HomeMy WebLinkAbout1991-11-19; City Council; 11443; TEMPORARY FINANCING FOR THE PALOMAR AIRPORT ROAD INTERCHANGE THROUGH TRANSNET FUNDSAB#&!?f TITLE:
MTG.ml TEMPORARY FINANCING FOR THE PALOMAR AIRPORT
DEPT..CM ROAD INTERCHANGE THROUGH TRANSNET FUNDS
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// J CITWF CARLSBAD - AGENVILL i
RECOMMENDED ACTION:
Adopt Resolution No. 9/ -3 ?]authorizing the Mayor to execute an agreeme
with SANDAG for the loan of TransNet funds for the Palomar Airport Rol
Interchange project.
ITF,M EXPLANATION:
The Palomar Airport Road Interchange project is one of the most hnporta
infrastructure facilities planned for construction in the near future. TI
interchange, along with other improvements to Palomar Airport Road schedul
for construction this fiscal year, will complete a key link in the City's circulatic
system.
Until now, the construction schedule for this interchange has been dependent
when the Citywide Community Facilities District (CFD) could provide fundir
The Palomar Airport Road Interchange is one of three interchanges to be financ
by the CFD in the next five years. Under the CFD, the bond issuance schedi
calls for Palomar Airport Road financing to be available during next fiscal yf
(1992-93) when the CFD tax base has the ability to support the issuance of de
Because of the significance of this improvement, staff has been working w SANDAG on a financing plan that will allsw the loan of TransNet Highway fur to the City this year in an effort speed CALTRANS toward awarding a contri
for the interchange. By having the funding available now rather than next ye
the City can certify to CALTRANS that financing is complete and the project c
proceed.
The funding plan is fairly simple. SANDAG, acting as the San Diego COUI
Regional Transportation Commission, Will issue short term Commercial Pa]
under the authority of Proposition A, the Local Transportation Sales Tax. Thc
funds can then be used to finance short term cash needs of various meml
agencies through loan programs. The City is allowed to borrow these ful
under the terms of the attached agreement. Interest costs are limited to the r
paid on the Commercial Paper issue. Repayment is pledged from three sourc(
Bridge & Thoroughfare District Fees, Community Facilities District Bonds
revenues, backed up by a pledge of General Fund sales tax revenues if the 0th are insufficient.
The funding plan calls for the City to pay CALTRANS progress payments as
project moves along, with TransNet funds being used to reimburse the City. r
City will only borrow the amount of funds necessary to carry the project throi
1992-93 when the CFD can provide permanent financing.
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Page TWO of Agenda Bill No. i( YYJ?
As with any endeavor, there are risks. The funding of this project is dependant
on the successful implementation of the CFD. The strength of the district is
dependant on the willingness of the taxpayers to pay their property taxes. In the
event that taxes went unpaid the City would be in a position where repayment
to TransNet would have to come from reserves and the CFD would have to
reimburse the City as soon as funds could be made available.
In no event would the City be expected to donate General Fund monies to thi:
project. Any payment of funds would be in the form of an interfund loan thal
becomes the obligation of the District to repay. This scenario becomes possible
if a significant number of property owners fail to pay their County tax bills thi:
year and next year. At this time we have no experience on the payment pattern:
that will result from the District.
Staff is recommending that Council approve the attached Resolution authorizin:
the Mayor to execute an agreement with SANDAG for the loan of TransNe
funds.
FISCAL IMPACT:
The loan of funds allows the City to proceed with the construction of th
Palomar Airport Road Interchange now rather than having to wait till next fisc2
year. This action has several fiscal impacts.
First, the ability to bid this project now in the present construction market Wi:
have a significant positive impact on the cost of the project. It is difficult tl
quantify the value of bidding in this climate, but it should be substantial.
Second, the completion of this facility will provide better access to the industri:
area of Carlsbad, which should have a positive effect on the ability of this are
to market the existing office/industrial building stock. This has a direct effect o
the City's sales and business license tax revenues.
