CITY COUNCIL MINUTES

MARCH 18, 2013


REGULAR MEETING

CLOSED SESSION 6:30 PM

ADJOURNED REGULAR MEETING 7:00 PM

COUNCIL CHAMBERS
3575 PACIFIC AVENUE
LIVERMORE, CA 94550
CLOSED SESSION

CALL TO ORDER

6:30 PM

Roll Call
Councilmember Doug Horner
Councilmember Laureen Turner
Councilmember Bob Woerner
Vice Mayor Stewart Gary
Mayor John Marchand

6:33 pm. All present. CM Turner arrived at 6:50 pm.

OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE CITY COUNCIL REGARDING CLOSED SESSION ITEMS

ADJOURN TO CLOSED SESSION

1. Litigation/Conference with Legal Counsel. To meet with the City Attorney regarding existing litigation pursuant to Government Code section 54956.9(a).

Discussion in open session would prejudice the position of the City in litigation. Two cases.

a. City of Fillmore v. California State Board of Equalization; City of Industry and City of Livermore v. City of Fillmore and California State Board of Equalization Los Angeles County Superior Court Case No. BX120799

Livermore City Council Agenda March 18, 2013

b.California State Board of Equalization Appeal

Account No. SRZ OHB 097-955387, Appeals Case ID:468939

Taxpayer:Owens& Minor Distribution

Note:

This Closed Session may be continued to the end of the Regular Meeting.

REGULAR MEETING

CALL TO ORDER 7:00 PM

1.01 Roll Call
Councilmember Doug Horner
Councilmember Laureen Turner
Councilmember Bob Woerner
Vice Mayor Stewart Gary
Mayor John Marchand

7:05 pm. All present.

PLEDGE OF ALLEGIANCE

REPORT OF ACTION TAKEN IN CLOSED SESSION None.

PROCLAMATIONS AND PRESENTATIONS

PROCLAMATION DECLARING MARCH 10-MARCH 16 GIRL SCOUT WEEK

Mayor Marchand presented a proclamation declaring March 10 March 16, 2013 Girl Scout Week.

PROCLAMATION DECLARING MARCH 2013 AMERICAN RED CROSS MONTH

Mayor Marchand presented a proclamation declaring March 2013 American Red Cross Month to Varsha Clark.

PROCLAMATION RECOGNIZING AXIS APRIL FOOLS 5K DAY ON APRIL 7, 2013

Mayor Marchand presented a proclamation recognizing Axis April Fools 5K Day on April 7, 2013 to Barbara Willis and Becky Yeffa.

PROCLAMATION HONORING POLICE CHIEF STEVE SWEENEY

Mayor Marchand presented a proclamation honoring Police Chief Sweeney on his retirement.

Chief Sweeney expressed his gratitude to the City Council, staff and the Livermore community for their support. He said he was honored to serve as a member of the Livermore Police Department.

City Manager Marc Roberts expressed thanks and appreciation from the entire City staff for Chief Sweeneys years of service.

CONFIRMATION OF ADVISORY BODY APPOINTMENTS AND ADMINISTRATION OF OATH OF OFFICE

Livermore Area Youth Advisory Commission - Adult Member Laura Spaugh to an unexpired term ending September 1, 2014

Appointment confirmed. Motion CM Turner, 2CM Gary, 5-0 vote

CITIZENS FORUM

Don Meeker, Livermore, spoke regarding the Beautification Committee and the Citys incorporation papers.

Michael Galvan, Community Resources for Independent Living (CRIL) Program Director, spoke regarding a DVD produced by CRIL showing its advocacy, mobility training and housing programs.

He presented each member of the Council with a copy of the DVD.

John Stein, Livermore, spoke regarding protection of the current airport protection area.

CONSENT CALENDAR

Item 4.04 In response to questions by CM Horner, City Manager Marc Roberts said Livermore Area Recreation and Park District (LARPD) had made the improvements on City owned property where the wireless telecommunication facilities would be located.

He said the revenue was shared with LARPD because of impacts that occurred to the LARPD improved facilities and operations.

He estimated the revenue would be between $1,000-$2,000 monthly, with LARPD receiving one-third of the monies collected.

