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HomeMy WebLinkAboutRes OB-077 (2)OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY CITY MANAGERS OFFICE STAFF REPORT REQUEST: APPROVAL OF OB RESOLUTION NO. OB-077 TO EXECUTE A PORTOLA AVENUE WIDENING PROJECT BOND PROCEEDS FUNDING AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AND THE CITY OF PALM DESERT AND TAKING CERTAIN RELATED ACTIONS SUBMITTED BY: Ryan Stendell, Senior Management Analyst DATE: June 16, 2014 CONTENTS: Resolution No. 08-077 Draft Reimbursement Agreement (C 27690A Recommendation ) By Minute Motion that the Oversight Board waive further reading and adopt Resolution No. OB -077 approving the execution of a Portola avenue Widening Project Bond Proceeds Funding Agreement between the Successor Agency to the Palm Desert Redevelopment Agency and the City of Palm Desert and taking certain related action. Background The Portola Avenue widening project has been listed on the Public Works Capital Improvements Projects list for some time now. Staff has acquired properties along the west side of Portola Avenue, north of Fred Waring to accommodate this project. Funding for this project has been listed as a combination of Bond Funding and Local Measure A. Project Areas 1 & 3 has had funding allocated for this project for some time. In total, there is $ 2,440,838 available to fund this project. The attached resolution and Bond Funding Agreement will allow staff to proceed with this project utilizing the allocated bond funds. If approved , the Public Works Department will proceed with the project in phases during the summers of 2014, & 2015 respectively to alleviate any impacts to the two schools located along Portola Avenue. Fiscal Analysis The Department of Finance has approved our Recognized Obligation Payment Schedule (ROPS) which lists this project with a total allocation of $2,440,838 (ROPS line items 50 & Staff Report Portola Avenue Widening Page 2 of 3 June 16, 2014 Contract No. C27690A 138). Staff has drafted the Bond Proceeds Funding Agreement to encumber the full amount and granted the City's Director of Finance to manage these funds for this purpose. Prepared By: Ryan Stendell Senior Management Analyst Rev an Concur: 7 ul S. Gibson, Director of Finance n M. Wohlmuth y Manager/Executive Director of the ccessor Agency of the Palm Desert edevelopment Agency (GrC) , c:Fc=rkact-kix-,Th Ao.SGr\ri--) BY OVERSIGHT BOARD ON ._l' VERIFIED BY Original on file with City Clerk's Office RESOLUTION NO. OB- 077 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE EXECUTION OF A PORTOLA AVENUE WIDENING PROJECT BOND PROCEEDS FUNDING AGREEMENT BETWEEN THE SUCCESSOR AGENCY AND THE CITY OF PALM DESERT AND TAKING CERTAIN RELATED ACTIONS RECITALS: A. The Palm Desert Financing Authority (the "Financing Authority") previously issued its Tax Allocation Revenue Bonds (Project Area No. 1, As Amended), 2006 Series A, in the principal amount of $37,780,000 (the "PA1 2006A Bonds") and Tax Allocation Revenue Bonds (Project Area No. 3), 2006, in the principal amount of $15,059,526, pursuant to four separate Indentures of Trust, dated as of July 1, 2006, by and between the Financing Authority and Wells Fargo Bank, National Association, as trustee (the "Trustee"). B. Pursuant to the four Loan Agreements, dated as of July 1, 2006 (the "Loan Agreements"), by and among the Financing Authority, the former Palm Desert Redevelopment Agency (the "Former RDA"), and the Trustee, proceeds of the PA1 2006A Bonds and PA3 2006 Bonds were lent to the Former RDA as a loan (the "Loans"). C. The Former RDA caused a portion of the proceeds of the PA1 2006A Bonds and PA3 2006 Bonds received as part of the Loans to be deposited into a Project Fund (the "PA1 2006A Project Fund" and the "PA3 2006 Project Fund"), which were established, and are held, by the Trustee pursuant to the Loan Agreements. D. Pursuant to the Loan Agreements, moneys in the PA1 2006A Project Fund and PA3 2006 Project Fund shall be disbursed from time to time to finance the cost of redevelopment projects in or of benefit to the Former Agency's Project Area No. 1, As Amended (the "Project Area") and Project Area No. 3. E. As documented by the Official Statements, dated June 22, 2006 and June 27, 2006, respectively, and