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Home My WebLink About04 - Transfer of Excess Bonita Canyon Bond FundsCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 4 February 23, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Tracy McCraner, Administrative Services Director (949) 644 -3123 or tmccraner(a)newportbeachca.gov Dan Matusiewicz, Acting Deputy Administrative Services Director (949) 644 -3126 or danm(c)_newportbeachca.gov SUBJECT: TRANSFER OF EXCESS BONITA CANYON BOND FUNDS ISSUES: Should the City appropriate $100,000 of excess Bonita Canyon bond funds for additional improvements at Bonita Canyon Sports Park? Additionally, should the City Council authorize a transfer of the remaining $1,013,884 excess Bonita Canyon bond funds from the City improvement account to the Newport Mesa Unified School District's (NMUSD) related improvement account? RECOMMENDATION: Approve a budget amendment appropriating $100,000.00 in the Bonita Canyon fund for additional improvements to Bonita Canyon Sports Park and authorize the transfer of the remaining excess Bonita Canyon Bond funds ($1,031,884) from the City improvement account to the NMUSD improvement account. DISCUSSION: In order to finance certain public improvements associated with the Bonita Canyon development, a joint powers authority (JPA) and a Community Facilities District (CFD) was established in 1998. The JPA subsequently issued bonds which were secured by property within the Bonita Canyon CFD boundaries. Both the City and NMUSD are representatives of the CFD and maintain separate improvement accounts. The City has surplus bond funds available in its improvement account. In accordance with the Bonita Canyon bond indenture, the surplus funds can be: 1) transferred from the City improvement account to the NMUSD improvement account; Transfer of Excess Bonita Canyon Funds February 23, 2010 Page 2 2) utilized to reduce the outstanding bonds, provided that the surplus amount is equal to or greater than $50,000.00; or 3) utilized to pay interest on the Bonds, provided the surplus amount is less than $50,000.00. While the City's improvements related to this bond issue have been substantially completed, the bond indenture allows the City to transfer excess funds in the City's improvement account to the School District Improvement account. According to the bond indenture, the School Improvement account may be used by the School District for: Financing new construction, modernization, relocation and interim facilities, and related costs to serve students generated by development within the Community Facilities District, including acquisition of property as needed to provide capacity in existing schools for students generated by such development, interim facilities if opening of Newport Coast Elementary School is delayed beyond September 1999, and /or enhancing Newport Coast Elementary School or Corona del Mar High School, and a capacity zone study of the Corona del Mar zone. On November 5, 2009 the City received a written request from the School District asking that a portion of the City's Improvement account surplus be transferred to the School District Improvement account for the construction (and other related costs) of expanding parking at Corona del Mar High School. Pending the approval of the budget amendment, the City would transfer a portion of the surplus funds, determined by the City, to the School District Improvement account for this project. As of January 31, 2010, the City Improvement account had a balance of $1,131,884, which was derived from a transfer of investment earnings on the Reserve Fund's balance. The City plans to retain $100,000.00 of that amount for contemplated additional improvements at Bonita Canyon Sports Park including: construction of additional shade structures at West Park; construction of backstops at fields 1 -4; installation of safety surfacing at tot lots; and the implementation of plant and tree in -fills throughout the park to include Macarthur and Manning tract areas. After considering the $100,000 of contemplated additional improvements, the remaining surplus funds that can be transferred from the City Improvement account to the School Improvement account total $1,031,884. Environmental Review: The City Council's approval of this agenda item does not require environmental review. Transfer of Excess Bonita Canyon Funds February 23, 2010 Page 3 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: Funding is available in the City improvement fund held by the bond trustee. Alternatives: The City could perform additional improvements at Bonita Canyon Sports Park if they are consistent with the bond indenture or reduce the outstanding bonds secured by the property within the CFD. Prepared by: OrEifi Matusiewicz Acting Deputy Administrative Attachments: Letter from NMUSD Budget Amendment Submitted by: Tracy M r ner Administ ve Services Director NEWPORT -MESA Unified School District 2985 -A Bear Street + Costa Mesa • California 92626 .'(714) 424 -5000 BOARD OF TRUSTEES Dana.Black . Dave Brooks • Michael Collier Wait Davenport • Martha Fluor • Judy Franco a Karen Velsey Jeffrey C. Hubbard, Ed. D., Superintendent Mailing Addry %: P.O. Box CW Newpno 11pach. CA Y*66.34. R November 5. 2009 Dennis Danner City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 Dear Dennis, At recent meetings of the governing board of CFD 98 -1, our joint powers' arrangement between the City of Newport Beach and the Newport -Mesa Unified School District, we discussed the fact that there is approximately one million dollars in the City's portion of the CFD 98 -1 Improvement Fund.. Unfortunately, the permitted projects for CFD 98 -1 are tightly limited within the legal documents. What is available, of course, is a transfer to the school district for "school improvement purposes" to benefit CFD 98 -1. We have previously used this mechanism to fund the improvement known as the "Loop Road" at Newport Coast Elementary School. We'd like to propose another project which we believe will benefit CFD 98 -1 and the general Newport community. Students in grades 7 -12 from CFD 98 -1 attend Corona del Mar High School. As both our entitles recognize, parking at Corona del Mar High School is quite limited. Consequently, we would ask that the monies determined by you to be currently available in the City's portion of the CFD 98 -1 Improvement Fund be transferred to the District's portion of the CFD 98 -1 Improvement Fund for the purpose of expanding parking at Corona del Mar High School. I believe when we first talked.of this last Spring that then City Manager Homer Bludau indicated that the amount beyond $100,000 could be made available. On October 27, 2009, the Board of Education approved the Long Range Facilities Master Plan for Corona del Mar High School which included an expansion of parking which is to be accomplished by relocating three tennis courts. The immediate increase in parking will be the creation of 121 stalls to the main lot along Eastbluff Drive. The net increase, however, will be partially reduced in the next few years as new facilities are built near the other lots. Nonetheless, the net increase will remain at approximately 80 stalls. Please see the attached graphic representation. The total cost of the project, though design is not complete, is anticipated to be in the neighborhood of $1.3 Million, with the funding for the balance beyond what can be identified from CFD 98 -1 coming from district sources. We would, if at all possible, like to proceed with this project during the summer of 2010. If you have any questions, please do not hesitate to give me a call at 714 424 -5002. Sincerely, ( /"BSI Paul H. Reed Deputy Superintendent and Chief Business Official cc: Dr. Jeffrey Hubbard, Superintendent ... .. .. .. .. .. . .... 0 Current sTAL.Ls '*Proposed 640 STALLS (Net Gain Relocate Existing �-w Tennis Courts + 121 STALLS AN, .. . ........ . (266) I mmwfm v -mSTALLS A (80) cot UrIMIre, Parkh