HomeMy WebLinkAbout2011/12/13 Item 09CITY COUNCIL
AGENDA STATEMENT
~~~ CIlY OF
CHUTAVISTA
12/13/11 Item
ITEM TITLE:
SUBMITTED BY:
REVIEWED BY:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE DIRECTOR OF FINANCE
TO CLOSE AD 97-2 IMPROVEMENT FUND (OTAY RANCH,
VILLAGE ONE) AND DIRECT THE TRUSTEE (US BANK) TO
TRANSFER SURPLUS FUNDS TO THE REDEMPTION FUND 1N
ORDER TO CALL BONDS, PROVIDE REFUNDS, REDUCE
FUTURE ASSESSMENTS, REIMBURSE THE GENERAL FUND,
AND ALLOCATE TO CIl' OTAY RANCH VILLAGE ONE
MAINTENANCE OF IMPR,,OtVEMENTS
DIRECTOR OF FINANCEtt'
DIRECTOR OF PUBLIC WO ~__'~~~
CITY MANAGER Ay, Gib
ASSISTANT CITY ANAGER G> 1/
4/STHS VOTE: YES L], NO
SUMMARY
The City of Chula Vista (the "City) formed Assessment District (AD) No. 97-2 (Otay Ranch,
Village One) (the "District") in 1997. The District issued its $12,430,000 Limited Obligation
Improvement Bonds (the "Bonds") in 1999 for the purpose of providing financing for the
construction and acquisition of certain public improvements, which benefit properties within the
District. The improvements within the District have been completed and surplus funds remain
and are held in trust by US Bank. Pursuant to Section 10427 of the California Streets and
Highways Code (the "Code"), any surplus in the Improvement Funds shall be used for one or
more of the following purposes:
^ Transfer to the General Fund of the City, provided that the amount transferred shall
not exceed the lesser of one thousand dollars ($1,000) or 5 percent of the total amount
expended from the improvement funds.
^ As a credit upon the assessment and any supplemental assessment.
^ Maintenance of the improvement.
^ Call bonds, thereby reducing outstanding assessments and subsequent assessment
installments.
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12/13/11, Item
Page 2 of 4
In accordance with the above described Section 10427, staff is recommending that US Bank
take the following actions:
1. Close Improvement Fund AD 97-Z and pay associated costs for the closure
2. Transfer $1,000 to the City's General Fund
3. Set aside monies in a trust fund to be allocated towards a Capital Improvement Project to
maintain improvements that were financed through the District
4. Transfer the remaining funds from the Improvement Fund to the Redemption Funds,
which shall be used to provide refunds to eligible property owners that prepaid their
assessments, and to call bonds and reduce principal on active parcels
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with
the California Environmental Quality Act (CEQA) and has determined that the proposed actions
qualify for a Class 1 categorical exemption pursuant to Section 15301 [Existing Facilities] of the
State CEQA Guidelines because the proposed actions consist of utilization of existing surplus
funds for administrative and on-going maintenance operations of existing improvements
involving negligible or no expansion of an existing use. Thus, no further environmental review is
necessary.
RECOMMENDATION
Council adopt the resolution.
BOARDS/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
Assessment District Funds
As part of the approval to form an assessment district and issue bonds, the City establishes three
trust funds: 1) the Improvement Fund whereby all monies received from cash collection,
proceeds from the sale of bonds and applicable contributions are placed (such funds are used to
pay for the improvements); 2) the Reserve Fund whereby all monies designated to assist in the
payment of delinquencies are placed (typically 10% of the outstanding principal); and 3) the
Redemption Fund whereby all monies received from the payment of assessments are placed.
Money in this last fund is used to make principal and interest payments on the bonds.
Pursuant to California Streets and Highways Code § 10427 et seq., if funds remain in an
Improvement Fund after completion of improvements and payment of all claims, any surplus in
the Improvement Funds shall be used for one or more of the following purposes:
^ Transferred to the General Fund if the surplus does not exceed the lesser of $1,000 or 5%
of the total amount expended from the Improvement Fund;
^ Applied as a credit on the assessment or refunded to the payer if such assessment has
been paid in cash;
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12/13/11, Item
Page 3 of 4
^ Utilized for maintenance of the improvements;
^ Utilized to call and redeem bonds, thereby reducing the outstanding principal and
subsequent assessment installments.
Assessment District 97-2
The City formed AD 97-2 in 1997. Attached is a copy of the District boundaries for reference.
The District issued its $12,430,000 Bonds in 1999 for the purpose of providing the financing for
the construction and acquisition of certain public improvements to benefit the District. The
improvements include grading and site preparation; slope and erosion control; domestic and
wastewater improvements; street improvements such as curb, gutter, medians, and sidewalks;
and the installation of traffic signals, street lights and signage.
