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HomeMy WebLinkAbout04 - Reimbursement for Marina Park, Sunset Ridge Park & 1499 Monrovia�EWPORr CITY OF c � NEWPORT BEACH 9<1F00.H\P City Council Staff Report Agenda Item No. 4 November 27, 2012 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Finance Department Dan Matusiewicz, Finance Director 949 - 644 -3126, danm @newportbeachca.gov PREPARED BY: Trevor Power, Accountant APPROVED: TITLE: Reimbursement Resolutions for Marina Park, Sunset Ridge Park and 1499 Monrovia Expenditures ABSTRACT: The City has received appropriate approval to move forward with three capital projects, Marina Park, Sunset Ridge Park and the acquisition of 1499 Monrovia Avenue. At the discretion of City Council, these projects may be funded via tax - exempt debt issuance. Prior to a debt issuance, the City may incur land acquisition, site preparation and construction costs associated with the projects. If the City desires the option to reimburse itself from debt proceeds for these project costs incurred prior to a debt issuance, a 'Reimbursement Resolution" must be passed within sixty days from the date the costs were incurred. Otherwise, the costs incurred prior to the adoption of such a resolution would not be eligible for debt financing and the City would be required to fund these activities in cash. Any specific plans to finance these projects would require future Council authorization to approve the issuance of lease revenue bonds, certificates of participation or other financing sources. RECOMMENDATION: Adopt Resolution No. 2012 - 104 that would allow the City to reimburse itself for project costs incurred prior to debt issuance for the Marina Park project. Adopt Resolution No. 2012 - 105 that would allow the City to reimburse itself for project costs incurred prior to debt issuance for the Sunset Ridge Park project. Bond Reimbursement Authorization for Marina Park, Sunset Ridge Park and 1499 Monrovia Expenditures November 27, 2012 Page 2 Adopt Resolution No. 2012 - 106 that would allow the City to reimburse itself for project costs incurred prior to debt issuances for the acquisition of the property at 1499 Monrovia. FUNDING REQUIREMENTS: There is no fiscal impact related to this item DISCUSSION: On June 13, 2012, the California Coastal Commission (CCC) approved the Marina Park project's coastal development permit, and two months later, on August 9, 2012, the CCC approved the Sunset Ridge Park project's coastal development permit, clearing the way for the City to move forward with both projects. The construction start date has not yet been determined for either project, but staff anticipates initial demolition and site preparation for both projects to begin in early 2013. Initial construction cost estimates, which are still subject to final design work and bidding, range from $20 -28 million for Marina Park and in the $7 -9 million range for Sunset Ridge Park. On October 9, 2012, Council authorized the City Manager to execute a purchase and sale agreement to acquire the property located at 1499 Monrovia for a purchase price of $4.3 million. This property acquisition closed on November 15, 2012. Cash funding all of these three projects could represent a burden on the City's ability to complete these and future projects and may create further liquidity issues if future cash flows do not occur as anticipated. Therefore, it may be in the City's best interest to utilize tax exempt financing to fund all or a portion of these project costs. However, to have that option, a "reimbursement resolution" must be passed within sixty days of land acquisition and construction expenditures. Therefore, the purpose of these Resolutions is to establish the authority for the City to reimburse itself for project costs incurred prior to future debt issuance. Specific financing plans will require further authorization by City Council. Should City Council not approve any proposed financing, the reimbursement resolutions will have no effect. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it 4 Bond Reimbursement Authorization for Marina Park, Sunset Ridge Park and 1499 Monrovia Expenditures November 27, 2012 Page 3 has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: Dan Matusiewicz Finance Director Attachments: Resolution — Reimburse for Project Costs Incurred Prior to Debt Issuance for the Marina Park Project Resolution — Reimburse for Project Costs Incurred Prior to Debt Issuance for the Sunset Ridge Park Project Resolution — Reimburse for Project Costs Incurred Prior to Debt Issuances for the Acquisition of the Property at 1499 Monrovia 3 RESOLUTION NO. 2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH REGARDING ITS INTENTION TO ENABLE REIMBURSEMENT OF INTERIM EXPENDITURES FROM PROCEEDS OF A POSSIBLE FUTURE DEBT ISSUANCE FOR MARINA PARK PROJECT WHEREAS, the City of Newport Beach (the "City ") intends to finance the costs of park improvements including but not limited to site preparation and construction of a new multipurpose and sailing program building; a new marina; park amenities and new restrooms; a public parking area; and any other appurtenant facilities improvements or capital costs related thereto all positioned in an area known as Marina Park located on approximately 10 acres of land (the "Project "); and WHEREAS, the City intends to finance the Project or portions of the Project with the proceeds of obligations, the interest upon which is excluded from gross income for federal income tax purposes, (the "Obligations "); and WHEREAS, prior to incurring Obligations the City desires to incur certain expenditures with respect to the Project from available monies of the City, which expenditures are desired to be reimbursed by the City from a portion of the proceeds of the Obligations. