Finance Advisory Committee Agenda 01/09/2001 Finance, Advisory, Committee, Agenda, 2001, The proposed Long Point Resort Project (the "Project") includes a nine-hole regulation length golf course and assumes the use of City owned land for four holes. The Project also includes a golf range that would be operated on City owned land. As you already know, the City has not decided whether to use its land for the operation of the golf course and/or practice range. The Planning Commission will review land use issues in the normal course of its review of the Project. The City must make a decision to either accept or reject Destination Development Corporationís (the "Developer") proposal before July 17, 2001 in accordance with the California Permit Streamlining Act., In the event a concession agreement is negotiated between the City and the Developer of the Project, the concession fee will be a material economic consideration. The City Council (in conjunction with the consultants it has retained) would negotiate the terms and conditions of such a concession agreement, including the concession fee. Staff is seeking suggestions regarding methods that could be used to determine the concession value (and fee) for the use of the Cityís land. A couple alternatives include: RPV Finance Advisory Committee Meeting Agenda for 01/09/2001 JANUARY 9, 2001

AGENDA

CITY OF RANCHO PALOS VERDES

FINANCE ADVISORY COMMITTEE

TUESDAY, JANUARY 9, 2001

7:00 P.M.

City Hall

Community Room

  1. Roll Call.
  2. Approval of Agenda.
  3. Approval of Minutes for the meeting of December 12, 2000. (Butler)
  4. Long Point Resort Project – Suggestions Regarding Valuation Methods And Protective Covenants For A Concession Agreement. (McLean)
  5. Summary Of Findings And Recommendation – Forrestal Management Plan. (McLean)
  6. Consideration For Changing The Day Of The Regularly Scheduled Finance Advisory Committee Meetings. (Burton)
  7. Status report of economic trends that may have an impact on the City (if any). (Burton)
  8. Public Comments.
  9. Adjournment.

 

TO:HONORABLE CHAIR AND MEMBERS OF THE FINANCE ADVISORY COMMITTEE

FROM:DENNIS McLEAN, FINANCE DIRECTOR

DATE: JANUARY 9, 2001

SUBJECT:LONG POINT RESORT PROJECT – SUGGESTIONS REGARDING VALUATION METHODS AND PROTECTIVE COVENANTS FOR A CONCESSION AGREEMENT

RECOMMENDATION:

  1. To provide staff with suggestions regarding valuation methods for determining the concession fee that the City should be paid by the developer in the event City owned land is used for the proposed golf operation; and
  2. To provide staff with suggestions regarding protective covenants that could be included in a concession agreement with the developer in the event City owned land is used for the proposed golf operation.

BACKGROUND AND DISCUSSION:

The proposed Long Point Resort Project (the "Project") includes a nine-hole regulation length golf course and assumes the use of City owned land for four holes. The Project also includes a golf range that would be operated on City owned land. As you already know, the City has not decided whether to use its land for the operation of the golf course and/or practice range. The Planning Commission will review land use issues in the normal course of its review of the Project. The City must make a decision to either accept or reject Destination Development Corporation’s (the "Developer") proposal before July 17, 2001 in accordance with the California Permit Streamlining Act.

Suggestions Regarding Valuation Methods For A Concession Agreement

In the event a concession agreement is negotiated between the City and the Developer of the Project, the concession fee will be a material economic consideration. The City Council (in conjunction with the consultants it has retained) would negotiate the terms and conditions of such a concession agreement, including the concession fee. Staff is seeking suggestions regarding methods that could be used to determine the concession value (and fee) for the use of the City’s land. A couple alternatives include:

  • Comparable amounts currently paid in similar transactions (i.e. the Ocean Trails and the Palos Verdes Peninsula Unified School District lease agreement); or
  • The present value of an annuity based upon the difference between the estimated value of the Project with a golf operation vs. the value without a golf operation.

Upon summarizing the FAC’s suggestions, staff will forward them to other appropriate staff, the City’s consultants and the City Council.

