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MINUTES OF THE
CITY OF SAN RAMON – OVERSIGHT BOARD
May 24, 2012

A regular meeting of the Oversight Board of the City of San Ramon was held May 24, 2012 at 4:02 p.m. in the City Council Chamber at City Hall, 2222 Camino Ramon, City Manager Greg Rogers presiding.
PRESENT:  Boardmembers Gary Black, Patricia Boom, Marc Fontes, Mary Lou Oliver, Scott Perkins, and Chair Richard Price.
ABSENT:  Boardmember Kevin Horan.
STAFF PRESENT:  City Manager Greg Rogers, Administrative Services Director Eva Phelps, and Board Clerk Patricia Edwards.

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ANNOUNCEMENTS

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PUBLIC COMMENT

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APPROVAL OF MINUTES

(#4.1) Minutes of the April 5, 2012 regular meeting.

Mbr. Oliver’s motion to adopt the April 5, 2012 regular Oversight Board (OB) minutes was seconded by Mbr. Perkins and passed 4-0-1-2.  Mbr. Horan was absent.  Mbrs. Black and Boom abstained.

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CONSENT CALENDAR

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UNFINISHED BUSINESS

(#6.1) Resolution No. OB 2012-004 – Adopting Revised Recognized Obligation Payment Schedules in Accordance with the Provisions of Health and Safety Code Section 34177(l).

City Manager Greg Rogers provided the report.  He noted that the Department of Finance directed the City to revise the Recognized Obligation Payment Schedules (ROPS) to reflect a single $250,000 expenditure.  This change has been reviewed and adopted by the Successor Agency.  Mr. Rogers recommended that a portion of the $250,000 be allocated for legal services and reduce the amount that the City would be reimbursed for costs.  He recommended that the OB approve the revised ROPS.  Mbr. Oliver asked what the estimated amount of the tax increment available to the Board would have been.  Mr. Rogers stated that the State provided 5% of the tax increment revenue for the first year in the legislation.  This formula would have provided $450,000 for San Ramon.  The State is now using a reduced number, 5% of what would be netted out to the Successor Agency, or $250,000.  The State does not recognize the need for any financial support for the OB.  Vice Chair Fontes added that the letter from the Department of Finance is included in the staff report. 

Mbr. Perkins’ motion to adopt Resolution No. OB 2012-004 was seconded by Mbr. Boom and passed 6-0-1-0.  Mbr. Horan was absent.

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NEW BUSINESS

(#7.1) Process to Obtain Legal Services for the Oversight Board.

City Manager Greg Rogers stated that this item is a follow up to the discussion from the April 5, 2012 meeting regarding the OB’s need for legal counsel.  The staff report outlines a process for hiring legal services.  He asked for the OB’s concurrence on the process.  Chair Price stated that Danville used a broker to manage the sale of their OB’s property.  Mr. Rogers stated a broker does not provide legal advice to the Board.  The need for legal advice is more important than a broker’s services which are comparable to a marketing agent.  There are pending legislative amendments which will affect how the property can be sold.  One of the amendments proposes that the entities taking on this transaction have liabilities.  He suggested that a second step could involve hiring a broker.  He recommended that an attorney draft the sales contract to protect the entity selling the property.  Mbr. Perkins concurred with the need for an attorney.  He noted that there are issues associated with the Development Agreement and other proposals for the use of the property which may arise.  An attorney would be able to provide guidance and advice for these issues.  Mbr. Boom concurred with Mbr. Perkins. 

Mbr. Oliver’s motion to adopt the process to obtain legal services as proposed in the staff report (item 7.1) was seconded by Mbr. Perkins and passed 6-0-1-0.  Mbr. Horan was absent.

(#7.2) Discussion of the Former Mudd’s Property, 10 Boardwalk Place (APN 209-770-015).

Chair Price opened the public comment.

