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'cfh OF SAN _RNARd;Ho - REQIDsT FOR COUNCIL A<<910N
STAFF REPORT
At the March 31, 1988 meeting of
Place Commission, the issue of
schedule for the parking District
was discussed.
the Central city Parking
the accelerated repayment
secondary assessment roll
As background to this issue, it is the Commission's
understanding that in 1979 the City loaned the Parking
District approximately $800,000 to fund an expansion project
which created 383 additional parking spaces in the downtown
parking district lots. The loan was to be repaid through
an additional property assessment of approximately 30t of.the
1978 primary assessment roll which amounted to $30,300
annually. This assessment has been collected since 1979.
The City Council at their November 16,1987 meeting, revised
the repayment schedule in order to retire the outstanding
portion of the loan in seven years. They directed that the
outstanding balance be retired through an increase in the
secondary assessment and that an interest rate of 9t be
charged on the unpaid balance. They further directed that
all the interest income generated on the unpaid balance be
reserved in a capital improvement development account which
would be reserved to fund future parking needs of the
downtown community.
The net impact of the Council Action to repay the loan in the
7-year period will be an increase in the secondary assessment
for all owners of real property in the parking district.
Although the exact amount of the increase will not be known
until July 1988, it is estimated at approximately three times
the 1986 rate. The increase in the assessment only applies
to the secondary assessment and will be reflected on the 88-
89 tax bills.
Certain members of the Commission as well as other owners of
real property in the parking district have expressed concern
over the accelerated repayment schedule. In response to this
concern, we respectfully request that the Mayor and Council
set a public hearing to reconsider this issue.
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E. GEORGE WEBSTER, Chairman
Central City Parking Place Commission
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CI~ OF SAN BIERNARDGO -
RI!QUQsT FOR COUNCIL ABION
Dept: FINANCE
Dats: OCTOBER 14, 1987
Subject: Amounts due to the General Fund from the
Parking District Fund and amounts to
be provided for future parking needs
within the Parking District
From: WARREN A. KNUDSON
Synopsis of Previous Councilllction:
Various hearings establishing Parking District and setting annual assessments.
Recommended motion:
Adopt Resolution
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Signature
Contact penon: WARREN KNUDSON AND ROGER HARDGRAVE
Phone: 5242 AND 5025
Supportln, data attached:
YES
Ward:
1
FUNDING REQUIREMENTS:
Amount:
Sourca: (ACCT. NO.)
(ACCT. DESCRIPTION) PARKING DISTRICT
Finance:
Council Not..:
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CITY OF SAN BERNARDINO -
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II.QU.ST FOR COUNCIL ACTION
STAFF REPORT
Staff has presented reports to the Ways and Means Committee addressing needs
and funding of the Parking District. On October 12 a report to the Committee
identified amounts due to the General Fund from the Parking District as a
result of General Fund monies advanced for Parking District expansion.
The amount due to the General Fund is $731.128.89. The amount of $314.998.66
has been assessed to cover costs of the expansion and is available in the
Parking District Fund to reduce the amount owed to the General Fund. The
estimated Parking District Fund Balance at June 30, 1987, is $410,541.
As was addressed in the report to the Ways and Means Committee, the amounts
advanced for Parking District expansion in 1979 and 1980 were intended to be
repaid by either a bank loan or the issuance of bonds. Neither option turned
out to be feasible at the time.
The Ways and Means Committee made the following recommendations which are
embodied in the attached resolution:
1. Transfer the amount of $314,998.66 from the Parking District Fund to the
General Fund to be applied to the amount owed to the General Fund by the
Parking District Fund. The amount originally owed is $731,129.
2. Direct that any amounts assessed from the "secondary roll" for Parking
District expansion and the $8.100 per year that was initially for the purpose
of leasing parking from the Masonic Temple be annually applied toward the
amount owed to the General Fund by the Parking District Fund.
3. Direct that the remaining amount owed to the General Fund after the transfer
directed in item #1 be retired in 7 years by means of an increase in the
"secondary roll" for parking expansion and that an interest rate of 9%
be charged on the unpaid balance.
4. Direct that the interest desired from #3 and any unobligated income from
leases within the Parking District reserved in a capital improvement development
account within the Parking District Fund for future parking needs.
The balance owed to the General Fund after the transfer of $314.998.66 would
be $416,131. To retire that amount in 7 years, the assessment for principal
would be approximately $59,447, compared to the present $30.300. Interest
charges on the unpaid balance at 9% would be approximately $37,451 for the
first year.
