CITY COUNCIL
AGENDA
Study Session
Wednesday, March 27, 2024
3:00 PM
City Council Chambers
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
MAYOR
Mark Carnevale
CITY COUNCIL MEMBERS
Mayor Pro Tem
Nancy Ross
Councilmember
Raymond Gregory
Councilmember
Ernesto Gutierrez
Councilmember
Rita Lamb
• CALL TO ORDER
• ROLL CALL
• AGENDA FINALIZATION
At this time the City Council may announce any items being pulled from the agenda or continued to another date.
1. PUBLIC COMMENT
This is the opportunity for members of the public to comment on any items not appearing on the regular agenda. Because of restrictions contained in California Law, the City Council may not discuss or act on any item not on the agenda but may briefly respond to statements made or ask a question for clarification. The Mayor may also request a brief response from staff to questions raised during public comment or may request a matter be agendized for a future meeting. Public Comment will be limited to three (3) minutes.
2. STUDY SESSION
Normally no action is taken on Study Session items, however, the City Council reserves the right to give specific policy direction and take specific action as Cathedral City P a g e 2
necessary. Presentation will be limited to 10 minutes unless other provisions are made in advance.
A. Finance Advisory Committee Interviews
Recommendation: Interview applicants for four vacant seats on the Finance Advisory Committee.
B. Community Development Block Grant (CDBG) FY 2024-2025 Annual Action Plan (AAP) Introduction
Recommendation: To introduce the City’s Community Development Block Grant (CDBG) FY 2024-25 Annual Action Plan (AAP) for the City Council’s review, discussion, and direction.
C. Grants Management Overview
Recommendation: This agenda item is for review and discussion only.
D. Refunding of Tax Allocation Bonds
Recommendation: This agenda item is for review and discussion only.
3. CLOSED SESSION
A. Conference with Legal Counsel - Anticipated Litigation/Threat of Litigation, Pursuant to Government Code Section 54956.9(d)(2).
Number of Potential Cases: One
ADJOURN
NOTES TO THE PUBLIC:
The City of Cathedral City complies with the Americans with Disabilities Act of 1990. If you require special assistance to participate in this meeting, please call the City Clerk’s Office at (760) 770-0322 at least 48 hours prior to the meeting.
If you desire to address the City Council during the meeting, please complete a Request to Speak Form available at the entrance and present it to the City Clerk. Speakers will be called upon at the appropriate time.
Any documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection in the City Clerk’s office at City Hall located at 68 -700 Avenida Lalo Guerrero during normal business hours. In addition, such documents will be posted on the City’s website at www.cathedralcity.gov.
Cathedral City Page 1 of 2 Printed on 3/21/2024
Staff Report
City Council
Item No. 2.A
Meeting Date: March 27, 2024
From: Tracey Hermosillo, City Clerk
Title: Finance Advisory Committee Interviews
City Council
RECOMMENDATION:
Interview applicants for four vacant seats on the Finance Advisory Committee.
BACKGROUND:
The terms of appointments and term limits for commissions and committees have been established in the Cathedral City Municipal Code and by Resolution. There are no term limits established for committees in the municipal code. All members of the commissions and committees shall be appointed for a three -year term unless otherwise provided by law, Ordinance, Resolution or if not applicable. When an unexpected vacancy occurs on a commission/committee, an appointment may be made to fulfill the remainder of the term. Most, if not all, terms will expire on June 30th of their respective year.
The Finance Advisory Committee is made up of five members and currently has four vacant seats. The committee meets annually or on an as needed basis and shall be subject to the provisions of the Brown Act.
DISCUSSION:
Staff solicits applications on an on -going basis to fill these and other vacant seats on commissions and committees . To date staff has received applications from the following three individuals for the Finance Advisory Committee:
Teri Hargreaves
Danny Lee
Rick Saldivar
Their applications are attached for your review.
It is the staff’s recommendation to interview each applicant for consideration of an appointment to the Finance Advisory Committee . The terms for the seats on this
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committee are all set to expire on June 30, 2026, with the exception of one, which will expire on June 30, 2024. In an effort to spread out the expiration dates for the seats on this committee staff is proposing the following list of seats and terms to be considered when conducting interviews and making formal appointments:
• One unexpired seat with a term continuing to June 30, 2026 • One unexpired seat with a term continuing to June 30, 2026 • One unexpired seat with a term continuing to June 30, 2027 • One unexpired seat with a term continuing to June 30, 2027
Formal appointments may be made during the regular City Council meeting on March 27, 2024.
FISCAL IMPACT:
There is no fiscal impact to the city with this item.
