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HomeMy WebLinkAboutMinutes-04-29-82-Adjourned Regular Meeting6i6 � MINUTES OF THE CITY COUNCIL OF THE CITY OF DOWNEY ADJOURNED REGULAR MEETING APRIL 29, 1982 The City Council of the City of Downey held an adjourned regular meeting at 4:00 p.m., April 29, 1982, in the Council Chamber of the Downey City Hall, Mayor Lyell W. Swearingen presiding. PRESENT: Council Members: Lyell W. Swearingen Mayor James T. Quinn Mayor Pro Tem Robert G. Cormack Theodore H. Jackman Milton R. Mackaig ALSO PRESENT: John W. Donlevy, City Manager Royal M. Sorensen, City Attorney Dudley Lang, Assistant City Manager Robert L. Shand, City Clerk -Treasurer Judy McDonnell, Executive Secretary Mayor Swearingen announced the adjourned meeting is to consider documents relative to financing procedures and construction bids for the Civic Center Project. Mr. Donlevy commented on his attendance at the bond bid opening this morning in San Francisco. He reviewed the procedures that have taken place to date in getting the project ready to go to a bond issue of $13 million, noting the involy- ment of Dean Witter Reynolds as financial consultant and Orrick, Herrington & Sutcliffe as legal counsel. He stated three bids were received on the bonds from Merrill Lynch, American Express, and Security Pacific. The low bidder on the bonds was Security Pacific, with an interest rate of 11.4665, and all three were excellent bids. The construction funds received from the $13 million will be $8,376,530, with the difference between the two figures being for reserve funds, interest funds, cost for the issuance, and the bond discount. The net annual debt service to the City will fluctuate from a low of 1.3 million to a high of 1.4 million. Mr. Donlevy then outlined the actions to be taken by the Council in authorizing the Civic Center Corporation to proceed. Speaking to the construction bids received, Mr. Donlevy said the two low bid- ders, Berry Construction and P & A Construction, have requested withdrawal, and staff recommends approval of the withdrawal and accepting the low bid of J. A. Stewart Construction in the amount of $5,115,115. A discussion was then held regarding whether to let the two low bidders with- draw their bids without imposing a penalty, which is staff's recommendation. Mr. Sorensen mentioned there is a provision in case law, which says a contrac- tor may withdraw without penalty if he has done so by virtue of a mistake of fact and not on some obvious negligence on his part. Mr. Donlevy requested that any further discussion as to whether the Council wants to take action against the two bidders should be held to the end of the meet- ing and then a separate action can be taken at that time. Mr. Donlevy complimented the firms of Dean Witter Reynolds, who handled the financing, and Orrick, Herrington & Sutcliffe, who handled the legal portion. Pauline Aberbach, of Dean Witter Reynolds, commented on the bond sale and the annual debt service for the bonds, noting the first payment will begin in October, 1984, approximately one year after the City has occupied the premises. Diane Potter, of Orrick, Herrington & Sutcliffe, briefly discussed the actions to be taken by the Council, which she said are contained in one resolution. Autho- rization of the Council is needed for signing any documents and certificates on the Civic Center Complex property. Council Minutes 4/29/82 (adj.) -1- �9(eq RESOLUTION NO. 4096 OF THE CITY OF DOWNEY APPROVING PLANS AND SPECIFICATIONS FOR PUBLIC FACILITIES, AUTHORIZING EXECUTION OF A SITE LEASE BETWEEN THE CITY AND CITY OF DOWNEY CIVIC CENTER CORPORATION, APPROVING RENTAL TO BE PAID PURSUANT TO A FACILITY LEASE BETWEEN SAID CORPORATION AND THE CITY, APPROVING FINANCING OF PUBLIC FACILITIES BY SAID CORPORATION, APPROVING FINANCING ARRANGEMENTS FOR THE BONDS OF SAID CORPORATION, APPROVING CONTRACT FOR CONSTRUCTION OF PUBLIC FACILITIES, AUTHORIZING ASSIGNMENT OF ARCHITECTS', BOND COUNSEL'S AND FINANCING CONSULTANTS' CONTRACTS TO SAID CORPORATION, AND AUTHORIZING EXECUTION OF NECESSARY CERTIFICATES The Resolution was read by title only. It was moved by Councilman Jackman, seconded by Councilman Quinn, and passed by unanimous vote to waive further read- ing and to adopt Resolution No. 4096. Subordination Agreement and Assignment of Certificates of Deposit - Civic Center Complex Property Mr. Lang commented on a proposal to enter into a Subordination Agreement with the School District for the "Z" campus site. He said the purpose of the Agreement will be to eliminate the prior lien on the property so that the underwriters for the bonds would have first right on the property. Certificates of Deposit would be assigned to the School District for them to hold during the period leading up to the time when the payments would have normally been made by the City for the project site. Mr. Lang said the City would still be making the investments and retaining any interest earned from the investments. It was moved by Councilman Jackman, seconded by Councilman Quinn, and passed by unanimous vote to authorize the City to enter into the Subordination Agreement with, and assign the necessary Certificates of Deposit, to the Downey Unified School District, and also authorize the Mayor to sign the necessary documents required for the subordination which would make the bonds for Civic Center development more salable. Discussion then resumed on whether to allow the two low bidders on Center Construction to withdraw their bids without penalty. It was men a subcontractor, who was a sub for both bids, had made the error. It was a concensus of the Council and so ordered to do nothing. It was moved by Councilman Mackaig to Rbbert L. Saian�City Clerk -Treasurer 4:35 p.m. Council Minutes 4/29/82 (adj.) -2-