HomeMy WebLinkAboutRes OB-071 (2)OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE PALM
DESERT REDEVELOPMENT AGENCY
STAFF REPORT
REQUEST: APPROVE THE EXECUTION OF A DISTRICT 12 (TAMARISK)
UTILITY UNDERGROUNDING 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: David Hermann, Management Analyst
DATE: May 5, 2014
CONTENTS: Resolution No. OB - 071
Reimbursement Agreement (C
Recommendation
By Minute Motion that the Oversight Board:
N/A
)
1) Adopt Resolution No. OB - 071 approving the execution of a District
12 (Tamarisk) Utility Undergrounding Project Bond Proceeds Funding
Agreement between the Successor Agency to the Palm Desert
Redevelopment Agency and the City of Palm Desert
Backaround
Residents of Palm Desert's Tamarisk neighborhood have submitted a petition
requesting that the City of Palm Desert begin the formation of an assessment district for
the purpose of undergrounding utilities in that neighborhood.
Because the petition was signed by 70 percent (70%) of the property owners in the
district it qualifies to participate in the City's utility undergrounding assistance program
which, in the past, was funded through redevelopment.
With the approval of the Successor Agency's Finding of Completion in 2013, by the State
Department of Finance, the Successor Agency can now utilize Project Area 1 Bond
Proceeds to complete projects outlined in the bond covenants, including assistance for
utility undergrounding projects such as the proposed project in District 12.
On February 27, 2014, the Board of the Successor Agency to the Palm Desert
Redevelopment Agency and the Palm Desert City Council adopted resolutions initiating
proceedings for the undergrounding of utility facilities and approving the execution of a
District 12 (Tamarisk) Utility Undergrounding Project Bond Proceeds Funding Agreement
between the Successor Agency and the City.
Staff Report
Tamarisk Utility Undergrounding Reimbursement Agreement
Page 2 of 3
May 5, 2014
The Council also appropriated $400,000 from Account #400-4256-464-4001 to pay for
engineering fees that will allow project design to proceed.
Southern California Edison's preliminary rough order of magnitude cost estimate for the
proposed undergrounding project is $2.5 million ($2,500,000.00). This estimate has an
estimated accuracy variance of plus or minus 40 percent (40%). Verizon and Time
Warner Cable have provided similar rough order of magnitude estimates for their portion
of the infrastructure to be undergrounded in the amounts of $160,116.99 and
$133,811.00 respectively for a total rough estimate project cost of $2,793,927.99.
More information and a more precise cost estimate of the proposed Tamarisk Utility
Undergrounding District (District 12) will be available after Southern California Edison
(SCE) has completed its design of the project.
Recently, a group of property owners on Heliotrope Drive have submitted a petition to
the City to form their own utility undergrounding assessment district. Staff is working
with the project and assessment engineers for the proposed Tamarisk district to
determine whether it would be feasible and cost effective to combine the two proposed
districts, both of which would be eligible for assistance from redevelopment bond
proceeds, into a single project.
Because of this additional variable in the proposed project, SCE has not yet provided
the amount of the Calculated Advanced Engineering Fee that it requires to begin final
design of the project After the fee has been paid, it will take approximately ten months
to finish the design and put the project out to bid. Once the bid prices are known, the
engineer will spread the assessment and complete the engineer's report. If all goes
well, ballots will be sent out to the property owners for the confirmation vote. If
successful, construction could start in late 2015 or early 2016. The use of
redevelopment bond proceeds to fund the proposed undergrounding project would be
limited to subsidizing the cost of the project's initial design and assistance with the
portion of the project in the public right of way.
Fiscal Analysis
Although the General Fund would initially advance the funds for this work, it is the intention
of the Successor Agency to reimburse the City from redevelopment bond proceeds as utility
undergrounding improvements are included in the bond covenants. Funding for this project
in the amount of $400,000 has been included in ROPS 13-14B on line 49.