FIVE YEAR STRATEGIC PLAN:
None
ATTACHMENTS:
Teri Hargreaves_Redacted
Danny Lee_Redacted
Rick Saldivar_Redacted
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CITY
OF CATHEDRAL CITY
COMMISSION/BOARD/COMMITTEE APPLICATION
Comm
ission/Board/Committee
on which you would like to serve:
(One Application for each Commission/Board/Committee)
NAME:
HOM
E ADDRESS:
(Appl icants must be a Registered Voter in Cathedral City) HOME
PHONE: CELL PHONE:
E-ma
il ADDRESS:
LENG
TH OF RESIDENCY IN CATHEDRAL CITY:
IF EM
PLOYED, PLEASE LIST WHERE YOU WORK AND POSITION YOU HOLD:
PLE
ASE ATTACH A LETTER OF INTEREST INCLUDING, BUT NOT LIMITED TO, THE FOLLOWING:
• Why
you wish to be considered for appointment to the Commission/Board/Committee • Your relevant experience and knowledge
The i
nformation provided will be used by the City Council as part of the application process and will be considered by the City Council upon receipt, provided a vacancy exists on the Board , Commission or Committee for which you have applied. If there is no vacancy, your application will be kept on file for one year for consideration should an opening occur.
Pleas
e keep in mind that State Law requires specific Commission/Board/Committee members to file a Financial Disclosure Statement.
Pleas
e return application to: City of Cathedral City
Office
of the City Clerk
68 -700 Avenida Lalo Guerrero
Cathedral
City, CA 92234
Submit by email to: [email protected]
Thank you for your willingness to serve your local government and community.
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Attachment: Teri Hargreaves_Redacted (4154 : Finance Advisory Committee Interviews) February 8, 2024
Honorable Mayor, Mayor Pro Tem and Councilmembers,
I am happy to apply to serve on the Cathedral City Finance Advisory Committee. I am proud to say that I have lived in Cathedral City for more than thirty years. Over the years I have seen a lot of positive changes and progress in our city. I am at a time in my life when I now have time to give back to the City where my family has lived all these years.
As you know, I was a member of the Cathedral City Residents Yes on Measure B committee, which was successful in phasing out short-term vacation rentals in our residential neighborhoods. I also recently was a member of the Resident Study Committee to review unfunded needs in the community and make suggestions for addressing those needs. It was rewarding to serve on these committees because I felt I was helping the community as a whole.
My professional background is in law. While I don’t have a professional background in finance, I am very detail-orientated and am good at analyzing and evaluating information.
Practically speaking, over the years I have overseen the finances of many school groups and charitable organizations including managing our own personal household finances.
Thank you for considering me for appointment to the Finance Advisory Committee. It would be my pleasure to serve on this committee to benefit the residents of our community.
Sincerely,
Teri Hargreaves
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Attachment: Teri Hargreaves_Redacted (4154 : Finance Advisory Committee Interviews)
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Attachment: Danny Lee_Redacted (4154 : Finance Advisory Committee Interviews)
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Attachment: Danny Lee_Redacted (4154 : Finance Advisory Committee Interviews)
CITY OF CATHEDRAL CITY
COMMISSION/BOARD/COMMITTEE APPLICATION
Commission/Board/Committee
on which you would like to serve:
(One Application for each Commission/Board/Committee)
NAME:
HOME ADDRESS:
(Applicants must be a Registered Voter in Cathedral City) HOME PHONE: CELL PHONE:
E-mail ADDRESS:
LENGTH OF RESIDENCY IN CATHEDRAL CITY:
IF EMPLOYED, PLEASE LIST WHERE YOU WORK AND POSITION YOU HOLD:
PLEASE ATTACH A LETTER OF INTEREST INCLUDING, BUT NOT LIMITED TO, THE FOLLOWING:
• Why you wish to be considered for appointment to the Commission/Board/Committee • Your relevant experience and knowledge
The information provided will be used by the City Council as part of the application process and will be considered by the City Council upon receipt, provided a vacancy exists on the Board , Commission or Committee for which you have applied. If there is no vacancy, your application will be kept on file for one year for consideration should an opening occur.
Please keep in mind that State Law requires specific Commission/Board/Committee members to file a Financial Disclosure Statement.
Please return application to: City of Cathedral City
Office of the City Clerk
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Submit by emDiO tR
thermosillo#FDtKeGUDOFityJRY
Thank you for your willingness to serve your local government and community.
