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HomeMy WebLinkAbout05 JOINT FAC AGMNT SANTA ANA 05-01-06 AGENDA REPORT Agenda Item 5 Rewewe~ ~ City Manager Finance Director MEETING DATE: May 1, 2006 TO: FROM: William A. Huston, City Manager Ronald A. Nault, Finance Director SUBJECT: JOINT COMMUNITY FACILITIES AGREEMENT BY AND BETWEEN THE CITY OF TUSTIN AND THE CITY OF SANTA ANA SUMMARY: The Cities of Tustin and Santa Ana have entered into a Joint Exercise of Powers Agreement creating the Tustin-Santa Ana Transportation System Improvement Authority. The Authority will be undertaking improvements at the intersections of Dyer and Grand and Edinger and Grand. The City of Tustin wishes to fund our portion of these projects from Community Facility District Bond proceeds. This will require the Cities to enter into the Joint Community Facilities Agreement attached to this report. RECOMMENDATION: Authorize the City Manager to sign the attached Joint Community Facilities Agreement by and between the City of Tustin and the City of Santa Ana. FISCAL IMPACT: None. DISCUSSION: The Mello-Roos Community Facilities Act of 1982 is very flexible in the financing of Community Facilities. The Act allows for financing of work outside the boundaries of the District if the modifications are necessary to facilitate the development within the District. The City of Santa Ana will be undertaking intersection enhancements at Grand/Dyer and Grand/Edinger that are identified as mitigation measures in the Legacy EIS/EIR. Signing the Joint Community Facilities Agreement with Santa Ana will allow the City of Tustin to use Community Facility District proceeds to pay for our fair share of the improvements. Staff is currently preparing the documentation to create a Community Facilities District for Lennar's Columbus Grove and Columbus Square projects. The proceeds from the new CFD will be used to fund the improvements in the city of Santa Ana. Attachment \\cot-secondlusers$\ TSkaffWauff(RAN)VCFAWithCityOfSantaAnaMay2006.doc JOINT COMMUNITY FACILITIES AGREEMENT by and between CITY OF TUSTIN and CITY OF SANTA ANA Dated as of May 1, 2006 City of Tustin Community Facilities District No. 06-1 (Tustin Legacy/Lennar Homes) DOCSLAI :517226.3 JOINT COMMUNITY FACILITIES AGREEMENT THIS JOINT COMMUNITY FACILITIES AGREEMENT (this "Facilities Agreement"), dated as of May I, 2006, is by and between the CITY OF TUSTIN, a general law city organized and existing under the laws of the State of California ("Tustin"), and the CITY OF SANTA ANA, a charter city organized and existing under the laws of the State of California and its charter ("Santa Ana"). WITNE S SETH: WHEREAS, the owner of certain property within Tustin has submitted to the City Council of Tustin (the "Tustin City Council") a petition to institute proceedings under the Mello- Roos Community Facilities Act of 1982 (the "Act") to establish a community facilities district; WHEREAS, pursuant to the Act and said petition, the Tustin City Council has instituted proceedings to establish City of Tustin Community Facilities District No. 06-1 (Tustin Legacy/Lennar Homes) (the "Community Facilities District"), to authorize the levy of special taxes (the "Special Taxes") upon the land within the Community Facilities District and to issue bonds (the "Bonds") secured by the Special Taxes, the proceeds of which are to be used to finance certain public facilities; WHEREAS, the facilities proposed to be financed by the Community Facilities District include certain facilities to be owned and operated by Tustin (the "Tustin Facilities") and certain facilities to be owned and operated by Santa Ana (the "Santa Ana Facilities"); WHEREAS, Section 53316.2 of the Act provides that a community facilities district may finance facilities to be owned or operated by an entity other than the agency that created the community facilities district only pursuant to a joint community facilities agreement or a joint exercise of powers agreement adopted pursuant to said Section; WHEREAS, Section 53316.2 of the Act further provides that at any time prior to the adoption of the resolution of formation creating a community facilities district, the legislative bodies of two or more local agencies may enter into a joint community facilities agreement pursuant to said Section and Sections 53316.4 and 53316.6 of the Act to exercise any power authorized by the Act with respect to the community facilities district being created if the legislative body of each entity adopts a resolution declaring that such a joint agreement would be beneficial to the residents of that entity, and by its authorization hereof, the legislative body of each of Tustin and Santa Ana has so declared; WHEREAS, Tustin and Santa Ana desire to enter into this Facilities Agreement in accordance with Sections 53316.2, 53316.4 and 53316.6 of the Act in order to provide for the financing of the Santa Ana Facilities through the issuance of Bonds by the Community Facilities District; WHEREAS, Santa Ana and Tustin have entered into an Amendment to Joint Exercise of Powers Agreement between the City of Santa Ana and the City of Tustin Regarding the Tustin- Santa Ana Transportation System Improvement Authority, dated as of February 22, 2001 (said DOCSLA1:517226.3 1 Amendment, as originally executed or as it may from time to time be amended is referred to herein as the "Amendment"); WHEREAS, pursuant to the Amendment, Tustin is required to pay to Santa Ana Tustin's fair share obligation of certain of the costs of the Santa Ana Facilities, as and when set forth in the Amendment; and WHEREAS, Tustin and Santa