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City hereby states its intention and reasonably expects to reimburse Project costs incurred prior to the incurrence of the Obligations with proceeds of the Obligations. Section 2: The reasonably expected maximum principal amount of the Obligations is $30,000,000.00. Section 3: This resolution is being adopted on or prior to the date (the "Expenditures Date or Dates ") that the City will expend monies for the portion of the Project costs to be reimbursed from proceeds of the Obligations. Section 4: The expected date of incurrence of the Obligations will be within one year of the Expenditures Date or Dates or the date the Project is placed in service, whichever occurs last. Section 5: Proceeds of the Obligations to be used to reimburse Project costs are not expected to be used directly or indirectly to pay debt service with respect to any obligation (other than to pay current debt service coming due within the next succeeding one year period on any tax - exempt obligation of the City (other than the Obligation)) or to be held as a reasonably required reserve or replacement fund with respect to a obligation of the City or any entity related in any manner to the City, or to reimburse any expenditure that was originally paid with the proceeds of any obligation, or to replace funds that are or will be used in such manner. Section 6: The resolution is consistent with the budgetary and financial circumstances of the City, as of the date hereof. No monies from sources other than the Obligation are, or are reasonably expected to be reserved, allocated on a long -term basis, or otherwise set aside by the City (or any related party) pursuant to its budget or financial statement. Section 7: This resolution is adopted as official action of the Issuer in order to comply with Treasury Regulation 1.150 -2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of City expenditures incurred prior to the date of incurrence of the Obligations, is part of the City's official proceedings, and will be available for inspection by the general public at the main administrative office of the City. Section 8: The City Council finds this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 9: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED, this 27th day of November, 2012 NANCY GARDNER Mayor of the City of Newport Beach ATTEST: LEILANI BROWN City Clerk of the City of Newport Beach RESOLUTION NO. 2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH REGARDING ITS INTENTION TO ENABLE REIMBURSEMENT OF INTERIM EXPENDITURES FROM PROCEEDS OF A POSSIBLE FUTURE DEBT ISSUANCE FOR SUNSET RIDGE PARK PROJECT WHEREAS, the City of Newport Beach (the "City ") intends to finance the costs of park improvements including but not limited to site preparation and construction of a baseball field that overlaps in area with two soccer fields, a playground, a grass warm -up field, pedestrian paths, view areas, a shade structure picnic area, a restroom /storage facility, and any other appurtenant facilities improvements or capital costs related thereto, all located on approximately 14 acres of land positioned in the northwest corner of West Coast Highway and Superior Avenue in an area known as Sunset Ridge Park (the "Project"); and WHEREAS, the City intends to finance the Project or portions of the Project with the proceeds of obligations, the interest upon which is excluded from gross income for federal income tax purposes, (the "Obligations "); and WHEREAS, prior to incurring Obligations the City desires to incur certain expenditures with respect to the Project from available monies of the City, which expenditures are desired to be reimbursed by the City from a portion of the proceeds of the Obligations. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows Section 1: The City hereby states its intention and reasonably expects to reimburse Project costs incurred prior to the incurrence of the Obligations with proceeds of the Obligations. Section 2: The reasonably expected maximum principal amount of the Obligations is $10,000,000.00. Section 3: This resolution is being adopted on or prior to the date (the "Expenditures Date or Dates ") that the City will expend monies for the portion of the Project costs to be reimbursed from proceeds of the Obligations. Section 4: The expected date of incurrence of the Obligations will be within one year of the Expenditures Date or Dates or the date the Project is placed in service, whichever occurs last. Section 5: Proceeds of the Obligations to be used