indio cfd adoption goals cfd offering march 3.2004

8/13/2019 Indio CFD Adoption Goals CFD Offering March 3.2004

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CITY OF INDIO

AGENDA REPORTMarch 3, 2004

TO: ayor and Council

THRU: om Ramirez, City Manager

FROM: erry Carter, Finance Director (

SUBJECT: Adoption of Goals and Policies for Community Facilities Districts andAssessment Districts

SUMMARY: At the January 7, 2004 Council meeting, a desire was expressed to havethe goals and policies on debt financing formalized into a written document. With thecontemplation of establishing a Community Facilities District for Public Safety, a formalwritten document is required also. Staff has created these policies on debt financingas a guideline to assist all concerned parties in determining the City's approach toland secured financing. It is the City's intent to support projects which address apublic need and provide a public benefit.

Previous Council Action: At the January 7, 2004 Council Meeting, Council voicedsupport of debt financing in the form of Assessment Districts when necessary fordevelopment addressing a public need and provide a public benefit.

Financial Implications: The City of Indio incurs no financial liability in an AssessmentDistrict or Community Facilities District.

Recommendation: Staff recommends approval of resolution accepting the Goalsand Policies for Community Facilities Districts and Assessment Districts.

Proposed Motion: Move approval of resolution approving Local Public Agency Goalsand Policies for Community Facilities Districts and Assessment Districts.

List of Attachments:

A. Goals and PoliciesB. Resolution

ITEM NO. 3


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RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF INDIOADOPTING GOALS AND POLICIES PURSUANT TO THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982

WHEREAS, the Mello-Roos Community Facilities Act of 1982, as amended,commencing with Section 53311 of the Government Code of the State of California (the Act )provides that on and after January 1, 1994, a local agency may initiate proceedings to establish adistrict pursuant to the Act only if it has first considered and adopted local goals and policiesconcerning the use of the Act; and

WHEREAS, the City Council ( Council ) of the City of Indio (the City ) desires to

initiate proceedings to form community facilities districts to finance certain public capitalimprovements and/or services,

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF INDIO DOESHEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. The Council hereby adopts the Local Public Agency Goals and Policies forCommunity Facilities Districts and Assessment Districts, a copy of which is attached heretoand a copy of which shall be kept on file with the O ffice of the City Clerk.

Section 2. This Resolution shall take effect from and after the date of its passage andadoption

PASSED, APPROVED AND ADOPTED this day of 2004, by thefollowing vote:

AYES:

NOES:

ABSENT:

JACQUELINE BETHEL, MAYOR

ATTEST:

CYNTHIA HERNANDEZDEPUTY CITY CLERK, CMC

45426322. I -1


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LOCAL PUBLIC AGENCYGOALS AND POLICIES FOR

COMMUNITY FACILITIES DISTRICTS ANDASSESSMENT DISTRICTS

MARCH 2004


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TABLE OF CONTENTS

SECTION 1: ENERAL POLICY STATEMENT

SECTION II: NITIATION OF THE FINANCING

SECTION III: CONOMIC VIABILITY OF THE FINANCING

SECTION IV: EVENUE SUPPORTING THE FINANCING

SECTION V: TRUCTURE OF THE FINANCING

SECTION VI: GREEMENTS WITH AFFECTED PUBLIC ENTITIES 2

SECTION VII: REDIT ENHANCEMENTS 2

SECTION VIII: OFFERING STATEMENT 4

SECTION IX: DMINISTRATION 4

SECTION X: XEMPTIONS TO THESE POLICIES 6


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SECTION I: GENERAL POLICY STATEMENT

The City of Indio (the City ) has created these policies on debt financing (the Policies ) as a

guideline to assist all concerned parties in determining the City's approach to land securedfinancing. It is the City's intent to support projects which address a public need and provide apublic benefit. These policies are also designed to comply with Section 53312.7(a) of theGovernment Code.

1. The City Council (the City Council ) will consider the use of communityfacilities districts ( community facilities districts ), or fixed lien specialassessments districts ( assessment districts ) as well as other methods of publicfinancing to assist residential projects.

2. The use of community facilities districts or assessment districts will be permittedto finance public facilities whose useful life will be equal to or greater than theterm of the bonds, including fees associated with such public facilities. Exceptfor maintenance and operation of public facilities being financed, the use ofcommunity facilities districts for funding those services identified as eligible bythe Mello-Roos Community Facilities Act of 1982, as amended, shall not beallowed except when sponsored by or required by the City Council. Facilitieswhich are, upon completion, owned, operated or maintained by public agenciesshall be considered public facilities. Limited exceptions will be made forfacilities to be owned, operated or maintained by private utilities.

The City is concerned that the proposed project that is to be financed is notpremature for the area in which it is to be located. The proposed project must beconsistent with the City's General Plan.

Projects that require: (i) a General Plan amendment; (ii) a change of zone thatincreases the density or intensity of land use, (iii) a specific plan, or (iv) a specificplan amendment to increase density or intensity of land use will require anevaluation by the City as to whether the proposed project is premature.

3. Extending public financing to a p roposed project for identified publicimprovements, or to pay development/impact fees associated with a proposed

project, cannot be done without considering the aggregate public service needs forthe project. Upon receipt of an application for public financing, the City willnotify the other public entities having responsibility to service the proposedproject and request comment on the application.

Must consider aggregate

public service needsfor the project.


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4. These Policies are not to be applied to land secured financing(s) that require anaggregate principal amount of bonds of less than $1,000,000 for the constructionof public facilities for developed residential properties and that are to bestructured pursuant to the Improvement Act of 1911 (Section 5000 et seq. of theStreets and Highways Code), Chapter 27 Part 3, Division 7 of the Streets andHighways Code (Commencing at Section 5870), or similar statutory authority.

5. Application for such financing shall be made to the Finance Director.

6. Priority will first be given for financing public facilities, such as water mains,sewer mains and electrical conduit. Connection or development impact feesrelated to such facilities may also be financed.

SECTION II: INITIATION OF THE FINANCING

A. Application

The proponent (and property owner, if not the proponent) of a project must obtain andsubmit the required application to the City's Finance Director.

Prior to accepting an application for a land secured financing, the Finance Director mayrequest that the proposed project be reviewed and commented on by a special districtcommittee to be composed of representatives of any potentially affected Citydepartments, City Attorney, and City's financing advisors.

An application must be completed and the necessary information provided, as determinedby the Finance Director, before any action will be taken to process the application andinitiate financing for a project.

B. Processing and Formation Fees

All costs to the City associated with the proceedings statutorily required toestablish either a community facilities district or an assessment district are to beadvanced by the applicant and paid prior to the actual sale of any bonds. Theapplicant will be reimbursed solely from the proceeds of the bonds sold for allmonies advanced.

An initial deposit in an amount of not less than $50,000 is to be attached to thecompleted application submitted; such deposit amount to be determined from timeto time by the Finance Director. The deposit shall be placed in a separate interestbearing trust account held by the City. All costs of the City and/or its consultantsretained during the formation process are to be paid from this account. Theapplication will not be considered complete without payment of the deposit.

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If, in the judgment of the Finance Director, the costs incurred or projected willcause the balance in this account to fall below $5,000, a written demand shall bemade to the applicant to advance monies sufficient to bring the account balance

that is projected to meet remaining costs required to establish the financingdistrict. Failure to advance the requested monies within 10 (ten) days of a writtendemand by the City will result on all processing of the application to cease and nofurther actions to be taken toward establishing the financing district until themonies have been received. Waiver of this requirement or of the deposit can bemade only by formal action of the City Council.

Monies held in the trust account are to be applied to pay the City and its staff inreviewing and processing the application as well as the costs of the assessmentengineer, special tax consultant, appraiser, absorption consultant, all publicationexpenses, and any other costs determined by the City to be necessary to establish

the financing district.

Accompanying the application will be an agreement governing the processing orformation fee, its deposit in a trust account, the use of the monies, the return to theapplicant of any unused portion of the fee or other monies advanced, andreimbursement of all monies advanced from bond proceeds.

Petition for Formation and Waiver of Time Requirement of the Election

Community Facilities Districts

The Mello-Roos Community Facilities Act of 1982, as amended, (the Act )requires that a petition requesting the formation of a proposed communityfacilities district signed by landowners holding title to ten percent (10%) if theland by area within the proposed community facilities district be submitted to theCity before formal action can be commenced to form the community facilitiesdistrict. The form of the petition will be supplied by bond counsel once thecompleted application has been received and initial processing has beencompleted.

