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°q,,FOfL City Council Staff Report
July 22, 2014
PFC Agenda Item No. 2
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Finance Department
Dan Matusiewicz, Finance Director/Treasurer
949 - 644 -3123, danm @newportbeachca.gov
PREPARED BY: Trevor Power, Accountant
TITLE: Newport Beach Public Facilities Corporation
ABSTRACT:
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
2014 -15 fiscal year, elect officers, approve minutes of the July 23, 2013 meeting, and
receive and file this brief financial report.
FUNDING REQUIREMENTS:
There is no fiscal impact related to this item. Council members who serve as members
of the Newport Beach Public Facilities Corporation do not receive compensation for the
Public Facilities Corporation role.
DISCUSSION:
A common and efficient way to finance public facilities is through the use of Certificates
of Participation (COPs). All COPs are structured so that the ownership of the building,
equipment or land being financed (the "Project ") is vested in a third -party entity that then
leases the Project back to the public agency conducting the financing, giving that
agency the use or occupancy of the Project in return for lease payments. The third -party
entity assigns the lease payments to a trustee, who then remits the lease payments to
investors of the COPs. 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 Cannery Village Parking Lot has
long been completed and the debt retired. 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.
Newport Beach Public Facilities Corporation
July 22, 2014
Page 2
The City Council sits as the Board, with the City Manager serving as President, the City
Clerk 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.
In Fiscal Year 2010 -11, $126,660,000 of Series 2010 COPs was 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 2010 Certificates was 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 2010 Certificates were used to finance the
acquisition, improvement and equipping of the Civic Center Project. As of June 30,
2014, the outstanding principal balance of the Series 2010 Certificates is $119,455,000.
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).
ATTACHMENTS:
Attachment A Financial Statements
ATTACHMENT A
NEWPORT BEACH PUBLIC FACILITIES CORPORATION
Comparative Balance Sheet
June 30, 2014 and 2013
Assets
Cash with fiscal agent
Due from other funds
Total Assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Due to other funds
Total Liabilities
Fund balances:
Nonspendable
Restricted for:
Debt Service
Committed
Assigned
Unassigned
Total fund balance
Total liabilities and fund balance
2014 2013
$ 7,901,395 $ 7,838,990
$ 7,901,395 $ 7,838,990
7,901,395 7,838,990
7,901,395 7,838,990
$ 7,901,395 $ 7,838,990
NEWPORT BEACH PUBLIC FACILITIES CORPORATION
Comparative Statement of Revenues,
Expenditures and Changes in Fund Balances
June 30, 2014 and 2013
Revenues:
Lease revenues
Investment income
Federal interest subsidy
Total revenues
Expenditures:
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over expenditures
Fund balance, beginning
2014 2013
$ 8,265,532 $ 8,067,030
287 125
2,352,662 2,424,915
10,618,481 10,492,070
2,775,000 2,690,000
7,781,076 7,867,714
10, 556, 076 10, 557, 714
62,405 (65,644)
7,838,990 7,904,634
Fund balance, ending $ 7,901,395 $ 7,838,990