The URL can be used to link to this page

Home My WebLink About2/18/2009 - STAFF REPORTS - 2.P. 4ALM 5 c y N M 'f C °p"row..ro' Pr CITY COUNCIL/COMMUNITY REDEVELOPMENT AGENCY STAFF REPORT DATE: February 18, 2009 CONSENT CALENDAR SUBJECT: REPAYMENT AND RELENDING OF COMMUNITY REDEVELOPMENT AGENCYLOANS FROM: David H_ Ready, City Manager BY: Department of Finance and Treasury SUMMARY This is an annual administrative item that the City and Community Redevelopment Agency must undertake to transfer working capital to the Merged Area #1 and #2 Capital Project Funds from the Merged Area #1 and #2 Debt Service Funds. The legal and appropriate way to accomplish this is via the annual repayment of loans to and relending of funds from the General Fund. RECOMMENDATION: CITY COUNCIL RECOMMENDATION: 1) The City Council accept repayments of loans from the Merged Area #1 and Merged Area #2 Debt Service Funds in the amount of$1,466,785 and $545,000, respectively; and 2) The City Council approve the issuance of new loans at 6% interest from the General Fund to Merged Area #1 and Merged Area #2 Capital Projects Funds, in the amount of $1,466,785 and $545,000, respectively, effective February 18, 2009. 3) Adopt Resolution No. "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2008-2009 FISCAL YEAR." ITEM NO. z . City Council Staff Report February 18, 2009 -- Page 2 Repayment and Relending of CRA Loans 4) Adopt Resolution No. " A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2008-2009 FISCAL YEAR. REDEVELOPMENT AGENCY RECOMMENDATION: 1) The Community Redevelopment Agency approve repayment of loans to the City of Palm Springs by the Merged Area 41 and Merged Area #2 Debt Service Funds in the amount of $1,466,785 and $545,000, respectively,- and 2) The Community Redevelopment Agency accepts new loans at 6% interest from the General Fund to Merged Area #1 and Merged Area #2 Capital Projects Funds, in the amount of $1,466,785 and $545,000, respectively, effective February 18, 2009. 3) Adopt Resolution No. "A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2008- 2009 FISCAL YEAR. 4) Adopt Resolution No. "A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2008- 2009 FISCAL YEAR. BACKGROUND: State rules governing redevelopment accounting require that tax increment received by an Agency be deposited in the Debt Service Fund of the Agency, and do not allow the use of tax increment for the "working capital" of the Agency, including administrative costs or even capital projects. The correct and legal way to fund these activities is for the General Fund of the City to lend the Agency's Capital Projects Funds the amount necessary to cover administrative and capital project costs. The loans are then annually repaid to the City by the Agency's Debt Service Fund- This is similar to how a bond issue works, where the proceeds of the issue are deposited and placed in the Capital Projects Funds to be utilized, while the repayment of the bonds comes from the Debt Service Fund. This is the accepted and established mechanism for funding the Capital Projects Fund, practiced by more than 90% of the redevelopment agencies statewide. As the amounts of the loans are generally the same from year to year, the net indebtedness of the CRA project areas remain the same and the net effect on the City Council Staff Report February 18, 2009 -- Page 3 Repayment and Relending of CRA Loans As the amounts of the loans are generally the same from year to year, the net indebtedness of the CRA project areas remain the same and the net effect on the General Fund is zero. While tax increment in the Agency has increased dramatically, administrative costs have been stable over the past several years. There are four budget resolutions attached amending the 2008-2009 budget, two of which amend the General Fund budget and one each for Merged Project Area #1 and #2. These are necessary to comply with the accounting rules. Geoffrey S, Kiehl Thomas Wilson✓ Director of Finance and Treasurer Assistant City Manager David H. Ready Suzan arrell City Manager Financial Advisor Attachments: Resolutions -- la RESOLUTION NO, A RESOLUTION OF THE COMMUNITY REDEVELOMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR FISCAL YEAR 2008-09. WHEREAS, Resolution No. 1365 approving the budget for the Fiscal Year 2008-09 was adopted on June 18, 2008; and WHEREAS, the Executive Director has recommended, and the Agency Board desires to approve, certain amendments to said budget; NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record inter-fund cash transfers as required in accordance with this Resolution, and that Resolution 1365, adopting the Fiscal Year 2008-09 Budget is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount No. 001 12416 $1,466,785 General Fund Redevelopment Agency Loans Receivable Purpose: To provide funding for new loan to Merged