FINANCE ADVISORY COMITTEE
RICK SALDIVAR
45yrs
Founder and Director of Chance Initiative
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Attachment: Rick Saldivar_Redacted (4154 : Finance Advisory Committee Interviews)
To Whom it may concern:
I hope this letter finds you well. I am writing to express my strong interest in joining the finance committee. As a highly motivated and detail-oriented person, I believe that my grant writing skills and budget experience align perfectly with the goals and objectives of the committee.
Having participated in the resident study committee for a new proposed tax for Cathedral City, I have gained a comprehensive understanding of the financial need of our community. My background in searching for funding for various programs along with budgeting finances for those programs has equipped me with the necessary tools to contribute effectively to the finance committee.
Throughout my career, I have successfully written and awarded grant funding. I have managed financial budgets and developed strategic financial plans. These experiences have enabled me to develop a keen eye for identifying areas of improvement and implementing effective financial strategies including finding monetary resources.
Furthermore, my strong communication and interpersonal skills have proven instrumental in collaborating with cross-functional teams and stakeholders. I believe that effective communication is essential to foster a collaborative environment within the committee and to facilitate informed decision-making.
Thank you for your time and consideration.
Sincerely,
Rick Saldivar
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Attachment: Rick Saldivar_Redacted (4154 : Finance Advisory Committee Interviews)
Cathedral City Page 1 of 3 Printed on 3/21/2024
Staff Report
City Council
Item No. 2.B
Meeting Date: March 27, 2024
From: John Corella, Director of Engineering/Public Works Title: Community Development Block Grant (CDBG) FY 2024 -2025 Annual Action Plan (AAP) Introduction
City Council
RECOMMENDATION:
To introduce the City’s Community Development Block Grant (CDBG) FY 2024-25 Annual Action Plan (AAP) for the City Council’s review, discussion, and direction.
BACKGROUND:
The Community Development Block Grant (CDBG) program funding awarded from U.S.
Department of Housing and Urban Development (HUD), allows Cathedral City to carry out a wide range of community development activities directed toward revitalizing neighborhoods, economic development, and improving community facilities and services, principally for low-to-moderate (low-mod) income individuals.
As an entitlement city, Cathedral City receives annual entitlement funds to address the priority needs of our community outlined in the 5 -Year Consolidated Plan (Con Plan).
Within the Con Plan is t he Annual Action Plan (AAP), identifying how CDBG funds will be allocated for the upcoming fiscal year as part of the Con Plan objectives.
At the City Council meeting on June 22, 2022, the City Council approved the FY 2022 - 2027 Con Plan, which included broad priority needs and subcategory needs. The City Council wanted to select versatile priority needs such that, should an unforeseen priority need arise during the lifespan of the Con Plan, the need could still be addressed with CDBG funds.
DISCUSSION:
At this City Council meeting, city staff will be introducing the FY 2024 -2025 AAP for review. The presentation on the AAP will include discussion on allocations for program administration and public improvements . In the previous year, the city received it’s CDBG allocation by the end of February ; however, HUD has not provided a timeline for when the city can expect CDBG allocation award in the upcoming fiscal year. The city is expecting approximately $570,000 in funding, similar to the previous fiscal year.
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The next steps include a city staff presentation of the proposed CDBG FY 2024 -2025 AAP and the proposed schedule, including notices and public hearings to comply with HUD requirements and the approval of the AAP.
Cathedral City CDBG Program FY 2024-25
Typically, the AAP includes allocations for program administration, public services and public improvements. Due to limited CDBG funding available, city staff is proposing for the FY 2024 -2025 General Fund to fund at minimum the equivalent to 15% of CDBG allocation for public services (similar to what City Council approved on May 24, 2023, for the FY 2023 -2024 AAP). The General Fund will fund public services to allow CDBG funds to provide additional funding for public improvements . The proposed FY 2024 - 2025 allocations are as follows:
ADMINISTRATIVE (≤20%) FUNDING
Total Funding Allocated $ 114,000
PUBLIC SERVICES (≤15%) FUNDING
Total Funding Allocated $ -
PUBLIC IMPROVEMENTS (>80%) FUNDING
Whitewater Area Street Rehabilitation $ 451,000
Sidewalk Repair Assistance Program $ 5,000
Total Funding Allocated $ 456,000
TOTAL FUNDING $ 570,000
Public Improvements: The portion of the CDBG allocation that can be used for Public Improvements is not capped and in the above scenario is shown as $456,000. As in the past years, this funding would be used to fund a public improvement project within a low-mod area designated by HUD and the Sidewalk Repair Assistance Program.
