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HomeMy WebLinkAbout2009/04/28 Item 2 CITY COUNCIL AGENDA STATEMENT . ~If ::S t-- CITY OF ~ - (HULA VISTA ITEM TITLE: SUBMITTED BY: REVIEWED BY: APRIL 28, 2009, Item~ RESOLUTION OF THE CITY COTJNCIL OF THE CITY OF CHULA VISTA AUTHORlZING THE TRANSFER OF THE REMAINING uf-.ltXPENDED PROCEEDS OF THE 2004 CERTIFICATES OF PARTICIPATION (CIVIC CENTER PROJECT-PHA.SE 1) AND THE 2006 CERTIFICATES OF PARTICIPATION, (CIVIC CENTER PROJECT - PHASE 2) TO REINffiURSE THE PUBLIC FACILITIES DEVELOPi'vIENT IMPACT FEE FUND ANTI AUTHORIZING AL"JD DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH DIRECTOR OF F~EfrREASURER '~ CITY!'vIANAGER . . ~ ASSISTAt"JT CITY lANAGER "7) 4/5THS VOTE: YES D NO 0 SlTMJ.\1A.RY The Civic Center remodel project has been completed. The Public Facilities Development Impact Fee Fund (PFDIF) paid for the capital expenditures of Phase 3 of the Civic Center remodel totaling $10.5 million. There is still approximately $1.41 million available in the 2004 and 2006 Certificate of Participation bond proceeds that can be used to reimburse the PFDIF fund for these capital expenditures. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that reimbursement of the PFDIF for capital expenditures is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section 15060( c )(3) of the State CEQA Guidelines the actions proposed are not subject to CEQA. RECOiYIMENDATION Council approve, the resolution. 2-1 APRIL 28, 2009, Item~ Page 2 of3 BOARDS/COl\'uvllSSION RECOMMENDATION Not applicable. DISCUSSION The City's Public Financing Authority issued 2004 and 2006 Certificates of Participation (COPs) to fmance the construction and remodel of Phases 1 and 2 of the Civic Center complex. The third phase of construction was funded on a pay-as-you-go basis using the available cash in the PFDIF fund at the time. PFDIF capital expenditures amount to $10.5 million and are eligible for reimbursement from the remaining project funds of the two Certificates of Participation. The 2004 and 2006 GOPs have approximately $950,000 and $460,000 remaining in their respective project funds for a total of $1.41 million that is available for reimbursing the PFDIF fund. The project funds are set-aside at bond issuance to segregate monies available for construction of the facilities from the required reserve funds. The reimbursement is necessary in order to close out these funds and to comply with United States Treasury Regulation Section 1.148-6 regarding the final allocation of the remaining bond proceeds within five years of the Phase 1 bond issuance date (September 16,2004). Approving this resolution will accomplish this and provide some cash relief for the PFDIF which is currently in a detlcit of approximately $4.3 million at this time. A brief history of the Civic Center project and fmancings follow. Civic Center Proiect Historv The City of Chula Vista has experienced significant growih in population this decade with SAl'\.Jl)AG projecting the City to reach a build out population of over 315,000 by 2030. The City Council recognized that the existing Civic Center Complex would no longer accommodate the staff required to service the current population and that of the future. Additionally, modernization and retrofitting of all of the Civic Center Complex buildings were going to be required in order to meet current code requirements and to accommodate current and emerging technology. Therefore on July 10, 2001 the City Council approved the Civic Center Master Plan for the expansion of the existing Civic Center Complex and directed staff to return with recommended long-terrn-fmancing. On August 3, 2004, the City Council approved resolution 2004-266 for the financing of the first phase of the Civic Center Complex project, which included the reconstruction of the City Hall building. The tIrst phase was substantially completed in November 2005. On February 14, 2006, the City Council approved resolution 2006-051 for the financing of the second phase of the Civic Center Complex project that included the major remodel of the development services building. The second phase was substantially completed in January 2007. Work began on Phase 3 in December 2007 with the project being substantially completed in July 2008. The Notice of Completion for Phase 3 was issued on August 5, 2008. 