Tuesday, June 6, 2023
Meeting Agenda
Closed Session - 5:30 PM
HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY HOUSING
AUTHORITY
COMMUNITY DEVELOPMENT COMMISSION
WATER DISTRICT
HESPERIA JOINT PUBLIC FINANCE AUTHORITY – SPECIAL MEETING City Council Chambers
9700 Seventh Ave., Hesperia CA, 92345
City Clerk's Office: (760) 947-1007
City Council Members
Brigit Bennington, Mayor
Larry Bird, Mayor Pro Tem
Allison Lee, Council Member
Cameron Gregg, Council Member
Rebekah Swanson, Council Member
Nils Bentsen, City Manager
Pam K. Lee, City Attorney
See page (3) for details on public meeting guidelines during the COVID-19 (Coronavirus) Pandemic
Amended Agenda
Green Sheet Item #9 information updated after posting of the Agenda NOTE: In compliance with the Americans with Disability Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (760) 947-1007 or (760) 947-1026. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility.
B
rigit Bennington, Mayor 9700 Seventh Avenue
Larry Bird, Mayor Pro Tem Hesperia, CA 92345
Cameron Gregg, Council Member
Allison Lee, Council Member 760-947-1000
Rebekah Swanson, Council Member TD 760-947-1119
Nils Bentsen, City Manager www.cityofhesperia.us
Gateway to the High Desert
City of Hesperia
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June 6, 2023City Council Meeting Agenda
REGULAR MEETING AGENDA
HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
HESPERIA HOUSING AUTHORITY
HESPERIA COMMUNITY DEVELOPMENT COMMISSION
HESPERIA WATER DISTRICT
HESPERIA JOINT PUBLIC FINANCE AUTHORITY – SPECIAL MEETING 9700 7th Avenue, Council Chambers, Hesperia, CA 92345
As a courtesy, please silence your cell phones and other electronic devices while the meeting is in session. Thank you.
Prior to action of the Council, any member of the audience will have the opportunity to address the legislative body on any item listed on the agenda, including those on the Consent Calendar.
Individuals wishing to speak during General Public Comments or on a particular numbered item must submit a speaker slip to the City Clerk with the agenda item noted. Speaker slips should be turned in prior to the public comment portion of the agenda or before an agenda item is discussed. Comments will be limited to three minutes for General Public Comments, Consent Calendar items and New Business items. Comments are limited to five minutes for Public Hearing items.
In compliance with the Brown Act, the City Council may not discuss or take action on non-agenda items or engage in question and answer sessions with the public. The City Council may ask brief questions for clarification; provide a reference to staff or other resources for factual information and direct staff to add an item to a subsequent meeting.
CLOSED SESSION - 5:30PM
Roll Call
Mayor Brigit Bennington
Mayor Pro Tem Larry Bird
Council Member Allison Lee
Council Member Cameron Gregg
Council Member Rebekah Swanson
Conference with Legal Counsel – Existing Litigation
Government Code Section 54956.9(d)1
1. County of San Bernardino v City of Hesperia
Case No. : CIVSB2209965
Conference with Real Property Negotiators – Property Negotiations Government Code Section – 54956.8
1. Negotiating Parties: City of Hesperia and Mega Factors, Ltd.
Location: APN 0398-251-300-0000
Under Negotiation: Price and Terms
CALL TO ORDER - 6:30 PM
June 6, 2023City Council Meeting Agenda
A. Invocation
B. Pledge of Allegiance to the Flag
C. Roll Call
Mayor Brigit Bennington
Mayor Pro Tem Larry Bird
Council Member Allison Lee
Council Member Cameron Gregg
Council Member Rebekah Swanson
D. Agenda Revisions and Announcements by City Clerk
E. Closed Session Reports by City Attorney
ANNOUNCEMENTS/PRESENTATIONS
1. Presentation to retiring City Manager Nils Bentsen by the City Council GENERAL PUBLIC COMMENTS (For items and matters not listed on the agenda) Individuals wishing to speak during General Public Comments or on a particular numbered item are requested to submit a speaker slip to the City Clerk with the agenda item noted. Speaker slips should be turned in prior to the public comment portion of the joint agenda or before an agenda item is discussed. Comments will be limited to three minutes for General Public Comments, Consent Calendar items and New Business items. Comments are limited to five minutes for Public Hearing items.
In compliance with the Brown Act, the City Council may not discuss or take action on non-agenda items or engage in question and answer sessions with the public. The City Council may ask brief questions for clarification; provide a reference to staff or other resources for factual information and direct staff to add an item to a subsequent meeting.
JOINT CONSENT CALENDAR
1. Consideration of the Draft Minutes from the Special Meeting held Tuesday, May 16, 2023.
Recommended Action:
It
is recommended that the City Council approve the Draft Minutes from the Special Meeting held Tuesday, May 16, 2023.
Staff Person: Assistant City Clerk Erin Baum
Draft CC Min 2023-5-16Attachments:
2. Warrant Run Report (City - Successor Agency - Housing Authority - Community Development Commission - Water)
Recommended Action:
June 6, 2023City Council Meeting Agenda
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
Staff Person: Director of Administrative Services Casey Brooksher SR Warrant Run 6-6-2023
Attachment 1 - Warrant Run
Attachments:
3. Vehicle Procurement
Recommended Action:
It
is recommended that the City Council and Board of Directors of the Hesperia Water District approve Joint Resolution No. 2023-26 and HWD No. 2023-10 authorizing a City Council Bidding Override exemption for the purchase of four (4) small sized trucks, by authorizing the City Manager to enter into an agreement with Victorville Chevrolet in the not-to-exceed amount of $145,000 for the purchase of two (2) new 2023 Chevy Colorado small sized trucks (truck) for the Code Enforcement Program, one (1) new 2023 Chevy Colorado truck for the Streets Maintenance Program, and one (1) new 2023 Chevy Colorado truck for the Production Program.
Staff Person: Director of Public Works Jeremy McDonald
SR Vehicle Procurement 6-6-2023
Joint Resolution 2023-26
Attachment 2 - Bid Comparison
Attachments:
4. Award of Contract for Heating, Ventilation, and Air-Conditioning (HVAC) Preventative Maintenance and Repair Services
Recommended Action:
It is is recommended that the City Council and Board of Directors of the Hesperia Water District (District) authorize the City Manager to enter into a three (3) year contract with Allison Mechanical, Inc. in a not-to-exceed amount of $246,816 for heating, ventilation, and air-conditioning (HVAC) preventative maintenance and repair services for City and District facilities.
Staff Person: Director of Public Works Jeremy McDonald
SR Allison Mechanical Inc. Agreement 6-6-2023Attachments:
5. Award of Contract for Emergency Road Repairs Related To 2023 Winter Storms
Recommended Action:
It
is recommended that the City Council ratify the award and affirm a contract to Cooley Construction, Inc. for emergency road repairs related to storm damage in the amount of $860,082 and authorize a 10% contingency in the amount of $86,008 for a total not-to-exceed amount of $946,090.
Staff Person: Director of Public Works Jeremy McDonald
June 6, 2023City Council Meeting Agenda
SR Award of Contract for Emergency Road Repairs 6-6-2023Attachments:
6. Final Map No. 18955-4
Recommended Action:
It
is recommended that the City Council adopt Resolution No. 2023-35 approving Final Map No. 18955-4 to create 57 residential lots on approximately
18.5 gross acres and accept right-of-way necessary to develop Tract 18989-1 Lot 4, Planning Area 6 of the Tapestry Specific Plan. (Applicant: Silverwood Development Phase I, LLC).
Staff Person: Administrative Analyst Bethany Hudson and Deputy Development Services Director Dani Fox
SR Final Map No. 18955-4 6-6-2023
Resolution 2023-35
Attachment 2 - Final Tract Map 18955-4
Attachments:
CONSENT ORDINANCES
WAIVE READING OF ORDINANCES
Approve the reading by title of all ordinances and declare that said titles which appear on the public agenda shall be determined to have been read by title and further reading waived.
7. Development Code Amendment DCA23-00004; Applicant: City of Hesperia; Area affected: City-wide
Recommended Action:
Place on second reading and adopt by title waiving the text of Ordinance No. 2023-08 approving Development Code Amendment DCA23-00004 modifying development standards associated with on-site digital advertising signs.
Staff Person: Senior Planner Ryan Leonard
SR Development Code Amendment 5-16-2023
Ordinance 2023-08
Attachment 2 - Exhibit A
Attachment 3 - Planning Commission Staff Report with attachments Attachments:
PUBLIC HEARING
Individuals wishing to comment on public hearing items must submit a speaker slip to the City Clerk with the numbered agenda item noted. Speaker slips should be turned in prior to an agenda item being taken up.
Comments will be limited to five minutes for Public Hearing items.
WAIVE READING OF ORDINANCES
Approve the reading by title of all ordinances and declare that said titles which appear on the public agenda shall be determined to have been read by title and further reading waived.
8. Development Code Amendment DCA23-00001 and Specific Plan Amendment SPLA23-00003; Applicant: City of Hesperia; Area affected: City-wide
June 6, 2023City Council Meeting Agenda
Recommended Action:
It
is recommended that the City Council introduce and place on first reading Ordinance No. 2023-09 approving Development Code Amendment DCA23-00001 and Specific Plan Amendment SPLA23-00003 modifying development standards associated with the establishment of new vehicle wash facilities.
Staff Person: Senior Planner Ryan Leonard
SR DCA23-00001 & SPLA23-00003; Applicant: City of Hesperia 6-6-2023 Ordinance 2023-09
Attachment 2 - Exhibit A
Attachment 3 - Planning Commission Staff Report
Attachments:
NEW BUSINESS
9. Resolution of the City Council of the City of Hesperia and a Resolution of the Board
of Directors of the Hesperia Joint Public Finance Authority, Each Authorizing the Issuance and Sale of the 2023 Refunding Lease Revenue Bonds and Related Documents and Actions
Recommended Action:
It is recommended that the City Council adopt the following resolution:
Resolution No. CC 2023-24 - Resolution of the City of Hesperia approving, authorizing and directing execution of certain financing documents and directing certain related actions in connection with the refinancing of outstanding lease payment obligations
It is recommended that the Hesperia Joint Public Finance Authority adopt the following resolution:
Resolution No. HJPFA 2023-02 - Resolution of the Hesperia Joint Public Finance Authority approving, authorizing and directing execution of certain financing documents and directing certain related actions in connection with the refinancing of an outstanding lease obligation of the City of Hesperia Staff Person: Director of Administrative Services Casey Brooksher
June 6, 2023City Council Meeting Agenda
SR 2023 Refunding Lease Revenue Bonds 6-6-2023
Resolution 2023-24
Resolution HPJFA 2023-02
Attachment 3 - Preliminary Official Statement
Attachment 4 - Site and Facilities Lease
Attachment 5 - Property Lease
Attachment 6 - Indenture
Attachment 7 - Escrow Deposit and Trust Agreement
Attachment 8 - Bond Purchase Agreement
Attachment 9 - Amendment to 2012 Site Lease
Attachment 10 - Amendment to 2012 Property Lease
Attachment 11 - Subordination Agreement
Attachments:
COUNCIL COMMITTEE REPORTS AND COMMENTS
The Council may report on their activities as appointed representatives of the City on various Boards and Committees and/or may make comments of general interest or report on their activities as a representative of the City.
CITY MANAGER/CITY ATTORNEY/STAFF REPORTS
The City Manager, City Attorney or staff may make announcements or reports concerning items of interest to the Council and the public.
ADJOURNMENT
I, Erin Baum, Assistant City Clerk of the City of Hesperia, California do hereby certify that I caused to be posted the foregoing agenda on Wednesday, May 31, 2023 at 5:30 p.m. pursuant to California Government Code §54954.2. _____________________________
Erin Baum,
Assistant City Clerk
Documents produced by the City and distributed less than 72 hours prior to the meeting regarding items on the agenda will be made available in the City Clerk's Office during normal business hours.
City of Hesperia
City of Hesperia
Meeting Minutes - Draft
City Council
Tuesday, May 16, 2023 6:30 PM
REGULAR MEETING AGENDA
HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
HESPERIA HOUSING AUTHORITY
HESPERIA COMMUNITY DEVELOPMENT COMMISSION
HESPERIA WATER DISTRICT
HESPERIA FIRE PROTECTION DISTRICT – SPECIAL MEETING
CLOSED SESSION - 5:30
Roll Call
Present: 5 - Mayor Pro Tem Bird (via teleconference), Council Member Swanson, Council Member G
regg, Mayor Bennington, and Council Member Lee
Conference with Legal Counsel – Existing Litigation - Government Code Section 54956.9(d)1
1. ((Mojave Basin Water Cases) City of Barstow, et al. v. City of Adelanto, et al. San Bernardino County Superior Court Case No. CIV 20856
8)
CALL TO ORDER - 6:30 PM
A. Invocation
B. Pledge of Allegiance to the Flag
C. Roll Call
Present: 5 - Mayor Pro Tem Bird (arrived 7:23 pm), Council Member Swanson, Council Member Gregg, Mayor Ben
nington, and Council Member Lee
D. A genda Revisions and Announcements by City Clerk
E.
Closed Session Reports by City Attorney
City Council Chambers
9700 Seventh Ave.
Hesperia CA, 92345
City of Hesperia
ANNOUNCEMENTS/PRESENTATIONS
1. Presentation of Certificate of Recognition to the Hesperia High School Art Show winners.
2. Presentatio
n to the City Council by Adam Panos, Deputy Fire Marshall, on San Bernardino County Fire District’s Fire Corp
Program.
GENERAL PUBLIC COMMENTS (For items and matters not listed on the agenda) Bob Nelson commented on urban sprawl.
Al Vogler commented on a Code Enforcement issue.
JOINT CONSENT CALENDAR
Joint Consent Calendar items 4 and 15 were pulled for public comment and voted on independently.
A motion was made by Swanson, seconded by Gregg, that the Joint Consent Calendar, minus items 4 and 15, be approved. The motion carried by the following vote:
Aye: 4 - Swanson, Gregg, Bennington, and Lee
Nay: 0
Absent: 1 - Bird
1. Consideration of the Draft Minutes from the Special Meeting held Tuesday, May 2, 2023.
Recommended Action:
It is recommended that the City Council approve the Draft Minutes from the Special Meeting held Tuesday, May 2, 2023.
Sponsors: Assistant City Clerk Erin Baum
2. Warrant Run Report (City - Successor Agency - Housing Authority - Community Development Comm
ission - Water)
Recommended Action:
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Succes sor Agency to the Hesperia Co
mmunity Redevelopment Agency, Hesperia Housing Authority, Comm unity Developm
ent Commission, and Water District.
Sponsors: Director of Administrative Services Casey Brooksher
3. Treasurer’s Cash Report for the unaudited period ended March 31, 2023.
Recommended Action:
It is recommended that the Council/Board accept the Treasurer’s Cash Report for the City, Succes sor Agency to the Hesperia Co
mmunity Redevelopment Agency, Hesperia Housing Authority, Comm unity
City of Hesperia
Development Commission, and Water District.
Sponsors: Director of Administrative Services Casey Brooksher
4. Proposed Early Retirement of 2018 San Bernardino County Transportation Authority (SBCTA) Loan Recommended Action:
It is recommended that the City Council authorize the proposed early retirement of the 2018 San Bernardino County Trans
portation Authority (SBCTA) Loan and approve Resolution No. 2023- 26, amending the F
iscal Year (FY) 2022-23 Budget for the final principal and interest payment.
Sponsors: Director of Administrative Services Casey Brooksher Al Vogler commented on this item.
A motion was made by Swanson, seconded by Gregg, that item #4 be approved. The motion carried by the following vote:
Aye: 4 - Swanson, Gregg, Bennington, and Lee
Nay: 0
Absent: 1 - Bird
5. G & M Automotive Center, Inc. Contract Amendment
Recommended Action:
It is recommended that the City Council and Board of Directors of the Hesperia Water District (District) authorize the City Manager to approve an amendment of $250,000 to the existing contract with G & M Automotive Center, Inc. for a total revised not-to-exceed amount of $500,000 and approve a one-year contract extension for vehicle maintenance and repairs.
Sponsors: Director of Public Works Jeremy McDonald
6. Contract with Badger Meter, Inc.
Recommended Action:
It is recommended that the Board of Directors of the Hesperia Water District authorize the City Manager to approve a contract for Fi
scal Year (FY) 2023-24 with Badger Meter, Inc. in the not-to-exceed amount of $350,000 for the purchase of Badger water meters and related water meter parts.
Sponsors: Director of Public Works Jeremy McDonald
7. Contract with Ferguson Waterworks
Recommended Action:
It is recommended that the Board of Directors of the Hesperia Water District authorize the City Manager to enter into a one (1)
year agreement with Ferguson Waterworks in an amount not-to-exceed $200,000, for the purchase of DFW meter boxes and lids.
Sponsors: Director of Public Works Jeremy McDonald
City of Hesperia
8. D&H Water Systems, Inc. - New Contract
Recommended Action:
It is recommended that the Board of Directors of the Hesperia Water District authorize the City Manager to enter into a on
e (1) year agreement with D&H Water Systems, Inc. in a not-to-exceed contract amount of $65,000, for the purchase of Constant Chlor Plus Briquettes.
Sponsors: Director of Public Works Jeremy McDonald
9. Lawnscape Systems, Inc. Contract Amendment
Recommended Action:
It is recommended that the City Council authorize the City Manager to approve an amendm ent of $62,000 to the existing contract with Lawnscape Systems, Inc. for a total revised not-to-exceed contract amount of $296,376, and approve a one-year contract extension for weed control and abatement services.
Sponsors: Director of Public Works Jeremy McDonald
10. Nobel Systems, Inc. Contract Amendment
Recommended Action:
It is recommended that the City Council and Board of Directors of the Hesperia Water District (District) authorize the C
ity Manager to approve an amendment of $29,000 to the existing contract with Nobel Systems, Inc. (Nobel) for a revised not-to-exceed contract amount of $192,984 for GeoViewer Mobile, which includes unlimited licenses for Valve Exercise and Underground Service Alert (USA) DigMark modules.
Sponsors: Director of Public Works Jeremy McDonald
11. Duthie Power Services, Inc. Contract Amendment
Recommended Action:
It is recommended that the City Council and Board of Directors of the Hesperia Water District (District) authorize the C
ity Manager to approve an amendment of $20,000 to the existing contract with Duthie Power Services, Inc. for a total revised not-to-exceed amount of $90,000, and approve a one-year contract extension for generator maintenance.
Sponsors: Director of Public Works Jeremy McDonald
12. Pacific Products & Services, LLC Contract Amendment Recommended Action:
It is recommended that the City Council authorize the City Manager to approve an amendm ent of $90,000 to the existing contract with Pacific Products & Services, LLC for a total revised not-to-exceed contract amount of $220,000, and approve a one-year contract extension for the purchase of traffic signs and sign materials.
Sponsors: Director of Public Works Jeremy McDonald
City of Hesperia
13. GP Electric Motor Contract Amendment
Recommended Action:
It is recommended that the City Council and Board of Directors of the Hesperia Water District (District) authorize the City Manager
to approve an amendment of $30,000 to the existing contract with GP Electric Motor for a total revised not-to-exceed amount of $160,000, and approve a one-year contract extension for well motor maintenance.