The FY 2021 -2022 program funded the Via De Anza Street Improvements Project, Phase I, utilizing the $436,357 public improvements entitlement. The FY 2022 -2023 AAP public improvements entitlements allocation of $387,119 funded the completion of the Via De Anza Street Improvements Project - Phase II and allocated $15,000 to establish and initiate a Sidewalk Repair Assistance Program. The FY 2023 -2024 AAP
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public improvements entitlements allocated $445,646 toward the, soon to be underway, Via De Anza Street Improvements Project - Phase III and also allocated $10,000 to the Sidewalk Repair Assistance Program.
For the FY 2024 -2025 AAP, Staff is proposing public improvement entitlements to fund $451,000 for the Whitewater Area Street Rehabilitation Project and $5,000 to continue providing funding for the Sidewalk Repair Assistance Program.
Please note a reduction in the amount of $5,000 is proposed for the Sidewalk Repair Assistance Program for the FY 2024 -2025. This reduction is based on the minimal responses to this program offered to residents within the HUD designated low-mod income areas of the city.
Schedule: The following schedule for study, review and approval of the FY 2024 -2025 AAP is proposed to maintain compliance with HUD:
• March 27, 2024, City Council meeting:
o Introduction of the FY 2024 -2025 AAP including program administration and public improvements.
• March 31, 2024:
o Posting of the 30-day notice for public comments on the AAP. • April 30, 2024:
o End posting of the 30-day notice for public comments on the AAP. • May 8, 2024, City Council meeting:
o Public Hearing for the approval of the AAP.
In summary, at tonight’s City Council meeting, staff is requesting City Council review, discuss and provide direction to staff to proceed with the proposed FY 2024 -2025 Annual Action Plan (AAP).
FISCAL IMPACT:
At this time, this item has no fiscal impact. Please note, if any funds remain from the FY 2023-2024 AAP, th ose funds can be reprogrammed into the FY 2024 -2025 AAP later via an administrative or substantial amendment.
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Staff Report
City Council
Item No. 2.C
Meeting Date: March 27, 2024
From: Kevin Biersack, Financial Services Director
Title: Grants Management Overview
City Council
RECOMMENDATION:
This agenda item is for review and discussion only.
BACKGROUND:
For the first time, a city -wide Grants Analyst position was included in the adopted biennial budget for Fiscal Year (FY) 2023/2024 and FY 2024/2025. In the fall of 2024, the city was successful in recruiting for this position and the Grants Analyst started with the city on November 27, 2023.
DISCUSSION:
In creating this position, staff identified eight (8) primary functions that the Grants Analyst would be responsible for:
• Identifying federal, state, county and corporate/private grant funding organizations
• Determining techniques and methods of researching grant opportunities • Participating or leading in preparing, developing/writing, and submitting grant proposals
• Securing and maintaining funding from external agencies • Establishing and maintain ing contacts and partnerships with potential and existing funding sources
• Managing and monitoring complex grants and contracts with funding agencies, on-time and within budget
• Determining principles and practices of public agency grant funding • Establishing principles and practices of efficient and compliant grant administration – Tyler Munis Grant Manager/Master
Staff have since expanded upon these functions and created additional detail s in the attached Grant Management Functions list.
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Separately, staff have developed an overall Grants Management process to preview with City Council. Attached is a comprehensive Grant Overview with four (4) accompanying flowcharts:
• Identifying Funding Opportunities
• Grant Application Submission
• Grant Administration
• Grant Closure
Finally, i n starting/ramping up with this new position, various grant activities (see the attached list) have been initiated and/or accomplished in these first three (3) months with respect to:
• Completed Applications
• In-Progress Applications
• On-Going Grants with Assistance
• Grant Tracking
FISCAL IMPACT:
None at this time.
FIVE-YEAR STRATEGIC PLAN:
Goal C: FISCAL STABILITY and SUSTAINABILITY
Objective: Cathedral City has economically prospered by facilitating investment of private dollars in high quality development which benefits the community. We remain financially solvent by instituting prudent fiscal policies and transparent financial practices.