2-2 APRlL 28, 2009, Item~ P ~ e" age .J or .J DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found a conflict exists, in that Council Member Castaneda has property holdings within 500 feet of the boundaries of the property, which is the subject of this action. . FISCAL IMP ACT Current Year Impact Approval of this action will result in the Public Facilities Development Impact Fee fund being reimbursed up to $1.5 million for capital expenditures related to Phase 3 of the Civic Center remodel. The PFDIF is currently in a deficit due to the lack of new development in the City. The cash deficit reported to the City Council on the December 16, 2008 agenda item asking for approval of an inter fund loan from the TDIF to the PFDIF amounted to $4.2 million as of the end of fiscal year 2007-08. That deficit has grown slightly to $4.3 million, however approval of the reimbursement will reduce the deficit by approximately $1.41 million to less than $2.9 million. On-Go in!;, Impact There is no further impact as result ofthis action. ATTACHMENTS None Prepared by: Phillip Davis, Assistant Director, Finance 2-3 RESOLUTION NO. 2009- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORlZING THE TRi\NSFER OF THE REMAINING UNEXPENDED PROCEEDS OF THE 2004 CERTIFICATES OF PARTICIPATION (CIVIC CENTER PROJECT-PHASE 1) AND THE 2006 CERTIFICATES OF PARTICIPATION, (CIVIC CENTER PROJECT - PHASE 2) TO REIMBURSE THE PUBLIC FACILITIES DEVELOPMENT IMPACT FEE FUND AND AUTHORlZING AND DIRECTING CERT AIN ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Chula Vista (the "City") is a municipal corporation and a charter city duly organized and existing under and pursuant to the Constitution and laws of the State of California (the "State"); and WHEREAS, the Chula Vista Public Financing Authority (the "Authority") has assisted the City in financing the first phase of the construction, reconstruction, modernization and equipping of the Civic Center and certain infrastructure improvements (the "2004 Project") through the execution and delivery of the $37,240,000 City of Chula Vista 2004 Certificates of Participation (Civic Center Project - Phase I) (the "2004 Certificates") pursuant to that certain Trust Agreement, dated as of September I, 2004 (the "Original Trust Agreement"), by and among the City, the Authority and The Bank of New York Trust Company, N.A., as successor- in-interest to BNY Western Tmst Company (the "Trustee"); WHEREAS, in order to facilitate the execution and delivery of the 2004 Certificates, the City leased to the Authority the real property (the "Site") set forth in Exhibit A to that certain Site Lease, dated as of September 1, 2004 (the "Original Site Lease"), by and between the City and the Authority, and the Authority simultaneously leased back the Site and the improvements located thereon to be constructed with the proceeds of the 2004 Certitlcates (together, the "Leased Premises") to the City pursuant to that certain Lease/Purchase Agreement, dated as of September 1, 2004 (the "Original Lease"), by and between the City and the Authority; and WHEREAS, the Original Trust Agreement and the Assignment Agreement, dated as of September I, 2004, by and between the Authority and the Trustee, allowed for the execution and delivery of Additional Certitlcates (as that term is detlned in the Original Trust Agreement) to finance additional improvements for the City; and WHEREAS, in order to provide additional financing for the acquisition, construction, reconstruction, modernization and equipping of the Civic Center and the construction of improvements to the City's Nature Center (the "2006 Project" and together with the 2004 Project the "Project") , the City caused the Trustee to execute and deliver' the 2006 Certificates of Participation (Civic Center Project - Phase 2), in the aggregate principal amount of $20,325,000 (the "2006 Certitlcates" and together with the 2004 Certificates the "Certificates"); and DOCSOC/1341649v 1/024036-0044 2-4 VVHEREAS, in connection with the sale, preparation, execution and delivery of the 2006 Certificates, the City entered into that certain First Amendment to Site Lease, dated as of March 1, 2006, by and between the City and the Authority and that certain First Amendment to Lease/Purchase Agreement, dated as of March 1, 2006 (the "First