the Certificates Regarding Compliance with Certain Tax Matters, dated as of July 6, 2006 and July 25, 2006, respectively (the "Tax Certificates"), it was intended, at the issuance of the PA1 2006A Bonds and PA3 2006 Bonds, that the projects to be financed from moneys deposited in the PA1 2006A Project Fund and PA3 2006 Project Fund include, among others, the Portola Avenue Widening Project (described as the " " in the Tax Certificates) (the "Project"). F. Pursuant to AB X1 26 (which became effective at the end of June 2011) and the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Ca1.4th 231(2011), the Former RDA was dissolved as of February 1, 2012, and the Successor Agency was constituted. GrCityMgrRvan StendelbStaff Reports2014 May 22iReimbursement Agreements,Portola Ave Widenmg.Oversight Board.Palm Desert - OB reso - PA 1&3 Bond Proceeds Funding Agmt- Pmmla Avenue Wtdening.docx RESOLUTION NO. OB-077 G. AB 1484, which became effective at the end of June 2012, amended and supplemented the provisions of AB X1 26. Together, AB X1 26 and AB 1484 are referred to in this Agreement as the "Dissolution Act." H. Pursuant to Section 34175(b) of the California Health and Safety Code ("HSC"), all assets, properties, contracts, leases, books and records, buildings, and equipment of the Former RDA, including all unspent proceeds of the PA1 2006A Bonds and PA3 2006 Bonds remaining in the PA1 2006A Project Fund and PA3 2006 Project Fund (the "PA1 2006A and PA3 2006 Bond Proceeds"), transferred to the control of the Successor Agency by operation of law. I. According to HSC Section 34191.4, after the receipt by the Successor Agency of a finding of completion (the "Finding of Completion") issued by the California State Department of Finance (the "DOF") pursuant to HSC Section 34179.7, the PA1 2006A and PA3 2006 Bond Proceeds shall be used for the purposes for which the PA1 2006A Bonds and PA3 2006 Bonds were sold, in a manner consistent with the original bond covenants. J. By DOF's letter, dated May 15, 2013, the DOF informed the Successor Agency that the DOF has issued a Finding of Completion to the Successor Agency. K. There remains a balance of PA1 2006A in the PA1 2006A Project Fund (in the amount of $15,591,166 as of April 30, 2014) and PA3 2006 Bond Proceeds in the PA3 2006 Project Fund (in the amount of $14,026,020 as of April 30, 2014). L. The Successor Agency desires to use a portion of the PA1 2006A and PA3 2006 Bond Proceeds for completion of work with respect to the Project. M. Because of the limited staffing of the Successor Agency and the traditional role and the established procedures of the City of Palm Desert (the "City") with respect to the awarding of public works contracts, the Successor Agency and the City desire to enter into the Project Bond Proceeds Funding Agreement, pursuant to which the City will agree to perform or cause to be performed all work required to complete the Project, with payment therefor to be made from the PA1 2006A and PA3 2006 Bond Proceeds. N. Pursuant to HSC Sections 34178(a) and 34180(h), with the approval of this Oversight Board, the Successor Agency may enter into agreements with the City. O. The Board of Directors of the Successor Agency has adopted a resolution on May 22, 2014, approving the execution and delivery by the Successor Agency of the Portola Avenue Widening Project Bond Proceeds Funding Agreement. NOW, THEREFORE, THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: GrCityMgrRyan StendellStaff Reports'2014, May 22 Reimbursement Agreements.Portola Ave Widening Oversight BoardPalm Desert - OB reso - PA 1&3 Bond Proceeds Funding Agmt- Portola Avenue Widening dncx RESOLUTION NO. OB-077 Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2. Portola Avenue Widening Bond Proceeds Funding Agreement. This Oversight Board hereby approves the Successor Agency's execution and delivery of the Portola Avenue Widening Project Bond Proceeds Funding Agreement, substantially in the form attached hereto as Exhibit A. Section 3. Other Acts. The members of this Oversight Board and the staff of the Successor Agency are hereby authorized, jointly and severally, to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution and the Portola Avenue Widening Project Bond Proceeds Funding