Ana desire to provide a credit against Tustin's obligation to pay such costs ofthe Santa Ana Facilities pursuant to the Amendment, if and to the extent that Bond proceeds are made available to Santa Ana to pay such costs; NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: Section 1. The Community Facilities District; Issuance of Bonds. The Tustin City Council shall, in its sole discretion, determine whether and when it may be appropriate to establish the Community Facilities District. In no event shall Santa Ana have any right to compel the Tustin City Council to establish the Community Facilities District. Tustin shall engage such consultants as it may deem necessary or appropriate to facilitate the establishment of the Community Facilities District. Santa Ana shall have no responsibility for any costs incurred by Tustin in connection with the establishment of the Community Facilities District. It is anticipated that the Community Facilities District will issue Bonds to finance the acquisition, construction and installation of the Tustin Facilities and the Santa Ana Facilities. If the Community Facilities District is established, the Tustin City Council, acting as the legislative body of the Community Facilities District, shall, in its sole discretion, determine whether, when, under what conditions and to what extent Bonds shall be issued to finance the acquisition, construction and installation of the Tustin Facilities and the Santa Ana Facilities, or any combination thereof. In no event shall Santa Ana have any right to compel the Community Facilities District to issue Bonds to finance the acquisition, construction and installation of Santa Ana Facilities or to disburse Bond proceeds to pay the costs of the acquisition, construction and installation of Santa Ana Facilities. Section 2. Santa Ana Facilities. The Santa Ana Facilities, including any real or tangible property which is to be purchased, constructed, expanded or rehabilitated, are described in Exhibit A attached hereto. It is anticipated that the Community Facilities District will issue Bonds, a portion of the proceeds of which are to be available to finance the acquisition, construction and installation of the Santa Ana Facilities. If the Community Facilities District issues Bonds for such purpose, Tustin shall, or shall cause the Community Facilities District to, notify Santa Ana of the amount of such proceeds available for such purpose within 15 days of such proceeds becoming so available. Santa Ana shall not apply any of the proceeds of the Bonds to the purchase of any Santa Ana Facilities unless such Santa Ana Facilities were constructed as if they had been constructed under the direction and supervision, or under the authority of, Santa Ana. DOCSLAI :517226.3 2 Section 3. Disbursements. Bond proceeds available for the acquisition, construction and installation of the Santa Ana Facilities shall be deposited in a special account (the "Santa Ana Facilities Account") to be established under the Indenture pursuant to which the Bonds are issued. Moneys on deposit in the Santa Ana Facilities Account shall be invested and disbursed at the direction of the Community Facilities District. To the extent that Bond proceeds are available therefor, the Community Facilities District shall cause disbursements to be made from the Santa Ana Facilities Account from time to time to pay the costs of the acquisition, construction and installation of the Santa Ana Facilities upon submission of a written request of Santa Ana stating (a) the name and address of the person to whom payment is to be made, (b) the amount to be paid, (c) that an obligation in such amount has been incurred by Santa Ana, (d) the purpose for which the obligation to be paid was incurred, (e) that each item of the obligation to be paid constitutes a cost of the Santa Ana Facilities, (f) that the obligation to be paid has not been the subject of a prior Santa Ana request for disbursement from the Santa Ana Facilities Account, and (g) if the amount requested to be disbursed is to be applied to the purchase of any Santa Ana Facilities, that such Santa Ana Facilities were constructed as if they had been constructed under the direction and supervision, or under the authority of, Santa Ana. The Community Facilities District shall process in a timely manner written requests for disbursements received from Santa Ana that conform to the requirements hereof. Section 4. Credit for Tustin's Oblil!ation for Imnrovements. Upon the deposit of proceeds of the Bonds in the Santa Ana Account, Tustin shall receive a credit against the payment of its fair share obligation of the Total Costs (as defined in the Amendment) for each Improvement (as defined in the Amendment) in an amount equal to the amount so deposited, and, upon such deposit, Tustin shall be deemed to have paid, in accordance with the Amendment, such fair share obligation in an amount equal to the amount so deposited. Section S. Construction. Ownershin and Maintenance of Tustin Facilities and Santa Ana Facilities. Tustin shall be solely responsible for the acquisition, construction and installation of the Tustin Facilities, and Santa Ana shall have no responsibility therefor or liability with respect thereto. The Tustin Facilities shall be and remain the sole and separate property of Tustin and shall be operated, maintained and utilized by Tustin. Santa Ana shall not have any ownership interest in the Tustin Facilities, and Santa Ana shall have no responsibility for the operation, maintenance or utilization of the Tustin Facilities or any liability with respect thereto. Santa