ATTACHMENTS:
Grant Management Functions
Step 0 Grant Timeline - Overview
Step 1 Grant Timeline - Identifying Funding Opportunities Step 2 Grant Timeline - Grant Application Submission
Step 3 Grant Timeline - Grant Administration
Step 4 Grant Timeline - Grant Closure
Grants Management Activity FY 2023.2024 03.15.2024
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GRANTS MANAGEMENT FUNCTONS
• Identifying Federal, State, County and corporate/private grant funding organizations o Use multiple tools, including Grants.Gov (Federal) and CalGrants, to research funding organizations
o Subscribe to grant funding opportunity notifications
o Review grantor websites for open / upcoming opportunities • Determining techniques and methods of researching grant opportunities o Attend available workshops
o Research funding opportunities in partnership with City Staff o Present high-level details to Department Leadership
• Participating or leading in preparing, developing/writing, and submitting grant proposals o Determine grant requirements
o Review RFPs prior to notifying department head
o Form Grants Team among departmental staff and identify qualifying project o Lead the Grants Team during the preparation and writing phases o Ensure all required information is submitted
• Securing and maintaining funding from external agencies o Partner with departments to apply for external funding o Confirm requirements are met to ensure continued funding o Fulfill grant reporting, including updates to relevant directors/managers o Assure grant reimbursements are accurate
• Establishing and maintaining contacts and partnerships with potential and existing funding sources
o Serve as centralized contact in the city for external funding/reimbursements o Communicate directly with grantor contacts and establish rapport • Managing and monitoring complex grants and contracts with funding agencies, on-time and within budget
o Ensure timelines are met
o Support Grants Team with completing deliverables such as reports, invoices, presentations, etc.
o Monitor Purchase Orders and Invoices
o Coordinate Budget
• Determining principles and practices of public agency grant funding o Research and document best policies and procedures
o Maintain and refine flowcharts of grant process(es)
• Establishing principles and practices of efficient and compliant grant administration – Tyler Munis Grant Manager/Master.
o Work with Finance Staff to ensure Purchase Orders, Invoices, and Projects are established/maintained in Tyler Munis
o Create support documents, such as diagrams, to share with stakeholders o Implement Best Practices within Tyler
o Ensure timely and accurate Federal and State reporting
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Attachment: Grant Management Functions (4149 : Grants Management Overview) Identify Funding
Opportunities
Contact the relevant department.
Does the grant support the strategic plan?
Do we want to pursue the grant?
Are resources (i.e., personnel) available?
Is the timeframe reasonable?
Assemble a grant team for the opportunity.
Are matching funds required? If so, are funds available? Does the grant application need council approval?
Grant Application
Submission
Grant
Administration
Grant Closure
Write the narratives for the application.
Develop the project budget and timeline.
Determine the resources needed for the grant.
Final review and submission of the application.
Receive grant award notification.
Grant contract is approved by council.
Grant Team
Grants Analyst
Determine Grant Requirements
Write, if applicable
Track
Quality Assurance
May serve as Project Administrator
Department Members
Develop Project Plans
Provide Technical Execution
External Grant Writer, if applicable
Write and Prepare Application
May serve as Project Administrator
Receive notice to proceed from granting agency.
Grants Analyst executes financial tasks.
Project Administrator executes administrative tasks.
Department members execute technical tasks.
Grant team meets as needed.
Grants Analyst confirms expenses are paid and grant is up to date in Tyler ERP.
Project Administrator finalizes reports to the granting authority.
Department members finalize all technical requirements.
Grants Analyst ensures funds are received from granting authority.
Grant Process Overview
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Attachment: Step 0 Grant Timeline - Overview (4149 : Grants Management Overview) Grant Team
Relevant?
Review RFPs
Outside sources
suggest RFPs
End Process
Brief Department
Head Feasible?
NoNo
Assemble
Necessary Parties
Yes
Detailed Review
of Grant
Requirements
Review Current &
Pending Projects
External Grant Writer
(NAI, MVR, etc.)
Attend Workshops
High Level
Review of Grant
Requirements
Subscribe to
Notifications
Is Match
Available?
Determine Grant
Project
Council Approval
Begin Grant
Application
Step 1: Identifying Funding Opportunities
Grants Analyst Department Members
Is Match
Needed?
Need Council
Approval?
Yes
Yes
No
No
End Process
No
Approved
Failed
Yes
Yes
Grants Analyst
IDs Funding
Organizations
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Attachment: Step 1 Grant Timeline - Identifying Funding Opportunities (4149 : Grants Management Overview) Grant Team
End
Process
Begin Grant
Application
Grants Analyst Department Members
Determine
Required
Resources
Submit Grant
Application Awarded?
Council
Approval
Bring Grant
Contract to
Council
Failed
Approved
Review by Grants
Analyst and
Department
Members
Write Grant
Narratives
Final Review
Step 2: Grant Application Submission
External Grant Writer
Enter into Tyler
ERP
Prepare Grant
Budget and
Timeline
Yes
No
Begin Project
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Attachment: Step 2 Grant Timeline - Grant Application Submission (4149 : Grants Management Overview) Technical TasksAdministrative Tasks
Notice to Proceed
Step 3: Grant Administration
Department Members
[CIP] Execute
Design &
Construction Bids
Meet As Needed
Based on Project
Complexity
Finance & ERP Tasks
Monitor Purchase
Orders and
Invoices
Track Costs and
Budget Fulfill Grant
Reporting
Confirm Best
Practices Are
Followed
Create Diagrams
and Other
Support
Documents
Project Nears
Completion
Grants Analyst Project Administrator
***Grants Analyst may serve as Project Administrator*** Track Timeline
Submit Cost
Reimbursements
[CIP] Procure
Project
Management
[Non-CIP]
Training,
Purchases,
Outreach, etc.