Sponsors: Director of Public Works Jeremy McDonald
14. Contract Amendment for Street Sweeping Services
Recommended Action:
It is recommended that the City Council authorize the City Manager to approve an amendm ent of $357,585 to the
existing contract with Guardian Street Sweeping for a total revised not-to-exceed amount of $715,170 and
approve a one-year contract extension for street sweeping services.
Sponsors: Director of Public Works Jeremy McDonald
15. Final Map 18989-1
Recommended Action:
It is recommended that the City Council adopt Resolution No. 2023-29 approving Final Map No. 18989-1 to create 39 lots on approxim
ately 986 gross acres and accept right-of-way necessary to develop Phase 1 of the Tapestr
y Specific Plan. (Applicant: Silverwood Development Phase I, LLC).
Sponsors: Deputy Devel
opment Services Director Dani Fox and Administrative
Analyst Bethany Hudson
Bob Nelson commented on this item.
A motion was made by Swanson, seconded by Gregg, that item #15 be approved. The motion carried by the following vote:
Aye: 4 - Swanson, Gregg, Bennington, and Lee
Nay: 0
Absent: 1 - Bird
16. Approval of a Multiple Employer Other Post Employment Benefit (OPEB)/Pension 115 Trust with Shuster Advisory Group, LLC
Recommended Action:
It is recommended that the City Council adopt Resolution No. 2023-31, authorizing the City Manager to execute agreements with Shuster Advisory Group LLC, Charles Schwab Trust Bank, and Alta Trust Company for the establishment and administration of a Multiple Employer OPEB and Pension 115 Trust; and the Board of Directors of the Hesperia Fire Protection District (HFPD) adopt Resolution HFPD No.
City of Hesperia
2023-03, approving the discontinuance of the HFPD’s participation in the Post-Employment Benefits Trust administered by the Public Agency Retirement Services (“PARS”), and approving agreements with Shuster Advisory Group LLC, Charles Schwab Trust Bank, and Alta Trust Company for the establishment and administration of a Multiple Employer OPEB/Pension 115 Trust.
Sponsors: Director of Administrative Services Casey Brooksher
PUBLIC HEARING
17. Development Code Amendment DCA23-00004; Applicant: City of Hesperia; Area affected: City-wide Recommended Action:
It is recommended that the City Council introduce and place on first reading Ordinance No. 2023-08 approving Developm
ent Code Amendment DCA23-00004 modifying development standards associated with on-site digital advertising signs.
Sponsors: Senior Planner Ryan Leonard
A motion was made by Swanson, seconded by Lee, that this item be approved. The motion carried by the following vote:
Aye: 5 - Bird, Swanson, Gregg, Bennington, and Lee Nay: 0
NEW BUSINESS
18. FY 2023-24 Budget Workshop #2 - Budget Update
Recommended Action:
It is recommended that the City Council/Boards receive and file this staff report, which provides inform
ation about the current status of the City of Hesperia’s proposed operating budget for FY 2023-24, and adopt Joint
Resolution No. 2023-30, HHA 2023-04, HFPD 2023-02, and HWD 2023-06 amending the Financia
l Policies.
Sponsors: Director of Administrative Services Casey Brooksher and Assistant City Manager Rachel Molina
A motion was made by Gregg, seconded by Lee, that this item be approved. The motion carried by the following vote:
Aye: 5 - Bird, Swanson, Gregg, Bennington, and Lee Nay: 0
19. City of Hesperia Community Assistance Program (CAP) - Grant Awards Recommended Action:
It is recommended that the City Council, after reviewing the Hesperia City Council Advisory Committee
City of Hesperia
(CCAC) CAP applicant rankings, Exhibit “A,” adopt Resolution No. 2023-21 to approve the Program Year (PY) 2023-24 CAP funding for each applicant.
Sponsors: Assistant City Manager Rachel Molina, Economic Development Manager Victor Knight and Administrative Analyst April Antonio A motion was made by Gregg, seconded by Swanson, that this item be approved as amended.
The motion carried by the following vote:
Aye: 5 - Bird, Swanson, Gregg, Bennington, and Lee Nay: 0 The council directed that this item be amended to enable the distribution of any unused funds to the next eligible applicant on the ranking list.
COUNCIL COMMITTEE REPORTS AND COMMENTS
The Mayor, Mayor Pro Tem, and Council Members reported from various events and Committees.
Council Member Gregg requested staff bring forward an item exploring support mechanisms for the Farmer's market.
Mayor Pro Tem Bird appointed Roman Aguilar to the City Council Advisory Committee (CCAC) and requested that staff bring forward an item to change the day week on which CCAC meetings are held to avoid appointee conflicts.
Council Member Swanson appointed Ramon Franco to the CCAC and Christopher Sevy to the Planning Commission (PC).
Mayor Bennington asked staff to agendize an update on VVWRA water for a future meeting.
CITY MANAGER/CITY ATTORNEY/STAFF REPORTS
None.
ADJOURNMENT
The meeting was adjourned in honor of Council Member Gregg’s daughter’s birthday at 8:14 pm. _____________________________
Erin Baum,
Assistant City Clerk
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City of Hesperia
STAFF REPORT
DATE: June 6, 2023
TO: Mayor and Council Members
City Council, as Successor Agency to the Hesperia Community Redevelopment Agency
Chair and Commissioners, Hesperia Housing Authority
Chair and Commissioners, Community Development Commission Chair and Board Members, Hesperia Water District
FROM: Nils Bentsen, City Manager
BY: Casey Brooksher, Director of Administrative Services Anne Duke, Deputy Finance Director
Martha Cortes, Accountant
SUBJECT: Warrant Run Report (City – Successor Agency – Housing Authority – Community Development Commission – Water)
RECOMMENDED ACTION
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
BACKGROUND
The Warrant Run totals represented below are for th e period April 15, 202 3 through April 28, 2023.
ATTACHMENT(S)
1. Warrant Runs
Agency/District Accounts Payable Payroll Wires Totals
City of Hesperia $2,381,845.13 $275,626.94 $0.00 $2,657,472.07 Successor Agency 0.00 0.00 0.00 0.00
Housing Authority 0.00 182.20 0.00 182.20
Community Development Commission 0.00 0.00 0.00 0.00
Water 198,486.44 113,978.17 0.00 312,464.61
Totals $2,580,331.57 $389,787.31 $0.00 $2,970,118.88
YEAR-TO PRIOR FY YTD
W/E W/E WARRANT DATE DATE
FUND # FUND NAME 4/21/2023 4/28/2023 TOTALS Wires TOTALS * TOTALS Accounts Payable
100 GENERAL 135,691.13$ 1, 737,235.06$ 1, 872,926.19$ -$ 24, 983,151.82$ 23, 058,931.48$ 200 HESPERIA FIRE DISTRICT -$ -$ -$ -$ -$ -$
204 MEASURE I - RENEWAL -$ 2, 680.00$ 2, 680.00$ -$ 265, 933.42$ 260, 681.53$ 207 LOCAL TRANSPORT-SB 325 765.28$ -$ 765. 28$ -$ 288, 574.41$ 28, 666.16$ 209 GAS TAX-RMRA -$ -$ -$ -$ 880. 00$ 68, 083.24$
210 HFPD (PERS) -$ -$ -$ -$ 1, 093,204.87$ 1, 007,746.00$ 251 CDBG -$ -$ -$ -$ 792, 721.69$ 1, 086,933.10$ 254 AB2766 - TRANSIT -$ -$ -$ -$ -$ -$
256 ENVIRONMENTAL PROGRAMS GRANT 2,135.05$ -$ 2, 135.05$ -$ 28, 512.42$ 33, 384.89$ 257 NEIGHBORHOOD STABILIZATION PROG -$ -$ -$ -$ -$ -$ 262 SB 1383 LOCAL ASSISTANCE GRANT -$ -$ -$ -$ 31, 598.69$ -$ 263 STREETS MAINTENANCE 15,509.53$ 48, 810.30$ 64, 319.83$ -$ 1, 613,844.55$ 1, 410,081.42$ 300 DEV. IMPACT FEES - STREET -$ -$ -$ -$ 34, 221.18$ 49, 585.90$ 301 DEV. IMPACT FEES - STORM DRAIN -$ -$ -$ -$ 17, 460.50$ 98, 384.50$ 302 DEV. IMPACT FEES - FIRE -$ -$ -$ -$ -$ -$
303 DEV. IMPACT FEES - POLICE -$ -$ -$ -$ -$ 23, 330.00$ 304 DEV. IMPACT FEES - PUBLIC WKS. -$ -$ -$ -$ -$ -$ 306 DEV. IMPACT FEES - 2018-STREETS -$ -$ -$ -$ 5, 027,815.99$ 2, 152,591.86$ 312 DIF 2018-POLICE FACILITIES -$ -$ -$ -$ 7, 969.11$ 6, 888.17$ 313 DIF A-04 DRAINAGE -$ -$ -$ -$ 6, 270.00$ 963, 699.00$ 396 DEVELOPMENT IMPACT -$ -$ -$ -$ -$ -$
399 FEMA-1203-DR (DISASTER) -$ -$ -$ -$ -$ -$
400 2004 STREETS -$ -$ -$ -$ -$ -$
401 CITY DEBT SERVICES -$ -$ -$ -$ -$ -$
402 WATER RIGHTS ACQUISITION -$ -$ -$ -$ 1, 432,351.95$ 1, 436,593.88$ 403 2013 REFUNDING LEASE REV BONDS -$ -$ -$ -$ 872, 392.46$ 865, 585.83$ 501 CFD 91-3 BELGATE -$ -$ -$ -$ -$ -$
504 CITY WIDE STREETS - CIP -$ -$ -$ -$ 7, 866,856.79$ 1, 540,617.89$ 509 CITY FACILITIES CIP -$ -$ -$ -$ -$ -$
800 EMPLOYEE BENEFITS 299,655.22$ 116, 622.92$ 416, 278.14$ -$ 7, 467,562.45$ 6, 196,430.35$ 801 TRUST/AGENCY 21,361.14$ 520. 00$ 21, 881.14$ -$ 1, 673,504.22$ 2, 598,670.13$ 802 AD 91-1 AGENCY -$ -$ -$ -$ -$ -$
804 TRUST-INTEREST BEARING -$ 859. 50$ 859. 50$ -$ 174, 938.50$ 66, 720.00$ 807 CFD 2005-1 -$ -$ -$ -$ 1, 300,227.50$ 1, 281,548.77$ 808 HFPD (TRANSITION) -$ -$ -$ -$ 317, 384.59$ 369, 875.18$ 815 PLAN REVIEW TRUST - FRONTIER -$ -$ -$ -$ 6, 584.08$ -$ CITY 475,117.35$ 1,906,727.78$ 2, 381,845.13$ -$ 55, 303,961.19$ 44, 605,029.28$ 163 REDEVELOP OBLIG RETIREMENT-2018 -$ -$ -$ -$ 9, 708,465.48$ 9, 999,319.34$ SUCCESSOR AGENCY -$ -$ -$ -$ 9, 708,465.48$ 9, 999,319.34$ 370 HOUSING AUTHORITY -$ -$ -$ -$ 49, 809.31$ 48, 948.18$ HOUSING AUTHORITY -$ -$ -$ -$ 49, 809.31$ 48, 948.18$ 170 COMMUNITY DEVELOPMENT COMMISSION -$ -$ -$ -$ -$ -$ COMMUNITY DEVELOPMENT COMMISSION -$ -$ -$ -$ -$ -$ 700 WATER OPERATING 60,717.93$ 88, 145.98$ 148, 863.91$ -$ 6, 840,391.27$ 6, 872,212.71$ 701 WATER CAPITAL -$ -$ -$ -$ 37, 673.00$ 89, 261.90$ 710 SEWER OPERATING 35,686.30$ 1, 438.08$ 37, 124.38$ -$ 4, 104,181.76$ 4, 011,428.06$ 711 SEWER CAPITAL 9,870.00$ 1, 956.50$ 11, 826.50$ -$ 1, 104,977.69$ 159, 765.59$ 713 SEWER CAPITAL REHAB AND REPLACE -$ -$ -$ -$ -$ -$ 720 RECLAIMED WATER OPERATIONS 671.65$ -$ 671. 65$ -$ 260, 532.11$ 236, 533.55$ WATER 106,945.88$ 91,540.56$ 198, 486.44$ -$ 12, 347,755.83$ 11, 369,201.81$ ACCOUNTS PAYABLE TOTAL 582,063.23$ 1,998,268.34$ 2, 580,331.57$ -$ 77, 409,991.81$ 66, 022,498.61$ REG. PAYROLL
City -$ 275,626.94$ 275, 626.94$ -$ 6, 096,360.62$ 5, 457,066.25$ Housing Authority -$ 182.20$ 182. 20$ -$ 4, 002.84$ 1, 668.70$ Water -$ 113,978.17$ 113, 978.17$ -$ 2, 484,191.22$ 2, 382,793.84$ PAYROLL TOTAL -$ 389,787.31$ 389, 787.31$ -$ 8, 584,554.68$ 7, 841,528.79$ City of Hesperia
WARRANT RUNS
04/15/2023 - 04/28/2023
*No payments were issued on July 1, 2023.
Attachment 1
City of Hesperia
STAFF REPORT
DATE: June 6, 2023
TO: Mayor and City Council Members
Chair and Board Members, Hesperia Water District
FROM: Nils Bentsen, City Manager
BY: Jeremy McDonald, Director of Public Works
Robert Worby, Fleet / Warehouse Supervisor
SUBJECT: Vehicle Procurement
RECOMMENDED ACTION
It is recommended that the City Council and Board of Directors of the Hesperia Water District approve Joint Resolution No. 2023 -26 and HWD No. 2023 -10 authorizing a City Council Bidding Override exemption for the purchase of four (4) small sized trucks, by authorizing t he City Manager to enter into an agreement with Victorville Chevrolet in the not-to-exceed amount of $145,000 for the purchase of two (2) new 2023 Chevy Colorado small sized trucks (truck) for the Code Enforcement Program, one (1) new 2023 Chevy Colorado truck for the Streets Maintenance Program, and one (1) new 2023 Chevy Colorado truck for the Production Program.
BACKGROUND
As part of fleet management, vehicles are reviewed periodically to maintain an optimal operating fleet.
Vehicles that exceed the average useful life and have higher than expected lifetime maintenance costs are recommended for replacement. By replacing the fleet on a scheduled basis, it lowers long- term maintenance costs for the City. Other experienced benefits of fleet replacement include improved occupant safety and lower fuel expenditures.
ISSUES/ANALYSIS
On May 10, 2023, Public Works requested quotes for two (2) two-wheel drive and two (2) four-wheel drive trucks . The bid request was sent to various dealerships for the vehicles and included a requirement of delivery by June 30, 2023. On May 16, 2023, the bid closed with Sunland Ford being the only respondent and total bid of $176,026 for four small sized trucks. Subsequently, on May 17, 2023, Victorville Chevrolet responded with a bid of $ 144,703. Typically, the late bid would be removed from consideration; however, in this case the bid difference of $31,323 is approximately the cost of one small sized truck.
Upon staff review, it was determined that the late bid from Victorville Chevro let was an oversight by the vendor. Furthermore, the Victorville Chevrolet bid is nearly 22% less than Sunland Ford , which thereby saves the City and taxpayers money. As recommended with Joint Resolution No. 2023-26 and HWD 2023-10, the City Council can provide a bidding override exemption and award Victorville Chevrolet the contract for the vehicles.
FISCAL IMPACT
Funds for this purchase has been included in the FY 2022-23 Budget. By City Council approving to override the bidding process, as allowed in the Municipal Code, the City will save approximately $31,000 or 22% by awarding Victorville Chevrolet the winning bid over Sunland Ford.
Staff Report to the Mayor, City Council and Board of Directors of the Hesperia Water District Vehicle Procurement
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. Joint Resolution No. 2023-26 and HWD No. 2023-10
2. Bid Comparison
JOINT RESOLUTION NO. 2023-26
RESOLUTION HWD NO. 2023-10
A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HESPERIA,
CALIFORNIA, AND THE BOARD OF DIRECTORS FOR THE HESPERIA
WATER DISTRICT, TO USE THE BIDDING OVERRIDE EXEMPTION
WHEREAS, the City of Hesperia has adopted municipal codes, of which details the process for bidding of items, such as vehicle codes; and
WHEREAS, §3.08.070 of the Hesperia Municipal Code allows for certain exemptions to the bidding requirements; and
WHEREAS, as allowed by the Municipal Code, the City Council may determine by resolution that it would be in the best interest of the city to dispense with biddi ng; provided, however, that the City Council shall state the basis of its determination;
WHEREAS, accepting the bid from Victorville Chevrolet will result in a substantial savings, which is in the best interest of the City;
WHEREAS, the City Council accepts the bid from Victorville Chevrolet; and
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HESPERIA,
CALIFORNIA AND BOARD OF DIRECTORS OF THE HESPERIA WATER DISTRICT, AS FOLLOWS:
Section 1. The Council and Board hereby finds that all of the facts set forth in the Resolution are true and correct.
Section 2. That the Council and Board authorize the City Manager to enter into an agreement in the not-to-exceed amount of $145,000 for the pu rchase of four (4) Chevy Colorado small size vehicles.
Section 3. The City Clerk and Secretary shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions.
ADOPTED AND APPROVED THIS 6th DAY OF JUNE 2023.
______________________________
Brigit Bennington, Mayor/Chair
ATTEST:
_________________________________
Erin Baum, Assistant City Clerk/Secretary
Bid Comparison Type: Taxable
Bid Comparison Completed By: R. WORBY
Date:
Item
No. Qty Description Bidder Part # Unit Cost Extended Amount Bidder Part # Unit Cost Extended
Amount Bidder Part # Unit Cost
Extended
Amount Bidder Part # Unit Cost
Extended
Amount
1 2 2023 4 x 2 White Mid-Size Crew Cab N/A $31,500.00 $63,000.00 N/A $38,295.00 $76,590.00 N/A $0.00 $0.00 N/A $0.00 $0.00 1 2 2023 4 x 4 White Mid-Size Crew Cab N/A $35,400.00 $70,800.00 N/A $41,950.00 $83,900.00 N/A $0.00 $0.00 N/A $0.00 $0.00 1 4 Spray On Bed Liner N/A $0.00 $0.00 N/A $595.00 $2,380.00 N/A $0.00 $0.00 N/A $0.00 $0.00 1 4 Document Fee (Taxable) N/A $85.00 $340.00 N/A $85.00 $340.00 N/A $0.00 $0.00 N/A $0.00 $85.00 1 4 License Fee (Non-Taxable) N/A $33.00 $132.00 N/A $33.00 $132.00 N/A $0.00 $0.00 N/A $0.00 $33.00 1 4 California Tire Fee (Non-Taxable) N/A $8.75 $35.00 N/A $8.75 $35.00 N/A $0.00 $0.00 N/A $0.00 $8.75 $134,307.00 $163,377.00 $0.00 $0.00
$10,395.86 $12,648.78 $0.00 $0.00
Total Actual Bid $144,702.86 Total Actual Bid $176,025.78 Total Actual Bid $0.00 Total Actual Bid $0.00 $144,702.86 $176,095.31 $0.00 $0.00
$0.00 $69.54 Difference $0.00 $0.00
Final Total $144,702.86 Final Total $176,025.78 Final Total $0.00 Final Total $0.00 Total Bid Before Tax
Submitted Bid Amount Submitted Bid Amount
Difference
Total Bid Before Tax
Submitted Bid Amount
Difference
Sunrise Ford
Redlands, CA
Fairview FordSunland Ford
Sales Tax
San Bernardino, CA
Total Bid Before Tax
Victorville, CA
Total Bid Before Tax
5/16/2023
Submitted Bid Amount
Difference
Victorville Chevrolet
Victorville, CA
Sales Tax Sales TaxSales Tax
City of Hesperia
STAFF REPORT
DATE: June 6, 2023
TO: Mayor and Council Members
Chair and Board Members, Hesperia Water District
FROM: Nils Bentsen, City Manager
BY: Jeremy McDonald, Director of Public Works
Marc Morales, Management Analyst
SUBJECT: Award of Contract for Heating, Ventilation, and Air -Conditioning (HVAC) Preventative Maintenance and Repair Services
RECOMMENDED ACTION
It is recommended that the City Council and Board of Directors of the Hesperia Water District (District) authorize the City Manager to enter into a three (3) year contract with Allison Mechanical, Inc. in a not-to-exceed amount of $246,816 for heating, ventilation, and air-conditioning (HVAC) preventative maintenance and repair services for City and District facilities.