The Act also provides that the length of time required for formation can beshortened if one hundred percent (100%) of the property owners within the

proposed boundaries of the community facilities district execute a waiverregarding the timing of and certain procedures associated with the requiredspecial election. The applicant should indicate on the application whether thiswaiver can be secured.

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2. ssessment Districts

The City will expect that the applicant for an assessment district will be able tosecure signatures from a sufficient number of landowners within the proposedassessment district on a petition, the form of which is to be supplied by bondcounsel, to satisfy the Special Assessment Investigation Limitation and MajorityProtest Act of 1931. This act requires signatures from landowners representing atleast sixty percent (60%) of the land area within the proposed boundaries of theassessment district.

C. election of Financing Team

The City shall select the bond counsel, financial advisors, underwriter or placement agentor remarketing agent, and fiscal agent/trustee. It will require the retention of underwriterand/or disclosure counsel. Providers of letters of credit, liquidity supports and othertypes of credit enhancements are also subject to the approval of the City.

In addition to the consultants that compose the financing team, as noted above, the Cityshall select an assessment engineer for assessment district or special tax consultant forcommunity facilities district to determine a fair and reasonable method to allocate theassessment or special tax required to meet debt service on the bonds and other relatedexpenses of the proposed financing district.

Unless satisfactory and current information regarding land values for property within theproposed financing district is available, the district shall require that a real estateappraiser of its choice be retained and an appraisal made. Additionally, an economist orreal estate appraiser or other qualified independent third party may also be retained forthe purpose outlined in Section IILA. In addition, the City reserves the right to retainadditional professional consultants that it deems appropriate.

SECTION III: CONOMIC VIABILITY OF THE FINANCING

In evaluating the application and the proposed debt issue, the City may require any or all of thefollowing to determine the economic viability of the proposed project and the timing of the saleof any bonds or series thereof.

A. bsorption Study

Unless waived by the Finance Director, an absorption study of the proposed project shallbe required for land secured financing. The absorption study shall be used as a basis toverify that the assumptions supporting the assessment spread or the special tax formulaare appropriate and sufficient revenues can be colleted to support the bondedindebtedness to be incurred.

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The absorption study will also be used to evaluate the timing considerations identified bythe applicant and the financing team. The absorption study will be provided to theappraiser and the appraisal required below in Section III.B is to reflect consideration ofthe absorption study.

B. Appraisal

A current appraisal will be required of the property that comprises the financing districtagainst which a lien will be placed to secure the bonded indebtedness to be incurred. Theappraisal will be made by an appraiser retained by the City. It is to be made consistentwith the guidelines attached hereto as Attachment A. An appraisal may be waived bythe Finance Director for any properties that have been developed with residential unitsand sold to individuals. These properties may be valued at (1) the then-current assessedvalue or (2) if the sale transaction is not yet recorded on the County Assessor's tax roll,the documented sale price.

The Bulk Land Value as specified in Attachment A will serve as the basis forestablishing the land value to lien ratios for transactions involving undeveloped parcels.The City requires, for residential projects, an overall minimum land value to lien ratio of3 to 1. The lien component of the ratio is to include all debt represented by anyoverlapping community facilities district or assessment district affecting the property.The City will also review the land value to lien ratios on an individual parcel and/orgrouping of parcels within the boundaries of the financing district to determine thesecurity of the debt issue.

C. Financial Information Required of Applicant

Both at time of application and prior to the sale and issuance of any bonds, the applicantfor a land secured debt issue and all property owners owning property within theboundaries of the proposed financing district that will be responsible for twenty percent(20%) or more of the debt service on the bonded indebtedness to be incurred shallprovide financial statements (preferably audited) for the current and prior two fiscalyears. The applicant shall also provide all other financial information related to theproposed project that may be requested by the City. This information may be disclosedin the official statement_

Subsequent to the sale and issuance of the bonds, federal and state statutes and/orregulations regarding the particular type of financing may require the preparation ofperiodic reports. The applicant and all major participants in the project will be requiredto provide infoimation needed to complete such statutorily required reports. In addition,the City department or related City or agency responsible for the administration of thebonds may require information of the applicant or the major participants in the project tosatisfy reporting demands for rating agencies or institutional buyers.

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D. Land Use Approvals

For land secured financing the City will require, at a minimum, that the proposed projectmust:

be consistent with the General Plan;

2. ave had the service levels for the required public facilities established or theexact public facilities required for the project identified.

A proposed project that requires: (i) a General Plan amendment, (ii) a change of zonethat increases the density or intensity of land use, (iii) a specific plan, or (iv) a specificplan amendment that increases the density or intensity of land use will be referred to theFinance Director for evaluation as to whether the project is premature.

An appropriate environmental review by the local governing body of the proposed projectis to have been completed separately before issuance of the bonds that will haveaddressed all of the public facilities that are to be constructed through the proposedfinancing.

E. Equity Participation by Applicant and Major Participants

In evaluating the proposed debt issuance, the City will consider the equity participation ofthe applicant and the major participants in the proposed project. At the time theapplication for the proposed financing is received, an analysis will be made as to theequity interest that the applicant has in the proposed project. It will also be required ofthe applicant that in addition to the financing, the applicant will fund in-tractinfrastructure and may be expected to contribute to other public improvements related tothe proposed project.

SECTION 1V: EVENUE SUPPORTING THE FINANCING

Land secured bonds are termed limited obligations whose primary repayment issecured, in the case of a community facilities district, by a special tax, or in the case of an

assessment district, by a confirmed assessment lien. The following are the criteria thatwill be applied in evaluating the revenue stream that will be supporting a proposed landsecured bond financing.

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1. ommunity Facilities Districts

a. The rate and method of apportionment of the special tax must be bothreasonable and equitable in apportioning the costs of the public facilitiesto be financed to each of the parcels within the boundaries of the proposeddistrict. The City prefers that this apportionment of costs be based on thebenefit that each parcel is to receive from the public facilities.

b. The rate and method of apportionment of the special tax is to provide forthe administrative expenses of the proposed District, including, but notlimited to, those expenses necessary for the enrollment and collection ofthe special tax and bond administration.

c. All property not otherwise exempted by the Act from taxation shall besubject to the special tax. The rate and method of apportionment mayprovide for exemptions to be extended to parcels that are to be dedicatedat a future date to public entities, held by a home owner's association, ordesignated open space.

d. The annual special tax levy on each residential parcel developed to itsfinal land use shall be approximately equal each year, except that the Citywill allow an annual escalation factor, not to exceed two percent (2%).

e. The maximum annual special tax, together with ad valorem property taxes,

county service area charges, special assessments or taxes for anoverlapping financing district, or any other charges, taxes or fees payablefrom and secured by the property, including potential charges, taxes orfees relating to authorized but unissued debt of public entities other thanthe district, in relation to the expected assessed value of each parcel uponcompletion of the private improvements to the parcel is of greatimportance to the City in evaluating the proposed financing.

The objective of the City is to limit the overlapping debt burdens on anyparcel to two percent (2%) of the expected assessed value of the parcelupon completion of the private improvements. In evaluating whether this

objective can be met, the City will consider the aggregate public serviceneeds for the proposed project. It will consider that public improvementsthe applicant is proposing be financing in relation to these aggregate needsand decide what is an appropriate amount to extend in public financing tothe identified public improvements.

This evaluation will be based on information obtained from other affectedtaxing entities that have jurisdiction to impose a levy on the proposedproject.

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f. The total maximum special taxes that can be collected from taxableproperty in a district, taking into account any potential changes in land useor development density or rate, and less all projected administrative

expenses, must be equal to at least one hundred ten percent (110%) of thegross annual debt service on any bonds issued by or on behalf of thedistrict in each year that said bonds will remain outstanding.

g. The rate and method or apportionment of the special tax shall include aprovision for a back up tax to protect against any changes in developmentthat would result in insufficient special tax revenues to meet the debtservice requirements of the District. Such back up tax shall be structuredin such a manner that it shall not violate any provisions of the Actregarding cross-collateralization limitations for residential properties.

h. A formula to provide for the prepayment of the special tax may beprovided; however, neither the City nor the community facilities districtshall be obligated to pay for the cost of determining the prepaymentamount which is to be paid by the applicant.