4.02 Kathy Chase, Livermore, spoke regarding changes to the Airport Commission duties and membership composition.

She said airport commissioners should be able to provide input on the airport hangar rental rates and the running of the airport.

4.08 Pat Ferguson, Livermore, spoke regarding the price per unit on the subject property and questioned if low-income affordable housing was in the best interest of the community.

In response to questions by Mayor Marchand, City Manager Marc Roberts said approval of Item 4.08 would acquire the property and allow for renovation, on-site management with better screening of the tenants and provide affordable workforce housing. Improvements to the property would be a safer and more prosperous addition to the neighborhood.

Item 4.02 Mayor Marchand said the City Council changed the composition of the Airport Commission to make the commission more inclusive and eliminate the conflict of interest with too many members being tenants who continually voted against raising airport hangar fees.

Item 4.02 CM Woerner said the Airport was an asset for the entire community; the operation needed to be run as a business and rents needed to be comparable to other area airports.

ON THE MOTION CM WOERNER, SECONDED BY CM HORNER CARRIED ON A 5-0 VOTE, THE CITY COUNCIL APPROVED THE CONSENT CALENDAR.

4.01 Approval of minutes - February 25, 2013 special City Council meeting and February 25, 2013 regular City Council meeting.

4.02 Adoption of Ordinance 1977 amending Municipal Code 2.41 to change Airport Commission Duties and Responsibilities.

4.03 Resolution 2013-019 to revise the Airport Commission Rules of Procedure to reflect changes to the duties and responsibilities of the Airport Commission.

4.04 Resolution 2013-020 authorizing execution of a revenue-sharing agreement with the Livermore Area Recreation and Parks District (LARPD) for wireless telecommunication facility leases on land owned by the City and operated and/or maintained by LARPD.

4.05 Resolution 2013-021 authorizing execution and recording of the Subdivision Improvement Agreement; approving Tract 7782 Final Map for recording; accepting on behalf of the public all real property offered for dedication within Tract Map 7782; rejecting at this time, reserving the right to accept the offers at a future date: Lots A-G,

Sonia Way, Stickley Drive, Gilbert Lane, Olmstead Way, Wexler Way, Mizner Court, Prairie Way, Public Utility Easement, and Sidewalk Easement; and authorizing execution and recording of a Quit Claim Deed for a portion of Parcel B of Tract 7421. (The Grove Phase 3)

4.06 Resolution 2013-022 declaring non-complying parcels a public nuisance requiring abatement, directing staff to proceed with the 2013 Weed Abatement Program, and setting a public hearing date of April 22, 2013.

4.07 Resolution 2013-023 authorizing execution of five year agreements with Accela, Inc., in an amount not to exceed $1,300,000, and Government Capital Corporation Loan Agreement, in the amount of $1,292,217, for the upgrade and funding of City's Accela Permits Plus land management system to Accela Automation land management system.

4.08 Resolution 2013-024 authorizing appropriation of City Affordable Housing Trust Funds, in an amount not to exceed $810,000, provided through a loan agreement with Hello Housing for acquisition of the multi-family property located at 389 McLeod Street; and authorizing execution of loan agreements and a regulatory agreement with Hello Housing related to the property acquisition.

PUBLIC HEARINGS None.

MATTERS FOR CONSIDERATION

REGARDING CITY COUNCIL APPOINTMENTS TO INTERGOVERNMENTAL AGENCIES - None.

REGARDING A LOAN FROM THE CITY OF LIVERMORE TO LIVERMORE VALLEY PREFORMING ARTS CENTER IN THE AMOUNT OF $475,000

Recommendation: Staff recommended the City Council provide direction. City Manager Marc Roberts presented the staff report.

Len Alexander, Executive Director, Livermore Valley Performing Arts Center (LVPAC), referred to LVPACs letter dated March 11, 2013 to the City

Council requesting a loan in an amount up to $475,000. He said if the Livermore Redevelopment Agency were still in place, LVPAC would be six months away from opening the regional theater and would have had $10 million in the bank. He spoke regarding the original plan for a downtown performing arts center that was developed more than a decade ago and the success of the Bankhead Theater. He said the downtown was significantly different than it was five years ago and the success was not limited just to the Bankhead; it included the Bothwell Art Center, the downtown artist studios, Art Walk, and the free Friday night concerts on the plaza that were all part of LVPACs activities. The requested loan was not about building the regional theater; the loan was about enabling LVPAC to meet its obligations while the lawsuit against the State moved forward to a resolution and to create the extra time needed for LVPAC and the City to examine additional options to protect the Bankhead.

