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HomeMy WebLinkAboutAgenda Statement 1985/08/27 Item 10 COUNCIL AGENDA STATEMENT Item 10 Meeting Date 8/27/85 ITEM TITLE: a. Resolution 62 /-C-C) Approving an agreement with George Simpson for Project Management Services for the EastLake Financial Plan b. Resolution / A- 15-3 Approving an agreement with F. MacKenzie Brown, Inc. , Bond Counsel , Wildan Associates, Engineering Consultant, and Kadie-Jensen and Johnson, Financial Consultants 00,7 SUBMITTED BY: Director of Public�,WWorks/City Engineer REVIEWED BY: City Manager )C� (4/5ths Vote: Yes No X ) On February 26, 1985, Council adopted the EastLake I SPA which included approval of a development agreement and the Public Facilities Financing Plan. It is now appropriate to implement the Public Facilities Financial Plan and it is recommended that the agreements with the above consultants be approved. RECOMMENDATION: Adopt resolutions approving agreements. BOARDS AND COMMISSIONS RECOMMENDATION: N/A DISCUSSION: As part of the approval for the EastLake I development, Council adopted the Public Facilities Financing Plan which was prepared by Wedin Enterprises and which recommended methods of providing the public facility infrastructure needed to serve EastLake. It covered not only the typical subdivision requirements of streets, drainage, sewer and water, but also looked at off-site water facilities, off-site major road facilities, parks, schools, fire station and transportation center. That report looked at several different issues and recommended certain facilities be completed by subdivision requirements, others be completed by Mello-Roos taxing district, and others by a combination of an FBA; assessment districts; etc. The Facilities Plan included a staging program for the development of the entire eastern area anticipated to be developed by the time EastLake I was completed. The plan looked at all of the major street facilities in the eastern area, and required certain facilities to be installed prior to the cumulative number of building permits issued from all of the developments in that area. The plan anticipated other developments such as Bonita Meadows, Mount Vista, Bonita Long Canyon, Charter Point, El Rancho del Rey, and Terra Nova, as well as EastLake. It proposed primary methods of financing and secondary methods of financing for each of 52 projects. d � Page 2, Item 10 Meeting Date 8/27/85 CONSULTANT SELECTION The consulting team is comprised of a project manager, an engineering firm, an assessment and bond attorney, and a financial consultant. The task of this team will be to review in detail the Public Facilities Financial Plan, test the feasibility for the recommended financing mechanisms for each project, and recommend for each project the 1 ) funding mechanism, 2) which development project is responsible, and to what degree, 3) when each project will be needed, and 4) complete necessary studies to implement the funding mechanism. It is proposed to have two agreements for this work, one with the project manager and another one with the support consultants. The project manager will be George Simpson, an individual who has had extensive experience with the City of San Diego in establishing financing mechanisms for development. In fact, he has been involved in over 10 successful major community plans which have established financing programs for the infrastructure. These programs are very similar to what Chula Vista will be doing in the eastern area. He will act as a consultant to the City of Chula Vista to advise us in working with the support consulting team and, also, to direct the activities of that team. Since City staff presently has no one on staff that has been involved with a venture of this complexity and magnitude, it is staff's intention to learn from Mr. Simpson, and as future districts are established in the eastern area; to be able to take over his role with in-house staff. It is difficult to advertise for consultants for a project of this nature since very few of these types of financing programs have been done in California. However, we did receive proposals from two groups of consultants, the first group being the parties recommended in the resolution. The second group was headed by Deloitte Haskins & Sells who utilized the expertise of the following consultants: engineering consultant, C2HM Hill , assessment engineering consultant, Nestie Burdin and Stone; financial consultant, Fieldman & Rolapp; and legal counsel , Jones Hall , Hill & White. A staff committee composed of the Assistant City Manager, the Finance Director, the Planning Director, the Assistant City Attorney and the Director of Public Works/City Engineer reviewed both the proposals and interviewed the consultants. The committee selected the group comprising Wildan Associates, MacKenzie Brown, Kadie-Jensen and Johnson as the recommended consulting team with the leadership of George Simpson because they felt that this group had more direct pertinent past experience for this type of project than the other team. The support consultants have had direct experience in both Mello-Roos Districts and FBA' s. In making the final selection, the committee considered very highly the specific expertise of each consultant and the consultant's ability to deliver the end product in the amount of time necessary to meet EastLake' s time schedule. MacKenzie Brown has been legal counsel for assessment districts in Chula Vista, and is one of the foremost assessment attorneys in California. Wildan Inc. has been involved in several large public financing projects including Mello-Roos Acts as well as major public improvement districts using assessment district financing. Wildan was the traffic consultant to the City' s E.I.R. consultant to evaluate the EastLake Plan, so that firm is familiar with this project. Page 