Summary Of Suggestions Regarding Protective Covenants For A Concession Agreement

Notwithstanding the seriousness of other land use issues, the proposed use of the City’s land for the golf operation requires careful consideration of the legal and business issues, especially the covenants to protect the City’s interest in its land (the "protective covenants"). Therefore, staff is seeking suggestions regarding the protective covenants that could be included in a concession agreement, including:

  • Requiring the City’s discretionary consent prior to any assignment of the managerial operation of the golf course and/or practice range to another party; or
  • Exclusion of the entire golf course and practice range from any security agreement entered into by the Developer; or
  • The inclusion of a first right of refusal to purchase the golf course and/or practice range in the occurrence of certain events (i.e. bankruptcy, cessation of operation);

Staff encourages the FAC to provide any other comments it may have regarding the proposed concession agreement. Upon summarizing the FAC’s suggestions, staff will forward them to other appropriate staff, the City’s consultants and the City Council.

Finance Advisory Committee’s Request – Inquiry to Department of Interior

During its meeting on December 12, 2000, the FAC unanimously agreed via a motion, to ask staff to send a letter to the Department of Interior. The letter would outline the proposed Project, the City’s timeline for processing the Developer’s application and inquire whether the concept of the proposed golf operation is already known to be "unapprovable". Staff discussed this suggestion with the City Manager and the Deputy planning Director after the December 12, 2000 meeting of the FAC. Based upon its discussions with the Department of Interior, staff believes that if the federal agency were to reply to such a written inquiry from the City, it would likely state that it would review the proposal only after approval of the Project by the City. Unless directed to do so by the City Council, staff will not send the written inquiry suggested by the FAC to the Department of Interior.

 

Suggested Timeline for the Finance Advisory Committee’s Review

Based upon the following timeline, the FAC will complete its review and make its recommendation prior to the proposed May 8, 2001 Planning Commission hearing.

Task Benchmark

Tentative Date

Reviewed the Draft Scope of Services letter between Keyser Marston Associates Inc. (the City's Resort consultant) and HVSI and provide comments and suggestions to Staff and PMW Associates (the City's lead consultant for the Project) for incorporation into the final letter

Completed

12/15/00

Provide Staff with a summary of suggestions regarding valuation methods and protective covenants for a concession agreement

1/9/01

Expected completion of HVSI's limited study

1/31/01

Review and finalize the summary of suggestions regarding valuation methods and protective covenants for a concession agreement

February 2001 Meeting

First review of HVSI's limited study by the FAC

February 2001 Meeting

Complete the review of HVSI limited study and develop a recommendation regarding the Developer’s projected tax and fee revenues and HVSI's limited study

March 2001 Meeting

Complete the review of the Project and develop the framework of its recommendation to the City Council

March 2001 Meeting

Review a draft of its recommendation to the City Council

April 2001 Meeting

Presentation of a recommendation to the City Council

4/17/2001

Respectfully submitted,

 

 

Dennis McLean

Finance Director

 

TO: HONORABLE CHAIR AND MEMBERS OF THE FINANCE ADVISORY COMMITTEE

FROM: DENNIS McLEAN, FINANCE DIRECTOR

DATE: JANUARY 9, 2001

SUBJECT: SUMMARY OF FINDINGS AND RECOMMENDATION – FORRESTAL MANAGEMENT PLAN

RECOMMENDATION:

  1. To concur with the reasonableness of the preliminary cost estimates for Alternatives I, II and III, including the estimated cost of any necessary Environmental Impact Report (EIR), that has been included in the revised Exhibit A; and
  2. To recommend to the City Council the adoption of the Forrestal Management Plan with the following suggestions:
  1. To consider directing staff to perform the necessary planning and design engineering, including cost estimates, to enable the City Council to make a decision between the project choices contained in Alternatives II and III (see Exhibit A), or any variation thereof.
  2. To consider directing staff to utilize grant funds procured (if any) and available restricted funds (i.e. Measure A, QUIMBY and EET) to implement the alternative selected by the City Council.
  3. To consider the offer made by the Palos Verdes Peninsula Land Conservancy (the "PVPLC") to manage the Forrestal property and work with the City to procure funds to implement the alternative selected by the City Council.
  4. To not consider Alternative I (see Exhibit A).

