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1998 02 17 RDA Minutes LA QUINTA REDEVELOPMENT AGENCY MINUTES FEBRUARY 17, 1998 Regular meeting of the La Quinta Redevelopment Agency was called to order by Chairman Perkins. PRESENT: Board Members Adolph, Henderson, Pena, Sniff, Chairman Perkins ABSENT: None PUBLIC COMMENT None CONFIRMATION OF AGENDA Board Member Pena asked that Consent Calendar Item No.4 be moved to Business Session Item No.4. APPROVAL OF MINUTES MOTION It was moved by Board Members SniffiHenderson to approve the Minutes of February 3, 1998 as submitted. Motion carried unanimously. BUSINESS SESSION 1. CONSIDERATION OF THE DISPOSITION AND SALE oF UP TO THREE HOMES OF THE 49 SINGLE-FAMILY HOMES THAT COMPRISE THE LA QUINTA RENTAL HOUSING PROGRAM. Mr. Herman, Community Development Director, advised that staff, having reviewed four options regarding the disposition of 49 single-family homes in the La Quinta Rental Housing Program, is recommending that the Agency retain ownership of the units and sell up to three per year. Therefore, this is a request to allow the sale of up to three units from the La Quinta Rental Housing Program and to authorize funding in the amount of $200,000 to upgrade various units which were built in 1 988 and in need of some repair. Staff is also recommending waiver of the 95% loan-to-value ratio criteria contained in the Rehabilitation Loan Program, subject to the applicant being a very-low or low- income household, the property being 20 years old or more and occupied by the owner, and the loan request being less than $10,000. Waiving the criteria will assist in rehabilitating some of the older homes in the Cove. BIB] 03-11-1998-U01 04:25:16PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 17-U02 1998-U02 is I Redevelopment Agency Minutes 2 February 1 7, 1 998 Board Member Henderson asked how the funds would be distributed and if the contractors' licenses would be verified. Mr. Spevacek, consultant with RSG, advised that once the itemized budget prepared by the homeowner's contractor is approved by staff, the funds will be placed in a construction draw account to be used for the repairs. The final release will not occur until after the filing deadline for filing mechanics liens against the property. The contractor must have a contractor's license, workman's compensation insurance, and a Cit* business license. In response to Board Member Pena, Mr. Spevacek advised that staff is proposing the City be responsible for maintaining the landscaping once the units are repaired. Board Member Sniff questioned the construction date and asked staff to verify it. In response to Board Member Adolph, M*. Spevacek advised that the renters are currently responsible for maintaining the property, but some have failed to do it and have let the properties get rundown. Staff feels that if the Agency is responsible for maintenance, that the investment in repairing the units won't be short-lived. The renters are not required to provide property insurance as the properties fall under the City's umbrella insurance policy. Board Member Adolph felt the City should have insurance coverage for damages caused by the renters. In response to Board Member Pena, Mr. Spevacek advised that the renters must qualify for the County's Section 8 Program and that La Quinta Real Estate is supposed to run background checks on each one. He advised that there have been few delinquencies in rent and few instances of excessive abuse. He further advised that the units were in mixed repair when they were purchased two years ago and the proposed improvements are basic normal repairs. Board Member Henderson asked if this involved the Building Horizon's Program to which Mr. Spevacek responded no, but advised that staff is looking to get them involved with two other units. In response to Board Member Sniff, Ms. Honeywell, Agency Counsel, advised that loss of the renters' personal belongings would be covered under the City's liability insurance if the house shbuld be destroyed because of faulty wiring, etc., but not if it's due to natural disasters such as floods. BIB] 03-11-1998-U01 04:25:16PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 17-U02 1998-U02 Redevelopment Agency Minutes 3 February 17, 1 998 Board Member Pena commented on the possibility of using some of these units to house artists and artisans as discussed in the past and Mr. Spevacek advised that it would be a