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HomeMy WebLinkAbout10 - NB-1 - City Council Resolution of Intention Rel - 5/3/2016CITY COUNCIL AGENDA REPORT MEETING DATE: MAY 3, 2016 ITEM NUMBER: NB -1 SUBJECT: CITY COUNCIL RESOLUTION DETERMINING THE PUBLIC NECESSITY AND INTEREST DEMANDS THE ACQUISITION, CONSTRUCTION, OR COMPLETION OF CERTAIN MUNICIPAL IMPROVEMENTS FOR AFFORDABLE RENTAL HOUSING PURPOSES, BUT EXCLUDING THE R-1 SINGLE-FAMILY ZONES, AND THEIR FINANCING THROUGH THE ISSUANCE OF A GENERAL OBLIGATION BOND, INCLUDING DIRECTING THE CITY PLAN OF MUNICIPAL IMPROVEMENTS FOR AFFORDABLE RENTAL HOUSING BE PRESENTED TO THE PLANNING COMMISSION FOR CONSIDERATION AND ACTION; AND, DIRECTING THE CEO AND CITY ATTORNEY TO PROCEED WITH AN AFFORDABLE RENTAL HOUSING GENERAL OBLIGATION BOND MEASURE DATE: APRIL 21, 2016 FROM: THOMAS P. DUARTE, CITY ATTORNEY BRENDA GREEN, CITY CLERK THOMAS R. HATCH, CHIEF EXECUTIVE OFFICER PRESENTATION THOMAS R. HATCH, CEO BY: THOMAS P. DUARTE, CITY ATTORNEY FOR FURTHER INFORMATION Brenda Green, at (714) 754-5221 CONTACT: RECOMMENDATION: The City Council (a) adopt Resolution No. 16-xx determining the public interest and necessity demands the acquisition, construction or completion of certain municipal improvements for affordable rental housing purposes within the City, but excluding the R-1 single-family zones, and their financing through the issuance of a general obligation bond, and directing the presentation to the Planning Commission of the city plan of municipal improvements; and (b) direct the CEO and his staff, and the City Attorney, special counsel and financial advisor to proceed with the ballot measure for the general obligation bond for affordable housing. BACKGROUND: On April 5, 2016, the City Council provided direction to the CEO and City Attorney (and their designees) to proceed with initiating steps to place a local measure on the November 8, 2016 general election ballot to authorize the City to levy a tax and issue $20,000,000 (approx.) in General Obligation Bonds for affordable housing purposes. The City retained Fieldman, Rolapp and Associates to provide financial, tax and election professional services and authorized Stradling Yocca Carlson & Rauth, P.C. to provide public finance, bond counsel and related special counsel legal services, all in preparation of analyses and documents related to the proposed bond measure for affordable housing. In order to call for an election to issue municipal bonds, the City Council must first consider and adopt a "Resolution of Intention" determining it is in the public interest and necessity to acquire, construct or complete certain municipal improvements for affordable housing purposes within the City, but excluding the R-1 single-family zones. The CEO and City Attorney have caused to be prepared City Council Resolution No. 16-xx (Attachment 1) that, if adopted, determines the public interest and necessity demands the acquisition, construction or completion of certain municipal improvements for affordable rental housing purposes within the City, but excluding the R-1 single-family zones, and their financing through the issuance of a general obligation bond. Bond Election Process There are several steps the City must take in order to call for an election to issue a general obligation bond: 1 Adopt a Resolution of Intention (also referred to as a resolution of necessity) to issue a general obligation bond (Attachment 1). Government Code Section 43607 provides that a city must consider and adopt a resolution by a two-thirds vote determining the public interest and necessity demands the acquisition, construction or completion of certain municipal improvements before a general obligation bond can be issued, including property or structures necessary or convenient to carry out the objects, purposes, and powers of the city. 2. Planning Commission Considers City Plan of Municipal Improvements Government Code Section 43603 provides for the City Planning Commission (and City Council) to consider and approve a group of municipal improvements as constituting a city plan, which the City Council may authorize to be placed on the ballot as a single bond proposition. If the Resolution of Intention is adopted at this meeting, which includes the city plan of municipal improvements for affordable rental housing within the City, but excluding the R-1 single-family zones, it is anticipated that the Planning Commission will consider and take action on a resolution relating to this city plan at the Planning Commission meeting of May 23, 2016. 3. Ordinance calling for an election Government Code Section 43608 provides that at a meeting subsequent to the adoption of the Resolution of Intention, the City Council may consider, introduce and then pass by two-thirds vote an ordinance calling for the bond election. Based on a schedule prepared by Fieldman, this Ordinance and related resolutions (described below) will be presented to the City Council at the June 7 and June 21, 2016 regular meetings. The Ordinance will include, among other provisions: a. Object and purpose of the general obligation bond; b. Estimated cost of the municipal improvements and principal amount of the bond with interest rate information. Here, the general obligation bond for affordable rental housing will be approximately $20,000,000; C. Date and manner of holding the election on November 8, 2016. 