Approve Costs
Start Grant
Closure
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Attachment: Step 3 Grant Timeline - Grant Administration (4149 : Grants Management Overview) Technical TasksAdministrative Tasks
Project Nearing
Completion
Step 4: Grant Closure
Department Members
[CIP] Close Out
Construction
Meet to Confirm
All Grant
Requirements Are
Met
Finance & ERP Tasks
Confirm All Data
in Tyler ERP
Generate Final
AR Invoice
Finalize
Document
Management
Final Best
Practices Review
Final Review of
Costs & Budget
Grants Analyst Project Administrator
***Grants Analyst may serve as Project Administrator*** Submit Final
Reimbursement
Invoice
Prepare & Submit
Final Grant
Reports
[CIP] Approve
Retention
Payments
[Non-CIP]
Confirm
Completion
Final Costs
Approval
Grant Project
Finalized
Ensure Funds Are
Received
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Attachment: Step 4 Grant Timeline - Grant Closure (4149 : Grants Management Overview) FY 2023/2024
GRANT MANAGEMENT ACTIVITY
03.15.2024
COMPLETED APPLICATIONS
• United States Department of Energy (US DOE) Energy Efficiency and Conservation Block Grant (EECBG) Program Voucher – Fiscal Year (FY) 23-24 - $112,920 • California Governor’s Office of Emergency Services (CalOES) Listos California Community Emergency Response Team (CERT) - $25,000
• Federal Emergency Management Agency (FEMA) Assistance to Firefighters Grant - $154,604.27
IN-PROGRESS APPLICATIONS
• California Fire Foundation – Est. $15,000
ON-GOING GRANTS WITH ASSISTANCE NOW BEING PROVIDED
• US DOE EECBG Program Voucher
• Office of Traffic Safety (OTS) Child Passenger Safety Grant • California Department of Housing and Community Development Local Early Action Planning (LEAP) Grant
GRANT TRACKING IN TYLER MUNIS GRANTS MANAGER/MASTER
• 2023 Greater Palm Springs Tourism Grant
• Active Transportation Program (ATP) Cycle 5 – Downtown Connectors • US Department of Justice (US DOJ) Bureau of Justice Assistance (BJA) Edward Byrne Memorial Justice Assistance Grant (JAG) FY 21, FY 22, FY 24 • CalRecycle Beverage Container Recycling Payment Program • CalRecycle Rubberized Pavement Date Palm Pavement Rehab • Statewide Park Development and Community Revitalization Program Dream Homes Park Grant
• US DOE EECBG Program Voucher - FY 23-24
• Firehouse Subs Public Safety Foundation Grant 2023
• FM Global Fire Prevention Grant FY 24
• Highway Safety Improvement Program (HSIP) Cycle 11
• OTS Selective Traffic Enforcement Program (STEP) Grant 2023-2024 • Riverside County Transportation Commission (RCTC) Transportation Development Act (TDA) Perez Rd Class IV Separated Bikeways
• Senate Bill 1383 Local Assistance Grant Program
• RCTC TDA Whispering Palms Trail Bike Lane FY 24
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Attachment: Grants Management Activity FY 2023.2024 03.15.2024 (4149 : Grants Management Overview)
Cathedral City Page 1 of 5 Printed on 3/21/2024
Staff Report
City Council
Item No. 2.D
Meeting Date: March 27, 2024
From: Kevin Biersack, Financial Services Director
Title: Refunding of Tax Allocation Bonds
Successor Agency
RECOMMENDATION:
This agenda item is for review and discussion only.
BACKGROUND
The Redevelopment Agency of the City of Cathedral City (the “Predecessor Agency”) adopted redevelopment plans for Cathedral City Redevelopment Project Area No. 1, Cathedral City Redevelopment Project Area No. 2 and Cathedral City Redevelopment Project Area No. 3, each located within the City of Cathedral City (the “City”).
Thereafter, on September 27, 2006, Cathedral City Redevelopment Project Area No. 1, Cathedral City Redevelopment Project Area No. 2 and Cathedral City Redevelopment Project Area No. 3 were merged to create a merged redevelopment project area (the “Merged Redevelopment Project Area”).
