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HomeMy WebLinkAbout04 - Funding for OASIS and Sunset Ridge ParkCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 4 November 12, 2008 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Dennis C. Danner, Administrative Services Director (949) 644 -3123 or ddanner(a_city.newport- beach.ca.us Dan Mafusiewicz, Finance Officer (949) 644 -3126 or dmatusiewicz (cb city. newport- beach. ca. us SUBJECT: Interim Funding Reimbursement Authorization for the OASIS Senior Center and Sunset Ridge Park for Potential Pay Back ISSUE: Should the City Council adopt the attached reimbursement resolutions that would allow the City the option to reimburse itself for project costs incurred prior to possible future debt issuances for the OASIS Senior Center project and the development of Sunset Ridge Park? RECOMMENDATION: Adopt the two attached reimbursement resolutions that would allow the City the option to reimburse itself for project costs incurred prior to possible future debt issuances for the OASIS Senior Center project and the development of Sunset Ridge Park. DISCUSSION: The City Council has directed staff to take certain steps toward the design and replacement of the OASIS Senior Center site and the acquisition, design and development of Sunset Ridge Park. Initial expenditures for these projects will be funded from the General Fund - Capital Improvement Reserve. If the projects proceed, the City may eventually decide to finance these projects over a longer period of time than the construction period, through the issuance of debt. If the City desires to have the option to repay itself for site preparation and construction expenditures incurred prior to a debt issue, a "Reimbursement Resolution" for each project must be passed ahead of the these expenditures. Therefore, the purpose of these Resolutions is to establish the authority for the City to do exactly that, if we choose to do so at the time. If the projects do not go forward, or if we end up deciding not to borrow the money, nothing needs to be done and the Resolutions will have no effect. Interim Funding Reimbursement Resolutions November 12, 2008 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 resolutions. Alternatives: The City Council could choose not to adopt these reimbursement resolutions. Site preparation and constructions costs incurred prior to any debt issuance would not be reimbursable from debt proceeds. Prepared by: an Matusiewicz Finance Officer Attachments: Proposed Resolutions Submitted by: 4�� Dennis C. Danner Administrative Services Director Resolution No. 2008- 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 THE OASIS SENIOR CENTER WHEREAS, the City of Newport Beach ( "City ") intends to finance the costs of the OASIS Senior Center Project which includes demolition of an existing senior center, site clearing and grubbing, grading, construction of an approximately 39,000 square -foot single story wood framed senior center, construction of a retaining wall, and associated site improvements to be constructed on the 4.92 acre site of the existing OASIS Senior Center at the corner of Marguerite Ave. and 5'h Ave. in Corona Del Mar. (the "Project "); 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 the City Council of the City of Newport Beach hereby resolve, order and determine as follows: 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. 2. The reasonably expected maximum principal amount of the Obligations is $25,000,000.00. 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. 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. 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 orwill be used in such manner. 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. 7. 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. Resolution No. 2008- 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 SUNSET RIDGE PARK WHEREAS, the City of Newport Beach ( "City ") intends to finance the costs of construction of the acquisition, and development of a 13.67 acre park situated on the northern comer of Pacific Coast Highway and Superior Avenue in West Newport Beach known as Sunset Ridge Park. The Sunset Ridge Park development project will also include the acquisition and grading of an access road from Pacific Coast Hwy, parking area, and various active and passive park amenities (the "Project "); 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 the City Council of the City of Newport Beach hereby resolve, order and determine as follows: 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. 2. The reasonably expected maximum principal amount of the Obligations is $15,000,000.00. 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. 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. 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. 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. 7. 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.