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HomeMy WebLinkAboutRes Land-Based Financing DistrictsCITY OF PALM DESERT STAFF REPORT REQUEST: APPROVAL OF CITY COUNCIL RESOLUTION NO. 06- ADOPTING A POLICY FOR THE REIMBURSEMENT FOR STAFF COSTS ASSOCIATED WITH LAND -BASED FINANCING DISTRICTS SUBMITTED BY: DAVE YRIGOYEN, DIRECTOR OF REDEVELOPMENT/HOUSING DATE: APRIL 27, 2006 CONTENTS: RESOLUTION NO. 06- STAFF TIME REIMBURSEMENT POLICY Recommendation: That the City Council open the public hearing and following testimony take the following action: 1. That the City Council approve Resolution No. 06- , adopting a policy for the reimbursement of staff costs associated with land -based financing districts within the City of Palm Desert. Executive Summarv: Adoption of this policy will authorize the City to be reimbursed for staff costs associated with land based financing districts. Discussion: City Council had previously requested staff to research the possibility of creating a policy that regulates the fees charged to developers for land -based bond issues. Currently, based on precedent, the City requires a $50,000 deposit for the formation of district, issuing of the bond and any direct costs associated with the district, but has no provision for reimbursement of staff time. Typically, staff time is calculated at the end when all improvements are completed and then reimbursed with remaining bond funds, if available. This policy will ensure that staff time spent in connection with the formation of any financing district, the issuance of bonds and the acquisition and construction of public facilities is available and recovered through the bond proceeds. An initial policy was created and reviewed by the Investment and Finance Committee in July 2004. Following much scrutiny, the committee requested staff to have the policy further reviewed by the City Attorney and Agency Counsel for their suggested modifications and approval. GARDAWaria Hunt1WPDATANYRIGOYEN\STFRPTS1042706stf imereimbursepolicy.doc Staff Report Approval of Staff Time Reimbursement Policy associated with Land -Based Financing Districts Page 2 April 27, 2006 Legal counsel has reviewed the policy and made minor modifications. In addition, legal counsel has advised that since this is an administrative fee, it is not subject to the Proposition 218 process. Legal counsel has suggested, however, that this item be brought before the City Council for adoption just as any other fee, whereby it is placed on a public hearing agenda. The policy establishes that Developers/Owners will be required to pay an up front administration fee for personnel time and materials, which can be reimbursed as part of the Cost of Issuance, if the bonds are issued. The policy can be modified, as necessary, at the discretion of the City Council once adopted. The Investment and Finance Committee reviewed the revised Staff Time Reimbursement Policy and has voted to recommend that the City Council adopt them. Staff recommends that the City Council adopt the Policy for Staff Costs Associated with Land -Based Financing Districts. Submitted By: Approval: �av�e�Y r i Director o edevelopment/Housing VAT:tbm Approval: A� Carlos L. Orteg City Manager ,tiri McCarthy M)tedevelopm Paul S. Gibson Finance Director/Treasurer RESOLUTION NO.06- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT ADOPTING A REIMBURSEMENT POLICY FOR STAFF COSTS ASSOCIATED WITH LAND -BASED FINANCING DISTRICTS RECITALS: WHEREAS, the City Council of the City of Palm Desert (the "City Council") encourages development of commercial, residential and industrial property which result in reciprocal value to the City; and WHEREAS, the City Council will consider developer or property owner initiated applications requesting the formation of community facilities districts or assessment districts to assist these types of development; and WHEREAS, the City Council has expressed a desire that staff ensures that the time that is spent by City personnel in connection with the formation of any financing district, the issuance of bonds and the acquisition and construction of public facilities is recovered on a revenue neutral basis; and WHEREAS, City staff have prepared a Reimbursement Policy for Staff Costs Associated with Land -Based Financing Districts (the "Reimbursement Policy"), a copy of which Reimbursement Policy has been presented to the City Council and is on file in the office of the City Clerk and open to public inspection; and WHEREAS, the City Council has conducted a