Reason For Placement On Supplemental Agenda
To present to the Mayor and Common Council the recommendation of the Ways and
Means Committee which was held on October 12, 1987.
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C I T Y"" 0 F q A N B E R PA R
INTEROFFICE MEMORANDUM
8710-106
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TO: WAYS AND MEANS COMMITTEE
FROM: WARREN A. KNUDSON. DIRECTOR OF FINANCE
SUBJECT: PARKING DISTRICT FINANCING
DATE:
COPIES:
OCTOBER 7. 1987
(7220)
CITY ADMINISTRATOR, MAYOR
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This Is In response to a request for a report on the
financing of the parking district expansion. funds paid out
of the General Fund by the City IS I result of this
explnslon. Ind alternatives to retiring the debt.
BACKGROUND.
In 1977 Plrklng District Lease Revenue Bonds In the Imount of
SI.950.000 were Issued for Icqulsltlon. demolition. and
construction of off-site plrklng spices. The revenue from
Parking District assessments Is used to mike lelse plyments
to the Agency.
In 1979 the City and the Plrklng Pllce Commission determined
thlt explnslon of the District WIS necessary. The cost WIS
estlmlted It SI.2 mil I Ion Ind review of documentltlon
Indlcltes thlt the cost was Intended to be covered Inltlllly
by I commerclll loan Ind replld mainly from Increlses In
Ilsess.ents to plrcels within the District.
The Redevelopment Agency was authorized to Iccept funds
advlnced to It by the City for District expanllon with the
Intent that the monlel .ould be repaid from a par.anent loan.
At a liter date (December 19.1) consideration .al given to
funding the COltl of the DI.trlct Expansion by melnl of a
bond 'Isue.
Neither the co..erclal lo.n nor the bond Issue .pproach ...
fe.slble .t the tl.e and neither ca.e to fruition.
8eglnnlng In 1979 . RSecond.ry RollR ..s .dded to the
.Prlmary Roll. ... In pllce to service the P.rklng District
Lease Revenue Bonds In the .mount of SI.950.000 which were
Issued In 1977. The .Secondary Roll. .as based upon 30. of
the existing assessment. and the rol I was set at S30.300
annually. Several documents state that the purpose of the
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INTEROFFICE MEMORANDUM: 8710-106
PARKING DISTRICT FINANCING
October 7, 1987
Page 3
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the CIty of San BernardIno .Ith a note that states In part:
"The funds .ere transferred to the Agency as a vehIcle
for the purchasing of the propertIes end the construction
of facilities. Repayment to the General Fund .as anticI-
pated In the form of long-term lease revenue financing,
repaid by Ad Valorem assessments to the parking distrIct.
The financing has yet to be accomplished. The a.ount of
$652,075 Is recorded as an advance to the Agency. The
advance bears no Interest."
Any monies paid to the City's General Fund to reduce the
amount of the "loan" or "advance" .111 be eddltlonel cash to
the General Fund but .111 not resu I tin ne. revenue for
budget purposes.
AVAILABLE FOR DEBT REDUCTION
I.
~"JlJIary Ro I I
$30,000 has been
ment according
$242,098.66.
The secondary roll of epproxlmately
essessed since 1979. The total assess-
to the Real Property section has been
2. Property Acqulsltfon - In 1978 an additional amount of
$8,100 .as authorized to add to the assess.ent rol I. The
amount .as classified as property acquisition costs end
was the a.ount paid for the lease of parking spaces from
the Masonic Temple. The Parking Place Co..lsslon decided
to continue the assessment and It re.alns In place.
The total of these amounts assessed Is $314,998.66
through June 30, 1987.
3. ParkIng DI.trfct Fund Balance - At June 30. 1987, the
Parking District Fund has an estl.ated fund balance of
$410.'41. This represents an accu.ulatlon of the above
assess.ents which have not been paid out as well as
approxl.ately $9'.000 re.ultlng fro. prior year
actlvltle. (higher revenue. or lower expenditure. than
anticipated).