BACKGROUND
The City contracts with a n HVAC contractor for preventive maintenance and repairs at various City and Water District facilities, including the Hesperia Branch Library. These services include quarterly filter changes, system adjustments, and repairs to ensure HVAC systems are operating to factory specifications. With the aging HVAC systems, an aggressive preventative maintenance program will be incorporated to ensure these systems are operating at optimal capacity. While preventative maintenance will not eliminate failures, this w ill reduce the frequency in which they occur.
ISSUES/ANALYSIS
The current contract for HVAC preventative maintenance and repair services is set to expire on June 30, 2023 and to continue to provide these services, the City prepared a formal bid that was released on April 27, 2023 and closed on May 18, 2023. The City received the following bids:
Allison Mechanical, Inc. McCloskey Mechanical
Contractors, Inc.
FM Thomas Air
Conditioning, Inc.
FY 2023-24 $79,816 $204,234 $109,072
FY 2024-25 $82.299 $215,959 $114,037.35
FY 2025-26 $84,701 $228,458 $117,402.33
Total Cost $246,816 $648,651 $340,511.68
Upon review of the submitted bids, Allison Mechanical, Inc. was deemed the lowest responsible/responsive bidder for HVAC preventative maintenance and repair services.
Staff Report to the Mayor and Council Members, Chair and Board Members, Hesperia Water District Award of Contract for Heating, Ventilation, and Air-Conditioning (HVAC) Preventative Maintenance and Repair Services June 6, 2023
FISCAL IMPACT
Sufficient funding has been included in the proposed Fiscal Year 2023-24 Operating Budget.
ALTERNATIVES
1. Provide alternative direction to staff.
ATTACHMENTS
None
City of Hesperia
STAFF REPORT
DATE: June 6, 2023
TO: Mayor and Council Members
FROM: Nils Bentsen, City Manager
BY: Jeremy McDonald, Director of Public Works
Marc Morales, Management Analyst
SUBJECT: Award of Contract for Emergency Road Repairs Related To 2023 Winter Storms
RECOMMENDED ACTION
It is recommended that the City Council ratify the award a nd affirm a contract to Cooley Construction, Inc. for emergency road repairs related to storm damage in the amount of $860,082 and authorize a 10% contingency in the amount of $ 86,008 for a total not -to-exceed amount of $946,090.
BACKGROUND
On February 25 and 26, 2023, a large storm passed through Hesperia with heavy rain and snow fall causing significant flooding throughout the City. From the significant flooding on the roadways, the roads incurred major damage, which included an undermined road, excessive potholes in low flow areas, flowline damage, and asphalt berm damage. Public Works staff work ed diligently during the storm event responding to road conditions from the aftermath by clearing debris, pothole filling, and backfilling trenches from the stormwater flow.
On February 28, 2023, the City Manager declared a local emergency caused by the winter storm event. The local emergency was confirmed and ratified by the City Council at the March 7, 2023 City Council Meeting via Resolution No. 2023-16 and 2023-17.
From the aftermath of the storm, City staff identified thirteen (13) areas where emergency road repairs are needed, which include Sultana St reet, Peach Ave nue, Joshua St reet, and other various locations. These road repairs include removal and repair of roadways, removal and repair of asphalt berm, and grind and overlay where there are a significant number of potholes.
ISSUES/ANALYSIS
In order to expedite the emergency road repairs, the City prepared an emergency formal bid that was released on March 8, 2023, and closed on March 21, 2023. The City received the following bids:
Contractor Cooley
Construction, Inc.
Sully-Miller
Contracting Co
Total Cost $860,081.50 $1,208,200
Staff Report to the Mayor and City Council Members
Award of Contract for Emergency Storm Damage Road Repairs June 6, 2023
Upon review of the submitted bids, Cooley Construction, Inc. was deemed the lowest responsible/responsive bidder for the emergency road repairs. Cooley Construction, Inc. has completed several roadway projects for the City and staff recommends awarding the contract.
The City’s Purchasing Ordinance, Section 3.08.070(A)(1) – Emergency Purchase, states that when an emergency exists, in which the City Manager activates the Emergency Operations Center (EOC), the procurement of goods and/or services necessary to properly mitigate the emergency may be made. All purchases made under the emergency authority shall be subject to ratification by the City Council. A Notice to Proceed was issued to Cooley Construction, Inc. to commence work on May 22, 2023 , with sixty (60) calendar days to complete, which will be on July 21, 2023.
FISCAL IMPACT
With these emergency road repairs, Fund 204 will be utilized to fund this emergency project.
Once the project is complete, the City will submit for reimbursement to the Federal Emergency Management Agency (FEMA).
ALTERNATIVES
1. Provide alternative direction to staff.
ATTACHMENTS
None.
City of Hesperia
STAFF REPORT
DATE: June 6, 2023
TO: Mayor and Council Members
FROM: Nils Bensten, City Manager
BY: Rachel Molina, Assistant City Manager
Dani Fox, Deputy Development Services Director
Bethany Hudson, Administrative Analyst
SUBJECT: Final Map No. 18955-4
RECOMMENDED ACTION
It is recommended that the City Council adopt Resolution No. 2023-35 approving Final Map No. 18955-4 to create 57 residential lots on approximately 18.5 gross acres and accept right-of-way necessary to develop Tract 18989 -1 Lot 4, Planning Area 6 of the Tapestry Specific Plan. (Applicant: Silverwood Development Phase I, LLC).
BACKGROUND
On January 26, 2016, the City Council approved Tentative Tract Map No. 18955 to create 2,104 residential unit lots on 986 gross acres within the Tapestry Specific Plan , now known as the Silverwood Project, located south of Ranchero Road at the intersection of I Avenue . Final Map 18955-4 subdivides Lot 4, Planning Area 6 of Final Map 18989-1 to create 57 residential lots on approximately 18.5 gross acres and dedicates the in-tract right-of-way for utility infrastructure , streets, easements, open space and parks within the Silverwood project.
Staff has reviewed the final map and determined that it complies with the Tapestry Specific Plan, the Tapestry Development Agreement, the General Plan and zoning regulations , all required conditions of approval, and all local ordinances related to the creation of these parcels. The developer has executed a Subdivision Improvement Agreement in accordance with local ordinances and the Subdivision Map Act and posted the necessary bonds for offsite improvements.
ISSUES/ANALYSIS
There are no issues identified with this item.
FISCAL IMPACT
There are no significant fiscal impacts to the City related to this action
ALTERNATIVE(S)
1. Provide alternative direction to staff.
Staff Report to the Mayor and Council Members
Final Tract Map 18955-4
June 6, 2023
ATTACHMENT(S)
1. Resolution No. 2023-35
2. Final Tract Map No. 18955-4
RESOLUTION NO. 2023-35
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HESPER IA, CALIFORNIA, APPROVING FINAL TRACT MAP NO. 18955-4 TO CREATE 57 LOTS ON APPROXIMATELY 18.5 GROSS ACRES AND ACCEPT RIGHT -OF- WAY NECESSARY TO DEVELOP TRACT 18989-1, LOT 4, PLANNING AREA 6 OF THE TAPESTRY SPECIFIC PLAN (APPLICANT: SILVERWOOD
DEVELOPMENT PHASE I, LLC)
WHEREAS, on January 26, 2016 the City Council recommended that Tentative Tract Map No. 18955 for approval; and
WHEREAS, Tentative Tract Map No. 18955 is to create a total of 2,104 residential unit lots on 986 gross acres; and
WHEREAS, Tract Map No. 18955-4 is to create 57 lots on 18.5 gross acres within the Tapestry Specific Plan; and
WHEREAS, Tract Map No. 18955-4 is to accept right-of-way for the in-tract infrastructure; and
WHEREAS, all legal prerequisites to the adoption of this resolution have occurred.
NOW THEREFORE , BE IT RESOLVED BY THE CITY OF HESPERIA CITY COUNCIL AS FOLLOWS:
Section 1. Final Tract Map No. 18955-4 is hereby approved, and the City Clerk is authorized to present same to the County Recorder to be filed for record.
Section 2. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.
ADOPTED AND APPROVED this 6th day of June, 2023.
Brigit Bennington
Mayor
ATTEST:
Erin Baum
Assistant City Clerk
Attachment 1
THIS PAGE LEFT INTENTIONALLY BLANK
City of Hesperia
STAFF REPORT
DATE: May 16, 2023
TO: Mayor and Council Members
FROM: Nils Bentsen, City Manager SECOND READING AND ADOPTION BY: Rachel Molina, Assistant City Manager
Ryan Leonard, Senior Planner
SUBJECT: Development Code Amendment DCA23-00004; Applicant: City of Hesperia; Area affected: City-wide
RECOMMENDED ACTION
It is recommended that the City Council introduce and place on first reading Ordinance No. 2023-08 approving Development Code Amendment DCA23-00004 modifying development standards associated with on-site digital advertising signs.
BACKGROUND
The proposed Development Code Amendment is intended to incorporate needed revisions to the Municipal Code. Over the past few years, the City has seen an increase in the number of businesses wishing to construct new on -site digital display signs. Currently, the City Mun icipal Code does not contain any regulations or operational standards for on -site digital advertising displays. For example, the City’s sign ordinance (Chapter 16.36 of the Municipal Code) contains various regulations regarding the size, placement, and type of signage that a site may qualify for (i.e. monument sign, pole sign, wall sign, etc.) however it does not contain any development standards as to the placement or operational characteristics of on -site digital display sign. This Development Code Amendment will provide additional standards for sites to be eligible for on - site digital advertising displays and contains regulations that address the operation of digital display signs.
Furthermore, as new digital advertising signs have been constructed, staf f has received several complains from nearby property owners who are concerned with the lighting intensity of the signs, and the impacts that the signs could have on pass-by traffic.
ISSUES/ANALYSIS
Currently the Development Code allows all sites in the City that would otherwise qualify for a wall sign, monument sign, freestanding sign, or freeway sign to incorporate a digital advertising display as part of the signage. As previously mentioned, there are no regulations that would restrict a site from qualifying for a digital display sign.
While the use of digital advertising displays may be appropriate in certain instances, the over proliferation of digital advertising could lead to the aesthetic degradation along major commercial corridors. In many com munities, digital advertising displays are regulated to mitigate negative impacts on surrounding rights-of-way and adjacent properties. For comparison, staff reviewed the regulations of other nearby cities to determine if they had similar or more restricti ve regulations.
Staff Report to the City Council
DCA23-00004
May 16, 2023
The City of Victorville does not allow digital signs for any commercial use that is less than 50 acres in size. In addition, the Town of Apple Valley generally limits on -site digital advertising displays to only specified commercial zones a nd requires a minimum lot frontage of 100 feet in order to be eligible for an on -site digital advertising display. The Town of Apple Valley also contains numerous design standards and operational standards that are specific to on-site digital display signs.
The proposed Development Code Amendment would add new regulations that any digital advertising display that is included as a monument, freestanding or freeway sign may only be allowed on lots that exceed 5 gross acres in size and that are part of a multi -tenant shopping center with a defined anchor tenant. However, lots that are less than 5 acres in size would still qualify for a digital wall sign. It should be noted that the following types of uses would be exempt from the 5-acre minimum lot size requirement: gas stations (digital display limited to fuel pricing information only), churches, public and non -profit school facilities, movie theaters, public buildings, and private clubs and lodges (i.e. Moose Lodge, VFW, etc). The City’s existing regulations currently allow monument, freestanding or freeway signs to be located a minimum of 1-foot away from the property line. The proposed 5 acre minimum lot size requirement for any digital display that is part of a monument, freestan ding or freeway sign will reduce potential adverse impacts to nearby traffic and surrounding rights -of-way. Furthermore, the proposed regulations will maintain the City’s existing standard that all sites throughout the City may still qualify for a digital wall sign.
The proposed Development Code Amendment also contains regulations that require a digital advertising display to be located a minimum of 150 feet away from any residentially zoned property. In addition, the proposed Development Code Amendment contains the following design standards:
a. Signs visible from the public right-of-way shall not change at a frequency in excess of one alternation per five (5) seconds.
b. Transition between slides shall not exceed one (1) second. c. No digital display may depict or simulate any motion or video (i.e., video clips, flashing, etc.).
d. All digital advertising displays shall be equipped with a light meter to automatically adjust the display brightness to ambient light conditions.
e. Digital advertising displays may not advertise off-site businesses. f. Digital advertising displays shall be subject to current Caltrans' specifications as to brightness, frequency of changeable copy and depiction of movement. g. Digital advertising displays may not be added to legal non-conforming signs. h. All digital advertising displays must comply with the illumination provisions of this Section.
Taken together these requirements will ensure that all new digital advertising displays are developed in an orderly and quality manner.
Planning Commission Review: On May 11, 2023, the Planning Commission is scheduled to consider the proposed Development Code Amendment. This meeting has not occurred as of the preparation date of this staff report, but staff will report to the City Council the outcome of the Planning Commission meeting at the May 16, 2023, City Council hearing.
Conclusion: The Development Code Amendment complies with the General Plan.
Furthermore, implementation of the proposed development standards will contribute towar ds a visually pleasing environment along the City’s major commercial corridors and will add clear
Staff Report to the City Council
DCA23-00004
May 16, 2023
development regulations that will ensure that future sites are developed in an orderly and quality manner
ATTACHMENT(S)
1. Ordinance No. 2023-08
2. Exhibit "A"
3. Planning Commission Staff Report with attachments.
ORDINANCE NO. 2023-08
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HESPERIA,
CALIFORNIA, ADOPTING A DEVELOPMENT CODE AMENDMENT
MODIFYING DEVELOPMENT STANDARD S ASSOCIATED WITH ON-SITE DIGITAL ADVERTISING SIGNS (DCA23-00004)
WHEREAS, on January 5, 199 8, the City Council of the City of Hesperia adopted Ordinance No. 250, thereby adopting the Hesperia Municipal Code; and
WHEREAS, the City proposes to amend Chapter 16.36.060 of the City of Hesperia Municipal Code by adding specific regulations for on-site digital advertising displays; and
WHEREAS, the City finds that it is necessary to amend the development regulations applicable for onsite digital advertising si gns to reduce potential adverse impacts to nearby traffic and surrounding rights-of-way and to ensure that future sites are developed in an orderly and quality manner; and
WHEREAS, the proposed Development Code Amendment is exempt from the California Environmental Quality Act (CEQA) per Section 1506 1(b)(3), where it can be seen with certainty that there is no significant effect on the environment. The proposed Development Code Amendment is also exempt from the requirements of the California Environmental Quality Act by Section 16.12.415(B)(10) of the City’s CEQA Guidelines, as the Development Code Amendment does not propose to increase the density or intensity allowed in the General Plan.
WHEREAS, on May 11, 2023, the Planning Commission of the City of Hesperia conducted a duly noticed public hearing pertaini ng to the proposed amendment and concluded said hearing on that date; and
WHEREAS, on May 16, 2023, the City Council of the City of Hesperia conducted a duly noticed public hearing pertaining to the proposed Amendment and concluded said hearing on that date; and
WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF HESPERIA DOES ORDAIN AS FOLLOWS:
Section 1. The City Council hereby specifically finds that all of the facts set forth in this Ordinance are true and correct.
Section 2. Based upon substantial evidence presented to the City Council, including written and oral staff reports, the City Council specifically finds that the prop osed Ordinance is consistent with the goals and objectives of the adopted G eneral Plan as it will enhance the quality of life by providing a visually pleasing environment and promote the public health, safety and welfare.
Section 3. The proposed develop ment code amendment is ne cessary because the existing regulations do not co ntain any developme nt standards as to the placement or operational characteristics of on -site digital display signs. The Development Code
Amendment will provide standards for sites to be eligible for on-site digital advertising displays and contains regulations that address the operation of digital display signs.
Section 4. Based on the findings and conclusions set forth in this Ordinance, this City Council hereby adopts Development Code Amendment DCA23-00004, adding new regulations that any digital adv ertising display that is included as a monument, freestanding or freeway sign may only be allowed on lots that exceed 5 gross acres in size and that are part of a multi-tenant shopping center with a defined anchor tenant as shown on Exhibit “A.”
Section 5. This Ordinance shall take effect thirty (30) days from the date of adoption.
Section 6. The City Clerk shall certify to the adoption of t his Ordinance and shall cause the same to be posted in three (3) public places within the City of Hesperia pursuant to the provisions of Resolution No. 2007-101.
ADOPTED AND APPROVED on this 6th day of June 2023.
__________________________________ _______________________________ Brigit Bennington, Mayor
ATTEST:
_________________________________________
Erin Baum, Assistant City Clerk
Attachment 2
EXHIBIT “A”
16.36.060 - Nonresidential signs (includes hotel and motel).
A. The following signs shall be permitted for nonresidential uses. Deviations from the following standards and the sign menu in Section 16.36.130 shall be permitted subject to review and approval of a site sign plan to govern all signage on a site. Should the site plan contain requests for signs that exceed the requirements of Section 16.12.220(7) of the development code, then the sign plan shall be referred to the pl anning commission for review and approval.
B. Total Sign Area. The total sign area for an individual use or combination of uses or buildings on a commercial or industrial site is computed as three-square feet of signage per one lineal foot of principal build ing(s) that fronts on a street, alley or parking lot with customer entrances. Institutional uses shall not be granted a cumulative total, but shall be allowed signs listed in the sign menu and described per this chapter.
C. All signs must adhere to size, hei ght and spacing limits per the type of sign as specified below:
1. Attached (Wall or Integral Roof) Signs. Wall signs are permitted at two square feet of sign area per lineal foot of principal building(s) fronting the street(s) with a maximum area of one hundred fifty (150) square feet per sign. Wall signs must be attache d to the building and may be designated as integral roof signs, but shall not extend above the roof. Wall signs shall be placed on the exterior wall of the tenant space. Any number of signs may be used but the maximum area allowed shall be the cumulative total of all wall signs.
