Please post this announcement online since it was released at the very last minute.
The Encinitas City Council has called a special meeting for Wednesday, April 16, at 4:30 p.m. to discuss and vote on the purchase terms of the Pacific View property. The Memorandum of Understanding (MOU) containing the proposed conditions for the sale appears below and the meeting agenda can be viewed here.The terms were worked out by an ad hoc committee headed by City Manager Gus Vina and Encinitas Union School Superintendent Timothy Baird. It's hoped that the City Council will vote to approve the MOU, and in turn, the school district will vote to officially cancel the Pacific View auction at its April 29th meeting.City Councilmember Tony Kranz, a primary force behind the city's dramatic last-minute purchase, explained that the meeting should "move the purchase process forward towards the final sale agreement." The meeting may go into a closed session to discuss details-- if so, results will be announced publicly immediately following the closed session.Special City Council Meeting on Pacific View PurchaseWednesday, April 16, 2014 at 4:30 p.m.Encinitas City Council Chambers505 South Vulcan AvenueEncinitas, California 92024SavePacificView.org will continue covering events relating to Encinitas' acquisition of the heritage site.
MEMORANDUM OF UNDERSTANDING REGARDING INTENT TO ENTER INTO PURCHASE AGREEMENT
City of Encinitas (“Buyer”) and the Encinitas Union School District (“Seller”) desire to enter into this Memorandum of Understanding Regarding their Intent to enter into a Purchase Agreement (“MOU”) for the purchase of the former Pacific View School Site. The purpose of this MOU is to set forth the current intent of the parties with respect to the general terms and conditions to be included in the final Purchase and Sale Agreement to be entered into between Buyer and Seller (“Purchase Agreement”).
RECITALS
WHEREAS, the Buyer and Seller have entered into negotiations regarding the Buyer’s proposed purchase of the former Pacific View School Site, consisting of approximately 2.8 acres located at 608 Third Street, Encinitas, California APN 258-115-122 (“Property”) from the Seller; and
WHEREAS, the Buyer and Seller desire to enter into this MOU in order to memorialize the current status of such negotiations as well as the good faith deposit and other actions to be taken in advance of the parties development and execution of a final Purchase Agreement;
TERMS
1. Terms
The parties have mutually agreed upon the following terms and conditions relative to their
negotiations and the basic terms to be included in the final Purchase Agreement for the Property:
negotiations and the basic terms to be included in the final Purchase Agreement for the Property:
a. The purchase price for the Property, in its as-is condition, shall be Ten Million Dollars ($10,000,000) due at the close of escrow.b. The Buyer will agree not to sell the Property for ten (10) years from the date of the close of escrow, except as set forth herein. If the Buyer decides to sell the property before this ten (10) year period elapses, Buyer must first offer the Property back to the Seller for re- purchase for the original $10 Million purchase price (plus the reasonable value of any improvements made to the Property by Buyer). After this ten (10) year period, the Buyer may dispose of the Property in any manner it chooses.c. The Old Schoolhouse will remain on the Property.d. Upon approval and execution of this MOU, and in advance of the finalization of Purchase Agreement, Buyer will immediately make a non-refundable deposit (credited to the purchase price) payment to the Seller in the amount of Fifty thousand dollars ($50,000). This deposit shall not be refundable except as described below in paragraphs (e) and (f).e. Upon approval and execution of this MOU, and in advance of the finalization of the Purchase Agreement, Seller will provide Buyer and its consultants access to the Property for the purpose of inspecting the Property and conducting environmental testing of the soils underlying the Property. In the event such testing reveals contaminants in the soil, then Seller shall either remedy such contamination or else refund the Buyer's deposit described above. At the same time, Buyer shall also review the preliminary title report and ensure that the Property is unencumbered by any title exceptions affecting the Seller’s ability to transfer unencumbered fee title to the Buyer. In the event any such title exceptions are identified, then Seller shall either remove such exception or else refund the Buyer's deposit described above.f. The parties shall use reasonable efforts to enter into the Purchase Agreement on or before May 31, 2014. Seller shall not enter into or conduct any discussions with any other person or entity with respect to the sale or disposition of the Property prior to such date. During this time period, the Buyer shall use all reasonable efforts to obtain the municipal bond financing necessary to secure the funds for the purchase price prior to the Close of Escrow. If Buyer cannot secure such financing, then Buyer and Seller shall mutually agree to an alternative financing plan for the purchase price, or else Seller shall refund Buyer’s deposit described above.g. It is expressly understood that the terms of this MOU do not constitute a binding obligation on the parties to enter into a Purchase Agreement for the Property. Neither party shall be finally bound to buy or sell the Property unless and until the Purchase Agreement is executed by the parties and delivered to each other. It is contemplated that the Agreement shall contain such other terms, covenants, conditions, warranties and representations as are customary or appropriate in transactions of this nature.
2. Laws: This MOU shall be governed by the laws of the State of California.
3. Interpretation: In interpreting this MOU, it shall be deemed that it was prepared jointly by the
Parties with full access to legal counsel of their own. No ambiguity shall be resolved against any party on the premise that it or its attorneys were solely responsible for drafting this MOU or any provision thereof.
Parties with full access to legal counsel of their own. No ambiguity shall be resolved against any party on the premise that it or its attorneys were solely responsible for drafting this MOU or any provision thereof.
4. Severability: The unenforceability, invalidity or illegality of any provision(s) of this MOU shall not render the other provisions unenforceable, invalid, or illegal.
5. Integration: This MOU represents the entire understanding of the Parties as to those matters contained herein, and supersedes and cancels any prior oral or written understanding, promises or representations with respect to those matters covered hereunder. This MOU may not be modified or altered except in writing signed by both parties hereto. This is an integrated document.
