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Home My WebLink AboutRes 2019-52-SCE-Highlands Undrgrdng Dist No. 04-01CIC - STAFF REPORT CITY OF PALM DESERT FINANCE DEPARTMENT MEETING DATE: July 11, 2019 PREPARED BY: Janet M. Moore, Director of Finance 2019-52 REQUEST: Approve and Adopt Resolution No. Determining and Providing for the Disposition of a refund from Southern California Edison in Connection with the City of Palm Desert Highlands Undergrounding District No. 04-01 Recommendation By Minute Motion, that the City Council: 1) Approve and adopt for the Disposition Connection with th Strateqic Plan Obiective Executive Summary e 2019-52 Resolution No. authorizes the City to use the refund from Southern California Edison to call outstanding bonds, prior to their maturity, in accordance with Section 10110.1 of the Streets and Highway Code. Discussion The Highlands Undergrounding Improvement District 04-01 was formed on June 8, 2006. Improvements bonds in the amount of $3.165 million were issued on July 13, 2006 to pay for the improvements. The improvements were completed during the 2008-2009 Fiscal Year. The City received a refund from Southern California Edison ("SCE") in the amount of $109,526.23 directly related to the advance of $818,853.45 provided to SCE per the "Agreement for Replacement of Overhead Distribution and Telecom Facilities and Underground Facilities" (Contract No. C 24460A). The advance was the estimated amount requested in order for SCE to perform the work for the Highlands Undergrounding Project. After completion of all the improvements and SCE's financial analysis, a refund was issued to the City which represents the Rule 20B Income Tax Component of Contribution (ITCC). July 11, 2019 Staff Report Adopt Resolution Determining and Providing for the Disposition of a Refund from SCE Page 2 of 2 The City contracts with Willdan Financial for assessment district administration. When Willdan completes their analysis determining the proportionate share to apply to each parcel in the district, a bond call will be processed. It is expected to be in September or March of the 2019-2020 fiscal year. As of June 30, 2019, the outstanding principal for the Highlands Improvement District is approximately $1.3 million. Staff recommends that the City Council approve and adopt Resolution No.2019-52 determining and providing for the disposition of the refund from SCE, in connection with the City of Palm Desert Highlands Undergrounding District No. 04-01, to be used to call bonds. Fiscal Analvsis Approval of the resolution will allow the Highlands Improvement District to reduce their outstanding principal obligation by lowering the overall debt by $109,000 (8% of the outstanding principal) and proportionately reduce the outstanding assessment for each property within the district. DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER LEGAL REVIEW NA Robert Hargraves Ja t M. Moore ?etM. Moore Lauri Aylaian City Attorney Director of Finance Director of Finance City Manager ATTACHMENT: Resolution No. 2019-52 Copy of Refund Highlands District Boundary Map H \WPDOCS\Interoffice Memos\Assessment Districts\Highlands\Resolution Authorizing disposition of Highlands adj docx RESOLUTION NO. 2019-52 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT DETERMINING AND PROVIDING FOR THE DISPOSITION OF A REFUND FROM SOUTHERN CALIFORNIA EDISON IN CONNECTION WITH THE CITY OF PALM DESERT HIGHLANDS UNDERGROUNDING DISTRICT NO. 04-01 RECITALS: A. Pursuant to its Resolution No. 06-49, adopted on April 13, 2006 (the "Resolution of Intention"), the City Council declared its intention to order certain improvements (the "Improvements") and to form the Highlands Utility Undergrounding Assessment District No. 04-01(the "Assessment District") pursuant to the Municipal Improvement Act of 1913 (Streets and Highways Code Section 10000 et seq.) (the ,$Act" B. The City Council conducted special assessment proceedings in accordance with its Resolution of Intention, and pursuant to