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HomeMy WebLinkAboutMinutes - City Council - unsigned - 1992-01-20 City Council, Adjourned Regular Meeting Council Chambers Redding, California January 20, 1992 6:43 p.m. The meeting was called to order by Mayor Dahl with the following Council Members present: Arness, Buffum, Fulton, Moss and Dahl. Also present were City Manager Christofferson, Assistant City Manager McMurry, City Attorney Hays, Director of Public Works Galusha, Director of Planning and Community Development Perry, Director of Finance Downing, Assistant City Engineer Aasen, Housing Manager Maurer, Associate Planner Morgon, Recreation Superintendent Sherer, Transportation Coordinator Duryee, Public Information Officer Bachman, City Clerk Strohmayer, and Secretary to the City Council Rudolph. REDDING SOFTBALL AND SPORTS COMPLEX - Award of Bid (P-050-600-200 & B-050-020) Assistant City Manager McMurry related that City has reached a point in the process where a decision needs to be made with regard to proceeding to award a bid and construct the Sports Complex. He stated that the low bid currently before Council of $3,610,858, which is $500,000 below the engineer's estimate, is very good. The alternative bid package, which would have constructed about one-third of the total project, actually came in at $2,300,000, or about two- third's of the cost of the entire project, and would not seem to be a cost effective way to proceed. Mr. McMurry explained that the problem regarding the issuance of a permit by the Board of Supervisors for the use, not the construction, of a sewage disposal facility at the site still remains unsolved. Alternatives to resolve this issue include legal action seeking to compel the issuance of the permit; utilization of portable facilities not requiring the permit issuance; or annexing the area under our normal annexation procedures or through the detached annexation authority provided in State law, which would render the permit issue moot. Mr. McMurry related that the operating proforma prepared by J. C. Draggoo and Associates indicates, at present and proposed levels of activity, the Sports Complex should pay for itself and perhaps return a small surplus to the City. Therefore, based upon these projections, there should not be a negative operating and maintenance cost impact on the General Fund. Mr. McMurry explained that Council has the following options: (1) Not awarding the bid at the present time and directing staff to pursue an extension of the bid with the low bidder. The original low bid is good through today, and the Public Works Department has made contact with the contractor who has indicated a willingness to consider an additional extension, but would need to discuss it with his subcontractors. In addition, there is a negotiated wage increase which goes into effect in June for carpenters, which he anticipates will have a slight impact on the bid prices; (2) Not to pursue the project any further, which would mean the City would be unable to meet the strong demand for recreational and tournament softball that it currently experiences; and (3) Award the bid, indicate the preferred financing alternative and direct staff to pursue the alternative sewage disposal arrangements. In response to Council Member Fulton, Finance Director Downing explained that the following financing options are available: (1) Apply the $1,200,000 available in the Park Development Account, as of June 30th, towards the project, with the remaining balance of $3,200,000 to be financed. A 30 year scenario would result in annual debt payments of $257,600. She related that the City, on an average, collects $253,000 in park development monies, thereby requiring any difference to come from the general fund; and (2) Finance entire $4,600,000 and use park development monies, $1,200,000, to cover any difference between park development monies collected each fiscal year and actual debt service payments of approximately $373,200. In response to Council Member Arness, Ms. Downing related that the park development fees are based upon the size of the structure. Planning and Community Development Perry stated that these fees have not changed since 1978. 26 01/20/92 Council Member Arness related that the project is timely and needed and that he favors financing the least amount possible, $3,200,000, as the payments are more manageable. Council Member Buffum explained that she has been involved with the Sports Complex for the last 6 or 7 years and it is a high community priority project which she believes in and supports. However, due to the present financial condition of the City, she opined that she would be derelict in her duties to agree to go into debt for some $4,000,000. She related that her position might be different had it been possible to have the complex completed in time for the National Softball Tournament; however, she indicated that she attended the tournament in 1989, and while not perfect, it worked. She stated that now is not the time for the City to take on additional debt when it is looking at deficits in the General Fund and related that it is bad policy to borrow from the water utility fund to pay for any part of the project. She related that the City must ensure that it can continue to provide basic services, such as police and fire protection. She explained that even though her heart is with the individuals who would benefit from the project, at this point in time, she does not feel it would be prudent to proceed. Council Member Moss stated, that based on a worst case scenario, he sees the impact on the General Fund being substantially less than what the City has been putting into the Downtown Mall for some 20 years. He related that he was on the Planning Commission when the site was chosen and to not press forward at the present time would be the death of the project. He also explained that the City is likely to encounter the same problems today as it would in two or three years if the project was reactivated. He foresees the maximum annual exposure to the General Fund being approximately $150,000. He opined that the City can afford this important project and that he would like to see it proceed, incurring as little debt as possible. Council Member Fulton explained that it is not the appropriate time to be taking on additional obligations when the City is considering possible layoffs and cut backs in necessary services. He stated that there is no question about the need; however, he opined that it would be a mistake to proceed with the project at the present time. Mayor Dahl stated it is an excellent project, however, he sees problems in three areas: (1) Potential litigation; (2) Shasta County's refusal to issue a sewer permit; and (3) Proposed funding mechanism. He stated that the bottom line is that the City does not have funds to pay for the project without incurring debt. He acknowledged that this has been a priority project; however, he concurred with Council Members Buffum and Fulton in not proceeding with the project at the present time. Council Member Buffum suggested that while the majority of Council cannot in good conscience consent to borrowing some $4,000,000, possibly the $1,200,000 in park development fees can be used to develop the Enterprise Park. Council Member Moss explained that the City is currently paying off bonds which were tendered some 15 to 25 years ago. He stated that this is a long term project and Council needs to evaluate whether or not it will be a priority in the next 30 years and that its decision should not be based on the City's current financial condition. He related that there is no doubt that the City will continue to grow and it will be several years before the General Fund has any exposure. MOTION: Made by Council Member Buffum, seconded by Council Member Fulton, to not proceed with the Redding Softball and Sports Complex at the present time. Voting was as follows: Ayes: Council Members - Buffum, Fulton and Dahl Noes: Council Members - Arness and Moss Absent: Council Members - None 27 01/20/92 ADJOURNMENT There being no further business, at the hour of 7:12 p.m., Mayor Dahl declared the meeting adjourned. APPROVED: ________________________________ Mayor ATTEST: ________________________________ City Clerk