4. Additional City Council Resolutions a. Resolution requesting consolidation of election, including the form of the question or measure to be voted upon; b. Resolution setting priorities for filing written arguments and directing the City Attorney to prepare an impartial analysis; and C. Resolution regarding tax rate statement. ALTERNATIVES CONSIDERED: If to be adopted, the Government Code requires this Resolution of Intention to be passed by an affirmative vote of at least four (4) members of the City Council, thereafter the additional action items will be prepared and presented, as applicable, to the City's Planning Commission and to City Council, as described above. In the alternative, if there are not four (4) votes approving this Resolution, then the action will fail and the Resolution will not be adopted; and, this will result in no other action items relating to the Measure being presented to the Planning Commission or the City Council and the Measure will not be placed on the November 8, 2016 general election ballot. FISCAL REVIEW: It is unknown at this time the exact cost for holding the bond election on November 8, 2016. The total cost will depend upon the number of local initiative(s), measure(s) or other propositions to be held at the same time in the upcoming November general election. Based on the City Clerk's discussions with and information distributed to her by the County Registrar of Voters, as well as the City Clerk's experience and expertise, it is estimated that the costs for holding this measure and bond election will be about $20,000. The City has sufficient funds to cover the cost of placing this measure on the ballot and holding the bond election. No City funds or resources will be used in support or opposition of the bond measure. LEGAL REVIEW The City Attorney has reviewed this agenda report and the Resolution and concurs with the recommended actions. CONCLUSION: The CEO and City Attorney recommend the City Council adopt the attached Resolution No. 16-xx, a Resolution of Intention including the city plan of municipal improvements for affordable housing purposes, which city plan is directed to be presented to the Planning Commission for consideration and action at a regular or special meeting. Thomas R. Hatch Thomas P. Duarte Chief Executive Officer City Attorney ATTACHMENTS: 1 Resolution No. 16-xx RESOLUTION NO. 16- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DETERMINING THAT THE PUBLIC INTEREST AND NECESSITY DEMANDS THE ACQUISITION, CONSTRUCTION OR COMPLETION OF CERTAIN MUNICIPAL IMPROVEMENTS FOR AFFORDABLE RENTAL HOUSING PUBLIC PURPOSES WITHIN THE CITY BUT EXCLUDING THE R-1 SINGLE- FAMILY ZONES; AND MAKING FINDINGS RELATING THERETO WHEREAS, the City of Costa Mesa is a California municipal corporation and general law city ("City"); and WHEREAS, applicable law provides the City certain powers and responsibilities with respect to the regulation and provision of affordable housing for residents of the City, including affordable rental housing; and WHEREAS, the State Legislature has promulgated that the provision of housing for all Californians is a concern of vital statewide importance; and WHEREAS, the California Government Code authorizes cities, including general law cities such as the City, to purchase, lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit and as necessary or proper for municipal purposes, including without limitation for affordable housing purposes under terms and conditions the City deems best suited to the provision of affordable housing all pursuant to applicable laws; and WHEREAS, under the Government Code real property of cities can be utilized, in accordance with a city's best interests, to provide housing affordable to persons and families of low or moderate income as defined by Section 50093 of the Health and Safety Code or as defined by the United States Department of Housing and Urban Development; and WHEREAS, in order to improve public safety and for other valid public purposes to address City opportunities related to the provision of affordable rental housing constituting municipal improvements within the City to the full extent permitted by applicable law (provided that this measure excludes the R-1 single-family zones), the City desires to cause the construction, installation, acquisition and/or improvement of affordable rental housing within the City but excluding the R-1 single-family zones; and WHEREAS, under the Government Code, in particular Section 43600, et seq., a general obligation bond (or bonds) may be issued by a general law city to finance the acquisition, construction or completion of a "municipal improvement" or group of municipal improvements, which term includes property or structures necessary or convenient to carry out the objects, purposes, and powers of the City. