HomeMy WebLinkAboutR37- Economic Development CITY OF SAN BERNARDINO ORIGINAL
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A.Marzullo SUBJECT: Tax and Equity Fiscal Responsibility Act
Interim Executive Director (TEFRA) Public Hearing for the issuance of
recovery zone facility bonds by the San
Bernardino Joint Powers Financing Authority
DATE: August 26,2010 for the benefit of the City of San Bernardino
Redevelopment Agency
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Synousis of Previous Commission/Council/Committee Action(s):
On August 20,2009,Redevelopment Committee Members Johnson,Baxter,and Brinker unanimously voted to recommend that
the Mayor and Common Council consider designating the City of San Bernardino as a Recovery Zone under the American
Recovery and Reinvestment Act of 2009.
On September 21, 2009, the Mayor and Common Council designated the City of San Bernardino as a Recovery Zone for the
purposes of Section 14000-1, 1400U-2,and 140OU-3 of the Internal Revenue Code of 1986.
On July 22,2010,Redevelopment Committee Members Johnson,Marquez,and Brinker unanimously voted to recommend that
the Mayor and Common Council and the Joint Powers Financing Authority adopt the required Resolutions to approve the
financing of projects designated by the City of San Bernardino, within the City's Economic Recovery Zone, and declare the
intention to issue Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds for the projects designated.
On August 2, 2010,the Mayor and Common Council approved Resolutions approving the financing of the projects designated
by the City within the City's Economic Recovery Zone and declaring its intention pursuant to Treasury Regulation 1.150-2 to
use funds for said projects.
On August 2,2010,the Joint Powers Financing Authority declared its intention to issue Recovery Zone Bonds for the Projects
designated by the City within the City's Recovery Zone.
kmomn`-m---------------------
Recomeuded Motion(s):
OPEN/CLOSE TEFRA PUBLIC HEARING
(Mayor and Common Council)
Resolution of the Mayor and Common Council of the City of San Bernardino Approving the Issuance of Recovery
Zone Facility Bonds by the San Bernardino Joint Powers Financing Authority for the Benefit of the
j Redevelopment Agency of the City of San Bernardino
Contact Person(s): Kathleen Robles Phone: (909)663-1044
Project Area(s): All Ward(s): All
Supporting Data Attached: Q Staff Report 0 Resolution(s)0 Agreement(s)/Contract(s)O Map(s)0 Letter(s)
Funding Requirements: Amount: $ -0- Source: N/A
Budget Authority: ez N/A
Signature: Fiscal Review:
Efbil A. Marzullo,Interim Ew tiv�recto—r Lo Ill n r ' Financial Officer
Commission/Council Notes:
P:Ugend To=m y Co=iuionTDC20IM-07-3010RxartryZoosBOA-TEFMSR.dOCX COMMISSION MEETING AGENDA
Meeting Date: 09/07/2010
Agenda Item Number: "7
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
TAX AND EQUITY FISCAL RESPONSIBILITY ACT (TEFRA) PUBLIC HEARING FOR THE
ISSUANCE OF RECOVERY ZONE FACILITY BONDS BY THE SAN BERNARDINO JOINT
POWERS FINANCING AUTHORITY FOR THE BENEFIT OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO
BACKGROUND:
On February 17, 2009, Congress passed the American Recovery and Reinvestment Act of 2009 (the
"Act") which provides for the issuance of Recovery Zone Economic Development Bonds ("RZEDBs")
and Recovery Zone Facility Bonds ("RZFBs") by states, counties and large municipalities between 2009
to January 1, 2011. Based upon review of the Act, the City of San Bernardino (the "City") is eligible to
issue bonds under the Act if it declares itself a"recovery zone"within the meaning of the Act.
On September 21, 2009, the Mayor and Common Council of the City of San Bernardino ("Council")
approved Resolution No. 2009-328, designating the City as a "recovery zone" pursuant to the American
Recovery and Reinvestment Act of 2009 (the "Act") as codified in the Internal Revenue Code of 1986, as
amended (the "Code"). The City received an allocation of$10,602,000 for the issuance of facility bonds
which are a form of private activity bonds. The Code requires that prior to the issuance of private activity
bonds,the local governing jurisdiction hold a public hearing to approve the project.