Assessment Districts

a. The apportionment of the assessment lien among the parcels comprisingthe proposed assessment district shall be based upon the direct and specialbenefit each parcel received from the public facilities to be financed.

b. The assessment lien is to provide for the administrative expenses of theassessment district including, but not limited to, those expenses necessaryfor the enrollment and collection of the annual assessment installmentsand bond administration.

c. All property within the boundaries of the proposed assessment district notstatutorily exempted by the applicable provision of the California Streetsand Highways Code will be subject to an assessment lien.

d. The annual assessment installment levied on each parcel developed to itsfinal land use shall be approximately equal each year, except that a

variation for administrative expenses will be allowed.

e. The annual assessment installment, together with ad valorem propertytaxes, county service area charges, special assessments or taxes for anoverlapping financing district, or any other charges, taxes or fees payablefrom and secured by property, including potential charges, taxes, or feesrelating to authorized but unissued debt of public entities other that theCity, in relation to the expected assessed value of each parcel uponcompletion of the private improvements to the parcel is of greatimportance to the City in evaluating the proposed financing.


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The objective of the City is to limit the overlapping debt burden on anyparcel to two percent (2%) of the expected assessed value of the parcelupon completion of the private improvements. In evaluating whether thisobjective can be met, the City will consider what public improvements theapplicant is proposing be financed in relation to these aggregate needs anddecide what is an appropriate amount to extend in public financing to theidentified public improvements.

This evaluation will be based on information obtained from other affectedtaxing entities that have jurisdiction to impose a levy on the proposedproject.

f. onsistent with the applicable statutory provisions of the CaliforniaStreets and Highways Code, a property owner shall have the right toprepay all or a part of the assessment lien.

3. eimbursement Revenues

Full or partial reimbursement revenue received from a public agency or entity forconstruction by the financing district of identified public facilities required to besized to exceed the service needs of the properties within the financing districtshall be considered revenues of the financing district. These reimbursementsshall, depending on date of receipt, be used to either augment constructionproceeds or to reduce the outstanding bonded indebtedness of the financingdistrict as determined appropriate by the City.

SECTION V: STRUCTURE OF THE FINANCING

In structuring a particular land secured financing, the City and its financing team will insure thatthe following issues are addressed if determined to be applicable or appropriate for the particulardebt issue.

A. Limited Obligation of the City

Both the statutory authority providing for the issuance of the bonds as well as the

proceedings resulting in the sale and issuance of the bonds must insure the bonds arelimited obligations of the City payable only from the revenue source identified and do notrequire the expenditure of the general funds or any other revenues of the City to satisfydebt service obligations or to replenish any reserve fund established for the bonds.

B. Structuring of Debt Service

Land secured financing is to be structured with level debt service, or as otherwisepermitted in these Policies, and to mature within thirty (30) years of the first scheduledprincipal payment of the bonds.

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C. edemption Provisions

1. Prepayment and optional redemption

(a) ommunity Facilities Districts

It is the preference of the City that the bonds will have redemptionprovisions that provide call protection with the maximum premiumto be paid not to exceed two percent (2%) and allow for bonds tobe redeemed not later than the thirteenth year without premium.

(b) Assessment Districts

It is the preference of the City that the bonds will have redemptionprovisions that provide that the maximum premium to be paid willnot exceed three percent (3%), the term for which the premium isto be paid will not exceed twelve (12) years, and in the thirteenthyear, the bonds can be redeemed without premium.

2. Unexpended construction proceeds. If applicable, land secured financingis to have redemption features that will allow the City to use unexpendedproceeds to redeem bonds at par upon completion of the public facilities tobe financed, or upon the City, in its sole discretion, determining that all ora portion of the public facilities cannot be constructed.

3. Open market purchase. The City shall be permitted, in lieu of redeemingbonds, to purchase bonds on the open market at a price not to exceed parplus accrued interest.

D. eserve Funds

The City will require that for land secured financing, a reserve fund be established at arequired funding level as determined appropriate by the financing team. For land securedfinancing, the City has determined the appropriate funding level to be the lesser of:

1 aximum annual debt service on all bonds then outstanding; or,

2. one hundred twenty-five percent (125%) of average annual debt service on allbonds then outstanding; or

3. ten percent (10%) of the original proceeds of the bonds; or

4. as otherwise required by federal law.

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E. Capitalized Interest

In land secured financing, the City is concerned with the degree to which propertyownership, and therefore the responsibility for payment of the special tax or annualassessment installments, is concentrated in one or more individuals or entities.Capitalized interest is considered a means by which the City can assure itself and bondowners that debt service obligations will be met during the initial year(s) of the financingdistrict. However, the amount of capitalized interest should be balanced against theannual levy on future landowners.

The amount of capitalized interest that will be required to be funded from bond proceedsin a particular land secured financing shall be based on the degree to which the propertyownership is concentrated in one individual or entity. Whenever one individual or entitywhose land holdings within the financing district is responsible for ten percent (10%) ormore of the debt service on the bonds, twelve (12) months of capitalized interest, or anamount determined by the financing team to be adequate, will be required.

F. Foreclosure Covenant

The City will extend the following covenant dealing with judicial foreclosure:

The City covenants for the benefit of the owners of the Bonds that, subject to exceptionstated in the following sentence, it will commence judicial foreclosure proceedings notlater than the October 1 following the Fiscal Year: (a) if the Finance Director determinesthat there is a delinquency of an assessment/special tax of $2,000 or more for a priorFiscal Year(s), for any single parcel of land in the District, foreclosure shall becommenced against such parcel of land in the District; (b) if the Finance Directordetermines that the total amount of delinquent assessments/special tax for the prior FiscalYear for the entire District, less the total delinquencies under subsection (a) above,exceeds five percent (5%) of the total assessments/special taxes due and payable in theprior Fiscal Year, foreclosure shall be commenced against such parcel of land in theDistrict with a cumulative delinquency of $1,000 or more; and (c) if the Finance Directordetermines that the total amount of delinquent assessments/special taxes for the priorFiscal Year for the entire District, less the total delinquencies under subsections (a) and(b) above, exceeds three percent (3%) of the total assessments/special taxes due andpayable for the prior Fiscal Year, foreclosure shall be commenced against each parcel ofland within the District with any amount of delinquency for the prior Fiscal Year(s), andthe City shall diligently pursue to completion such foreclosures. The City shall issuenotices of delinquency against all parcels with delinquent Assessments, regardless ofamount, within 60 days after the Finance Director has received the Auditor's Report forJuly of that Bond Year showing such delinquent Assessments. The City shall not beobligated to advance funds in order to maintain the reserve fund at the reserverequirement.


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G. Underwriter and Original Issue Discount

The underwriter's discount shall be negotiated and determined solely by the City andshall be competitive with and comparable to such discounts on similar financing beingissued by the City or other public entities. The City shall consider any othercompensation the underwriter may be receiving in connection with the bond financing indetermining the appropriate amount of the discount.

An original issue discount will be permitted only if the City determined that suchdiscount results in a lower true interest cost on the bonds and that, for land securedfinancing, the use of an original issue discount will not adversely affect the ability of thefinancing City to construct public facilities identified by the bond documents.

H. Timing of Bond Sale

If the City is to construct the improvements, no issuance and sale of bond or any series ofbonds will be completed until plans and bid specifications for the public facilities to befinanced by the bonds are final and all required approvals associated therewith have beenreceived, unless the bonds are being issued for the purpose of paying development orimpact fees, in which case, the City may intend to combine such amounts with otherfunds to construct a public facility. However, if the debt issue can be structured in morethan one series and if the statutory authority pursuant to which the financing district hasbeen established allows, and the City Council finds that the proposed public facilitieshave regional and/or other significant public benefit, the initial bond series may financethe design, engineering and preparation of the bid specifications for the public facilities.

SECTION VI: GREEMENTS WITH AFFECTED PUBLIC ENTITIES

Joint financing agreement(s) required with other public entities which will own, maintainor operate the facilities to be financed, or whose development fees are being paid, mustbe adopted and approved by all parties at or prior to the adoption of the resolutionestablishing the financing district.

SECTION VII: REDIT ENHANCEMENTS

Credit enhancements, if required by the City, are utilized either to improve the credit worthinessof the proposed financing or to insure that the debt service requirements of the proposed debtissue are met in a timely manner. It is important to the City of minimize the possibility of a debtissue being placed in default and to insure that sufficient cash flows are available to meet debtservice requirements.

The City will examine carefully the provider of the required credit facility and the form that thecredit facility will take. The rating of the provider, as well as the provider's capitalization, are ofprincipal concern, and a reduction in either during the term of the credit facility to a levelunacceptable to the City may require that an alternate credit facility be secured from an

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acceptable provider. The City reserves the right, in its sole discretion, to determine theacceptability of both the credit facility and its provider.