He said the Department of Finances final administrative rejection of the project came on December 18, 2012.

The loan agreement called for releasing funds in March, followed by a draw option. The first round of funding would allow LVPAC to make a scheduled principal payment to the Bankhead bond holders; the second round was conditioned upon successfully extending the letter of credit with the Bank of New York/Mellon.

The two-step process was designed to protect the City should the negotiations with the Bank prove unproductive.

He recalled six years ago when he and Phil Wente stood in the Chambers and promised that LVPAC would never ask the City for operating support.

He said it was extremely uncomfortable to ask for the Citys financial assistance; however, LVPAC had no choice as all other short-term options had been exhausted.

He said with the Citys support, LVPAC could fashion a plan that would allow LVPAC to go forward to build on the successes that the original downtown performance arts center vision had set in motion.

Mayor Marchand invited public comment.

Bill Goldstein, Deputy Director for Science and Technology, Lawrence Livermore National Laboratory, read a letter from Director Parney Albricht, in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

John Shirley, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Kathy Streeter, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Lawrence Kole, Pacific Chamber Symphony, support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Teri Tith, Livermore, read a letter from Catherine Cheda, Hawthorne Suites General Manager, in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Bill Lokke, San Francisco Philharmonic Baroque Board member, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Lynn Seppala, Livermore, Del Valle Fine Arts Board member, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Ron Koopman, Livermore, Pacific Chamber Symphony Chairperson, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Don Meeker, Livermore, expressed appreciation for the clarity in the staff report and the work Council and staff had done to balance the Citys budget.

Pat Ferguson, Livermore, spoke in opposition to the approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Clark Streeter, Livermore Cultural Arts Council, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Jean King, Livermore-Amador Symphony, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Raquel Holt, Livermore Valley Opera, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Jim Schmidt, Livermore Valley Opera, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Nancy Bankhead, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Valerie Raymond, Livermore, presented a letter to the Council from Linda Trane. She said the loan agreement needed to have more stringent language to make sure the loan money would be spent on the purposes intended in addition to a solid repayment plan.

Michael J. Bocchicchio, LVPAC Board member, read a letter from Mike Madden in support of in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Arthur H. Barinque, Livermore, read letters from Dale Kaye, Innovation Tri-Valley, and Walter Davies, Commission for the Arts member, in support of in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Carole Hilton, Livermore, spoke in opposition to the approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

JoAnne Eteve, Livermore, spoke in opposition to the approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Kathy Chase, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

John Pitts, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Phil Didlake, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Charles Hartwig, Rae Dorough Speaker Series Chairperson, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

William Dunlop, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Sally Dunlop, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Pamela Philbert, Livermore Opera Board member, read a letter from David Corkhill, Livermore Cinemas, in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Bob Carling, Sandia National Labs Director, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Howard Tsztoo, Cantabella Childrens Chorus Advisory Board, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Linda Ryan, Bothwell manager, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

John Stein, Livermore, spoke in opposition to approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Michael Bordoni, Barry Swenson Builder, San Jose, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Stan Houston, ABC Music, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Tom Reitter, LVPAC Board member, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Maryann Brent, Livermore, read a letter from Johnny Schell, Sanctuary owner, in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Layne Marceau, LVPAC Boardmember and President of Shea Homes, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Jeff Kaskey, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Sally Dunlop, Livermore, read a letter from Vickie Schellenberger, in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Michaele Kashgarian, Livermore Cultural Arts Council and Valley Dance Theatre, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Carol Hovey, Tri-Valley Repertory Theater, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Brian Mayall, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Jay Davis, LVPAC and Livermore Valley Chamber of Commerce Board member, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Bob Baltzer, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Rajnish Khann, Livermore, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Aaron Ortiz, Executive Director of East Bay Youth and Family Initiatives, spoke in support of approval of the loan to Livermore Valley Performing Arts Center for the Bankhead Theater.

