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HomeMy WebLinkAbout16 - City Hall Interim Funding AuthorizationCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 16 May 24, 2005 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Dennis C. Danner, Administrative Services Director, (949) 644 -3123, ddanner @city.newport- beach.ca.us SUBJECT: Adopt Resolution No. 2005-_ Regarding Interim Funding Reimbursement Authorization for Prospective City Hall Complex and Rescind Resolution No. 2003 -41 ISSUE: Should Resolution No. 2003 -41 be updated to reflect current estimates for expected maximum principal amount of a possible future debt issuance (including costs of issuance) for construction of a City Hall, Fire Station, Parking Structure, Council Chambers, and Community Meeting Room? RECOMMENDATION: Adopt the attached Resolution No 2005 -_ and rescind Resolution No. 2003 -41. DISCUSSION: Background: The City Council has directed staff to take steps regarding the design of potential replacement structures for the City Hall complex. Expenditures for this process may be paid directly from City assets as approved during the budget process. If the project proceeds, the City may eventually decide to incur an indebtedness to fund it. If the City desires to have the option to repay the General Fund for these prior expenses as part of that debt issuance, an "Inducement Resolution" must be passed ahead of time. Therefore the purpose of this Resolution is to establish the authority for the City to do exactly that, if we choose to do so at the time. If the project does not go forward, or if we end up deciding not to borrow the money, nothing needs to be done and the Resolution will have no effect. At this time, no decision has been made to proceed with any issuance of debt, nor for the renovation or rebuilding of the City Hall complex. Interim Funding Reimbursement Authorization for Prospective City Hall, Fire Station, and Parking Structure Project May 24, 2005 Page 2 On August 12, 2003, the City Council adopted Resolution No. 2003 -41 addressing this issue. Staff is proposing the rescission of Resolution 2003 -41 and the adoption of Resolution No. 2005 _ that updates the current estimate for the expected maximum of a possible future debt issuance, including all costs of issuance. This is the only change to the original Resolution. Environmental Review: None required. Public Notice: With City Council Agenda. Funding Availability: None Required. Alternatives: To not adopt the Resolution, thereby not increasing the maximum principal amount of the obligation established by Resolution 2003 -41. Prepared by: Lois Thompson, Fiscal Operations Manager Attachment: Proposed Resolution Submitted by: Dennis C. Danner, Director Resolution No. 2005- 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 AND RESCIND RESOLUTION NO. 2003 -41. WHEREAS, the City of Newport Beach ( "City ") may finance the costs of construction of a new City Hall, Fire Station, and Parking Structure complex (the 'Project "); WHEREAS, the City may 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 may 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 $50,000,000.00. 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. 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`" day of May, 2005 MAYOR ATTEST: CITY CLERK