The nature and terms of the credit facility will vary with regard to the type of financing for whichit is being required. If the value-to-lien ratio of particular property within a financing district is4.0 to 1 or greater, the City will not require a letter of credit or other security enhancements tosecure payment of the special taxes or assessments to be levied annually on such propertieswithin the district. However, letters of credit or other security may be required for individualparcels within the district that have a value-to-lien ratio of less than 4.0 to 1. Any securityrequired to be provided by the applicant will be discharged by the City upon the opinion of astate certified appraiser retained by the City, that a value-to-lien ratio of 4.0 to 1 has beenattained.

If required by the City, a credit facility having the following terms will be provided:

1. The credit facility will name the City or the financing district as beneficiary.

2. The face amount of credit facility will be equal to twice the amount of the annualdebt service obligation for which the property is responsible.

3. The credit facility will have a term of one year and be subject to annual renewalor call.

4. The credit facility may be drawn upon should there be a default by the property

owner in the timely payment of the special tax obligation or the annualassessment installment.

5. The face amount of the credit facility will be subject to periodic adjustmentsshould the property owner sell or transfer portions of the property to unrelatedthird parties.

6. All fees payable on the letter of credit or other security will be the soleresponsibility of the applicant or developer, not the City or the district.

For purposes of these Policies, parties will be considered to be related should they be so deemed

by the Internal Revenue Code of 1986, as amended, and the regulations promulgated there under.However, the City does reserve the right to apply a stricter standard than that provided by theInternal Revenue Code in determining parties to be related.

The City may, in its sole discretion, require additional credit enhancement for a particular landsecured financing if it is determined that it is needed to bring the credit worthiness of theproposed debt issue to a level that is acceptable to the City.

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SECTION VIII: OFFERING STATEMENT

It is the intent of the City to comply with all applicable federal or state requirements regardingdisclosure to insure that fair and accurate descriptions of debt issued are provided to thepurchasers of the bonds. The City will require retention of counsel by an underwriter ordisclosure counsel for any particular land secured financing having an aggregate principal valueof $1,000,000 or more. Decisions as to the adequacy of the disclosure will be determined by theCity, its counsel, bond counsel and underwriter or disclosure counsel. No preliminary or finaloffering statement for a particular land secured financing will be released for circulation unless itis deemed final by the City on the advice of its counsel and bond counsel.

The proponent(s) of a particular land secured financing and all principal participants therein areexpected to provide the information requested by the City, its counsel, the underwriter, itscounsel, disclosure counsel or bond counsel that is deemed necessary for disclosure purposes.Failure on the part of the proponent and any principal participant to comply with such requestswill jeopardize completion of the debt issue.

The proponent of a particular land secured financing and all principal participants therein will berequired to execute those certificates and provide those written opinions of their respectivecounsel that are required by the terms of the bond purchase agreement. Failure to do so willresult in the bonds not being issued and sold.

SECTION IX: DMINISTRATION

A. ond Administration

(1) Community Facilities Districts

These bonds are issued pursuant to bond indentures or fiscal agentagreements which identify the Finance Director of the City to haveadministrative responsibility for this debt issued. This includes, amongother duties, the computation and enrollment of the special tax, paymentof principal and interest on the bonds, initiation of foreclosure proceedingswith regard to delinquent parcels, and management and investment ofmonies held in all fund and accounts created by the bond indentures orfiscal agent agreement.

(2) Assessment Districts

These bonds are issued pursuant to bond indentures or fiscal agentagreements that will identify the Finance Director of the City to haveadministrative responsibly for this debt issued. This includes, amongother duties, the computation and enrollment of the annual assessmentinstallment, payment of principal and interest on the bonds, initiation offoreclosure proceedings with regard to delinquent parcels and

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management and investment of monies held in all funds and accountscreated by the bond indentures or fiscal agent agreements.

Construction Contract Administration

(1) Acquisition

The City will acquire public facilities to be financed by the proceeds of thebonds upon completion of discreet components of the facilities, or discretecomponents as approved by the City at its sole discretion.

(2) Reimbursement

At the time of submission of an application for a land secured financing,

the Finance Director will consider whether the City will require the publicfacilities to be constructed by the proponent of the financing as if theywere a public work. If this is to be required, the public facilities are to beconstructed as public works consistent with all applicable statutoryrequirements. Design engineering, project management and constructioncontract administration are to be provided by the financing proponent butsubject to oversight and approval by the City.

At the time the financing district is established, the proponent of thefinancing shall enter into an acquisition funding agreement that willidentify the public facilities to be constructed, development or impact fees

to be paid and the amount with respect to such facilities or fees. Uponcompletion of the specified public facilities, if any, the financing districtwill acquire the completed facilities consistent with the terms of theagreement.

(3) Construction

The City may determine that the public facilities to be financed are to beconstructed as a public work with project management and constructioncontract administration services provided by the City or the related public

agency. If this determination is made, then in the resolution of intention

for establishing the financing district, the City will find that it is not in thepublic interest to allow the property owners within the financing district toenter into a contract to construct the public facilities.

Notice to Future Property Owners

The applicant or property owner will be required to disclose the specific special taxes orassessments of the financing district that they have been involved in and any other specialtax, assessment or liens on individual parcels to existing and future property owners. Inaddition to all requirements of law, the City shall require the applicant to provide

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disclosure of such information to the purchasers of property within the financing districtand the terms and conditions of bonds issued on behalf of the financing district. Suchdisclosure requirement shall include notifications to potential property purchasers, as wellas methods to notify subsequent property purchasers.

SECTION X: XCEPTIONS TO THESE POLICIES

The City may find in limited and exceptional instances that a waiver to any of the above statedpolicies is reasonable given identified special City benefits to be derived from such waiver. Suchwaivers are granted only by action of the City Council based upon specific public purpose and/orhealth and safety findings.

**************************************************

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ATTACHMENT ACRITERIA FOR APPRAISALS

Definition of Appraisal

An appraisal is a written statement independently and impartially prepared by a qualifiedappraiser setting forth an opinion of fair market value of an adequately described property as of aspecific date, supported by the presentation and analysis of relevant market information.

Standards of Appraisal

The format and level of documentation for an appraisal depend on the complexity of theappraisal problem. A detailed appraisal will be prepared for complex appraisal problems. Adetailed appraisal will reflect nationally recognized appraisal standards, including, to the extentappropriate, the Uniform Appraisal Standards for Land Acquisition and the CDIAC AppraisalGuidelines (published in 1994). An appraisal must contain sufficient documentation, includingvaluation data and the appraiser's analysis of the data, to support his or her opinion of value. At aminimum, the appraisal shall contain the following:

1. he purpose and/or function of the appraisal, a description of the property beingappraised, and a statement of the assumptions and limiting conditions affecting theappraisal.

An adequate description of the physical characteristics of the property being appraised,location, zoning, present use, and an analysis of the highest and best use.

All relevant and reliable approaches to arrive at the value consistent with commonlyaccepted professional appraisal practices. If a discounted cash flow analysis is used, itshould be supported with at least one other valuation method such as a market approachusing sales that are at the same stage of land development. If more than one approach isutilized, there must be an analysis and reconciliation of approaches to value that aresufficient to support the appraiser's opinion of value.

4. A description of comparable sales, including a description of all relevant physical, legaland economic factors such as parties to the transaction, source and method of financing,and verification by a party involved in the transaction.

5. A statement of the value of the real property.

6. The date of appraisal, signature and certification of the appraiser.

Attachment A-1


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Conflict of Interest

No appraiser or review appraiser will have any interest, direct or indirect, in the real propertybeing appraised for the City that would in any way conflict with the preparation or review of theappraisal. Compensation for making an appraisal will not be based on the amount of thevaluation.

Appraisal Premises

The valuation of the proposed district should be based on three premises:

1. aw Land Value- (Premise #1): The total land within the project is valued as is.

(a) With any existing infrastructure.(b) Without proposed infrastructure being financed.(c) With existing parcel configuration.(d) Considering planned densities allowed by the specific site plan of the project.

This is a typical type of land valuation.

2. roject Buildout Value-(Premise #2): The total land within the project is valued underprojected conditions.

(a) With proposed infrastructure being financed completed.(b) At the planned densities allowed by the specific plan.(c) Land development is at the stage of being marketed to merchant builders or

tentative tract maps ready to be filed.

This is a projected value based on the project plans predicated on the market conditionscontinuing as projected.

3. ulk Land Value-(Premise #3): The total land within the project is valued underprojected conditions.

(a) With proposed infrastructure being financed completed.

(b) With existing parcel configurations.(c) Considering planned densities allowed by the specific plan of the project.

This premise should consider a discounted or quick sale valuation considering time,cost and the possibility of a per unit value based on the total size of the project.

