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HomeMy WebLinkAboutRDA RES 399RESOLUTION NO. 399 A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING PAYMENT BY THE AGENCY OF THE COST OF THE — CONVERSION OF EXISTING OVERHEAD COMMUNICATION AND ELECTRIC FACILITIES TO UNDERGROUND LOCATIONS ALONG HIGHWAY 74 THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section l. Pursuant to provisions of the Community Redevelopment Law (California Health and Safety Code Section 33000, et s_eg.), and in particular Section 33445 thereof, the Palm Desert Redevelopment Agency (the "Agency") proposes to pay for the cost of converting existing overhead communication and electric facilities to underground locations in public rights-of- way on the west side of Highway 74 north of Highway 111. The conversion includes the removal of poles, overhead wires and overhead structures and the underground installation of wires and structures for supplying electric, communication, or similar associated service (the "Conversion"). The above-described section of Highway 74 is located in Project Area No. 1 of the Agency (the "Project Area"). The City Council has previously determined that the Project Area is an area in which the combination of conditions of blight is so prevalent and so substantial that it causes a reduction of, or lack of, proper utilization of the area to such an extent that it constitutes a serious physical, social and economic burden on the community which cannot reasonably be expected to be reversed or alleviated by private enterprise or governmental action, or both, without redevelopment. Among other things, the Project Area contains vacant and underutilized properties, properties which suffer from depreciated or stagnant property values, and deteriorated, aged and obsolete buildings. In addition, the Project Area is characterized by the existence of inadequate public improvements, public facilities, and utilities which cannot be remedied by private or governmental action without redevelopment. The Conversion will serve a basic purpose of redevelopment; redevelopment includes the provision of structures as may be appropriate or necessary in the interest of the general welfare. In addition, a fundamental purpose of redevelopment is to expand employment opportunities and to provide an environment for the social, economic and psychological growth and well-being of all citizens. Highway 74 is a major arterial in the City. The proposed Conversion will mitigate safety hazards associated with overhead facilities, increase the effectiveness of utility service and improve the aesthetics of the area, all for the benefit of the health, safety and welfare of the residents and taxpayers of the Project Area, thereby assisting in eliminating factors which prevent or substantially hinder the economically P6402\0001\617765.1 Resolution No. 399 viable use or capacity of buildings or lots, encouraging private- sector investment in the Project Area and facilitating the redevelopment of the Project Area. Section 2. Pursuant to budget considerations of the -- City, the cost of the Conversion has been allocated to the Agency. While the City intends to advance the cost of the Conversion, any moneys paid initially by the City for the Conversion will constitute loans of such moneys by the City to the Agency. The budget constraints of the City prevent the City from financing the Conversion by any means. Except for the moneys to be loaned from the City to the Agency for the Conversion (which the City will, upon repayment, use for other budgeted purposes of the City), no moneys of the City were, are, or are reasonably expected to be available on a long-term basis under the buaget of the City to pay for the cost of the Conversion. Traditional methods of financing such as the issuance of general obligation bonds are unavailable as a practical matter because of the extraordinary majority voter approval requirements of two- thirds of the electorate. Assessment financing or special tax financing could overburden benefitting properties with assessments or special taxes and, in addition, special taxes require a two-thirds vote and assessments are subject to a majority protest. Section 3. The Agency hereby finds and determines that based upon the foregoing and other information presented to the Agency: (i) the Conversion will benefit the Project Area and the immediate neighborhood in which the project is located; (ii) the —� payment of funds for the Conversion will assist in the elimination of one or more blighting conditians inside the Project Area; (iii) the payment of funds for the Conversion is consistent with the Agency's implementation plan adopted pursuant to Health and Safety Code Section 33490; and (iv) no other reasonable means of financing the Conversion is available to the City. Section 4. Section 1.150-2 of the Treasury Regulations governs the allocation of expenditures of a reimbursement bond. A reimbursement bond is that portion of an issue of bonds (or other cbligations) alloca�ed to reimburse an original expenditure (i.e., an expenditure for a governmental purpose that is originally paid from a source other than a reimbursement bond) that was paid before the date of issue of the bonds. Section 1.150-2 provides rules to determine when an allocation of proceeds of bonds to reimburse an original expenditure will be treated as an expenditure of those proceeds. Section 5. In order for such an allocation of proceeds to be treated as an expenditure of those proceeds, the issuer (or in certain cases, a conduit borrower) af the bonds must, in accordance with Section 1.150-2, adopt an official intent for the original expenditure. The official intent is a declaration of intention by the issuer (or the conduit borrower) to reimburse --" the original expenditure with proceeds of bonds. P6402\0001\617765.1 -2- Resolution N0. 399 Section 6. As set forth in Section 2 hereof, the City Council iritends to advance the costs of the Conversion and the Agency intends to reimburse the City for such advance. The Agency intends to reimburse the City's expenditures from the proceeds of bonds to be issued by the Agency or a related public entity. The Agency expects that all such City expenditures will be reimbursed with proceeds of the bonds. Section 7. The maximum principal amount of obligations expected to be issued for the purposes of reimbursing the City for the costs of the Conversion is $2,500,000.00. Section 8. This official intent is not declared as a matter of course and is not declared in an amount substantially in excess of the amounts expected to be necessary to reimburse the City's advance for the costs of the Conversion. Section 9. The Agency hereby approves payment by the Agency for all or a part of the cost of the Conversion from any revenues of the Agency lawfully available therefor, including the proceeds of bonds of the Agency secured by and payable from any revenues of the Agency lawfully available therefor, including taxes allocated to the Agency from the Project Area. Any moneys paid initially by the City for the Conversion will constitute loans of such moneys by the City to the Agency, and the Agency will repay such loans to the City from the proceeds of the Agency bonds (or bonds or other obligations issued by a related public entity), from time to time, upon demand by the City. PASSED, APPROVED and ADOPTED this 24th day of August , 2000. AYES: BENSON, KELLY, SPIEGEL, CRITES NOES : NONE ABSENTS : FERGUSON ABSTAINS : NONE % St. SECRET � n � `,. r� P6402\0001\617765.1 -3-