To finance projects within the Merged Redevelopment Project Area, the Predecessor Agency caused the Cathedral City Public Financing Authority (the “Authority”) to issue several series of tax allocation revenue bonds (the “Authority Bonds”), payable from amounts received from the Predecessor Agency pursuant to its:
• 2000A Merged Redevelopment Project Area Bonds,
• 2000B Merged Redevelopment Project Area Bonds,
• 2002A Merged Redevelopment Project Area and Project Area No. 3 Bonds, • 2004A Project Area No. 3 Bonds,
• 2004B Project Area No. 3 Taxable Bonds,
• 2007A Merged Redevelopment Project Area Bonds,
• 2007B Merged Redevelopment Project Area Bonds, and
• 2007C Merged Redevelopment Project Area Subordinate Bonds (collectively, the “Predecessor Agency Obligations”).
On June 28, 2011, the California Legislature adopted ABx1 26 to, inter alia, dissolve existing redevelopment agencies, including the Predecessor Agency. In accordance with the legislation, the Predecessor Agency was dissolved on February 1, 2012 and
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the Successor Agency was initially formed pursuant to Resolution No. 2011 -133 of the City Council, adopted on May 25, 2011, and such formation was reaffirmed pursuant to Resolution No. 2012-153 of the City Council, adopted on January 12, 2012.
On June 27, 2012, AB 1484 was adopted and specifically authorizes the issuance of refunding bonds by the Successor Agency under the authority of Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California and provides in Section 34177.5(a)(1) of the Health and Safety Code that “[t]he successor agency may pledge to the refunding bonds or other indebtedness the revenues pledged to the bonds or other indebtedness being refunded, and that pledge, when made in connection with the issuance of such refunding bonds or other indebtedness, shall have the same lien priority as the pledge of the bonds or other obligations to be refunded, and shall be valid, binding and enforceable in accordance with its terms.” Section 34177.5(g) of the Health and Safety Code states any bonds approved under this section will be seen as debt taken on by the dissolved redevelopment agency – as if the bonds had been issued before June 29, 2011, following all the old rules under the Community Redevelopment Law.
On October 15, 2014, the Successor Agency refinanced the Series 2000A, Series 2002A and 2004A Predecessor Agency Obligations to achieve debt service savings and caused the issuance of several series of tax allocation revenue bonds:
• 2014A Merged Redevelopment Project Area Bonds,
• 2014B Merged Redevelopment Project Area Housing Bonds, and • 2014C Merged Redevelopment Project Area Taxable Bonds (collectively, the “Successor Agency Obligations”).
On January 21, 2021, the Successor Agency refinanced the Series 2004B, 2007A and 2007B Predecessor Agency Obligations to achieve debt service savings and caused the issuance of several series of tax allocation revenue bonds:
• 2021A Merged Redevelopment Project Area Bonds,
• 2021B Merged Redevelopment Project Area Housing Bonds, and • 2021C Merged Redevelopment Project Area Subordinate Bonds.
The following table summarizes the outstanding Predecessor Agency and Successor Agency obligations.
Table 1. Outstanding Obligations
Bond
Series
Bond Balance
(FY 2024/25)
Term
(Fiscal Year Ending)
2000A $1,949,907 2000-2034
2007B $24,150,000 2007-2032
2014A $25,295,000 2015-2035
2014B $9,865,000 2015-2034
2014C $7,285,000 2015-2034
2021A $24,760,000 2022-2036
2021B $4,385,000 2022-2033
2021C $14,125,000 2022-2032
DISCUSSION:
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Given the favorable interest rate market conditions, the Successor Agency can achieve debt service savings and provide assistance to local taxing entities through the refunding or prepayment of either all or a portion of the Successor Agency Obligations Series 2014A and Series 2014B Bonds.
Based on market conditions as of March 4, 2024, the total gross savings in annual debt service payments are estimated at $2.88 million, and present value savings estimated at $2.44 million or 6.94%. In accordance with the City's debt policy, a minimum savings level of 3.00% is required to proceed with a refunding. However, should the City decide to move forward with the refunding, the minimum savings target for the Refunding Bonds will be set at 5.00%.
To assess the impact of interest rates on total savings, the table below outlines various scenarios where interest rates increase from those of March 4, 2024. Interest rates would need to rise by approximately 40 basis points above those of March 1, 2024, to achieve a net present value savings of approximately 5.00%.