2. Monument Signs. Monument signs shall not exceed forty-eight (48) square feet in area or eight feet in height. Monument signs may be increased to nine feet in height and sixty (60) square feet if installed in a landscaped planter not exceeding three feet in height and at least six feet longer and wider than the sign. Any size site may have at least one monument sign. Multiple numbers of monument signs and freestanding signs allowed for a site shall not exceed one sign per one hundred fifty (150) feet of street frontage.
3. Canopy and Pump Island Signs. Canopy signs are allowed ten square feet in area per side. Signs are to display logos or brand names only. Pump islands are allowed three square feet of sign area per pump.
4. Banners. Banners used as permanent signs shall be attached to a principal building and shall be allowed in addition to attached, secondary, window or canopy signs. The area of these signs shall be counted against the site's allocation. Permanent banners shall not be permitted on separate stand-alone frames or structures, and shall not be attached or tied to perimeter walls, fences, monument signs or freestanding signs.
Banners shall be made of canvas, vinyl or similar material of a minimum thickness of thirteen (13) ounces. The edges shall be folded, stitched or glued and equipped with eyelets or cords to facilitate mounting. Lettering, illustrations and logos shall be neat and professional in appearance. Banners shall be securely attached to buildings.
Banners may be mount ed inside windows. Any torn, faded, frayed or damaged banners shall be removed or replaced immediately.
5. Secondary Signs. Secondary signs such as food menus on fast food businesses or event or meeting signs shall not exceed fifty (50) square feet for any single sign (thirty (30) square feet for industrial uses)—unless approved as part of a site sign plan.
6. Secondary wall signs listing services offered such as nursery, pharmacy, tires, etc., with a maximum of fifty (50) square feet per sign.
7. Freestanding Sign s. Freestanding signs are permitted whenever the project site exceeds two and one-half acres of land or the street frontage where the freestanding sign is proposed exceeds one hundred seventy -five (175) lineal feet. A site with less street frontage may also be eligible for a single freestanding sign should it be combined with at least one other adjacent property by merger, or with a least two other properties through the recordation of a reciprocal access and signage agreement. Properties so merged or combined shall form a continuous street frontage. Freestanding signs for commercial or industrial uses shall not exceed twenty (20) feet in height or two hundred (200) square feet in area. Multiple numbers of monument signs and freestanding signs allowed for a site shall not exceed one sign per one hundred fifty (150) feet of street frontage.
8. Bulletin or Directory Board. Bulletin board signs are monument style signs used to direct customers to tenants on a multiple tenant site. Bulletin boards shall not exceed thirty (30) square feet in area and six feet in height with one per entrance on the site.
9. Freeway Signs. Freeways signs are signs located within six hundred sixty (660) feet of the freeway. Freeway signs may be forty (40) feet high and two hundred (200) square feet in area. When two or more uses record an agreement to share signage, a freeway sign with two signs may be up to three hundred (300) square feet in area and fifty (50) feet in height. A freeway sign with three or more signs may be up to four hundred fifty (450) square feet in area and sixty (60) feet in height. Notwithstanding the paragraph above, freeway signs between sixty (60) and one hundred (100) feet in height and up to one thousand (1,000) square feet in area may be permitted, subject to a study to determine the optimal location in relation to freeway off -ramps, overpasses, existing development, and topography. Such signs must be located on, or within one thousand (1,000) feet of the premises of a development project consisting of at least thirty-five (35) contiguous acres. No more than two signs may be permitted per development. Signs incorporating digital displays may not be closer than one thousand (1,000) feet from another digital display on the same side of the freeway.
Such displays ar e subject to current Caltrans' specifications as to brightness, frequency of changeable copy and depiction of movement. The location and design of freeway signs must be included in an approved site sign plan for the development to ensure consistency with the design and architecture of the project.
10. Institutional Uses in Commercial Designations. These uses, including schools, churches, hospitals and convalescent homes, shall be limited to a maximum of two square feet of attached sign area per principal building frontage. Monument signs shall be a maximum of forty -eight (48) square feet with one sign per driveway on public streets. Additional signage may be permitted when incorporated in a site sign plan.
11. Digital Advertising Displays (Digital Signs) . Unless otherwise listed below, d igital advertising displays installed as a part of any monument, freestanding or freeway sign may only be allowed on lots that exceed 5 gross acres in size and that are a part of a multi-tenant center with a defined anchor tenant. Lots that are less than 5 gross acres may be allowed one (1) digital wall sign. The following uses are not subject to the
minimum lot size requirements for digital advertising displays: service stations (digital display limited to the portion of the sign conveying pricing information), churches and other religious centers, public and non -profit school facilities, movie theaters, public buildings, public recreational buildings, private clubs and lodges.
All digital advertising displays shall be located a minimum of 150 feet away from any residentially zoned property, as measured from the sign to the residential property line.
The digital displays will be limited to the same size limitations currently allowed in Section 16.36.060 for the respective sign type (i.e monument, freestanding, wall sign and/or freeway sign). All digital signs shall be subject to the following operational standards:
a. Signs visible from the public right -of-way shall not change at a f requency in excess of one alternation per five (5) seconds.
b. Transition between slides shall not exceed one (1) second. c. No digital display may depict or simulate any motion or video (i.e., video clips, flashing, etc.).
d. All digital advertising displays sh all be equipped with a light meter to automatically adjust the display brightness to ambient light conditions. e. Digital advertising displays may not advertise off-site businesses. f. Digital advertising displays shall be subject to current Caltrans' specific ations as to brightness, frequency of changeable copy and depiction of movement. g. Digital advertising displays may not be added to legal non-conforming signs. h. All digital advertising displays must comply with the illumination provisions of this Section.
City of Hesperia
STAFF REPORT
DATE: May 11, 2023
TO: Planning Commission
FROM: Rachel Molina, Assistant City Manager
BY: Ryan Leonard, Senior Planner
SUBJECT: Development Code Amendment DCA23-00004; Applicant: City of Hesperia; Area affected: City-wide.
RECOMMENDED ACTION
It is recommended that the Planning Commission adopt Resolution No. PC -2023-17 recommending that the City Council introduce and place on first reading an ordinance approving Development Code Amendment DCA23-00004 modifying development standards associated with on-site digital advertising signs.
BACKGROUND
The proposed Development Code Amendment is intended to incorporate needed revisions to the Municipal Code. Over the past few years, the City has seen an increase in the number of businesses wishing to construct new on-site digital display sign s. Currently, the City Municipal Code does not contain any regulations or operational standards for on-site digital advertising displays. For example, the City’s sign ordinance (Chapter 16.36 of the Municipal Code) contains various regulations regarding the size, placement, and type of signage that a site may qualify for (i.e. monument sign, pole sign, wall sign , etc.) however it does not contain any development standards as to the placement or operational characteristics of on-site digital display sign. This Development Code Amendment will provide additional standards for sites to be eligible for on- site digital advertising displays and contains regulations that address the operation of digital display signs.
Furthermore, as new digital advertising signs have been constructed, staff has received several complains from nearby property owners who are concerned with the lighting intensity of the signs, and the impacts that the signs could have on pass-by traffic.
ISSUES/ANALYSIS
Currently the Development Code allows all sites in the City that would otherwise qualify for a wall sign, monument sign, freestanding sign, or freeway sign to incorporate a digital advertising display as part of the signage. As previously mentioned, there are no regulations that would restrict a site from qualifying for a digital display sign.
While the use of digital advertising displays may be appropriate in certain instances, the over proliferation of digital advertising could lead to the aesthetic degradation along major commercial corridors. In many communities, digital advertising displays are regulated to mitigate negative impacts on surrounding rights-of-way and adjacent properties. For comparison, staff reviewed the regulations of other nearby cities to determine if they had similar or more restrictive regulations.
The City of Victorville does not allow digital signs for any commercial use that is less than 50
Attachment 3
Staff Report to the Planning Commission
DCA2023-00004
May 11, 2023
acres in size. In addition, the Town of Apple Valley generally limit s on-site digital adv ertising displays to only specified commercial zones and requires a minimum lot frontage of 100 feet in order to be eligible for a n on -site digital advertising display. The Town of Apple Valley also contains numerous design standards and operational standards that are specific to on-site digital display signs.
The proposed Development Code Amendment would add new regulations that any digital advertising display that is included as a monument, freestanding or freeway sign may only be allowed on lots that exceed 5 gross acres in size and that are part of a multi -tenant shopping center with a defined anchor tenant . However, lots that are less than 5 acres in size would still qualify for a digital wall sign. It should be noted that the following types of uses would be exempt from the 5-acre minimum lot size requirement: gas stations (digital display limited to fuel pricing information only), churches , public and non -profit school facilities, movie theaters, public buildings, and private clubs and lodges (i.e. Moose Lodge, VFW, etc) . The City’s existing regulations currently allow monument, freestanding or freeway signs to be located a minimum of 1-foot away from the property line. The proposed 5 acre minimum lot size requirement for any digital display that is part of a monument, freestanding or freeway sign will reduce potential adverse impacts to nearby traffic and surrounding rights-of-way. Furthermore, the proposed regulations will maintain the City’s existing standard that all sites throughout the City may still qualify for a digital wall sign.
The proposed Development Code Amendment also contains regulations that require a digital advertising display to be located a minimum of 150 feet away fro m any residentially zoned property. In addition, the proposed Development Code Amendment contains the following design standards:
a. Signs visible from the public right-of-way shall not change at a frequency in excess of one alternation per five (5) seconds.
b. Transition between slides shall not exceed one (1) second. c. No digital display may depict or simulate any motion or video (i.e., video clips, flashing, etc.).
d. All digital advertising displays shall be equipped with a light meter to automatically adjust the display brightness to ambient light conditions.
e. Digital advertising displays may not advertise off-site businesses. f. Digital advertising displays shall be subject to current Caltrans' specifications as to brightness, frequency of changeable copy and depiction of movement. g. Digital advertising displays may not be added to legal non-conforming signs. h. All digital advertising displays must comply with the illumination provisions of this Section.
Taken together these requirements will ensure that all new digital advertising displays are developed in an orderly and quality manner.
Environmental: Approval of the Development Code Amendment is exempt from the requirements of the California Environmental Quality Act per Section 15061(b)(3), where it can be seen with certainty that there is no significant effect on the environment. The proposed Development Code Amendment is also exempt from the requirements of the California Environmental Quality Act by Section 16.12.415(B)(10) of the City’s CEQA Guidelines, as the Development Code Amendment does not propose to increase the density or intensity allowed in the General Plan.
Conclusion: The Development Code Amendment complies with the General Plan .
Furthermore, implementation of the proposed development standards will contribute towards a
Staff Report to the Planning Commission
DCA2023-00004
May 11, 2023
visually pleasing environment along the City’s major commercial corridors and will add clear development regulations that will ensure that future sites are developed in an orderly and quality manner
FISCAL IMPACT
There are no fiscal impacts identified with this action.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. Resolution No. PC-2023-17
2. Exhibit “A”
RESOLUTION NO. PC-2023-17
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF
HESPERIA, CALIFORNIA, RECOMMENDING THAT THE CITY COUNCIL
ADOPT A DEVELOPMENT CODE AMENDMENT MODIFYING
DEVELOPMENT STANDARD S ASSOCIATED WITH ON-SITE DIGITAL
ADVERTISING SIGNS (DCA23-00004)
WHEREAS, on January 5, 1998, the City Council of the City of Hesperia adopted Ordinance No. 250, thereby adopting the Hesperia Municipal Code; and
WHEREAS, the City proposes to amend Chapter 16.36.060 of the City of Hesperia Municipal Code by adding specific regulations for on-site digital advertising displays; and
WHEREAS, the proposed Development Code Amendment is exempt from the California Environmental Quality Act (CEQA) per Section 1506 1(b)(3), where it can be seen with certainty that there is no significant effect on the environment. The proposed Development Code Amendment is also exempt from the requirements of the California Environmental Quality Act by Section 16.12.415(B)(10) of the City’s CEQA Guidelines, as the Development Code Amendment does not propose to increase the density or intensity allowed in the General Plan.
WHEREAS, on May 11, 2023, the Planning Commission of the City of Hesperia conducted a duly noticed public hearing pertaini ng to the proposed amendment and concluded said hearing on that date; and
WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.
NOW THEREFORE, BE IT RESOLVED BY THE CITY OF HESPERIA PLANNING COMMISSION AS FOLLOWS:
Section 1. The Planning Commission hereby s pecifically finds that all of the facts set forth in this Resolution are true and correct.
Section 2. Based upon substantial evidence presented to the Commission, including written and oral staff reports, the Commi ssion specifically finds that the prop osed Ordinance is consistent with the goals and objectives of the adopted General Plan as it will enhance the quality of life by providing a visually pleasing environment and promote the public health, safety and welfare.
Section 3. The proposed develop ment code amendment is ne cessary because the existing regulations do not contain any developme nt standards as to the placement or operational characteristics of on -site digital display signs. The Development Code Amendment will provide standards for sites to be eligible for on-site digital advertising displays and contains regulations that address the operation of digital display signs.
Section 4. Based on the findings and conclusions set forth in this Resolution, this Commission hereby recommends adopt ion of Development Code Amendment DCA23- 00004, adding new regulations that any digital advertising display that is included as a monument, freestanding or freeway sign may only be allowed on lots that exceed 5 gross acres in siz e and that are part of a mul ti-tenant shopping center with a defined anchor tenants shown on Exhibit “A.”
ATTACHMENT 1
Resolution No. 2023-17
Section 4. That the Secretary shall certify to the adoption of this Resolution.
ADOPTED AND APPROVED on this 11th day of May 2023.
__________________________________ _______________________________ Roger Abreo, Chair, Planning Commission
ATTEST:
_________________________________________
Maricruz Montes, Secretary, Planning Commission
EXHIBIT “A”
16.36.060 - Nonresidential signs (includes hotel and motel).
A. The following signs shall be permitted for nonresidential uses. Deviations from the following standards and the sign menu in Section 16.36.130 shall be permitted subject to review and approval of a site sign plan to govern all signage on a site. Should the site plan contain requests for signs that exceed the requirements of Section 16.12.220(7) of the development code, then the sign plan shall be referred to the planning commission for review and approval.
B. Total Sign Area. The total sign area for an individual use or combination of uses or buildings on a commercial or industrial site is computed as three-square feet of signage per one lineal foot of principal building(s) that front s on a street, alley or parking lot with customer entrances. Institutional uses shall not be granted a cumulative total, but shall be allowed signs listed in the sign menu and described per this chapter.
C. All signs must adhere to size, height and spacing l imits per the type of sign as specified below:
1. Attached (Wall or Integral Roof) Signs. Wall signs are permitted at two square feet of sign area per lineal foot of principal building(s) fronting the street(s) with a maximum area of one hundred fifty (150) square feet per sign. Wall signs must be attached to the building and may be designated as integral roof signs, but shall not extend above the roof. Wall signs shall be placed on the exterior wall of the tenant space. Any number of signs may be used but the maximum area allowed shall be the cumulative total of all wall signs.
2. Monument Signs. Monument signs shall not exceed forty-eight (48) square feet in area or eight feet in height. Monument signs may be increased to nine feet in height and sixty (60) square feet if installed in a landscaped planter not exceeding three feet in height and at least six feet longer and wider than the sign. Any size site may have at least one monument sign. Multiple numbers of monument signs and freestanding signs allowed for a site shall not exceed one sign per one hundred fifty (150) feet of street frontage.
3. Canopy and Pump Island Signs. Canopy signs are allowed ten square feet in area per side. Signs are to display logos or brand names only. Pump islands are allowed three square feet of sign area per pump.
4. Banners. Banners used as permanent signs shall be attached to a principal building and shall be allowed in addition to attached, secondary, window or canopy signs. The area of these signs shall be counted against the site's allocation. Permanent banners shall not be permitted on separate stand-alone frames or structures, and shall not be attached or tied to perimeter walls, fences, monument signs or freestanding signs.
Banners shall be made of canvas, vinyl or similar material of a minimum thickness of thirteen (13) ounces. The edges shall be folded, stitched or glued and equipped with eyelets or cords to facilitate mounting. Lettering, illustrations and logos shall be neat and professional in appearance. Banners shall be secu rely attached to buildings.
Banners may be mounted inside windows. Any torn, faded, frayed or damaged banners shall be removed or replaced immediately.
5. Secondary Signs. Secondary signs such as food menus on fast food businesses or event or meeting signs shall not exceed fifty (50) square feet for any single sign (thirty (30) square feet for industrial uses)—unless approved as part of a site sign plan.
6. Secondary wall signs listing services offered such as nursery, pharmacy, tires, etc., with a maximum of fifty (50) square feet per sign.
7. Freestanding Signs. Freestanding signs are permitted whenever the project site exceeds two and one-half acres of land or the street frontage where the freestanding sign is proposed exceeds one hundred seventy -five (175) lineal feet. A site with less street frontage may also be eligible for a single freestanding sign should it be combined with at least one other adjacent property by merger, or with a least two other properties through the recordation of a reciprocal access and signage agreement. Properties so merged or combined shall form a continuous street frontage. Freestanding signs for commercial or industrial uses shall not exceed twenty (20) feet in height or two hundred (200) square feet in area. Multiple numbers of mon ument signs and freestanding signs allowed for a site shall not exceed one sign per one hundred fifty (150) feet of street frontage.
8. Bulletin or Directory Board. Bulletin board signs are monument style signs used to direct customers to tenants on a multiple tenant site. Bulletin boards shall not exceed thirty (30) square feet in area and six feet in height with one per entrance on the site.
9. Freeway Signs. Freeways signs are signs located within six hundred sixty (660) feet of the freeway. Freeway signs may be forty (40) feet high and two hundred (200) square feet in area. When two or more uses record an agreement to share signage, a freeway sign with two signs may be up to three hundred (300) square feet in area and fifty (50) feet in height. A freeway sign with three or more signs may be up to four hundred fifty (450) square feet in area and sixty (60) feet in height. Notwithstanding the paragraph above, freeway signs between sixty (60) and one hundred (100) feet in height and up to one thousand (1,000) square feet in area may be permitted, subject to a study to determine the optimal location in relation to freeway off -ramps, overpasses, existing development, and topography. Such signs must be located on, or within one thousand (1,000) feet of the premises of a development project consisting of at least thirty-five (35) contiguous acres. No more than two signs may be permitted per development. Signs incorporating digital displays may not be closer than one thousand (1,000) feet from another digital display on the same side of the freeway.
Such displays are subject to current Caltrans' specifications as to brightness, frequency of changeable copy and depiction of movement. The location and design of freeway signs must be included in an approved site sign plan fo r the development to ensure consistency with the design and architecture of the project.
10. Institutional Uses in Commercial Designations. These uses, including schools, churches, hospitals and convalescent homes, shall be limited to a maximum of two square feet of attached sign area per principal building frontage. Monument signs shall be a maximum of forty -eight (48) square feet with one sign per driveway on public streets. Additional signage may be permitted when incorporated in a site sign plan.