Mayor Marchand invited VM Gary and CM Woerner to comment as they had served on the City Council Sub-Committee for LVPAC.

Vice Mayor Gary said there were reasons not to do this loan. The City could not absorb the LVPAC/Bankhead construction debt; the LVPAC share of that debt was upwards of $8 to $10 million. He said enough seats could not be sold at a fair rate to buy down the construction debt of the Bankhead and the Citys current general fund revenues could not pick up that debt.

He said LVPAC must restructure that debt burden within its giving community and bank. LVPAC always envisioned a two theater operation that created a sustainable financing future for both theaters.

LVPAC may have lost that ability depending on the final action by the State. The bank and the community would be part of the solution.

After fifteen months of study, there had been a Gordian knot of complex legal and fiscal issues; LVPAC had to make payment in December, renew the underwriting letter of credit in June, the first installment payment was finishing their prior year debt payment that was deferred in December 2012 while everyone arm wrestled with the State of California In late December, the State said no, there was an administrative appeal, and the State again said no, forcing LVPAC to court in Sacramento against the State of California. He said an appropriate City Council did not cancel its prior obligations; there was a contract with LVPAC that was currently being litigated, the result of which was with the State of California.

The City could not vacate its prior agreements with LVPAC; to do so threatened the Citys future ability to render legal agreements and secure bond debt in the community.

LVPAC has taken its rights to the court, but their creditor, Bank of New York, refused to understand redevelopment and what the State meant to this complex set of legal and fiscal relationships. The question to be answered by the Council was, whether to use one-time reserves as a bridging solution to give LVPAC, its creditor and its giving community, time to figure out the plan for a successful Bankhead. He appreciated the testimony given by the arts community.

He said not doing a bridge loan at this time would negatively affect the downtown businesses, the hourly wait staff, per diem performers, and could put LVPAC into immediate bankruptcy with immediate cessation of the season, the obligations to the Bothwell and cultural Livermore.

He said LVPAC needed more time. VM Gary said the City could not make an ongoing fiscal contribution of the size necessary to save the Bankheads total debt load; it has to come from the private sector. He said he would support approval of the loan to provide the first draw, the incremental loan, to keep the Bankhead current so they could continue to negotiate with the Bank of New York/Mellon to get their letter of credit renewed and get the entire situation moved into 2014 by which they should have heard from the State of California and hopefully recovered something of their mammoth investment in the other project.

VM Gary said the first $200,000 payment, which would be most at risk should the letter of credit fail to be renewed this June, was .8% of the Citys total one time reserves; it was 18% of the Citys uncommitted reserve. He said the reserve fund to be used was totally discretionary for unanticipated and unique headaches that could occur. He said using those reserve funds would not affect the Citys ability to replace a police car or fire truck.

CM Woerner said this was an incredibly complicated situation. He said after an in-depth review of all the materials, he thought the loan requested by LVPAC was appropriate. He said the loan was the least worst of all alternatives; not a good option, but the City could not have LVPAC default on its loan because of the negative effect it would have on the community.

He emphasized that LVPAC had done an outstanding job of operating the Bankhead. The best outcome for the City was for LVPAC to continue operating the Bankhead. He said the situation was caused only because of the dissolution of redevelopment agencies; this was not a mismanagement issue.

He expressed full confidence in the operation of the Bankhead and said it should continue to be operated by LVPAC. The City was in no position to assume the debt obligations of LVPAC; so the Bank of New York and LVPAC must reach an accord and that was why 60% of the loan was contingent upon the letter of credit being extended. If the letter of credit was not extended, then there would be a very grim alternative.

He pointed out that based upon information from the City Attorneys Office and outside counsel regarding the underlying legal documents, the Bank of New York actually had a lot at risk by not extending the letter of credit. He said he was disappointed with the manner the Bank addressed the issue, but he was cautiously hopeful that the Bank would be reasonable and a deal would be struck. He said this was a bad situation, the loan was necessary to see through to a point where there could be resolution. He said the loan request from LVPAC served as an official notice that there was a problem to deal with and contingency and strategic planning needed to be done in advance. He said he would support the loan agreement; this was a one-time shot and noted there were contingencies to the loan agreement.