6. Counterparts: This MOU may be executed in counterparts, each of which shall constitute an original and all of which shall constitute one agreement.
IN WITNESS THEREOF, the parties hereto have executed this Memorandum of Understanding on the date written above:
SELLER: ENCINITAS UNION SCHOOL DISTRICT
BUYER: CITY OF ENCINITAS
With Vina and Baird running these meetings, you can be assured that taxpayers will get screwed. Two peas in a pod!
ReplyDeleteYup. More bonds..... Neither a borrower nor a lender be.
Delete7:58 Have you ever had a mortgage? Bought a car on time? Founded a business financed by outside investors? Lent money to a friend or relative in need?
DeleteNope. Never, always pay cash.
Delete7:58; I have, but I wanted those things. I didn't want PV but have no choice than to pay. Sort of like people who don't want Obamacare and have to pay.
DeleteI didn't want a war in Iraq.
Delete11:59-I didn''t either. Lots of things we have to pay for that we don't want, and I think for a lot of us, at least on fixed incomes, asking us to pay for PV is not right.
DeleteActually according to staff, Barth and Tony are leading the charge: the City Staff is participating reluctantly: they know that Barth, Shaffer and Kranz are going to find some way to raise taxes to fund a parcel with no plan for it and even they know that this is a non-starter. And Barth's business/arts acumen is again, laughable.
DeleteFor the wrong reasons Barth seems to think now that supposedly she isn't running for Mayor that the focus won't be on her.
When the Capital Improvement Plan gets cut up and public safety in school sidewalks and lifeguard towers are sacrificed Barth will back on the political firing line again. Barth's just not very good at leadership or politics.
Barth, Kranz and Shaffer have turned Encinitas into the Exxon Valdez.
1:27 I got to call you out, "staff is participatign reluctantly" - give me a break- staff does what theya re told-
DeleteWith Gaspar, Muir and Barth and Vina it was raid $7M from capital projects AND go another $8M in debt for the Hall Park just 18 months ago.
Gaspar and MUir have been riding shotgun on the Vina Barth Valdez express
Vote NO on any bond measure.
DeleteThis is a pretty weak MOU, as MOU's go...........
ReplyDeleteClearly financing is a contingency, and $50K as a non-refundable deposit is not enough to keep anyone in the deal. Basically, something had to be drafted for a council approval to keep moving forward (or cancel the auction) and this keeps the parties dancing.
- The Sculpin
Sculpin-The $50,000 is refundable under certain conditions of the MOU if I am reading it correctly.
DeleteYes, you are reading it correctly. My point is whether the deposit is substantial enough to keep the parties in the deal. For the buyer $50K for $10M deal is real easy to walk away from. For the seller, $50K is not enough to compel cooperation during the drafting of the PSA (Purchase and Sale Agreement). So you have to ask yourself what kind of "understanding" these two parties really have - i.e. there's still a lot of heavy lifting yet to do.
Delete- The Sculpin
Sculpin-Thanks for the clarification. It makes sense now.
DeleteLast minute notice is acceptable if it is for something good. It is all about intentions.
ReplyDeleteThe City has had a policy, ever since Lisa Shaffer and Tony Kranz were elected, even before they were seated, to give 72 hour notice for all Council Meetings, including so-called Special Closed Session meetings.
DeleteThe only time last minute notice is "acceptable," is if the City only had last minute notice. If the City knew about this meeting in advance, then the public should have been notified in advance.
You know what is said about good intentions? Good intentions pave the pathway to hell. Council's transparency is regressing under Teresa Barth, as Mayor. The last special closed session Pacific View Meeting was NOT reported out into open chambers at the regular council meeting, either. There was no explanation for this regression, either, except, basically, "because I said so!" coming from the Mayor.
Those of us, such as myself, not physically present at that last PV meeting weren't noticed of the following day's Press Conference, where Tony read a poem, and the $10 Million price was announced, until after the fact, because that meeting was not broadcast. I'm glad this afternoon's meeting will be, according to Kathy Hollywood, our City Clerk.
8:46: Who defines good? I want a few roads paved, or at least the potholes paved over. Is that good? Can't afford it if we keep buying trophy projects for someone else's legacy.
Delete8:54
DeleteIt does not escape my attention that the council scheduled this meeting in the middle of the Easter holiday week just as many people are preparing to leave town for the holiday or preparing to host families-
This not only means less people are likley to attend but also that less people will read the newspaper reports of the meeting this Friday when the Coast News Comes out as they would have left town.
The last time the city had a big financing matter to discuss Gus Vina Scheduled the meeting for the middle of the 4th of July week when again many residents were out of town or hosting families. Likewise residents were less likely to see the reports in the Coast News.
As we know Mr. Vina also withheld important financial cost estimates of the Lew Edwards survey from both the council members and the public.
In both instances- the Easter week special meeting and Hall Park 4th of july meeting the council decided to spend money.
Kind regards,
Andrew Audet
Right you are Andrew. I don't believe in coincidences and this is one of those times when there is really something amiss. Perhaps we should call our council members and ask them. Is Muir back from his holiday yet? If he isn't, then why couldn't they wait until they had a full council? Wait, he didn't want PV, so maybe they are having it because of his trip.
DeleteAt least the MOU allows the city to back out and get its $50,000 deposit back if it can't finance the deal. I'm sure there will be many questions at the council meeting about the impact of a $10M bond on the city's financial health and other city projects.
ReplyDeleteWe are doomed...
Delete9:07 AM
DeleteThe $50,000 is non refundable.
10:55-Actually under certain conditions it is refundable if I am reading the MOU right.
