Loading...
HomeMy WebLinkAboutReso 2008-300RESOLUTION NO. 2008-300 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN INTERFUND LOAN FROM THE TRANSPORTATION DEVELOPMENT IMPACT FEE FUND TO THE PUBLIC FACILITIES DEVELOPMENT IMPACT FEE FUND AND APPROPRIATING FUNDS THEREFOR WHEREAS, beginning in fiscal yeaz 1990, the City began an extensive capital outlay program for public facilities that was to be funded fully or partially from Public Facilities Development Impact Fees (PFDIF); and WHEREAS, the fees to fund these projects were initially established by Ordinance No. 2320 in August 1989; and WHEREAS, the objective of the development impact fees are to fund public facilities and related capital needs that are projected to be impacted by future growth; and WHEREAS, the PFDIF has expended $80 million constructing public facilities on a pay as you go basis using available cash in the PFDIF fund; and WHEREAS, these expenditures funded several major projects, including five fire stations and three recreation facilities; and WHEREAS, in addition, the PFDIF partially funded renovation of the Civic Center complex, South Chula Vista Library, and the new Police Facility using cash on hand; and WHEREAS, three projects (the Corporation Yazd, Police Facility and Civic Center) were partially financed through the issuance of Certificates of Participation (COP) for a total of $128.8 million (principal only) over along-term period using a combination of PFDIF funds and General Fund; and WHEREAS, because these debt obligations aze backed by the full faith and credit of the General Fund, the General Fund is ultimately responsible for the payment of all debt obligations, even though a certain percentage of the payments are dependent on the fees collected by the PFDIF fund; and WHEREAS, due to the significant housing meltdown and number of foreclosures experienced within the City of Chula Vista, the development of new housing has essentially come to a halt; and WHEREAS, this has created a cash deficit in the PFDIF fund of $4.2 million as of the end of fiscal year 2007/2008; and Resolution No. 2008-300 Page 2 WHEREAS, due to the severity of the housing crisis, it is clear that the PFDIF fund will be unable to meet its annual debt obligations for the next few yeazs; and WHEREAS, in order to avoid an impact to the General Fund, we aze recommending an interfund loan from the TDIF to the PFDIF fund for $5.2 million to make the debt service payments scheduled for the current fiscal yeaz 2008/2009; and WHEREAS, this will provide the City an opportunity to work through a restructuring of the PFDIF debt obligations with the objective of creating cash flow savings to meet debt obligations over the next few years; and WHEREAS, approving an interfund loan would aleve the General Fund of having to step in and pay the PFDIF debt obligation of $5.2 million and avoid a significant impact to the General Fund reserves in the current fiscal year; and WHEREAS, in the event that the PFID fund is unable to repay the TDIF over the thirteen-yeaz payment schedule beginning in Fiscal Year 2012/2013, the General Fund would be obligated to step in and make the annual payment of approximately $710,000; and WHEREAS, the interfund loan of $5.2 million would reduce the cash balance in the TDIF fund by the same amount; and WHEREAS, the funds would be paid back from the PFDIF over thirteen years beginning in fiscal yeaz 2012/2013 at an interest rate of 3.84% (based on the pooled fund rate); and WHEREAS, based on the schedule of projects and anticipated timeframes for completion, the interfund loan should not delay or prevent any TDIF projects from being constructed as planned; and WHEREAS, if the PFDIF fund is unable to pay the interfund loan back to the TDIF fund in a timely manner, then the General Fund would be obligated to pay the outstanding balance; and WHEREAS, based on a ten-year interfund loan schedule, the anticipated costs to the PFDIF fund is $1.9 million in interest; and WHEREAS, the additional costs would be incorporated into the next PFDIF fee update; and WHEREAS, the Finance Department will review the refunding and restructuring options of the outstanding COPS with the objective of providing long-term cash flow relief; and WHEREAS, staff will return in the near future with a staff report outlining the vazious options and costs for City Council consideration. Resolution No. 2008-300 Page 3 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that it approves an interfund loan from the Transportation Development Impact Fee fund to the Public Facilities Impact Fee fund in the amount of $5.2 million and appropriates funds therefor. Presented by M Kachadoorian Finance Director Approved as to form by iV y ^c_. B . Miesfeld Ci y Attorney ~ PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 16th day of December 2008 by the following vote: AYES: Councilmembers: Bensoussan, McCann, Ramirez, and Cox NAYS: Councilmembers: None ABSENT: Councilmembers: Castaneda ATTEST: _~!~-5_ Donna R. Norris, MC, City Clerk STATE OF CALIFORNIA COUNTY OF SAN DIEGO CITY OF CHULA VISTA Cheryl Cox, Ma o I, Donna R. Noms, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 2008-300 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 16th day of December 2008. Executed this 16th day of December 2008. ~~- ~_ o~ Donna R. Norris, CMC, City Clerk