HomeMy WebLinkAbout1999-03-23 - AGENDA REPORTS - US TREASURY REGS (2)AGENDA REPORT
City Manager
Item to be prese
NEW BUSINESS
DATE: March 15, 1999
SUBJECT: RESOLUTION OF INTENTION TO REIMBURSE FOR
CERTAIN EXPENDITURES FROM PROPOSED TAX
EXEMPT FINANCING AS REQUIRED BY UNITED STATES
DEPARTMENT OF TREASURY REGULATIONS 1.150-2
DEPARTMENT: Administrative Services
City Council adopt Resolution No. 99-47, declaring its intention to reimburse certain
expenditures from proposed tax exempt financing as required by United States
Department of Treasury Regulations Section 1.150-2.
BACKGROUND
In order to expedite the development of Golden Valley Road, the City is considering
the use of tax exempt financing, or forming of a community facilities district (Mello -
Roos), in an amount not to exceed $29,000,000. The development of this road is
critical to several projects in the area, and it is in the best interest of the City to
facilitate its development.
Under this Mello -Roos financing arrangement, Spirit Properties, Ltd., dba Santa
Clarita Business Park Company, will develop the Santa Clarita Business Park,
including but not limited to public infrastructure and a portion of Golden Valley
Road (Golden Valley Road Extension). The bonds, if issued, would be secured by
special taxes and certain bridge and thoroughfare fees. In essence, the developer
would repay his portion of the Mello -Roos bonds through taxes levied against the
property, and the City would repay its portion of the Mello -Roos bonds with bridge
and thoroughfare fees collected from the area.
At this time, the City intends to incur certain project expenses prior to the delivery
of the bonds; therefore, according to the Department of Treasury Regulations, the
City Council must declare its reasonable official intent to reimburse the
reimbursable expenses from the proceeds of the bonds.
I
i d1 1 1-",' 1Agendan
RESOLUTION NO. 99-47
March 15, 1999 — Page 2
ALTERNATIVE ACTIONS
1. City Council could chose, not to utilize tax exempt financing for this project and
thus not adopt this Resolution.
2. Other actions as identified by the City Council.
FISCAL IMPACT
The developer would be responsible to pay his portion of the project. Special taxes
would be collected each year, from the property, to repay the bonds. The City would
pay for its portion of the road with bridge and thoroughfare fees collected from the
area.
ATTACHMENT
Resolution No. 99-47
SS:KS;hds
co.&B.9947