challenge to have the ability to have enough space for artist lofts. Zoning for such mixed-use may be*included in the Village Specific Plan Update. In response to Board Member Sniff, Mr. Spevacek advised that the best units would probably be sold first, also taking into consideration those units in which the current tenants qualify and wish to purchase them. MOTION It was moved by Board Members Sniff/Adolph to retain the current ownership structure for the La Quinta Housing Program and continue with the sale of up to three units per year to very-low-income households; to authorize the appropriation of up to $200,000 from the La Quinta Rental Housing Program funds to refurbish various units; to authorize the Executive Director to execute the necessary contracts as the need occurs; and, to waive the 95% loan-to-value criteria contained in the Rehabilitation Loan Program based upon the four criteria contained in the staff report. Motion carried unanimously. 2. CONSIDERATION OF AN APPROPRIATION OF NOT TO EXCEED $95,000 FROM PROJECT AREA NO.1, LOW AND MODERATE-INCOME HOUSING FUND TO ACQUIRE AND REHABILITATE A SINGLE-FAMILY HOME LOCATED AT 77- 224 CALLE ENSENADA UNDER THE CITY'S REHABILITATION PROGRAM AND AUTHORIZE THE EXECUTIVE DIRECTOR TO EXECUTE THE AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY BY AND BETWEEN OLIVER E. FULLER AND THE LA QUINTA REDEVELOPMENT AGENCY. Mr. Herman, Community Development Director, advised that in October 1997, staff presented a list af 10 homes for the Agency to consider as part of the Agency's purchase and rehabilitation program and that only one of those units remains available. The property owner of another unit at 77-224 Calle Ensenada, has asked the City to purchase his property and after negotiating a purchase agreement with the property owner, staff is recommending appropriation of $55,000 to acquire and up to $40,000 to rehabilitate the property from Project Area No.1 Low-Mod Housing Fund. Board Member Pena wished to see photographs of the property before moving forward with this. In response to Board.Member Pena, Mr. Herman reviewed the purpose of the rehabilitation program and advised that the subject property needs to be either rehabilitated or razed and noted the possibility of asbestos being present. BIB] 03-11-1998-U01 04:25:16PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 17-U02 1998-U02 Redevelopment Agency Minutes 4 February 17, 1998 Board Member Sniff wasn*t sure the property is worth rehabilitating and felt perhaps it should be razed. In response to Board Member Adolph, Mr. Herman advised that the property has been red-tagged by the Building & Safety Department for being unfit to occupy. He further advised that staff is looking for authorization to purchase and rehabilitate the property. If after further review; rehabilitation doesn*t seem to be an option, staff will bring it back for authorization to raze it. Board Member Pena questioned why the property owner hasn*t been required to comply with certain conditions. Mr. Herman advised that the intent of the rehabilitation program is to improve the Cove by using redevelopment housing funds. Board Member Sniff felt perhaps more discretion should be used in selecting the houses and that the property owners of houses such as this, should be made to either fix or remove the houses. In response to Board Member Henderson, Mr. Spevacek advised that one of the two houses selected in November is in probate and staff is negotiating with the family to complete that purchase. The house on Ensenada came up because of the numerous code violations and staff is concerned about the impact it might have on the neighborhood if the owner fixes it up and rents it to less than desirable renters again. In addition to using the housing funds to promote affordable housing, the Agency is trying to use the funds to clear away some of the blight in the Cove such as this house. Staff is not proposing to begin rehabilitation, but rather to purchase it for further consideration. Board Member Pena continued to wish to see photographs of the house. MOTION It was moved by Board Members Sniff/Henderson to continue the consideration to purchase and rehabilitate property at 77-224 CalIe Ensenada to March 3, 1 998. Motion carried unanimously. 