

 

The issuance of the Authority Bonds and the purchase in lieu of redemption of the Agency Bonds will only be completed if sufficient savings are generated. To maximize the potential savings it is critical to avoid the cost of obtaining insurance on the Authority Bonds. As FSA already insures the Agency Bonds which will secure the Authority Bonds, Standard & Poor�s has agreed to provide an �AAA� rating on the Authority Bonds without the need to purchase additional bond insurance. As an alternative to providing the requested indemnification language to FSA, additional bond insurance could be purchased for the Authority Bonds. Purchasing additional bond insurance would increase the cost of issuance by a minimum of $360,000 significantly reducing the savings of the refunding.

 

The previously adopted resolutions granted staff the ability to make non-substantive changes to the bond documents. As the request to provide FSA with an indemnity did not arise until after the August 19, 2003 meeting, the need for additional Agency Board approval for this revision to the Second Supplemental Indenture is necessary. Bond Counsel, Quint & Thimmig LLP, has prepared the following language to be inserted within the Second Supplemental Indenture of Trust which provides the required indemnification:

 

The Agency covenants and agrees to indemnify and save the Bond Insurer and its officers, directors, agents and employees, harmless against all claims, losses, costs, expenses, liability and damages, including legal fees and expenses (including allocated costs of internal counsel), which the Bond Insurer may incur arising out of or in connection with any purchase in lieu of redemption of the 1993 Series A Bonds accomplished by the Agency, including the costs and expenses of defending against any claim of liability, suit, action or proceeding. Bond Counsel has opined that this revision to the Second Supplemental Indenture does not materially adversely affect the interests of the Owners of the Bonds, and therefore recommends adopting the aforementioned language. The amendment to the Second Supplemental Indenture of Trust will avoid the purchase of additional bond issuance costs which represents a minimum of $360,000.

 

Recommendation:

 

Adoption of proposed resolution entitled:

RESOLUTION APPROVING, AND AUTHORIZING AND DIRECTING EXECUTION OF A SECOND SUPPLEMENTAL INDENTURE OF TRUST RELATING TO THE REFINANCING OF REDEVELOPMENT ACTIVITIES WITHIN THE CITY CENTRE REDEVELOPMENT PROJECT AREA AND AUTHORIZING AND DIRECTING ACTIONS WITH RESPECT THERETO.

 

END OF CONSENT CALENDAR

 

 

REPORT TO AGENCY:

 

         5.       OFFER OF PREPAYMENT FOR THE PARTICIPANT REPAYMENT NOTE BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK AND STRATEGIC HOTEL CAPITAL, INCORPORATED (HILTON HOTEL):   

 

The purpose of this report is to present a proposal for prepayment of an outstanding note held by Strategic Hotel Capital pursuant to the Fourth Implementation Agreement (Agreement) dated September 1988 (later amended in August 1989, and May 1991), by and between the Redevelopment Agency (Agency) of the City of Burbank and Strategic Hotel Capital as assigned (Hilton Hotel); and to receive direction from the Agency Board on said offer.

 

On June 13, 1977, the Agency entered into a Disposition and Development Agreement (DDA) with the Center at Burbank Airport, a general partnership company.  The partnership was formed to develop a hotel and office project located on a 7.82 acre parcel at the southeast corner of Hollywood Way and Thornton Avenue in the Golden State Redevelopment Project Area.

 

The project initially was to include a minimum of 200 hotel rooms and 25,000 square feet (sf) of office space.  The original agreement was amended to require development of a minimum of 250 hotel rooms and 50,000 sf of office space. The project was completed in late 1980, and has since been operating as a Hilton Hotel (Hotel). The Hotel has been successful, and the City and Agency have benefited from the development through additional Transient Occupancy Tax (TOT), Transient Parking Tax, and Property Tax Increment (TI) generated by the project.