Delete10:55 Try reading section f:
Deletef. The parties shall use reasonable efforts to enter into the Purchase Agreement on or before May 31, 2014. Seller shall not enter into or conduct any discussions with any other person or entity with respect to the sale or disposition of the Property prior to such date. During this time period, the Buyer shall use all reasonable efforts to obtain the municipal bond financing necessary to secure the funds for the purchase price prior to the Close of Escrow. If Buyer cannot secure such financing, then Buyer and Seller shall mutually agree to an alternative financing plan for the purchase price, or else Seller shall refund Buyer’s deposit described above.
The Mayor et al is trying to find a way to stop both Muir and Gaspar from speaking against the terms of the purchase tonight: imagine if Jerome and Danny had tried to stop Maggie and teresa from speaking on an item?
DeleteThis is just all wrong. Better to walk away from the $50K in earnest money and call the district's bluff.
Kranz cannot believe everyone doesn't agree with him: he says the magic beans he traded for the family cow were delicious.
1:32 PM. This is nonsensical. One, until the MOU is executed the city isn't on the hook for the $50k. To walk away now doesn't risk the $50k. Two, I don't see how Muir or Gaspar can be prevented from speaking. All council members are equal. And what do you base this assertion on?
DeleteTony is Xeroxing money as we speak!
DeleteSo, 10M + interest and no money to improve the property. Swell.
ReplyDeleteHow about using the two contingency funds [11M] and the 2.5M additional tax revenue from 2013. Combine the two contingency funds into one "emergency" fund with a balance of 3.5M and pay cash. Rebuild the "emergency" fund each year at 1M off the top of the budget [before any other funding] or half any "surplus" revenues over anticipated -which ever is higher.
Two questions - does the State require a certain level of contingency funding and have we already spent the 2.5M ?
This saves interest payments over + or - 30 years, but at the risk of a possible emergency funding needs.
Don't help them, they are dangerous enough on their own.
DeleteGood ideas, lindpat. But I think the City has basically spent the contingency funding.
DeleteI am truly disappointed that the City has not been more aggressive in insisting at 0% terms, over 30 years, with EUSD carrying the loan, since the reason the School District claimed, for years, that the Naylor Act didn't apply, is because the property was to be exchanged, NOT SOLD, because EUSD wanted a continuing revenue stream, NOT an "one time injection of money into the General Fund."
Everyone should attend the meeting at the Community Center this afternoon at 4:25. If you are even 1 minute late, they will not let you speak.
ReplyDeleteThe council meeting is at city hall tonight.
ReplyDeleteYes, I apologize that I misinformed some people that the meeting was to be at the Community Center. Apparently I misread the announcement. It is to be at City Hall, and it will be broadcast, love, according to Kathy Hollywood.
DeleteIt will be broadcast, live, I meant, lol.
DeleteHasn't a soil test already been done to see if it is contaminated like the Hall property was? Seems like that should have already been done. Who pays for that?
ReplyDeleteI am informed there was a soil report done in 2006. I haven't seen it yet, but I hope to. This should have been disclosed in the June 6, 2007 Appraisal report, released only recently by EUSD, through one of my CPRA requests. According to my information, which I am hoping to verify, soon, there is "17 feet of fill under part of the building that would have to be removed."
DeleteI don't know that "fill" has to be removed unless there is redevelopment, but its existence should have been disclosed to ANY potential bidders, and on the previous EUSD appraisal report, which, as I said, has a "valuation date" as of 6/6/07. Another bait and switch by Superintendent Baird.
Many had hoped that at least preliminarily, the existing classrooms could be leased, rehabbed and maintained by a non-profit foundation through artists and the Historical Society.
What's concerning about the MOU is that it doesn't propose keeping the zoning the same, in perpetuity, which was part of EUSD's original terms. Does someone on Council want to change the zoning in the future? That couldn't be done without a public vote, in any case.
I wouldn't want the School District to demolish existing classrooms in order to haul away the fill. But an adjustment in the price should be made relative to the soils report, if that is true.
Moreover, Council should NEVER have taken the Naylor Act and Eminent Domain off the table in terms of negotiating. Apparently, Tony and Teresa, and Lisa, do NOT want to preserve .85 acre, or 30% of the property as public open space, as Education Code provides MUST BE OFFERED by all school districts disposing of surplus school sites immediately upon their boards of trustees' voting to sell or LEASE the former school sites.
So what you are saying is you don't care if an artist is slapping some paint on a canvas with a toxic cloud of dust just 17 feet below his/her studio.... Nice.
Delete10:44 AM
DeleteYou are needed to protest the city's burying of toxic soil on all the new developments on former green house properties- including the Hall property park.
What I am saying is that I don't know that the soil report says that the "fill" is contaminated. I am not jumping to any conclusions. I have submitted a CPRA request to see any soil reports.
DeleteFor any developer to do demolition and redevelopment of the property, there would probably have to be regrading, which could include hauling away fill dirt, if that is the standard.
I do not know what the source of any possible toxicity could be. My point is that the soil report should have been disclosed by EUSD.
The soil report should have been looked at before the City decided to offer 10 million dollars.
DeleteIf you care about this issue, be at City Hall at 4:30 today.
ReplyDeleteA few important observations:
1. The City did not want to invoke the Naylor Act since doing so would have required that at least 30% of the land area beyond parking lots be preserved as open space.
2. The MOU talks about preserving the school house, but does not mention any open space. It has been degraded since its first roll out.
3. The 2 comps that the School District provided did not take into account the 2006 soils report that documented toxic soils that will need to be addressed--therefore, the price is way out of line.
4. The comps are also based on an assumption that the zoning can be made denser. That is not a sure bet since Prop A requires that this would have to be decided by voters--not the council.
5. Teresa Barth called some of those involved in the SPV effort and asked for THEM to do an injunction on the recommendation of the City Attorney, Exactly what do we pay him for?
All of this points to a plan to try to upzone this property by the city and turn it into another high density dog instead of the art center we were fighting for.
