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HomeMy WebLinkAbout07 - Balboa Village Improvement DistrictCouncil Agenda Item No. 7 CITY OF NEWPORT BEACH Administrative Services Department Resource Management • Fiscal Services • M.I.S. • Revenue • Accounting July 24, 2001 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dennis Danner, Administrative Services Director 4.110 SUBJECT: FUNDING FOR THE BALBOA VILLAGE IMPROVEMENT PROJECT RECOMMENDED ACTION Adopt the attached Resolution. EXECUTIVE SUMMARY This Resolution authorizes the City to use the proceeds of future indebtedness, if any, to reimburse the General Fund for the Balboa Village Improvement Project expenditures made in advance of the indebtedness. BACKGROUND As previously reported to the City Council, funding for the Balboa Village Improvement Project is coming from a variety of sources. Approximately three million dollars of the total cost will be from the General Fund. It will probably be in the City's best interest to borrow this money instead of using existing reserves, since we are currently earning more on the investment portfolio than we would have to pay in interest and other charges for the borrowed funds. However, the City's flexibility to do this is legally constrained in several ways. Among these constraints is a maximum annual dollar limitation of $10.0 million in borrowed funds to be classified as "a small issuer ". The advantages of being a small issuer are that rebate requirements are eliminated and banks can compete for the debt issuance. Since we will exceed the small issuer limitation this calendar year with the CIOSA refunding alone, we should delay until January 2002 before making borrowing decisions for the Balboa Village Improvement Project. However, substantive actual project expenditures will begin in August 2001. Therefore the purpose of this Resolution is to authorize the City to use funds we ultimately borrow, if we do, to repay the General Fund for expenditures that take place in the interim. If we end up deciding not to borrow the money, nothing needs to be done and the Resolution will have no effect. Resolution No, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH REGARDING ITS INTENTION TO INCUR A TAX EXEMPT OBLIGATION WHEREAS, the City of Newport Beach ( "City') desires to finance the costs of construction of special improvements to the Balboa Peninsula (the 'Project'); 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, BE IT RESOLVED that the City Council of the City of Newport Beach hereby resolve, order and determine as follows: 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. 2. The reasonably expected maximum principal amount of the Obligations is $3,500,000.00. 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. 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. 5. Proceeds of the Obligations to be used to reimburse for 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. 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. 7. This resolution is adopted as official action of the Issuer in order to comply with Treasury Regulation §1.103 -18 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. 8. All the recitals in this Resolution are true and correct and the City Council of the City of Newport Beach so finds, determines and represents. ADOPTED, this 24`h day of July, 2001 MAYOR ATTEST: CITY CLERK is NOTICE OF PUBLIC HEARING AMEND 2001 -2002 CDBG ACTION PLAN AUTHORIZATION TO SUBMIT SELECTION 108 LOAN APPLICATION -:;�r '1 a4l o Notice is hereby given that a public hearing will be conducted by the City Council of the City of Newport Beach to consider the following actions regarding the planned public works improvements as set forth in the Balboa Village Pedestrian and Streetscape Improvement Plan: • Amend the current 2001 -02 Action Plan for the City's Community Development Block Grant Program to include the submittal of a Section 108 Loan to assist with the partial funding of the proposed public works improvement project. • Authorize the submittal of a Section 108 Loan Guarantee Application of up to $2.4 million to the U.S. Department of Housing and Urban Development for assistance in funding implementation of the Balboa Village Pedestrian and Streetscape improvement Plan. • Amend the 2000 -2001 Action Plan for the City's Community Development Block Grant Program to reprogram $30,000 from the ADA Improvements project to assist with the partial funding of the proposed Balboa Village Pedestrian and Streetscape Improvement Plan. The purpose of the hearing is to provide citizens an opportunity to comment on the .proposed actions to be taken. The public hearing will be on Tuesday, August 14, 2001, 7:00 PM, in the City Council Chambers located in the Newport Beach City Hall, 3300 Newport Boulevard, Newport Beach, CA 92658 -8915. Notice is hereby further given that all persons interested in reviewing the Amended Action Plan and the Draft Section 108 Loan Application may inspect copies at the City of Newport Beach Planning Department at City Hall after July 25, 2001. Comments or requests for additional information 'should be directed to the City of Newport Beach Planning Department at (949) 644 -3230, prior to August 14, 2001. LaVonne Harkless, City Clerk, City of Newport Beach Published in the Newport Beach -Costa Mesa Daily Pilot July 13, 2001.