HomeMy WebLinkAbout15 CAPITAL PROJECTS FUND BUDGET-TUSTIN LEGACY• A ends Item
AGET~TDA REPORT Reviewed:
City Manager ,~
Finance Director
MEETING DATE: DECEMBER 6, 2011
TO: WILLIAM A. HUSTON, INTERIM CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR
SUBJECT: CAPITAL PROJECTS FUND BUDGET APPROPRIATION FOR
VARIOUS REQUIRED TUSTIN LEGACY EXPENDITURES.
SUMMARY:
There are several required expenditures necessary to support the Tustin Legacy project
originally identified in the Tustin Legacy Disposition Strategy, including purchase of an
environmental insurance policy and support for any required insurance deductibles on
claim, any required reimbursements to the Department of Toxic Substance Control
(DTSC) for coordination on environmental claims, preparation of Covenants, Conditions
& Restrictions (CC&R's) for the Tustin Legacy project area and various planning
studies, including reexamination of water design features (lakes, fountains, etc.) in the
linear park areas costing approximately $1,000,000 for the MCAS Tustin
Redevelopment Project Area. Due to the constraints placed on the Redevelopment
Agency through AB 1X 26 and AB 1X 27, Staff is recommending that the resources to
fund the approximate $1,000,000 will be from the Capital Projects Fund undesignated
fund balance.
RECOMMENDATION:
It is recommended that the City Council approve:
1. A budget appropriation in the amount of $1,000,000 out of the Capital Projects
Fund undesignated fund balance to be expensed out of the Tustin Legacy
Expenditure Account (200-40-00-7500) to fund the purchase of the
environmental insurance any required environmental insurance deductible
payments required for remediation claims, any required reimbursements to the
DTSC for coordination on environmental claims, the preparation of CC&R's for a
portion of the Tustin Legacy Project, and certain planning studies needed as
identified in the Tustin Legacy Disposition Strategy, including but not limited to
the reexamination of water elements.
2. The MCAS Tustin Redevelopment Project Area will repay the Capital Projects
Fund the $1,000,000 with tax increment dollars if the current restraints are
removed from the Tustin Community Redevelopment Agency on AB 1X 26 and
AB 1X 27 after the California Supreme Court decision or from any future land
CAPITAL PROJECTS FUND BUDGET APPROPRIATION FOR VARIOUS REQUIRED TUSTIN LEGACY EXPENITURES
DECEMBER 6, 2011 Page 2
sale proceeds that are not committed under other Agreements for developer
reimbursements or Tustin Legacy Backbone Infrastructure obligations.
FISCAL IMPACT:
The Capital Projects Fund currently has $11,718,178 million in fund balance. Of that
amount $3,584,954 were contributions from the General Fund and undesignated. After
the budget appropriation of $1,000,000 the undesignated amount will be $2,584,954.
BACKGROUND:
With the Supreme Court stay on portions of AB 1X 26 and AB 1X 27, the Tustin
Community Redevelopment Agency ("Agency") is prohibited from undertaking certain
redevelopment activities, including entering into any new contracts for new programs and
projects that were not reported on the Enforceable Obligation Payment Schedule (FOPS),
the Revised Enforceable Obligation Schedule (Revised FOPS), or the Initial Recognized
Obligation Payment Schedule (IROPS) filed with the State. At the time the FOPS, the
Revised FOPS, and the IROPS were filed the City did not have contracts for certain
required and anticipated future needs including purchase of a new environmental pollution
legal liability insurance policy; any required deductibles necessary for environmental
remediation not being undertaken by the Navy under its current environmental insurance
policy's extended reporting period (through December 21, 2016}; any required
reimbursements to the DISC far coordination on environmental issues/claims; completion
of CC&R's for the portions of the Tustin Legacy Project prior to any anticipated sale of
early development opportunity sites; and planning studies recommended in the Tustin
Legacy Disposition Strategy adopted by the City Council on April 19, 2011, including but
not limited to reexamination of water elements. As a result, funds from MCAS Tustin
Redevelopment Project Area cannot be used to pay for these services.
To proceed with the sale and development of the Tustin Legacy Project located within the
MCAS Tustin Redevelopment Project Area, environmental insurance should be
purchased, approximately $700,000, and any required deductibles budgeted under the
new policy and existing policy's extended reporting period to mitigate any environmental
issues/claims that are current or may occur in the future. An agenda item will separately
provide for any City Council approvals necessary far placement of the new policy and for
authorizing staff to draw against any appropriated amounts identified in this report for
deductibles for existing or future claims and for any required reimbursements to the DTSC
for coordination on environmental issues/claims. The balance of the appropriation
amount, approximately $300,000, requested in this agenda report would be used for
planning related efforts with separate contracts to come back to the City Council for
preparation of CC&R's for the project area and reexamination of water features (lakes,
fountains, etc.) in the linear park areas as recommended in the Tustin Legacy Disposition
Strategy.
The $1,000,000 will be repaid to the Capital Projects Fund from MCAS Tustin
Redevelopment Project Area tax increment if the current restraints placed on the Agency
due to AB 1X 26 and AB 1X 27 are removed after the State Supreme Court decision,
CAPITAL PROJECTS FUND BUDGET APPROPRIATION FOR VARIOUS REQUIRED TUSTIN LEGACY EXPENITURES
DECEMBER 6, 2011 Page 3
andlor from any future land sale proceeds at Tustin Legacy after all other developer
reimbursement obligations are met (i.e., Vestar Infrastructure Construction and
Reimbursement Agreement), and any of the City's Tustin legacy Backbone Infrastructure
obligations.
Pamela Arends-King
Finance Director