Table 2: Interest Rate Sensitivity Analysis
Interest Rates
as of 3/4/2024 +25bps +35bps +40bps
True Interest Cost (%): 3.11% 3.36% 3.46% 3.52%
All-In True Interest Cost (%): 3.45% 3.70% 3.81% 3.86%
Gross Savings ($): $2,875,708 $2,410,208 $2,223,056 $2,127,847 Net PV Savings ($): $2,441,705 $2,022,693 $1,857,078 $1,774,689 % Savings of Refunded Bonds: 6.94% 5.75% 5.28% 5.05%
City Share (~16%): $ 460,113 $ 385,633 $ 355,689 $ 340,456 Other Tax Entities Share
(~84%): $2,415,595 $2,024,575 $1,867,367 $1,787,392
Timing of Refunding Bonds
The financing may take approximately 4 to 5 months to issue the Refunding Bonds, and provided below are the key milestones to complete the financing.
• April 24, 2024, Successor Agency Approval
• April 25, 2024, Agenda Deadline for County Oversight Board Meeting • May 16, 2024, County Oversight Board Approval
• May 17, 2024, Dept of Finance (DOF) Request Submission • June 10, 2024, Rating Presentation
• June 13, 2024, Receive DOF Approval
• June 14, 2024, Receive Rating
• June 25, 2024, Bond Sale
• July 11, 2024 , Bond Closing
Documents to be Approved by the Successor Agency
If approved to proceed, the financing and legal documents to be approved by the Successor Agency at the April 24, 2024 City Council meeting will include:
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• Successor Agency Resolution. The Resolution approves the issuance of the Refunding Bonds and authorizes certain authorized officers of the City to execute an Indenture of Trust and other legal documents as well as take other official actions necessary for issuing the Refunding Bonds on behalf of the Successor Agency. The Resolution authorizes the execution of the following documents:
o Indenture. This document provides the covenants and conditions for the Refunding Bonds and the duties of the trustee to the owners of the Refunding Bonds. It supplies the federal tax covenants to assure tax exemption of interest, as applicable, and, after pricing, will contain the final maturities and interest rates for the Refunding Bonds.
o Escrow Agreement. This is a form of agreement between the Successor Agency and the Trustee acting as Escrow Agent for the Successor Agency Obligations and specify the terms and conditions to provide for the payment and redemption of the outstanding Successor Agency Obligations.
o Preliminary Official Statement. This document is used by the Successor Agency to describe the bond financing and matters material to investors' decision to buy the Refunding Bonds, including certain risks.
This document will be completed with the final terms of the Refunding Bonds and interest rates when sold to the underwriter at pricing and become the final Official Statement.
o Bond Purchase Agreement. This is a form of agreement for the purchase of the Refunding Bonds from the Successor Agency by the underwriter. It will require completion to show the final pricing items. o Continuing Disclosure Agreement. This document requires the Successor Agency to provide certain financial information and operating data relating to the Successor Agency and notices of the occurrences of certain enumerated events to be filed with the Municipal Securities Rulemaking Board to assist the underwriter in complying with Rule 15c2 - 12 of the Securities and Exchange Commission.
FISCAL IMPACT:
The estimated annual savings for City General Fund revenues are 16% of the gross annual savings, while the remaining 84% will be passed on to our other taxing entities.
Table 3. Estimated Gross Annual Savings*
Maturity
Date
Prior
Debt
Service
New
Debt
Service
Total
Savings
Estimated
City’s Share
of Savings
8/1/2025 $ 4,504,500 $ 4,207,292 $ 297,208 $ 47,553
8/1/2026 4,505,250 4,212,750 292,500 46,800
8/1/2027 4,513,750 4,215,750 298,000 47,680
8/1/2028 4,509,250 4,211,500 297,750 47,640
8/1/2029 4,507,000 4,205,000 302,000 48,320
8/1/2030 4,506,500 4,211,000 295,500 47,280
8/1/2031 4,497,250 4,198,500 298,750 47,800
8/1/2032 4,504,250 4,208,000 296,250 47,400
8/1/2033 3,221,250 2,923,000 298,250 47,720
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8/1/2034 1,937,250 1,737,750 199,500 31,920
Total $41,206,250 $38,330,542 $2,875,708 $460,113
*Based on interest rates as of March 4, 2024.
FIVE-YEAR STRATEGIC PLAN:
Goal C: FISCAL STABILITY and SUSTAINABILITY
Objective: Cathedral City has economically prospered by facilitating investment of private dollars in high quality development which benefits the community. We remain financially solvent by instituting prudent fiscal policies and transparent financial practices.
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Staff Report
City Council
Meeting Date: March 27, 2024
From: Charles McClendon, City Manager
Title: Conference with Legal Counsel - Anticipated Litigation/Threat of Litigation, Pursuant to Government Code Section
54956.9(d)(2).
Number of Potential Cases: One
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