The work has been completed, all payments for the eligible costs have been paid, and funds
remain in the Improvement Fund in the amount of $1,529,871.77 (as of March 31, 2011).
Disposition of Funds
In an effort to maximize the use of surplus funds, staff is recommending the following:
1. Close Improvement Fund AD 97-2 and pay associated costs for the closure
2. Transfer $1,000 to the City's General Fund
3. Set aside monies in a trust fund to be allocated towards a Capital Improvement Project to
maintain the improvements that were financed through the District
4. Transfer the remaining funds from the Improvement Fund to the Redemption Fund,
which shall be used to provide refunds to eligible property owners that prepaid their
assessments and to call bonds and reduce principal on active parcels
A summary of the actions to be taken by US Bank are estimated as follows:
Descri tion Amount
Irrt rovement Fund Balance as of March 31, 2011* $1,529,871.77
General Fund Transfer ($1,000.00)
Closeout Costs ($8,000.00)
CIl' for Maintenance of Improvements ($563,263.00)
Call bonds and reduce future assessments ($882,209.79)
Refund to eli ible Pro erty Owners ($54,198.98)
Bond call ex enses includin redem tion remium ($21,200.00)
Ending Balance $0.00
*any funds remaining at the actual date of closure shall be applied to the redemption tuna
In reference to No. 3 above, staff recommends creating a new Capital Improvement Project
STL387 "Otay Ranch Village One Maintenance of Improvement" for purposes of maintaining
improvements completed in the benefited area until funds are exhausted. CIP STL387 will be
brought forward to City Council for appropriation of $563,263 during the FY 2012-13 CIP
Budget process. A schedule of improvements and related cost estimates are included as
Attachment 2.
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12/13/11, Item
Page 4 of 4
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no such holdings
within 500' of the boundaries of the property, which is the subject of this action.
CURRENT YEAR FISCAL IMPACT
There is positive fiscal impact to the General Fund of $1,000 and there are savings to Chula
Vista property owners. As a result of the principal reduction, each property will see an estimated
10% reduction in their annual principal and interest billed over the remaining 17 years. Actual
savings will depend upon the original assessment and revised debt service schedule. The bond
call will occur in March 2012 after the required 30-day noticing period to the Trustee.
The appropriation of $563,263 to a new Capital Improvement Project STL387 "Otay Ranch
Village One Maintenance of Improvement" will be brought to Council for approval during the
FY 2012-13 CIP Budget process and included in the CIP Program at that time.
ON GOING FISCAL IMPACT
Although a portion of surplus funds will be used to establish a CIP to maintain the improvements
completed and assist in preserving those improvements, funds are only available until exhausted.
However, on-going maintenance of those facilities thereafter will have an impact to the operating
budget and will need to be addressed at that time. It is estimated that those costs are $40,000
annually.
ATTACHMENTS:
1. Assessment District No. 97-2 Diagram
2. Assessment District No. 97-2 Proposed Maintenance of Improvements Schedule
Prepared by: Merce LeClair, Sr. Management Analyst (City of Chula Yista) and Brian Brown, Consultant (NBS)
J:lEngineerL4GENDAICAS2011112-13-11 L4D 97-2 OtayRanch Village One Closure dm edits.doc.
9-4
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AD97-02
EXTENDED
QUANTITY UNIT UNIT COST COST
East Palomar, Monarch East to E'1V AD Limits
PCC Sidewalk R&R 1,464 SF $7.00 $10,248
Concrete Patching /Joint Sealing LS LS $12,000.00 $12,000
PCC Driveway R&R 765 SF $11.00 $8,415
Storm Drain Stencil 6 EA $100.00 $600
Storm Drain Filter Insert -United Stormwater 6 EA $2,500.00 $15,000
Landscape Repair/Restoration 1 LS $3,000.00 $3,000
TOTAL $49,263
EXTENDED
QUANTITY UN1T UNIT COST COST
East Palomar Heritaqe Road to Monarch Eas_t_
PCC Sidewalk R&R 1,858 SF $7.00 $13,006
PCC Curb & Gutter R&R ~ 13 LF $40.00 $520
Concrete Patching !Joint Sealing LS LS $15,000.00 $15,000
Storm Drain Stencil 6 EA $100.00 $600
Storm Drain Filter Insert- United Stormwater 6 EA $2,500.00 $15,000
Landscape Repair/Restoration 0 LS $5,000.00 $0
Sidewalk to Trail Transitions (within PROW} 1 SF $5,000.00 $5,000
TOTAL $49,126
EXTENDED
QUANTITY UNIT UNIT COST COST
Monarch Drive
PCC Sidewalk R&R ~ 749 SF $7.00 $5,243
PCC Driveway R&R 765 SF $40.00 $30,600