11. Digital Advertising Displays (Digital Signs) . Unless otherwise listed below, d igital advertising displays installed as a part of any monument, freestanding or freeway sign may only be allowed on lots that exceed 5 gross acres in size and that are a part of a multi-tenant center with a defined anchor tenant. Lots that are less than 5 gross acres may be allowed one (1) digital wall sign. The following uses are not subject to the minimum lot size requirements for digital advertising displays: service stations (digital display limited to the portion of the sign conveying pricing information), churches and
other religious centers, public and non -profit school facilities, movie theaters, public buildings, public recreational buildings, private clubs and lodges.
All digital advertising displays shall be located a minimum of 150 feet away from any residentially zoned property, as measured from the sign to the residential property line.
The digital displays will be limited to the same size limitations currently allowed in Section 16.36.060 for the respective sign type (i.e monument, freestanding, wall sign and/or freeway sign). All digital signs shall be subject to the following operational standards:
a. Signs visible from the public right -of-way shall not change at a f requency in excess of one alternation per five (5) seconds.
b. Transition between slides shall not exceed one (1) second. c. No digital display may depict or simulate any motion or video (i.e., video clips, flashing, etc.).
d. All digital advertising displays sh all be equipped with a light meter to automatically adjust the display brightness to ambient light conditions. e. Digital advertising displays may not advertise off-site businesses. f. Digital advertising displays shall be subject to current Caltrans' specific ations as to brightness, frequency of changeable copy and depiction of movement. g. Digital advertising displays may not be added to legal non-conforming signs. h. All digital advertising displays must comply with the illumination provisions of this Section.
City of Hesperia
STAFF REPORT
DATE: June 6, 2023
TO: Mayor and Council Members
FROM: Nils Bentsen, City Manager
BY: Rachel Molina, Assistant City Manager
Ryan Leonard, Senior Planner
SUBJECT: Development Code Amendment DCA2 3-00001 and Specific Plan Amendment SPLA23-00003; Applicant: City of Hesperia; Area affected: City-wide.
RECOMMENDED ACTION
It is recommended that the City Council introduce and place on first reading Ordinance No. 2023-09 approving Development Code Amendment DCA23-00001 and Specific Plan Amendment SPLA23 -00003 modifying development standards associated with the establishment of new vehicle wash facilities.
BACKGROUND
Within the past year the City has seen in increase in the number of new carwash development applications. In response to the recent expansion of carwash developments, the City Council determined that w ithout further regulation of the location and operation of carwash facilities , there is the potential for significant negative impacts from the development of such uses that cannot be mitigated . To that end, on February 7, 2023, the City Council adopted Urgency Ordinance No. 2023-01 establishing a 45 -day moratorium on the establishment or expansion of new carwash facilities in the City. On March 21, 2023, the moratorium was extended for an additional period of ten (10) months and fifteen (15) days, for a total period of one year (Attachment 1).
The purpose of the development moratorium was to allow staff time to study the issues associated with carwash facilities and to present recommendations which would regulate the location of future carwash establishments and the types of development standards that should be imposed on their operation to mitigate any potential impacts.
Planning Commission Review: On April 13, 2023, the Planning Commission voted 4 -0 (Commissioner Bartz was absent) to forward this item to the City Council with a recommendation for denial. T he Planning Commission deliberated and discussed the proposed project and generally concluded that the proposed Development Code Amendment was not necessary. The overall consensus was that a carwash business would do their own market research and would only choose to invest at a specific location if there was enough consumer demand to warrant it.
There were no residents who spoke either in favor or opposition to the project.
ISSUES/ANALYSIS
Existing Regulations: Hesperia Municipal Code section 16.16.320 currently allows vehicle wash facilities in the General Commercial (C2), Service Commercial (C3), and the Limited Manufacturing (I1) zones with approval of a Conditional Use Permit (CUP). Vehicle wash facilities
Staff Report to the City Council
DCA23-00001 and SPLA23-00003
June 6, 2023
are listed as prohibited uses in the Conve nience Commercial (C1) and General Manufacturing (I2) zones. The proposed Development Code Amendment would not make any modifications to the above zoning designations.
Additionally, within the Main Street and Freeway Corridor Specific Plan (Specific Plan), carwash facilities are allowed in the Regional Commercial (RC), Auto Sales Commercial (ASC) Neighborhood Commercial (NC) and Commercial Industrial Business Park (CIBP) zones with approval of a CUP. Carwash facilities are listed as a permitted use in th e General Industrial (GI) zone of the Specific Plan. In addition, carwash facilities are listed as a prohibited uses in the Office Park (OP) and Office Commercial (OC) zones of the Specific Plan. Staff is proposing to change the current requirement to require a CUP for vehicle wash facilities within the General Industrial (GI) zone.
Additionally, Section 16.16.365 of the Municipal Code contains specific design and use standards for carwash facilities. This particular section of the Municipal Code is applicable to properties that are located within and outside of the Specific Plan.
Proposed Regulations: There are three common types of carwash facilities: full service, express, and ancillary facilitie s. Full - service carwash facilities are usually stand -alone facilities where employees either hand wash or detail vehicles. Express carwash facilities are usually fully automated carwash facilities with self - serve vacuum stalls. Ancillary facilities are t ypically automated facilities that are associated with gas stations, and more commonly called drive- thru carwashes.
Staff is proposing to create specific development standards that would apply to all future carwash facilities. The proposed Development C ode Amendment will add new distance and separation requirements that would require that each full service or express carwash facility be separated by a minimum of 2,000 feet from the nearest standalone carwash facility (i.e. full service or express facility). In addition, ancillary carwash facilitates which are part of a gas station would have to be located 1,000 feet away from the nearest standalone carwash facility. However, staff is not proposing a separation requirement from an ancillary carwash facilit y to another ancillary wash facility. Lastly, any new carwash facility application must submit a market research study supporting the viability of the project in the proposed location.
Carwash facilitates will continue to require a Conditional Use Permit , allowing the Planning Commission final say in determining whether a proposed project is suitable and appropriate
Environmental: Approval of the Development Code Amendment is exempt from the requirements of the California Environmental Quality Act per Section 15061(b)(3), where it can be seen with certainty that there is no significant effect on the environment. The proposed Development Code Amendment is also exempt from the requirements of the California Environmental Quality Act by Section 16.12.415(B)(10) of the City’s CEQA Guidelines, as the Development Code Amendment does not propose to increase the density or intensity allowed in the General Plan.
Conclusion: The Development Code Amendment complies with the General Plan. Ensuring that all future vehicle wash facilities are subject to a conditional use permit and adding minimum separation requirements between full service and express carwash facilities will ensure that future sites are developed in an orderly and quality manner.
FISCAL IMPACT
There are no fiscal impacts identified with this action.
Staff Report to the City Council
DCA23-00001 and SPLA23-00003
June 6, 2023
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. Ordinance 2023-09
2. Exhibit A
3. April 13, 2023, Planning Commission staff report (includes March 21, 2023 City Council staff report as an attachment.)
ORDINANCE NO. 2023-09
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HESPERIA,
CALIFORNIA, RECOMMENDING THAT THE CITY COUNCIL ADOPT A
DEVELOPMENT CODE AMENDMENT AND SPECIFIC PLAN AMENDMENT
MODIFYING DEVELOPMENT STANDARDS ASSOCIATED WITH CARWA SH DEVELOPMENTS (DCA23-00001 AND SPLA23-00003)
WHEREAS, on January 5, 1998, the City Council of the City of Hesperia adopted Ordinance No. 250, thereby adopting the Hesperia Municipal Code; and
WHEREAS, On September 2, 2008, the City Council of the City of Hesperia adopted Ordinance No. 2008-12, thereby adopting the Main Street and Freeway Corridor Specific Plan; and
WHEREAS, the City proposes to amend Chapter 16.16.365 (C) of the City of Hesperia Municipal Code which contains specific land use standards for vehicle wash facilities; and
WHEREAS, the City has a compelling interest in protec ting the public h ealth, safety, a nd welfare of its citizens, residents, visitors and businesses, and preserving the peace and quiet of the neighborhoods within the City by regulating the establishment and expansion of car washes within City limits; and
WHEREAS, the City is responsible for adopting and implementing land use regulations within its boundaries; and
WHEREAS, the City has no other development standards or regulations applicable to the operation of Cash Washes; and
WHEREAS, the City’s permissive policy towards car washes could result in a proliferation or oversaturation of said uses within the City; and
WHEREAS, developable land becomes scarcer in the City, there is concern that the proliferation of car washes without due consideration presents an immediate threat to public health, safety, or welfare because car washes generate undesirable conditions for adjacent properties as a result of noisy, large-scale industrial equipment including vacuums, pumps, pressurized sprayers, and dryers; and
WHEREAS, the oversaturation of car washes in the City provides little economic benefit to the City or City residents; and
WHEREAS, absent clear regulation, the proliferation and oversaturation of car washes in the City poses a threat to the public peace, health, and safety, and, unless the City takes action to regulate, the impacts described above are likely to continue to occur; and WHEREAS, the City desires to regulate car washes to ensure that public right-of-ways and public property remain free of public nuisances, safe and accessible for all users, and clear of conditions that pose threats to public health, safety, and welfare, to ensure that future development is undertaken in a manner consistent with the City’s General Plan, and to ensure that car wash operators comply with State and City regulations that consider the public’s health, safety, and welfare; and
WHEREAS, the City finds that it is necessary to amend the development regulations applicable for carwash developments and require that all full service or ex press carwash facilities be separated by a minimum of 2,000 feet from the nearest standalone carwash facility. In addition, ancillary carwash facilitates which are par t of a gas station would have to be located 1,000 feet away from the nearest standalone carwash facility (i.e. full service or express carwash). Lastly, any new carwash facility application must submit a market research study supporting the viability of the project in the proposed location; and
WHEREAS, the City finds that it is necessary to amend the dev elopment regulations within the Man Street and F reeway Corridor Specific Plan to require a C UP for vehicle wash facilities within the General Industrial (GI) zone. Currently, carwash facilities are allowed as a p ermitted use within the GI zone but do not require a CUP; and
WHEREAS, on February 7, 2023, the City Council adopted Urg ency Ordinance No. 2023 -01 establishing a 45-day moratorium on the establishment or expansion of new carwash facilities in the City; and
WHEREAS, on March 21, 2023, the City Council adopted Urg ency Ordinance No. 2023 -04 extending the moratorium for an additional period of ten (10) months and fifteen (15) days, for a total period of one year; and
WHEREAS, as of the effective date of this ordinance, Urgency Ordinance No. 2023-04 will be repealed and will no longer be in effect; and
WHEREAS, the proposed Development Code Amendment is exempt from the California Environmental Quality Act (CEQA) per Section 1506 1(b)(3), where it can be seen with certainty that there is no signifi cant eff ect on the environment. The proposed Amendments are also exempt fr om the requirements of the California Environmental Quality Act by Section
16.12.415(B)(10) of the City’s CEQA Gu idelines, as the Amendments are exempt if they do not propose to increase the density or intensity allowed in the General Plan; and
WHEREAS, on April 13, 2023, the Planning Commission of the City of Hesperia conducted a duly noticed public hearing pertaini ng to the proposed amendment and concluded said hearing on that date; and
WHEREAS, on June 6, 2023, the City Council of the City of Hesperia conducted a duly noticed public hearing pertaining to the proposed Amendment and concluded said hearing on that date; and
WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF HESPERIA DOES ORDAIN AS FOLLOWS:
Section 1. The City Council hereby specifically finds that all of the facts set forth in this Ordinance are true and correct.
Section 2. Based upon substantial evidence presented to the City Council, including written and oral staff reports, the City Council specifically finds that the propos ed Ordinance is consistent with the goals and objectives of the adopted General Plan as it will enhance the quality of life by preserving the peac e and quiet of the neighborhoods within the City by regulating the establishment and expansion of car washes within City
limits and will ensure that future development is undertaken in a manner consistent with the City’s General .
.
Section 3. The proposed develop ment code amendment is ne cessary because the existing regulations do not co ntain any development standards as to the placement or operational characteristics of carwash facilities. As developable land becomes scarcer in the City, there is co ncern that the proliferation of car washes without due consideration presents an imme diate threat to public health, safety, or wel fare b ecause car washes generate undesirable conditions for adj acent properties as a result of noisy, large -scale industrial equipment including vacuums, pumps, pressurized s prayers, and dryers. The Development Code Amendment will provide standards for sites to be eligible for carwash facilities These development standards address adverse impacts of carwash facilities on vehicular and pedestrian traffic, as well as nearby sensitive uses including residenc es and are necessary to protect public health, safety and general welfare.
Section 4. Based on the findings and conclusions set forth in this Ordinance, the City Council hereby adopts Development Code Amendment DCA23-00001 and Specific Plan Amendment SPLA23-00003 modifying development standa rds associated with the establishment of new of car wash facilities as shown on Exhibit “A.”
Section 5. This Ordinance shall take effect thirty (30) days from the date of adoption.
Section 6. The City Clerk shall certify to the adoption of t his Ordinance and shall cause the same to be posted in three (3) public places within the City of Hesperia pursuant to the provisions of Resolution No. 2007-101.
ADOPTED AND APPROVED on this 20th day of June 2023.
__________________________________ _______________________________ Brigit Bennington, Mayor
ATTEST:
_________________________________________
Erin Baum, Assistant City Clerk
EXHIBIT “A”
DCA23-00001 and SPLA23-00001
The following are modifications to Chapter 16.16.365 of the City of Hesperia Development Code regulations and Chapter 9 of the Main Street and Freeway Corridor Specific Plan (additions are in underlined red text and deletions are shown with red and strikethrough):
1) The following are modifications to Chapter 16.16.365 (C)-Vehicle Wash Facilities of the City Municipal Code
C. Vehicle Wash Facilities.
1. Vehicle wash facilities shall be developed in compliance with the following additional standards:
a. Full service and express vehicle wash facilities (i.e. standalone facilitates) shall be separated by a minimum of 2,000 feet, as measured from property lines.
b. Vehicle wash facilities that are ancillary to a primary use (i.e. a gas station) shall be separated by a minimum of 1,000 feet, as measured from the property line, from the nearest full service or express vehicle wash facility (i.e. standalone facility)
c. All gas station and car wash Conditional Use Permit applications shall include a market research study that analyses the feasibility of the project at the subject location.
d. All lights shall be reflected away from adjacent uses. e. Premises shall be maintained in a neat, orderly and environmentally safe manner, and all improvements shall be continuously maintained. f. Noise from vehicle wash activities shall not exceed levels established in Chapter 16.20, Article V (General Performance Standards).
MAIN STREET AND FREEWAY CORRIDOR SPECIFIC PLAN
Chapter 9, Subsection (I)- General Industrial Zone shall be amended to read:
1. Permitted Uses
The following uses are permitted in the General Industrial zone:
a) Commercial storage facilities (mini-warehouse).
b) Contractor’s storage yard.
c) Equipment (large) sales and rental.
d) Equipment (small) sales and rental.
e) Lumber yard and building materials (wholesale).
f) Manufacturing (indoors).
Attachment 2
g) Offices (administrative, business, executive and professional, but not including medical or dental).
h) Outdoor storage, incidental to the primary use.
i) Publishing and printing.
j) Retail sales ancillary to a manufacturing use on-site (floor area not to exceed 15% of gross floor area up to a maximum of 7,500 square feet). k) Truck terminal.
l) Vehicle repair – major.
m) Vehicle repair – minor.
n) Vehicle wash facilities.
o) Warehousing and wholesale distribution centers – 200,000 square feet or less. p) Accessory structures and uses customarily incidental to any permitted uses when located on the same site with the main building and use. q) Veterinary services- clinics and small animal hospitals (short term boarding). r) Other similar uses, as interpreted by the Development Services Director or his/her designee
2. Conditionally Permitted Uses
The following uses are conditionally permitted in the General Industrial zone:
a) Bus terminals.
b) Kennels – boarding of domestic animals.
c) Vehicle fuel stations (i.e,. gasoline stations).
d) Warehousing and wholesale distribution centers – 200,000 square feet or more e) Vehicle wash facilities.
City of Hesperia
STAFF REPORT
DATE: April 13, 2023
TO: Planning Commission
FROM: Rachel Molina, Assistant City Manager
BY: Ryan Leonard, Senior Planner
SUBJECT: Development Code Amendment DCA2 3-00001 and Specific Plan Amendment SPLA23-00003; Applicant: City of Hesperia; Area affected: City-wide.
RECOMMENDED ACTION
It is recommended that the Planning Commission adopt Resolution No. PC -2023-14 recommending that the City Council introduce and place on first reading an ordinance approving Development Code Amendment DCA23-00001 and Specific Plan Amendment SPLA23-00003 modifying development standards associated with establishment of new vehicle wash facilities.
BACKGROUND
Within the past year the City has seen in increase in the number of new carwash development applications. In response to the recent expansion of carwash developments, the City Council determined that w ithout further regulation of the location and operation of carwash facilities , there is the potential for significant negative impacts from the development of such uses that cannot be mitigated . To that end, on February 7, 2023 the City Council adopted Urg ency Ordinance No. 2023-01 establishing a 45 -day moratorium on the establishment or expansion of new carwash facilities in the City. On March 21, 2023 the moratorium was extended for an additional period of ten (10) months and fifteen (15) days, for a tota l period of one year (Attachment 1).
The purpose of the development moratorium was to allow staff time to study the issues associated with carwash facilities and to present recommendations which would regulate the location of future carwash establishments and the types of development standards that should be imposed on their operation to mitigate any potential impacts.
ISSUES/ANALYSIS
Existing Regulations: Hesperia Municipal Code section 16.16.320 currently allows vehicle wash facilities in the General Commercial (C2), Service Commercial (C3), and the Limited Manufacturing (I1) zones with approval of a Conditional Use Permit (CUP). Vehicle wash facilities are listed as prohibited uses in the Convenience Commercial (C1) and General Manufacturing (I2) zones. The proposed Development Code Amendment would not make any modifications to the above zoning designations.
Additionally, within the Main Street and Freeway Corridor Specific Plan (Specific Plan), carwash facilities are allowed in the Regional Commercial (RC), Auto Sales Commercial (ASC) Neighborhood Commercial (NC) and Commercial Industrial Business Park (CIBP) zones with approval of a CUP. Carwash facilities are listed as a permitted use in the General Industrial (GI)
Attachment 3
Staff Report to the Planning Commission
DCA23-00001 and SPLA23-00003
April 13, 2023
zone of the Specific Plan. In addition, carwash facilities are listed as a prohibited uses in the Office Park (OP) and Office Commercial (OC) zones of the Specific Plan. Staff is proposing to change the current requirement to require a CUP for vehicle wash facilities within the G eneral Industrial (GI) zone.
Additionally, Section 16.16.365 of the Municipal Code contains specific design and use standards for carwash facilities. This particular section of the Municipal Code is applicable to properties that are located within and outside of the Specific Plan.
Proposed Regulations: There are three common types of carwash facilities: full service, express, and ancillary facilities. Full- service carwash facilities are usually stand-alone facilities where employees either hand wash or detail vehicles. Express carwash facilities are usually fully automated carwash facilities with self- serve vacuum stalls. Ancillary facilities are typically automated facilities that are associated with gas stations, and more commonly called drive- thru carwashes.