Agreement. Section 4. Effective Date. This Resolution shall become effective in accordance with HSC Section 34181(f). APPROVED and ADOPTED this day of , 2014. AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY G. CrtyMgr Ryan Stendel4Staff Reports 2014 May 22.Reimbursement Agreements Portola Ave Widening Oversight Board.Palm Desert - OB reso - PA 1&3 Bond Proceeds Funding Agmt- Portola Avenue Wtdening.docx CONTRACT NO. C27690A PORTOLA AVENUE WIDENING PROJECT BOND PROCEEDS FUNDING AGREEMENT This PORTOLA AVENUE WIDENING PROJECT BOND PROCEEDS FUNDING AGREEMENT (this "Agreement"), dated as of , 2014, is entered into by and between the City of Palm Desert (the "City") and the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency," and together with the City, the "Parties"). RECITALS: A. The Palm Desert Financing Authority (the "Financing Authority") previously issued its 2006 Tax Allocation Revenue Bonds (Project Area No. 1, As Amended and Project Area No. 3), (the "the 2006 Bonds") for the purpose of financing redevelopment projects of benefit to Project Area No. 1, As Amended and Project Area No. 3 (the "Project Areas") of the former Palm Desert Redevelopment Agency (the "Former RDA"). B. Pursuant to four separate indentures, each dated as of July 1, 2006 (collectively, the "Indentures"), by and between the Palm Desert Financing Authority (the "Financing Authority") and Wells Fargo Bank, National Association, as trustee (the "Bond Trustee"), the Financing Authority has previously issued the following bonds: (i) The Palm Desert Financing Authority Tax Allocation Refunding Revenue Bonds (Project Area No. 1), 2006 Series A (the "PA1 2006A Bonds"); (ii) The Palm Desert Financing Authority Tax Allocation Refunding Revenue Bonds (Project Area No. 1), 2006 Series B (the "PA1 2006B Bonds"); (iii) The Palm Desert Financing Authority Tax Allocation Revenue Bonds (Project Area No. 3), 2006 Series A (the "PA3 2006A Bonds"); (iv) The Palm Desert Financing Authority Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3), 2006 Series B (the "PA3 2006B Bonds"); and (v) The Palm Desert Financing Authority Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 3), 2006 Series C (collectively with the PA3 2006A Bonds and the PA3 2006B Bonds, the "PA3 2006 Bonds"). C. Pursuant to four loan agreements, each dated as of July 1, 2006, (collectively, the "Loan Agreements"), by and among the Financing Authority, the former Palm Desert Redevelopment Agency (the "Former Redevelopment Agency") and the -1- G:\CityMgr\Ryan Stendell\Staff Reports\2014\Ma 22\Reimbursement Agreements\Portola Ave Widening\Oversight Board\Palm Desert - PA 1&3 Bond Proceeds Funding Agmt-Portola Ave YWidening.docx CONTRACT NO. C27690A Bond Trustee, proceeds of the PA1 2006 Bonds and the PA3 2006 Bonds were lent to the Former Redevelopment Agency as loans (the "Loans"). D. The Former Redevelopment Agency caused portions of the Loans to be deposited into certain Project Funds (the "Project Funds"), which were established pursuant to the Loan Agreements. E. Pursuant to the Loan Agreements, moneys in the Project Funds shall be disbursed and used from time to time to finance the costs of redevelopment projects of benefit to the Former Redevelopment Agency's Project Area No. 1 and Project Area No. 3, respectively. F. As documented by the Certificates Regarding Compliance with Certain Tax Matters, dated July 6, 2006 and July 25, 2006 respectively, (the "Tax Certificates"), it was intended, at the time of issuance of the PA1 2006 Bonds and the PA3 2006 Bonds, that the projects to be financed from moneys deposited in the Project Funds include, among others, the Portola Avenue Widening Project (including; design, deconstruction, construction, landscaping and all other related improvements) (the "Project"). G. Pursuant to AB X1 26 (which became effective at the end of June 2011) and the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Ca1.4th 231(2011), the Former RDA was dissolved as of February 1, 2012, and the Successor Agency was constituted. H. AB 1484, which became effective at the end of June 2012, amended and supplemented the provisions of AB X1 26. Together, AB X1 26 and AB 1484 are referred to in this Agreement as the "Dissolution Act." I. Pursuant to Section 