I. RECOMMENDATION:
Financial Services Director recommends the City Council and Successor Agency adopt Council Resolution No. 3998 and SA Resolution No. SA-337 Approving a Bond Expenditure Agreement between the City of Coalinga and the Coalinga Successor Agency.
II. BACKGROUND:
The Successor Agency to the Coalinga Redevelopment Agency (“Successor Agency”) issued Tax Allocation Bonds in 2009A (“Bonds”). Health & Safety Code (“HSC”) Section 34191.4(c) permits the Successor Agency to spend bond proceeds for the purposes for which the bonds were sold, in excess of amounts needed to satisfy approved enforceable obligations, in a manner consistent with the original bond covenants outlined on the fifth page of the Official Statement of the Bonds, under “Use of Bond Proceeds’. Such expenditures constitute “Excess Bond Proceeds” obligations that are listed on the successor agency’s Recognized Obligation Payment Schedule (“ROPS”).
III. DISCUSSION:
The excess bond proceeds would be used to support the reconstruction of approximately 3,000 linear feet of Phelps Avenue from Posa Chanet Boulevard to the City Limits East (together, “Project”). The Project will pulverize the existing AC pavement, grade the base material, install ADA compliant curb ramps and sidewalks, install AC pavement, traffic striping, and traffic signage, and adjust existing utility lids.
The Successor Agency is proposing a new 2021 Bond Expenditure Agreement between the City of Coalinga (“City”) and Successor Agency that authorizes the transfer of all unspent bond proceeds from the Successor Agency to the City to complete the Project as is consistent with the bond covenants (“2021 Bond Expenditure Agreement”). Up to $347,864 is authorized for transfer to account for changing balances due to interest between the time the agreement is adopted and executed.
This transfer would be placed on the Successor Agency’s ROPS for Fiscal Year 2021-22. If the 2021 Bond Expenditure Agreement is approved by DOF and funds are transferred from the Successor Agency to the City on the ROPS 21-22, the City will be able to spend the funds when they are needed as intended by the bond covenants without requiring DOF approval on subsequent ROPS. It will also make the Successor Agency eligible to adopt a Last & Final ROPS.
In addition, allowing the City to implement the Project with the excess bond proceeds would advance the City’s community development goals by revitalizing the former redevelopment project area and providing social and fiscal benefits to taxing entities and the community.
IV. ALTERNATIVES:
Not approve the agreement.
V. FISCAL IMPACT:
There is no fiscal impact to the General Fund. The Successor Agency will transfer to the City Excess Bond Proceeds held by Successor Agency in an amount of up to three hundred forty-seven thousand eight hundred and sixty-four dollars ($347,864). The funds transferred will be received as revenue in the City’s Fund 140 General Capital Projects to be expended on the project.
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