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HomeMy WebLinkAbout2009-025 RDA Lake Park Sign & Frontage ImprvmtFINANCING AGREEMENT LAKE PARK SIGN AND FRONTAGE IMPROVEMENTS PROJECT THIS FINANCING AGREEMENT ("Agreement") is made and entered into this 8`h day of December, 2009 by and between the CITY OF ATASCADERO, a general law city and municipal corporation ("City") and the COMMUNITY REDEVELOPMENT AGENCY OF ATASCADERO, a public body, corporate and politic ("Agency") Hereinafter, City and Agency shall be referred to collectively as the "Parties" and singularly as the "Party " RECITALS WHEREAS, the City Council previously adopted a Redevelopment Plan (the "Redevelopment Plan") for a redevelopment project area (the "Project Area"), and WHEREAS, the Agency is vested with responsibility pursuant to the Community Redevelopment Law (Part I of Division 24 of Health and Safety Code of the State of California) (the "Law") to implement the Redevelopment Plan both within and without the Project Area, and WHEREAS, the City has commenced planning for the construction of Lake Park Sign and Frontage Improvements Project (the "Project") at Atascadero Lake Park within the City, which public facilities upon their completion will be owned and operated by the City; and WHEREAS, the City lacks sufficient capital or general funds available which could be used to fully fund the Project and bring it to completion and it is not practical to arrange for assessment district or similar financing for the Project; and WHEREAS, the City has represented to the Agency that final planning and public bidding required before construction on the Project may commence and may take up to 24 months to be completed, and WHEREAS, the Project will address the goals and objectives of the Redevelopment Plan for the Project Area and will be of benefit to the Project Area in that the Project will improve the public safety attract additional tourists, assist with improving physical aesthetics, and alleviate blighting conditions in the area serving as the gateway to the Project Area, and WHEREAS, the Project is consistent with and will promote the Agency's Implementation Plan, and WHEREAS, the Agency intends to provide funding ("the Agency Funds") to assist the City with the cost of the Project because the Project will directly benefit the Project Area, and WHEREAS, pursuant to Health and Safety Code Section 33445, the Agency may, with the consent of the City Council, pay part or all of the cost of the construction of the Project if the Board and the City make certain specified findings, and WHEREAS, a noticed public hearing was held on December 8, 2009 wherein the Agency adopted Resolution No making all required findings for the use of Agency funds for the Project pursuant to Section 33445 NOW, THEREFORE, the Parties hereto state and agree as follows 1 The purpose of this Agreement is to set forth the understanding and agreement of the Parties with respect to the Agency's commitment to fund of the Project. The contents of this Agreement are intended to be as comprehensive as possible with respect to the Agency's commitment of funds to the Project yet not exhaustive with respect to additional issues that may arise relative to the development of the Project. In the event that issues occur that are not identified in this Agreement, the Parties agree to work together in good faith to resolve each matter 2 The Parties understand that the City will be required to complete final planning and public bidding required before construction on the Project may commence. Those final plans and the public bidding are prerequisites for the City's construction of the Project, including the improvements that will be of benefit to the Project Area. 3 The Parties further understand that the City expects that undertaking final planning activities, putting the Project out to bid, receiving bids, selecting a contractor and negotiating a contract with the selected contractor will take at least 6 months and could take as long as 24 months 4 The estimated total cost of the Project is $450,000 00 ("Total Cost") The Agency anticipates that the Project will address the goals and objectives of the Redevelopment Plan for the Project Area and will be of benefit to the Project Area by improving public safety, attracting additional tourists, enhancing the visitors' experience, assisting with improving physical aesthetics, and alleviating blighting conditions in the area serving as the gateway to the Project Area. The Agency has agreed to commit a total sum of four hundred thirty thousand, one hundred eighty dollars and no cents ($430,180 00) ("Agency Funds") to the Project to pay for the direct benefit to the Project Area. 5 The Parties agree that the Agency shall use the Agency Funds to the extent such funds have not been previously committed and are available in the Agency General Fund 220 to pay for and/or reimburse City for costs and expenses associated in any way with the design and construction of the Project including, but not limited to, services and costs for design, construction, installation, landscaping, project management, outside construction support, CEQA costs, necessary permits, temporary construction easements, and access agreements 6 Within thirty (30) business days of the Parties executing this Agreement, Agency shall segregated the sum of four hundred thirty thousand, one hundred eighty dollars and no cents ($430,180 00) within the Agency's accounts to be held in a separate account ("Escrow Account") to pay the Agency's share of the Project costs The Agency Funds shall be held in the Escrow Account until 2 months from the later of the date the project is completed or the date of the final invoice. The City shall request reimbursement from the Agency for Project costs actually incurred and the Agency shall reimburse the City from the Agency Funds in the Escrow Account. It is understood and agreed between the Parties that any funds remaining in the Escrow Account at the expiration of the 2 month period following the later of the date of the project completion or the date of the last invoice shall revert to the full control and discretion of the Agency 7 The City understands and agrees that the sources of the Agency Funds may be the proceeds of tax exempt bonds secured by the tax increment revenue the Agency receives pursuant to California Health and Safety