CURRENT ISSUE:
To maintain the allocation for the RZFBs, it is necessary for the Council to conduct a Tax and Equity
Fiscal Responsibility Act ("TEFRA") public hearing, as required by federal law and the Joint Powers
Agreement between the City and the Authority regarding the proposed $10,602,000 million public
financing for the "E" Street Project. The proposed structure of the bond financing and all terms and
conditions have been determined by the Redevelopment Agency of the City of San Bernardino's
("Agency")underwriter.
Agency Staff has determined that facility bonds issued under the Act may be used to finance the
acquisition and site preparation for the construction of commercial and retail facilities within the
downtown San Bernardino area (the 4e'E' Street Project"). Said project would be secured initially by
available Agency revenues and a deed of trust on the properties purchased for development. Thereafter,
j the `B" Street Project will be transferred to a developer to develop the project. After the transfer, the
security for the "E" Street Bonds will be lease revenues generated from the tenants of the "E" Street
Project, a developer guaranty(if necessary), a deed of trust and an Agency standby security agreement.
Pursuant to Section 147(f)of the Code, City staff has caused the publication of a notice of TEFRA public
hearing to be held on September 7,2010.
P 1Agvdu�=Nv CO imonTC 301MA -2010 Recoveryg eaplde-r SR.docx COMMISSION MEETING AGENDA
Meeting Date: 099/077/2010
Agenda Item Number: -"I
Economic Development Agency Staff Report
Recovery Zone Bonds
Page 2
ENVIRONMENTAL IMPACT:
The action of approving the attached resolution does not constitute a"project"under Section 15378 of the
California Environmental Quality Act.
FISCAL IMPACT:
There will be no adverse impact to the City for the approval of the "E" Street Project within the City's
jurisdiction. The project is secured by revenue sources other than City's revenues. Upon the issuance of
various series of bonds, any impact upon the City's General Fund will be determined at that time.
Account Budgeted Amount: $0.00 Balance as of September 26, 2010
Balance after approval of this item: $0.00
? RECOMMENDATION:
That the Mayor and Common Council adopt the attached Resolution.
Emil A. Marzullo,Interim Execu e Director
P wpnw ¢on,nn Dev CoMnson\CDC 2010WM72010 Recovery Zone Bonds-TEEM SR.docx COMMISSION MEETING AGENDA
Meeting Date: 09/07//2010
in
Agenda Item Number: Z 1
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
TAX AND EQUITY FISCAL RESPONSIBILITY ACT (TEFRA)PUBLIC HEARING FOR THE
ISSUANCE OF RECOVERY ZONE FACILITY BONDS BY THE SAN BERNARDINO JOINT
POWERS FINANCING AUTHORITY FOR THE BENEFIT OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO
BACKGROUND:
On February 17, 2009, Congress passed the American Recovery and Reinvestment Act of 2009 (the
"Act") which provides for the issuance of Recovery Zone Economic Development Bonds ("RZEDBs")
and Recovery Zone Facility Bonds ("RZFBs") by states, counties and large municipalities between 2009
to January 1,2011. Based upon review of the Act, the City of San Bernardino (the "City") is eligible to
issue bonds under the Act if it declares itself a"recovery zone"within the meaning of the Act.
On September 21, 2009, the Mayor and Common Council of the City of San Bernardino ("Council")
approved Resolution No. 2009-328, designating the City as a "recovery zone" pursuant to the American
Recovery and Reinvestment Act of 2009 (the "Act") as codified in the Internal Revenue Code of 1986, as
amended (the "Code"). The City received an allocation of$10,602,000 for the issuance of facility bonds
which are a form of private activity bonds. The Code requires that prior to the issuance of private activity
bonds,the local governing jurisdiction hold a public hearing to approve the project.
CURRENT ISSUE:
To maintain the allocation for the RZFBs, it is necessary for the Council to conduct a Tax and Equity
Fiscal Responsibility Act ("TEFRA") public hearing, as required by federal law and the Joint Powers
Agreement between the City and the Authority regarding the proposed $10,602,000 million public
financing for the "E" Street Project. The proposed structure of the bond financing and all terms and
conditions have been determined by the Redevelopment Agency of the City of San Bernardino's
("Agency")underwriter.