Attachment A-2


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CITY OF INDIO



THRU: om R amirez, City Manager 'PA)FROM: erry Carter, Finance Director

SUBJECT: pproval of Reim bursement R esolution

SUMMARY: The City of Indio desires to finance certain improvements benefiting itsMunicipal Golf Course by the sale of tax-exempt bonds, notes, or other obligations, inone or more se ries, the principal amount of the financings not to exceed $6 ,500,000 .

The City of Indio expects to incur certain expenditures relating to the golf course andto pay for such expenditures from the City's money on hand prior to the execution ofthe Obligations.

The City of Indio is declaring its official intent, subject to further approval of thisCouncil, to use the proceeds of the Obligations to reimburse itself for the

Reimbursem ent Expenditures.Previous Council Action: None

Financial Implications: Reimbursement of expenditures made prior to the executionof the Bonds.

Recommendation: Staff recomm ends approval of the Reimburseme nt Resolution.

Proposed M otion: Move app roval of the R esolution of the City of Indio declaring itsintent to issue tax-exem pt obligations for certain golf course improvem ents and toallow for the reimbursement of City expenditures made prior to the issuance of suchobligations.


A. Resolution

ITEM NO. 4


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RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL, OF THE CITY OF INDIO, CALIFORNIA,

DECLARING ITS INTENT TO ISSUE TAX-EXEMPT OBLIGATIONS FOR CERTAINMUNICIPAL GOLF COURSE IMPROVEMENTS AND TO ALLOW FOR THEREIMBURSEMENT OF CITY EXPENDITURES MADE PRIOR TO THE ISSUANCEOF SUCH OBLIGATIONS

RECITALS:

WHEREAS, the City of Indio desires and intends to finance certain golf courseimprovements; and

WHEREAS, the City expects to cause the execution, delivery, and sale of tax exemptbonds, notes, or other obligations, in one or more series, for the purpose of providing financing

for the golf course improvements in a principal amount of not to exceed $6,500,000 (theObligations ); and

WHEREAS, the City expects to incur certain expenditures relating to the Project and topay for such expenditures from the City's money on hand prior to the execution of theObligations (the Reimbursement Expenditures ); and

WHEREAS, the City reasonably expects to use a portion of the proceeds of theObligations to reimburse the City for the Reimbursement Expenditures.

NOW THEREFORE, THE CITY COUNCIL, OF THE CITY OF INDIO,

CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER ASFOLLOWS:

Section 1. he City hereby declares its official intent, subject to further approval ofthis Council, to use the proceeds of the Obligations to reimburse itself for the ReimbursementExpenditures. It is intended that this Resolution shall constitute a declaration of official intentwithin the meaning of Section 1.150-2 of the Treasury Regulations promulgated under Section150 of the Internal Revenue Code of 1986.

Section 2. he adoption of this Resolution shall not bind the City to proceed with theexecution and delivery of the Obligations until and unless all other necessary actions and

approvals are taken or received in accordance with all applicable laws.

Section 3. ll actions heretofore taken by the officers, or their respective designees,and the employees and agents of the City in connection with the financing of the Project arehereby ratified and confirmed. The officers and their designees, the employees and agents of theCity are hereby authorized to take any and all actions in connection with the financing of theProject and as may be necessary and consistent with the purposes of this Resolution.

Section 4. his Resolution shall take effect immediately upon its adoption.

1


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PASSED, APPROVED AND ADOPTED this 3rd day of March, 2004, by the followingvote:

JACQUELINE BETHEL, MAYORATTEST:


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CERTIFICATES OF PARTICIPATION GOLF COURSE IMPROVEM ENT PROJECT) 2004 SERIES ACITY COUNCIL March 3, 2004PAGE 2

PREVIOUS COUNCIL ACTION: None

ANALYSIS:

The ERA study was based on the following greens fees:

Resident

18-Hole

Daily GreensFee

(excluding cart)Weight

Peak $20.00 12%Shoulder 20.00 9%Off 15.00 2%

TwilightPeak $15.00 2%Shoulder 15.00 1%Off 15.00 1%

Nonresident

18-HolePeak $30.00 28%Shoulder 25.00 22%Off 15.00 16%


Average/Total $22.70 100%Less: Complimentary/Discount ( .14) ( % )

Weighted Average/Total $21.56 95%P

This fee level is expected by ERA to generate net income of $400,000 in 2006 basedon 44,000 rounds of play and $500,00Cliat stabilization of 47,000 rounds of play. TheERA projections of expenses take into account the course renovations and theadditional expenses related to some of the improved course features.

The City's financing team recommends that the City issue Certificates of Participation,and in effect, guarantee that the General Fund be responsible for paying debt servicein the event of a shortfall in net income of the course. This will allow the financing toachieve an investment grade rating and the average interest rate is expected to beapproximately 5.3%, and annual debt service of $415,000. Staff did considerfinancing the Golf Course improvements solely based on net revenue of the course.However, the interest rate was expected to be as high as 6.3%, given the uncertainnature of a start-up golf course and debt service to increase by more than $40,000


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CERTIFICATES OF PARTICIPATION GOLF COURSE IMPROVEM ENT PROJECT) 2004 SERIES ACITY COUNC IL - March 3, 2004PAGE 3

annually. Using the General Fund structure makes the course more affordable, sincethe risk that the course does not produce enough income is borne by the GeneralFund. This is not an uncommon financing method, since it is not particularly likely thatthe City would allow a stand-alone golf course financing to go into default in any eventand would pick up such shortfall. Therefore, Staff is recommending that the City issueCertificates of Participation to fund the estimated $4,900,000 in construction costs.

A resolution of the City and of the Indio Public Financing Authority is required toapprove the financing. The City resolution presented authorizes the Finance Directorto execute a purchase contract with O'Connor Southwest Securities for the sale of thebonds, at a rate not to exceed 7%, with an underwriter's discount not to exceed 1.5%.The resoluWi also approves the forms of the following documents required to issuethe bonds: a Trust Agreement between the City, the Authority and Union Bank of

California, N.A.; a Lease Agreement between the City and the Authority, a Site andFacilities Lease between the City and the Authority, the Continuing DisclosureAgreement; the Preliminary Official Statement relating to the Certificates ofParticipation and the Purchase Contract for the sale of the Bonds pursuant to anegotiated sale with O'Connor Southwest Securities which is scheduled to occur on orabout April 7, 2004 in an amount not to exceed $6,500,000. The forms of thedocuments are on file with the City Clerk.

FINANCIAL IMPLICATIONS:

The City will be responsible for funding any shortfall between actual net revenues ofthe renovated golf course and the estimated debt service on the financing of $415,000per year. An amount will be set aside from proceeds of the COPs to pay interest onthe bonds for 18 months. This is expected to cover the time to complete therenovations and grow-in the course.

RECOMMENDATION:

Staff recommends Council adopt the Resolution authorizing the issuance ofCertificates of Participation and authorizing the execution and delivery of certaindocuments in connection with the financing.

ACTION:

MOVE APPROVAL OF THE RESOLUTION OF THE CITY COUNCIL, OF THE CITYOF INDIO, CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OFCERTIFICATES OF PARTICIPATION AND AUTHORIZING THE PREPARATION,EXECUTION AND DELIVERY OF THE NECESSARY DOCUMENTS INCONNECTION THEREWITH


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CERTIFICATES OF PARTICIPATION (GOLF COURSE IMPROVEMENT PROJECT) 2004 SERIES ACITY COUNCIL March 3, 2004PAGE 4


A. Resolution authorizing issuance of City of Indio Certificates of Participation (GolfCourse Improvement Project) 2004 Series A

B. ERA Study


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RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL, OF THE CITY OF INDIO, CALIFORNIA,AUTHORIZING THE EXECUTION AND DELIVERY OF CERTIFICATES OFPARTICIPATION AND AUTHORIZING THE PREPARATION, EXECUTION ANDDELIVERY OF THE NECESSARY DOCUMENTS IN CONNECTION THEREWITH

WHEREAS, the City Council desires to initiate proceedings to provide for the executionand delivery of certificates of participation (the Certificates ) in the aggregate principal amountnot to exceed $6,500,000 the proceeds of which will be used to make improvements to the City'sgolf course (the Project ).

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF INDIO,CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER ASFOLLOWS:

Section 1. The City Council hereby authorizes the execution and delivery of theCertificates in the aggregate principal amount not to exceed $6,500,000. The Certificates shallbear true interest cost (including original issue shown) not greater than 7.0% and provides for anunderwriter's discount not greater than 1.5% of the principal amount of Certificates.

