HomeMy WebLinkAboutAGENDA 2012 0516 CC SPC ITEM 05A ITEM 5.A.
.. OF MOORRARK,CALli G!`
City Council Meeting
of 16 , ora
MOORPARK CITY COUNCIL - - - --- -�� - -
AGENDA REPORT
To: Honorable City Council .
From: David C. Moe 11, Redevelopment Managerl�' A
Date: May 14, 2012 (Meeting of 5116/12)
Subject: Consider an Agreement for the Use of Bond Proceeds for Capital
Improvements, as Authorized by Health and Safety Code Sections
34178 and 34180, Between the City of Moorpark Acting in its Role as
Successor Agency to the Former Redevelopment Agency of the City
of Moorpark and the City of Moorpark
BACKGROUND
On January 19, 2004 the City Council awarded a contract to HMC Architects ("HMC")
for preparation of conceptual site and building design for the Ruben Castro Human
Services Center ("RCHSC"). After the completion of these services, an agreement was
awarded to HMC to complete the total design of the building. On February 26, 2008, the
Planning Commission recommended conditional approval of Commercial Planned
Development Permit No.2007-02 to the City Council. On May 21, 2008, the City Council
approved Commercial Planned Development Permit No.2007-02 with certain conditions.
On December 21, 2006, The Redevelopment Agency of the City of Moorpark
("Redevelopment Agency") issued tax exempt bonds to finance the design and
construction of the RCHSC.
The design work and construction plans were completed by HMC and on May 19, 2010,
the City Council authorized staff to advertise for construction bids subject to the City's
receipt of signed Memorandums of Understanding (MOU) from the County of Ventura
and other project tenants, Catholic Charities, First 5 Nfl and Interface Children and
Family Services.
On January 16, 2008, the City Council authorized using the Multiple Prime Construction
Management method for the construction of the RCHSC. Using this method, the City is
taking the role of General Contractor, while hiring prime contractors to perform the
different trade components of the work.
1
Honorable City Council
May 16, 2012
Page 2
On January 19, 2011, the City approved the various contracts to.construct the RCHSC
and the City started the construction.
On June 29, 2011, Governor Brown signed into law ABx1 26, which was intended to
dissolve redevelopment agencies. Shortly after the bill was signed into law, the
California Redevelopment Association, League of California Cities, and some individual
cities and redevelopment agencies brought suit to invalidate the bill. During the
pendency of the litigation, most redevelopment powers were stayed and the CRA had
only limited power to act.
The litigation brought by the California Redevelopment Association and others resulted
in the California Supreme Court upholding ABx1 26 and consequently, on February 1,
2012, the Redevelopment Agency was dissolved pursuant to that legislation and the
City serves as the Successor Agency, with statutory duties and obligations related to
the former Redevelopment Agency's assets, duties, and obligations. Among the duties
and obligations of the Successor Agency is the use of any bond proceeds for "the
purposes for which bonds were sold unless the purposes can no longer be achieved"
pursuant to California Health and Safety Code section 34177(i).
On April 17, 2012, the Oversight Board approved the Recognized Obligation Payment
Schedule ("ROPS").
After the ROPS was approved by the Oversight Board, staff noticed calculation errors.
The approved and revised ROPS were sent to the Department of Finance ("DOF") on
May 1, 2012, for their review and comment with a memorandum explaining the errors
and informing the DOF a revised ROPS was going to be considered by the Oversight
Board on May 15, 2012. On May 3, 2012, the DOF responded to staff stating that the
approved ROPS contained errors and has been rejected. On May 15, 2012, the
Oversight Board approved the revised ROPS.
DISCUSSION
The DOF also informed staff that the all contracts between the City of Moorpark and
various contractors pertaining to the RCHSC would need to be removed, because the
contracts were held by the City and not the Redevelopment Agency.
The RCHSC is a City project that was being funded by the Redevelopment Agency with
bond proceeds issued in 2006. All contracts for the design and construction of the
RCHSC are held by the City. This practice of utilizing redevelopment tax increment for
funding City projects has been utilized since the creation of the Redevelopment Agency.
2
Honorable City Council
May 16, 2012
Page 3
Removing these contracts from the ROPS would halt payments owed to various
contractors and ultimately stop the project a few short months from completion..
ABx1 26 requires, in section 34177(1) that bond proceeds to be used for the purpose for
which the bonds were issued if that purpose can still be achieved, The Successor
Agency of the Redevelopment Agency of the City of Moorpark will be considering the
attached agreement, as Authorized by Health and Safety Code sections 34178 and
34180, for the use of bond proceeds for capital improvements needed to complete the
RCHSC project later on the agenda.
Due to the newly imposed deadline by the DOF, staff requested Oversight Board pre-
approval of the agreement in advance of the City and Successor Agency consideration.
On May 15, 2012, the Oversight Board approved the agreement.
STAFF RECOMMENDATION
Approve Agreement and authorize Mayor to sign on behalf of the City.
Attachment I — Bond Proceeds Use Agreement
3
AGREEMENT FOR THE USE OF BOND PROCEEDS
FOR CAPITAL IMPROVEMENTS
This Agreement for the Use of Bond Proceeds for Capital Improvements
("Agreement"), which is dated for reference as , is hereby
entered into by and between THE CITY OF MOORPARK, ACTING IN ITS
CAPACITY AS SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT
AGENCY OF THE CITY OF MOORPARK ("Successor Agency") and THE CITY OF
MOORPARK, a general law city and municipal corporation ("City"), as follows:
RECITALS
A. On December 21, 2006, the former Redevelopment Agency of the City of
Moorpark ("MRA") issued bonds primarily for the purpose of construction of a
human services center as stated in the Official Statement for the 2006 Bonds.