Finally, the risks outlined above should be recognized and understood befoi
taking this action. In the best case, the loan of funds is repaid at the end oft€
term by bonds issued by the CFD. In the worst case, the loan is repaid from Ci
reserves with the CFD reimbursing the City as soon as funds are available.
Staffs position is that the loan will provide a major positive benefit to the Ci
and the Palomar Airport Road corridor improvements and should be accepted 1
the City.
EXHIBITS:
1. Resolution No. 91 -333 Authorizing the Mayor to execute an agreeme
with SANDAG for the loan of TransNet funds for the Palomar Airpc
Road Interchange project.
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RESOLUTION NO. 9 1 - 3 7 3
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING THE MAYOR TO
EXECUTE AN AGREEMENT WITH SANDAG ACTING AS THE SAN
DIEGO COUNTY REGIONAL TRANSPORTATION COMMISSION
FOR THE LOAN OF TRANSNET FUNDS FOR THE PALOMAR
AIRPORT ROAD/I-5 INTERCHANGE PROJECT
WHEREAS, the City Council has directed staff to proceed with tf
construction of the Palomar Airport Road/I-5 Interchange project; and
WHEREAS, funding for this project will be made available during fisc
year 1992-93 from the Community Facilities District No. 1; and
WHEREAS, the City Council desires to advance the schedule of th
Palomar Airport Road/I-5 Interchange project into fiscal year 1991 -92 throug
the use of' a loan of TransNet Highway hnds by the County Region;
Transportation Commission; and
WHEREAS, said loan will allow the City to make findings as required k
CALTRANS that funding for the Palomar Airport Road/I-5 Interchange project *
available; and
WHEREAS, the attached Agreement provides the County Region:
Transportation Commission and the City of Carlsbad with the ability to enter int
said loan.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City (
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
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2. That the Mayor is hereby authorized to execute the attached
Agreement Exhibit A on behalf of the City of Carlsbad to accept the loan ol
TransNet Highway funds for the Palomar Airport Road/I-5 Interchangc
project.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the Cit]
Council of the City of Carlsbad, California on the 19 th day of bvpmhpr
, 1991, by the following vote, to wit:
AYES: Council Members Lewis, Kulchin, Larson, Nygaard & Stan1
NOES: None
ABSENT: None
ATTEST:
Q-QLtkA?~ ALETHA L. RAUTENKRANZ, City Clerk\
(SEAL)
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AGREEMENT BETWEEN
THE SAN DIEGO ASSOCIATION OF GOVERNMENTS
ACTING AS THE SAN DIEGO COUNTY KEGIONAI,
TKANSPOLU'ATION COMMlSSlON
AND
THE CITY OF CARLSBAD
FOR A LOAN OF TRANSNET FUNDS
FOR THE PALOMAR AIRPORT ROAD/I-5 INTERCHANGE PROJECT
THIS AGREEMENT is entered into this day of , 1991, betwe
the Sa11 Diego Association of Governments, a public agency acting as the San Diego COUI
Regional Transportation Commission (hereinafter referred to as "SANDAG") and the City
Carlsbad (hereinafter referred to as "City").