N-o •, vlinnamon A.8sr=4,IT'')
-N(Di BY OVERSIGHT BOARD
ON 55 5 - i 4
VERIFIED B �
David Hermann _ J �,5�
Management Analyst Original on file with City Clerk's Office
Prepared By:
Lei.4„4 ,44,-_-_
Staff Report
Tamarisk Utility Undergrounding Reimbursement Agreement
Page 3 of 3
May 5, 2014
Revieuvad and Concur:
Paul S. Gibson, Director of Finance
• . proval: ,
4 x 14, e g c J
ohn M. Wohlmuth
xecutive Director of the Successor Agency of the Palm Desert
Redevelopment Agency
RESOLUTION NO. OB 4)71
A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS FOR
THE SUCCESSOR AGENCY TO THE PALM DESERT
REDEVELOPMENT AGENCY APPROVING THE EXECUTION OF A
DISTRICT 12 (TAMARISK) UTILITY UNDERGROUNDING PROJECT
BOND PROCEEDS FUNDING AGREEMENT BETWEEN THE
SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT
AGENCY AND THE CITY 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 "2006A Bonds"), pursuant to an
Indenture 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 Loan Agreement, dated as of July 1, 2006 (the "Loan
Agreement"), by and among the Financing Authority, the former Palm Desert
Redevelopment Agency (the "Former RDA"), and the Trustee, proceeds of the 2006A
Bonds were lent to the Former RDA as a loan (the "Loan").
C. The Former RDA caused a portion of the proceeds of the 2006A Bonds
received as part of the Loan to be deposited into a Project Fund (the "2006A Project
Fund"), which was established, and is held by, the Trustee pursuant to the Loan
Agreement.
D. Pursuant to the Loan Agreement, moneys in the 2006A 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").
E. As documented by the Official Statement, dated June 22, 2006, and the
Certificate Regarding Compliance with Certain Tax Matters, dated as of July 6, 2006
(the "Tax Certificate"), it was intended, at the issuance of the 2006A Bonds, that the
projects to be financed from moneys deposited in the 2006A Project Fund include,
among others, the District 12 (Tamarisk) Utility Undergrounding Project (including initial
project design, assessment engineering, utility undergrounding in the public right of
way, and other associated costs) for the Project (the "Tamarisk Utility Undergrounding
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.
GVda\David Hermann\Word Fies\PIO\Undergrounding\Tamarisk Undergrounding\Oversight Board Resolution Project Area No 1 Bond Proceeds Funding Agmt - Tamarisk
Undergrounding doc
RESOLUTION NO. os - 071
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 2006A Bonds
remaining in the 2006A Project Fund (the "2006A 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 2006A
Bond Proceeds shall be used for the purposes for which the 2006A 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 2006A Bond Proceeds in the 2006A Project
Fund (in the amount of $15,630,738 as of December 31, 2013).
L. The Successor Agency desires to use a portion of the 2006A Bond
Proceeds for completion of work with respect to the Tamarisk Utility Undergrounding
Project 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 District 12 (Tamarisk) Utility Undergrounding 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 District 12 (Tamarisk) Utility
Undergrounding Project, with payment therefor to be made from the 2006A Bond
Proceeds.
NOW, THEREFORE, THE OVERSIGHT BOARD FOR THE
SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY
DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and
correct.
G:\rda\David Hermann Word Files\PIO\Undergrounding\Tamarisk Undergrounding\Oversight Board Resolution Project Area No 1 Bond Proceeds Funding Agmt - Tamansk
Undergrounding.doc
RESOLUTION NO. os - 071
Section 2. Effective Date. This Resolution shall take effect immediately upon
adoption.
PASSED, APPROVED and ADOPTED this 5th day of Mav , 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:\rda\David Hermann\Word Files\PIO\Undergrounding\Tamarisk Undergrounding\Oversight Board Resolution Project Area No 1 Bond Proceeds Funding Agmt - Tamarisk
Undergrounding.doc
RES. NO. OB - 071
DISTRICT 12 (TAMARISK) UTILITY UNDERGROUNDING PROJECT BOND
PROCEEDS FUNDING AGREEMENT
This DISTRICT 12 (TAMARISK) UTILITY UNDERGROUNDING PROJECT
BOND PROCEEDS FUNDING AGREEMENT (this "Agreement"), dated as of February 27,
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 four series of tax allocation bonds in 2006 (the "PA 1 2006 Bonds") for the purpose of
financing and refinancing redevelopment projects of benefit to Project Area No. 1, As Amended
(the "Project Area") of the former Palm Desert Redevelopment Agency (the "Former RDA").
B. The PAI 2006 Bonds were issued pursuant to two Indentures of Trust, each dated
as of July 1, 2006, by and between the Financing Authority and Wells Fargo Bank, National
Association, as trustee (the "Trustee").
C. Pursuant to the Loan Agreement, dated as of July 1, 2006 (the "Loan
Agreement"), by and among the Financing Authority, the former Palm Desert Redevelopment
Agency (the "Former RDA"), and the Trustee, proceeds of the 2006A Bonds were lent to the
Former RDA as a loan (the "Loan").
