HomeMy WebLinkAbout09 - Santa Ana Heights UndergroundingCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 9
October 11, 2005
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, Assistant City Manager
9491644 -3002 or dkiff @city.newport- beach.ca.us
SUBJECT: Santa Ana Heights Undergrounding Project —Budget Amendment
ISSUE:
Should the City provide the up -front payment required by Southern California Edison to
begin the engineering for the Santa Ana Heights Undergrounding Project, to be repaid
to the City at a later date?
RECOMMENDATION:
1. Approve Budget Amendment # _ appropriating $100,000 for the Utility
Undergrounding in Santa Ana Heights that will be funded by the OCDA's Santa Ana
Heights Project Area's tax increment revenue and bond proceeds.
2. Authorize the City Manager or the Mayor to enter into one or more agreements with
the Orange County Development Agency and /or the County of Orange for design
and /or construction work associated with the Utility Undergrounding project in Santa
Ana Heights.
DISCUSSION:
Background:
The Santa Ana Heights region is within a redevelopment area, which means that
property taxes generated above a certain "base year" are allocated according to a
"redevelopment plan" to both remove blight within the Santa Ana Heights neighborhood
and to provide low- and moderate - income housing in the region. The County of
Orange administers the redevelopment area via its Orange County Development
Agency (OCDA).
Like any redevelopment area, Santa Ana Heights has zoning regulations (in this case a
Specific Plan) and a Redevelopment Plan (which is a broader document that governs
SAH Projects — Budget Amendment
October 11, 2005
Page 2
future development in the area). The City adopted the Santa Ana Heights Specific Plan
when the City annexed the eastern Santa Ana Heights area effective July 1, 2003. The
Redevelopment Plan yields to the General Plan of the County and of the City where
noted in the Redevelopment Plan.
Redevelopment projects get their funding primarily from property tax increment. Tax
increment is the difference between the property taxes generated when an area is found
to be blighted and the property taxes generated when projects are constructed to
address blight. Redevelopment agencies ( "RDAs ") issue bonds — called Tax Increment
Bonds — in anticipation of paying back the bonds using property tax increment.
Proceeds from the bonds become the seed money to construct the improvements.
RDAs can use both bond proceeds and excess tax increment to fund projects (see
Exhibit A for more information about SAH Projects).
Included in the SAH Redevelopment Plan are several projects that the Santa Ana
Heights' Project Advisory Committee (PAC) believes are high priorities to get completed
soon. These include:
• A View Park at the corner of Mesa Drive and Birch Street.
• Utility Undergrounding along Cypress Street and parts of Mesa Drive.
• A Horse Arena in the Santa Ana /Delhi Channel's easement
• The Community Center project at the YMCA on University.
• The Fire Station on Acacia and Mesa.
Please see the attached map (Exhibit C) for the locations of these projects.
The City Council has taken action on each of these projects, in some cases entering
into agreements to construct and manage the improvements. These discussions have
been fairly complex, because the City does not control the funding source for the
improvements. PAC members have asked the City to coordinate the projects'
development because they view the County of Orange as being less able to complete
the projects in a timely manner as the City.
If the City is to take over project administration, we need to budget for and accept the
funds. We considered including all of these projects in the FY 2005 -06 Budget
submittals in early 2005, but we didn't have a good idea as to the specific projects and
amounts that would be needed in FY 05 -06. We were able to include funds for the Fire
Station, the Horse Arena and the View Park. Now we know how much to allocate for
the other projects.
We request a Budget Amendment in the amount of $100,000 to cover a year's worth of
design work to SCE and others. All costs will be funded via RDA funds transferred to
the City by the OCDA, either in current or anticipated agreements.
SAH Projects — Budget Amendment
October 11, 2005
Page 3
Committee Action: The SAH PAC supports this action by the City Council
Environmental Review: The City Council's approval of this Agenda Item does not
require environmental review.
Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act
(72 hours in advance of the public meeting at which the City Council considers the
item).
Fundinq Availability: All funds will be reimbursed by the Orange County Development
Agency and the SAH Project Area.
Submitted by
y
Dave iff
Assistant City Manager
Attachments: RDA Fund Summary
How the SAH RDA Will Fund Existing and Future Projects
Map of Projects
Budget Amendment
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Exhibit B
How the SAH RDA will fund existing (and future) Projects
Funds Available (July 2005)
Increment Added (FY 2005 -06), net of L -M Housing, County Admin Expense
Funds Available (July 2006)
SAH PAC's Proposed Projects
Old Kline Drive Improvements
Delhi Channel Horse Arena
Water Main, Riverside Drive
Orchard Drive Park
UUD #19 & Mesa Drive Trail
Fire Station (land purchase - $2.5M already paid)
Fire Station (building, landscaping [estimate])
View Park at Mesa -Birch
SAH Community Center ($4M land, $13M building)
Other Misc Projects
Subtotal of Proposed Projects
Surplus (Deficit) "
Increment Added (FY 2006 -07 to 2016 -17) ««
if all project expenses occurred in 05-06
"Assumes today's increment per year with 2.5% growth
$ 600,000
$ 250,000
$ 250,000
$ 100,000
$ 7,400,000
$ 1,681,000
$ 5,500,000
$ 250,000
$ 17,000,000
$ 136,000
$ 33,167,000
$
23,644,264
$
1,752,000
$
25,396,264
($7,770,736)
$ 20,622,009
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City of Newport Beach
BUDGET AMENDMENT
2005 -06
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates
X Increase Expenditure Appropriations AND
Transfer Budget Appropriations
SOURCE:
from existing budget appropriations
from additional estimated revenues
PX from unappropriated fund balance
EXPLANATION:
This budget amendment is requested to provide for the following:
To increase expenditures for Utility Undergrounding in Santa Ana Heights.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund
Account
Description
250
3605
Contributions - Fund Balance
REVENUE ESTIMATES (3601)
Number C5100879 SAH Utility Undergrounding
$100,000.00
Fund /Division
Account
Description
EXPENDITURE APPROPRIATIONS (3603)
NO. BA- 06BA -022
AMOUNT: $�oo,000.00
Increase in Budgetary Fund Balance
X Decrease in Budgetary Fund Balance
No effect on Budgetary Fund Balance
Amount
Debit Credit
$100,000.00
Description
Division
Number 7251 Contributions
Account
Number C5100879 SAH Utility Undergrounding
$100,000.00
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
' Automatic System Entry.
/
l
Signed:
/C' S -CS
FihaZZApproval: Administr ive S61 es irector
Date
Signed:
Administrative App oval: City Manager
D4te
Signed:
City Council Approval: City Clerk
Date