MEETING MINUTES

August 31, 1999
7:30 p.m.
City Council Chambers

Pursuant to Government Code Section '54952.2, the City Council Agenda for August 31, 1999 was posted on the door of the City Council Chambers, Third and AH@ Streets on August 27, 1999.

1. REVIEW OF ECONOMIC DEVELOPMENT INCENTIVE PACKAGE TO BE OFFERED TO SELECT BUSINESSES INTERESTED IN MOVING TO ANTIOCH
   

City Manager Ramsey gave a brief introduction of the evening and presented an overview of the connection between job/business incentives and Measure "U."

Economic Development Director Laura Sainz, gave the staff report dated July 21, 1999 outlining the incentive package currently being proposed on a trial basis.

In response to marketing questions from Council Member Freitas, Economic Development Director Sainz stated the City would embark on a mass marketing campaign that would include brochures. While Council Member Freitas felt the City Manager needed the necessary tools to negotiate with potential businesses, he also felt a mechanism should be put in place to keep the Council informed of the negotiation process with potential businesses. Furthermore, he felt a process was needed to track and ensure the benefit of the fee waiver was passed on to the end-user and suggested Council be involved in the approval of the consultants used. He then requested a mechanism be devised that would ensure the mandatory base wage would reflect the local inflation rate. He then stated these business incentives should be restricted to targeted geographic areas of Antioch, and be restricted to those businesses whose presence would be of the greatest benefit to Antioch as a whole.

Council Member Sudario stated she wanted each expenditure of the allocated money to come before the Council for a vote rather than be under the administration of the City Manager. She also requested full disclosure of the Community Development Block Grant funds designated for businesses during the last few years, and how that money had been spent. Ms. Sainz stated Block Grant funds could not be used for business incentives as being proposed. Although Council Member Sudario agreed with the requirement of new business providing benefits for their employees, she felt $12 an hour mandatory wage was unacceptable. She felt a minimum of $20 and hour would be necessary for employees to buy homes in Antioch and commute. She then requested an itemized list of the proposed waiver of fees stating she was opposed to the waiver; she did feel taxpayers should be paying relocation costs for potential businesses. Ms. Sudario requested a summary of the cost if the City lowered the building fees, rather than waiving them.

Responding to questions from Council, Ms. Sainz stated with the proposed $500,000 the City could possibly assist as many as four businesses. Council Member Soliz suggested a three-year rental subsidy program for businesses locating in the downtown area. He agreed the $12 an hour wage was not a livable wage, and suggested the language either be left out or changed to say "livable wage" rather than a specific amount. He was pleased this incentive package would only be available to businesses relocating from outside East County.

Roger Henry expressed concern regarding the fee waiver, stating he would prefer a sliding scale or some type of deferral during the first three years. He felt a tax reimbursement was counterproductive given the fact the City was trying to broaden its tax base.

Jean Kuberra stated she thought 500 employees generating a certain gross net income constituted a small business. She questioned the loan source for these small businesses and stated she did not feel the City should interfere with a business' tax deductions.

Council Member Freitas stated the work accomplished during this meeting was a good start, but felt Council would need more information to move forward with this item. He suggested Ms. Sainz return to Council in October with answers to the questions posed during this presentation, including how this proposal might affect the City financially. Council Member Sudario concurred and requested the next report include how these incentives would effect the General Fund.

2. WORK SESSION ON MEASURE "U" IMPLEMENTATION

City Manager Ramsey introduced the item and turned the presentation over to Community Development Deputy Director Victor Carniglia who presented the staff report on the tenth study session regarding Measure "U" Implementation. He concluded his report by stating staff was anticipating direction from Council to be brought forward in the form of a resolution at the meeting of September 14, 1999.

John Hall felt the appointment of a subcommittee should take place at an officially noticed public hearing and include two members-at-large. He felt there should be a definition of what constitutes a new homebuyer, resident, etc. He also asked for the definition of "established service levels" as outlined in the staff report, and stated he felt any exemptions granted should be done by either the Planning Commission or the City Council.

Allen Payton felt balance should be the focus of the discussion, and 300 homes per year would allow for more balance than 700 homes per year. He stated unless growth metering was removed after his term office expired, growth metering would apply to the McBail project. He also felt a regional fee would be helpful.

Mark Brady went over the proposed policies making several suggestions including: the annual rate should have the ability to both increase and decrease as necessary; require developers to submit proof the City was the primary reason for a project delay before being granted an extension. He then asked when the service levels were established for the Municipal Services Fee and requested Council budget a year in advance for any additional City workers needed to provide services for the projected residential increase. He further stated he would like to see an addition to the policy requiring projects to follow the local hire as outlined in the McBail project, and some wording stating staff would work with neighboring communities for sharing sales tax revenue.

Terry Ramus suggested the growth rate encompass the growth rate of the entire City keeping in mind the McBail project alone would be adding 75 homes per year. He felt 700 was too high, and stated the actual number be based on the assessment districts. He felt the Regional Transportation Fee was the most important part of this policy and was in need of a local increase. He stated if AB12 passed, East County would not have enough money to pay its transportation debt.

