HomeMy WebLinkAbout2010-02-23 - AGENDA REPORTS - ADDING CHAPTER 2.05 MC (2)CONSENT CALENDAR
DATE:
SUBJECT:
DEPARTMENT:
Agenda Item:
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval
Item to be presented by
February 23, 2010
4.
Jason Crawford
3
SECOND READING AND ADOPTION OF ORDINANCE
ADDING CHAPTER 2.05 TO THE SANTA CLARITA
MUNICIPAL CODE ESTABLISHING THE INDUSTRIAL
DEVELOPMENT AUTHORITY OF THE CITY OF SANTA
CLARITA; AND ADOPTION OF RESOLUTION DESIGNATING
THE BOARD OF THE INDUSTRIAL DEVELOPMENT
AUTHORITY OF THE CITY OF SANTA CLARITA
City Manager's Office
RECOMMENDED ACTION
City Council adopt an ordinance entitled: "AN ORDINANCE OF THE CITY COUNCIL OF
THE CITY OF SANTA CLARITA, CALIFORNIA, ADDING CHAPTER 2.05 TO THE
SANTA CLARITA MUNICIPAL CODE ESTABLISHING THE INDUSTRIAL
DEVELOPMENT AUTHORITY OF THE CITY OF SANTA CLARITA."
Adopt a resolution designating the Board of Directors for the Industrial Development Authority
of the City of Santa Clarita.
BACKGROUND
The City Council introduced and conducted a first reading of the ordinance on February 9, 2010.
Should the City Council approve the ordinance and resolution today, the Industrial Development
Authority would be effective March 23, 2010.
April 28, 2009, the City Council unanimously approved the 21 -Point Business Plan for Progress,
a broad -reaching economic development stimulus program designed to strengthen the local
economy for both the short- and long-term. The 21 -Point Business Plan for Progress included
goals to enhance local business partnerships, encourage quality job creation in the area through
business retention, expansion and attraction, bolster retail spending, and attract external dollars to
the community.
As part of this plan, the City is pursuing prudent opportunities that are available to assist local
businesses. One of those opportunities includes creating an Industrial Development Authority for
the purpose of issuing tax-exempt, private activity bonds to eligible businesses. The ability to
access this funding mechanism helps businesses increase investment in the community by being
able to access valuable capital allowing them to more successful, expand their operations and
hire more employees.
In 1980, the California State Legislature passed the California Industrial Development Finance
Act, which enabled every city and county in the state to create a local issuing entity. The Act
authorized each local government issuing entity to issue tax-exempt industrial development
bonds (IDBs) to finance eligible capital projects for manufacturing businesses. IDBS are one of
the few types of private activity bonds that may be sold as tax-exempt bonds on the municipal
bond market.
In order for local businesses to take advantage of this financing mechanism, the City must first
create an Industrial Development Authority. The City Council will serve as the Board of
Directors for the Industrial Development Authority and convene as necessary.
The methodology for issuing IDBs would be similar to the methodology the City currently uses
to handle private activity bonds, such as the Recovery Zone Facility Bonds and the most recent
approval of bond issuance by the California Statewide Communities Development Authority
(California Communities) for the Santa Clarita Valley Child and Family Center. The City would
serve as a conduit issuer and would not be liable for any debt incurred by the private borrower.
Businesses eligible to take advantage of this financing mechanism include:
Businesses that manufacture, fabricate, or assemble tangible products for sale;
Businesses which process for sale agricultural, mining, or forestry products; and
Businesses which process or manufacture recycled or reused products and materials for
resale.
IDBs can be used to finance capital projects for private businesses including the acquisition of
land, the acquisition, construction or rehabilitation of facilities, and the purchase of equipment.
The capital expenditures for the project may not exceed $20 million if contained within one
Jurisdiction or $40 million if the project is across multiple jurisdictions.
The American Recovery and Reinvestment Act of 2009 (ARRA) contains several provisions
which expand and strengthen California's IDB program. Most notably, IDBs can be accessed for
a limited time by "knowledge-based business," including ones that produce intangible items
including patents, copyrights, formulas, processes, designs, trademarks, know-how, among
others. Business that may now pursue this funding include:
• Software developers;
• Biotechnology firms;
• Pharmaceutical and nanotech companies; and
• Entertainment industry firms.
This expanded definition is set to expire January 1, 2011, however efforts are underway to make
this provision permanent.
City staff recommends partnering with California Communities to assist in the administration of
the program and issuing any bonds. California Communities is a joint powers authority
sponsored by the League of California Cities and the California State Association of Counties
and was established for the purpose of issuing bonds to finance projects that promote public
benefit and pursue economic development. Having California Communities responsible for the
administrative process of issuing IDBS is the most beneficial as they have extensive experience in
handling these types of programs. Additionally, no new funds would be required to market this
program as it could easily be added to the marketing and outreach efforts already being
conducted by the City's Economic Development division.
ALTERNATIVE ACTIONS
Other action as determined by City Council.
FISCAL IMPACT
There is no fiscal impact as a result of this item.
