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HomeMy WebLinkAbout12/20/2000 - STAFF REPORTS (10) 4 DATE: DECEMBER 20, 2000 TO: CITY COUNCIL FROM: REDEVELOPMENT DIRECTOR APPROVING COOPERATING MEMBERSHIP BY THE CITY OF PALM SPRINGS IN THE ASSOCIATION OF BAY AREA GOVERNMENTS (ABAG) AND ASSOCIATE MEMBERSHIP BY THE CITY OF PALM SPRINGS IN THE ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS AND THE TEFRA HEARING FOR THE PROPOSED ISSUANCE OF ABAG FINANCE AUTHORITY BONDS IN AN AMOUNT NOT TO EXCEED $4,000,000 FOR THE PURPOSE OF ASSISTING DESERT AIDS PROJECT, INC. RECOMMENDATION: It is recommended that the City Council consider an application by the Desert Aids Project for tax-exempt bond financing for the purchase of its building at 1675 North Sunrise Way, with bonds guaranteed by the State of California and issued by the Association of Bay Area Governments. Such an approval requires the City to join the Association of Bay Area Governments and its Finance Authority for Nonprofit Corporations and conduct a TEFRA hearing. SUMMARY: The Desert Aids Project (DAP) wishes to purchase its building using long-term, tax-exempt bonds guaranteed by the State. The Association of Bay Area Governments (ABAG) regularly issues such bonds for community organizations such as DAP, and can issue them more quickly and with less expense than the California Healthcare Facility Financing Authority. The City, however, is required to conduct the TEFRA public hearing required of all tax-exempt bonds, and become a Cooperating Member of ABAG (at no expense) and an Associate Member of ABAG's Finance Authority for Nonprofit Corporations to facilitate DAP's use of ABAG's bonding authority. BACKGROUND: This item was before the Council for discussion on November 15, 2000 and received the Council's direction to move forward on the bond issue. The Desert Aids Project (DAP) moved into its current space at 1675 North Sunrise Way approximately two years ago with the option to purchase the building at a favorable price. DAP is ready to complete the purchase, and wishes to use long- term, tax-exempt bonds guaranteed by the State to finance it. The bonds would be issued by ABAG and therefore would not have the City's name on them; in addition, the bonds are guaranteed by the State of California through the California Healthcare Facility Financing Authority. DAP has already received approval of the bond guarantees. Therefore, the City bears no financial nor credit risk if DAP were to default. All that is required of the City is to conduct the TEFRA hearing on the bond issue, as it must on any tax-exempt bond issue within its jurisdiction, as well as become a Cooperating Member of ABAG and an Associate Member of ABAG's Finance Authority for Nonprofit Corporations to make DAP eligible to use ABAG's bonding facility. DAP wishes to use ABAG rather than the State directly //A because ABAG has the ability to float the bond issue on a more timely basis, and its issuance costs are lower. DAP's financial consultant, Roy Nelson of Altura/Nelson, is from Northern California and has done several similar bond issues through ABAG. The potential City costs, such as the att ney review of the membership agreements or ongoing dues to ABA , would be reimbursed to the City by DAP. ,A- J N S. AYMON R devee p�mmen'tt Diirr�c r APPROVED City Manager � - ATTACHMENTS: 1. Resolution authorizing membership in ABAG 2. Resolution approving the proposed bond issue REVIEWED BY DEPT.OF FINANCE �rAz 100 Pine Street,Suite 2525 4111 Qflint & Thimmig ap Palm Springs, 76 91550 11 llllllllllll Telephone:415/765-1550 Attorneys at Law Telecopier:415/765-1555 E-mail-bquint@gtllp.com November 21,2000 Mr.John R. Raymond Director of Redevelopment City of Palm Springs 3200 East Tahquitz Canyon Way Pahn Springs,CA 92262 Re: ABAG Finance Authority for Nonprofit Corporations Insured Health Facility Revenue Bonds (Desert AIDS Project,Inc.),2001 Series A Dear Mr. Raymond: Enclosed, for action by the City of Palm Springs on December 20, 2000, are the following resolutions: 1. RESOLUTION APPROVING THE PROPOSED ISSUANCE BY THE ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS OF REVENUE BONDS IN AN AMOUNT NOT TO EXCEED $4,000,000 FOR THE PURPOSE OF ASSISTING DESERT AIDS PROJECT,INC. (the TETRA Resolution);and 2. RESOLUTION APPROVING COOPERATING MEMBERSHIP BY THE CITY OF PALM SPRINGS IN THE ASSOCIATION OF BAY AREA GOVERNMENTS AND ASSOCIATE MEMBERSHIP BY THE CITY OF PALM SPRINGS IN THE ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS AND THE EXECUTION OF AN ASSOCIATE MEMBERSHIP AGREEMENT RELATING TO ASSOCIATE MEMBERSHIP OF THE CITY IN THE AUTHORITY. Also enclosed are the following: 1. Associate Membership Agreement between the Authority and the City of Palm Springs;and 2. TETRA Notice,for publication in the Desert Sim on December 4,2000. Please note that my office will handle publication of the hearing notice and will arrange for a copy of the proof of publication to be sent to you. If you have any questions,please feel free to call me. Very truly yours i�� Brian D Quint BDQ:crq Enclosures cc Mr.Clarke J I-Iowall,Financial