Ana shall be solely responsible for the acquisition, construction and installation of the Santa Ana Facilities, and Tustin shall have no responsibility therefor or liability with respect thereto. The Santa Ana Facilities shall be and remain the sole and separate property of Santa Ana and shall be operated, maintained and utilized by Santa Ana. Tustin shall not have any ownership interest in the Santa Ana Facilities, and Tustin shall have no responsibility for the operation, maintenance or utilization of the Santa Ana Facilities or any liability with respect thereto. Section 6. Tax Matters. In connection with the issuance of any Bonds, a portion of the proceeds of which are to be made available to finance the acquisition, construction and DOCSLAL517226.3 3 installation of Santa Ana Facilities, Santa Ana agrees to execute and deliver such certifications and agreements as may be reasonably required in order for bond counsel to conclude that interest on such Bonds will be excluded from gross income under Section 103 of the Internal Revenue Code of1986. Section 7. Indemnification. Tustin agrees to protect, indemnify, defend and hold Santa Ana, and its officers, employees and agents, and each of them, harmless from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys' fees and court costs which Santa Ana, or its officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from Santa Ana, or its officers, employees or agents, or any combination thereof, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the Tustin Facilities. If Tustin fails to do so, Santa Ana shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys' fees or court costs, to and recover the same from Tustin. No indemnification is required to be paid by Tustin for any claim, loss or expense arising from the willful misconduct or negligence of Santa Ana, or its officers, employees or agents. Santa Ana agrees to protect, indemnify, defend and hold Tustin and the Community Facilities District, and their respective officers, employees and agents, and each of them, harmless from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys' fees and court costs which Tustin or the Community Facilities District, or their respective officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from Tustin or the Community Facilities District, or their respective officers, employees or agents, or any combination thereof, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the Santa Ana Facilities. If Santa Ana fails to do so, Tustin and the Community Facilities District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys' fees or court costs, to and recover the same from Santa Ana. No indemnification is required to be paid by Santa Ana for any claim, loss or expense arising from the willful misconduct or negligence of Tustin or the Community Facilities District, or their respective officers, employees or agents. Section 8. Nature of Ae:reement: Allocation of Special Taxes. This Facilities Agreement shall constitute a joint community facilities agreement entered into pursuant to Sections 53316.2, 53316.4 and 53316.6 of the Act. The entire amount of the proceeds of the Special Taxes shall be allocated and distributed to Tustin. Section 9. Third-Party Beneficiarv. If and when established, the Community Facilities District shall be a third-party beneficiary of this Facilities Agreement. Section 10. Limitation of Rie:hts to Parties. Nothing in this Facilities Agreement expressed or implied is intended or shall be construed to give to any person other than Tustin, Santa Ana and the Community Facilities District, any legal or equitable right, remedy or claim DOCSLAL517226.3 4 under or in respect of this Facilities Agreement or any covenant, condition or provision herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of Tustin, Santa Ana and the and the Community Facilities District. Section 11. Notices. All written notices to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to Tustin: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: Finance Director Ifto Santa Ana: City of Santa Ana 20 Civic Center Plaza Post Office Box 1988 Santa Ana, California 92707 Attention: Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Section 12. California Law. This Facilities Agreement shall be governed and construed in accordance with the laws of the State of California. Section 13. Severability. If any part of this Facilities Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Facilities Agreement shall be given effect to the fullest extent reasonably possible. Section 14. Snccessors. This Facilities Agreement shall be binding upon and inure to the benefit of the successors of the parties hereto. Section 15. Counterparts. This Facilities Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. DOCSLAl :517226.3 5 IN WITNESS WHEREOF, the parties hereto have executed this Facilities Agreement as of the date first written above. CITY OF TUSTIN By: CITY OF SANTA ANA By: DOCSLA1 :517226.3 6 EXHIBIT A DESCRIPTION OF SANTA ANA FACILITIES The types of facilities to be owned and operated by Santa Ana and financed by the Community Facilities District are street improvements at the intersection of Grand and Dyer and street improvements at the intersection of Grand and Edinger, as described in the Amendment. Dver Road and Grand A venue Improvements Add eastbound left-turn lane Add westbound through lane Grand Avenue and Edinger Avenue Improvements Add northbound left and right-turn lane Add eastbound left and right-turn lane Add southbound left and right-turn lane Add westbound left and right-turn lane DOCSLA1 :517226.3 A-I