Area#1 Capital &Admin to cover on- going costs. SECTION 2. SOURCE: Merged Area #1 is concurrently repaying $1,466,785 in loans from the General Fund. Fund Activity Account Amount No. 811 29301 $1,466,785 Merged Area #1 Fund Balance Capital & Admin ADOPTED this 18th day of February, 2009. David H. Ready, Executive Director ATTEST: James Thompson, Assistant Secretary { Resolution No, Page 2 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, Assistant Secretary of the Community Redevelopment Agency of the City of Palm Springs, hereby certify that Resolution No. _is a full, true and correct copy, and was duly adopted at an adjourned meeting of the Community Redevelopment Agency of the City of Palm Springs on by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, Assistant Secretary Community Redevelopment Agency City of Palm Springs, California RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR FISCAL YEAR 2008-09. WHEREAS, Resolution No. 1365 approving the budget for the Fiscal Year 2008-09 was adopted on June 18, 2008; and WHEREAS, the Executive Director has recommended, and the Agency Board desires to approve, certain amendments to said budget; NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record inter-fund cash transfers as required in accordance with this Resolution, and that Resolution 1365, adopting the Fiscal Year 2008-09 Budget is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount No. 001 12416 $545,000 General Fund Redevelopment Agency Loans Receivable Purpose: To provide funding for new loan to Merged Area#2 Capital &Admin to cover on- going costs. SECTION 2. SOURCE: Merged Area #2 is concurrently repaying $545,000 in loans from the General Fund. Fund Activity Account Amount No. 812 29301 $545,000 Merged Area #2 Fund Balance Capital &Admin ADOPTED this 18th day of February, 2009. David H. Ready, Executive Director ATTEST: James Thompson, Assistant Secretary _ L � Resolution No. Page 2 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, Assistant Secretary of the Community Redevelopment Agency of the City of Palm Springs, hereby certify that Resolution No. _is a full, true and correct copy, and was duly adopted at an adjourned meeting of the Community Redevelopment Agency of the City of Palm Springs on by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, Assistant Secretary Community Redevelopment Agency City of Palm Springs, California - ly � RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2008-09 FISCAL YEAR. WHEREAS, Resolution No. 22265 approving the budget forthe Fiscal Year 2008-09 was adopted on June 18, 2008; and WHEREAS, the City Manager has recommended, and the City Council desires to approve, certain amendments to said budget. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE, that the Director of Finance is authorized to record inter-fund cash transfers as required in accordance with this Resolution, and that Resolution No. 22265, adopting the Fiscal Year 2008-09 budget is hereby amended as follows.- SECTION 1. ADDITIONS Fund Activity Account Amount No. 001 12416 $1,466,785 General Fund Redevelopment Agency Loans Receivable Purpose: Establish funding for new loan to Merged Area#1 Capital &Admin to cover on- going costs. SECTION 2. SOURCE: Merged Area #1 is concurrently repaying $1,466,785 in loans from the General Fund. Fund Activity Account Amount No. 811 29301 $1,466,785 Merged Area #1 Fund Balance Capital &Admin ADOPTED THIS 18th day of February, 2009. David H. Ready, City Manager ATTEST: James Thompson, City Clerk - t� b Resolution No. Page 2 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full,true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California 1, � RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2008-09 FISCAL YEAR. WHEREAS, Resolution No. 22265 approving the budgetforthe Fiscal Year2008-09 was adopted on June 18, 2008; and WHEREAS, the City Manager has recommended, and the City Council desires to approve, certain amendments to said budget. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE, that the Director of Finance is authorized to record inter-fund cash transfers as required in accordance with this Resolution, and that Resolution No. 22265, adopting the Fiscal Year 2008-09 budget is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount No. 001 12416 $545,000 General Fund Redevelopment Agency Loans Receivable Purpose: Establish funding for new loan to Merged Area #2 Capital &Admin to cover on- going costs. SECTION 2. SOURCE: Merged Area #2 is concurrently repaying $545,000 in loans from the General Fund. Fund Activity Account Amount No. 812 29301 $545,000 Merged Area #2 Fund Balance Capital &Admin ADOPTED this 18th day of February, 2009. David H. Ready, City Manager ATTEST: James Thompson, City Clerk Resolution No. Page 2 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California