Ha ha. You got suckered. Quick wake up Lynn so she can throw her 2 cents into this pile of illogical thinking.
DeleteNo thanks, 9:55, for your lack of foresight and your inability to recognize Pacific View as a legacy current residents can leave to future generations.
DeleteEver notice the Scripps name on so many valuable institutions and public sites in San Diego County? That's due to the generous philanthropy of Ellen Browning Scripps. She also contributed in many ways that don't bear the Scripps name.
Maybe a wealthy resident or coalition of wealthy residents will leave a permanent legacy by donating to purchase the Pacific View site and to establish a cultural center there.
11:20 Somebody wealthy person already left PV to the residents!
DeleteNow EUSD is abusing their position and violating the Naylor Act while the council past and current refuse to hold EUSD accountable-
If a few wealthy people want to step up, likes Scripps, I say let them. They can leave their legacy, and let me get by with just paying my own bills so I don't have to use government assistance. God almighty. Is it to much to ask to stay within a budget? Seems as if it is. And asking a citizen to do Sabine's work is wrong on so many levels.
DeleteI want to see Dr. Lori's Sabine reports. If anyone knows her, will you ask her to send them to Wc?
DeleteHey 11:20- perhaps you could ask the Eckes to donate?? Oh that's right, the town has shit on them for the past 25 years... Maybe they'ed help if it was an abandoned school in Guatemala. Where they are appreciated....
DeleteSpare me. I remember the other Prop A when they tried to reclaim property that was in perpetuity. They had also moved most of their business to Guatemala, so I am happy that they have contributed to local schools there since they have outsourced their operations.
DeleteEckes have feathered their own nest in this city. Donations are tax write-offs, so don't think they'll miss any caviar over them. They've owned City Hall for a long time.
DeleteWeird about Teresa's phone calls. I'm aware of at least one received....
ReplyDeleteDump Barth! Dump Sabine!
DeleteSo much of Barths chicanery is finally coming to surface.
DeleteI don't understand what Teresa was asking for. Can someone explain?
ReplyDeleteShe was asking for a resident to spend the money and take the time to file an injunction against Baird's planned auction of PV. Someone else can go into the logistics. Suffice to say, that kind of action was the city's job. Her excuse for pushing off the action on a resident was "because the residents are the ones who are pushing for PV, not the city." Whatever, Teresa.
DeleteThe ass-coverage at the city is falling away. Dump Barth/Vina since they work as a unit! Dump Sabine!
DeleteBarth is showing the Peter Principle quantum style!
Delete10:27-Thanks. That is a huge request to ask. She wouldn't second Shaffer's motion to look into getting a new city attorney and yet she wants a resident to do his job?
ReplyDeleteWord is Audet hired an attorney at his own expense and there is legal standing to bring an action that EUSD and the city have failed to represent residents and taxpayers under the guidelines of the Naylor Act.
DeleteAudet suggested the council file an injunction at the March 12 council meeting to save residents money. Shaffer asked the city attorney if the Naylor Act applied and Sabine said it was a good question- Audet says it does and EUSD says it doesn't. No council member made a motion that the city should take action. THey then went behind closed doors and came back with an offer over the asking price.
At which point Teresa began dialing for dollars....
DeleteWill we ever know what's going on behind the curtain?
DeleteOur council are the 5 stooges!
DeleteI won't be voting for any bonding to fund PV. Much as I would like to see PV made into a great place for everyone, the City simply can't afford an other bond. If they attempt another lease revenue Bond such as the Hall property bond, they should be legally defeated because no source of funding from PV is known. The POSSIBILITY of the Hall property producing revenue was there at one time, but not any more -even if we charged the teams for field use, the up keep of the park would eat up those funds faster than they could build up.
ReplyDeleteJust like the Hall property originally, we have no idea of the up keep on PV. Will the City be responsible ? Who is going to develop the PV property ?
Why didn't the City offer 9.7M ? 9.6M ? How does a soils problem now emerge after all these years?
To many questions and too few answers
Sorry Lynn. If it is a lease revenue bond you don't get to vote.
DeleteI am not lindpat. But you are correct, no public vote for lease revenue bonds.
DeleteNo Lynn, these questions were being asked before the purchase, you just weren't interested. Don't tell me you still have hopes the school board will give the land to the city via a 30 year no interest loan?? Such folly.
DeleteTo have a legal lease revenue bond, you have to secure the revenue through actual cash flows from the bonded property. We already have two bonds outstanding that are essentially funded by the City general fund monies, not cash flows from the properties [the library bonds and the Hall property bonds]. Since there currently is no development plan for PV, any revenue generated by PV is strictly a pipe dream to be eventually figured out. Would you buy bonds passed on imaginary revenue streams ? Only if the City general fund stood behind them as it does in the cases of the library and the Hall property. Either way citizens of Encinitas is going to pay for this with interest in the future.
DeleteThree bonds outstanding with no revenue, all dependent on the Encinitas general fund , is a very bad idea and probably illegal - so I think we will end up voting on the proposed bond.
To clarify, here is an explanation from page 3 of the February 13, 2013 council staff report on the $8M Bonds for the Hall property construction:
DeleteThe primary security for a lease revenue bond issue is the City's pledge of its general fund revenues to repay the obligation. In addition, it is customary to pledge additional security in the form of an essential City asset. This would typically be the asset that is being constructed with the bond proceeds. However, in this case, there is a prior pledge of the Park Property for the City's 2010 bond issue, and the type of improvements being constructed do not provide the type of essential use or value required by bond investors. Thus, the City Manager has determined that it is appropriate to substitute the City's Public Works facility (the "Corporation Yard") as additional security for this bond issue. It should be emphasized that pledging a City asset for a bond issue is not comparable to pledging, say, one's home to secure a mortgage deed of trust. While a pledge of an asset conveys certain rights to the bondholders, it does not convey the right to foreclose or take possession of the pledged asset. The remedies accorded to bondholders in such a bond issue are limited by law and are extremely complex. For purposes of this discussion, the pledged asset provides an additional measure of security beyond the general fund revenue pledge, but it does not mean that ownership or use of that facility by the City is at risk.
