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<br />2. Approval of Tract Nos. 12563 through 12566 for recordation, sub-
<br />ject to review of bonds and approval by City Manager a"nd City
<br />Attorney. Bonds have been received guaranteeing the installa-
<br />tion of the required improvements, contingent upon approval of
<br />the proposed agreement.
<br />Moved by Councilwoman Cisneros, seconded by Councilman Rios, approv-
<br />ing Staff's report and recommendations, including Item Nos. 1 and
<br />2, as outlined. Unanimous vote.
<br />CITY MANAGER'S REPORTS AND RECOMMENDATIONS:
<br />Governmental Agencies
<br />Res. No. R-6-86 11
<br />City Manager Elliott advised the City of Colton was recently notified
<br />by the City of San Bernardino that Colton's involvement in a five -city
<br />Economic Development Authority (EDA) might be in default, which could
<br />result in the City of Colton paying approximately $500,000 back to the
<br />federal government.
<br />Mr. Elliott continued in 1978 the City of Colton, along with the cities
<br />of San Bernardino, Rialto, Fontana, and Redlands, formed a five -city
<br />Economic Development Authority and subsequently, a grant was approved
<br />and awarded to the five -city EDA in the amount of $2,957,088, which was
<br />sub -granted to Operation Second Chance, Inc. (OSC) for construction of
<br />a job training facility. OSC Inc. has operated the job training facil-
<br />ity since its construction, however, in the last few years, it has run
<br />into cash flow problems. OSC Inc. then took out a loan against the
<br />property in the amount of $800,000 which, at this time, is in default.
<br />Mr. Elliott stated the U. S. Department of Commerce advised the loan
<br />was illegal as they did not give permission for the loan, and the loan
<br />must be satisfied or a new plan be developed to put OSC in a positive
<br />cash flow and management position. After several meetings of the five -
<br />city Authority, it was felt that without an audit of OSC, the EDA could
<br />not determine a method of recovery. Each City involved will ask their
<br />respective councils to authorize an expenditure of $5,000 to be put in
<br />a pool to pay for an auditor chosen by the five -city Authority.
<br />Mr. Elliott concluded Staff recommends adoption of Resolution No. R-6-
<br />86, authorizing $5,000 to be transferred from Revenue Sharing to Ac-
<br />count No. 01-1201-35, City Manager Professional Services Account.
<br />After discussion among Council Members and Staff, the Council felt
<br />there should be strings attached to any money spent towards an audit,
<br />or resolution of this problem.
<br />Moved by Councilman Rehrer, seconded by Councilman Rios, to table this
<br />matter until the next regular Council Meeting. Unanimous vote.
<br />Library
<br />Mr. Elliott referred to a proposal from M. F. Whipple & Company con-
<br />cerning refinancing of the outstanding Certificates of Participation
<br />for the Colton Public Library in reducing costs to the City by obtain-
<br />ing a lower rate of interest.
<br />Mr. Michael F. Whipple, President, M. F. Whipple & Company, Inc., spoke
<br />to the Council Members regarding refunding of the Certificates at a
<br />lower interest rate than what the City is currently paying on the out-
<br />standing certificates, which would result in a savings of approximately
<br />$76,000 based on a non -rated issue.
<br />Mr. Francis Baum, of Best, Best & Krieger, also spoke to the Council
<br />Members in this regard, advising there would be no significant change
<br />to the contract and the total maturity would not change.
<br />After additional discussion, moved by Councilwoman Cisneros, seconded
<br />by Councilman Rios, to approve Staff's report and recommendations re-
<br />garding refinancing of Colton Public Library as outlined. Vote was
<br />unanimous.
<br />JAN 21
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