REQUEST FOR CITY COUNCIL ACTION

Transcription

1 REQUEST FOR CITY COUNCIL ACTION MEETING DATE: APRIL 26, 2016 TITLE: REDUCTION OF LIEN FOR ASSESSMENT DISTRICT NO (PLANNING AREA 58- EASTWOOD) RECOMMENDED ACTION Adopt - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IRVINE, CALIFORNIA, ORDERING CHANGE OF PROCEEDINGS TO REDUCE THE ASSESSMENT LIEN TO REFLECT REDUCED CONSTRUCTION COSTS AND OTHER COST SAVINGS WITHIN AND FOR ASSESSMENT DISTRICT NO (PLANNING AREA 58) EXECUTIVE SUMMARY The cost of infrastructure improvements in Assessment District No (Eastwood Village) are projected to be lower than originally estimated by the developer. Adoption of the attached resolution authorizes a reduction of the assessment lien from 52.2 million to 34.4 million resulting in lower annual assessments for property owners within this assessment district. If the City Council approves the recommended action, staff will notify the affected property owners of the City Council's approval and resulting changes in the assessment. COMMISSION/BOARD/COMMITTEE RECOMMENDATION Not applicable. ANALYSIS Assessment District No was formed in 2013 with an assessment lien of 52.2 million for the construction of infrastructure improvements in Planning Area 58 (Eastwood Village). The district includes property generally bounded by Portola Parkway, Jeffrey Road, Irvine Boulevard and Hicks Canyon Wash, as depicted in Attachment 1. In July 2015, an initial bond issuance of 34.4 million was approved and used for the administration and construction of infrastructure improvements. These improvements included streets, storm drain, water, sewer, traffic signals, utilities and water quality facilities.

2 City Council Meeting April26, 2016 Page 2 of 2 In March 2016, the Irvine Company, as majority owner of property within the district, requested a reduction of the lien from 52.2 million to 34.4 million based on its determination that the 34.4 million of bond funds were adequate to complete the assessment district improvements (Attachment 2). The proposed reduction of the lien will cause the projected assessment for each residential property owner to be reduced by approximately 600 annually. AlTERNATIVES CONSIDERED The City Council can deny the recommended action. This alternative is not recommended because the bond funds were intended for construction of specific infrastructure improvements that are now complete, and no new additional bond issuances or improvements are needed in this development area. FINANCIAL IMPACT There is no financial obligation or impact to the City in approving the recommendation. The administrative costs of the assessment district will cover the costs to process the lien reduction. REPORT PREPARED BY Ken Quon, P.E., Senior Civil Engineer ATTACHMENTS 1. Vicinity Map 2. Letter from The Irvine Company 3. Resolution

3 ASSESSMENT DISTRICT NO (PLANNING AREA 5B) AD (EASTWOOD VILLAGE) VICINITY MAP ATTACHMENT 1

4 t~ IRVINE COMPANY Since 1864 March 2, 2016 Ms. Valaya Chitchakkol City of Irvine One Civic Center Plaza P.O. Box Irvine, CA Re: Assessment District Lien Reduction Request (Eastwood) Dear Ms. Chitchakkol: On October 8, 2013, the City Council formed AD (the "AD") with a preliminary cost estimate of 52,530,165. The final cost assessment was issued by the AD's assessment engineer, Anderson-Penna, on April 8, 2014 at 52,227,000 (see Exhibit A). Prior to November 17, 2015 the Irvine Company (the "Company'') determined there were significant savings in both construction costs and indirect costs and the assessment district budget could be reduced to 34,430,000. The detailed revised cost estimate is provided as Exhibit B. On November 17, 2015, the AD issued 34,430,000 of assessment district bonds. The Sources & Uses of Funds for this bond issue was prepared by the City's financial advisor Fieldman Rolapp and is attached as Exhibit C. The uses of funds in Exhibit C exactly match the revised cost estimate shown on Exhibit B. There are no additional facilities to be financed, and no additional bonds may be issued for the AD. Therefore, the Company requests that the AD obtain an updated final cost assessment from Anderson-Penna, and that the City Council adopt a Lien Reduction to reflect the revised lien of 34,430,000. This action will provide additional assurance to homebuyers (the AD' s taxpayers) that the AD lien amount corresponds to the outstanding bonds and no additional AD liens will be placed on their property in the future. If you have questions or require additional information, please call me at (949) We look forward to working with you on this Lien Reduction. Sincerely, ~.~ Robert M. Lang Senior Vice President cc: Ken Quon, City of Irvine Paul Pender, Fieldman Rolapp William Marticorena II, Rutan & Tucker John Yeager, O'Neil LLP 550 Newport Center Drive, Newport Beach, California (949) ATTACHMENT 2