B. On June 16, 2010, the MRA approved the use of eight million nine hundred
twenty-five thousand five hundred dollars ($8,925,500.00) in bond proceeds
(the "Bond Proceeds") for the purpose of constructing two buildings totaling
approximately 25,000 square feet housing non-emergency medical dental
services, educational uses, and charitable services such as Catholic Charities
and First 5-Neighborhoods for learning, and a County of Ventura medical
building and additional space for the County Human Services Agency called
the Ruben Castro Human Services Center (the "Project").
C. On January 4, 2004, in reliance on the MRA's approval of the use of Bond
Proceeds for the Project, the City engaged HMC Architects for the design and
engineering of the Project. On May 19, 2010, the City issued an invitation for
bids on various portions of the Project after deciding that the Project would be
constructed as a multiple-prime project as recommended by the City's
construction manager Balfour Beatty Construction. On January 19, 2011, the
City awarded the multiple prime contracts for the Project to Jensen Design,
Damar Construction, Pierre Sprinkler, Precision Plumbing, Santa Clarita
Concrete, Steelcon, K&Z Cabinets, Best Roofing, Best Roofing, Center Glass
Company, SDI — Standard Drywall, Inc., Reliable Floor Covering, John Pence
Building Specialties, Environmental Heating and Air, and Taft Electric.
D. On June 29, 2011, Governor Brown signed into law ABx1 26, which was
intended to dissolve redevelopment agencies, including the MRA, statewide.
Shortly after the bill was signed into law, the California Redevelopment
Association, League of California Cities, and some individual cities and
redevelopment agencies brought suit to invalidate the bill. During the
pendency of the litigation, most redevelopment powers were stayed and the
CRA had only limited power to act.
1
LA#4811-1239-7071 v1
4
E. The litigation brought by the California Redevelopment Association and others
resulted in the California Supreme Court upholding ABx1 26 and consequently,
on February 1, 2012, the MRA was dissolved pursuant to that legislation and
the City serves as the Successor Agency, with statutory duties and obligations
related to the former MRA's assets, duties, and obligations.
G. Among the duties and obligations of the Successor Agency is the use of any
bond proceeds for "the purposes for which bonds were sold unless the
purposes can no longer be achieved" pursuant to California Health and Safety
Code section 34177(i).
H. The parties agree that the Project is at a critical juncture and that the Bond
Proceeds from the MRA 2006 Tax Increment Bond issuance, which were
previously dedicated to the Project both through the bond debenture
documents and by action of the MRA on June 16, 2010, would assist in
completing the Project; further, the parties acknowledge that completion of the
Project would be financially improbable without the Bond Proceeds.
1. While ABx1 26 generally does not allow the Successor Agency to enter into
new contracts, Health and Safety Code section 34178(a) allows it to enter or
re-enter into agreements with the City upon approval of its oversight board.
This clear statutory authority for the existence of this Agreement between the
City and the Successor Agency allows the City to execute this Agreement for
the transfer of funds between the parties to accomplish the purposes for which
the MRA 2006 Tax Increment Bond issuance was made.
J. On May 15, 2012, the Oversight Board for the Successor Agency to the former
Moorpark Redevelopment Agency approved this Agreement.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the promises made and recited
herein, the City and Successor Agency do hereby AGREE as follows:
1. PROJECT FUNDING. The Successor Agency shall, within ten (10) business
days of the effective date of this Agreement, as defined below, transfer to the City the
amount of five million one hundred thirty-nine thousand dollars ($5,139,000.00) in
proceeds from the 2006 Tax Increment Bond issuance by the MRA. The parties agree
that these Bond Proceeds were the result of bonds issued in whole or in part for the
construction of the Project and that the Project may still be brought to completion, thus
complying with the mandate of Health and Safety Code section 34177(1).
2. USE OF FUNDS AND REPORTING. The City shall do both of the following:
2.1. The City shall use the Bond Proceeds for those portions of the Project for
which the bonds were issued. At no time shall the City have authority to use the
2
LA 44811-1239-7071 v1
Bond Proceeds for any non-Project activities nor for any portions of the Project
for which alternate funding was pledged or secured.
2.2. The City shall provide the Successor Agency with quarterly reports that
shall include but not be limited to the amount of Bond Proceeds spent during the
reporting period, the names of all contractors paid with Bond Proceeds, the
activities that were funded by the Bond Proceeds, and the amount of Bond
Proceeds remaining in the City's custody and control.
3. RETURN OF UNSPENT FUNDS. Upon completion of the Project, the City shall
return to the Successor.Agency all Bond Proceeds not needed for or spent on the
Project or other uses consistent with the purposes for which the bonds were issued.
4. EFFECTIVE DATE. The parties recognize that pursuant to ABx1 26, the
California Department of Finance has three (3) days to request review of any action of
the Oversight Board and to notify the Successor Agency of its request for review.
Further, the State has ten (10) days following a request for review to challenge any
approval by the Oversight Board. Notwithstanding the prior approval of the Oversight
Board of this Agreement, the parties did not execute the Agreement until after approval
(tacit or explicit) of this Agreement by the Department of Finance. The Agreement is
therefore effective upon the date and year written above
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year written above.
CITY:
CITY OF MOORPARK
Janice Parvin, Mayor
ATTEST:
Maureen Benson, City Clerk
3
LA#4811-1239-7071 V1
SUCCESSOR AGENCY:
CITY OF MOORPARK ACTING AS
SUCCESSOR AGENCY TO THE
FORMER REDEVELOPMENT AGENCY
OF THE CITY OF MOORPARK
Steve Kueny, Executive Director
ATTEST:
Maureen Benson, Agency Secretary
APPROVED AS TO FORM
4
LA#4811-1239-7071 v1