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HomeMy WebLinkAbout03 - Bond Reimbursement Authorization for Civic Center ExpendituresCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 3 February 23, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Tracy McCraner, Administrative Services Director (949) 644 -3123 or tmccraner0newportbeachca.gov Dan Matusiewicz, Finance Officer (949) 644 -3126 or dmatusiewicz (conewportbeachca.gov SUBJECT: RESOLUTION 2010 - : Bond Reimbursement Authorization for Civic Center Expenditures ISSUE: Should the City Council adopt the attached reimbursement resolution that would allow the City the option to reimburse itself for project costs incurred prior to possible future debt issuances for the Civic Center project? RECOMMENDATION: Adopt Resolution No. 2010 - that would allow the City the option to reimburse itself for project costs incurred prior to possible future debt issuances for the Civic Center project. DISCUSSION: The City Council has directed staff to take certain steps toward the preparation and construction of the Civic Center project site. Initial planning expenditures for this project have been recorded in a Civic Center capital improvement fund. Funding is expected to be funded from future debt issuance consistent with the Facilities Financing Plan; however, if authorization to issue bonds is ultimately not approved by City Council for any reason, expenditures incurred for the project must be reimbursed from General Fund reserves. If the City desires the option to repay itself for site preparation and construction expenditures incurred prior to a debt issue, a "Reimbursement Resolution" for this project must be passed ahead of these expenditures. Therefore, the purpose of this Resolution is to establish the authority for the City to reimburse itself for the Civic Center project costs incurred prior to a debt issue. If the project does not go forward nothing needs to be done and the Resolution will have no effect. Interim Funding Reimbursement Resolution February 23, 2010 Page 2 Environmental Review: The City Council's approval of this agenda item does not require environmental review. Public Notice: This 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). Funding Availability: No funding is necessary to approve the reimbursement resolution. Alternatives: The City Council could choose not to adopt this reimbursement resolution. Site preparation and construction costs incurred prior to any debt issuance would not be reimbursable from debt proceeds. Prepared by: Submitted by: an Matusiewicz Tracy McC a er Finance Officer Administrative Services Director Attachments: Proposed Resolution RESOLUTION NO. 2010- 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 CIVIC CENTER PROJECT WHEREAS, the City of Newport Beach (the "City ") intends to finance the costs of site preparation and construction of a new City Hall, Park, and Parking Structure, all positioned in relationship with the existing Newport Beach Central Library located on approximately 19 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 be it RESOLVED that: 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; and 2. The reasonably expected maximum principal amount of the Obligations is $125,000,000.00; and 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; and 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; and 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; and 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, and 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 23r4 day of February, 2010 KEITH CURRY Mayor of the City of Newport Beach ATTEST: LEILANI BROWN City Clerk of the City of Newport Beach