What is "customary" with this City is not technically adequate, or legal, according to State regulations.
DeleteThe previous lease revenue bonds are bogus, but of course the banks issued them anyway, because they feel certain the City is a good credit risk. Also, lease revenue bond lawyers are paid a great deal to push these bonds through, even when the banks are not acting in strict accordance with statutory law.
What is bogus is that lease revenue bonds, after construction of a public asset, are supposed to generate a lease revenue stream, NOT simply act as artificial devices designed to "spin" our public assets as a type of collateral, to "pledge additional security in the form of an essential City asset."
After Pacific View is purchased and rehabbed, with removal of excessive blacktop, the former school site could immediately begin generating lease revenue through a non-profit foundation which could help to rehab the classrooms, and could lease those classrooms for artists' studios and a learning center, and also lease the open space as lovely community gardens where horticulture and landscaping design could be taught (think of the gardens created at the Del Mar Fair, yearly). These same gardens could also generate a lease revenue stream through small weddings held at Pacific View, in the gardens, on weekends.
Additionally, lease revenue, through the non-profit, could be generated by Farmers' Markets held at Pacific View, in the future. Because, after rehab there would be a lease revenue stream, no bond vote would be required. Lease revenue bonds are designed for projects with lease revenue streams. General Obligation Bonds should be voted upon by the public for any bonds secured, primarily, after construction at the public sites, by payments to the bond holders from a public agency's general fund.
And yes, while you may think it's folly, the City should demand that EUSD accept terms of carrying the loan over 30 years at 0% interest.
They will have to generate millions of dollars just to rehab the buildings. How is a bake sale going to raise that kind of funding?
DeleteI assure you that nobody will be allowed to occupy the buildings until they have been rehabilitated first. Can you say earthquake retrofit? $$$! The chicken and egg syndrome on steroids!
5:00
DeleteCan you name 4 other local schools that are now in operation and are just as old or older than PV but do not require eartjquake retrofit? Sure you can, but you won't because you always side with urban growth. To each his own.
Some botox and fresh lipstick on the old girl will be fine for the first years of PV's operation. Hopefully Mr. Baird will auction off what is now being stored at PV so that renovation can begin ASAP. And I believe hundreds of volunteers would love to pitch in to clean, green and restore much of it. Count me among them. Many hands make light work and the sooner PV is functional again the better. But keep your ideas of bake sales and bricks coming.
It's sounds so great and a novel idea for sure. But this is not Walden Fred. It will be a City run and owned operation with or without volunteers. They will go by the book as required by state law. All protocols will be followed with current building codes . It will be government code standards.
DeleteAnd no. I don't support urban growth. I'm just a realist. Look around we are surrounded by 25 million people. Change is going to come. You know you've lived it . All you have to do is look around your neighborhood. I'm all for controlling growth but you can't stop it.
DeleteSorry to be so dire but I recently found out my lease of the last four years will not be renewed as the new out of town group that just purchased the four properties that I and my neighbors live on will soon scrape them and build something like what's next door to you. Change is coming.
DeleteFor the pre-existing classrooms to be used, rehabbing them would NOT include earthquake retrofitting. These are on story buildings constructed in the 50's. That's another red herring, that everything, including pre-existing construction must be "retrofitted."
Delete3:53 PM. As is "customary", Lynn, you make a blanket statement without any reference to back it up. When you say:
Delete"What is "customary" with this City is not technically adequate, or legal, according to State regulations."
please point us to state code where you believe that's true.
Not only are you an expert in eminent domain but in government finance as well.
I backed up my opinion with the subsequent paragraphs in my 3:53 post. What is customary in our city, which was a phrase I was quoting, as quoted by another commenter, from City documents, is not correct according to Statutory law and the state regulations through the Office of Accounting.
DeleteThe Jarvis Taxpayer Association was a friend to the Citizens of Encinitas in providing lawyers to help us defeat the ill advised Prop C, locally, which was an illegal tax. Just as the State Bond provided no new water facility infrastructure, so the local bond was just meant to subsidize our general fund, and provided no separate services or "earmarked" guarantees.
If someone had challenged the lease revenue bond "floated" for our library, the Court would have found that there is no "lease holder" for the library, other than the City, through our General Fund, which is unacceptable, and not in keeping with the letter or intent of State Law.] http://sam.dgs.ca.gov/TOC/6000/6886.htm 6886 CLIENT DEPARTMENT’S RESPONSIBILITIES "Ensure that any lease or contract securing an issuance has all required elements exempting it from the definition of state constitutional debt (and that securitized operating leases have appropriate termination provisions). Obtain Attorney General review, as needed." From reading relevant State Supreme Court law, linked below, and the California State Administrative manual, linked above, it is apparent that THERE WILL BE NO LESSOR AND NO STREAM OF LEASE REVENUE WITH WHICH TO REPAY ANY LEASE REVENUE BONDS for the Hall Park "community" park and the Moonlight Beach improvements. Therefore, issuing such bonds WOULD NOT BE FOUND TO BE LEGAL. http://law.justia.com/cases/california/calapp3d/72/164.html It was not equitable or legal to use lease revenue bonds in a a "smoke and mirrors" scheme to avoid putting general obligation bonds to a public vote.
