ABSTRACT: Three noteworthy 13 July 2010 City Council Agenda Items, namely a Resolution authorizing Gerard Rose to represent the City of Carmel-by-the-Sea on the Carmel Regional Fire Ambulance (CRFA) Board of Directors, a Resolution supporting the proposed Monterey Regional Water Supply Program and Receive report from Bartle Wells Associates regarding the refunding of the 2001 Sunset Center Lease Certificates, are presented. Excerpts from Agenda Item Summaries and a report are presented.
AGENDA PACKET
Regular Meeting
Tuesday, July 13, 2010
4:30 p.m., Open Session
Live and archived video streaming
City Hall
East side of Monte Verde Street between Ocean and Seventh Avenues
VII. Consent Calendar
These matters include routine financial and administrative actions, which are usually approved by a single majority vote. Individual items may be removed from Consent by a member of the Council or the public for discussion and action.
F. Consideration of a Resolution authorizing Gerard Rose to represent the City of Carmel-by-the-Sea on the Carmel Regional Fire Ambulance (CRFA) Board of Directors.
Description: The CRFA Board has three voting members--one representative from Carmel and two from Carmel Valley (representing the Carmel Valley Fire Protection District), the two entities that comprise the Authority.
Article 6 of the CRFA Joint Powers Agreement relates to the membership of the Governing Board and states that, “The legislative body of each Authority member shall appoint either a member of the legislative body, its administrative officer, or its fire chief to serve as its representative to the Board.” Since April 2000, Gerard Rose has served as the Carmel delegate.
At its May 19, 2010 meeting, the CRFA Board amended Article 6 to expand the membership criteria to allow each legislative body to appoint “a voting citizen of the Member Agency jurisdiction” to serve as its representative to the Board.
Staff Recommendation: Adopt the Resolution.
Important Considerations: Former Council Member Rose has served on the CRFA Board for more than a decade, most recently as its president. We recommend he continue to serve on the board until the individual members of CRFA have finalized ongoing plans to disassociate themselves from the JPA. At that time, CRFA will then become independent and have its own budget.
X. Resolutions
A. Consideration of a Resolution supporting the proposed Monterey Regional Water Supply Program.
Description: The Regional Water Project for Monterey County is a water supply combination of desalination and underground storage (of winter river flows). This project will satisfy the demands mandated by the State to reduce the Monterey Peninsula’s reliance on the Carmel River for its water supply. It will also serve future needs for customers of the Marina Coast Water District.
An agreement has been reached by CalAm, Monterey County Water Resources Agency and the Marina Coast Water District to implement the Regional Water Project at a reduced price over alternate projects. This collaborative project will be the most environmentally friendly of the many options that were considered. The Project is now being reviewed by the California Public Utility Commission.
The Monterey Peninsula Mayors are currently meeting with the three above mentioned water agencies regarding governance of the Regional Water Project.
Staff Recommendation: Adopt the Resolution.
Important Considerations: Several regional water project alternatives have been considered that were either too expensive or did not have public support. The currently proposed Regional Water Project is a collaborative alternative that is cost effective and has less adverse environmental impact. The Regional Water Project will meet the objective of reducing CalAm’s historic diversions from the Carmel River by 70 percent.
Decision Record: No prior action has been taken by the Council on this Project.
XI. Orders of Council
A. Receive report from Bartle Wells Associates regarding the refunding of the 2001 Sunset Center Lease Certificates.
Description: As requested by Council at its June 8, 2010 meeting, Bartle Wells Associates principal Tom Gaffney has prepared a more detailed analysis of the refinancing options available to the City.
Decision Record: At its June 8, 2010 meeting, Council approved Resolution 2010-41, entering into an agreement with Bartle Wells Associates for financial advising services on the refinancing of the 2001 Sunset Center Lease Certificates.
BARTLE WELLS ASSOCIATES
INDEPENDENT PUBLIC FINANCE ADVISORS
1889 Alcatraz Avenue
Berkeley, CA 94703
510 653 3399 fax: 510 653 3769
www.bartlewells.com
Date: July 1, 2010
To: Rich Guillen, City Administrator
Dewey Evans, City Treasurer
From: Alex Handlers & Tom Gaffney
Re: Refinancing of 2001 Lease Revenue Certificates
A) Change in interest rates that would offset the $75,000 prepayment premium
All other things held equal, an increase in interest rates of approximately 0.12% (12 basis points) would offset the 1%, $75,000 prepayment premium on the outstanding 2001 Certificates. The 1% prepayment premium is in effect through October 2011. If the City waited until October 2011, it would also forego one year of savings, estimated at roughly $27,000. Accounting for these unrealized savings in the next year, interest rates would only need to rise by a little less than 1/10th of 1 percent to negate the savings from avoiding the prepayment
premium.
B) Front-Loaded and Back-Loaded Savings
To supplement the original numbers, which were based on roughly level annual savings, we added tables showing versions with front‐loaded and back‐loaded savings. All three versions of tables are attached. In reality, there is no correct answer regarding which approach is best from a financial perspective. For example, use of different discount factors in the present value analysis could result in different outcomes as which option yields the most present value savings. Hence, we generally maintain that the choice is a policy decision. While all options are equally valid, in general, most agencies opt for roughly level annual savings.
C) Debt Service with Reduced Reserve Fund Requirement at ½ Max Annual Debt Service
Tables showing projected debt service with a reduced reserve fund are attached. Since any change in the reserve fund is typically accounted for as a change in cash on the closing date, it will only have a small impact on any savings calculations.
Roughly Level Annual Savings
City of Carmel-by-the-Sea
2010 Refunding Savings Estimate
Gross savings as % of outstanding principal 7.0%
Present value savings as a % of outstanding principal 4.2%
7 comments:
The Jane Miller case settlement was announced following the 6-13-10 council meeting. Miller will receive 4 months' pay and $600,000, to be paid by the city's insurance coverage. The city's deductible is $10,000. Expect the city's future premiums for the pooled insurance coverage to increase.
Now the question is how long will we have to continue to put up with Rich Guillen?
Thank you Anonymous for your reporting. The date of the City Council meeting is 7-13-2010, or yesterday.
This settlement may be good for Jane Miller. It may give her some closure, but what about the next Jane Miller? As long as Rich Guillen is city administrator other employees who do not go along with Rich's abuses will be similarly victimized. No amount of settlement dollars can eliminate the future threat to city employees or lessen the liability to taxpayers should a future lawsuit be filed against the city.
With this settlement it is highly doubtful Mayor Sue McCloud will terminate Rich Guillen. She has stood by her man all this time and she needs him now more than ever. She will always put herself ahead of the interests of city employees and the public she is supposed to serve.
To answer the previous question, Carmelites will have to put up with Rich Guillen as long as Sue McCloud is mayor of Carmel-by-the-Sea. It would be nice if Jason led the charge to tell us the $600,000 plus is an admission of guilt on the part of the city council and because of that the city council will vote to get rid of Rich Guillen for the sake of Carmelites and the reputation of the city.
Yes, I meant July. Thanks for catching the typo.
You're Welcome!
The mayor and city council want us to believe the city didn't do anything wrong, but they settled anyway in order to avoid the expense of further litigation so they can direct their energies and resources towards addressing the challenges facing Carmel in this bearish economy. Let me get this straight. The city didn't do anything wrong, financial revenues are tight, but the city settles for more than $600,000. What is wrong with this picture?
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