ATTACHMENTS
Ordinance
Resolution
3
ORDINANCE NO. 10 -
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA CLARITA, CALIFORNIA, ADDING CHAPTER 2.05 TO THE
SANTA CLARITA MUNICIPAL CODE ESTABLISHING THE INDUSTRIAL
DEVELOPMENT AUTHORITY OF THE CITY OF SANTA CLARITA
SECTION 1. RECITALS
WHEREAS, the California Industrial Development Finance Act enabled every city and
county in the state to create a local issuing entity for the purpose of issuing tax-exempt industrial
development bonds to finance eligible projects; and
WHEREAS, the City hereby finds and declares that there is a need for an Industrial
Development Authority to function in the City.
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES
HEREBY ORDAIN AS FOLLOWS:
SECTION 2. That Chapter 2.05 is hereby added to the Santa Clarita Municipal Code to
read as follows:
"Chapter 2.05
INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF SANTA CLARITA
Sections:
2.05.010
Declaration of Need
2.05.020
Establishment
2.05.030
Board Designated
2.05.040
Statutory Authority
2.05.010 Declaration of Need
The City Council herby finds and declares that there is a need for an Industrial Development
Authority to function in the City.
2.05.20 Establishment
There is hereby established in the City an industrial development authority to be known as the
"Industrial Development Authority of the City of Santa Clarita."
2.05.030 Board Designated
The Board of the Industrial Development Authority of Santa Clarita shall be as designated by
City Council resolution.
`f
2.05.040 Statutory Authority
The Industrial Development Authority of Santa Clarita shall transact business and exercise those
powers as authorized by the California Industrial Development Financing Act (Title 10,
commencing with Section 91500, of the Government Code) and as such Act may be amended."
SECTION 3. This Ordinance shall be in full force and effect thirty (30) days from its
passage and adoption.
SECTION 4. The City Clerk shall certify to the passage of this Ordinance and shall
cause the same to be published as required by law.
PASSED, APPROVED AND ADOPTED this * * * * day of ********, 2010.
ATTEST:
CITY CLERK
MAYOR
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
I, Sarah P. Gorman, City Clerk of the City of Santa Clarita, do hereby certify that the
foregoing Ordinance No. * * * * was regularly introduced and placed upon its first reading at a
regular meeting of the. City Council on the * * * * day of * * * * * * * *, 2010. That thereafter, said
Ordinance was duly passed and adopted at a regular meeting of the City Council on the * * * * day
of * * * * * * * *, 2010, by the following vote, to wit:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
AND I FURTHER CERTIFY that the foregoing is the original of Ordinance No.
and was published in The Signal newspaper in accordance with State Law (G.C. 40806).
CITY CLERK
Dated
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
CERTIFICATION OF
CITY COUNCIL ORDINANCE
I, , City Clerk of the City of Santa Clarita, do hereby
certify that this is a true and correct copy of the original Ordinance No. ****, adopted by the City
Council of the City of Santa Clarita, CA on * * * * * * * * * * * *, 2010, which is now on file in my
office.
Witness my hand and seal of the City of Santa Clarita, California, this day of
20
City Clerk
By
Deputy City Clerk
RESOLUTION 10-
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA CLARITA, CALIFORNIA, DESIGNATING THE BOARD OF THE
INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF SANTA CLARITA
WHEREAS, the California Industrial Development Finance Act enabled every city and
county in the state to create a local issuing entity for the purpose of issuing tax-exempt industrial
development bonds to finance eligible projects; and
WHEREAS, the City hereby finds and declares that there is a need for an Industrial
Development Authority to function in the City; and
WHEREAS, on , the City Council adopted Ordinance No. establishing
the Industrial Development Authority of the City of Santa Clarita; and
WHEREAS, pursuant to Santa Clarita Municipal Code Section 2.05.030, the Governing
Board for the Industrial Development Authority of the City of Santa Clarita is to be designated by
City Council resolution.
NOW, THEREFORE, the City Council of the City of Santa Clarita does hereby resolve as
follows:
SECTION 1. The City Council hereby declares itself to be the Board of Directors for the
Industrial Development Authority of the City of Santa Clarita and all the rights, powers,
privileges, duties, liabilities, disabilities, and immunities vested in such Board shall be vested in
this City Council as such Board.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this day of 52010.
MAYOR
ATTEST:
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA)
I, Sarah Gorman, City Clerk of the City of Santa Clarita, do hereby certify that the
foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a
regular meeting thereof, held on the day of , 2010, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
2
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
CERTIFICATION OF
CITY COUNCIL RESOLUTION
I, Sarah Gorman, City Clerk of the City of Santa Clarita, do hereby certify that this is a true and
correct copy of the original Resolution 10- adopted by the City Council of the City of Santa
Clarita, California on , 2010, which is now on file in my office.
Witness my hand and seal of the City of Santa Clarita, California, this day of
, 2010.
Sarah Gorman
City Clerk
By
Susan Caputo, CMC
Deputy City Clerk