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HomeMy WebLinkAbout7/16/2008 - STAFF REPORTS - RA.1. �O p p l.M S,* ry u n 0ROtt4o'n r'4f lFO RN'P. CITY COUNCIUCOMMUNITY REDEVELOPMENT AGENCY STAFF REPORT DATE: July 16, 2008 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 $645,000, 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 of $545,000, respectively, effective June 18, 2008. 3) Adopt Resolution No. "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2007-2008 FISCAL YEAR." Item No. RA1 . City Council Staff Report July 16, 2008 -- 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 2007-2008 FISCAL YEAR. REDEVELOPMENT AGENCY RECOMMENDATION: 1) The Community Redevelopment Agency approve repayment of loans to the City of Palm Springs by 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 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 of $545,000, respectively, effective June 18, 2008. 3) Adopt Resolution No. "A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2007- 2008 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 2007- 2008 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 deposit are 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 OOd0��° City Council Staff Report July 16, 2008 -- Page 3 Repayment and Relending of CPA Loans There are four budget resolutions attached amending the 2007-2008 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. t • Geoffre S' Kfehl John a � d Director of Finance and Treasurer for o development Thomas WilsorrY David H. Ready Assistant City Manager City Manager Attachments: Resolutions 000003 RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2007-08 FISCALYEAR. WHEREAS, Resolution 1328 approving the budget forthe fiscal year 2007-08 was adopted on June 6,2007; and WHEREAS, the City Manager has recommended, and the City Council 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 1328, adopting the budget for the 2007-08 fiscal year is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount No. 001 12416 General Fund Redevelopment $1, 466,785 Agency Loans Receivable Purpose: 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 Merged Area #1 29301 $1,466,785 Capital &Admin Fund Balance ADOPTED THIS day of , 2008. David H. Ready, City Manager ATTEST. James Thompson, City Clerk 000. 0011 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 ©QQQ�� RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2007-08 FISCAL YEAR. WHEREAS, Resolution 21901 approving the budget for the fiscal year 2007-08 was adopted on June 6,2007; and WHEREAS, the City Manager has recommended, and the City Council 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 21901, adopting the budget for the 2007-08 fiscal year is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount No. 001 12416 General Fund Redevelopment $1,466,785 Agency Loans Receivable Purpose: 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 Merged Area #1 29301 $1,466,785 Capital &Admin Fund Balance ADOPTED THIS day of , 2008. 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 OO��d"s RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2007-08 FISCAL YEAR. WHEREAS, Resolution 21901 approving the budget for the fiscal year 2007-08 was adapted on June 6,2007; and WHEREAS, the City Manager has recommended, and the City Council 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 21901, adopting the budget for the 2007-08 fiscal year is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount No. 001 12416 General Fund Redevelopment $545,000 Agency Loans Receivable Purpose: 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 Merged Area #2 29301 $545,000 Capital & Admin Fund Balance ADOPTED THIS day of , 2008. David H. Ready, City Manager ATTEST: James Thompson, City Clerk RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2007-08 FISCALYEAR. WHEREAS, Resolution 1328 approving the budget for the fiscal year 2007-08 was adopted on June 6,2007; and WHEREAS, the City Manager has recommended, and the City Council 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 1328, adopting the budget for the 2007-08 fiscal year is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount No. 001 12416 General Fund Redevelopment $545,000 Agency Loans Receivable Purpose: 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 Merged Area #2 29301 $545,000 Capital & Admin Fund Balance ADOPTED THIS day of , 2008. 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 MCI