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HomeMy WebLinkAbout01 ADOPTION OF RESOLUTION NO. 10-09Agenda Item AGENDA REPORT Reviewed: City Manager Finance Director MEETING DATE: JANUARY 7, 2010 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR SUBJECT: ADOPT RESOLUTION NO. 10-09 EXPRESSING OFFICIAL INTENT REGARDING CERTAIN EXTRAORDINARY WORKING CAPITAL EXPENDITURES TO BE REIMBURSED WITH PROCEEDS OF OBLIGATIONS SUMMARY: The Superior Court has ordered the City of Tustin to increase its probable compensation to equal the amount of the jury's verdict in the acquisition of 34 acres of property, an extraordinary working capital expenditure. Resolution 10-09 expresses the official intent to reimburse expenditures pursuant to Treasury regulations Section 1.150- 2. RECOMMENDATION: It is recommended that the City Council adopt resolution 10-09 expressing official intent to reimburse certain extraordinary working capital expenditures with proceeds of obligations. FISCAL IMPACT: The City's General Fund will be reimbursed with proceeds of tax allocation housing bonds for the amount of the jury's verdict, not to exceed $40 million. BACKGROUND: Through court proceedings with the Orange County Superior Court, the City of Tustin settled an eminent domain proceeding with AAE Pacific Park Associates (AAE) that involved the acquisition of land for right-of-way usage for the Newport Blvd extension project. AAE stipulated that the total acres the City would acquire were 34 acres which includes the land needed for the Newport Blvd. extension project. The jury determined that the value of the land and damages was $70.5 million, the appraised value as of April 2007 plus $50,600 in damages. This is significantly less than the $126 million AAE initially wanted for the land purchase and damages. The City deposited $52.2 million with the court, but owes the difference of $18.1 million plus interest and attorney fees that will be determined at a future date by the Orange County Superior Court. The acquisition of the land is considered an extraordinary capital expenditure. The General Fund will fund the amount due with proceeds of tax-exempt tax allocation housing bonds issued by the ADOPT RESOLUTION NO. 10-09 EXPRESSING OFFICIAL INTENT REGARDING CERTAIN EXTRAORDINARY WORKING CAPITAL EXPENDITURES TO BE REIMBURSED WITH PROCEEDS OF OBLIGATIONS JANAURY 7, 2010 Page 2 Tustin Community Redevelopment Agency. Such bond proceeds will repay the City's advance to the Agency relating to the write down of land for use for affordable housing purposes. Resolution 10-09 is a declaration of official intent to reimburse expenditures pursuant to Treasury Regulations Section 1.150-2 so the City can be reimbursed from the Agency bonds for amounts advanced by the City before such bonds are issued. a Pamela Arends-King v Finance Director Attachment(s): Resolution 10-09 Exhibit A -Description of Expenditures RESOLUTION NO. 10-09 RESOLUTION EXPRESSING OFFICIAL INTENT REGARDING CERTAIN EXTRAORDINARY WORHING CAPITAL EXPENDITURES TO BE REIMBURSED WITH PROCEEDS OF OBLIGATIONS WHEREAS, the City proposes to issue or cause the issuance obligations (the "Obligations") to finance certain extraordinary working capital expenditures described in Exhibit A hereto (the "Expenditures"); WHEREAS, the Expenditures have been made not more than 60 days prior to the adoption of this Resolution or will be paid on or after the adoption of this Resolution; and WHEREAS, the City reasonably expects to reimburse itself for the Expenditures with the proceeds of the Obligations; NOW, THEREFORE, THE CITY OF TUSTIN, CALIFORNIA, RESOLVES AS FOLLOWS: SECTION 1: The City reasonably expects to reimburse all or a portion of the Expenditures with the proceeds of the Obligations. SECTION 2: The maximum principal amount of the Obligations is $40,000,000. SECTION 3: This Resolution is a declaration of official intent to reimburse expenditures pursuant to Treasury Regulations Section 1.150-2. SECTION 4: Appropriate officers and officials of the City are hereby authorized and directed to take such action and to execute such documents as may be necessary or desirable to effectuate the intent of this resolution. SECTION 5: This Resolution shall be in full force and effect immediately upon its adoption. PASSED AND ADOPTED at a special meeting of the City Council of the City of Tustin on the 7'" day of January, 2010. JERRY AMANTE, Mayor ATTEST: PAMELA STOKER, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 10-09 was duly passed and adopted at a special meeting of the Tustin City Council, held on the 7th day of January, 2010 by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: PAMELA STOKER, City Clerk EXHIBIT A DESCRIPTION OF EXPENDITURES The Superior Court has ordered the City to increase its deposit of probable compensation to equal the amount of the jury's verdict. The deposit is in compensation for the City's acquisition of 34 acres of property, which includes one warehouse structure.