duly noticed public hearing with respect to the Reimbursement Policy and the City Council has considered all written and oral comments submitted with respect thereto; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: Section 1. The foregoing recitals are true and correct and a substantive part of this Resolution. Section 2. The City Council hereby adopts the Reimbursement Policy. P6401-0001\883694v1.doc PASSED, APPROVED, and ADOPTED this 27th day of April, 2006, by the following vote to wit: AYES: NOES: ABSENTS: ABSTAINS: Jim Ferguson, Mayor ATTEST: Rachelle D. Klassen, City Clerk CITY OF PALM DESERT REIMBURSEMENT POLICY FOR STAFF COSTS ASSOCIATED WITH LAND -BASED FINANCING DISTRICTS INTRODUCTION The City of Palm Desert will consider developer or property owner initiated applications requesting the formation of community facilities or assessment districts and the issuance of bonds to finance eligible public facilities. The City Council has expressed a desire that staff ensures that the time that is spent by City personnel in connection with the formation of any financing district, the issuance of bonds, and the acquisition and construction of public facilities is recovered on a revenue neutral basis. OBJECTIVE The objective of this policy is to set parameters to reimburse the City for personnel costs associated with the formation of financing districts, as well as the issuance of bonds and the acquisition and construction of public facilities. The initial fee will cover the City's first year administration costs until such costs can be recovered through the property tax rolls. The policy will also address reimbursement for any refunding of outstanding bonds as well. In addition, the policy will address reimbursement for any personnel costs associated with the supervision, management and oversight of the acquisition and construction of projects financed by the districts. CITY ADMINISTRATIVE REIMBURSEMENT New Bond Issues: The City shall receive an administrative fee to reimburse the City's costs in connection with the formation of a financing district and the issuance of bonds. The City shall calculate the administration fee based on an estimate of City personnel time and materials required. The City's administration fee will be considered a component of the costs of issuance and will be reimbursed to the landowner or developer from bond proceeds in the event bonds are issued. For assessment districts, the assessment proceedings will include authorization for the City to levy annual administrative assessments, not to exceed a designated maximum annual amount. The actual staff costs provided in connection with each new bond issue shall be tracked annually, and staff will make the proper adjustments through the administrative assessments included on the property tax rolls each year (subject to the maximum administrative assessment). In addition, if necessary, staff will adjust the annual administrative assessments (within the maximum) to account for any deficit related to the administrative fee described above. GARDAWada Hunt\WPDATA\YRIGOYEN\Reimbursement Policy\Reimbursement Policy.doc For community facilities districts, the rate and method of apportionment of the special tax will include the payment of the City's annual administrative expenses as a component of the annual special tax requirement. The actual staff costs provided in connection with each new bond issue shall be tracked annually, and staff will make the proper adjustments to the annual special taxes included on the property tax rolls each year (subject to the maximum special tax). In addition, if necessary, staff will adjust the annual special tax (within the maximum) to account for a deficit related to the administrative fee described above. Refinanced Bond Issues: The City shall be reimbursed for the City's costs in connection with issuing refunding bonds on a time and materials basis for City personnel time spent on the issuance of the refunding bonds. Staff will calculate an estimate and refine the estimate at the time of the pricing of the bonds. The costs will be included in the costs of issuance for the refunding bonds. These costs will be disclosed to any developer or owner who has requested the City to undertake a refunding. In addition, where the City initiates a refunding without a request, these costs will be disclosed in the staff report prepared in connection with the City Council's consideration of the refunding. To the extent allowable, refunding proceedings for assessment