The Malibu City Council on Monday set the process in motion to issue up to $7 million worth of certificates of participation, or COPs, to fund the redesign of the building that will become the new City Hall. The preliminary cost for the project is an estimated $4.8 million. Councilmember Pamela Conley Ulich was the lone vote against issuing the COPs, her reasoning being that the redesign cost had not been finalized.
The COPs, which are similar to bonds, will be issued on March 10 at an average interest rate of 5.38 percent. Assistant City Manager Reva Feldman said the city will likely only need to issue $6.6 million worth of bonds, but the authorization for the higher amount will allow for flexibility in case there is a “dramatic change in interest rates.” The COPs will generate $5 million for the city for the project and additional money to cover the price of issuing the bonds and other associated costs. Beginning in 2013, the city will pay off the debt with annual payments of $470,000 from the General Fund for 30 years.
If the actual project costs end up being less than $5 million, the remaining money could go to pay off the debt or be used for another capital project.
City Council candidate Mike Sidley asked that council not vote on the item so that the next council, which will include two new members elected in April, be allowed to vote on the issue.
“I think the city is not recognizing all the potential debts that they are going to have to incur,” said Sidley, who referred to the amount of money the city might have to pay to hook up to a future wastewater treatment facility. He and several council members disputed how much that would actually cost.
Sara Oberlies of Stone & Youngberg, the city’s bond underwriter, advised against waiting because of the state government’s sour financial situation. Despite Malibu’s top level credit rating from Standard & Poor’s, she said there is a risk that the interest rate could go up if the issuance is delayed as Sacramento comes close to voting on its 2010-11 fiscal year budget.
Former Mayor Ken Kearsley also spoke in favor of not waiting. “This is the time to strike,” he said. “We’ve got the perfect opportunity to get a quality City Hall with low bids, low interest rate and low price.”
Several council members spoke against Sidley’s request as a political move. Mayor Sharon Barovsky said, “I was elected to represent for eight years, and that’s what I attend to do.”
Councilmember Andy Stern added, “I was elected to make business decisions for the city, not gamble on the future of interest rates.”
Conley Ulich refused to support the measure because the cost of the project is not scheduled to be finalized until March 22. “I will not issue COPs without knowing where that money will be used,” she said.
The council learned on Monday the estimated cost of creating the new city hall includes $150,000 to upgrade the interior to meet the standards of Leadership in Energy and Environmental Design, or LEED, silver certification. This is the second level of the four possible levels of LEED ratings established by the U.S. Green Building Council.
Council candidate Steve Scheinkman told the council that an expert told him a number of changes to the design could be done at a low cost to improve on the environmental sensitivity of the project. Jim Wyrick of LPA, the city’s architect for the project, said some of the suggestions were difficult to do while keeping the cost of the project down.
“We’d love to do more,” he said. “I think we’re doing as much as we can with the financial constraints of the project.”
Scheinkman said he disagreed, and would return with more information at next month’s meeting on the subject.
Conley Ulich made several comments on ways to reduce the cost of the project. She had an item scheduled on the agenda to create an ad-hoc committee to meet with the architect on this issue. But the item was withdrawn because council members had voted to shorten the meeting so they could get to the nearby Santa Monica Mountains Conservancy hearing [see article] on the overnight camping plans.
Councilmember John Sibert said he was concerned about trimming the costs.
“If we cut back a little bit to save a few dollars, we may be cheating the public on their ability to watch the council meetings,” said Sibert, who said the city must make sure to create an acceptable product for those wishing to watch the meetings at home and on the Internet.
Also at the meeting, the council approved a measure to allow Broad Beach residents to vote on creating an assessment district to underground their utilities. If approved, the homeowners would be assessed $29,000 to $37,000 for the cost of the project.
Additionally, the council honored Tom Martin with a Malibu Tile. He served as the captain at the Lost Hills Sheriff’s Station for seven years. Martin was recently promoted as commander at the Los Angeles County Sheriff ‘s Department’s Detective Division in Monterey Park. Joseph Stephen has replaced Martin.