5 !EXHIBIT A ENGINEER'S REPORT CITY OF IRVINE ASSESSMENT DISTRICT NO (Planning Area SB) Exhibit B - Cost Estimate Summary Cost Estimate Below is an overall summary of the District costs. The estimated costs of the improvements for the District are detailed on the attached pages. Preliminary Assessment Final Assessment Construction Subtotal Construction Costs 38,308,000 38,308,000 38,308,000 38,308,000 General Incidentals City Administration Professional Services/ Bond Issuance Costs Subtotal General Incidental Costs 250, , , , , ,000 Total Construction Costs' Total General Incidental Costs Total Construction/General Incidental Costs 38,308, ,000 39,170,000 38,308, ,170,000 Capitalized Interest, Reserve Funds, & Discount Capitalized Interest (13% of issue) Reserve Fund (10% of issue) Underwriter's Discount (2% of issue) Subtotal Cap. Interest, Reserve, & Discount 6,789,000 5,223,000 1,045,000 13,057,000 6,789,000 5,223,000 1,045,000 13,057,000 Total Construction Costs and Capitalized Interest/Reserve/Discount 52,227,000 52,227!000 Total Assessment Amount 52,227,000 52,227,000 ~""' ANDERSON PENNA

6 Irvine Community Development Company Planning Area 58 Assessment District No CITY OF IRVINE!EXHIBIT B Improvement Project Exhibit 8 - Cost Estimate Preliminary Estimate Confirmed Assessment Revised Estimate STREET IMPROVEMENTS On Site Streets Sidewalks 3,117, ,694 3,287,459 Off Site Irvine Blvd. Street Improvements Sidewalks 724,312 38,180 1,454,771 Jeffrey Road Streets 40,000 Traffic Signals Irvine Blvd. and A Street (New) Jeffrey and Encore (Modification) Jeffrey and non Street (New) Jeffrey Road and Irvine Boulevard Jeffrey Road - 50% 400, , , ,000 7,516,767 7,269,576 SUBTOTAL STREET IMPROVEMENTS 13,067,370 12,011,806 SEWER/STORM IMPROVEMENTS On-Site Storm Drain Sanitary Sewer Domestic Water Reclaimed Water 5,747, , , ,397 4,295, , , ,360 Irvine Blvd. Storm Drain Sanitary Sewer Domestic Water Domestic Water 171,848 81,952 26, , , ,450 32,350

7 Planning Area 58 Assessment District No CITY OF IRVINE Exhibit B - Cost Estimate Improvement Project Preliminary Estimate Confirmed Assessment Revised Estimate Jeffrey Road Domestic Water Reclaimed Water 22,838 19,084 SUBTOTALSEWERISTORM IMPROVEMENTS 8,142,948 7,079,543 WATER QUALITY Water Quality Basins NTS Basin Landscape 373, , ,822 SUBTOTAL WATER QUALITY 570, ,822 UTILITIES Irvine Blvd. Dry Utilities (Gas and Electric) Non-Refundable Fees 154, , , ,000 On-Site Dry Utilities (Gas and Electric) Non-Refundable Fees 1,040,312 1,374,464 1,329,925 1 ' 117,909 Adjustment for DU 5% cap (340,000) (1,277,074) SUBTOTAL UTILITIES 2,626,165 1,720,000 Zone 1 PUBLIC PARK Park Construction Community Buildings Adjustment for Transfers I Reimbursements SUBTOTAL PUBLIC SPORTS PARK CONSTRUCTION SUBTOTAL 24,406,700 21,514,171 Design Permits I Fees I Bonds Construction Management, Const. Engr. (Soils, Survey, Archeo) Contingencies 20% NITM Fees Rounding TOTAL CONSTRUCTION 1 ' 178,844 1 ' 178,844 1,010,437 5,533,175 5,000,000 38,308, , , , ,000 4,536,402 4,236 28,248,272

8 Planning Area 58 Assessment District No CITY OF IRVINE Exhibit B- Cost Estimate Improvement Project Preliminary Estimate Confirmed Assessment Revised Estimate Note: All streets are full section unless otherwise noted. Signals are all new unless otherwise noted. GENERAL INCIDENTALS City Administration 250,000 Professional Services 612,000 Bond Issuance /Other Contingency 250, ,000 SUBTOTAL OF GENERAL INCIDENTALS 862, ,000 CAP. INTEREST, RESERVE FUND & DISCOUNT Capitalized Interest (13% of issue) 6,789,000 Reserve Fund (10% of issue) 5,223,000 Underwriter's Discount (2% of issue) 1,045,000 Rounding SUBTOTAL OF CAP. INTEREST, RESERVE FUND & DISCOUNT 13,057,000 3,042,971 2,096, ,000 5,319,728 TOTAL ASSESSMENT DISTRICT 52,227,000 34,430,000

9 Oct 27, :27pm Prepared by Field man, Rolapp & Associates SOU RCES AND USES OF FUNDS CITY OF IRVI NE- Assessment Districts - All Outstanding Bonds AD (Series A) FINA L BOND PRICING NUMBERS Page I!EXHIBIT c I Dated Date Delivery Date 11117/ / Sources: Bond Proceeds: Par Amount 34,430, ,430, Uses: Project Fund Deposits: General incidentals - City Dry Utilities 5% of Par Amount Project Fund excl Dry Utilities Other Fund Deposits: Debt Service Reserve Fund Capitalized Interest (thru 3/2/2018) Delivery Date Expenses: Cost of Issuance 862, I. 720, , , 11 0, ,096, ,139, , ,430, Note: I. Capitalized interest gross funded through March 2,