Please also review the following:
“there are instances at both the state and local level where lease revenue bonds make sense. Specifically, if the improvement being financed by the indebtedness itself generates revenue, an argument can be made that voter approval should not be required because the source of the repayment does not put taxpayers at risk. The clearest example of the legitimate use of lease revenue bonds is a public parking garage. Parking garages generate revenue and that revenue can be used to repay the bond holders."
http://www.hjta.org/california-commentary/voters-shut-out-prison-bond-debt-decis ion
Pacific View will generate a lease revenue stream. But for anyone interested in lease revenue bonds, and how the City's "customary practice" of collateralizing through public assets is not acceptable, because there must be, after construction an actual lease revenue stream, here is more from previous e-mails I sent to the City:
DeleteAs you must be aware, the way debt, including public debt is handled, by the government and through banks, puts the "little guy," put us, the consumers, ratepayers and taxpayers, at a huge disadvantage. There is inadequate regulation, as you know, for the stock market, as well. The SEC is composed of banking interests! Numerous citizens, including on the Leucadia Blog, beginning in 2006, have been bringing up lease revenue bonds, and how "dodgy" they are. I don't feel that the SDWD should have been used as a supposed "revenue stream" for the lease revenue bond that was "floated" to buy the Hall Property, in the first place. As we know, SDWD is NOT citywide. Second, its monies do NOT go into paying for use or occupancy, or building or creating the park. The whole ploy was a ruse, and creating a special "Financing Authority" is simply a way, in this case, that lawyers have devised to deny the citizens our right to vote on general obligation bonds.
http://law.justia.com/cases/california/calapp3d/72/164.html
The link I shared with you above, has this language, which I'll quote, below. Case law has the same validity as statutory law.
Delete"'The law is well settled in this state that installment contracts of any kind, where the installment payments are to be made over a period of years and are to be paid out of the ordinary revenue and income of a city, where each installment is not in payment of the consideration furnished that year, and the total amount of said installments when coupled with the other expenditures exceeds the yearly income, are violative of the constitutional provision in question unless approved by a popular vote. This is so whether the contract be denominated a mortgage, lease, or conditional sale. ... [C]ontracts for the furnishing of property in the future have been upheld, but only where no liability or indebtedness came into existence until the consideration was actually furnished. In other words, [72 Cal. App. 3d 172] such contracts are valid where each year's installment is within the city's income, and where each year's payment is for the consideration actually furnished that year.'" (Offner, supra, at p. 486; Dean, supra, at p. 477; Italics in original.)"
". . . Further, contrary to the strictures of the Offner-Dean rule that the lease create an indebtedness only for each installment of rent as it falls due, the effect of the repayment clause is to create an aggregate indebtedness on the part of the City above and beyond yearly rental payments. [3a] The constitutional debt limitation provision was enacted "to prevent the improvident creation of inordinate debts which might be charged against taxpayers in ever increasing volume from year [72 Cal. App. 3d 174] to year." (Lagiss v. County of Contra Costa, supra, 223 Cal. App. 2d 77, 85; cf. McBean v. City of Fresno (1896) 112 Cal. 159, 164 [44 P. 358].)
"Each year's income and revenue must pay each year's indebtedness and liability, and no indebtedness or liability incurred in one year shall be paid out of the income or revenue of any future year." (McBean, supra, at p. 164.) The constitutional provision is there to insure that "every separate payment is supported by its own consideration and ... falls within the budgetary allotment provided for that year. ..."
(County of Sacramento v. Assessment Appeals Bd. No. 2 (1973) 32 Cal. App. 3d 654, 668 [108 Cal.Rptr. 434].) [2b] The repayment clause violates the above principles: It creates a municipal indebtedness in 1975 (the execution date of the repayment contract) to be paid out of the City's general funds in 1980, regardless of the expenditures allotted for that year and regardless of the revenue generated by the special fund which is to finance the project."
". . . California courts have recognized that any obligation which creates a liability upon the general funds of a City beyond the year in which funds are received, is violative of the constitutional limitation unless approved by popular vote. (City of Montclair v. Donaldson, supra, 205 Cal. App. 2d 204-205; City of Palm Springs v. Ringwald, supra, 52 Cal. 2d 620, 626; City of Oxnard v. Dale, supra, 45 Cal. 2d 729, 733.)"
" . . . In sum, we conclude that the repayment contract violates the constitutional debt limitation because it contravenes the Offner-Dean [72 Cal. App. 3d 177] requirement that each year's payment be supported by consideration furnished that year, and because the City's in futuro commitment of its general funds to repay the Agency's HUD obligation in the absence of a two-thirds vote of the electorate creates an illegal indebtedness as articulated by the Supreme Court in City of Palm Springs v. Ringwald, supra. For these reasons, the judgment of the trial court in favor of respondents as to the repayment contract is incorrect and must be reversed."
If you read the precedent, above, you will see that similarly, the City's repayment contract with the Finance Authority has violated and would violate the constitutional debt limitation because it contravenes lease revenue case law, that each year's payment must be supported by consideration furnished that year (a REVENUE STREAM) and because the City's in futuro commitment of its general funds to repay the Finance Authority's obligation in the absence of a two-thirds vote of the electorate creates an illegal indebtedness as articulated by the Supreme Court.
DeleteFrom my reading of this precedent and the other precedent I shared through links, above, the City's creating a Finance Authority may have been okay, but that there must be a legitimate consideration paid for "use and occupancy," which consideration is derived from such occupation and use.
That is, SDWD's "revenue stream" was not derived from or related to the occupancy and use of the former Hall Property. Nor should the since issued lease revenue bond have been ‘artificially” secured by the Mossy Property, at the greater expense of SDWD ratepayers! We honestly don't see how that lease revenue bond "scheme" could be legal.