Section 2. The City Council hereby approves the Trust Agreement, the LeaseAgreement, the Site and Facilities Lease, the Continuing Disclosure Agreement and a CertificatePurchase Agreement, substantially in the forms annexed hereto, with such revisions,amendments and completions as shall be approved by a Responsible Officer, such approval to beconclusively evidenced by the execution and delivery thereof A Responsible Officer shall

include any member of the City Council, the City Manager, the Finance Director, the City Clerkor any official of the City designated by the Mayor or the City Manager as a Responsible Officer.

The City Council has made findings that the Project provides open space within the Citysuch that the Project fulfills a significant and essential public purpose for the City and itsresidents and in the event that the Project may not be functional as a municipal golf course, theCity will continue to make lease payments for the use and occupancy of the Project as essentialopen space

Section 3. The City Council hereby approves the Preliminary Official Statementrelating to the Certificates, substantially in the form annexed hereto, with such revisions,amendments and completions as shall be approved by a Responsible Officer with the advice ofSpecial Counsel and Disclosure Counsel, in order to make the Preliminary Official Statementfinal as of its date, except for the omission of certain information, as permitted by Section240.15c2-12(b)(1) of Title 17 of the Code of Federal Regulations ( Rule 15c2-12 ), and anycertificate relating to the finality of the Official Statement under Rule 15c2-12. A ResponsibleOfficer is authorized and directed to execute and deliver a final Official Statement andamendments and updates thereto, as appropriate, in substantially the form hereby approved, withsuch additions and changes as may be approved by Special Counsel and Disclosure Counsel andthe Responsible Officer executing the same, such approval to be conclusively evidenced by theexecution and delivery thereof

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ANALYSIS OF FINANCIAL PERFORMANCE

Projections of golf play, greens fee structure, and other course revenue and expense

characteristics are based on prevailing and anticipated market conditions presented earlier,

and the following considerations:

The proposed course would be comparable in terms of design and maintenance

quality to facilities such as Oasis and Suncrest in Palm Desert and Cimarron in

Cathedral City.

The course would be operated by a qualified professional golf course

management company.

The golf course would be night lighted.

The course is assumed to be open to the public with discounted rates during the

shoulder and off seasons. In addition, City of Indio resident discounts also have

been assumed.

Golf carts would be optional.

A double-ended golf practice range would offer 30 tee stations for same-day

golfers and commercial use, and would be night lighted. A golf academy is being

proposed for one end of the range, but has not been evaluated in this analysis.

A modular clubhouse of approximately 2,500 square feet, plus cart storage to

accommodate a fleet of 40 carts, would be constructed. The clubhouse would

include a small pro shop, administration office and storage areas, and a snack

bar/grill. The following space allocation would be representative of the modular

clubhouse.

Size(square feet)

Pro Shop 600Office and Storage Area 400Snack Bar/Grill/Kitchen 1,00 0Restrooms/Common Area/Circulation 500

Total 2,500

Economics Research Associates ity of IndioERA No. 15422 age 1


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A permanent clubhouse is proposed as part of a second development phase (3-5

years after course construction is completed), but has not been included in this

analysis.

The course is owned by a qualified public entity which is exempt from real estate

property tax.

A modest recovery of the Coachella Valley golf market occurs over the next

several years.

Utilization

Annual golf play for the subject course, reflecting the greens fees and other course

characteristics indicated below, is projected as follows:

Number of Rounds

ity Nonresident TotalYear R esident Public P ay

1 12,000 28,000 40,0002 13,000 31,000 44,0003+ 14,000 33,000 47,000

Based on the market conditions described above, and with particular consideration to the

design characteristics of the proposed course, the distribution of play at stabilization is estimated

as follows:

Season

Numberof

Rounds Weight

AverageRounds/

Day

Peak(January 1-April 30) 21,150 45% 175

Shoulder(May 1-May 31;October 1-December 31) 16,450 35% 137

Off(June 1-September 30) 9,400 20% 78

Total 47,000 100% 130

Economics Research Associates ity of IndioERA No 15422 age 2


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Greens Fees

The following greens fees structure, expressed in constant 2004 dollars, for the proposed

course are consistent with current and projected market support, the course design, and annual

play projections:

Resident18-Hole

Daily Greens Fee(excluding cart) Weight

Peak $20.00 12%Shoulder 20.00 9%

Off 15.00 2%Twilight


Nonresident18-Hole



Average/Total $22.70 100%Less: Complimentary/Discount ( .14) 5L)

Weighted Average/Total $21.56 95%

Other Revenue

Other sources of revenue include electric cart rental, practice range, pro shop sales, food

and beverage operations, and miscellaneous income. Estimates for these are as follows:

Carts

Fee (per person)18-hole

9 hole$10.00$ 6.00



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Utilization 0%

Average Revenue/Round 3.84

Practice Range (30 tees night lighting)

Gross Revenue

Pro Shop

Gross Revenue

Food and Beverage

Gross Revenue

Miscellaneous Income

(pull carts, club rentals, equipment repair,other)

$150,000 per year

$ 2.25 per round

$ 4.00 per round

$ 25,000 per year

Golf Course Operating Expenses

The costs of operating the renovated executive course including course maintenance,

water, utilities, replacement reserve, golf operations, and general and administrative expenses

are based on discussions with City staff, selected golf course management firms, the experience

of local course operators, and our general experience with golf courses located in similar desert

climates.

Cost of Sales (percent of gross revenue)

Merchandise 65%Food and Beverage 32%

Course Maintenance

Salaries and Benefits $225,000Water and Utilities 70,000Service and Supplies 125,000Maintenance Equipment 50,000

Total $470,000



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TablePRO FORMA NET OPERATING INCOME STATEMENT

Indio Executive Golf Course

(In Current S000s)

ANNUAL ROUNDSREVENUE

Greens Fees @ $21.56Cart FeesPractice RangePro Shop MerchandiseFood & BeverageOther

Gross RevenueLess: Cost of Sales

Pro Shop MerchandiseFood & BeverageSubtotal Cost of Sales

TOTAL REVENUEOPERATING EXPENSESCourse Maintenance

Salaries & BenefitsWater & UtilitiesServices & SuppliesMaintenance Equipment

Subtotal Course MaintenanceGolf OperationsPro Shop StaffCart LeaseCart Maintenance/StaffPractice RangeMiscellaneousSubtotal Golf Operations

F&B Operating ExpensesClubhouse UndistributedGeneral & Administrative

Salaries & BenefitsInsuranceProperty TaxesOther Services/SuppliesAdvertising & PromotionManagement FeeSubtotal G&A

Course Capital ReserveTOTAL EXPENSESNET OPERATING INCOME

Year1 2 3 4 5 Total

40,000 44,000 47,000 47,000 47,000

$862 $977 $1,075 $1,107 $1,141 $5,162

154 174 191 197 203 919150 155 159 164 169 796

90 102 112 116 119 539160 181 199 205 212 958

25 26 27 27 28 133

$1,441 $1,615 $1,764 $1,817 $1,871 $8,507

$59 $66 $73 $75 $77 $3505 1 58 64 66 68 306

$110 $124 $137 $141 $145 $657

$1,331 $1,490 $1,627 $1,676 $1,726 $7,851

$225 $232 $239 $246 $253 $1,19570 72 74 76 79 372

125 129 133 137 141 66450 52 53 55 56 265

$470 $484 $499 $514 $529$2,495

$100 $103 $106 $109 $113 $53130 31 32 33 34 15915 15 16 16 17 8025 26 27 27 28 13320 21 21 22 23 106

$190 $196 $202 $208 $214 $1,009$72 $82 $90 $92 $95 431$25 $26 $27 $27 $28 $133

$75 $77 $80 $82 $84 $39820 21 21 22 23 106

- - - - - -5 0 52 53 55 56 26515 15 16 16 17 8084 87 89 92 95 446

$244 251 $259 $267 $275 $1,2955 0 52 53 55 56 265

$1,051 $1,090 $1,128 1,162 $1,197 $5,629$280 $400 $499 $514 $529 2,222

Note: Reflects 3.0% average annual inflation rate, beginning in year 2.Source: Economics Research Associates.


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CITY OF INDIO



THRU: om R amirez, City Manager

FROM: erry Carter, Finance Director

SUBJECT: onfirmation of Unpaid Assessments for Assessment District No.2003-5 (Sunburst)

SUMMARY

Assessm ent District No. 2003-5 (Sunburst) encompasses T ract No. 3041 2 and 3041 2-1, a 135 lot single-family subdivision to be located generally west of Madison Streetand North of Fred Waring Drive known as Sunburst. All property within theAssessment District is owned and being developed by Lennar Homes of California,Inc., a California Corporation. The Assessment District was formed to provide amethod of financing certain public improvements associated with the developmentwithin the Assessment District. The Assessment District will issue Limited ObligationImprovement Bonds secured by assessments to be levied on property within itsboundaries.