BACKGROUND:

Assignment by the City Council

At its November 17, 1998 meeting, the City Council directed Staff to work with the Recreation and Parks Committee and the Palos Verdes Peninsula Land Conservancy (the "PVPLC") to prepare a management plan for the Forrestal property. Accordingly, the Forrestal Property Management Plan Subcommittee (the "Forrestal Subcommittee") was formed, consisting of two members of the R&P Committee, two members of the PVPLC, one member of the Equestrian Committee and one member of the Los Serenos de Point Vicente (the City’s docents). The Forrestal Subcommittee conducted a series of monthly meetings, as well as a public outreach meeting on May 25, 2000. Afterwards, the Deputy Planning Director prepared a staff report for the City Council, dated September 5, 2000, recommending the adoption of the Forrestal Management Plan (the "Plan").

During its meeting on September 5th, the City Council referred the Plan to the Finance Advisory Committee (the "FAC"). The FAC was directed to review the estimated initial costs and annual maintenance costs of the three alternatives contained in the September 5th staff report and make a recommendation to the City Council. The FAC will present its recommendation at a joint workshop with the City Council and the Recreation and Parks Committee on January 30, 2001.

FAC Meeting - October 4, 2000 – Review of the Plan

The Members of the FAC conducted a site visit of the Forrestal property on September 23, 2000. Two weeks later, the City’s Deputy Planning Director, Director of Public Works and the City’s geological engineer, James Lancaster of Zeisler Kling Consultants, Inc., presented an overview of the Plan at the October 4th meeting of the FAC. Several documents were attached to the October 4th staff report, including:

  • A copy of the September 5, 2000 City Council staff report;
  • A copy of the letter written to the City Attorney from the City’s geological engineer, dated April 21, 2000;
  • A revised cost summary referred to as the schedule of Initial Costs & Annual Maintenance Alternatives (see Exhibit A);
  • A copy of the Memorandum written to the City’s Deputy Planning Director from the City Attorney, dated July 28, 2000;
  • A copy of several updates to the Plan written by the Deputy Planning Director; and
  • A copy of several letters from the public.

Additionally, Staff distributed a copy of the Forrestal Management Plan for review by each Member of the FAC.

After Staff completed the presentation of its overview of the Plan, the FAC asked Staff and the City’s Geological Engineer questions, received testimony from several members of the public and discussed the Plan.

FAC Meeting on December 12, 2000 – Summary of Findings and First Draft Recommendation – Forrestal Management Plan

Staff presented an overview of the First Draft Recommendation – Forrestal Management Plan during the regular FAC meeting on December 12, 2000. Afterwards, the City’s Public Works Director and Geological Engineer answered questions asked by the FAC members, including questions regarding public access and safety. At the conclusion of its discussion, the members of the FAC agreed that the estimated cost for the preparation of an EIR should be included in Alternatives II and III.

Additionally, the FAC agreed that Alternative I is not prudent without repair or removal of the gunite drains. The mere installation of chain link fencing cannot eliminate the use of the dangerous trails (especially those near the gunite drains) that are closed to public use. Therefore, Alternative I should be excluded from its recommendation to the City Council.

Exhibit A - Initial Costs & Annual Maintenance Alternatives

Staff and the City’s Geological Engineer have prepared preliminary costs estimates of the Initial Costs & Annual Maintenance Alternatives (see attached Exhibit A). A formal engineering study has not been conducted during the preparation of the Plan and the cost estimates. A brief summary of the three preliminary alternatives follows:

Alternative I (Not Recommended)

Chain link fencing would be installed throughout the property to minimize access to the dangerous areas of the Forrestal property. Public access to a number of trails would continue to be prohibited. Warning signs have been installed to discourage use of prohibited trails. The entire gunite drainage system would be left "as is".

Alternative II (Minimum recommendation by the City’s Geological Engineer)

The existing trails would remain open to the public after the completion of Alternative II. Public access to closed trails (referenced in Alternative I) would continue to be prohibited. Based upon the preliminary assessment by Staff and the City’s Geological Engineer, Alternative II would include:

  • The installation of split rail fencing to serve as protective barriers for the public;
  • The replacement of the drainage facilities along Forrestal and Intrepid;
  • Removal of the stairway along Forrestal;
  • The construction of an earthen berm to the trail along the Quarry Bowl; and
  • The construction of a new storm drain from the toe of the slope to the trail head along the Quarry Bowl.

Staff has included a provision in Alternative II for $25,000 in the revised Exhibit A for the possible cost of the preparation of an EIR as suggested by the FAC.

