TITLE
Recommendation to adopt Resolution of Intention to incur bonded indebtedness of the proposed City of Long Beach Community Facilities District No. 2007-2 (Belmont Shore) in an amount not to exceed
$5.8 million; and set date of public hearing for Tuesday, December 11, 2007 at 5:00 p.m. (District 3)
DISCUSSION
In 1988, the City Council formed the City of Long Beach Community Facilities District NO.1 (Belmont Shore) (CFD 1) to provide a means to finance parking improvements in the Belmont Shore area of the City. CFD 1 was authorized to levy a special tax on commercial property located within CFD 1, and the revenues from that special tax, along with revenues derived from parking meters in the Belmont Shore area, have been used to finance various parking and related improvements, as well as to pay debt service on parking meter revenue bonds issued by the City in 1993. The Parking Commission has now identified an additional parking lot located at 189 Park Avenue that it would like the City to acquire and improve in the Belmont Shore area, and alley way improvements that need to be made to enhance parking in the area, and would like to raise funds to finance those improvements. The current CFD 1 does not have the clear authority to fund these new improvements. City Staff, working with various financial and legal consultants, have determined that the most efficient and economical way to provide funds for the new improvements is for the City to form a new community facilities district (CFD) under the authority of the City's Special Tax Financing Improvement Law, with boundaries and maximum tax rates the same as for CFD 1, for the purpose of financing the identified improvements, refinancing the 1993 bonds and allowing for possible future financing of additional parking improvements.
Under a separate City Council letter, a resolution of intention to form the CFD is being submitted. The resolution of intention to form the CFD precedes this action. Adoption of the attached Resolution (Attachment A) declares the intention of the City Council to incur bonded debt for the proposed CFD.
The Long Beach Municipal Code (LBMC), Division V, in Chapter 3.52, Long Beach Special Tax Financing Improvement Law, provides a mechanism to finance public and capital facilities and services. It authorizes the formation of community facilities districts. Once formed, a community facilities district can finance facilities and, if authorized, provide services through payment of a special tax levied against the landowners in the community facilities district. These special taxes also may be used to pay debt service on bonds issued to finance eligible facilities. The new CFD will not be authorized to fund any services.
Section 3.52.561 of the LBMC requires that City Council, by resolution, deem it necessary for a proposed community facilities district to incur bonded indebtedness, and state the amount of the proposed debt, the purpose for which the proposed debt is to be incurred, and the time and place for a hearing by the City Council on the proposed debt issue.
The Resolution provides that the maximum bonded indebtedness for the new CFD is $5,800,000 using the current maximum special tax rate for CFD 1 of 66~ per square foot of commercial land in CFD 1. If approved, special taxes for the CFD would be levied on commercial land in the CFD in accordance with the proposed Rate and Method of Apportionment of Special Tax for the proposed CFD. It is expected that the special taxes to be levied annually in the new CFD will be at the same rate as those currently levied in CFD 1 ($.12 per commercial square foot of land), and that parking meter revenues from the Belmont Shore area in the amount of $200,000 per fiscal year also will be used to assist in the payment of bonds to be issued for the new CFD.
On December 21, 1999, the City Council adopted Local Goals and Policies for Community Facilities Districts Related to Commercial Development (Attachment B). These require certain lien-to-value ratios and provide for other financing restrictions applicable to bonds issued for community facilities districts.
The Resolution provides for a public hearing on the proposed debt issuance, which is scheduled on December 11, 2007 at 5:00 p.m. Following the public hearing, a special election will be held at which landowners in the proposed CFD will vote on forming the CFD, assessing the special tax and approving the proposed bonded indebtedness for the CFD.
As described in the City Council letter for the other Resolution of Intention to form the CFD, the boundaries for the CFD are proposed to be the same as the boundaries for the current CFD 1, which is to be replaced with the new CFD.
This item was reviewed by Assistant City Attorney Heather A. Mahood on October 31, 2007 and Budget Management Officer Victoria Bell on November 1, 2007.
TIMING CONSIDERATIONS
City Council action on this item is requested on November 13, 2007, to support activities and proceedings to incur debt after the formation of the CFD.
FISCAL IMPACT
There is no fiscal impact to the City associated with the requested action. All bond proceeds and CFD revenue will be collected in, and expended from CFD trust accounts. All expenses related to the formation of the CFD will either be paid from the proceeds of bonds issued for the CFD or from amounts currently available in the Belmont Shore Parking Revenue Fund.
SUGGESTED ACTION
Approve recommendation.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH DECLARING ITS INTENTION TO INCUR BONDED INDEBTEDNESS OF THE PROPOSED CITY OF LONG BEACH COMMUNITY FACILITIES DISTRICT NO. 2007-2 (BELMONT SHORE)
Respectfully Submitted,
LORI ANN FARRELL
ACTING DIRECTOR OF FINANCIAL MANAGEMENT
MICHAEL CONWAY
ACTING DIRECTOR OF COMMUNITY DEVELOPMENT
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APPROVED: |
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PATRICK H. WEST |
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CITY MANAGER |