10 CITY COUNCIL RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IRVINE, CALIFORNIA, ORDERING CHANGE OF PROCEEDINGS TO REDUCE THE ASSESSMENT LIEN TO REFLECT REDUCED CONSTRUCTION COSTS AND OTHER COST SAVINGS WITHIN AND FOR ASSESSMENT DISTRICT NO (PLANNING AREA 5B) WHEREAS, on December 10, 2013, the City Council of the City of Irvine (the City ) passed and adopted Resolution No (the Resolution of Intention ) resolving its intention to order certain improvements and acquisitions to be made, to form Assessment District No (the Assessment District ) and to issue bonds to represent unpaid assessments therein pursuant to the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code), the Improvement Bond Act of 1915 (Division 10 of the California Streets and Highways Code) and Chapter 5 of Division 7 of Title 2 of the City of Irvine Municipal Code (collectively, the Act ) and reference to the Resolution of Intention is hereby expressly made for further particulars; and WHEREAS, on April 8, 2014, the City Council adopted its resolution approving the Final Engineer s Report, dated April 8, 2014, as identified in said Resolution (the Final Engineer s Report ), among other things, approving ordering the construction and/or acquisition of certain public improvements located within or adjacent to the Assessment District, and levying the assessments on the parcels determined to be especially benefited by the Project, in the amounts set forth in the Final Engineer s Report; and WHEREAS, thereafter, on April 11, 2014, the Notice of Assessment and the assessment diagram for the Assessment District were recorded in the Official Records of the Orange County Recorder, and the individual assessments thereby became a lien upon the respective individual parcels upon which they had been levied in an aggregate amount of 52,227,000 (the Original Assessment Lien ); and WHEREAS, in order to provide a portion of the moneys required to finance said improvements, the City Council, under the provisions of the Act, on July 28, 2015, adopted Resolution No (the Resolution of Issuance ), which, among other matters, authorized the issuance of improvement bonds of the City designated City of Irvine Assessment District No Limited Obligation Improvement Bonds, Series A (the Series A Bonds ) upon the security of the unpaid assessments of the parcels within the Assessment District and provided that said issuance would be in accordance with the Act and authorized the execution thereof; and WHEREAS, the Irvine Company (the Company ) and the City have now determined that there were and have been significant savings in both construction costs ATTACHMENT 3

11 and indirect costs and that the Assessment District budget, and associated aggregate assessment lien, now can and should be reduced to 34,430,000; and WHEREAS, the Company has requested, and the City Council now agrees, to reduce the Original Assessment Lien from 52,227,000 to 34,430,000 (the Final Assessment Lien ); and WHEREAS, this City Council is authorized and by this Resolution wishes to order a change of proceedings pursuant to Section of the 1913 Act, without a public hearing, to provide for the reduction of assessments to reflect the reduction from the Original Assessment Lien to the Final Assessment Lien. NOW, THEREFORE, the City Council of the City of Irvine DOES HEREBY RESOLVE as follows: SECTION 1. That pursuant to the provisions of Section of the 1913 Act, this City Council hereby orders a reduction in the amount of the assessment lien from 52,227,000 to 34,430,000, and a concurrent proportional reduction in the assessment lien as allocated to each of the parcels located within the Assessment District. SECTION 2. That the City Clerk is authorized and directed to cause the preparation and recording of an appropriate addendum to the Notice of Assessment which was recorded on April 11, 2014, to reflect the reduced amount of the Final Assessment Lien and the concurrent proportionate reduction in the assessments for each of the parcels located within the Assessment District subject to the Final Assessment Lien. SECTION 3. That the City Clerk is hereby directed to transmit a certified copy of this resolution to the Orange County Auditor, and the Orange County Auditor is requested to proceed in accordance with Section 8682 of the California Streets and Highways Code in the collection of installments of principal, interest and administrative costs respecting those unpaid assessments which, in the aggregate, total the Final Assessment Lien. PASSED AND ADOPTED by the City Council of the City of Irvine at a regular meeting held on the day of, ATTEST: MAYOR OF THE CITY OF IRVINE CITY CLERK OF THE CITY OF IRVINE -2- CC RESOLUTION 16-XX

12 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF IRVINE ) I, MOLLY MCLAUGHLIN, City Clerk of the City of Irvine, HEREBY DO CERTIFY that the foregoing Resolution was duly adopted at a regular meeting of the City Council of the City of Irvine, held at the day of, AYES: NOES: ABSENT: ABSTAIN: COUNCILMEMBERS: COUNCILMEMBERS: COUNCILMEMBERS: COUNCILMEMBERS: CITY CLERK OF THE CITY OF IRVINE -3- CC RESOLUTION 16-XX