65A - MATER DEI UPDATE - Laserfiche WebLink

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Mater Dei May 17, 2016 Page 4 Staff Review Staff from the Public Works Agency, City Attorney's Office and the City Manager's Office conducted an analysis of Appendix 1 as presented. Should the City Council desire to move forward with any or all of the requests, staff would recommend an amendment to the Development Agreement rather than an appendix. This would provide clarity and protect against potential inconsistencies between the Development Agreement and the Appendix. The language in section 11(a) is not advisable because it would likely require the City to expedite construction, which could increase the overall cost of the project. Additionally, it would leave the City open to liability if it was not possible to complete the work in the time frame proposed. Section 11.5 is also not advisable because it would give Mater Dei complete control over the work, which could lead to increased costs for the City. In such a reimbursement arrangement, Mater Dei could take over the work, use any contractor they chose, and require the City pay the cost without a predefined limit. This would become an unfunded liability to the City. The City Manager requests a super majority vote as the future funds would most likely be reserve funds. Should the Mayor and City Council decide to move forward, staff would recommend that a predetermined amount be identified and that the developer be responsible for completing the work as was previously done with the 1999 Amendment. The City has fulfilled its promise to the original agreement, the first amendment, and throughout the development of the second amendment. Staff did not promise or agree to any of the requests within the Mater Dei Appendix request. During the Site Plan Review phase of the project, the concept of City financial participation was not raised, and notes were added to the site plan specifying that all improvements needed for the project were to be constructed at the sole expense of the developer. STRATEGIC PLAN ALIGNMENT Not applicable. FISCAL IMPACT The fiscal impact will vary depending on the Mayor and City Council's direction. Below are potential fiscal impacts for the three options presented as part of the recommended options. a. Fund the Mater Dei Appendix request via an Amended Development Agreement, in a not to exceed amount of $2.5 million, through the budget process (requires simple majority; reduces the City Manager's Proposed Budget) • This action would require the City Manager to adjust the General Fund Proposed Budget by the total not to exceed amount. In this case, programs, services, and staffing would be impacted by a direct amount allocated to this Development Agreement. An exact proposal would be included as part of the City Manager's Proposed Budget for City Council consideration and approval. This would be the first time in three years that programs would be reduced or cut. 65A -4