Staff is proposing to create specific development standards that would apply to all future carwash facilities. The proposed Development Code Amendment will add n ew distance and separation requirements that would require that each full service or express carwash facility be separated by a minimum of 2,000 feet from the nearest standalone carwash facility (i.e. full service or express facility). In addition, ancillary carwash facilitates which are part of a gas station would have to be located 1,000 feet away from the nearest standalone carwash facility. However, staff is not proposing a separation requirement from an ancillary carwash facility to another ancillary w ash facility. Lastly, any new carwash facility application must submit a market research study supporting the viability of the project in the proposed location.
Carwash facilitates will continue to require a Conditional Use Permit, allowing the Planning Commission final say in determining whether a proposed project is suitable and appropriate
Environmental: Approval of the Development Code Amendment is exempt from the requirements of the California Environmental Quality Act per Section 15061(b)(3), where it can be seen with certainty that there is no significant effect on the environment. The proposed Development Code Amendment is also exempt from the requirements of the California Environmental Quality Act by Section 16.12.415(B)(10) of the City’s CEQA Guidelines, as the Development Code Amendment does not propose to increase the density or intensity allowed in the General Plan.
Conclusion: The Development Code Amendment complies with the General Plan. Ensuring that all future vehicle wash facilities are subject to a conditional use permit and adding minimum separation requirements between full service and express carwash facilities will ensure that future sites are developed in an orderly and quality manner.
FISCAL IMPACT
There are no fiscal impacts identified with this action.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. March 21, 2023 City Council staff report
2. Resolution No. PC-2023-14 with Exhibit A.
City of Hesperia
STAFF REPORT
DATE: March 21, 2023
TO: Mayor and Council Members
FROM: Nils Bentsen, City Manager
BY: Rachel Molina, Assistant City Manager
Ryan Leonard, Senior Planner
SUBJECT: Consideration of an Urgency Ordinance Adopting an Interim Urgency Ordinance Pursuant to California Government Code Section 65858 Extending a Moratorium on the Establishment or Expansion of Car Washes for a Period of Ten (10) Months and Fifteen (15) Days.
RECOMMENDED ACTION
It is recommended that the City Council adopt Urgency Ordinance 2023 -04 pursuant to California Government Code Section 65858, extending a moratorium for a period of ten (10) months and fifteen (15) days a moratorium on the establishment or expansion of car washes.
BACKGROUND
Pursuant to State law, Government Code Section 65858, a city may enact an interim zoning ordinance on an urgency basis for the protection of public safety, health, and welfare by prohibiting any use(s) that a city is intending to study within a reasonable period of time. In recent years, the City of Hesperia has had several new proposed car wash businesses which negatively impact the quality of life within Hesperia and compromises Hesperia's ability to provide a variety of services and attract new businesses.
On February 7, 2023 the City Council adopted Urgency Ordinance No. 2023-01 establishing a 45-day moratorium on the establishment or expansion of car washes. Pursuant to State law, the adopted urgency ordinance is valid for 45 days and will expire on March 24, 2023, unless extended by the City Council. After holding a public hearing, the City Council can extend the urgency ordinance for up to an additional 10 months and 15 days, for a total period of one year.
As with the initial adoption of the urgency ordinance, a four-fifths (4/5) vote is required to extend the urgency ordinance.
Staff intends to present a development code amendment to the Planning Commission on April 13, 2023, that would include additional regulations for the establishment of new c ar wash facilities. After the Planning Commission hearing, the upcoming development code amendment would be presented to the City Council for a final decision. An extension of the urgency ordinance would allow staff additional time to complete the necessar y work to finalize the development code amendment and to present it to the Planning Commission and City Council.
ISSUES/ANALYSIS
There are three common types of car washes: full service, express, and ancillary facilities. Full - service car washes are usually stand-alone facilities where employees either hand wash or detail vehicles. Express car washes are usually fully automated car wash facilities with self - serve
Staff Report to the City Council
Urgency Ordinance-Carwash Moratorium
March 21, 2023
vacuum stalls. Ancillary facilities are typically automated facilities that are associa ted with gas stations, and more commonly called drive - thru car washes. There are currently no City - wide regulations in effect regarding the operational and locational standards for car washes of any type.
The City currently has 21 car washes including 13 express facilities, three full -service facilities, and five facilities that are attached to gas stations, minimarts, and other business. A table of all facilities citywide and their location is shown below in Table 1. Attachment 1 shows the locations of the facilities that are along Main Street and Bear Valley Road.
Table 1-Carwash Facilities Citywide
As developable commercial land becomes scarcer in the City, there is concern that the proliferation of car washes without due consideration presents an immediate threat to public health, safety, or welfare because car washes generate undesirable conditions for adjacent properties as a result of noisy, large -scale industrial equipment including vacuums, pumps, No. Address Type Name
1 16002 Main St Full Service Shark Sight Hand Car Wash and Hot Wax 2 16701 Main St Express Main Street Car Wash
3 13311 Main St Express Hesperia Speedwash
4 14076 Main St Express Xpress Car Wash Inc
5 14949 Bear Valley Rd Full Service Bear Valley Car Wash 6 18659 Bear Valley Rd Express Quick Quack Car Wash
7 16028 Main St Express E-Z Coin Car Wash
8 17165 Bear Valley Rd Express Bear Valley Coin Car Wash 9 17985 Bear Valley Rd Express Express Car Wash
10 17465 Main St Express Gaius Family Corp
11 13188 Main St Gas Station Chevron Travel Center
12 12720 Main St Gas Station Sky Marketing Inc
13 Main St Express Quick Quack Car Wash
14 16968 Main St Express Quick Quack
15 17112 Main St Express Mister
16 13100 Main St Gas Station Western Refining Retail
17 12675 Main St Express Main Street Inc
18 13537 Main St Express Sparkys Car Wash
19 16575 Bear Valley Rd Full Service Shine Auto Spa
20 15760 Ranchero Rd Gas Station Shell
21 12750 Main St Gas Station AM PM
Staff Report to the City Council
Urgency Ordinance-Carwash Moratorium
March 21, 2023
pressurized sprayers, dryers, engines, and car stereos. In addition, the use increases vehicle traffic in the immediate vicinity, and can cause runoff of chemicals. Airborne mist, odors from chemicals and vehicle exhaust are also a result of such uses.
Furthermore, the oversaturation of car washes in the City provides little economic benefit to the City or City residents as there are minimal sales tax revenues associated with the use, few employees hired, and typical wages paid would not increase the City’s overall median income.
Car washes are often noisy due to large industrial sized equipment and cause an increase in vehicular traffic where they are located. Additionally, car washes near residential uses have the potential to expose residents to excessive noise and traffic. The negative impacts frequently associated with operation of car washes will likely increase as car washes continue to proliferate throughout the City, resulting in an unregulated and significant negative impact upon public health, safety, and welfare of the community.
Staff intends to study the issues associated with car washes to determine which locations are most appropriate for the use, and the types of development standards that should be imposed on their operation to mitigate any potential impacts. This includes reviewing land use definitions for car washes to determine if revisions are needed, evaluating all land use district s in which car washes are permitted for suitability and study development standards and best practices from other jurisdictions to determine if they would be appropriate City-wide.
Further, staff believes that continued approval of entitlements, building permits, or other approvals for new or expanded car washes poses a current and immediate threat to the public health, safety or general welfare. Without further regulation of their location and operation, there is the potential for significant negative imp acts by the development of new car washes or the expansion of existing car washes that cannot be mitigated.
Pursuant to Government Code Section 65858, a city may adopt an interim ordinance, prohibiting any uses that may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time, for the immediate preservation of the general health, safety or welfare, provided the ordinance contains a declaration of the facts constituting the urgency, and is passed by not less than a four-fifths (4/5) vote of the City Council.
With adoption of this Ordinance, the City will extend the moratorium for a period of ten (10) months and fifteen (15) days, or until such time as a permanent development code amendment is in full force and effect.
FISCAL IMPACT
There are no fiscal impacts identified with this action.
ALTERNATIVE(S)
1. Deny the extension of the development moratorium and allow the existing 45 -day moratorium to expire
2. Provide alternative direction to staff.
ATTACHMENT(S)
1. Carwash locations along Main Street and Bear Valley Road
2. Urgency Ordinance 2023-04
Carwash Locations along Main Street from the I-15 freeway to Topaz Avenue CARWASH LOCATIONS ALONG MAIN STREET FROM THE I-15 FREEWAY TO TOPAZ AVENUE ATTACHMENT 1
ATTACHMENT 1A
Carwash Locations along Main Street from Seventh Avenue to I Avenue
CARWASH LOCATIONS ALONG MAIN STREET FROM SEVENTH AVENUE TO I AVENUE
Carwash Locations along Bear Valley Road from the I-15 freeway to Hesperia Road CARWASH LOCATIONS ALONG BEAR VALLEY ROAD FROM THE I-15 FREEWAY TO HESPERIA ROAD
ATTACHMENT 1B
Carwash Locations along Bear Valley Road from Hesperia Road to the eastern City boundary
CARWASH LOCATIONS ALONG BEAR VALLEY ROAD FROM HESPERIA ROAD TO THE EASTERN
CITY BOUNDARY
ATTACHMENT 1C
ORDINANCE NO. 2023-04
AN INTERIM URGENCY ORDINANCE OF THE CITY OF HESPERIA, CALIFORNIA, ENACTED PURSUANT TO CALIFORN IA GOVERNMENT CODE SECTION 65858
EXTENDING A TEMPORAR Y MORATORIUM ON THE ESTABLISHMENT OR
EXPANSION OF CAR WAS H FACILITIES WITHIN THE CITY LIMITS FO R TEN MONTHS (10) AND FIFTEEN (15) DAYS.
WHEREAS, the City of Hesperia has the authority and responsibility to protect the public health, safety, and welfare of the City; and
WHEREAS, the City has a compelling interest in protecting the public health, safety, and welfare of its citizens, residents, vis itors and bus inesses, and preserving the peac e and quiet of the neighborhoods within the City by regulating the establishment and expansion of car washes within City limits; and
WHEREAS, the City is responsible for adopting and implementing land use regulations within its boundaries; and
WHEREAS, the City has no other development standards or regulations applicable to the operation of Cash Washes; and
WHEREAS, the City’s pe rmissive policy towards car washes could result in a proliferation or oversaturation of said uses within the City; and
WHEREAS, developable land becomes scarcer in the City, there is concern that the proliferation of car washes without due consideration presents an imme diate threat to public health, safety, or welfare because car washes generate undesirable conditions for adjacent properties as a result of noisy, large-scale industrial equipment including vacuums, pumps, pressurized sprayers, dryers, engines, and car stereos. In addition the use increases vehicle traffic in the immediate vicinity, and can cause runoff of chemicals. Finally, airborne mist, odors from chemicals and vehicle exhaust are a result of such uses; and
WHEREAS, the oversaturation of car washes in the City provides little economic benefit to the City or City residents; and
WHEREAS, absent clear regulation, the proliferation and oversaturation of car washes in the City poses a threat to the public peace, health, and safety, and, unless the City takes action to regulate, the impacts described above are likely to continue to occur; and WHEREAS, the City desires to regulate car washes to ensure that public right-of-ways and public property remain free of public nuisances, safe and accessible for all users, and clear of conditions that pose threats to public health, safety, and welfare, to ensure that future development is undertaken in a manner consistent with the City’s General Plan, and to ensure that car wash Operators comply with State and City regulations tha t consider the public’s health, safety, and welfare; and
WHEREAS, the City anticipates that car wash operators may seek to establish additional car washes, or desire to expand existing car washes before a non-urgency ordinance would become effective; and
WHEREAS, Government Code Sections 36934, 36937 and 65858 expressly authorize the City Council to adopt an urgency ordinance for the immediate preservation of the public peace, health or safety and to prohibit a use that is in conflict with a contemplated g eneral plan, specific plan, or zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time; and WHEREAS, City staff require time to study and develop appr opriate regulations for car wash operators consistent with State and federal law; and
WHEREAS, on February 7, 2023 the City Council adopted Ordinance No. 2023-01 establishing a 45-day moratorium on the establishment or expansion of car washes within the C ity limits.
Ordinance No. 2023-01 will expire on March 24, 2023; and WHEREAS, the City now desires to impose a ten month (10) and fifteen (15) day moratorium on the establishment or expansion of car washes within the City limits in order to complete a proposed development code amendment that will create new development regulations and development standards for car wash facilities; and
WHEREAS, pursuant to the above-described express statutory authority and its police power, the City Council desires, on an u rgency basis, to temporarily prohibit establi shment of new, or expansion of existing, car washes within the City.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HESPERIA, CALIFORNIA DOES HEREBY ORDAIN AS FOLLOWS.
SECTION 1. FINDINGS
The City Council finds the facts set forth in the recitals in this Urgency Ordinance are true and correct, and are hereby incorporated by reference. Additionally, based on the foregoing, both verbal and written testimony at the public hearing, including the staff report, exhibits, and any materials provided by members of the public, the City Council finds as follows:
A. This Ordinance is being adopted in order to allow the City time to thoroughly study and develop the City’s laws, rules, procedures and fees related to the operation and establishment of car washes, to enable the City to adequately and appropriately preserve the health, safety and welfare of the community in the City of Hesperia.
B. For the purposes of this Ordinance the definition of “Car Wash” shall include full service, express, and ancillary facilities. Full-service car washes are usually stand-alone facilities where employees either hand wash or detail vehicles. Express car washes are usually fully automated car wash facilities with self-serve vacuum s talls. Ancillary facilities are typically automated facilities that are associated with gas stations, and more commonly called drive- thru car washes. This ordinance is intended to apply to car washes that are either the primary use or the accessory use of the relevant parcel. Temporary car washes (e.g., fundraising activities generally conducted at a s ervice station or other automotiv e-related bu siness, where volunteers wash vehicles by hand and the duration of the event is limited to one day) are not part of this definition.
C. For purposes of this Ordinance, “ Car Wash Operator” shall mean a person that manages and/or operates a car wash, whether for profit or not.
D. The City finds that in the absence of a regulatory framework to govern car washes, the adverse impacts frequently associated with car washes likely will occur, resulting in unregulated and significant negative impacts upon the public health, safety, and welfare of the community.
E. The City finds that the adverse impacts from car washes include the following:
(1) The proliferation of car washes throughout the City without due consideration presents an immediate threat to p ublic health, safety, or welfare because car washes generate undesirable conditions for adjacent properties as a result of use noisy, large -scale industrial equipment including vacuums, pumps, pressurized sprayers, dryers, engines and car stereos; and (2) In addition, the use tends to increase vehicle traffic in their immediate vicinity, and can cause runoff of chemicals; and
(3) Also, airborne mist, odors from chemicals and vehicle exhaust are also a result of such uses; and
F. The City also finds that car washes could have a negative economic impact for the City as follows:
(1) The use provides little economic benefit to the City or City residents, as there are minimal sales tax revenues associated with the use, few employees hired, and typical wages paid would not increase the City’s overall median income; and (2) The continued establishment of car washes will result in th e immediate loss of potential revenues to the City and the immediate loss of desirable commercial and/or manufacturing sites throughout the City.
G. The City needs time to draft a proposed text amendment to the Zoning Code to preserve the health, safety and welfare of the community in the City of Hesperia with respect to the operation of car washes.
SECTION 2. AUTHORITY AND EFFECT
The State Planning and Zoning Law (Cal. Gov’t Code Sections 65000, et seq.) broadly empowers the City to plan for and regulate the use of land in order to provide for orderly development, the public health safety and welfare , and a balancing of property ri ghts and the desires of the community and how its citizens envisions their city.
SECTION 3. MORATORIUM
A. During the Effective Period of this Ordinance as specified below, no permit shall be issued, for any development of any new car wash, nor may a permit be issued for the expansion of an existing car wash, within the City. The foregoing shall explicitly proh ibit the issuance of any zoning, land use, discretionary permit, building permit, environmental approval, business license or any other entitlement involving bu sinesses defined as a car wash herein, during the Effective Period.
B. Notwithstanding the fore going, any existing car wash facility shall be allowed to obtain their annual City of Hesperia business license. Additionally, permits may be issued for minor construction, rehabilitation and landscaping or other purposes not involving an expansion of building area. Any car wash facilities under construction with a valid building permit or any car wash facility approved by the Planning Commission on the effective date of th is Urgency Ordinance shall be exempt from this Urgency Ordinance.
SECTION 4. STUDY AND DEVELOPMENT
During the period of this Ordinance, the City shall study and develop as necessary City laws, rules, procedures and fees related to car washes, to enable the City to adequately an d appropriately preserve the heal th, safety and welfare of the community in the City of Hesperia.
Pursuant to Government Code Section 65858 the Planning Manager will issue a report for the legislative body on what has been accomplished duri ng the moratoriu m before it expires or is extended.
SECTION 5. URGENCY MEASURE
It is hereby declared that this Ordinanc e is necessary as an urgency measure for the preservation of the public health, safety and welfare. The City Council finds that current zoning regulations and land use plans do not adequately regulate the establishment and operation of car washes and therefore do not adequately protect the peace, health, safety and general welfare of the residents of the City or in communities around the City. The City Council finds the urgency measure is necessary in order to ensure adequate regulation of the operation of car washes. The facts constituting the urgency are:
The City of Hesperia does not currently have clear standards in the Hesperia Municipal Code related specifically to the establishment and expansion of car washes within the City.
The negative impacts frequently associated with operation of car washes will likely increase as car washes continue to proliferate throughout the City, resulting in an unregulated and significant negative impact upon public health, safety, and welfare of the community.
To permit the proliferation of car washes to continue within the City without being subject to specific regulations that are consistent with the General Plan, and that take into account the impacts that such establishments have, constitutes a threat to the health, safety, and welfare. Car washes generate undesirable conditions for adjacent properties. Airborne mist, odors from chemicals and vehicle exhaust, and noise from vacuums, pumps, pressurized sprayers, dryers, engines and car stereos are examples of common impa cts generated by these uses. The impacts can be detrimental to the quality of life for adjacent residents and disruptive to adjacent businesse s.
Allowing the continued establishment of car washes will re sult in the immediate p otential for disruptions to the quality of life for adjacent residents and businesses.
Car Wash facilities in the community provide the City with little economic benefit as there are minimal sales tax revenues associated with car wash operations.
Car Wash facilities hire few employees and typical wages paid at car wash facilities would not increase the City’s overall median incomes. Car washes therefore would not bolster employee densities in commercial and manufacturing zones or increase the per capita median income of the community. Allowing the continued establishment of car washes will result in the immediate loss of
potential income to City residents and reduce potential employment opportunities throughout the City.
Car wash operators are likely to seek to be located in the City based on the lack of explicit regulations, which will further exacerbate the impacts of such businesses.
Absent the adoption of this Interim Urgency Ordinance, the operation of car washes in the City would likely result in the negative and harmful secondary effects, as identified above, including, but not limited to, increased noise, traffic, pollution, and public health and safety concerns, and other impacts identified herein.
