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Home My WebLink AboutPFC-3 - PFC-3 - Newport Beach Public Facilities Corporation Report�EVVPpRr CITY OF NEWPORT BEACH oaH'P City Council Staff Report Agenda Item No. PFC -3 July 24, 2012 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Finance Department Tracy McCraner, Director /Treasurer 949 - 644 -3123, tmccraner @newportbeachca.gov PREPARED BY: Rukshana Virany, Accounting Manager APPROVED: p, /tp TITLE: Newport Beach Public Facilities Corporation The Bylaws of the Newport Beach Public Facilities Corporation call for an annual meeting of the Board of Directors. RECOMMENDATION: Convene the meeting of the City of Newport Beach Public Facilities Corporation for the 2012 -13 fiscal year, elect officers, approve minutes of the July 12, 2011 meeting and receive and file this brief financial report. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION: A common and efficient way to finance public facilities is through the use of Certificates of Participation (COPs) but they are dependent on a lease revenue stream between two entities. The City of Newport Beach Public Facilities Corporation was first formed for this purpose in 1988 in order to specifically finance the acquisition and construction of the Cannery Village Parking Lot. The Corporation's role was later expanded to allow for the construction of public facilities, more generally, when financing of the Central Library construction was necessary in 1992. The City Council sits as the Board, with the City Manager serving as Secretary, and the Finance Director serving as Treasurer. Normally, the Mayor will serve as Chairperson of the Board, with the Mayor Pro -Tem serving as Vice - Chairperson. Newport Beach Public Facilities Corporation July 24, 2012 Page 2 In Fiscal Year 2010 -11, $20,085,000 of Series 2010A (Tax Exempt) and $106,575,000 of Series 2010B (Federally Taxable Direct Pay Build America Bonds) Certificates of Participation were issued to provide financing for the acquisition, improving and equipping of a new Civic Center (which includes a new City Hall, an expansion to the Central Library, civic park and a parking structure). A portion of the Series 2010A Certificates were issued to refinance the $3,990,000 principal outstanding on the 1998 Library COPS resulting in a net present value savings of $429,500. Accordingly, the 1998 Library COPs have been defeased pursuant to the defeasance provisions of the 1998 Trust Agreement. The remaining proceeds from the Series 2010A Certificates and Series 2010B Certificates are to be used to finance the acquisition, improvement and equipping of the Civic Center Project. As of June 30, 2012, the outstanding principal balance of the Series 2010A is $18,345,000 and the Series 2010B is $106,575,000. 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 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 Tracy McCraner Finance Director/Treasurer Attachments: A. Agenda B. Minutes from July 12, 2011 meeting C. Financial Statements CITY OF NEWPORT BEACH PUBLIC FACILITIES CORPORATION ANNUAL MEETING NOTICE Tuesday, July 24, 2012 4:30 p.m. City Council Chambers 3300 Newport Blvd. Newport Beach, CA 92663 AGENDA Election of Officers Mayor Mayor Pro Tem Council Members City Manager Finance Director Chairperson of the Corporation Vice - Chairperson of the Corporation Corporation's Board of Directors Corporation's Secretary Corporation's Treasurer 2. Approval of Minutes from the meetings of July 12, 2011. 3. Receive, discuss as necessary, and file Financial Report from the Corporation's Treasurer 4. Public Comments 5. Adjournment t City Council Minutes Newport Beach Public Facilities Corporation July 12, 2011 -- 4:00 p.m. 1. ROLL CALL - 4:00 p.m. Present: Council Member Hill, Mayor Pro Tern Gardner, Mayor Henn, Council Member Selich, Council Member Curry, Council Member Daigle Excused: Council Member Rosansky Council Member Rosansky arrived at 4:05 p.m. 2. ELECTION OF OFFICERS R3 Motion by Council Member Curry, seconded by Council Member Selich to elect the Mayor as Chairperson of the Corporation, the Mayor Pro Tem as the Vice - Chairperson of the Corporation, the Council Members as the Corporation's Board of Directors, the City Manager as the Corporation's Secretary, and the Finance Director as the Corporation's Treasurer for the 2011 -2012 fiscal year. The motion carried by the following roll call vote: Ayes: Council Member Hill, Council Member Rosansky, Mayor Pro Tern Gardner, Mayor Henn, Council Member Selich, Council Member Curry, Council Member Daigle Motion by Corporation Board of Director Curry, seconded by Corporation Board of Director Selich, to waive reading of the subject minutes, approve as written, and order filed. Ayes: Board of Directors Rosansky, Selich, Curry, Daigle; Vice - Chairperson Gardner; and Chairperson Henn Abstain: Board of Director Hill 4. NEWPORT BEACH PUBLIC FACILITIES CORPORATION FINANCIAL REPORT Corporation Treasurer McCraner provided a staff report to discuss the Central Library Certificates of Parcipation (COPs), the issuance of the COPs to finance the Civic Center Project, and the outstanding principal balances. In response to Council Member Hill's questions, Corporation Secretary Kiff explained why the term acquisition might have been used relative to the Civic Center Project, but stated that the property belongs to the City. Corporation Treasurer McCraner explained that the balance sheet only lists current year activities for the bond funds. James Mosher suggested that the report include how funding through the Corporation compares to the cost to the taxpayers if the same facilities were financed through a voter - approved bond. Corporation Board of Duxector Curry reported that the use of COPS dates back to 1976 in California. He stated that using General Obligation Bonds would be cheaper but includes the authority to levy a tax for the debt. He emphasized that the City did not see a need to levy a tax and decided to utilize COPS in order to not raise taxes. Motion by Corporation Board of Director Curry, seconded by Corporation Board of Director Selich, to receive and file the Newport Beach Public Facilities Corporation Financial Report. Byes: Board of Directors Hill, Rosansky, Selich, Curry. Daigle; Vice - Chairperson Gardner; and Chairperson Henn 61 PUBLIC COMMENTS -None 6, ADJOURNMENT - 4:07 p.m. The agenda for the Newport Beach Public Facilities Corporation was posted on July 7, 2011, at 2:10 p.m. on the City Hall Bulletin Board locaLed outside of the City of Newport Beach Administration Building. Recording Secretary Mayor City Clerk NEWPORT BEACH PUBLIC FACILITIES CORPORATION Balance Sheet June 30, 2012 COP Debt Service Assets Cash with fiscal agent $ 7,904,634 Due from other funds - Other Total Assets $ 7,904,634 Liabilities and Fund Balances Liabilities: Accounts payable $ Due to other funds Total Liabilities Fund balances: Nonspendable - Restricted for: Debt Service 7,904,634 Committed - Assigned Unassigned Total fund balance 7,904,634 Total liabilities and fund balance $ 7,904,634 NEWPORT BEACH PUBLIC FACILITIES CORPORATION Statement of Revenues, Expenditures and Changes in Fund Balances For the Year ended June 30, 2012 Revenues: Lease revenues Investment income Intergovernmental Total revenues Expenditures: Current: General government Public safety Public works Community development Community services Capital outlay Debt service: Principal Interest and fiscal charges Service fees Total expenditures Excess (deficiency) of revenues over expenditures Fund balance, beginning COP Debt Service $ 8,078,506 217 2,535,196 10,613,919 1,740,000 7,941,268 •.: - 932,651 6,971,983 Fund balance, ending $ 7,904,634