TITLE
Recommendation to adopt Resolution of Intention to establish the City of Long Beach Community Facilities District No. 2007-2 (Belmont Shore); initiate proceedings to levy special taxes; approve boundaries and rate and method of apportionment of special taxes; establish voting procedure; 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.
The refinancing of the 1993 bonds, which bear interest at a rate above current market rates, will allow for additional capacity to fund the improvements from special taxes levied in the new CFD and bonds to be issued for the new 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. Once the new CFD is established, the City will take action to terminate the current CFD 1, so the property in the new CFD will only be subject to a single special tax levy. The current maximum special tax rate for CFD 1 is $.66 per square foot of commercial land and it is proposed that the new CFD have the same maximum special tax rate; however, it is contemplated that the initial bonded debt of the new CFD will only require the same $.12 per commercial square foot of commercial land annual rate (in addition to $200,000 of annual parking meter revenues) to service the bonds to be issued to finance the new parking and related improvements and to refinance the 1993 bonds.
The Long Beach Municipal Code, Division V, Chapter 3.52, contains the Long Beach Special Tax Financing Improvement Law, which governs the formation by the City Council of community facilities districts. On December 21, 1999, the City Council adopted Local Goals and Policies for CFDs related to commercial development (attached as Exhibit A), including which law and goals and policies will apply to the formation of the CFD and any bonded indebtedness issued by the City for the CFD. The Special Tax Financing Improvement Law, which is broader than the State's Mello Roos Law, provides a mechanism to form community facilities districts and to finance public capital facilities and services. Once formed, a community facilities district can finance facilities and provide services through payment of a special tax levied against the owners of land in the community facilities district. These special taxes are then used to make bond payments and to pay for any authorized municipal services. The new CFD will not be authorized to fund any services. A consecutive City Council letter and resolution discussing the intention to incur tax-exempt bonded indebtedness for the proposed CFD is being submitted on this date under separate cover.
Adoption of the attached Resolution (Exhibit B) will declare the City Council's intention to initiate the CFD formation proceedings and set a public hearing on the proposed CFD for December 11, 2007 at 5:00 p.m. The Resolution describes the proposed boundaries of the CFD, the proposed special taxes to be levied on property within those boundaries, indicates the intention of the City Council to issue bonds for the CFD payable from the special taxes, and provides for a public hearing on the proposed CFD at the City Council meeting on December 11, 2007. The Resolution also designates the law firm of Quint & Thimmig LLP as bond counsel and disclosure counsel, the firm of E.J. De La Rosa & Co., Inc. as underwriter, the firm of NBS Government Finance Group as special tax consultant, and the firm of Gardner, Underwood & Bacon LLC as financial advisor to the City for the proposed CFD and authorizes the City Attorney and the City Manager or designee, as applicable, to enter into agreements with said firms for their services related to the CFD. The exhibits to the Resolution describe the facilities that would be eligible to be funded by the CFD, and sets forth the rate and method of apportionment of special taxes that would be authorized to be levied on property in the CFD.
The boundary map for the proposed CFD (Exhibit C) shows the parcels to be included, which are the same parcels currently located in CFD 1.
Immediately following the public hearing called for by the Resolution on December 11, 2007, it is expected that an election will be called for March 3, 2008, at which the landowners in the proposed CFD will vote on the establishment of the CFD and the levy of the special tax. The results of this election would then be announced at the March 4, 2008 City Council meeting.
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 the activities and formation of the CFD, so that the financing of the proposed parking improvements can occur in the late Spring of 2008.
FISCAL IMPACT
There is no fiscal impact to the City associated with the requested action. All bond proceeds and revenue from the CFD 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 ESTABLISH A COMMUNITY FACILITIES DISTRICT AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES THEREIN - BELMONT SHORE AREA
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 |