Roz Rogoff, resident, stated that she agrees with the need for the OB to have legal advice.  She stated that the original legislation provided that a property which was purchased to be used as a park or for public use could be retained by one of the organizations within the OB.  She asked for clarification if the Mudd’s property falls into this category.  She stated that the Disposition and Development Agreement (DDA) for Mudd’s is void because Mr. LeBlanc did not provide the required financial plans by the February 28, 2012 deadline.  Mr. LeBlanc did not meet the deadline for the 90 day extension which he requested so no additional extension needs to be provided to him.

Matthew Larson, member of the Growing Room Education Council, described his vision for the Mudd’s property.  He expressed an interest in working with the OB to preserve the Mudd’s property.  He recognized that time is critical because the building is falling apart and is subject to vandalism.  The Growing Room is a nonprofit company which operates child care services on several San Ramon Valley Unified School District sites.  The program provides excellent care at affordable rates and engages children in after school learning and enrichment activities.  He has been researching how to bring children to an outdoor nature program to connect children with the environment and farm life.  He believes that Mudd’s is the perfect location for this program.  He believes that there will be community support for a children’s program at Mudd’s and that it is important to connect children to their recent heritage.  The building has significance for California’s green movement and is an example of California history because of the architecture and property development.  The Growing Room is prepared to purchase the building for $500,000 cash.  He estimates that an additional $250,000 is needed to renovate the building to bring it up to Code.  They anticipate investing another $500,000 over the next ten years to add progressive energy conservation, green movement enhancements, solar electricity, rain harvesting, and LED lighting.  The site will merge history with the present green initiatives.  He wants to work with the City and the community to make it a part of San Ramon’s history.  He asked for the best way to provide the proposal to the OB as it navigates the legal side of this issue.

Mr. Rogers stated that he can provide copies of the Growing Room’s proposal.  He recommended that an attorney be retained before the OB is in a position to respond to any proposal or evaluate whether there are any residual claims based on the previous DDA.  He indicated that the state wants the property to be marketed.  Whatever offer or proposal is accepted by the OB needs to be provided to the Department of Finance for their final approval.  He recommended that the OB wait for a legal opinion regarding the disposition of Mudd’s and the process to evaluate offers.  Chair Price asked Mr. Larson for patience while the OB works through the process.  He stated that the OB is responsible for maximizing the value of the property for redistribution to the other agencies.  He thanked Mr. Larson for his interest in making the community better.

Mbr. Oliver asked how long it will take the OB to secure legal services.  Chair Price estimated that it will take 30 to 60 days.  Mbr. Oliver asked if the state will accept this time line.  Mr. Rogers responded that the state anticipated that time will be needed to dispose of Agency properties.  The OB needs to list the property in order to obtain the maximum amount for the assets as required by the state.  The legal services contract will be covered by the OB’s administrative expenses so there is no need to receive approval from the state for this expenditure.  Mbr. Boom noted that the OB’s decisions need to be reviewed by the state.  She asked if this condition relates to the sale of property.  Mr. Rogers stated that the sale of property is a two step process and requires the approval of the OB with final approval of the Department of Finance.  He added that the Department may ask for the property appraisals and marketing efforts.  Mbr. Perkins asked what the Successor Agency’s (SA) role is in the disposition of the Mudd’s property or other assets.  Mr. Rogers stated that the SA provides the initial approval and forwards it to the OB.  Mbr. Perkins stated that since the process starts with the SA, the OB could reject the SA’s proposal.  The Department of Finance could reject the OB’s recommendation.  Mbr. Black stated that three appraisals are required by the state when the School District is dealing with surplus property.  The process includes offering the property to other governmental agencies and then making the property available for public sale.  Mr. Rogers stated that the original legislation does not specify the process.  Although an appraisal is required, it is not clear who will pay for it.  Mbr. Perkins noted that the City should not pay for an appraisal for property which does not benefit the City.  Chair Price suggested that the appraisal fee be incorporated into the brokerage agreement and that the OB needs to look into this process. 

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ADJOURNMENT

At 4:40 p.m., there being no further business, Chair Price adjourned the meeting.


Richard Price, Chair
Patricia Edwards, Board Clerk

Approved at the August 13, 2012 Oversight Board meeting 6-0-1-6; Horan absent.

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