Agency Staff has determined that facility bonds issued under the Act may be used to finance the
acquisition and site preparation for the construction of commercial and retail facilities within the
downtown San Bernardino area (the "'E' Street Project"). Said project would be secured initially by
available Agency revenues and a deed of trust on the properties purchased for development. Thereafter,
the "E" Street Project will be transferred to a developer to develop the project. After the transfer, the
security for the "E" Street Bonds will be lease revenues generated from the tenants of the "E" Street
Project, a developer guaranty(if necessary), a deed of trust and an Agency standby security agreement.
Pursuant to Section 147(f)of the Code, City staff has caused the publication of a notice of TEFRA public
hearing to be held on September 7, 2010.
P:\Agma.\c== coo maaTx 201Mw -2010 a a away zme eooaa-reran srt.docx COMMISSION MEETING AGENDA
Meeting Date: 09/07/2010
Agenda Item Number: �31
1 RESOLUTION NO. COPY
2
3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
4 OF SAN BERNARDINO APPROVING THE ISSUANCE OF RECOVERY
ZONE FACILITY BONDS BY THE SAN BERNARDINO JOINT POWERS
5 FINANCING AUTHORITY FOR THE BENEFIT OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
6
7 WHEREAS, the City of San Bernardino, California (the "City") is a municipal corporation
8 and charter city, duly organized and existing pursuant to the provisions of the constitution of the
9 State of California; and
10 WHEREAS, the Community Development Commission of the City of San Bernardino (the
11 "Commission") is the governing body of the Redevelopment Agency of the City of San Bernardino
12 (the "Agency"), a public body, corporate and politic, established by the City and organized and
13 existing pursuant to the California Community Redevelopment Law (Health and Safety Code
14 Section 33000,et seq.)(the"CRL"); and
15 WHEREAS, the City and the Agency have heretofore entered into a Joint Exercise of
16 Powers Agreement establishing the San Bernardino Joint Powers Financing Authority (the
17 "Authority") for the purpose of issuing bonds, the proceeds of which may be loaned to any of its
18 members to finance public capital improvements; and
19 WHEREAS, Congress passed the American Recovery and Reinvestment Act of 2009 (the
20 "Act') which amends the Internal Revenue Code of 1986 (the "Code") to authorize a city to
21 designate a "recovery zone" for the purpose of issuing Recovery Zone Economic Development
22 Bonds under Section 1400U-2 of the Code, and Recovery Zone Facility Bonds under Section
23 1400U-3 of the Code to promote economic recovery within the country; and
24 WHEREAS, pursuant to Resolution No. 2009-328 entitled the"Resolution of the Mayor and
25 Common Council of the City of San Bernardino Designating the City of San Bernardino as a
26 Recovery Zone for Purposes of Sections 1400U-1, 1400U-2 and 1400U-3 of the Internal Revenue
27 Code of 1986," adopted on September 21, 2009, the City designated the entire geographical area of
28 the City a "recovery zone," and the City has received an allocation from the State of California in
I the amount of$10,602,000 for Recovery Zone Facility Bonds which shall expire on December 31,
2 2010; and
3 WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986 (the "Code'),
4 the issuance of the Bonds by the Authority must be approved by the City of San Bernardino ("City")
5 after a Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA")public hearing; and
6 WHEREAS, the Mayor and Common Council of the City of San Bernardino (the"Council")
7 is the elected legislative body of the City and is an applicable elected representative required to
8 approve the issuance of the Bonds under Section 147(f)of the Code; and
9 WHEREAS, the Authority has requested that the Council approve the issuance of the Bonds
10 by the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code
11 and the requirements of Section 9 of the Amended and Restated Joint Exercise of Powers
12 Agreement, dated as of June 1, 1988 (the "Agreement"), among certain local agencies, including the
13 City; and
14 WHEREAS, the City has caused the timely publication of notice regarding the holding of a
15 public hearing in accordance with Section 147(f) of the Code in connection with the proposed
16 issuance of the not to exceed $10,602,000 the Authority Lease Revenue Bonds Series 2010 ("E"
17 Street Project — Exhibit "A") (Tax Exempt —Recovery Zone Facility Bonds) and now seeks to
18 approve the issuance of the bonds by the Authority pursuant to the public hearing conducted on that
19 date; and
20 WHEREAS, the proposed security for the Bonds will initially be certain pledged revenues of
21 the Redevelopment Agency of the City of San Bernardino and a deed of trust on the property, and
22 subsequently lease revenues generated from the tenants of the "E" Street Project, and including, but
23 not limited to, a developer guaranty and a deed of trust on the property; and
24 WHEREAS, California Debt Limit Allocation Committee ("CDLAC") Regulations do not
25 require that California Environmental Quality Act ("CEQA") or zoning compliance be completed
26 prior to the holding of a public hearing for purposes of the CDLAC Regulations and City staff will
27 make a determination as to any zoning and CEQA requirements, and address those requirements,
28 prior to the final approval of the project and the issuance of bonds; and
2
I WHEREAS, pursuant to Section 147(f) of the Code, the Council has, following notice, duly
2 given, held a public hearing regarding the issuance of the Bonds, and now desires to approve the
3 issuance of the Bonds by the Authority solely for the purpose of satisfying the requirement of said
