Item 22 - Approval to Advance the Retirement of Bonds for Assessment AGEND~ EPORT SUMMARY
TO: Honorable Mayor and Members~,~°f the City Council ~~~
FROM: James L. Bowersox, City Mana.~
BY: Peggy Stewart, Director of ~ ~
Services ~ ~
Mark S. Weston, Director of Engineering Service~a~
Javid Siminou, Senior Civil Engineer~ "'
Ninoy Basuil, Civil Engineer(~:)
DATE: May 23, 1995
SUBJECT: Approval to Advance the of Bonds for A
District No. 79-1
Assessment District No. 79-1 "as created by the City Council of the City of Powa' on
September 18, 1981 to fund pu lic for the installation of a water s'stem
and for in the eastern portion of Poway. Bonds were so d to
finance the and o be redeemed by installments within a period of 1
years, beginning on January 2, I983 and ending on July 2, 1997. P bene iting
from the were assessed, and these were used to pay off he
bond obligations.
ixteen properties on Donart Drive need to connect to the AD 79-1 water system to
mprove quality and service. Also, other p east of the District boundary
esire to connect to a public water supply due to inadequate ground water supplies.
herefore, advance t of the bonds is recommended.
ENVIRONMENTAL REVIEW
This action is not subject to C.E.Q.A. review.
Appropriate $200,000.00 from the water fund reserves to retire bond obligations and
miscellaneous expenses.
ADDITIONAL PUBL ~DENCE
Property owners in District No. 79-1.
RECOMMENDATION
t is recommended that the City Council adopt the resolution approving advance
of bonds for A District No. 79-1 by September 2, 1995.
ACTION
MAY23 995 ITEM 22
-- AGENDA REPOR
CITY OF POWAY
TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Manager
INITIATED BY: Peggy Stewart, Director of A ministrative Service~
Mark S. Weston, Director of ngineeri,~g Services~e~
Javid Siminou, Senior Civil ngineerO-
Ninoy Basuil, Associate Civi Engineer~
DATE: May 23, I995
SUBJECT: Approval to Advance the of Bonds for
District No. 79-1
BACKGROUND:
A District No. 79-1 ("District" o "AD 79-1") was crea ed b' the City
Council of the City of Poway on September 8, 1981 to fund publ c im
for the installation of a pump station, pr mary water distribut on 1 ne,
tank, and J work for the bene it o the
properties within the District.
Sixteen in the Belvedere Estates located on Don rt Dive with their
water sup 1' serviced from a hydro-pn umatic pump station ave een receiving
poor wate uality for many years. A so, owners of proper ies ocated east of
Blue Crys a Trails have expressed n erest t connect to he C ty water
supply, he water system in AD 79- s the c osest available to
the public water system. However, he AD 79- water system would not become
available to others outside the Dis rict unti the bond obligation is paid in
full in July, 1997.
The area encompassing the District (Attachment 1) is located at the eastern
ortion of the City in the vicinit' of Poway Road and Espola Road and is
enerally bounded by Donart Drive n the west and Blue Crystal Trails on the
ast. AD 79-1 was created pur uan to the p of the Municipal
mprovement Act of 1913, Divi§ on 2 of the California Street and Hi hways
ode. The were f nanced through the sale of bons issue
pursuant to the terms and p of the Improvement Bond ct of 1 15,
Division 10 of the Streets and Highways Code. The bonds are eing re eemed by
installments for a period of 15 years, beginning on January 2, 1983 and ending
ACTION:
of 7 23 1995 ITEM 22
Approval to Advance th~ ,<etirement of Bonds for A ' District No. 7g-1
May 23, 1995
Page 2
on July 2, 1997. The money for the of the bonds comes from
ts collected from the benefiting property owners. Those who have not
paid their ts in full are being assessed twice a year. The
t is placed on the property owners property tax bill and is collected
in the same manner as general County Taxes.
FINDINGS:
Pursuant to Part 11, Division 10 of the Streets and Highways Code of the State
of California, ~ at Section 8750, the may advance the
maturity of the bond to the second day of March or September in any year and
pay and cancel the same whenever there is surplus moneys for
Staff a~ considered several methods which could be used to retire the bonds.
Staff as held several neighborhood meetings with the re idents of AD 79-1 and
proper y own rs adjoining the District which would like o receive service
from t e pub ic water system. Through the process of ne ghborhood input and
staff analy s, a methodology has been proposed which al ows of the
bonds; prov es a partial rebate, refund, or deferral of fees; and
connection ees for new water supply service connecting and benefiting from
the Distric facilities. The elements of the plan to retire the bonds include
the following:
1. The reserve fund and the construction fund balances will be applied
to retiring the bonds.
2. Payments for ts after the December, 1994 payment will be
returned and/or deferred to the property owners being assessed.
3. The same prorated benefit will be applied to current property owners
whose properties retired the early.
4. Large 1. ot property owners with properties 8 acres or larger will
receive an additional 50% rebate or deferral.
5. All properties within the t district will be exempt in the
future from any fee for AD 79-1 facilities. These
properties are still subject to all other fees assessed by
the City. . _.