AlTERNATIVES
The funds are available In the Parking District Fund to
reduce the debt to the General Fund by 5314.998.66. which Is
the amount that has been assessed on the "Secondary ROll" and
tha "Property Acquisition" rolls. Documentation that has
been prepared both by the City and RDA In prior years
Indicates that the additional assessments were for the
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INTEROFFICE MEMORANDUM: 8710-106
PARKING DISTRICT FINANCING
October 7, 1987
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purpo$e of payIng for ParkIng DIstrIct expansIon, T~e monIes
avaIlable from the two assessments would allow for reduction
of the amount due to the General Fund. FormalIzatIon of a
pol Icy to apply the amount of the desIgnated assessments
annually would provIde for annual debt servIce and elImInate
the uncertaInty that has existed.
RECOMMENDATIONS
1. Reduce the amount due to the General Fund from the
balance avaIlable from the Parking DIstrIct Fund.
2. FormalIze through actIon of the Mayor and Common CouncIl
the amounts of the assessments to be used annuelly to pay
back the loan to the General Fund.
3.
EstablIsh a new
General Fund and
leased parkIng.
4. Establish a fund for future parkIng dIstrict needs.
Interest rate
a policy on
on the amount due the
the use of monIes from
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WARREN A. KNUDSON
DIrector Of FInance
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2 RESOLUTION OF THE CITY OF SAN BERNARDINO REGARDING
REPAYMENT OF AMOUNTS DUE TO THE GENERAL FUND FROM THE PARKING
3 DISTRICT FOND, ESTABLISHING AN ANNUAL PAYBACK ARRANGEMENT
INCLUDING INTEREST, AND ESTABLISHING A FUND FOR FUTURE PARKING
4 DISTRICT NEEDS.
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RESOLUTION NO.
87-403
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION 1.
The Mayor and Common Council of the City of San
Bernardino hereby order and direct that the amount of $314,998.66
be transferred from the parking District Fund to the General Fund
to be applied to the amount owed to the General Fund by the
11 Parking District Fund which amount originally owed is
12 $731,129.00.
13 SECTION 2. The Mayor and Common Council of the City of San
14 Bernardino do hereby direct that any amounts assessed from the
15 .secondary roll. for parking district expansion, and the
16 $8,100.00 per year that was initially established for the purpose
17 of leasing parking from the Masonic Temple be annually applied
18 toward the amount owed to the General Fund by the Parking
19 District Fund.
20 SECTION 3. The Mayor and Common Council of the City of San
21 Bernardino do hereby direct that the remaining amount owed to the
22 General Fund after the transfer directed in Section 1 above, be
23 retired in seven years by means of an increase in the .secondary
24 roll. for parking expansion, and that an interest rate of 9% per
25 annum be charged on the unpaid balance.
26 SECTION 4. The Mayor and Common Council of the City of San
27 Bernardino do hereby direct that the interest received from
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10-15-87
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1 Section 3 above and any unobligated income from leases within the
2 Parking District be reserved in a capital improvement development
3 account within the Parking District Fund for future parking
4 needs.
5 I HEREBY CERTIFY that the foregoing resolution was duly
6 adopted by the Mayor and Common Council of the City of San.
7 Bernardino at a regular meeting thereof,
8 held on the 16th day of November , 1987, by the
9 following vote, to wit:
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AYES:
Council Members
Estrada, Reilly. Flores.
Maudsley, Minor, Miller
NAYS:
ABSENT:
None
Council Member Pope-Ludlam
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/' City Clerk
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18
19
20
Approved as to form
21 and legal content:
22 ~4rr .,V~_~
23 C Atto~-
The foregoing resolution is hereby approved this
IJli. day
of
November
, 1j87.
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Mayor 0
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10-15-87
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VANIB.GROUPOFCOMPANIES,INC. >c" ''''/ ..
P.O. Box 310~ Vanir Tower, City Hall Plaza, San Bernardino, Ca1if~ia 92402 - i..
Telephone (714) 884-9477
Real Estate Industries . Communications . Entertainment
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April 28, 19B8
Mr. George Webster
Chairman
Central City Parking Place Commission
CITY OF SAN BERNARDINO
300 North D Street
City Hall Plaza
San Bernardino, CA 92401
Re: Repayment of Loan for Parking District
Dear Mr. Webster:
Please be advised that vanir Group of Companies, Inc. protests
the revised repayment schedule for the above mentioned loan. The
increase in the assessment is an unfair burden to the property
owners of downtown. Vanir Group of Companies, Inc. and many of
the other downtown property owners are supporting a program to
revitalize downtown, however, with this unfair financial burden
it is more difficult for a business to be successful. Therefore,
we request that the Council's action to repay the loan in seven
years be revised to the original agreement for the benefit and
interest of businesses downtown.
