HomeMy WebLinkAbout1988-06-21; Housing & Redevelopment Commission; 109; Redevelopment Bond Project Funding PrioritiesI .
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HOUSING AND-‘.EDEVELOPYENT COYMI&N - AGENDA BILL 0 -&
AB#109 TITLE: DEPT. HD. (‘- ‘*
MT& 6/21/88 REDEVELOPMENT BOND PROJECT FUNDING PRIORITIES CITY ArrVvm
DEPT. RED CITY MGR%i&-
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RECOMMENDED ACTION:
Staff recommends that the Housing and Redevelopment Commission establish a basic project priority time-frame as proposed and direct staff to implement programs.
I ITEM EXPLANATION:
On February 2, 1988, the Housing and Redevelopment Commission authorized the issuance of Redevelopment Tax Allocation Bonds. These bonds were proposed to fund the following projects:
PRIORITY PROJECT ESTIMATED COST
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1. Carlsbad Senior Center $3.5 million 2. Parking Facilities 1.5 3. Elm/Carlsbad Blvd. Streetscape 5.4 - 6.0+ 4. Blufftop Walkway .6
PROJECT STATUS:
Senior Center - Design approved, scheduled for construction in Fall 1988
Parking Facilities - Four sites proposed, first lease (54 spaces) to Commission in June, others in negotiations.
Streetscape - Design approved, in plan check, ready for construction in Fall 1988.
Blufftop Sidewalk- Bids opened. Ready for award in June, construction time: five (5) months.
Each capital project will be considered by the Housing and Redevelopment Commission under separate action with individual fiscal reports. However, the funds available will not cover all projects. Some projects may have to be delayed due to the release of funds schedule. Staff is proposing the above list of projects as the order of priority. Additionally, staff feels that the actual cost for the streetscape project could far exceed the allotted funds. Staff suggests that the Blufftop Walkway be deleted from this project list or an alternate source of funds be allocated for this project. A loan from the bond program could be considered.
AGENDA BILL NO. 109 PAGE 2
FISCAL IMPACT:
The Redevelopment Agency has $10.4 million in construction funds available from the recent Tax Allocation Bond Issue. In addition, an estimated $400,000 in interest will be earned during the next 2 l/2 to 3 years while capital projects are being constructed. The Agency will therefore have a total of about $10.8 million available to spend on capital projects by the end of the third year. The Agency currently has plans to spend approximately $11.0 million on capital projects and this total could rise to as much as $13.0 million to $14.0 million should any of the projects experience major complications during construction. In order to establish appropriate use of bond funds, it will be necessary for the Redevelopment Commission to establish priorities on the various projects to be funded. If these projects are funded on a first come, first served basis, the Agency will find that certain high priority projects cannot be completed due to lack of funding.
EXHIBITS:
l- Redevelopment Bond Program
2- Drawdown Schedule
3- Memo dated 6/10/88 from Finance Director to City Manager regarding use of Redevelopment Bond Proceeds.
EXHIBIT 1
REDEVELOPMENT AGENCY
BOND PROGRAM
MILLION DOLLARS
FUNDS AVAILABLE DEMAND FOR FUNDS
m SIDEWALK m SENIOR CENTER m PARKING
- STREETSCAPE w CONTINGENCY 0 BOND PROCEEDS
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EXHIBIT 2
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June 10, 1988
TO: CITY MANAGER
FROM: FINANCE DIRECTOR
USE OF REDEVELOPMENT BOND PROCEEDS
Summary
Staff is recommending that the City Council review the funding priority of the
projects to be constructed with tax allocation bond proceeds. Due to the
limited amount of money available, Council cannot construct all projects
previously considered as candidates for the Bond Program. Bond funds will fall
anywhere from $300,000 to $3 million short of providing all the resources
necessary for the construction of these projects.
Background
A few months ago the City of Car&bad sold $12 million of Tax Allocation Bonds
creating a pool of useable funds of approximately $10.8 million (proceeds of
$10.4 million plus $400,000 in interest to be earned over the next three years).