34175(b) of the California Health and Safety Code ("HSC"), all assets, properties, contracts, leases, books and records, buildings, and equipment of the Former RDA, including all unspent proceeds of the PA1 2006 and PA3 2006 Bonds remaining in the PA1 and PA3 2006 Project Fund (the "PA1 and PA3 2006 Bond Proceeds"), transferred to the control of the Successor Agency by operation of law. J. According to HSC Section 34191.4, after the receipt by the Successor Agency of a finding of completion (the "Finding of Completion") issued by the California State Department of Finance (the "DOF") pursuant to HSC Section 34179.7, the PA1 and PA3 2006 Bond Proceeds shall be used for the purposes for which the PA1 and PA3 2006 Bonds were sold, in a manner consistent with the original bond covenants. K. By DOF's letter, dated May 15, 2013, the DOF informed the Successor Agency that the DOF has issued a Finding of Completion to the Successor Agency. L. There remains a balance of PA1 2006 Bond Proceeds in the PA1 2006 Project Fund (in the amount of $15,591,166) and a balance of PA3 Bond Proceeds in the PA3 Project Fund (in the amount of $ 14,026,020) as of April 30, 2014. -2- G:\CityMgr\Ryan Stendell\Staff Reports\2014\Ma 22\Reimbursement Agreements\Portola Ave Widening\Oversight Board\Palm Desert - PA l &3 Bond Proceeds Funding Agmt-Portola Ave widening.docx CONTRACT NO. C27690A M. The Successor Agency desires to use a portion of the PA1 2006 Bond Proceeds and a portion of the PA3 2006 Bond Proceeds to provide funds to complete the Project. N. Pursuant to HSC Section 34177(1), the Successor Agency must prepare a Recognized Obligation Payment Schedule ("ROPS") for each six-month fiscal period ("ROPS Period"). The ROPS must be submitted to the Oversight Board of the Successor Agency (the "Oversight Board") and the DOF for approval. O. Pursuant to HSC Section 34191.4(c)(2), the use of PA1 2006 Bond Proceeds and PA3 2006 Bond Proceeds for obligations must be listed on a ROPS. P. Prior to the execution of this Agreement, the Successor Agency has prepared a ROPS listing line items which include the use of the PA1 2006 Bond Proceeds (in the amount of $1,362,919) and the PA3 2006 Bond Proceeds (in the amount of $1,077,919) for the Project (together, the "Project 13-14B Estimate"), and the Oversight Board and the DOF have approved the relevant ROPS items. OB-077 Q. Resolution No. adopted by the Oversight Board on , 2014 approving the Successor Agency's execution and delivery of this Agreement was approved [deemed approved] by the DOF pursuant to HSC Section 34179(h) on , 2014 (the "DOF Agreement Approval Date"). NOW, THEREFORE, THE PARTIES DO HEREBY AGREE AS FOLLOWS: Section 1. Subject to the provisions of this Agreement and with the funding provided pursuant to this Agreement, the City agrees to perform or cause to be performed all work required for the completion of the Project, including but not limited to the preparation of designs, plans and specifications and all acquisitions, demolitions, construction and installations. The City shall perform such work in accordance with all applicable federal, state and local laws, rules and regulations. Subject to the covenants set forth herein, the City shall have the sole discretion with respect to the design, planning, specification and the timing with respect to all components of the Portola Avenue Widening Projects Project. Section 2. As soon as practical upon the Parties' execution of this Agreement, the Successor Agency shall transfer to the City an amount equal to the ROPS 13-14B Project Estimate from the PA1 and PA3 2006 Bond Proceeds on deposit in the PA1 and PA3 2006 Project Fund. Section 3. (a) The Parties acknowledge and agree that the PA1 2006 Bond Proceeds and the PA3 2006 Bond Proceeds shall be the sole sources of the Successor Agency's payment for the completion of the Project pursuant to this Agreement. The Parties also agree that the City's obligation with respect to the work for the Project under this Agreement shall be limited to the extent that funding therefor is available from the PA1 2006 Bond Proceeds and the PA3 2006 Bond Proceeds. -3- G:\CityMgr\Ryan Stendell\Staff Reports\2014\Ma 22\Reimbursement Agreements\Portola Ave Widening\Oversight Board\Pahn Desert - PA 1 &3 Bond