Amendment to LeaseIPurchase Agreement" and together with the Original Lease, the "Lease Agreement"), by and between the City and the Authority, in order to add certain real property and improvements to the Site and the Leased Premises, consisting of Montevalle Park and Salt Creek Park and to make certain amendments thereto; and WHEREAS, to facilitate the execution and delivery of the 2006 Certificates the City entered into that certain Amended and Restated Trust Agreement, dated as of March 1, 2006 (the "Amended and Restated Trust Agreement"), by and among the Authority, the City and the Trustee and that certain First Amendment to Assignment Agreement, dated as of March 1, 2006, by and between the Authority and the Trustee; and WHEREAS, Section 3.4 of the Lease Agreement provides that upon completion of the Project a Completion Certificate is to be filed with the Trustee and all unexpended proceeds of the 2004 Certificates and the 2006 Certificates, as applicable, are to be applied in accordance with the provisions of Section 3.04 of the Amended and Restated Trust Agreement; and WHEREAS, Section 3.04 of the Amended and Restated Trust Agreement provides that upon the delivery of a Certificate of Completion for the Project the unexpended proceeds of the Certificates on deposit in the Project Fund shall be applied to the payment of principal and interest with respect to the Certificates as described in Section 5.04 of the Trust Agreement or, at the written eleCtion of the City Representative (as defined in the Amended and Restated Trust Agreement) delivered to the Trustee, together with an opinion of Special Counsel that such transfer will not cause interest due with respect to the Certificates to be included in gross income for federal income tax purposes, shall be transferred to the City for the purpose of capital expenditures of the City, and following such transfer, the.Project Fund shall be closed; and WHEREAS, the Project is now complete and unexpended proceeds remain on deposit in the Project Fund; and WHEREAS, the City has previously disbursed moneys from its Public Facilities Development Impact Fund (the "PFDIF Fund") to pay for a portion of the Project and now desires to direct that the unexpended proceeds of the Certificates be transferred to the PFDIF Fund for the purpose of future capital expenditures as provided in Section 5.04 of the Amended and Restated Trust Agreement; and WHEREAS, there has been delivered to the Trustee the oplillon of Special Counsel required by Section 5.04 of the Amended and Restated Trust Agreement to permit the transfer of the Imexpended proceeds of the Certificates in the Proj ect Fund to the City; NOW, THEREFORE, the City Council of the City of Chula Vista does hereby resolve as follows: 2 DOCSOC/1341649v 1/024036-0044 2-5 SECTION 1. Findings. The City Council hereby specifically finds and declares that each of the statements, [mdings and determinations of the City set forth in the recitals set forth above are true and correct. SECTION 2. Authorization of Transfer of Unexpended Proceeds of the Certificates to the PFDIF Fund. Each of the Mayor of the City, the City Manager of the City and the Director of Finance of the City, or their designees (collectively, the "Authorized Officers"), is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver to the Trustee a vvritten election of the City to have all unexpended amounts in the Project Fund transferred to the City, to cause the opinion of Special Counsel required by Section 5.04 of the Amended and Restated Trust Agreement to be delivered to the Trustee and to take all other actions required to cause such unexpended amounts to be transferred to the City. All amounts transferred to the City by the Trustee shall be deposited in the PFDIF Fund SECTION 3. Other Actions. The Authorized Officers are each hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which each may deem necessary or advisable to carry out, give effect to and comply with the terms and intent of this Resolution, the Certificates, the Lease Agreement and the Amended and Restated Trust Agreement. SECTION 4. Effect. T-his Resolution shall take effect immediately upon its passage. Presented by Approved as to form by Q,fftlov~) \ it }VJies . ~~itVttomey Maria Kachadoorian Director of Finance 3 DOCSOC/ 13 41649v 1/024036-0044 2-6