Nor would the proposed lease revenue bond to raise money for building the first tier of the first phase of the Hall Property be legal. In other precedent, I shared, revenue was obtained from ball stadiums. The Jarvis Taxpayer Association link I shared discussed lease revenue bonds being legitimate for parking structures, which would generate a revenue stream paid by those who parked there.
Obviously, the City also could not afford to take away so much money from other vital improvement funds, such as open space and habitat funding and funding for flooding, in particular. Our City isn't functioning within its means.
If our City were in such great financial shape as Mayor Stocks claimed during his State of the City address, and was claimed by Stocks and the City Manager during the budget report, then why would we have to do this proposed reallocation of capital improvement funds?
Lynn. It appears you quickly make up your mind and then go searching for anything that appears to support your position. Because you've dumped a lot here, I, and hopefully others who have some time, will try to rebut it but there is only so many hours in the day.
DeleteFirst, you can't use state government financing guidelines for local governments. They are different so referencing the state department of general services doesn't apply here.
Second, and that's all I have time for, the kind of lease-revenue bonds the city issued for community park/moonlight are pretty common throughout the state. They are similar in concept to certificate of participation bonds which have been used for decades.
A soap opera should be filmed at city hall, could be entertaining enough to pay for everything! Opening scene is someone's love child being conceived in the back office while mountains of paperwork is piled up being ignored.
ReplyDeleteGosh, what a creative idea. That couldn't possibly happen at City Hall, could it?
DeleteReminds me of the t.v. series Parks and Rec. only on a bigger level. This has become ridiculous to anyone who knows anything about what is going on at the City. And there is plenty of blame to pass around. We are a city of 63,000 people who wanted to get away from County supervision. Now, we have a bunch of lame duck councilmen and women, and a napoleonic city manager. Add to that a bunch of new directors and you have a great soap opera. Unfortunately, the average citizen is losing. Sort of like in the federal government.
DeleteEncinitas is Pension Paradise for incompetent civil servants. Maybe the City can order their personnel too wear chastity belts while on the clock!
DeleteAnd Shaffer will somehow tell us in her next newsletter how this all makes sense and wasn't her fault.
ReplyDeleteYou begun to recognize a pattern have you?
DeleteTypical academic = all theory and no application.
DeleteShaffer's newsletter will be interesting, that's for sure. Where is the spin doctor? I thought she was supposed to take heat for their mistakes.
ReplyDeleteShe is busy working on Barth's election campaign at Shaffer's house: along with employees of EUSD. Ask Lisa.
Deleteit is my opinion Barth plans to run and will announce in August. This way she avoids scrutiny letting all the criticism go towards Gaspar. Then she hopes to position herself as a savior. Her ego is too big to step down and she is plotical animal. Wait for it, she is running
DeleteWrong. Barth will not run for elective office.
DeleteDump Barth!
DeleteI think she already dumped herself...
DeleteI just got a response back from the Executive Secretary for EUSD, who acts in the same capacity as our City Clerk, in dealing with public information requests.
ReplyDeletehttp://ww2.eusd.net/Pages/Pacific-View.aspx
The soil report can be found there. From a preliminary reading of the soil report, just as I suspected, the fill areas would have to be properly graded and re-compacted for any redevelopment. Also, should there be any excavation for potential underground parking, the fill dirt would have to be removed.
nothing to see here people, please move along
ReplyDeleteI'm starting to smell a rat. Whose idea was this in the first place? And why is Tony Krantz so hung ho.
DeleteThis comment has been removed by the author.
Delete12:37
DeleteNo "t" in Kranz, an no "h" in Gung. But I would imagine Tony's desire to preserve his home town played a big part in wanting to save Pacific View school. Who's idea was it to keep the property public for education? J.S. Pitcher, the man who originally donated it. But more recently it's hard to pin point that person who wanted it to remain for education since so many people were discouraged to learn it might not ever be a school again. Probably began with a board member of EUSD, but was Scott Chatfield who led the pack of citizenry IMHO. I don't smell any rats yet. But am optimistic PV will become a substantial benefit to the city and many who will regularly go there to teach, learn and perform.
Fred, I would feel more comfortable if the vision were controlled by the artistic community than City Hall. You guys did the strong lifting, and the 3 council members are taking credit. Once Vina gets involved, we will all be sorry given his failed record that started before he joined Encinitas.
Delete1:59 Others may not feel the same optimism as you. Some of us are not happy that the council paid way more than the appraised value. There will be tons of extra costs to get that property ready for anything. I wouldn't be too confident or optimistic just yet.
DeleteBefore the City attempts to buy anything they should take a look at their own debt ratio and analyze where they stand today with failing infrastructure such as beach access and lifeguard towers and paying off existing debt.
ReplyDeleteThe city set aside $5M for moonlight beach, that included the lifeguard tower. Besides how many more lives will be saved with a new tower?? Do we really need a new tower to apply band aids to tourist sun burns?? No we don't.
DeleteMoonlight was a package with Hall. Hall was $19.3 million. The total for both was close to $25 million, so Moonlight was close to $6 million, but that did not include a new lifeguard tower. It did, however, include $1.1 million for a lovely two-car garage.
DeleteIt did include a new LG tower, I was at the meeting. The taxpayers have been ripped off again.
DeleteThat same money is part of the $10 mil. Ask Tony.
DeleteThat same money is part of the $10 mil. Ask Tony.
Delete1:32 PM. No it didn't. Much of the construction funds came from the state grant for Beacon(s) beach as that project was stalled over bluff stabilization issues and the grant was set to expire. There wasn't enough money in that grant to include the tower at Moonlight. However, storage space has been an ongoing issue at the tower and the garage helped solve that.
DeleteOk 1:42 let's assume the money for moonlight beach came from the state Beacons project. Then we ask........... Wait for it......... Wait for it.... Where did the $5M that the council approved for moonlight get spent?? Where did it go?? Where's the money???
