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HomeMy WebLinkAbout2023-13 - Declaring Its Intention to Reimburse Project Costs from the Proceeds of the Issuance of Bonds for Assessment District No. 120-2 and Assessment District No. 124RESOLUTION NO. 2023-13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, DECLARING ITS INTENTION TO REIMBURSE PROJECT COSTS FROM THE PROCEEDS OF THE ISSUANCE OF BONDS FOR ASSESSMENT DISTRICT NO. 120-2 AND ASSESSMENT DISTRICT NO. 124 WHEREAS, proceedings were previously undertaken under the provisions of the Municipal Improvement Act of 1913, Division 12 of the California Streets and Highways Code (the "Act"), to form the City of Newport Beach Assessment District No. 120-2 ("AD 120-2"), and the City of Newport Beach Assessment District No. 124 ("AD 124"); WHEREAS, AD 120-2 was formed on January 11, 2022, and AD 124 was formed on July 27, 2021 (collectively, the "Assessment Districts"); WHEREAS, the purpose of the Assessment Districts is to fund the undergrounding of certain existing overhead utilities located within each of the Assessment Districts; WHEREAS, the City Council of the City of Newport Beach (the "Issuer") desires to finance the costs of acquiring certain public facilities and improvements, as provided in Exhibit A, Description of Project, which is attached hereto and incorporated herein by this reference (the "Project"), relating to the undergrounding of the utilities within Assessment Districts; WHEREAS, the Issuer intends to finance the acquisition of the Project or portions of the Project with the proceeds of the sale of obligations the interest upon which is excluded from gross income for federal income tax purposes (the "Obligations"); and WHEREAS, prior to the issuance of the Obligations, the Issuer desires to incur certain expenditures in furtherance of the Project, to be advanced by Issuer, which expenditures are desired to be reimbursed by the Issuer from a portion of the proceeds of the sale of the Obligations. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Resolution No. 2023-13 Page 2 of 4 Section 1: The Issuer hereby states its intention, and reasonably expects, to reimburse Project costs incurred prior to the issuance of the Obligations with proceeds of the Obligations. Exhibit A, Description of Project, generally describes the Project expenses that will be advanced by the Issuer and reimbursed from a portion of the proceeds of the forthcoming sale of the Obligations. Section 2: The reasonably expected maximum principal amount of the Obligations is $2,620,250 with respect to the portion of the Project relating to AD 120-2, and $32,815,700 with respect to the portion of the Project relating to AD 124. Section 3: This resolution is adopted on, or prior to, the date that the Issuer will expend monies for the portion of the Project costs to be reimbursed from proceeds of the Obligations (the "Expenditure Date"). Section 4: Except as described below, the expected date of issue of the Obligations will be within eighteen months of the later of the Expenditure Date and the date the Project is placed in service; provided, that the reimbursement may not be made more than three years after the original expenditure is paid. For Obligations subject to the small issuer exception of Section 148(f)(4)(D) of the Internal Revenue Code, the "eighteen -month limit" of the previous sentence is changed to "three years" and the limitation of the previous sentence beginning with "; provided, ...." is not applicable. Section 5: Proceeds of the Obligations to be used to reimburse for Project costs are not expected to be used, within one year of reimbursement, 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 Issuer (other than the Obligations) or to be held as a reasonably required reserve or replacement fund with respect to an obligation of the Issuer or any entity related in any manner to the Issuer, 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: This resolution is consistent with the budgetary and financial circumstances of the Issuer, as of the date hereof. No monies from sources other than the Obligation issue are, or are reasonably expected to be reserved, allocated on a long-term basis, or otherwise set aside by the Issuer (or any related party) pursuant to their budget or financial policies with respect to the Project costs. To the best of its knowledge, this City Council is not aware of the previous adoption of official intents by the Issuer that have been made as a matter of course for the purpose of reimbursing expenditures and for which tax exempt obligations have not been issued. Resolution No. 2023-13 Page 3 of 4 Section 7: The limitations described in Section 3 and Section 4 do not apply to (a) costs of issuance of the Obligations, (b) an amount not in excess of the lesser of $100,000 or five percent (5%) of the proceeds of the Obligations, or (c) any preliminary expenditures, such as architectural, engineering, surveying, soil testing, and similar costs other than land acquisition, site preparation, and similar costs incident to commencement of construction, not in excess of twenty percent (20%) of the aggregate issue price of the Obligations that finances the Project for which the preliminary expenditures were incurred. Section 8: This resolution is adopted as official action of the Issuer to comply with Treasury Regulation § 1.150-2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of Issuer expenditures incurred prior to the date of issue of the Obligations, is part of the Issuer's official proceedings, and will be available for inspection by the general public at the main administrative office of the Issuer. Section 9: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. Section 10: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 11: The City Council finds the adoption of this resolution is exempt from environmental review under the California Environmental Quality Act ("CEQA") pursuant to Section 15302(d) (conversion of overhead electric utility distribution system facilities to underground including connection to existing overhead electric utility distribution lines where the surface is restored to the condition existing prior to the undergrounding) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential to have a significant effect on the environment. Resolution No. 2023-13 Page 4 of 4 Section 12: 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 14t" day of February, 2023. ATTEST: L�:zww%�Z'Ji brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE �-- 0 .^ Aaron C. Harp City Attorney Attachment(s): Exhibit A - Description of Project EXHIBIT A DESCRIPTION OF PROJECT ASSESSMENT DISTRICT NO. 120-2 The conversion of certain overhead electrical, cable and communication facilities to underground locations located within and around AD 120-2, together with appurtenant work. ASSESSMENT DISTRICT NO. 124 The conversion of certain overhead electrical, cable and communication facilities to underground locations located within and around AD 124, together with appurtenant work STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; the foregoing resolution, being Resolution No. 2023-13 was duly introduced before and adopted by the City Council of said City at a regular meeting of said Council held on the 141h day of February, 2023; and the same was so passed and adopted by the following vote, to wit: AYES: Mayor Pro Tern Will O'Neill, Council Member Brad Avery, Council Member Robyn Grant, Council Member Lauren Kleiman, Council Member Joe Stapleton, Council Member Erik Weigand NAYS: None RECUSED: Mayor Noah Blom IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 151h day of February, 2023. Dak, j - Leilani I. Brown City Clerk Newport Beach, California