to reimburse Project costs are not expected to be used directly or indirectly to pay debt service with respect to any obligation (other than to pay current debt service coming due within the next succeeding one year period on any tax - exempt obligation of the City (other than the Obligation)) or to be held as a reasonably required reserve or replacement fund with respect to a obligation of the City or any entity related in any manner to the City, or to reimburse any expenditure that was originally paid with the proceeds of any obligation, or to replace funds that are or will be used in such manner. Section 6: The resolution is consistent with the budgetary and financial circumstances of the City, as of the date hereof. No monies from sources other than the Obligation are, or are reasonably expected to be reserved, allocated on a long -term basis, or otherwise set aside by the City (or any related party) pursuant to its budget or financial statement. Section 7: This resolution is adopted as official action of the Issuer in order to comply with Treasury Regulation 1.150 -2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of City expenditures incurred prior to the date of incurrence of the ;y Obligations, is part of the City's official proceedings, and will be available for inspection by the general public at the main administrative office of the City. Section 8: The City Council finds this action is not subject to the California Environmental Quality Act ( "CEQX) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 9: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED, this 27`h day of November, 2012 NANCY GARDNER Mayor of the City of Newport Beach ATTEST: LEILANI BROWN City Clerk of the City of Newport Beach RESOLUTION NO. 2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH REGARDING ITS INTENTION TO ENABLE REIMBURSEMENT OF INTERIM EXPENDITURES FROM PROCEEDS OF A POSSIBLE FUTURE DEBT ISSUANCE FOR THE ACQUSITION OF PROPERTY WHEREAS, the City of Newport Beach (the "City ") intends to finance the acquisition of property in the City of Newport Beach, County of Orange, State of California commonly known as 1499 Monrovia, Assessor's Parcel Number: 424 - 401 -14 and any other capital costs related thereto (the "Project"); and WHEREAS, the City intends to finance the Project or portions of the Project with the proceeds of obligations, the interest upon which is excluded from gross income for federal income tax purposes, (the "Obligations "); and WHEREAS, prior to incurring Obligations the City desires to incur certain expenditures with respect to the Project from available monies of the City, which expenditures are desired to be reimbursed by the City from a portion of the proceeds of the Obligations. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City hereby states its intention and reasonably expects to reimburse Project costs incurred prior to the incurrence of the Obligations with proceeds of the Obligations. Section 2: The reasonably expected maximum principal amount of the Obligations is $4,500,000.00. Section 3: This resolution is being adopted on or prior to the date (the "Expenditures Date or Dates ") that the City will expend monies for the portion of the Project costs to be reimbursed from proceeds of the Obligations. Section 4: The expected date of incurrence of the Obligations will be within one year of the Expenditures Date or Dates or the date the Project is placed in service, whichever occurs last. Section 5: Proceeds of the Obligations to be used to reimburse Project costs are not expected to be used directly or indirectly to pay debt service with respect to any obligation (other than to pay current debt service coming due within the next succeeding one year period on any tax - exempt obligation of the City (other than the Obligation)) or to be held as a reasonably required reserve or replacement fund with respect to a obligation of the City or any entity related in any manner to the City, or to reimburse any expenditure that was originally paid with the proceeds of any obligation, or to replace funds that are or will be used in such manner. Section 6: The resolution is consistent with the budgetary and financial circumstances of the City, as of the date hereof. No monies from sources other than the Obligation are, or are reasonably expected to be reserved, allocated on a long -term basis, or otherwise set aside by the City (or any related party) pursuant to its budget or financial statement. Section 7: This resolution is adopted as official action of the Issuer in order to comply with Treasury Regulation 1.150 -2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of City expenditures incurred prior to the date of incurrence of the Obligations, is part of the City's official proceedings, and will be available for inspection by the general public at the main administrative office of the City. Section 8: The City Council finds this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 9: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED, this 27th day of November, 2012 NANCY GARDNER Mayor of the City of Newport Beach ATTEST: LEILANI BROWN City Clerk of the City of Newport Beach