Storm Drain Stencil 12 EA $100.00 $1,200
Storm Drain Filter Insert -United Stormwater 12 EA $2,500.00 $30,000
Landscape Repair/Restoration 1 LS $5,000.00 $5,000
TOTAL $72,043
EXTENDED
QUANTITY UNIT UNIT COST COST
Heritaqe Road Telegraph Cyn. to E. Palomar
Storm Drain Stencil 8 EA $100.00 $800
Storm Drain Filter Insert -United Stormwater 8 EA $2,500.00 $20,000
Trail Repaving 20,000 SF $6.00 $120,000
Pavement Sealcoat (Chip Seal) 160,000 SF $0.40 $64,000
Pavement Restriping
Bike Lane (excl. Legends) 4,000 LF $0.50 $2,000
Striped Median (2-way Solid/Skipped) 8,000 LF $1.00 $8,000
Miscellaneous (Solid Yellow at Median) 4,000 LF $0.50 $2,000
Pavement Legends 1 LS $10,000.00 $10,000
Traffic Control 1 LS $20,000.00 $20,000
TOTAL $246,800
Total Construction $417,232
Contingencies (@ ZO%) $83,446
Design & Inspection (@15%) $62,585
iPR,O.fEC~ TQTAL -- $5~3,26~1)
9-6
RESOLUTION NO. 2011-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE DIRECTOR OF FINANCE
TO CLOSE AD 97-2 IMPROVEMENT FUND (OTAY RANCH,
VILLAGE ONE) AND DIRECT THE TRUSTEE (US BANK) TO
TRANSFER SURPLUS FUNDS TO THE REDEMPTION FUND IN
ORDER TO CALL BONDS, PROVIDE REFUNDS, REDUCE
FUTURE ASSESSMENTS, REIMBURSE THE GENERAL FUND,
AND ALLOCATE TO CIP OTAY RANCH VILLAGE ONE
MAINTENANCE OF IMPROVEMENTS
WHEREAS, the City of Chula Vista (the "City) formed Assessment District (AD) No.
97-2 (Otay Ranch, Village One} (the "District") in 1997; and
WHEREAS, the District issued $12,430,000 Limited Obligation Improvement Bonds (the
"Bonds") in 1999 for the purpose of financing the construction and acquisition of certain public
improvements, which benefit properties within the District; and
WHEREAS, the public improvements financed by the Bonds include grading and site
preparation; slope and erosion control; domestic and wastewater improvements; street
improvements such as curb, gutter, medians, and sidewalks; and the installation of traffic signals,
street lights and signage; and
WHEREAS, the improvements within the District have been completed; and
WHEREAS, in accordance with Section 10427 of the California Streets and Highways
Code (the "Code"), staff is recommending that US Bank take the following actions:
1. Close Improvement Fund AD 97-2 and pay associated costs for the closure
2. Transfer $1,000 to the City's General Fund
3. Set aside monies in a trust fund to be allocated towards a Capital Improvement Project to
maintain the improvements that were financed through the District
4. Transfer the remaining funds from the Improvement Fund to the Redemption Fund,
which shall be used to provide refunds to eligible property owners that prepaid their
assessments and to call bonds and reduce principal on active parcels.
WHEREAS, the following is a summary of the actions to be taken by US Bank and an
estimate of the associated allocations/funding:
Description Amount
Improvement Fund Balance as of March 31, 2011* $1,529,871.77
General Fund Transfer ($1,000.00)
Closeout Costs ($8,000.00)
CIP for Maintenance of Improvements ($563,263.00)
Call bonds and reduce future assessments ($882,209.79)
Refund to eligible Property Owners ($54,198.98)
Bond call expenses including redemption premium ($21,200.00)
Ending Balance $0.00
*any funds remaining at the actual date of closure snail ee appi~ea to ine reaemptron iunu
9-7
Resolution No.
Page 2
WHEREAS, staff recommends creating a new Capital Improvement Project STL387
"Otay Ranch Village One Maintenance of Improvement" for purposes of maintaining
improvements completed in the benefited area until funds are exhausted; and
WHEREAS, CIP STL 387 will be brought forward to City Council for appropriation of
$563,263 during the FY 2012-13 CIP Budget process; and
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Chula
Vista does hereby authorize the Director of Finance to close the Improvement Fund of
Assessment District 97-2 (Otay Ranch, Village One) and direct the trustee (US Bank) to take the
following actions:
^ Close Improvement Fund AD 97-2 and pay associated costs for the closure
^ Transfer $1,000 to the City's General Fund
^ Set aside $563,263.00 in a trust fund to be allocated towards a Capital Improvement
Project to maintain the improvements that were financed through the District
^ Transfer the remaining funds from the Improvement Fund to the Redemption Funds,
which shall be used to provide refunds to eligible property owners that prepaid their
assessments and to call bonds and reduce princi^a~ ~„ ~~r;~,P Y\aYr~P1C
Presented by
Richard A. Hopkins
Director of Public Works
9-8