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Costa Mesa, California: SECTION 1. Findings and Determinations. a. The foregoing recitals are true and correct and a material part of this Resolution. b. The City Council finds that the public interest and necessity demands the acquisition, construction, or completion by the City of certain affordable rental housing municipal improvements, as follows: i. Acquire, construct or improve real property for affordable rental housing within the City of Costa Mesa, but excluding the R-1 single-family zones, including property or structures necessary or convenient to carry out the related objects, purposes, and powers of the City ("Affordable Rental Housing Improvement Measure"). C. The estimated cost of the municipal improvements set forth in Section l.b. is $20,000,000, which will be provided through a general obligation bond. The acquisition, construction or completion of the municipal improvements require an expenditure greater than available in the City's current budget and will require the issuance of a bond therefor, and such issuance is necessary and convenient to carry out the objects, purposes and powers of the City. SECTION 2. Fiscal Accountability. a. The expenditure of bond proceeds to acquire, construct or complete municipal improvements for affordable rental housing and related voter authorized municipal improvements for affordable rental housing public purposes will be subject to strict financial accountability requirements. b. Independent financial audits will be performed and issued to the public annually, and all bond expenditures will be monitored by independent oversight, such as a citizens' oversight committee, to ensure that funds are spent only as promised, as provided by applicable law. i. The independent oversight, such as through a citizens' oversight committee, will include, among others, representatives of a bona fide taxpayers association, a business organization, and a senior citizens organization, or other representative members; provided however, no City employees or vendors shall be allowed to serve as members of a citizens' oversight committee. C. Since this Measure is subject to voter approval and, if approved by two-thirds of the voters, would provide for the sale of bonds, the City hereby does, and if approved will continue to, provide for and implement bond accountability in compliance with Government Code Section 53410, including but not limited to: (i) a statement indicating the specific purposes of the bond, i.e., affordable rental housing in the City authorized under the Government Code and other applicable laws; (ii) the requirement that the proceeds of the bonds, when issued, shall be applied only to such affordable rental housing purposes, (iii) the creation of an account into which the proceeds of the bonds, when issued, shall be deposited, and (iv) preparation each year of an annual report under Government Code Section 53411 including without limitation information about the amount of funds collected and expended and the status of any project required or authorized to be funded with the proceeds of the bonds. d. In the event the bond proceeds are committed to and expended on one or more affordable rental housing projects in the City (subject to no project to be located in the R-1 single-family zones), which bond proceeds are leveraged or otherwise paired with other public or private funding sources, including in particular federal or state affordable housing program funds, the Resolution No. 16 - Page 2 of 3 City will carry out the project or projects in accordance with federal and state laws and regulations applicable to such federal or state affordable housing programs. SECTION 3. No Administrator Salaries. a. Proceeds from the sale of the bonds authorized by the City's Affordable Rental Housing Improvement Measure shall be used only to acquire, construct or complete the municipal improvements for affordable rental housing specified in the Measure, and not for any other purpose, including administrators' salaries or other operating expenses. By law, all funds can only be spent on municipal improvements. SECTION 4. City Plan of Municipal Improvements for Affordable Rental Housing Purposes. a. The affordable rental housing contemplated to be provided with the proceeds of the bonds contemplated by this Resolution may be in multiple locations in the City, comprising a group of municipal improvements, provided the R-1 single-family zones are excluded. The City is authorized under the Government Code to purchase, lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit and as necessary or proper for municipal purposes, including without limitation for affordable rental housing purposes under terms and conditions the City deems best suited to the provision of affordable rental housing (subject to no project to be located in the R-1 single-family zones); and, further, under such laws real property and real property interests of the City can be utilized, in accordance with the City's best interests, to provide housing affordable to persons and families of low or moderate income; and, the City may construct, install, acquire and/or improve municipal improvements, which this City Council hereby approves as a "group of municipal improvements" "constituting a city plan" for affordable rental housing purposes within the meaning of California Government Code Section 43603 and 43604, and this City Council hereby directs that this Resolution be forwarded to the Planning Commission of the City for its consideration of treatment of this group of improvements as a city plan for purposes of said section. SECTION 5. City Clerk Certification. The City Clerk shall certify to the adoption of this Resolution. PASSED AND ADOPTED this 3rd day of May 2016. ATTEST: Brenda Green, City Clerk APPROVED AS TO FORM: Thomas P. Duarte, City Attorney CITY COUNCIL Stephen M. Mensinger, Mayor Resolution No. 16 - Page 3 of 3 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that the above and foregoing Resolution No. 16- is the original resolution of the City Council that was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 3rd day of May 2016, by the following roll call vote, to wit: CITY COUNCIL: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this day of May 2016. Brenda Green, City Clerk