Code Section 33670 (the "Bonds") If bonds are used as a funding source, the City covenants and agrees with respect to the Project to comply with all applicable requirements of the federal Internal Revenue Code necessary to preserve the tax- exempt status of the interest on the Bonds and specifically covenants, without limiting the generality of the foregoing, as follows (a) Private Activity The City will take no action or refrain from taking any action or make any use of the proceeds of the Bonds or of any other monies or property which would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended, and (b) Arbitrage The City will make no use of the proceeds of the Bonds or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and (c) Federal Guaranty The City will make no use of the proceeds of the Bonds or take or omit to take any action that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended, and (d) Information Reporting. The City will cooperate with the Agency in providing information that the Agency needs to comply with the informational reporting requirement of Section 149(e) of the Internal Revenue Code of 1986, as amended, and (e) Hedge Bonds. The City will make no use of the proceeds of the Bonds or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause the Bonds to be considered "hedge bonds" within the meaning of Section 149(g) of the of the Internal Revenue Code of 1986, as amended, unless the City takes all necessary action to assure compliance with the requirements of Section 149(g) of the of the Internal Revenue Code of 1986, as amended, to maintain the tax exempt status of interest on the Bonds for federal income tax purposes and such action has been approved by the Agency 8 In contemplation of the provisions of Section 895.2 of the California Government Code imposing certain tort liability jointly upon public entities solely by reason of such entities being Parties to an agreement as defined in Section 895 of said code, the Parties hereto, as between themselves pursuant to the authorization contained in Sections 895 2 and 895 6 of said code, will each assume the full liability imposed upon it or any of its officers, agents or employees by law for personal injury, property damage or loss to third Parties caused by a negligent or wrongful act or omission of that party occurring in the performance of the Agreement. To achieve the above stated purpose, each party indemnifies and holds harmless the other party for any damage, loss, cost or expense arising out of its own negligent or wrongful acts or omissions. 9 This Agreement shall be governed by the laws of California and together with the attached exhibits represents the entire agreement of the Parties as to the subject matter of this Agreement. IN WITNESS WHEREOF, the City and Agency have approved the foregoing FINANCING AGREEMENT and caused the same to be executed by their duly authorized officers as set forth below CITY (� ( "B y' City Manager APPROVED AS ;FORM City Attorney AGENCY 1 A' By• V11� Executive Dire for APPROVED AS T,0fORM Bye R-s-� Agency General Counsel Atascadero City Council ITEM NUMBER. C - 4 DATE 12/08109 Staff Report — Administrative Services Department Allocation of Funds for Lake Park Sign and Frontage Improvements Project RECOMMENDATIONS Council 1 Authorize the City Manager to execute a Financing Agreement between the Community Redevelopment Agency of Atascadero and the City of Atascadero, and, 2 Authorize the Director of Administrative Services to amend the budget by increasing Transfer from Redevelopment Agency Revenues by $430,180 and appropriating $430,180 of these revenues for the Lake Park Sign and Frontage Improvements Project. DISCUSSION The Redevelopment Agency Board has indicated in the past that the City's Lake Park Sign and Frontage Improvements Project was a high priority and one that should be funded with Agency General Funds The Agency began budgeting for this project in fiscal year 2007-2008 and funding for the entire project is currently included in the Agency's budget. Recent legislation has passed and will take effect on January 1, 2010 that limits the Agency's ability to fund this and other projects outside the Redevelopment Project Area unless funds are committed to the project prior to the end of the calendar year Because the Board continues to see this project as a high priority and would like to fund it with Agency funds, the Board has adopted a resolution to that effect earlier tonight. Execution of this agreement commits the City to completing the Lake Park Sign and Frontage Project and being reimbursed by the Agency (up to $430,180) for the project. The City will not receive any additional administration funds from the Agency, and there will be no net effect on City finances The Project Staff has commenced planning and design for the construction of the Lake Park Sign and Frontage Improvements Project. This project provides for landscaping and other improvements along Highway 41 from the Lake Park driveway to the Veteran's Memorial It will include signage for the Lake Park, and ornamental fencing along the pedestrian path The project will enhance the beauty of the park and the Highway 41 corridor, provide safety for pedestrians, and alleviate the blighted conditions The location of the Lake Park is considered to be the western gateway to the City The completion of this project is expected to improve the beauty and alleviate the blighted condition of this gateway area, enhance visitors' experiences, and generate additional tourism throughout the City and the Redevelopment Project Area Additionally, the project will provide residents of the City an enhanced and more aesthetically pleasing recreational opportunity No Other Method of Financing With the condition of the local, state, and national economy, the City has reduced the general fund budget. All but the highest Council priorities have been cancelled or postponed The City has indicated to the Agency that sufficient funding is not otherwise available It is not practical to arrange for an assessment district or other funding mechanism for the project at this time FISCAL IMPACT The City will receive $430,180 from the Redevelopment Agency and will expend $430,180 on completion of the City's Lake Park Sign and Frontage Improvements Project. ATTACHMENT 1 Draft Financing Agreement -- Lake Park Sign and Frontage Improvements