The Assessment Engineer prepared a report of the amount to be assessed to eachparcel of property within the Assessm ent District, and the prope rty owner was g iven athirty-day period to prepay any such assessment if desired. No assessments wereprepaid and the unpaid assessments can now be confirmed.

PREVIOUS COU NCIL ACTION:

At the City Council meeting on January 21, 2004 the City Council completedproceedings to form the A ssessment D istrict and approved the issuance of the LimitedObligation Improvem ent Bonds.

ANALYSIS:

An Assessment Diagram and Notice of Assessment was recorded on January 23,2004 in the office of the County R ecorder under document number 2004-005004 2. Theamount of the unpaid assessments for Assessment District No. 2003-5 (Sunburst) is$1,890,000 and will represent the principal amount of limited obligation improvementbonds to be issued upon the security of the unpaid assessments in AssessmentDistrict No. 2003-5 (S unburst). The assessm ent per lot is $14,000.

ITEM NO. 6


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CONFIRMATION OF UNPAID ASSESSMENTSCITY COUNCIL - March 3, 2004PAGE 2

FINANCIAL IMPLICATIONS:

The City does not incur any financial obligations with this action. The City's cost toadminister the Assessment District annually will be reimbursed through annualassessments charged to property owners.

RECOMMENDATION:

Staff recommends Council adopt the Resolution determining the unpaid assessmentsin Assessment District No. 2003-5 (Sunburst).

ACTION:

MOVE APPROVAL OF THE RESOLUTION OF THE CITY COUNCIL OF THE CITYOF INDIO DETERMINING UNPAID ASSESSMENTS FOR ASSESSMENT DISTRICT

NO. 2003-5 (SUNBURST)


A. Resolution Determining Unpaid Assessments


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RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF IN DIO DETER MINING UN PAIDASSESSMENTS FOR ASSESSMENT DISTRICT NO.2003-5 (SUNBURST)

WHEREAS, the City Council (the City Council ) of the City of Indio, California(the City ) has previously undertaken proceedings under the Municipal ImprovementAct of 1913 (the Act ), being Division 12 of the Streets and Highways Code of the Stateof California, and has confirmed assessments for the Assessment District No. 2003-5(Sunburst) (the Assessment District ), and an Assessment Diagram and Notice ofAssessment has been recorded on January 23, 2004 in the office of the County Recorderof the County of Riverside; and

WHEREAS, such proceedings provide that bonds representing the unpaidassessments will be issued pursuant to the Improvement Bond Act of 1915 (the A1915Act ), being Division 10 of the Streets and Highways Code; and

WHEREAS, the Assessment Engineer has filed with the City Clerk a list ofunpaid assessments for the Assessment District, a copy of which list is attached hereto asExhibit A and by this reference incorporated herein, certifying the amount of theassessments remaining unpaid as shown on Exhibit A ; and

WHEREAS, this City Council wishes to establish said amount as the amount ofthe unpaid assessments and to ratify the amount of $1,890,000 as the principal amount oflimited obligation improvement bonds to be authorized and issued in these proceedingsupon the security of said unpaid assessments;

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City ofIndio as follows:

Section 1. he above recitals are all true and correct.

Section 2. he City hereby finds and determines, as set forth in Exhibit A,that the amount of assessments remaining unpaid in the Assessment District is$1,890,000, and, that by separate resolution, the City has authorized the issuance of

limited obligation im provement bonds in a principal amount of said unpaid assessments.Section 3. he unpaid assessments shall be payable in the manner provided in

Section 8680 et seq. of the 1915 .Act, and shall be payable in the same manner and at thesame time and in the same installments as the general taxes of the City on real propertyare payable. Pursuant to Section 8682 of the 1915 Act, a certified copy of this resolutionand a copy of the list of unpaid assessments shall be filed by the City Clerk in the Officeof the Auditor-Controller of the County of Riverside. Said County Auditor-Controller isrequested to proceed in accordance with Section 8682 of the 1915 Act in the collection of

45371330.1

1


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installments of these assessments and the interest thereon on the secured property taxassessment roll of the County of Riverside.

Section 4. he actions of the City Clerk, the City staff and consultantsrelating to the preparation of the list of unpaid assessments and filing the same with theCounty Auditor-Controller is hereby confirmed and ratified.

Section 5. his resolution shall take effect immediately upon its adoption.

PASSED, APPROVED and ADOPTED this day of 2004by the following vote:

AYES:

NOES:

JACQUELINE BETHEL, MAYOR

ATTEST:


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CITY OF INDIOAGENDA REPORT

Meeting of March 3, 2004

TO:

THRU:

FROM:

DATE:

SUBJECT:

Mayor and City Council

Tom Ramirez, City Manager

/ohn Corella, Director of Public Works/City EngineerAmir H , Mparrissi Deputy Director of Public Works/City Engineer

February 23, 2004

Consideration of approving cooperative agreement between DesertSands Unified School District, City of La Quinta and the City of Indiofor the design and construction of pedestrian safety traffic controlsignals at Amelia Earhart Elementary and John Glenn Middle Schools.

Summary

This agreement is for design and construction of pedestrian safety traffic signals andsafety lights at the Amelia Earhart Elementary and John Glenn Middle Schools. Thesignalizing will provide additional safety to pedestrians crossings at two locations.One at Dune Palms Drive and Desert Crest Road and the other at Miles Avenue andthe entrance of John Glenn Middle School. The staff recommendation is that theCity Council approve the agreement attached to this report.

Background

The Desert Sands Unified School District requested a review and assessment on aneed to provide manageable student crossing on Miles Avenue at the John GlennMiddle School and a crossing on Dune Palms Road at Desert Crest Drive intersectionfor the Amelia Earhart Elementary School. Both cities of Indio and La Quintaidentified corrective measures to address the need.

The City of La Quinta, on behalf of the Desert Sand Unified School District(DSUSD), the City of Indio and itself applied for a State of California Safe Route toSchool grant in 2003. The state has approved the grant in the amount of $244,800through its Safe Routes to School Program on November 21, 2003. This grant will

ITEM NO. 7


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pay for approximately 85% of the estimated cost of the proposed improvements. The

remaining balance of $37,851 will be shared equally among the two cities andDSUSD.

The enclosed cooperative agreement between the DSUSD, the City of La Quinta, andthe City of Indio is for the design, construction and financing, of the proposedpedestrian safety traffic signals and safety lights at the intersection of Dune PalmsRoad and Desert Crest Drive and Miles Avenue at the entrance of John GlennMiddle School. The agreement provides that the cities of La Quinta and Indio willenter into a subsequent agreement to share equally the annual operating andmaintenance costs.

The cooperative agreement includes each party's responsibilities and obligations.The City of Indio is responsible to pay for one-third of the projects' remaining shareand then pay for fifty-percent (50%) of the maintenance and operation cost incooperation with the City of La Quinta.

Financial Considerations

The City of Indio's one-third of the project's local share is estimated at $12,617.

This cost is proposed to be funded from the City's Traffic Signal Funds (CIF-TrafficSignal). The maintenance and operation cost will be programmed into the nextPublic Services departmental operational bilge

Reviewed and concurred:erry Carter, Fiance Director

Staff Recommendation

Staff is requesting that the City Council approve the cooperative agreement enclosedto this report and authorize the City Manager and Mayor to execute the agreement.

Staff is also requesting that the City Council authorize the City Manager to executeall subsequent agreements and/or contracts to complete the project.


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COOPERATIVE AGREEMENTFOR THE DESIGN AND CONSTRUCTION

OF TRAFFIC CONTROL SIGNALS

This agreement (hereinafter Agreement ) entered into this ay of 2004, isbetween the Desert Sands Unified School District, a school district organized and existing under the laws ofthe State of California, referred to herein as DSUSD, the City of La Quinta, a Municipal Corporation andcharter city, referred to herein as LA QUINTA, and the City of Indio, a Municipal Corporation, referredto herein as INDIO. DSUSD, LA QUINTA and INDIO are collectively referred to in this Agreement asPARTIES.

RECITALS

(I) DSUSD, LA QUINTA arid INDIO desire to install two (2) traffic control signals and safetylighting, referred to herein as PROJECT, at the intersection of Dune Palms Road and DesertCrest Drive (adjacent to the Amelia Earhart Elementary School) and on Miles Avenue at the JohnGlen Middle School, and desire to specify the terms and conditions under which the PROJECT isto be engineered, constructed, financed, operated and maintained.