As a result of t he negative and harmful secondary effects associated with imprope rly regulated or unregulated operation of car washes, the current and immediate threat such effects pose to the public health, safety and welfare, it is necessary to adopt a temporary, ten month (10) and fifteen (15) day day moratorium on the establishment of new car washes and the expansion of existing car washes in the City.
A moratorium is immediately required to preserve the public health, safety and welfare and should be adopted immediately as an urgency ordinance, to make certain that the establishment and expansion of car washes is prohibited for the period of this Ordina nce. Imposition of a moratorium will allow the City sufficient time to conclude the prep aration of a com prehensive ordinance for the regulation of such activities.
SECTION 6. SEVERABILITY
The City Council hereby declares, if any provision, section, subsection, pa ragraph, sentence, phrase or word of this Ordinance is rendered or declared invalid or unconstitutional by any final action in a court of competent jurisdiction or by reason of any preemptive legislation, then the City Council would have independently adopted the remaining provisions, sections, subsections, paragraphs, sentences, phrases or words of this Ordinance and as such they shall remain in full force and effect.
SECTION 7. CEQA COMPLIANCE
Pursuant to the California Environmental Quality Act Guidelines ("CEQA," California Code of Regulations Title 14, §§ 15000 et seq.), this Interim Urgency Ordina nce is exempt fr om CEQA based on the following: ( i) this Ordinance is not a project within the meaning of CEQA Section 15378 because it has no potential for resulting in physical change to the environment, either directly or indirectly and (ii) this Ordinance is also exempt pursuant to CEQA Section 15061(b)(3) since the proposed ordinance involves an Interim Urgency Ordinance establishing a ten month (10) and fifteen (15) day moratorium on the operation of car washes and thus there is no possibility that the proposed ordinance may have a significant effect on the environment.
SECTION 8. EFFECTIVENESS OF ORDINANCE.
This Ordinance shall take effect immediately upon its adoption by a 4/5 vote, pursuant to the authority conferred upon the City Council by Government Code Sections 36934, 36937, and 65858.
This Ordinance shall be effective during the Effective Period which shall be from its adoption and shall be of no further force and effect ten months (10) and fifteen (15) days following the date of its adoption unless extended in accordance with the provisions set forth in Government Code Section 65858(b).
SECTION 9. PUBLICATION
The City Clerk shall certify as to the passage and adoption of this Interim Urgency Ordinance and shall cause the same to be published in a manner prescribed by law.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Hesperia, California, at a regular meeting held on this 21st day of March, 2023.
____________________________
Brigit Bennington, Mayor
ATTEST:
_____________________________
Erin Baum, Assistant City Clerk
RESOLUTION NO. PC-2023-14
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF
HESPERIA, CALIFORNIA, RECOMMENDING THAT THE CITY COUNCIL
ADOPT A DEVELOPMENT CODE AMENDMENT AND SPECIFIC PLAN
AMENDMENT MODIFYING DEVELOPMENT STANDARD S ASSOCIATED
WITH CARWASH DEVELOPMENTS (DCA23-00001 AND SPLA23-00003)
WHEREAS, on January 5, 1998, the City Council of the City of Hesperia adopted Ordinance No. 250, thereby adopting the Hesperia Municipal Code; and
WHEREAS, On September 2, 2008, the City Council of the City of Hesperia adopted Ordinance No. 2008-12, thereby adopting the Main Street and Freeway Corridor Specific Plan; and
WHEREAS, the City proposes to amend Chapter 16.16.365 (C) of the City of Hesperia Municipal Code which contains specific land use standards for vehicle wash facilities; and
WHEREAS, the City proposes to amend Chapter 9 o f the Main Street and Freeway Corr idor Specific Plan to require that any new vehicle wash facility in the General Industrial (GI) zone require a CUP; and
WHEREAS, the City finds that it is necessary to amend the development regulations applicable for carwash developments and require that all new o r expanded carwash facilities meet specified distance limitations between other carwash facil ities and that all gas stati on applications shall submit a market research study; and
WHEREAS, the proposed Development Code Amendment is exempt from the California Environmental Quality Act (CEQA) per Section 1506 1(b)(3), where it can be seen with certainty that there is no signifi cant eff ect on the environment. The proposed Amendments are also exempt fr om the requirements of the California Environmental Quality Act by Section
16.12.415(B)(10) of the City’s CEQA Gu idelines, as the Amendments are exempt if they do not propose to increase the density or intensity allowed in the General Plan; and
WHEREAS, on April 13, 2023, the Planning Commission of the City of Hesperia conducted a duly noticed public hearing pertaini ng to the proposed amendment and concluded said hearing on that date; and
WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.
NOW THEREFORE, BE IT RESOLVED BY THE CITY OF HESPERIA PLANNING COMMISSION AS FOLLOWS:
Section 1. The Planning Commission hereby specifically finds that all of the facts set forth in this Resolution are true and correct.
Section 2. Based upon substantial evidence presented to the Commission, including written and oral staff reports, the Commi ssion specifically finds that the proposed Ordinance is consistent with the goals and objectives of the adopted General Plan.
Section 3. Based on the findings and conclusions set forth in this Resolution, this Commission hereby recommends adoption of Development Code Amendment DCA23- ATTACHMENT 1
Resolution No. 2023-14
00001 and Specific Plan Amendment SPLA23-00003 modifying development standards associated with establishment of new of car washes and demonstrate co mpliance with specific criteria and devel opment standards prior to oper ating in the City as shown on Exhibit “A.”
Section 4. That the Secretary shall certify to the adoption of this Resolution.
ADOPTED AND APPROVED on this 13th day of April 2023.
__________________________________ _______________________________ Roger Abreo, Chair, Planning Commission
ATTEST:
_________________________________________
Maricruz Montes, Secretary, Planning Commission
EXHIBIT “A”
DCA23-00001 and SPLA23-00001
The following are modifications to Chapter 16.16.365 of the City of Hesperia Development Code regulations and Chapter 9 of the Main Street and Freeway Corridor Specific Plan (additions are in underlined red text and deletions are shown with red and strikethrough):
1) The following are modifications to Chapter 16.16.365 (C)-Vehicle Wash Facilities of the City Municipal Code
C. Vehicle Wash Facilities.
1. Vehicle wash facilities shall be developed in compliance with the following additional standards:
a. Full service and express vehicle wash facilities (i.e. standalone facilitates) shall be separated by a minimum of 2,000 feet, as measured from property lines.
b. Vehicle wash facilities that are ancillary to a primary use (i.e. a gas station) shall be separated by a minimum of 1,000 feet, as measured from the property line, from the nearest full service or express vehicle wash facility (i.e. standalone facility)
c. All gas station and car wash Conditional Use Permit applications shall include a market research study that analyses the feasibility of the project at the subject location.
d. All lights shall be reflected away from adjacent uses. e. Premises shall be maintained in a neat, orderly and environmentally safe manner, and all improvements shall be continuously maintained. f. Noise from vehicle wash activities shall not exceed levels established in Chapter 16.20, Article V (General Performance Standards).
MAIN STREET AND FREEWAY CORRIDOR SPECIFIC PLAN
Chapter 9, Subsection (I)- General Industrial Zone shall be amended to read:
1. Permitted Uses
The following uses are permitted in the General Industrial zone:
a) Commercial storage facilities (mini-warehouse).
b) Contractor’s storage yard.
c) Equipment (large) sales and rental.
d) Equipment (small) sales and rental.
e) Lumber yard and building materials (wholesale).
f) Manufacturing (indoors).
g) Offices (administrative, business, executive and professional, but not including medical or dental).
h) Outdoor storage, incidental to the primary use.
i) Publishing and printing.
j) Retail sales ancillary to a manufacturing use on-site (floor area not to exceed 15% of gross floor area up to a maximum of 7,500 square feet). k) Truck terminal.
l) Vehicle repair – major.
m) Vehicle repair – minor.
n) Vehicle wash facilities.
o) Warehousing and wholesale distribution centers – 200,000 square feet or less. p) Accessory structures and uses customarily incidental to any permitted uses when located on the same site with the main building and use. q) Veterinary services- clinics and small animal hospitals (short term boarding). r) Other similar uses, as interpreted by the Development Services Director or his/her designee
2. Conditionally Permitted Uses
The following uses are conditionally permitted in the General Industrial zone:
a) Bus terminals.
b) Kennels – boarding of domestic animals.
c) Vehicle fuel stations (i.e,. gasoline stations).
d) Warehousing and wholesale distribution centers – 200,000 square feet or more e) Vehicle wash facilities.
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City of Hesperia
STAFF REPORT
DATE: June 6, 2023
TO: City Council of the City of Hesperia
FROM: Nils Bentsen, City Manager
BY: Casey Brooksher, Director of Administrative Services
SUBJECT: Resolution of the City Council of the City of Hesperia and a Resolution of the Board of Directors of the Hesperia Joint Public Finance Authority , Each Authorizing the Issuance and Sale of the 2023 Refunding Lease Revenue Bonds and Related Documents and Actions
RECOMMENDED ACTION
It is recommended that the City Council adopt the following resolution:
Resolution No. CC 2023-24 – Resolution of the City of Hesperia approving, authorizing and directing execution of certain financing documents and directing certain related actions in connection with the refinancing of outstanding lease payment obligations
It is recommended that the Hesperia Joint Public Finance Authority adopt the following resolution:
Resolution No. HJPFA 2023-02 – Resolution of the Hesperia Joint Public Finance Authority approving, authorizing and directing execution of certain financing documents and directing certain related actions in connection with the refinancing of an outstanding lease obligation of the City of Hesperia
BACKGROUND
In 2013, the Hesperia Joint Public Finance Authority (“Authority”) issued refunding bonds (“2013 Bonds”) to refinance the City of Hesperia’s ( “City”) outstanding 2005 Variable Rate Demand Certificates of Participation (Civic Plaza Financing), which had financed the acquisition of the Civic Plaza. The 2013 Bonds are payable from lease payments made by the City from its General Fund. Based on current market conditions, there is an opportunity to refinance the outstanding 2013 Bonds for debt service savings (“Refunding Bonds”).
Issue Original Par
Hesperia Joint Public Finance Authority,
2013 Lease Revenue Bonds (Refinancing of the 2005 Civic Plaza Financing) *
$12,445,000
* Callable any date after 10/1/2023 at par. Current outstanding principal balance is $9,610,000 .
The City’s municipal advisor, in consultation with the proposed underwriter, estimates that, based on current market conditions:
Staff Report to the Mayor, City Council and the Hesperia Joint Public Finance Authority Authorizing the issuance and sale of the 2023 Refunding Lease Revenue Bonds June 6, 2023
(i) the projected debt service gross savings from issuing Refunding Bonds to refinance the outstanding 2013 Bonds is $2,121,900, or an average annual reduction in debt service payments of $163,223 over the next twelve (12) years.
(ii) the projected true interest cost is estimated to be 3.53%, and
(iii) the principal amount of outstanding bonds is projected to be reduced from $9,610,000 to $7,480,000.
The final bond year of the Refunding Bonds would remain the same as the 2013 Bonds, but the final maturity date will be extended by one month (from October 1, 2035 to November 1, 2035) to satisfy rating agency requirements.
The City’s Debt Policy requires a minimum net present value savings (including transaction costs) equal to at least 3% of the outstanding principal amount of the bonds to be refunded . Under current market conditions and using very conservative assumptions , the proposed refunding would result in projected net present value savings (including transaction costs) of 5.86% of the outstanding principal amount of the 2013 Bonds. In addition to generating debt service savings, the proposed refunding of the 2013 Bonds would also:
Potentially f ree up an encumbered City asset, which may facilitate future financings.
Use the existing debt service reserve fund to buy down the debt now instead of waiting to apply it as a credit against the debt service owed in the final year of the 2013 Bonds.
Reduce the principal amount of debt outstanding by about $2,130,000.
Below is a table summarizing the details of the Refunding Bonds:
*Preliminary subject to change. Based on interest rates as of May 2, 2023.
The Refunding Bonds will be payable from and secured by semi -annual lease payments made by the City to the Authority (and assigned to the Trustee) pursuant to the Property Lease Refunding Bonds
Refunding Type Current
Tax Status Tax-Exempt
Par Amount of 2023 Bonds $7,480,000
True Interest Cost 3.53%
Call Date 11/1/2033 @ 100%
Underlying Rating A-
Bond Insurance Rating AA
Amount of Refunded Bonds $9,610,000
Call Date of 2013 Bonds 10/01/2023 @ 100%
Final Maturity 11/1/2035
Savings Statistics
Average Annual Savings $163,223
Total Gross Savings $2,121,900
Net Present Value Savings $562,669
% Savings of Refunded Bonds 5.86%
Refunding Statistics*
Staff Report to the Mayor, City Council and the Hesperia Joint Public Finance Authority Authorizing the issuance and sale of the 2023 Refunding Lease Revenue Bonds June 6, 2023
described below with respect to the City properties identified in the list below (“Leased Property”).
The City will covenant to budget and appropriate for the lease payments, subject to abatement in the event of eminent domain or property damage. Although the City is expected to pay the lease payments from its General Fund, there is no lien upon or pledge of any particular City revenues.
Initial Leased Property:
• City Hall*
• Civic Plaza Park
*It is anticipated that City Hall will be released and substituted with the Hesperia Branch Library.
Bond Sizing (Not-to-Exceed Amounts) - In order to authorize the sale of the Bonds, staff must provide not-to-exceed amounts in the City Resolution and the Authority Resolution. In order to provide staff with maximum flexibility in determining the optimal size of the Bonds, staff requests:
a not to exceed principal amount of $9,000,000; a net present value savings of not less than 3% of the outstanding principal amount of the 2013 Bonds ; and a not -to-exceed Underwriter ’s discount of 1.10%. These limits have been included in the City Resolution and Authority Resolution to create a reasonable amount of flexibility for the City and the Authority, even though the final principal amount, and underwriter’s discount are anticipated to be less, and in the case of the net present value savings, savings are anticipated to be greater.
Official Action - Tonight’s action is the last step in the process to refund the 2013 Bonds. It is anticipated that the refunding will be completed in July 2023. The key milestones to complete the refunding are identified below:
Secure underlying credit rating and municipal bond insurance (Pending) Adoption of Resolutions approving the Refunding Bonds , Preliminary Official Statement and related financing documents (Tonight’s Action)
Negotiated sale of Refunding Bonds (June 2023)
Refunding Bonds Closing (July 2023)
Approval of tonight’s resolutions will authorize the issuance of the Refunding Bonds and approve the Preliminary Official Statement and related documents and actions as follows:
Approve Preliminary Official Statement – The form of the Preliminary Official Statement is approved and Designated Officers of the City and the Authority are authorized to deem it final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934. Stifel, Nicolaus & Company, Inc., as the underwriter for the Refunding Bonds (“Underwriter”), is authorized to distribute the Preliminary Official Statement to potential investors .
Designated Officers are authorized to finalize the Official Statement after the Refunding Bonds have been priced by the Underwriter.
Approve Continuing Disclosure Certificate – The form of the Continuing Disclosure Certificate is approved in substantially the form thereof or with such changes as may be approved by a Designated Officer of the City and is included in the Preliminary Official Statement as Appendix D.
Staff Report to the Mayor, City Council and the Hesperia Joint Public Finance Authority Authorizing the issuance and sale of the 2023 Refunding Lease Revenue Bonds June 6, 2023
Approve Site and Facilities Lease – The form of the Site and Facilities Lease is approved in substantially the form thereof or with such changes as may be approved by a Designated Officer. The Site and Facilities Lease is between the City and the Authority and allows the City to lease the Leased Property to the Authority in order to allow the Authority to sub-lease the Leased Property back to the City pursuant to the Property Lease.
Approve Property Lease – The Authority will sub-lease the Leased Property back to the City pursuant to the Property Lease. The City will covenant in the Property Lease to budget and appropriate for the scheduled lease payments – in an amount sufficient to pay debt service on the Refunding Bonds – on an annual basis.
Approve Indenture – Under the Indenture, between the Authority and U.S. Bank Trust Company, National Association, as trustee, the Authority will issue the Refunding Bonds; the trustee will use the lease payments paid by the City and assigned by the Authority to pay debt service on the Refunding Bonds. Proceeds from the sale of the Refunding Bonds by the Authority to the Underwriter will be used by the Authority to pay the site lease payment. The proceeds of the site lease payment will be used to (i) fund a refund ing escrow for the 2013 Bonds and (ii) pay the costs of issuing the Refunding Bonds. There is no debt service reserve fund for the Refunding Bonds.
Approve Escrow Deposit and Trust Agreement– This Agreement with U.S. Bank Trust Company, National Association, as escrow bank and trustee for the 2013 Bonds, governs the use of the Refunding Bonds proceeds (and other available funds, including the 2013 Reserve Fund) to pay the principal and interest due on the 2013 Bonds on October 1, 2023 and to redeem the remaining principal of the 2013 Bonds on October 1, 2023. This document includes directions to invest the Escrow Fund, and includes forms of redemption notice and defeasance notice.
Approve Bond Purchase Agreement – The form of the Bond Purchase Agreement is approved in substantially the form thereof or with such changes as may be approved by a Designated Officer. The City and the Authority will enter into a Bond Purchase Agreement with the Underwriter with respect to the Refunding Bonds. The Bond Purchase Agreement will specify the conditions under which the Underwriter will purchase the Refunding Bonds.
Approve Amendments to 2012 Financing Documents – The Finance Authority previously issued its 2012 Lease Revenue Bonds (Water Rights Acquisition) in the aggregate principal amount of $26,735,000 (the “2012 Bonds”), under an Indenture dated as of December 1, 2012; the 2012 Bonds are payable from lease payments made by the City under a Property Lease dated as of December 1, 2012 (the “2012 Property Lease”), between the Finance Authority as lessor and the City as lessee . Staff is recommending that the City amend the 2012 Property Lease and other documents relat ed to the 2012 Bonds to release the Hesperia Branch Library and the Civic Plaza Park as leased property thereunder. This release will provide greater flexibility to the City with future financings.
The amendments are approved in substantially the form on file with the City Clerk , with such changes as may be approved by a Designated Officer.
Approve County Subordination Agreement – Staff recommends that the Hesperia Branch Library be leased under the Property Lease and the Site Lease, but, in order to lease the Hesperia Branch Library, the City needs to receive from the County of San
Staff Report to the Mayor, City Council and the Hesperia Joint Public Finance Authority Authorizing the issuance and sale of the 2023 Refunding Lease Revenue Bonds June 6, 2023
Bernardino a written subordination of its interests under an unrecorded lease agreement to the Property Lease and the Site Lease . The form of the subordination agreement between the City and the County is approved in substantially the form on file with the City Clerk, with such changes as may be approved by a Designated Officer. If required by the County, the Authority will be added as a party.
The resolution authorizes the Designated Officers to do any and all things and take any and all actions, which they, or any of them, may deem necessary or advisable in connection with the issuance, sale, and delivery of the Refunding Bonds.