Thank you.
Sincerely,
OF COMPANIES, INC.
HFD/djw
Enclosure: Parking District Secondary Assessment Roll Memo
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LOS ANGELES' SAN ANTONIO' SAN BERNARDINO' WASHINGTON. D.C. . SACRAMENTO
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MAYOR & CITY COUNCIL
Let me introduce myself, Erven Tallman of Inland Empire
Properties Ltd. owner of 215 N "D" Street, corner or 2nd and
"D" Street building.
I was requested on behalf of the Parking Commission and
myself to appear here this morning to discuss the action
taken by the City Council November 16, 1987 in reguards to
the secondary assessment in the Downtown Parking District.
I am here both as a concerned property owner, and as a
Parking Commission member.
I would like to read my prepared statement and will try and
respond to your questions after my full presentation please.
Thank you.
RE: 215 N "D" STREET
In my case our secondary tax assessment by being accelerated
go from $273.85 yearly to $821.55 per year on a 7 year
accelerated basis, this additional $5750.00, versus a
$1916.00 payout in the same period.
This is a $3755 payment, which we did not budget for. With a
high vacancy factor in my building, 215 N "D" Street, this is
a financial burden that was never contemplated. Other
property owners and leasees will be f~ced ~ith the similar
financial burden proportionately.
~~bmi~ted -
;,rven Tallman - Inland Empire PropErt'i2.s 1 ..ct.
Sun Bernardino Parking Commission
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MAYOR & COMMON COUNCIL
Re: Secondary assesment roll, annual payback arrangement
which was established for the Parking District in 1978.
By virtue of the City lending the City Parking District
approximately $800,000 to fund the projects, creating 383
additional parking spaces in downtown parking district lots.
The repayment terms, which was very clear at the outset,
namely repayment of the secondary assessment of 30% of the
1978 primary assessment roll, amounting to $30,300 annually.
This has been collected since 1979 - (No variation to the
original intent, 20 yr or 25 yr payback repayment terms, as
it exists to this date.
The City Councils' November 16, 1987 meeting revised the
terms of repayment, by accelerating the payback in 7 years on
the total amount outstanding balance on the loan.
This acceleration would triple the secondary assessment, plus
adding a 9% interest charge to the unpaid balance .all due and
payable in 7 years.
This earned income on the interest portion would be reserved
in a capital improvement development account, which would be
reserved to fund future parking needs of the downtown
community, this is contrary to the original terms and
cunditions of the loan.
This net effect of tripling the 1986 secondary assessment on
the 88-89 tax bills is going to create property owner leasee
financial hardships.
Firstly, Raising this assessment without due consideration of
~hat effect it has on 194 property owners who are having a
difficult time with high vacancy in the downtown district, as
it exists.
\lhat effect is it going to have on the Main Street Program?
\Ie are attempting to invite Business into the Downtown - we
need cooperation and this is a negative action in our
opinion.
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It is not only a financial issue, but an Ethical issue too.
In 1978, the Council agreed to the terms and conditions, on
the one hand, the property owners faithfully fulfill their
obligation on the other hand. Now the Council is resciding
this 20 year agreement?
This November 16, 1987, City Council revision is not fair,
ethical, nor is it taking many concerns of the Business and
property owners, and leasees who are being asked to pay
acceleration of this assessment.
If the increase is implemented, it is going to leave a
profound effect on the Business owners and property owners
who did not budget for this and will create a financial
hardship.
It appears to us, if the Council takes this action,
it will cause a further deterioration of Public confidence in
a act of "Saying One Thing and Doing Something Else."
I would like to suggest that the City Council resi.nd the
November 16, 1987 meeting, on the revised payment action.
Revert back to the original intent, of the 20 rear repayment
basis.
If the Council accepts my suggestion, this would be a show of
confidence and support for the Downtown Businesses and
froperty Owners and we would be very greatful of your
favorable response. As a secondary consideration, the City
Council meet with the Parking Commission and work out a more
favorable strategy to satisfy the property owners and
leasees.
Alternatively, if the Co~~il is negative on the issue, I
would like to request a ~ day continuance to allow sufficent
time for the City staff to notify not only the property
owners, but the leasees who will be burdened with these
revised payments, to appear before the Council.
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Erven Tallman - A Concerned
Downtown Property Owner
San Bernardino Parking Commissioner