DeleteDon't worry. Vina says we're talk about that later. The council is one big horse's patootie for listening to Vina.
DeleteThe new lifeguard tower has not been built or even funded. The Moonlight Beach improvements consisted of the new parking garage and the the bathrooms and snack bar. The old bathrooms and snack bar were demolished.
DeleteThe financing for the Hall property park construction and the Moonlight Beach improvements were combined using lease revenue bonds, money from the Hall property park fund, money from the state originally for Beacon's, and money raided from other existing funds with no plans for replacing the money.
It wasn't necessary to combine the two projects to finance. Vina did it to make the whole scheme more palatable for the public. There was more opposition to the ultra-expensive Hall park project. It was even suggested it be built in stages by Tony Kranz Moonlight Beach improvements could have been built with the state money and additional money from city funds. Shaffer was correct in questioning the linkage of the two projects.
3:12 PM. See July 11, 2012 council meeting staff report. On page 5 summary:
DeleteMoonlight State Beach Improvements $ 4. 8 million
Existing Grant Funds 1. 9 M
Financing( a) 2.9 M
The $2.9M is Moonlight Beach's share of the bonds. That's how it got spent. If you can show this didn't happen, please show us. Now that the Moonlight construction is over, the money has been spent.
Since it didn't format properly, please note the $4.8M is the total for Moonlight with $1.9M from the state grant and $2.9M from proceeds of the bond sale.
DeleteLet them use the old tower for another 5 tears. What purpose is an upgraded tower going to serve? Maybe the city shouldn't have built unnecessary fire stations!
DeleteVina wrongly told the council at the July 2012 Hall Park meeting that the Moonlight and Hall Park funding were linked.
ReplyDeleteThen in 2013 in response to a question from council member Shaffer city staff told the councils the projects were not linked.
Another example of city Manager Vina misleading the public and the council on important financial information.
Andrew Audet
Not sure where you're going with this. Staff recommendation in 2012 & 2013 was to combine the funding shortfall into one bond issue, thus saving on legal and financial fees. Other than the bond issue, the projects are unrelated. I don't see any misinformation on this.
DeletePlease point us to where you think it is.
How could Shaffer not see that the bond issue included both projects as that was clearly spelled out in the staff reports and the $8M figure came from the combined shortfalls of the two projects rounded up, at council direction, to provide a cushion.
Where we're all going with this is: residents lose again.
DeleteJust like Stockton...
DeleteExcept you lose just by living in Stockton...
Delete2:29
ReplyDeleteAt the July 2012 meeting Vina told the public the city was in good financial shape. This was not true. Now we know the city's finances are in shambles and there is no money for other projects.
Vina also told the council the hall park and moonlight were linked. Another untruth as council later learned they were not linked or dependent on each other.
where is it going? Vina tells untruths, misrepresents information to the council and public and is a threat to the well being of taxpayers
Moonlight and Hall were combined as one bond issue. That's what 1:04 meant by posting "Moonlight was a package with Hall."
ReplyDeleteWhere's the money?? If $5M already spent at moonlight why do we need to spend another $5M??
DeleteTo replace the lifeguard tower. The old tower wasn't replaced under the Hall park/Moonlight improvements package.
DeleteNothing wrong with current tower.
DeleteI do like the idea of a slide from the tower to the soup though. Might speed up rescues. Definitely more fun though. Especially with waxed paper.
Delete6:57 PM
ReplyDeleteThe cost estimate was done years ago. If built in the next year, the cost could be $8 mil. Lots of bells and whistles. It would be cheaper to buy one of the houses on the bluff and build a slide down to the beach.
For those of you interested in the possibility of lease revenue bonds being used to fund PV, follow this link: http://scocal.stanford.edu/opinion/rider-v-city-san-diego-31920.
ReplyDeleteThis opinion is currently being appealed.This strong opinion notes that because Joint Power Authority agencies are not mentioned in specific State law, they are a separate entity and not subject to debt limitations of the members of the JPA or other requirements. Note that this case involves the expansion of the San Diego convention center - a location that is known to generate revenue. Our possible funding of PV with lease revenue bonds does not provide any known sources of revenue. As I have pointed out before, we have previously issued lease revenue bonds with no revenue source.
We should not do this again, whether technically legal or not. The citizens of Encinitas should vote on a general obligation bond if thyere is no other way to pay for PV.
I resent Shaffer's statement when she said 50 years from now know one will know or care what we paid for PV. She must be a fortune teller.
ReplyDeleteTo be fair, what this council is doing to increase unfunded road and pension liabilities will dwarf the $10 million purchase price.
DeleteWhen no matter where you are you always believe you know better than everybody else: it just seems like you are prescient. Lisa should be careful and Kranz as well: they could end up the minority this Fall and then they'll be signing Kumbaya!
DeleteThere's more to it than whether on not anybody will remember 50 years from now that the City spent $10 million to buy PV.
DeleteGoing that route is continuing and reinforcing a bad habit. The City spent $40 million to buy the property and build the Hall Park. It's four ball fields, a skate park, a dog park, restrooms, short roads and parking lots. Is that worth $40 million? Not by a long shot.
Spending $10 million for PV is another in a string of bad precedents. Count increasing pensions by 35% among them.
Whether you're ready or not, it's "whether or not" above.
Delete11:50 AM.
ReplyDelete"As I have pointed out before, we have previously issued lease revenue bonds with no revenue source."
The lease is between the city and the JPA.
Oh, also:
Delete"This opinion is currently being appealed"
The case is from 1998. The state supreme court confirmed the appeals court opinion on August 6, 1998.
Thanks for the update/ clarification !
DeleteYes, the lease is between the City and the JPA, but the City has no source of funding from the properties involved. The lease depends on the City general fund - a fund that can only be stretched so far
Delete