CM Horner said he had spent a long time considering the request and had many discussions with members of the community. He said the loan, along with the $400,000 loan from Alameda County, would enable LVPAC to make the debt payment and to continue operations through the end of 2013.

Without the loan, LVPAC would default. He did not want to see that. If there was a default, Bank of New York could call the loan, foreclose and the Bankhead could go dark. He said this was not a situation anyone wanted to have in the downtown. LVPAC had provided a beautiful theater and many opportunities for the enrichment of residents.

CM Horner said LVPAC deserved a chance to get its house in order. He said this loan was a cup of water and not access to the well.

He said this loan would be one time, and LVPAC would have until the end of the year to restructure the loan, create a settlement agreement, increase fundraising, cut operating costs, and increase revenue. If LVPAC defaulted on the loan, the regional theater was likely dead and the ability to secure a loan would be gone.

He said if that were to happen, the City could enter into negotiations with the Bank of New York to buy the Bankhead. He said the Bank of New York had no interest in owning, operating or running a theater and would look to minimize their cost. By consultant estimates that had been shared with the Council, the City could possibly buy that building for $1 million and commit the rest of the landfill fees.

The $475,000 loan being considered would not go toward the $1 million that it would cost the City to purchase the building; it would be lost at that point.

He said the loan was not a down payment towards an eventual buyout this was truly a loan that would be lost if LVPAC defaulted.

He said $475,000 could be used by the City for other purposes such as additional police officers, restoring library hours of operation, pay-down on unfunded future pension liability, and restoration of other City services. This could be the first request of up to a $925,000 in loan requests.

He hoped there were no more loan requests and this got fixed between now and the end of the year. He said over the next eight months, he wanted to have conversations pertaining to our values as a city and where our money should be going. He said the City could not assume this debt but could provide some breathing room.

The City could not be the permanent source of revenue. He said the LVPAC Board of Directors needed to examine recent decisions made, especially the debt of $9.4 million for the development of the regional theater. No developer that he knew of would risk more money than it had before obtaining financing.

A developer would go out and get the entitlement, develop necessary drawings, get the financing, then create construction documents and get a building permit.

Going farther than entitlement cost millions of dollars to LVPAC. If more prudent decisions had been made over the use of those dollars then there would be no need to have this conversation. There was no reason to have a building permit in hand when there was no financing to build that building in the other hand.

He said he would support approval of the loan request and hoped over the next eight months there would be a plan of how to save the Bankhead.

CM Turner said she was the lone wolf. She had some very significant concerns about the loan for operating costs for the Bankhead Theater.

She said earlier in the meeting, there was a request for funding from Hello Housing accompanied by specific requests along with a secure repayment source and defined plan on how the money was going to be spent. A few months ago, the Housing Opportunity Center came to the City for financial assistance with a plan of reorganization and restructuring so that their request would be a one-time only ask.

The City had not received this from LVPAC. Fifteen months ago the City found out the reality was that this might be a self-supporting theater yet had not seen a plan on how it was going to work. She asked how could the theater become a self-supporting theater and without a plan, she did not want to give any money. She understood the difficult situation LVPAC was in but approval of the loan was not a good use of taxpayer money.

She said she needed to garner taxpayer money with more respect. She said there was the premise of someday the Bankhead would be supported by the regional theater but that remained unseen. She said LVPAC was an organization frustrated by the States actions, fighting for survival, but not adapting or changing to the new political environment. She loved the Bankhead and the productions, its aiding the economic blossoming of the downtown, but it was not the only factor that made the downtown a success. She said the City was not in a position to hand over almost half a million dollars of unsecured money with no guarantee of return. She was concerned that this would be the first of many asks that would come close to, if not exceed, one million dollars of taxpayer money and put the City down a very dangerous slope of financially supporting a theater in perpetuity. The Bankhead was worthy; however, absent a plan to reorganize the structure of the theater and work sensibly in a post-redevelopment world, she could not support the loan.

She said without the loan, the Bankhead was not going to magically disappear or crumble to the ground, it would still be there.

Reorganization would need to happen and she had faith in the passion of the supporters of the performing arts community in Livermore to make it work somehow down the road.

She said this had been known about for fifteen months, the time to have its house in order was now, before asking for extra money.

