2002 AGN JT JAN 15 I01 - Laserfiche WebLink

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Item #1 CITY OF COLTON AGENDA REPORT FOR THE JOINT MEETING OF THE CITY COUNCIL FOR THE CITY OF COLTON AND THE COLTON PUBLIC FINANCING AUTHORITY MEETING OF JANUARY 15, 2002 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: DILU DE ALWIS, FINANCE DIRECTOR P� SUBJECT: APPROVAL OF ISSUANCE OF LEASE REVENUE BONDS DATE: JANUARY 8, 2002 BACKGROUND At the August 21, 2001 City Council Meeting, the City Council approved agreements with Big League Dreams for the construction and management of a community sports park. Due to the national tragedy involving the World Trade Center and the adverse impact on the economy, certain amendments to the agreements were made to help mitigate the financial risk to the City. These amended agreements were approved by the City Council at the meeting of November 6, 2001. DISCUSSION/ ANALYSIS The proposed project is a 16-acre sports park consisting of three replica baseball stadiums, one multi-sport pavilion, one skateboard arena, one stadium/concessionaire and two tot-lots. The maximum Lease Revenue Bond issue size of $7.2 million will include the estimated project cost, debt service reserve and cost of issuance and is for a period of twenty-five years. The actual amount of bonds issued will probably be less than this amount particularly if the $2 million State Infrastructure Bank loan is approved. The approximate annual lease payments are not expected to exceed the $500,000 amount the City has appropriated for debt service in the current budget year and the budget for fiscal year 2002/2003. The bonds will be issued under a competitive bid process, which should benefit the City in the form of the lower interest rates thereby lower lease payments. The proposed rating agency, Standard & Poors, will conduct a site visit of the City of Colton during the next couple of weeks, in order to review the overall city management and its finances. The City will lease back the following assets; City Hall Complex, Hutton/Community Center and four fire stations. As the lease payments are made each year, the leased assets may be substituted or released when values exceed the remaining lease payments. FINANCIAL IMPACT Funds for the Lease payments have been budgeted in the current fiscal year and the following fiscal year in account 100- 1000-1150-3890.