Services Manager,Association of Bay Area Governments(w/encl.) Quint&Thimmig LLP 11/21/00 ASSOCIATE MEMBERSHIP AGREEMENT by and between the ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS and the CITY OF PALM SPRINGS THIS ASSOCIATE MEMBERSHIP AGREEMENT dated as of December 20, 2000, by and between the ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS, a joint powers authority duly organized and existing under the laws of the State of California (the "Authority") and the CITY OF PALM SPRINGS, a municipal corporation and general law city duly organized and existing under the laws of the State of California (the "City"); WITNESSETH: WHEREAS, certain public agencies of the State of California (collectively, the "Members"),have entered into a Joint Powers Agreement, dated as of April 1, 1990, revised as of September 18, 1990, and further revised as of June 9, 1992 (the "Agreement'), establishing the Authority and prescribing its purposes and powers; and WHEREAS, the Authority has been formed for the purpose, among others, to assist nonprofit corporations and other entities to obtain financing for projects and purposes serving the public interest; and WHEREAS, the Board of Directors of the Authority has determined that the City should become an associate member of the Authority, NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained,the Authority and the City do hereby agree as follows: Section 1. Purpose. The purpose of this Associate Membership Agreement is to assist nonprofit corporations and other entities to obtain financing for projects and purposes serving the public interest within or impacting upon the City. Section 2. Associate Members Status. The City is hereby made an associate member of the Authority for all purposes of the Agreement, the provisions of which are hereby incorporated herein by reference. From and after the date of execution and delivery of this Associate Membership Agreement by the City and the Authority, the City shall be and remain an associate member of the Authority. Section 3. Restrictions on Rights of Citv. The City shall not have the right, as associate member of the Authority, to vote on any action to be taken by the Authority or participate in debate. In addition, no officer, employee or representative of the City shall have any right to become an officer or director of the Authority. 01009.08 //A y Section 4. Effect of Prior Authority Actions. The City hereby agrees to be subject to and bound by all actions previously taken by the Board of the Authority to the same extent as the other members of the Authority are subject to and bound by such actions. Section 5. No Obligations of City. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of the City. Section 6. Execution of the Agreement. Execution of this Associate Membership Agreement shall satisfy the requirement of Article )CM, Section 1(d) of the Bylaws of the Authority which require that each new member of the Authority execute the Agreement. In addition,the City hereby acknowledges such Bylaws. IN WITNESS WHEREOF, the parties hereto have caused this Associate Membership Agreement to be executed and attested by their proper officers thereunto duly authorized, on the day and year first set forth above. ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS By Title Attest: Secretary CITY OF PALM SPRINGS By Title Attest: City Clerk -2- 1104 Quint&Tlumrnig LLP 11/21/00 NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that on December 20, 2000, a public hearing as required by section 147(f) of the Internal Revenue Code of 1986 will be held with respect to the proposed issuance by the ABAG Finance Authority for Nonprofit Corporations of its revenue bonds in one or more series in an amount not to exceed $4,000,000 (the 'Bonds"). The proceeds of the Bonds will be used to purchase and renovate an approximately 46,000 square foot building located at 1695 North Sunrise Way in Palm Springs, California, to be owned and partially used by the Desert AIDS Project, Inc., a nonprofit pubic benefit corporation and an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, in connection with its integrated services for persons with AIDS/HIV, and to be partially used by the Critical Care Institute, a nonprofit pubic benefit corporation and an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, in connection with its research and education regarding critical care and emergency health care services. The hearing will commence at 7:00 P.M. or as soon thereafter as the matter can be heard, and will be held in the City Council Chambers, City Hall, 3200 East Tahquitz Canyon Way, Palm Springs, California. Interested persons wishing to express their views on the issuance of the Bonds or on the nature and location of the facilities proposed to be financed may attend the public hearing or,prior to the time of the hearing,submit written comments. Written comments should be addressed to City Clerk, City of Palm Springs, 3200 East Tahquitz Canyon Way, Palm Springs, CA 92262. Date: December 4, 2000 CITY OF PALM SPRINGS Patricia A. Sanders, City Clerk [TO BE