Roger Henry stated Council had invested a lot of time and effort into the development of Measure "U."  He felt Council's decision regarding the growth rate would have a lasting effect on their credibility. He further felt a Municipal Services Fee should be implemented at this time.

Guy Bjerke, Staff Vice-President of the Homebuilders Association, felt some of the proposed policies should not be adopted until a subcommittee was appointed to negotiate with those property owners and developers with development agreements. He felt the number of homes being built in East County would be reduced to the point the amount of transportation fees currently being collected could remain at its current level or be lowered. He further felt it would be irresponsible of the Council to adopt these policies on September 14, 1999 without forming a subcommittee authorized to work directly with the building community, who were committed to finalizing these policies a quickly as possible.

Jean Kuberra felt the policies should not be adopted until after the General Plan was updated. She felt without an updated General Plan it would be impossible to project the impact these policies might impose on the City. She questioned who would constitute the "City" as referenced in the proposed policy.

James Kyle voiced his concern on the placement of a growth cap, he felt the market should be the driving force behind the number of homes built and pointed out the number being suggested, 700, reflected the number of homes that had been built each year for quite some time based on supply and demand. He then questioned the cost of potential litigation fees should citizens decide to file against the City. He stated he was not aware of any incentive being proposed by Council to lure Antioch residents away from their out-of-town employers to Antioch based employers.

Council Member Freitas asked Finance/Leisure Services Director Tasker to explain what the consequences to the City, the School District, and transportation would be if all development was stopped. In response, Mr. Tasker started with the School District stating the Mello Roos bonds could not be canceled until after the houses were built, adding the District was in the process of building several schools over the next few years; should all development stop, there would only be enough money to build perhaps two of the four planned schools. In order to finish the Mello Roos as planned, Antioch would need to build approximately12,500 total homes. The current plan would put the last school on board in 2002/2003, mitigating the school shortfall in the Mello Roos area. He explained that while the outstanding debt of $36M was not a City debt, this financial obligation of the School District would directly affect the City's ability to make bond payments, and the increase in bond costs would eventually trickle down to the taxpayers. To the question of whether or not building 700 houses a year could be considered "business as usual," Mr. Tasker stated he could not quote a number without looking over his figures, nor could he give a prudent number of houses to be built without compromising the City's financial standing.

Council Member Freitas stated there were currently 5,200 homes legally approved and ready to be built by the year 2002. He felt policy numbers 1, 2, and 3 would only be useful in negotiating new development agreements by providing caps, and the policies as provided did not address the issues facing the City, primarily roads, jobs, and schools. He asked staff to determine whether or not a Municipal Services Fee would be legally defensible if implemented, stating once the legality had been determined Council should move forward and either implement such a fee or drop it altogether. He further stated he would like to see two (2) jobs, with a livable wage and benefits, created for every house built and exemptions be virtually non-existent. He felt the General Plan update was very important.

Mayor Rocha stated the development community was watching and listening. She then asked Council Member Freitas and Mayor Pro Tem Davis to be the Council's representatives on the subcommittee. It was determined the appointment of the Subcommittee would be agendized for the meeting of September 14, 1999.

City Attorney Galstan stated the hearing regarding the BAART Methadone Clinic had been rescheduled for September 20-22, 1999.

Ron Anderson asked whether or not the developers were responsible for providing temporary classrooms until the schools were built. He then asked if any new material had been submitted regarding the Renaissance Faire. City Manager Ramsey stated the city was not in receipt of anything regarding a deadline from the Renaissance Entertainment Corp.

In response to the question regarding school classrooms, City Attorney Galstan explained a law put in place during the 1980's required developers to provide a dollar amount for each square foot of new homes built be paid for a period of five years. The Council at that time did not feel the dollar amount for the specified five year period would provide adequate classrooms and elected to create the Mello Roos. In response to Council Member Sudario's question of whether or not the developers were paying the fees for portable classrooms for five years, City Attorney Galstan stated they were not, however the developers were paying Mello Roos fees from the time the building permit is pulled until the house is sold. To her question of how the law requiring developers could be overwritten by Mello Roos, Community Development Deputy Director Carniglia stated the City had essentially told the developers the City would need five elementary schools, two middle schools, and one high school to accommodate this new area you are building and you must agree to participate in Mello Roos District. The cost is then woven into the price of the house, some of which is paid by the developer and some of the cost is passed on to the buyer. Council Member Sudario then requested the answer to Mr. Anderson=s question in writing along with the difference between the fee vs. Mello Roos. She further requested a letter directed to Mr. Anderson explaining the same.

Jean Kuberra questioned the legality of the meeting being called for September 1, 1999. City Attorney Galstan stated the meeting had been properly noticed. She then asked if Assessment District #27 was set up to partially provide schools and asked to have the answer provided in a public forum.

With no further business, Mayor Rocha adjourned the meeting at 10:02 P.M. to the joint Antioch Unified School District Board/City Council meeting of September 1, 1999 at 7:00 P.M. in the Prospects High School Atrium.

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