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Home My WebLink AboutRes 09-62 - PD Highlands Undergrounding Dist 04-01 - Surplus CITY OF PALM DESERT FINANCE DEPARTMENT STAFF REPORT REQUEST: APPROVE AND ADOPT RESOLUTION NO. 09-62 AUTHORIZING THE DISPOSITION OF APPROXIMATELY $1,107,910 IN SURPLUS IMPROVEMENT FUNDS IN CONNECTION WITH THE CITY OF PALM DESERT HIGHLANDS UNDERGROUNDING ASSESSMENT DISTRICT 04-01. DATE: AUGUST 27, 2009 CONTENTS: RESOLUTION NO. 09-62 EXHIBIT A Recommendation: By Minute Motion, that Council approve and adopt Resolution No. 09-62 authorizing the disposition of approximately $1,107,910 in surplus improvement funds in connection with the City of Palm Desert Highlands Undergrounding Assessment District 04-01. Back_qround: The Highlands Undergrounding Improvement District 04-01 was formed on June 8, 2006, and improvement bonds in the amount of $3.165 million were issued on July 13, 2006 to cover the costs of the improvements. The City of Palm Desert General Fund was the only investor in these bonds. As part of this improvement district, the City offered to all residents the opportunity to enter into a Deferred Loan program specifically created for the Highlands Undergrounding Assessment District. Ten properties signed up. To date, six properties remain part of the deferred loan program with the City of Palm Desert. The improvements are complete and payments for all claims have been made leaving a surplus of bond money of $1,107,910. Pursuant to the Streets and Highway Code Section 10427 & 10427.1; surplus improvement bond funds shall be used to call outstanding bonds prior to maturity. The Assessment Engineer has calculated the refunds and credits as follows; twenty-two � property owners who paid their assessments in full will receive cash refunds totaling $112,954. The average refund to the condominium owners will be $794 and the Staff Report Adopt Resolution Authorizing the Disposition of Surplus Improvement Funds - Highlands Undergrounding August 27, 2009 Page 2 of 2 average refund for the single family homes will be $8,751. The allocation is based solely on the assessment of the single-family homes types of properties. The condominiums were originally assessed $2,531 whereas, the other properties were assessed an average of $27,882. Six property owners who remain part of the deferred loan program have been given the option to use the money to reduce the principal owed on their loans or receive a refund. In either case, the deferred loan program lien will remain intact and the City General Fund will be paid in full the earliest between a change in title or when note becomes due. Refunds or credits for the Deferred Loan program are estimated at $60,727. The original loans issued through this program were $256,004 with current loans outstanding of$175,813. The remaining $934,229 of surplus improvement funds will be used to call bonds and credit the remaining 136 parcels in the district. The $934,229 will be paid directly to the General Fund since they are the only investor in the bonds. It is staff's recommendation to approve and adopt Resolution Noo9-62 authorizing the disposition of approximately $1,107,910 in surplus improvement funds in connection with the City of Palm Desert Highlands Undergrounding Assessment District 04-01. Submitted by: Approval: aul S. Gibson, hn M. Wohlmuth Director of Finance/City Treasurer City Manager CITY COUNCIL�CTION APPROVED � DENiED R C IVED OTHER o - MEETING DATE `�- •Q AYE5 ,..,V�,_ �C�/��C��'I, iKP_t C� c�� rIE�/�ii _ � � NOES: �n'� �_ .,�_, �,_,� � ABSENT: � ABSTAIN: VERIFIED BY: � � Original oa File with City erk's Office W:Wgenda Items�2009-08-27\Highlands Disposition of Improvement Bonds\SR-Res authorizing disposition of surplus improvement bonds Highlands 082709.docx RESOLUTION NO. 09-62 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT DECLARING AND PROVIDING FOR THE DISPOSITION OF SURPLUS IN THE IMPROVEMENT FUND 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 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 have been completed and the payment of all claims from the Improvement Fund established for the Assessment District (the "Improvement Fund") have been made and the City Manager has filed with the City Treasurer a certificate stating that the Improvements have been completed and that all costs of the Improvements have been paid or are not required to be paid from the Improvement Fund. Surplus funds remain in the Improvement Fund. D. Streets and Highways Code Sections 10427 and 10427.1 provide that surplus funds remaining in the Improvement Fund by reason of the assessments may be used to call the 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 finds that the Improvements have been completed and that the payment of all claims from the Improvement Fund has been made or are not required to be paid from the Improvement Fund and hereby determines that the amount of surplus remaining in the Improvement Fund by reason of the assessments is approximately $1,107,910. The City's Director of Finance shall determine the exact amount of the surplus remaining in the Improvement Fund. G:\Finance\Niamh Ortega\Staff Reports\RES-Surplus Improvement Funds Highlands 082709.docx Resolution No. 09-62 ' Section 2. Subject to any requirement to rebate amounts to the United States, the City Council hereby declares that the surplus remaining in the Improvement Fund shall be used to call outstanding Bonds prior to maturity in accordance with Sections 10427 and 10427.1 of the Streets and Highways Code and the City Council hereby directs the City Treasurer to transfer the amount in the Improvement Fund in accordance with this Resolution, and the Improvement Fund shall thereafter be closed. PASSED, APPROVED and ADOPTED this 27th day of August, 2009, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Robert A. Spiegel, Mayor ATTEST: Rachelle D. Klassen, City Clerk PALM DESERT, CALIFORNIA 2 G:\Finance\Niamh Ortega\Staff Reports\RES-Surplus Improvement Funds Highlands 082709.docx TO: City Treasurer City of Palm Desert Certificate of the City Manager Highlands Utility Undergrounding Assessment District No. 04-01 Limited Obligation Improvement Bonds Series 2006 I, John M. Wohlmuth, HEREBY CERTIFY as follows: 1. I am the City Manager of the City of Palm Desert("City"). 2. The project described in Section 1 of Resolution No. 06-114, adopted by the City Council of the City on July 13, 2006 (the "Resolution") has been completed and all costs of that project have been paid or are not required to be paid from the Improvement Fund created by Section 4.1 of the Resolution. IN WITNESS WHEREOF, I have hereunder set my hand this day of , 2009. J M. Wohlmuth C' y Manager ity of Palm Desert P6401-1034\1109294v l.doc