Proceeds Funding Agmt-Portola Ave widening.docx CONTRACT NO. C27690A (b) At any time, if the City determines that the amount previously transferred by the Successor Agency pursuant to this Agreement is insufficient for the completion of the Project, the City's Finance Director shall notify the Successor Agency, specifying the estimated dollar amount necessary for the completion of the Project (the "Additional Funding Amount"). To the extent that sufficient unspent PA1 2006 Bond Proceeds or PA3 2006 Bond Proceeds (or a combination thereof) remain available, the Successor Agency shall list the Additional Funding Amount on the ROPS for the next available ROPS Period. Upon obtaining the Oversight Board's and the DOF's approval for such ROPS item(s), the Successor Agency shall transfer or caused to be transferred to the City the Additional Funding Amount from the PA1 2006 Bond Proceeds or the PA3 2006 Bond Proceeds, or a combination thereof as applicable, as soon as practicable upon the commencement of the applicable ROPS Period. (c) Before the transfer of any Additional Funding Amount pursuant to Section 3(b) above, the City may, but is not obligated to, advance funds from sources available to City for the work necessary for the Project (each such advance being a "City Advance"). Any Additional Funding Amount transferred by the Successor Agency pursuant to Section 4(b) shall first be used to reimburse the City for outstanding City Advances, and then to pay for other expenditures of the Project. Section 4. To the extent the City still holds unspent PA1 2006 Bond Proceeds or PA3 2006 Bond Proceeds transferred pursuant to this Agreement after the completion of the Project (as determined by the legislative body of the City), the City shall return such unspent PA1 Bond Proceeds and PA3 2006 Bond Proceeds to the Successor Agency within a reasonable time after such determination. Section 5. The City covenants that it shall use the PA1 Bond Proceeds and the PA3 2006 Bond Proceeds in a manner consistent with the covenants in the Loan Agreement and the Tax Certificate, including, but not limited to, any covenants regarding the tax-exempt status of interest on the PA1 Bond Proceeds and the PA3 2006 Bonds under the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. Section 6. Each Party shall maintain books and records regarding its duties pursuant to this Agreement. Such books and records shall be available for inspection by the officers and agents of the other Party at all reasonable times. Section 7. The Parties agree to take all appropriate steps and execute any documents which may reasonably be necessary or convenient to implement the intent of this Agreement. Section 8. This Agreement may be amended from time to time by written instrument executed by both Parties. Section 9. No official, agent, or employee of the Successor Agency or the City, or members of the City Council, or members of the Successor Agency Board of Directors or Oversight Board shall be individually or personally liable for any payment -4- G:\CityMgr\Ryan Stendell\Staff Reports\2014\Ma 22\Reimbu cement Agreements\Portola Ave Widening\Oversight Board\Palm Desert - PA 1&3 Bond Proceeds Funding Agmt-Portola Ave Vwidening.docx CONTRACT NO. C27690A hereunder in the event of any default or breach by the Successor Agency or the City, or for any amount which may otherwise become due to the City or Successor Agency, or successor thereto, or on any obligations under the terms of this Agreement. Section 10. This Agreement is made in the State of California under the Constitution and laws of the State of California, and is to be so construed. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized officers. SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By JOHN WOHLMUTH, EXECUTIVE DIRECTOR ATTEST: RACHELLE D. KLASSEN, SECRETARY TO THE SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY CITY OF PALM DESERT By VAN G. TANNER, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK APPROVED: OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By BOB A. SPIEGEL, CHAIR Date: -5- G:\CityMgr\Ryan Stendell\Staff Reports\2014\Ma 22\Reimbursement Agreements\Portola Ave Widening\Oversight Board\Palm Desert - PA I &3 Bond Proceeds Funding Agmt-Portola Ave Widening.docx