districts will include authorization for the City to levy annual administrative assessments and refunding proceedings for community facility districts will include authorization for the rate and method of apportionment to include the payment of the City's annual administrative expenses as a component of the annual special tax requirement. The actual staff costs provided in connection with each refunding issue shall be tracked annually, and staff will make the proper adjustments through the administrative assessments or special taxes included on the property tax rolls each year (subject to the maximums). In addition, to the extent allowable, staff will adjust the annual administrative assessments or special taxes to account for any deficit related to the administrative fee described above. Construction Manaaement for the Assessment Districts or Community Facilities Districts: The City shall include within the cost estimate for any assessment district or community facility district, including districts formed to place utilities underground, any personnel costs for supervising, managing and oversight of the construction of projects of the district. Staff will calculate an estimate and refine the estimate prior to the pricing of the bonds. Modifications: The City Council may modify and/or repeal this policy at its discretion. This policy shall be reviewed by staff periodically to ensure that it is consistent with state and federal laws. NOTICE OF PUBLIC HEARING REGARDING ADOPTION OF A REIMBURSEMENT POLICY FOR STAFF COSTS ASSOCIATED WITH LAND -BASED FINANCING DISTRICTS NOTICE IS HEREBY GIVEN that on;: n the Council Chambers of the City of Palm Desert, 73-510 Fred Waring ^Drive, Palm Desert, California 92260-2578, a public hearing will be held on the proposed adoption by the City Council of the City of Palm Desert of a Reimbursement Policy for Staff Costs Associated with Land -Based Financing Districts. The objective of the Reimbursement Policy is to provide reimbursement to the City for personnel costs associated with the formation of financing districts (assessment districts and community facilities districts), as well as the issuance of bonds and the acquisition and construction of public facilities. The Reimbursement Policy provides for (i) the imposition of an administrative fee to reimburse the City's costs in connection with the formation of a financing district and the issuance of bonds and (ii) the ongoing payment of the City's annual administrative expenses in connection with a financing district. The proposed Reimbursement Policy is on file in the office of the City Clerk, 73-510 Fred Waring Drive, Palm Desert, California 92260-2578, and available for public inspection. At the above -described public hearing, all persons who desire to be heard with respect to the proposed Reimbursement Policy may appear before the City Council and be heard thereon. Date: April 7, 2006LV - 5HELLE D. KLASSEN,'CITY CAL RK CITY OF PALM DESERT, CALIFORNIA (760) 346-0611 P6401-0001 \8 83 871 v l .doc Legal Notice - Public Hearing Reimbursement Policy for Staff Costs - Lnd Based Financi... Page 1 of 1 Martinez, Gloria From: Moeller, Charlene [CMOELLER@palmspri.gannett.coml Sent: Friday, April 07, 2006 12:13 PM To: Martinez, Gloria Subject: RE: Legal Notice - Public Hearing Reimbursement Policy for Staff Costs - Lnd Based Financing Dist. Ad recieved and will publish on date(s) requested. Cfiarfene 9doeller TU51ic Notice CustomerService ft. (760) 778-4578, Fax (760) 778-4731 My hours are Mon -Fri 8:00-5:00 pm. Desert Sun legalsCthedesertsun.com c,le, Desert Post Week& dvwleaals@thedesertsun.com The Valley's #1 Source in News & Advertising! -----Original Message ----- From: gmartinez@ci.palm-desert.ca.us [maiito:gmartinez@ci.palm-desert.ca.us] Sent: Friday, April 07, 2006 12:09 PM To: charlene.moeller@desertsun.com Cc: mhunt@ci.palm-desert.ca.us; cjaime@ci.palm-desert.ca.us; bkeating@ci.palm-desert.ca.us Subject: Legal Notice - Public Hearing Reimbursement Policy for Staff Costs - Lnd Based Financing Dist. PLEASE PUBLISH THE FOLLOWING: PUBLIC HEARING Adopting of a Reimbursement Policy for Staff Costs Associated w/Land-Based Financing Districts. TWO TIMES IN THE DESERT SUN Thursday, April 13, 2006 and Thursday, April 20, 2006 <<PH 042706 - Reimbrsmnt Policy 4 Staff Costs - Land Based Financing Dist..DOC>> Thank you, CharleneH Have a GOOD weekend. 911. gkiia 9lfartinez 73-510 Fred Waring Drive Palm Desert, California 92260 (760) 346-0611 Ext. 354 gmartinez@ci.palm-desert.ca.us 4/7/2006