its Resolution No. 06-86, adopted on June 8, 2006, the City Council ordered the formation of the Assessment District and the making of the Improvements and confirmed the assessments. Pursuant to its Resolution No. 06-114, adopted on July 13, 2006, the City Council issued bonds (the "Bonds") to finance the Improvements, and the City Treasurer invested in and purchased the Bonds from the City. C. The Improvements were completed in 2009, and the City Council, pursuant to its Resolution No. 09-62, adopted on August 27, 2009, declared and determined that surplus funds in the amount of approximately $1,107,910 remaining in the Improvement Fund at such time by reason of the assessments were to be used to call outstanding Bonds prior to maturity in accordance with the Act. A portion of outstanding Bonds were so called with such surplus funds on September 2, 2009. D. Pursuant to its Resolution No. 06-49, adopted on April 13, 2006, the City Council declared its intention to enter into an agreement with Southern California Edison ("SCE") pursuant to Chapter 2 of the Act, Sections 10109 and 10110 of which provide that improvements to be owned, managed or controlled by a regulated public utility may be acquired or installed under the Act and that the City shall enter into an agreement with the public utility providing for such acquisition or installation. E. Pursuant to the authority conferred by Chapter 2 of the Act and Resolution No. 06-49, the City Council approved on August 24, 2006, and the City entered into, an agreement with SCE entitled, "Agreement for Replacement of Overhead Distribution and Telecom Facilities with Underground Facilities" (Contract No. C24460A) (the "SCE Agreement"), which provided for the City to advance to SCE the amount of $818,853.45, such amount being the estimated amount necessary for SCE to perform the work of relocating and undergrounding certain of the Improvements -1- P6401-1034\2069427v1.doc approved by Resolution No. 06-86. In accordance with the Act, Resolution No. 06-49, and the SCE Agreement, the City advanced such amount to SCE in September 2006 from proceeds of the Bonds. F. In 2016, SCE provided to the City a refund in the amount of $109,526.23 (the "SCE Refund"). G. Section 10110.1 of the Act provides that any refund payments received by the City under the SCE Agreement may be used to call outstanding Bonds. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS: Section 1. The City Council hereby determines and declares that the SCE Refund shall be used to call outstanding Bonds prior to maturity in accordance with Section 10110.1 of the Streets and Highways Code. Section 2. The City Treasurer and all other officers of the City are hereby authorized and directed, jointly and severally, to do any and all things, and to execute and deliver any and all documents, which they may deem necessary or advisable in order to consummate the bond call herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, and all actions heretofore taken by the officers, employees and agents of the City with respect to the transactions set forth above are hereby approved, confirmed and ratified. PASSED, APPROVED and ADOPTED this day of July, 2019, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: Rachelle D. Klassen, City Clerk Susan Marie Weber, Mayor -2- P6401-1034\2069427v1.doc ante..,... . 13 mew x aAQlMLwww�l'RwwllS a11l INIlwwafr7w�Mv ww aRW"Y v�wwwwov�von aaw viw mvlwm wwiw � rawsArw w�vx-rawnv�uanlwwrwwr. Ma� M W w M N. pJw�wR�YMI a�rRr4ln.�+�wn masxwlET�MRw-�Rlw� �vwr wv nwaa� wwswrtwivw� art! wwwwn IY�I- R iA1N 1YwR ■�L— OwwR lnea�rvw�a-irtr awwww. wr.o• u-'-IIL�wrwf�w Rwrvw av-wvrei aawrv� Iw.la41-IOMRIf li iYw-w�l� awm,�w� ww-uwwr i-r<� wawwn�a BWNIDARY MAP OF PROPOSED PALM DESERT HrGHLANDS UTILITY UNDEROROUNDING ASSESSMEW DI5T11ICT NO. 04-01 MAMMOMAMM WMTVCFCMM:CRla ► I I I Imo, I ell ®®®I®y®�®�®��®I®I®`®�®�®��®�e� ®®®I��e�®�e►el�l®®®i- SHEET 1 CF 3 wrr.�r�,werw�� o --ate ® M _nlFinancial MuniFinancial I'xhibit F - Page 2 City of Palm desert