3. CONSIDERATION OF AUTHORIZATION TO PROCEED WITH THE REFUNDING OF TWO LA QUINTA REDEVELOPMENT AGENCY BOND ISSUES: THE 1991 PROJECT NO.1 BONDS AND THE 1992 PROJECT NO.2 BONDS. Mr. Falconer, Finance Director, advised that staff is requesting authorization to proceed with the refunding of the 1991 Project No.1 Bonds and the 1992 Project No.2 Bonds. In refunding the Project No.1 bonds, staff projects raising BIB] 03-11-1998-U01 04:25:16PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 17-U02 1998-U02 Redevelopment Agency Minutes 5 February 17, 1 998 $6.5 million in new monies and in refunding Project No.2 bonds, $1.7 million. However, refunding Project No.2 bonds will require renegotiation of the Pass- Through Agreement with the County which could result in less funds. In response to Board Member Adolph, Mr. Falconer advised that staff will come back for authorization to issue the bonds in approximately 30 days. Board Member Sniff supported moving forward with the Project No.1 bonds, but felt staff might need some latitude in dealing with the Project No. 2 bonds because of the Pass-Through Agreement. Mr. Genovese, Executive Director, advised that authorization is needed to proceed with rate negotiations and that this issue will come back to the Agency prior to the bonds being issued. In response to Chairman Perkins, Mr. Genovese advised that in regard to the Pass-Through Agreement, we need to renegotiate the payment schedule and will most likely offer some funds up front to reduce the payments in succeeding years. MOTION It was moved by Board Members Sniff/Henderson to authorize staff and the bond refunding team to proceed forward and refund the 1991 Project Area No.1 and the 1 992 Project Area No.2 Tax Allocation Bonds. Motion carried unanimously. 4. CONSIDERATION OF ACCEPTANCE OF BID FOR ASSESSMENTISEWER HOOK- UP FEE SUBSIDY PROGRAM PROJECT NO.98-02, DENBOER ENGINEERING & CONSTRUCTION. In response to Board Member Pena, Mr. Hartung, Building & Safety Director, confirmed that DenBoer Engineering & Construction would be subcontracting out the work, but staff has looked at the specifications and has determined that the general contractor is not required to complete a certain percentage of the work. Board Member Pena was concerned about the subcontractor doing the work under another contractor's license. Mr. Hartung advised that the subcontractor was unable to do it on his own because of the bonding issues which DenBoer is handling and he noted that DenBoer has done this on four previous projects which were acceptable to the City and completed in a timely manner. BIB] 03-11-1998-U01 04:25:16PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 17-U02 1998-U02 Redevelopment Agency Minutes 6 February 17, 1998 In response to Board Member Henderson, Mr. Hartung advised that any licensed subcontractor can hook-up sewers on private property without placing a yearly bond with CVWD. Board Member Adolph asked if staff had any concerns with this and if the subcontractor is a local contractor. Mr. Hartung advised that staff has no concerns with it and that the subcontractor and engineering firm are both local contractors from Cathedral City. MOTION It was moved by Board Members Sniff/Adolph to accept the low bid from DenBoer Engineering & Construction for the hook-up of 1 7 sewers in the amount of $27,397. Motion carried with Board Member Pena voting NO. CONSENT CALENDAR 1. APPROVAL OF DEMAND REGISTER DATED FEBRUARY 17, 1998. 2. TRANSMITTAL OF TREASURER'S REPORT DATED DECEMBER 31, 1997. 3. ACCEPTANCE OF ASSESSMENT/SEWER HOOK-UP FEE SUBSIDY PROGRAM PROJECT NO. 97-05 AND AUTHORIZATION TO FILE A NOTICE OF COMPLETION. 4. SEE BUSINESS SESSION ITEM NO.4. MOTION It was moved by Board Members Sniff/Adolph to approve the Consent Calendar as recommended and amended. Motion carried unanimously. DEPARTMENT REPORTS 1. TRANSMITTAL OF REVENUE & EXPENDITURES REPORT DATED DECEMBER 31, 1997. MOTION It was moved by Board Members Sniff/Henderson to receive and file the Revenue & Expenditures Report dated December 31, 1997. Motion carried unanimously. CHAIR AND BOARD MEMBERS' ITEMS None BIB] 03-11-1998-U01 04:25:16PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 17-U02 1998-U02 Redevelopment Agency Minutes 7 February 1 7, 1 998 CLOSED SESSION None PUBLIC HEARINGS None There being no further business, it was moved by Board Members Sniff/Adolph to adjourn: Motion carried unanimously. Re pe tfully submitted, UNDRA L. JUHOLA, Secretary La Quinta Redevelopment Agency BIB] 03-11-1998-U01 04:25:16PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 17-U02 1998-U02