3, Item 10 Meeting Date 8/27/85 It is proposed that the majority of the consultant' s work will be completed within 120 days. All the necessary engineering information, legal , and financial recommendations will be completed so the Council can make a clear decision and move into public hearing process to establish the legal mechanisms to produce the necessary funding programs. Robert Santos, Vice President, EastLake Development Company, has met with the selected development consulting team and supports staff's recommendation to adopt the two resolutions. FACILITIES BENEFIT ASSESSMENT One of the most complicated aspects of this Facilities Financing Plan is the Facilities Benefit Assessment District. This is complicated by the fact that it would involve property owners both within the City of Chula Vista and outside the City of Chula Vista. The facilities benefit assessment district is a pay-as-you-go assessment district very similar to the "H" Street program that was adopted by Council several years ago. Assessment spreading principles are used to equitably apportion the costs of the facilities like an Assessment District, but, unlike an Assessment District, no bonds are sold to obtain money for construction. Due to the above factors and the fact that this project includes many more streets than the "H" Street Program, it is anticipated that this FBA will require a lot of work and coordination between the different property owners, and City staff does not have the expertise or time to do this project. The consultant will set up the facilities benefit assessment district including the necessary maps, agreements, and calculations to spread the cost, set up in such a fashion that the City staff could, with the aid of micro computers, maintain the FBA over a period of years. Once the consultant's work is completed, the City Council could then conduct the necessary public hearings and adopt the necessary resolutions. MELLO-ROOS ACT The Public Facilities Plan prepared by Wedin Enterprises suggested the use of the Mello-Roos taxing district to fund the following improvements: water facilities, community park, high school , elementary school , fire station, and transportation center. The aggregate total of these facilities equals $20,813,000. Since these consultants have successfully established other Mello-Roos districts, they will more closely test the feasibility for each of the 52 improvements and either include them in a proposed Mello-Roos district and/or make other suggestions. FISCAL IMPACT: The total cost of all the consultants will be charged on an hourly basis as provided for in their agreement, not to exceed specific amount.amount. EastLake will pay the entire cost. Because it is typical t the bond counsel and the financial consultant receive their fee as a percent of the bond sale, r in t work in this process will credi ted towar ds the final work in preparing the perspective and the bond counsel 's opinion. JPL:nr/ WPC 1621E COUNCIL AGENDA STATEMENT Item 10 Meeting Date 8/27/85 ITEM TITLE: a. Resolution / -/fib Approving an agreement with George Simpson for Project Management Services for the EastLake Financial Plan b. Resolution A-2-45C3 Approving an agreement with F. MacKenzie Brown, Inc. , Bond Counsel , Wildan Associates, Engineering Consultant, and Kadie-Jensen and Johnson, Financial Consultants SUBMITTED BY: Director of Public Works/City Engineer REVIEWED BY: City Manager i647 ' (4/5ths Vote: Yes No X ) On February 26, 1985, Council adopted the EastLake I SPA which included approval of a development agreement and the Public Facilities Financing Plan. It is now appropriate to implement the Public Facilities Financial Plan and it is recommended that the agreements with the above consultants be approved. RECOMMENDATION: Adopt resolutions approving agreements. BOARDS AND COMMISSIONS RECOMMENDATION: N/A DISCUSSION: As part of the approval for the EastLake I development, Council adopted the Public Facilities Financing Plan which was prepared by Wedin Enterprises and which recommended methods of providing the public facility infrastructure needed to serve EastLake. It covered not only the typical subdivision requirements of streets, drainage, sewer and water, but also looked at off-site water facilities, off-site major road facilities, parks, schools, fire station and transportation center. That report looked at several different issues and recommended certain facilities be completed by subdivision requirements, others be completed by Mello-Roos taxing district, and others by a combination of an FBA; assessment districts; etc. The Facilities Plan included a staging program for the development of the entire eastern area anticipated to be developed by the time EastLake I was completed. The plan looked at all of the major street facilities in the eastern area, and required certain facilities to be installed prior to the cumulative number of building permits issued from all of the developments in that area. The plan anticipated other developments such as Bonita Meadows, Mount Vista, Bonita Long Canyon, Charter Point, El Rancho del Rey, and Terra Nova, as well as EastLake. It proposed primary methods of financing and secondary methods of financing for each of 52 projects. Page 2, Item 10 Meeting Date 8/27/85 CONSULTANT SELECTION The consulting team is comprised of a project manager, an engineering firm, an assessment and bond attorney, and a financial consultant. The task of this team will be to review in detail the Public Facilities Financial Plan, test the feasibility for the recommended financing mechanisms for each project, and recommend for each project the 1 ) funding mechanism, 2) which development project is responsible, and to what degree, 3) when each project will be needed, and 4) complete necessary studies to implement the funding mechanism. It is proposed to