D. The Former RDA caused a portion of the proceeds of the 2006A Bonds received
as part of the Loan to be deposited into a Project Fund (the "2006A Project Fund"), which was
established, and is held, by the Trustee pursuant to the Loan Agreement.
E. Pursuant to the Loan Agreement, moneys in the 2006A 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").
F. As documented by the Official Statement, dated June 22, 2006, and the Certificate
Regarding Compliance with Certain Tax Matters, dated as of July 6, 2006 (the "Tax
Certificate"), it was intended, at the issuance of the 2006A Bonds, that the projects to be
financed from moneys deposited in the 2006A Project Fund include, among others, utility
undergrounding projects (including the initial design and assessment engineering for the District
12 (Tamarisk) Utility Undergrounding District Project (the "Project").
G. Pursuant to AB XI 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 CaL4th 231(2011), the Former RDA was dissolved as of February 1, 2012,
and the Successor Agency was constituted.
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RES. NO. OB — 071
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 2006A Bonds remaining in the 2006A
Project Fund (the "2006A 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 2006A Bond Proceeds shall be
used for the purposes for which the 2006A 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 2006A Bond Proceeds in the 2006A Project Fund (in
the amount of $15,630,738 as of December 31, 2013).
M. The Successor Agency desires to use a portion of the 2006A Bond Proceeds for
completion of work with respect to 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 expenditure of 2006A Bond Proceeds
for an obligation must be listed on a ROPS.
P. The Successor Agency previously prepared a ROPS ("ROPS 13-14B") covering
the period from January 1, 2014 through June 30, 3014 ("ROPS 13-14B Period").
Q. Listed as Item No. 49 (Forty -Nine) on the ROPS 13-14B is the anticipated use of
the PA2 2006 Bond Proceeds for the Project.
R. The Oversight Board adopted Resolution No. OB-050, on September 10, 2013,
approving ROPS 13-14B. The Oversight Board -approved ROPS 13-14B was submitted to the
DOF for review.
S. DOF issued its letter dated December 17, 2013, confirming the DOF's approval of
Item No.49 (Forty -Nine) of ROPS 13-14B, subject to the modification that the ROPS 13-14B
Period funding amount for the Project (the "ROPS 13-14B Project Estimate") be changed
pursuant to a revised schedule submitted by the Successor Agency during the DOF review
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12812-0001\1610512.1
RES. NO. OB - 071
process (the "Revised Schedule"). Per the Revised Schedule, the ROPS 13-14B Project Estimate
is $450,000.
T. 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 this
Agreement, for the City to perform or cause to be performed all work required to complete the
Project, with payment therefor to be made from the 2006A Bond Proceeds.
U. Pursuant to HSC Sections 34178(a) and 34180(h), with the approval of the
Oversight Board, the Successor Agency may enter into agreements with the City.
OB-071
V. Resolution No. adopted by the Oversight Board on
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 , 2013.
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 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
Project.
Section 2. (a) The City and the Successor Agency currently estimate that the
dollar amount to be spent for the Project during the period from January 1, 2014 through June
30, 2014 (the "ROPS 13-14B Period") is $400,000 (the "ROPS 13-14B Project Estimate").
(b) The Successor Agency shall list the ROPS 13-14B Project Estimate on its
ROPS for the ROPS 13-14B Period ("ROPS 13-14B"), in as many line items on ROPS 13-14B
as the Successor Agency deems appropriate.
(c) Subject to the approval (and any modification) by the Oversight Board and
the DOF of the ROPS 13-14B item(s) described in Section 2(b), at the commencement of the
ROPS 13-14B Period, the Successor Agency shall transfer or caused to be transferred to the City
an amount equal to the ROPS 13-14B Project Estimate from the 2006A Bond Proceeds on
deposit in the 2006A Project Fund.
Section 3. (a) The Parties acknowledge and agree that the 2006A Bond Proceeds
shall be the sole source 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 2006A Bond Proceeds.
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RES. NO. OB - 071
(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 2006A Bond Proceeds 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 2006A Bond Proceeds 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 2006A 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 2006A Bond Proceeds to the
Successor Agency within a reasonable time after such determination.
Section 5. The City covenants that it shall use the 2006A 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 2006A 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 he 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 he 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 he individually or personally liable for any payment 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.
.4..
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RES. NO. OB - 071
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SIGNATURES TO FOLLOW]
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 TANNER, MAYOR
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
APPROVED:
OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE PALM
DESERT REDEVELOPMENT AGENCY
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12812-0001\1610512.1
RES. NO. OB - 071
By
BOB A. SPIEGEL, CHAIR Date:
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