4 Section 147(f)of the Code.
5 NOW, THEREFORE,IT IS HEREBY RESOLVED,DETERMINED AND ORDERED
6 BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
7 FOLLOWS:
8 Section 1. The above Recitals are true and correct in all respects and are incorporated herein
9 by reference.
10 Section 2. The Mayor and Common Council have held a public hearing in accordance with
11 the provisions of Section 147(f) of the Code as commonly referred to as a TEFRA hearing, and have
12 considered all testimony and comments submitted in connection with the proposed issuance of the
13 Bonds. The City hereby approves the issuance of the Bonds pursuant to the TEFRA hearing.
14 Section 3. The Council hereby approves the issuance of the Bonds by the Authority for the
15 purposes of financing the acquisition, construction, and improvement of the "E" Street Project. It is
16 the purpose and intent of the Mayor and Common Council that this Resolution constitute approval
17 of the issuance of the Bonds by the Authority solely for the purposes of(a) Section 147(f) of the
18 Code by the applicable elected representative of the governmental unit having jurisdiction, in
19 accordance with said Section 147(f), and (b) Section 9 of the Agreement. The City assumes no
20 liability or responsibility of any nature whatsoever with respect to the Bonds and any aspects thereof
21 as to compliance with all applicable federal tax and securities laws when the Bonds are issued.
22 Section 4. The proceeds of the Bonds shall be applied by the Authority in part to reimburse
23 the City for the Reimbursement Expenditures with respect to the Projects.
24 Section 5. The Mayor of the City, and/or his designees are hereby authorized and directed,
25 jointly and severally, to do any and all things and to execute and deliver any and all documents that
26 they deem necessary or advisable in order to carry out, give effect to and comply with the terms and
27 intent of this Resolution and the financing transaction approved hereby.
28
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P UppMYVfmlutiwBVlad01Po6 @OION¢R)d0 Runvery Zone Fond,-T,Fl A MCC R—d-
I Section 6. This Resolution shall take effect upon its adoption and execution in the manner
2 as required by the City Charter.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
1
OF SAN BERNARDINO APPROVING THE ISSUANCE OF RECOVERY
2 ZONE FACILITY BONDS BY THE SAN BERNARDINO JOINT POWERS
FINANCING AUTHORITY FOR THE BENEFIT OF THE
3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
4
5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
6 Common Council of the City of San Bernardino at a meeting
7 thereof held on the day of , 2010, by the following vote,to wit:
8
9 Authority Members: Ayes Nays Abstain Absent
10 MARQUEZ
DESJARDINS
11
BRDUCER
12 SHORETT _
13 KELLEY _
14 JOHNSON
15 MCCAMMACK _
16
17
Rachel G. Clark, City Clerk
18
19 The foregoing Resolution is hereby approved this day of 2010.
20
21
22 Patrick J. Morris, Mayor
23 City of San Bernardino
24
25 Approved as to Form:
26 By. . 4*
27 ames F. Penman, City Attorney
28
5