RECITALS
WHEREAS, the voters approved Proposition A on November 3, 1987, aclopt;iig
San Diego Transportation Improvement Program Ordinance and Expenditure Plan, Ordinal
87-1, (referred to herein as "Ordinance"); and
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WHEREAS, Section 3 of the Ordinance imposed a 1/2 percent transactions and
tax (referred to herein as "Sales Tax") for a period not to exceed twenty years for the purr
of providing funding for highway, transit, bicycle, and local street and road improvemc
regionwide; and
WHEREAS, Section 9 of the Ordinance provides that the Sales Tax reveriues s
not be used to replace private developer funding which has been or will be committed for
project; and
WHEREAS, SANDAG adopted Commission Policy #2 which allows SANDA(
approve a loan of Sales Tax revenues to finance a project which is prohibited from receil
funding under Section 9 of the Ordinance subject to certain terms and conditions: and
WHEREAS, the City has expressed interest in a loan of Sales Tax funds to accelc
the implementation of the Palomar Airport Road/I-5 Interchange Improvement Project (refe
to herein as "Project"); and
WHEREAS, the Project is included in arid will be financed by developers tlirc
Bridge and Thoroughfare Benefit District No. 1 and Community Facilities District No. 1 ma
it subject to the requirements of Section 9; and
WHEREAS, the Project would be an eligible street and road project undei
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Ordinance absent private developer funding; and
WHEREAS, in order to accelerate the implementation of this important projec
SANDAG and the City desire to enter into a Sales Tax loan agreement in accordance with tl krms aid coriditions of Coinrnissiori Policy #2,
NOW THEREFORE, SANDAG and the City agree as follows:
1. That SANDAG will loan up to $8,200,000 from the 1991 Series A Sales Tax Reveni
Commercial Paper Notes to the City for development of the Project. Payments will 1
made by SANDAG to the City on a reimbursement basis following receipt of a pay~nc
request from the City with supporting documentation.
That, until such time as the amount loaned is repaid in full, SANDAG will deduct t
prorated share of the debt service payments on that portion of the Comrnercial Paper Nc
funds loaned for the Project from the City’s share of the Sales Tax revenues allocated f
street and road purposes.
That the City will repay the total amount loaned, plus an amount equal to all debt serv
payments made up to the point in time at which the loan is repaid, from revenues IK
available through Bridge and Thoroughfare District #1 and/or Coinmunity Facilit
District #l. The repayment of the amount of Sales Tax revenues used for debt servi
purposes shall include the interest earnings that the Sales Tax funds would have earned 1-
the funds remained in the Sales Tax fund. Such interest earnings shall be computed bac
on the average annual rate of return earned on the investment of the Sales Tax fu
during the period of the loan. It is currently anticipated that the repayment of the loan 1
take place by the fall of 1992.
That, in the event that revenues from Bridge and Thoroughfare District #1 and
Community Facilities District #1 are not sufficient to repay the loan and related d
service and interest payments, then the City shall provide payment from other Jocaf rl
transportation Sales Tax revenues.
That upon repayment, SANDAG will retire that portion of the outstanding Comnier
Paper Notes loaned to the Project and will reimburse the City’s Sales Tax funds in
amount equal to the total debt service payments made plus the amount of interest earni
that these funds would have earned had the funds remained in the Sales Tax fund.
That, in no case shall the repayment of the amount loaned plus related dcbt ser
payments take place after the termination date of the Sales Tax.
That the City covenants that it will not take any action that would adverscly affect [tic exempt status of SANDAG’s Commercial Paper Notes and that it will not refinance
loan with tax-exempt debt without SANDAG’s approvd.
That SANDAG and the City may review the terms of this agreement should
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subsequent amendments to the Ordinance modifying the financing provisions of Propositi01
A be adopted.
9. That this agreement complies with the provisions of CoInrnission Policy #2 and thc
Ordinance and will be carried out in accordance tlicrewith.
IN WITNESS THEREOF, the authorized representatives of both parties hav~
executed this agreement effective the date specified above.
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SAN DIEGO ASSOCIATION OF GOVERNMENTS
ACTING AS THE SAN DIEGO COUNTY REGIONAL
TRANSPORTATION COMMISSION
KENNETH E. SULZER
Executive Director
APPROVED AS TO SUFFICIENCY OF FORM AND LEGALITY:
DEBRA A. GREENFIELD
SANDAG General Counsel
CLAUDE LEWIS
Mayor, City of Carlsbad
APP OVED AS TO FORM: -I
i p+,,?)l/;l,j!v
NCENT BIONDO JR. -
City Attorney, City of ~ar~sbad
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