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HomeMy WebLinkAboutRPT 3 RECREATION CIPS 11-21-88.' OATE: 11/3/88 RE PORTS NO. 3 1.1-21-88 'Inter.-Com FROM: $ UBJ ECT: HONORABLE MAYOR ANDMEMBERS OF THE CITY COUNCIL CITY ATTORNEY RECEIPTS AND EXPENDITURES FOR RECREATION' CAPITAL PROVEMENTS The staff has been asked to review City records and advise the Council as to expenditures the City has made for recreation pro- grams and what obligations the City may have regarding the expen- diture of monies for recreational and other related activities. City records have been reviewed and we advise you as follows below. 1. In 1976 the City received $59,871 of fi*re insurance funds. when the. Tustin Youth Center building burned down. In 1977 the ' City sold the property on which the Youth Center building had been located to a pre-school for $93,000. Thus, the City received a total of $151,871 from the sale of the real property and fire insurance proceeds. Attached is a copy of the City Council minutes of December 6, 1976 relative to this matter. 2. In 1979, the City sold to. Foster Arts Company for $425,000 a parcel of property situated on 6th Street, contiguous to the easterly side of the Boys and Girls Club of Tustin. At its September 17, 1979 meeting, the City Council adopted a minute order relative to the proceeds of the sale of that property, as follows: . ' "It was moved by* Welsh, seconded by Kennedy, to commit the proceeds from the sale of the 6th Street surplus property to the acquisition or development of future recreational or cultural facilities and to authorize the General Fund to recover the *actual cost of appraisals and other expenses of the sale." A copy of the council minutes of September 17, 1979 is attached. The effect of this ~inute order and of thes minutes can ' only be construed a~ a statement of the inte..cions of the members of the City Council at that time. The proceeds of the sale of the property to Foster Arts were, appropriately, placed in the General Fund and never segregated into any special fund. 3. In'.1984 the City sold a small parcel of property adjacent to the Boys Club to Foster Arts for use as a 'parking lot in return for the agreement of Foster Arts to construct certain recreation improvements on the property which would be compatible with the parking lot and could be used by the Boys Club. Subsequently it was agreed among _Foster Arts, the Boys Club and the City that in lieu of such recreation improvements Foster Arts would pay $20,000. The City relinquished that sum of money to the Boys and Girls Club. Attached are City Council minutes of July 16, 1984 relative to that matter. 4. Attached hereto is a document entitled "Capital Improvements 1979/80 - 1988/89" which shows the expenditures made for capital improvements of various recreational and cultural facilities of the City from 1979 to the current year. As you can see, the amounts which have been spent for capital improvements of park , recreational and cultural facilities during this period can be summarized as follows: General Fund Park .Development Fund Bea.utification Fund Grant Funds Community Redevelopment Agency Fund $ 180,550 $ 122,500 $ 21,100 $1,117,000 $1,253,200 Total $4,744,350 The foregoing amounts are only the amounts expended for capital improvements. The City has, of course, also ex- pended substantial amounts on non-capital improvement ex- penses. 5. The City has also paid the Boys and Girls Club $21,265 from Revenue Sharing funds during the period 1982/83 - 1986/87 and has recently agreed to pay the Boys and Girls Club $17,000 for the cost of new bleachers. 6. Finally, there may be considered the value being given each year to the Boys and Girls Club of Tustin by the City leasing to the Boys and Girls Club the 6th Street property for $1.00 per year Calculating that the a""acent parcel -sold to Foster Arts had a value in 1979 of $425,000 and using' that figure as its present value, without regard to inflation or other property value increase trends, and cal- culating that a reasonable rental of land might be approxi- mately 10% per year, means that the City under its $1 .a year lease with the Boys and Girls Club is in effect donating at. least $40,000 a year to the Boys and Gi'rls Club, and maybe considerably more if the property is considered to have a Value greater than the adjacent parcel had in 1979. It might also be noted that with this lease having a 50 year term at the rental of $1. a year, that the value of the dona- tion to the Boys and Girls Club of Tustin over the 50 year --'lease term would appear to be at least $2,000,000. City Attorney JGR:se :R: 11/2/88 (1222) JGR: se: R: 11/4/88 JGR: se :R: 11/7/88 JGR: se :R: 11/8/88 cc:' WH RW RN