PUBLISHED IN THE DESERT SUN, ON MONDAY,DECEMBER 4, 2000, TO BE ARRANGED BY QUINT &THIMMIG LLP] 01009.08 A010 RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA APPROVING COOPERATING MEMBERSHIP BY THE CITY OF PALM SPRINGS IN THEASSOCIATION OF BAY AREA GOVERNMENTS AND ASSOCIATE MEMBERSHIP BY THE CITY OF PALM SPRINGS IN THE ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS AND THE EXECUTION OF AN ASSOCIATE MEMBERSHIP AGREEMENT RELATING TO ASSOCIATE MEMBERSHIP OF THE CITY IN THE AUTHORITY WHEREAS, Desert Aids Project(the"Participant'), a nonprofit, public benefit corporation organized and existing under the laws of the State of California, has requested that the City assist in the financing of certain health facilities forthe Participant in and to the benefit of the City; and WHEREAS, in furtherance thereof and to facilitate such request, the City desires to become a cooperating member of the Association of Bay Area Governments("ABAG')and an associate member of the ABAG Finance Authority for Nonprofit Corporations (the "Authority"); and WHEREAS, the form of associate membership agreement (the "Associate Membership Agreement") between the City and the Authority has been filed with the City, and the members of the Council,with the aid of its staff, have reviewed the Associate Membership Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL of the City of Palm Springs, California that: SECTION I. Cooperating Membership in ABAG. The Council hereby approves cooperating membership by the City in ABAG. The Council hereby authorizes the Mayor, the City Manager or other appropriate officer or official of the City to formally request such cooperating membership. SECTION II. Associate Membership in the Authority. The Council hereby approves associate membership by the City in the Authority. SECTION III. Approval of Associate Membership Agreement. The Council hereby approves the form of, and authorizes the Mayor, the City Manager or any designee of such officers, to execute, the Associate Membership Agreement and authorizes the City Clerk to attest to such signature, in substantially the form on file with the City Clerk, together with any changes therein deemed advisable by the official signing the Associate Membership Agreement. SECTION IV. Official Action. The Mayor, the City Manager, the City Clerk and other officers and officials of the City, are hereby authorized and directed to take all actions and do all things necessary or desirable hereunder with respect to associate membership in the Authority including, but not limited to, the execution and delivery of any and al agreements, certificates, instruments and other documents which they, or any of them, may deem necessary or desirable and not inconsistent with the purposes of this resolution. SECTION V. Effective Date. This Resolution shall take effect upon its adoption by this Council. ADOPTED this day of 2000. AYES: NOES: ABSENT: ABSTAIN: ATTEST: CITY OF PALM SPRINGS BY City Clerk City Manager REVIEWED & APPROVED 1/6 Z RESOLUTION NO. OF THE CITY OF PALM SPRINGS, CALIFORNIA APPROVING THE PROPOSED ISSUANCE OF THE ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS OF REVENUE BONDS IN AN AMOUNT NOT TO EXCEED $4,000,000 FOR THE PURPOSE OF ASSISTING DESERT AIDS PROJECT, INC. WHEREAS, THE ABAG Finance Authority for Nonprofit Corporations (the "Authority") proposes to issue its revenue bonds in an amount not to exceed$4,000,000(the"Bonds") forthe purpose of assisting Desert Aids Project, Inc. (the"Corporation")in purchasing and renovating an approximately 46,000 square foot building located at 1695 North Sunrise Way in Palm Springs,California,to be owned and operated by the Corporation, a nonprofit public benefit corporation and an organization described in section 501 (c)(3) of the Internal Revenue Code of 1986, in connection with its integrated services for persons with AIDS/HIV; and WHEREAS, section 147(f)of the Internal Revenue Code of 1986, requires the Council, as the elected representative of the City,the host jurisdiction of such facilities, to approve the issuance by the Authority of the Bonds after a public hearing following reasonable notice; and WHEREAS, a public hearing was held by the Council on Wednesday, December20,2000, at the hour of 7:00 P.M. in Council Chambers, at 3200 East Tahquitz Canyon Way, Palm Springs, California, following duly published notice thereof, and all persons desiring to be heard have been heard; and WHEREAS; it is in the public interest and for the public benefit that the Council, as the elected representative of the City, the host jurisdiction of such facilities, approve the execution and delivery by the City of the proposed installment sale agreement; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL of the City Palm Springs, California, hereby finds, determines and declares that issuance by the Authority of the Bonds in the maximum principal amount of$4,000,000, for the purposes described above, is hereby approved. ADOPTED this day of 2000. AYES: NAYES: ABSENT: ABSTAIN: ATTEST: CITY OF PALM SPRINGS BY City Clerk City Manager REVIEWED & APPROVED f!