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Wednesday, May 30, 2012

City Hires Financial Consultant for Civic Center Sewer Proposal

• Will Explore Establishing ‘Community Facilities District’


Despite protests from residents and a threat of litigation, the Malibu City Council, on a 4-1 vote with Councilmember Skylar Peak absent,  this week approved this week agreements with a bond counsel, legal specialists and banking and underwriting officers for financing a Community Facilities District for the proposed Civic Center wastewater treatment system.
Council members were told another $6 million is needed to complete preliminary work on the design phase of the project including an Environmental Impact Report.
“I agree this is a good idea,” said Mayor Laura Rosenthal. “This is an innovative way to pay for this not by the city. I understand the frustration about [how this] will affect development in the Civic Center.”
After citing a lengthy history of the septic prohibition and Memo of Understanding, Councilmember John Sibert said, “As painful as it is, this is something we need to do. We need to move forward,” he said.
Councilmember Lou La Monte said, “Everybody up here was opposed to this project. Ultimately everybody was against us. This is what this is about, money. We need to meet the deadline for design. I don't think we should invest half of our own reserves. The people benefiting from this should pay. We are obligated to the MOU.”
Assistant City Manager Reva Feldman, told council members the agreements they approved do not authorize the issuance of any type of indebtedness nor the formation of a CFD.
“Final approval of a CFD will require additional city council action and a vote by properties within the proposed district and will be brought forward to council at a later date,” Feldman said.
City officials indicated the properties in such a district would include at this time only the commercial properties in phase one
However, there were protests from some homeowners who said they wanted to be extracted from any district.
Serra Retreat homeowner Ozzie Silna cautioned the city on how it proceeded. “We will be taking legal action against any and everybody on behalf of our self-interest,” he said.
In 2009, a previous council approved $2.6 million for an agreement with RMC Water and Environment to provide engineering and design services for what is called the Malibu Civic Center Integrated Water Quality Management Plan.
Of the total approved $102,800 was used toward stormwater design and engineering services for Legacy Park leaving over $2.5 million for the design and engineering of a wastewater treatment facility.
City Manager Jim Thorsen when explaining meeting the MOU deadline did not talk about the design specifics., However, Feldman, in her staff report, noted the design costs have increased because of the apparent dispersal process being considered, lower aquifer injection.
“All of the design and engineering work that has been completed to date indicates that the city will be able to proceed with a lower aquifer injection process. Exploratory test well drilling and groundwater extraction was successfully completed. It is anticipated that this assessment will be successful and allow the city to continue the project by constructing and testing a full-size well, the installation of six adjacent monitoring wells, and the completion of a final model,” Feldman wrote, in her memo to council members.
What Feldman told the council was the total of funds needed is $6 million including final design and engineering  for $1.5 million and additional $1.9 million will be needed for the development of the EIR, final construction drawings, bid documents and all permits bringing the total to $6 million. The funds provided by the city are expected to be reimbursed by the CFD. 
The council approved a bond counsel agreement with Stradling, Yocca, Carlson & Rauth for bond counsel services to establish the Communities Facilities.
The council also approved an agreement with Stone&Youngberg, which is now a division of Stifel Nicolaus for investment banking and underwriting services to help in establishing the CFD and in financing the project and issuing CFD debt, 
“Due to the complex nature of the CFD and the potential subsequent benefit assessment district, a special tax consultant is necessary. David Tausig and Associates, Inc. has worked with the city on other assessment related projects and has provided public finance consulting services to over 2000 public and private sector clients,” Feldman added.

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