Alternative III

All of the improvements described in Alternative II would be included in Alternative III. Additionally, slope re-grading would be conducted along Forrestal and Intrepid. This would enable the re-opening of several trails along Forrestal and Intrepid. Staff has included a provision in Alternative III for $50,000 in Exhibit A for the possible cost of the preparation of an EIR.

Finance Advisory Committee’s Recommendation – Evaluation Of Other Open Space Property Regarding Necessary Major Repairs

During its meeting on December 12, 2000, the FAC unanimously moved to recommend to staff to evaluate other open space property (similar to Forrestal) for determination whether other major repairs may be necessary in the near future. Staff has discussed this recommendation and will include it in the forthcoming master plan of drainage project. To the best of staff’s knowledge, no major repairs are anticipated upon any other open space land owned by the City in the near future.

FISCAL IMPACT

Staff and the City’s Geological Engineer have prepared preliminary costs estimates of the Initial Costs & Annual Maintenance Alternatives (see Exhibit A). Once again, a formal engineering study has not been conducted. Based upon the preliminary review, the initial costs will be about $365,000 and $725,000 for Alternatives II and III respectively.

The FY 00-01 budget includes an appropriation of about $92,000 of General funds for planning and design engineering services associated with the Plan. The Initial Costs presented in Exhibit A are not included in the FY 00-01 budget of the City, nor the Year 2000 Five-Year Financial Model, last revised in October 2000.

The Public Works department is awaiting a reply from Los Angeles County whether or not Measure A Maintenance funds can be used to pay for the Initial Costs described in the Plan. Approximately $450,000 of restricted Measure Maintenance funds are currently allotted to the City.

Regardless whether Measure Maintenance funds can be used, Staff anticipates a diligent search to procure federal, state, and other county and non-profit funding of the initial costs proposed in the Plan. The availability of additional outside funds, as well as use of the City restricted funds (i.e. QUIMBY and EET), should also be considered.

Sincerely,

 

Dennis McLean

Finance Director

 

TO: HONORABLE CHAIR AND MEMBERS OF THE FINANCE ADVISORY COMMITTEE

FROM: DENNIS McLEAN, FINANCE DIRECTOR

DATE: JANUARY 9, 2001

SUBJECT: CONSIDERATION FOR CHANGING THE DAY OF THE REGULARLY SCHEDULED FINANCE ADVISORY COMMITTEE MEETINGS

Staff Coordinator: Matt Burton, Accounting Manager

RECOMMENDATION:

Discuss and consider changing the day of the regularly scheduled Finance Advisory Committee meeting.

BACKGROUND:

At its December 12, 2000 meeting, the Finance Advisory Committee (FAC) moved to agendize the topic of changing the date of the regularly scheduled FAC meetings. The FAC currently meets on the second Tuesday of each month. The Planning Commission also meets regularly on the second Tuesday of each month. Members of the FAC, as well as members of the public, have expressed concern over having both meetings take place at the same time. Because several of the projects assigned to the FAC by the City Council (i.e. the Long Point Project) are also assigned to the Planning Commission for review, the public has expressed an interest in attending both meetings. The members of the FAC would have to formally approve changing the day of their regularly scheduled meeting prior to making any changes.

DISCUSSION

Staff has reviewed the City’s calendar of regularly scheduled meetings and determined that if the FAC were to change the day of their meeting, the second or fourth Monday or the second or fourth Wednesday of the month appear to be the best alternatives. Staff considered many factors in determining these four alternatives. First, City Council meetings are held on the first and third Tuesdays of each month, therefore Staff suggests that FAC meetings be held on an "off-council" week. Additionally, the Planning Commission meets on both the second and fourth Tuesdays of each month and members of the public have expressed an interest in being able to attend both FAC meetings and Planning Commission meetings. Staff further believes that the second or fourth Wednesday may be the best alternative, provided each of the FAC member’s schedules will allow for it. By having the FAC meetings the night after a Planning Commission meeting, both FAC members and the public would be able to consider any discussion or action taken by the Planning Commission the previous evening.

Another alternative would be for the FAC to keep the regular meeting date on the second Tuesday of the month. While there would still be a conflict with the regularly scheduled Planning Commission meetings, the members of the FAC would not have to go through the process of trying to rearrange their schedules.

Sincerely,

Dennis McLean

Finance Director