(2) The PROJECT locations are jointly owned fifty percent (50%) by LA QUINTA and fifty percent(50%) by INDIO.

(3) It has been determined that the State of California promulgated traffic signal warrants have beenmet for the PROJECT locations.

(4) The California Department of Transportation (Caltrans) approved a grant in the amount of$244,800.00 through its Safe Routes to School (SR2S) Program on November 21, 2003. Thegrant represents approximately 85% of the estimated cost to complete the PROJECT.

(5) DSUSD, LA QUINTA and INDIO desire to equally share the remaining unfunded project costs inthe amount of $37,850.00. The unfunded project costs represent approximately 15% of theestimated costs to complete the PROJECT, referred to herein as PROJECT SHARE.

Section I

DSUSD AGREES:

(1) To pay an amount equal to one third (1/3) of the PROJECT SHARE for construction, design,engineering, inspection/testing/survey, contingency and administrative costs as described onExhibit A attached hereto and incorporated herein by this reference).

( 2) To deposit with LA QUINTA within thirty (30) days of receipt of billing therefor the amount of$12,617, which figure represents DSUSD's estimated PROJECT SHARE of the cost ofpreliminary engineering, construction, construction engineering and administration, as required to

complete the PROJECT. In no event will DSUSD's obligation for all anticipated costs under thisAgreement exceed 115% of DSUSD's estimated costs, as listed in Exhibit A, provided thatDSUSD may, at its sole discretion, in writing, authorize a greater amount. However, this does notobligate LA QUINTA in any way to provide additional funds for PROJECT.

Section IILA QUINTA AGREES:

(1) To pay an amount equal to one third (1/3) of the PROJECT SHARE for construction, design,engineering, inspection/testing/survey, contingency and administrative costs as described onattached Exhibit A.

2) To prepare Plans, Specifications and Estimates (PS&E) for the PROJECT. PS&E are to beprepared in accordance with the Standard Plans and Specifications of the State of California

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Department of Transportation, the standards and practices of LA QUINTA and all applicable lawsand regulations.

(3) To have final design documents and drawings for the PROJECT prepared by or under the

direction of a civil engineer registered and licensed in the State of California, and that thespecifications, each set of plans and any reports shall bear the professional seal, certificate andsignature of the professional engineer responsible for their preparation.

(4) To apply for any necessary encroachment permits for work within the INDIO street right-of-way,in accordance with INDIO standard permit procedures.

(5) To advertise, award and administer a public works contract for the construction of the PROJECTimprovements.

(6) To retain or cause to be retained for audit by DSUSD, INDIO or other governmental auditors for aperiod of three (3) years from the date of final payment, all records and accounts relating toconstruction of the PROJECT.

(7) Upon completion of the PROJECT, to furnish INDIO a complete set of full-sized reproducibleDrawing of Record plans.

(8) To enter into a maintenance agreement with INDIO, whereby LA QUINTA will agree to maintainand operate the facilities and LA QUINTA will pay fifty percent (50%) and INDIO will pay fiftypercent (50%) of the maintenance and energy costs for the PROJECT.

Section III

INDIO AGREES:

(1) To pay an amount equal to one third (1/3) of PROJECT SHARE for construction, design,engineering, inspection/testing/survey, contingency and administrative costsas described onattached Exhibit A.

(2) To deposit with LA QUINTA within thirty (30) days of receipt of billing therefor the amount of$12,617, which figure represents INDIO's estimated PROJECT SHARE of the cost of preliminaryengineering, construction, construction engineering and administration, as required to completethe PROJECT. In no event will INDIO' s obligation for all anticipated costs under this Agreement

exceed 115% of INDIO's estimated costs, as listed in Exhibit A, provided that INDIO may, atits sole discretion, in writing, authorize a greater amount. However, this does not obligate LAQUINTA in any way to provide additional funds for the PROJECT.

(3) To issue, free of charge, upon application by LA QUINTA or LA QUINTA's contractor, thenecessary Encroachment Permits for required work within the INDIO streets right-of-way.

(4) To enter into a maintenance agreement with LA QUINTA, whereby LA QUINTA will agree tomaintain and operate the facilities and LA QUINTA will pay fifty percent (50 %) and INDIO willpay fifty percent (50%) of the maintenance and energy costs for the PROJECT.

Section IV

IT IS MUTUALLY AGREED AS FOLLOWS:(1) The total cost of PROJECT is estimated to be $282,650.

(2) The SR2S Grant in the amount of $244,800 shall be shared equally by DSUSD, LA QUINTA andINDIO.

(3) If, for any reason, the SR2S Grant is not received by LA QUINTA, DSUSD and INDIO agree topay an amount equal to one third (1/3) of the total estimated project cost of $282,650.

(4) Upon opening bids for construction of the PROJECT, if bids indicate a cost overrun of no morethan 15% of the construction costs estimate as described in Exhibit A, LA QUINTA may awardthe contract.

(5) If, upon opening of bids, it is found that a cost overrun exceeding 15% of the construction costestimate will occur, INDIO, LA QUINTA and DSUSD shall endeavor to agree upon an alternativecourse of action. If, after thirty calendar days from the date of bid opening, an alternative courseof action is not agreed upon, this Agreement shall be deemed to be terminated by mutual consent,with each agency sharing incurred costs in accordance with the cost shares as set forth in Section I,Article 1), Section II, Article (1), Section III, Article (1), and Section IV, Article (1).

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(6) All contract change orders exceeding 15% of the bid price for the relevant contract bid items shallbe submitted by LA QUINTA to INDIO and DSUSD for review and approval prior toauthorization by LA QUINTA to construction contractor.

(7)In construction of said work, LA QU1NTA will furnish a representative to perform the function ofResident Engineer, and INDIO may furnish a representative. INDIO's representative may consultwith LA QUINTA's representative, but LA QUINTA's decision shall be considered final.

(8) No alteration or variation of the terms of this Agreement shall be valid unless made in writing andsigned by all parties, and no oral understanding or agreement not incorporated herein shall bebinding on either party hereto.

(9) Upon completion of all work under this Agreement, ownership and title to all materials,equipment, and appurtenances installed will be jointly shared in the ratio of fifty percent (50%)LA QUINTA, fifty percent (50%) INDIO.

(10) Neither INDIO nor DSUSD nor any officer or employee thereof shall be responsible for anydamage or liability occurring by reason of anything done or omitted to be done by LA QUINTAunder or in connection with any work, authority or jurisdiction delegated to LA QUINTA underthis Agreement. It is further agreed that, pursuant to Government Code Section 895.4, LAQUINTA shall fully indemnify and hold DSUSD and INDIO harmless from any liability imposedfor injury {as defined by Government Code Section 810.8) occurring by reason of anything doneor omitted to be done by LA QUINTA under or in connection with any work, authority orjurisdiction delegated to LA QUINTA under this Agreement.

(11) Neither LA QUINTA nor any other officer or employee thereof shall be responsible for anydamage or liability occurring by reason of anything done or omitted to be done by INDIO orDSUSD under or in connection with any work, authority or jurisdiction delegated to INDIO orDSUSD under this Agreement. It is also agreed that, pursuant to Government Code Section 895.4,INDIO and DSUSD shall fully indemnify and hold LA QUINTA harmless from any liabilityimposed for injury (as defined by Government Code Section 810.98) occurring by reason ofanything done or omitted to be done by INDIO or DSUSD under or in connection with any work,authority or jurisdiction delegated to INDIO or DSUSD under this Agreement.

NOTICES:

Any notice required to be sent pursuant to this Agreement shall be sent by regular mail,addressed as follows:

CITY OF INDIO

City of IndioTom Ramirez,_City Manager100 Civic Center MallIndio, CA 92202

Dated:

By:Jacquie Bethel Mayor

ATTEST:

By:Cynthia Hernandez, Deputy City Clerk

APPROVED AS TO FORM:

By:Edward Kotkin, City Attorney

CITY OF LA QUINTA

City of La QuintaTom Genovese, City Manager78-105 Calle EstadoLa Quinta, CA 92253

Dated:

By:Don Adolph, Mayor

ATTEST:

By:June Greek, City Clerk


By:M. Katherine Jenson, City Attorney

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DESERT SANDS UNIFIED SCHOOLDISTRICT

Desert Sands Unified School DistrictPeggy Reyes, Director of Facility Services47-950 Dune Palms RoadLa Quinta, CA 92234

Dated:

By:Charlene Whitlinger, AssistantSuperintendent of Business Services

ATTEST:

By:


By:

LAJohn\CorrespondenceDSUSMSR2S Coop Agreement.doc

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