have two agreements for this work, one with the project manager and another one with the support consultants. The project manager will be George Simpson, an individual who has had extensive experience with the City of San Diego in establishing financing mechanisms for development. In fact, he has been involved in over 10 successful major community plans which have established financing programs for the infrastructure. These programs are very similar to what Chula Vista will be doing in the eastern area. He will act as a consultant to the City of Chula Vista to advise us in working with the support consulting team and, also, to direct the activities of that team. Since City staff presently has no one on staff that has been involved with a venture of this complexity and magnitude, it is staff's intention to learn from Mr. Simpson, and as future districts are established in the eastern area; to be able to take over his role with in-house staff. It is difficult to advertise for consultants for a project of this nature since very few of these types of financing programs have been done in California. However, we did receive proposals from two groups of consultants, the first group being the parties recommended in the resolution. The second group was headed by Deloitte Haskins & Sells who utilized the expertise of the following consultants: engineering consultant, C2HM Hill , assessment engineering consultant, Nestie Burdin and Stone; financial consultant, Fieldman & Rolapp; and legal counsel , Jones Hall , Hill & White. A staff committee composed of the Assistant City Manager, the Finance Director, the Planning Director, the Assistant City Attorney and the Director of Public Works/City Engineer reviewed both the proposals and interviewed the consultants. The committee selected the group comprising Wildan Associates, MacKenzie Brown, Kadie-Jensen and Johnson as the recommended consulting team with the leadership of George Simpson because they felt that this group had more direct pertinent past experience for this type of project than the other team. The support consultants have had direct experience in both Mello-Roos Districts and FBA' s. In making the final selection, the committee considered very highly the specific expertise of each consultant and the consultant' s ability to deliver the end product in the amount of time necessary to meet EastLake's time schedule. MacKenzie Brown has been legal counsel for assessment districts in Chula Vista, and is one of the foremost assessment attorneys in California. Wildan Inc. has been involved in several large public financing projects including Mello-Roos Acts as well as major public improvement districts using assessment district financing. Wildan was the traffic consultant to the City' s E.I.R. consultant to evaluate the EastLake Plan, so that firm is familiar with this project. ! Page 3, Item 10 Meeting Date 8/27/85 It is proposed that the majority of the consultant' s work will be completed within 120 days. All the necessary engineering information, legal , and financial recommendations will be completed so the Council can make a clear decision and move into public hearing process to establish the legal mechanisms to produce the necessary funding programs. Robert Santos, Vice President, EastLake Development Company, has met with the selected development consulting team and supports staff's recommendation to adopt the two resolutions. FACILITIES BENEFIT ASSESSMENT One of the most complicated aspects of this Facilities Financing Plan is the Facilities Benefit Assessment District. This is complicated by the fact that it would involve property owners both within the City of Chula Vista and outside the City of Chula Vista. The facilities benefit assessment district is a pay-as-you-go assessment district very similar to the "H" Street program that was adopted by Council several years ago. Assessment spreading principles are used to equitably apportion the costs of the facilities like an Assessment District, but, unlike an Assessment District, no bonds are sold to obtain money for construction. Due to the above factors and the fact that this project includes many more streets than the "H" Street Program, it is anticipated that this FBA will require a lot of work and coordination between the different property owners, and City staff does not have the expertise or time to do this project. The consultant will set up the facilities benefit assessment district including the necessary maps, agreements, and calculations to spread the cost, set up in such a fashion that the City staff could, with the aid of micro computers, maintain the FBA over a period of years. Once the consultant's work is completed, the City Council could then conduct the necessary public hearings and adopt the necessary resolutions. MELLO-ROOS ACT The Public Facilities Plan prepared by Wedin Enterprises suggested the use of the Mello-Roos taxing district to fund the following improvements: water facilities, community park, high school , elementary school , fire station, and transportation center. The aggregate total of these facilities equals $20,813,000. Since these consultants have successfully established other Mello-Roos districts, they will more closely test the feasibility for each of the 52 improvements and either include them in a proposed Mello-Roos district and/or make other suggestions. FISCAL IMPACT: The total cost of all the consultants will be charged on an hourly basis as provided for in their agreement, not to exceed a specific amount. EastLake will pay the entire cost. Because it is typical that the bond counsel and the financial consultant receive their fee as a percent of the bond sale, a portion of their investigative work in this process will be credited towards the final work in preparing the perspective and the bond counsel 's opinion. J PL:n r/ WPC 1621E