These funds were to be used for the construction of projects benefiting the
Redevelopment area. At the time of the sale the City had plans for four major
projects that total more than the amount of funds available through the Bond
Issue * These projects are shown below:
1. Carlsbad Senior Center $3.5 million
2. Parking Facilities Along Elm Ave. $1.5 million
3. Elm/Carlsbad Blvd. Streetscape $5.4 million
4. Bluff Top Walkway $0.6 million
PROJECT FUNDING
TAX ALLOCATION BOND ISSUE
STREETSCAPE
0 1 2 6 6 7
TOTAL FUNDS MAILABLE - ABOUT $103 MIL
TOTAL PROJECT REQ - $11 MIL Ts) $13 MIL
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City Manager
June 10, 1988
Page 2
These four projects, totaling more than $11.0 million, represent the major
improvements within and around the Redevelopment area that could be funded
through the Bond Issue. Unfortunately, the Bond Issue did not supply sufficient
funds for the construction of all four projects. As the Redevelopment Agency considers spending Tax Allocation Bond funds, it is important to consider which
projects shall be funded first and which projects may have to wait or search fol
funding through another source.
The estimated $11 million construction cost does not include any allowance for
the expansion in scope, change orders, complications discovered during the
engineering phase or other unforeseen conditions. This is most evident in the
Elm and Carlsbad Blvd. Streetscape Project where the $5.4 million estimate could
grow by as much as $2 million if complications are discovered during
corlstructioll. This mealis that the City could find itself facing the need to
construct projects totaling $13 million while holding only $10.8 million in bond
funds .
The chart below provides a picture oE what the City is facing if all proposed
projects were funded from the Tax Allocation Bond Issue. In producing this
chart it is assumed that the Senior Citizens Center and the parking along Elm
Avenue are the primary projects that must be completed first. It is also
assumed that the Streetscape Project, which is terltatively scheduled to begin ia
early fi seal. year 1988-89, wc,uld be funded third. If we furtller assume tliat tile
Streetscape Project can be constructed for the estimated $5.4 million, the chart
shows that by the end of the Streetscape construction. No funding will be
available for the Sidewalk Project. If on the other hand we assume a worst case
scenario for the Streetscape Project, we can see that not only do we not have
funds available for the Sidewalk Program, but we also fall as much as $2 milli.on
short of being able to complete the Streetscape Program from the Tax Allocation
Bond Issue.
FUNDS AVAILABLE
TAX ALLOCATION BOND ISSUE .
S Million 12 , I
SENIOR CCNTER MAKINO 8lRCl!TflCAPE
BALANCE IN ACCOUNT AFTER EACH PROJECT
INCLUDINQ INTEREST - $10.8 MIL RAILMLE TOIAL PAOJECT REQ - $11 MIL TO $13 MIL
City Manager
June 10, 1988
Page 3
This ana1ysi.s points out the necessity to prioritize the use of Tax Allocation
Bond funds carefully before work is started on various projects. If the City
Council wishes to fund the Senior Center and the parking improvements as high
priority projects from the Bond Issue, $5.0 million of the available $10.8
million will be obligated immediately. This leaves approximately $5.8 million available for the Streetscape and Sidewalk Projects.
During the next few years the highest priority projects may not be the first
projects to come before the City Council for consideration. Should the Council
authorize staff to proceed with a lower priority project in advance of one of
the higher priority projects , we will find that funding priorities have been
changed inadvertently. Although the decision to delay a project that may be
ready to go to construction may not be an easy one, it is necessary to Laarantee
that funds are available for the higher priority projects when they are needed.
AS the City considers the construction of these projects, it may be important to
consider alternative funding sources where available. For example, if the
Council were to decide that it is important to proceed with the Sidewalk Project
and did not wish to interfere with the priority of the Senior Citizens Project
or the Parking and Streetscape Projects, it will require the use of General
Funds or the search for additional grant money to fund this particular project.
The General Fund has sufficient funds available in the unobligated fund balance
to either, a) loan $600,000 to the Redevelopment Agency or, b) directly fund the
construction of the Sidewalk Project at this time. Tllis would, however, reduce
the amount of funds within the General Fund to cover possible deficits or
revenue shortfalls in future years. Advancing these funds to the Redevelopment
Agency provides the possibility of repayment in future years with interest.
The City will. also be searching for alternative sources of funding for the
Streetscape Project should we experience significant change orders or
unforeseen complications during the construction of the project. At this time
no obvious sources of alternative funding is available. It will be important
for the City to be aware of this during the construction phase of the
Streetscape Project and to constantly be conscious of the limited resources
available for the project.
Staff has assumed that the Senior Center and the Parking Facilities are the
highest priority projects, followed by the Streetscape and the Bluff Top
Sidewalk Project. It would be appropriate to raise this issue with the City
Council to confirm the priority of the various projects and to alert the Council
to the funding issues that need to be addressed as the various projects are
approve:.
Chris Salomone
Marty Orenyak