6. Prope ties not currently connected to the public water supply system
will e asses ed a spe ial fee for utilizing District
facil ties. taff wil prepare a separat report and res lution for
Counc 1 adopt on to es ablish this fee. his money will e advanced
by the water und and hen returned by fu ure ees. The
fee will be ap ly $10,-00.00 for Dis r ct
Facilities. All properties ~ to the public wa er system
will be subject to all other connection fees as assigne by the City.
wishing to connect to the public water supply system
outside the District will be required to improve the public water
supply system in accordance to City standards and approved by the
Director of Engineering
995 ITEt ! 22
Approval to Advance e of Bonds for Asse ent District No. 79-1
May 23, 1995
Page 3
This proposal has been developed by the property owners within the District
and th City staff and is supported by the residents. Staff will proceed with
the de ails to implement this system and return to the Council with a
resolu ion to establish the fee to recover the funds advanced by
the wa er fund needed to retire the bonds.
There is approximately $552,000.00 currently available in the AD 79-1 Reserve
Fund and Construction Fund that could be utilized to help pay the balance. It
is estimated that an additional $200,000.00 is needed to retire the bonds and
fund the rebate/deferred program (Attachment 2).
Advance of the bond will be made pursuant to the aforementioned
Section of the Streets and Highways Code.
FISCAL IMPACT:
$ must be J from the Water Fund Balance Account No.
510-8916 which will be repaid to the water fund through future
fees.
ENVIRONM£NTAL IMPACT:
This action is not subject to C.E.Q.A. review.
PUBLIC NOTIFICATION & CORRESPONDENCE:
Property owners located in District No. 79-1.
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Adopt the resolution Approving the Advance R of Bonds for
Assessment District No. 79-1 (Attachment 2).
2. Approve the disbursement from the AD 79-1 Reserve and C
Funds and appropriate $ from the City's Water Fund Balance
Account to pay the bond obligation by September 2, 1995.
3. Direct staff to develop the final calculations, procedures, and
methods to dissolve AD 79-1 and return to City Council with a method
to recover the funds advanced by the water fund by a special
fee.
JLB:PS:MSW:JS:NB:bw
ATTACHMENTS:
1. Vicinity Map
2. Balance Sheet
3. Resolution
ITEM 2Z
CITY OF loOWAy ITr,~:
Approval to Advance the
TITLE: of 8Onds
~"r~s~SS~ent
ATTAchmENT:
WATER ASSESSMENT DISTRICT 79-1
(APPROXIMATE BALANCE SHEET - UNAUDITED)
Total t - $2,150,000
Total t of amounts paid in full - $589,681
Total amount to be paid by July, 1997 - $
Total principal owed $585,000
10% prepayment penalty 58,500
Total amount owed $643,500
Amount on reserve (bond collection) $393,787
Amount available from 149,410
Total available $543,197 -543,200
Shortage to pay bond amount $100,300
(to be paid by the City)
mount to r imburse early payment 3 ,000
ebate for arge lots 3 ,100
ee for bonds ,000
dministrat on fee for City ,000
Contingency 1,600
Total for $200,000
Figures will be adjusted after bond details are completed.
ATTACHMENT 2
I~iAY 23 1995 ITEiV! 22
Resolution No.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY
APPROVING THE ADVANCE RETIREMENT OF BONDS FOR
- ASSESSMENT DISTRICT 79-1
WHEREAS, on September 18, 1981, the City Council of the City of Poway
approved the creati n of Assessment District No. 79-1 ("District" or "AD 79-
1") to fund public mprovements for the installation of a pump station,
primary water distr bution line, tank, app and ~
work for the benefi of properties within the District; and
WHEREAS, AD 79-1 was created pursuant to the of the Municipal
I Act of 1913, Division 12 of the Streets and Highways Code of the
State of California; and
WHEREAS, the were financed through the sale of bonds issued
pursuant to the terms and p of the Improvement Bond Act of 1915,
Division 10 of said Streets and Highways Code; and
WHEREAS, the bonds are redeemed by installments within a period of
fifteen years, beginning on January 2, 1983 and ending on July 2, 1997; and
WHEREAS, sixteen properties outside the District located in the
Belvedere Estates on Donart Drive with water supply serviced from a hydro-
pneumatic pump station have been receiving poor water quality for many years;
and
WHEREAS, also, owners or properties located east of Blue Crystal Trails
and outside the boundary of AD 79-1 have expressed interest to connect to City
water supply; and
WHEREAS, the water system in AD 79-1 would not become available to
others outside the District until the bond obligation is paid off in July,
1997; and
WHEREAS, to provide better water service quality to said 16 properties
on Donart Drive and give an opportunity to other properties to be connected to
the City's water supply.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway
that:
1. The City finds that advance of bonds be made pursuant to
the p of Part 11, Division 10 of the Streets and Highways
Code of the State of California.
2. The City would disburse money from the AD 79-1 Reserve and
C Funds and appropriate $200,000.00 to retire the bond on
September 2, 1995.
PASSED, ADOPTED, AND APPROVED, by the City Council of the City of Poway,
California, at a regular meeting this 23rd day of May, 1995.
Don Higginson, Mayor
ATTEST:
1995 ITr--IVl 22