Mayor Marchand said he agreed there needed to be a plan to make it work. Unfortunately there was not time for that.

In response to questions by Mayor Marchand, City Manager Marc Roberts said if the loan was not granted, the Bank of New York could foreclose on the Bankhead.

The next payment was due near the end of March; if the payment was not made, LVPAC would be in default. Based on City analysis of LVPAC assets, there were not sufficient assets to make the payment due at the end of March; the bank could start foreclosure proceedings at that time.

Mayor Marchand said the State, in violation of its own constitution, dissolved redevelopment agencies and took the money out of the local communities.

The rules were continually changing and that was a difficult landscape to continue to work in. The $475,000 requested was one-time money.

He said the one-time money could only reopen libraries on a temporary basis, hire additional police officers for only one year; this was not long-term, sustainable funding. He said the one-time money was just like redevelopment funds that only could be used in the downtown on capital, not operational, expenses. The City could not support the long term debt service of LVPAC, but the purpose of City government was to provide services.

The City provided police, fire, libraries, streets, water, and also provided for economic development in the community. One of the Citys goals was to support business and economic development because that enables it to do everything else that depended on the longterm sustainable economic development within the community.

Since 2008, the first year the Bankhead Theater opened, there had been a net increase of 11% of the sales tax in the downtown. While other restaurants had opened, along with the movie theater and the Bankhead Theater, that 11% translated to $18 million of sales. The Bankhead Theater was a significant part of that increase.

The City could not afford to suddenly have one of those economic engines go dark. He said if the City stood to lose a significant fraction of $18 million, that was a risk he did not want to take. He said in 1985 there was nothing going on in the downtown. Now, the downtown was vibrant; people wanted to come to downtown. He did not want to pull $18 million out of the downtown. 51% of the City budget is for police and fire services, the City was committed to that which is supported by encouraging economic development and he did not want to pull any portion of the $18 million out of the downtown.

He said the $200,000 loan was an investment in the continuing economic development of the downtown and the City.

In response to questions by CM Turner, Mayor Marchand clarified the difference between the sales tax the City received and the total dollars in sales that generated the sales tax.

CM Woerner said he agreed it was difficult to support a loan without a plan. The point was there could not be a plan without the participation of the Bank of New York.

The Bank of New York had not been particularly cooperative at that point in time; to buy a little bit more time was needed. The Bank of New York had not been dealing with municipalities or non-profits; they inherited the loan when they purchased Mellon Bank and needed more time to understand and review all of the information forwarded to them.

He said there needed to be a plan, and $200,000 of the loan would buy some time. He said LVPAC needed to develop a plan and have a very straight conversation with the Bank of New York.

VM Gary said the first $200,000 of the loan would buy some time until June. The business community, those that employ people affected by this, needed to understand there could still be a default later this year if the Bank of New York did not come to understand the complexity of the situation.

He said the problem had to be dealt with this year. He said if there was no resolution with the Bank of New York, the second half of the loan might not be gotten to.

ON THE MOTION OF VM GARY, SECONDED BY CM WOERNER AND CARRIED ON A 4-1 VOTE, CM TURNER VOTING NO, THE CITY COUNCIL ADOPTED THE

FOLLOWING RESOLUTION AS AMENDED TO REMOVE SECTION 10 FROM THE LOAN AGREEMENT:

Resolution 2013-025 authorizing execution of a loan agreement with Livermore Valley Performing Arts Center in the amount of $475,000.

REGARDING PENDING STATE OR FEDERAL LEGISLATION None.

COUNCIL COMMITTEE REPORTS AND MATTERS None.

Mayor Marchand and the Councilmembers deferred their reports to the April 8, 2013 City Council meeting.

Mayor Marchand announced a Closed Session Special Meeting for Wednesday, March 20, 2013, 7:00 pm, at the City Administration Building.

ADJOURNMENT

8. ADJOURNMENT at 10:18 pm to a regular City Council meeting on Monday, March 25, 2013 at 7:00 pm, Council Chambers, 3575 Pacific Avenue, Livermore.

APPROVED: JOHN P. MARCHAND, MAYOR

ATTEST: SUSAN NEER, CITY CLERK

Minutes