Compliance with Federal Securities Laws - The attached Preliminary Official Statement has been reviewed and approved for transmittal to the City Council and the Board of Directors of the Authority by the City’s financing team. The distribution of the Preliminar y Official Statement by the Authority is subject to federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the Preliminary Official Statement to include all facts that would be material to an investor in the Refunding Bonds. Material information is information that there is a substantial likelihood would have actual significance in the deliberations of the reasonable investor when deciding whether to buy or sell the Refunding Bonds. If the City Council and the Board of Directors conclude that the Preliminary Official Statement includes all facts that would be material to an investor in the Refunding Bonds, they must adopt a resolution that authorizes staff to execute a certificate to the effect that the Preliminary Official Statement has been “deemed final.”
The Securities and Exchange Commission (the “SEC”), the agency with regulatory authority over municipal entities’ compliance with the federal securit ies laws, has issued guida nce as to the duties of the City Council/Board of Directors with respect to their approval of the Prelim inary Official Statement. In its “Report of Investigation in the Matter of County of Orange, California as it Relates to the Conduct of the Members of the Board of Supervisors” (Release No. 36761 / January 24, 1996) (the “Release”), the SEC indicated that, if a member of the City Council/Board of Directors has knowledge of any facts or circumstances that an investor would want t o know about prior to investing in the Refunding Bonds, whether relating to their repayment, tax-exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she should endeavor to discover whether such facts are adequately disclosed in the Preliminary Official Statement. In the Release, the SEC indicated that the steps that a member of the City Council/Board of Directors could take include becoming familiar with the Preliminary Official Statement and questioning staff and consultants about the disclosure of such facts.
Set forth below is a summary of the financing, including cross -references to specific sections of the Preliminary Official Statement.
Purpose of Financing. The 2023 Bonds are being issued to ( refinance the 2013 Bonds, which would reduce the semi-annual lease payments made by the City from its General Fund and (ii) pay the costs of issuing the 2023 Bonds. See the section of the Preliminary Official Statement entitled “REFUNDING PLAN.”
Security for the Refunding Bonds. The 2023 Bonds will be payable solely from and secured by Revenues and certain funds and accounts held under the Indenture. Revenues consist primarily of lease payments (the “Base Rental”) payments to be made by the City pursuant to the Property Lease for the use of the Leased Property See “THE LEASED PROPERTY.” Under the Property Lease, the City covenants to take such action as necessary to include the Base
Staff Report to the Mayor, City Council and the Hesperia Joint Public Finance Authority Authorizing the issuance and sale of the 2023 Refunding Lease Revenue Bonds June 6, 2023
Rental payments in its annual budgets and to make all necessary appropriations for such Base Rental payments (subject to abatement as described below). See “SECURITY FOR THE 2023 BONDS – Source of Payments; Covenant to Appropriate.”
Risk Factors. Base Rental payments are subject to complete or partial abatement in the event and to the extent that there is substantial interference with the City’s right to use and occupy the Leased Property. See the sections of the Preliminary Official Statement entitled “SECURITY FOR THE 2023 BONDS – Abatement” and “BOND OWNERS’ RISKS – Abatement.” Abatement of Base Rental payments under the Property Lease, to the extent payment is not made from alternative sources as described in the Official Statement, would result in all Bond Owners receiving less than the full amount of principal of and interest on the 2023 Bonds. To the extent that moneys in any of the funds and accounts established under the Indenture or proceeds of rental interruption insurance are available, Base Rental payments (or a portion thereof) may be made during periods of abatement.
The Refunding Bonds are payable from Base Rental payments made by the City under the Property Lease. Because the City expects to pay the Base Rental payments from its General Fund, the Official Statement includes material information about the City’s finances in APPENDIX A. Risk factors related to the General Fund are set forth in the sections of the Preliminary Official Statement entitled “BOND OWNERS’ RISKS.”
FISCAL IMPACT
The issuance of the Refunding Bonds will result in an average annual reduction in debt service payments of approximately $163,223. These are estimated savings based on market conditions as of May 2, 2023, and are subject to change. Costs will be paid from the proceeds of th e Refunding Bonds.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. Resolution No. 2023-24
2. HPJFA Resolution No. 2023-02
3. Preliminary Official Statement (including Continuing Disclosure Certificate)
4. Site and Facilities Lease
5. Property Lease
6. Indenture
7. Escrow Deposit and Trust Agreement
8. Bond Purchase Agreement
9. Amendment No. 1 to Site and Facilities Lease (related to the 2012 Bonds)
10. Amendment No. 1 to Property Lease (related to the 2012 Bonds)
11. Subordination Agreement
RESOLUTION NO. 2023-24
RESOLUTION OF THE CITY OF HESPERIA APPROVING, AUTHORIZING AND
DIRECTING EXECUTION OF CERTAIN FINANCING DOCUMENTS AND
DIRECTING CERTAIN RELATED ACTIONS IN CONNECTION WITH THE
REFINANCING OF OUTSTANDING LEASE PAYMENT OBLIGATIONS
WHEREAS, the City of Hesperia (the “City”) and the Hesperia Water District entered into a Joint Exercise of Powers Agreement, dated as of October 2, 2012, establishing the Hesperia Joint Public Finance Authority (the “Finance Authority”) for the purpose, a mong others, of providing assistance to the City with its financing programs; and WHEREAS, to provide assistance to the City with the financing of its acquisition of approximately 5,971 acre-feet of base annual production rights in the Alto Subarea of the Mojave Water Basin previously held by Rancho Las Flores, LLC, the Finance Authority previously issued its 2012 Lease Revenue Bonds (Water Rights Acquisition) in the aggregate principal amount of $26,735,000 (the “2012 Bonds”), under an Indenture dated as of December 1, 2012; the 2012 Bonds are payable from lease payments made by the City under a Property Lease dated as of December 1, 2012 (the “2012 Property Lease”), between the Finance Authority as lessor and the City as lessee; and
WHEREAS, the property leased by the City from the Finance Authority under the 2012 Lease Agreement includes the real property and improvements constituting the Hesperia Branch Library, the Civic Plaza Park and the Hesperia Police Station; and WHEREAS, in order to finance acquisition and construction of a new Civic Plaza and related on -site improvements, the City previously caused execution and delivery of its 2005 Variable Rate Demand Certificates of Participation (Civic Plaza Financing) (the “ 2005 Certificates”) pursuant to a Trust Agreement, dated as of May 1, 2005, among the City, th e Hesperia Public Financing Authority (the “Financing Authority”) and a corporate trustee; the 2005 Certificates represented interests in lease payments made by the City to the Financing Authority pursuant to a Lease Agreement, dated as of May 1, 2005; and WHEREAS, for the purpose of refinancing the 2005 Certificates, the City subsequently caused the Finance Authority to issue its 2013 Refunding Lease Revenue Bonds (Refinancing of 2005 Civic Plaza Financing) in the aggregate principal amount of $12,445,000 (the “2013 Bonds”), under an Indenture dated as of October 1, 2013 ; the 2013 Bonds are payable from lease payments made by the City under a Property Lease dated as of October 1, 2013 (the “2013 Lease Agreement”), between the Finance Authority as lessor and the City as lessee; and WHEREAS, the City leased the real property and improvements comprising City Hall from the Finance Authority under the 2013 Lease Agreement; and WHEREAS, the 2013 Bonds maturing on or after October 1, 2024 are subject to optional redemption, without premium, prior to maturity on any date on or after October 1, 2023, at the option of the Finance Authority; and
WHEREAS, in order to achieve cash flow savings, the City wishes to prepay the lease payments payable by the City under the 2013 Lease Agreement and to cause the Finance Authority to defease and redeem the 2012 Bonds and the 2013 Bonds, and, for that purpose, the
Finance Authority proposes to issue lease revenue bonds (the “2023 Lease Revenue Bonds”) under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Law”); and
WHEREAS, in order to accomplish the refinancing plan , (i) the City and the Finance Authority will enter into a Site and Facilities Lease (the “Site Lease”), under which the City will lease to the Finance Authority certain real property and improvements of the City (the “Leased Property”), (ii) the City and the Finance Authority will enter into a Property Lease (the “Property Lease”), under which the Finance Authority will sublease the Leased Property to the City, (iii) the City and the Finance Authority will enter into an Escrow Deposit and Trust Agreement (the “Escrow Agreement”) with U.S. Bank Trust Company, National Association, as escrow bank and trustee for the 2013 Bonds, (iv) the Finance Authority will enter into an Indenture (the “Indenture”) with U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) and (v) the Finance Authority will issue the 2023 Lease Revenue Bonds, which will be payable from the lease payments made by the City to the Finance Authority under the Property Lease; and
WHEREAS, there has been submitted to the City Council a form of preliminary Official Statement in connection with the marketing of the 2023 Lease Revenue Bonds and the City Council, with the aid of its staff, has reviewed the preliminary Official Statement to assure proper disclosure of all material facts relating to the 2023 Lease Revenue Bonds that are in the personal knowledge of the Council Members and the City staff; and
WHEREAS, the Finance Authority and the City propose to sell the 2023 Lease Revenue Bonds to Stifel, Nicolaus & Company, Incorp orated (the “Underwriter”) pursuant to a bond purchase agreement (the “Bond Purchase Agreement”), the form of which is on file with the City Clerk; and
WHEREAS, in order to assist the Underwriter in complying with Rule 15c2 -12 of the Securities and Exchan ge Commission, the City will undertake certain continuing disclosure obligations with respect to the 2023 Lease Revenue Bonds pursuant to a continuing disclosure certificate to be executed by the City (the “Continuing Disclosure Certificate”); and
WHEREAS, pursuant to Government Code Section 5852.1, certain information relating to the 2023 Lease Revenue Bonds is set forth in Exhibit A attached to this Resolution, and such information is hereby disclosed and made public; and
WHEREAS, the City and the Public Finance Authority intend to lease the Hesperia Branch Library and the Civic Plaza Park under the Property Lease and the Site Lease, but, in order to lease the Hesperia Branch Library, the City needs to receive from the County of San Bernardino (the “Coun ty”) a written subordination of its interests under an unrecorded lease agreement (“County Library Lease Agreement”) to the Property Lease and the Site Lease; and
WHEREAS, as a result, the City intends to lease the City Hall under the Property Lease and the Site Lease in place of the Hesperia Branch Library until the County has agreed to subordinate the County Library Lease Agreement to the Property Lease and the Site Lease, after which the City intends to substitute the Hesperia Branch Library for the Hesperia City Hall; and
WHEREAS, the City has duly considered such transactions and wishes at this time to approve certain matters relating to the transactions as being in the public interest of the City;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hesperia, as follows:
Section 1. Pursuant to the Law, and based on the information provided to the City Council by City staff and consultants, all as set forth in the proceedings and documents providing for the issuance and delivery of th e 2023 Lease Revenue Bonds , the City Council hereby finds and determines that the issuance of the 2023 Lease Revenue Bonds and the transactions related thereto will result in significant public benefits.
Section 2. The City Council hereby approves the pre paration of, and hereby authorizes the Mayor, the City Manager, or the written designee of the City Manager (each, a “Designated Officer”), acting alone, to deem final within the meaning of Rule 15c2 -12 of the Securities Exchange Act of 1934, as amended (except for permitted omissions), the preliminary form of the Official Statement describing the 2023 Lease Revenue Bonds (the “Preliminary Official Statement”) on file with the City Clerk, together with such changes or additions as a Designated Officer, acting alone may deem necessary, desirable or appropriate upon consultation with bond counsel. Distribution of the Preliminary Official Statement by the Underwriter is hereby approved.
A Designated Officer, acting alone, is hereby authorized to execute the f inal form of the Official Statement with such changes or additions as the Designated Officer deems necessary, desirable or appropriate upon consultation with bond counsel, and the execution of the final Official Statement by the City shall be conclusive ev idence of the approval of any such additions and changes. The City Council hereby authorizes the distribution of the final Official Statement.
Section 3. The City Council hereby approves the forms of the Site Lease and the Property Lease on file with the City Clerk, with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the City Clerk is hereby authorized to attest, as appropriate, the Site Lease and the Property Lease. The City Council hereby authorizes the performance by the City of its obligations under the Site Lease and the Property Lease. The City Council further hereby authorizes and directs execution and delivery by a Designated Officer of a memorandum of Property Lease.
Section 4. The City Council hereby approves the forms of the amendments to the site lease and the 2012 Property Lease related to the 2012 Bonds (the “2012 Lease Amendments”) on file with the City Clerk, with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer , acting alone, is hereby authorized and directed to execute, and the City Clerk is hereby authorized to at test, as appropriate, the 2012 Lease Amendments and such other agreements, documents and certificates as may be necessary or desirable to effectuate the purposes of the 2012 Lease Amendments. For the avoidance of doubt, the City Council hereby approves an d directs execution and delivery of the 2012 Lease Amendments regardless of whether the 2023 Lease Revenue Bonds are issued.
Section 5. The City Council hereby approves the form of a subordination agreement (the “Subordination Agreement”) between the City and the County on file with the City Clerk, with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a
Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the City Clerk is hereby authorized to attest, as appropriate, the Subordination Agreement and such other agreements, documents and certificates as may be necessary or desirable to effectuate the purposes of the Subordination Agreement. If requested by the County or another interested party, the Subordination Agreement may be updat ed to add the Finance Authority as a party.
Section 6. The City Council hereby approves the Continuing Disclosure Certificate in the form on file with the City Clerk, together with such changes thereto as a Designated Officer, acting alone, deems necessary, desirable or appropriate, the execution of which by a Designated Officer shall be conclusive proof of the approval thereof. A Designated Officer, acting alone, is hereby authorized and directed to execute the Continuing Disclosure Certificate, with such changes, insertions and omissions as may be approved by such official executing the Continuing Disclosure Certificate.
Section 7. The City Council hereby approves the form of the Bond Purchase Agreement on file with the City Clerk, with such a dditions thereto and changes therein as a Designated Officers, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions or changes; provided that no such addition or change shall provide for an underwriter’s discount (exclusive of any original issue discount) of greater than 1.1% of the principal amount of the 2023 Lease Revenue Bonds or net present value savings of less than 3% of the outstanding principal amount of the 2013 Bonds . A Designated Officer, acting alone, is hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City and to take all actions necessary to fulfill the City’s obligations thereunder.
Section 8. The City Council hereby approves the form of the Escrow Agreement on file with the City Clerk, with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or a ppropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the City Clerk is hereby authorized to attest, the Escrow Agreement. The City Council hereby authorizes the performance by the City of its obligations under the Escrow Agreement.
Section 9. The Designated Officers, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name of and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the 2023 Lease Revenue Bonds, the refinancing of the 2013 Bonds, the selection of the Leased Property under the Property Lease, the removal of the Hesperia Branch Library and Civic Plaza Park as leased property with respect to the 2012 Bonds, the Subordination Agreement, the elimination of encumbrances on title to the Leased Property (including any amendments to the documents related to the 2013 Bonds), the purchase of one or more insurance policies for the 2023 Lease Revenue Bonds if determined to be in the best interest of the City by a Designated Officer, and the consummation of the transactions as described herein, and such documents, assignments, certificates and agreements as may be required by any of the documents approved herein.
Section 10. This Resolution shall take effect immediately upon its passage and adoption.
* * * * * * * * * * * *
PASSED, APPROVED AND ADOPTED by the City Council of the City of Hesperia at a regular meeting held this 6th day of June, 2023.
AYES: Councilmember:
NOES: Councilmember:
ABSENT: Councilmember:
ABSTAIN: Councilmember
Brigit Bennington, Mayor
ATTEST:
Erin Baum, Assistant City Clerk
EXHIBIT A
REQUIRED GOOD FAITH ESTIMATES PURSUANT TO
GOVERNMENT CODE SECTION 5852.1
1. True Interest Cost of the 2023 Lease Revenue Bonds: 3.53%.
2. Finance charge for the 2023 Lease Revenue Bonds, being the sum of all fees and charges paid to third parties (Co sts of Issuance of approximately $287,744 plus estimated underwriter’s compensation of $82,280): $370,024.
3. Amount of proceeds of the 2023 Lease Revenue Bonds expected to be received by the Finance Authority, net of proceeds for Costs of Issuance described in (2) above and net of capitalized interest (if any) and reserves (if any) paid or funded with the proceed s of the 2023 Lease Revenue Bonds:
$7,983,372.
4. Total payment amount for the 2023 Lease Revenue Bonds, being the sum of (a) debt service to be paid on the 2023 Lease Revenue Bonds to final maturity, plus (b) any financing costs not paid from proceeds o f the 2023 Lease Revenue Bonds: $10,417,722.
*All amounts and percentages are estimates, and are made in good faith by the City based on information available as of the date of adoption of this Resolution.
RESOLUTION HPJFA NO. 2023-02
RESOLUTION OF THE HESPERIA JOINT PUBLIC FINANCE AUTHORITY
APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN
FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS IN
CONNECTION WITH THE REFINANCING OF AN OUTSTANDING LEASE
OBLIGATION OF THE CITY OF HESPERIA
WHEREAS, the City of Hesperia (the “City”) and the Hesperia Water District entered into a Joint Exercise of Powers Agreement, dated as of October 2, 2012, establishing the Hesperia Joint Public Finance Authority (the “Finance Authority”) for the purpose, among others, of providing assistance to the City with its financing programs; and
WHEREAS, to provide assistance to the City with the financing of its acquisition of approximately 5,971 acre-feet of base annual production rights in the Alto Subarea of the Mojave Water Basin previously held by Rancho Las Flores, LLC, the Finance Authority previously issued its 2012 Lease Revenue Bonds (Water Rights Acquisition) in the aggregate principal amount of $26,735,000 (the “2012 Bonds”), under an Indenture dated as of December 1, 2012; the 2012 Bonds are payable from lease payments made by the City under a Property Lease dated as of December 1, 2012 (the “2012 Property Lease”), between the Finance Authority as lessor and the City as lessee; and
WHEREAS, the property leased by the City from the Finance Authority under the 2012 Lease Agreement includes the real property and improvements constituting the Hesperia Branch Library, the Civic Plaza Park and the Hesperia Police Station; and
WHEREAS, in order to finance acquisition and construction of a new Civic Plaza and related on -site improvements, the City previously caused execution and delivery of its 2005 Variable Rate Demand Certificates of Participation (Civic P laza Financing) (the “2005 Certificates”) pursuant to a Trust Agreement, dated as of May 1, 2005, among the City, the Hesperia Public Financing Authority (the “Financing Authority”) and a corporate trustee; the 2005 Certificates represented interests in lease payments made by the City to the Financing Authority pursuant to a Lease Agreement, dated as of May 1, 2005; and
WHEREAS, for the purpose of refinancing the 2005 Certificates, the City subsequently caused the Finance Authority to issue its 2013 Refunding Lease Revenue Bonds (Refinancing of 2005 Civic Plaza Financing) in the aggregate principal amount of $12,445,000 (the “2013 Bonds”), under an Indenture dated as of October 1, 2013 ; the 2013 Bonds are payable from lease payments made by the City under a Property Lease dated as of October 1, 2013 (the “2013 Lease Agreement”), between the Finance Authority as lessor and the City as lessee; and
WHEREAS, the City leased the real property and improvements comprising City Hall from the Finance Authority under the 2013 Lease Agreement; and
WHEREAS, the 2013 Bonds maturing on or after October 1, 2024 are subject to optional redemption, without premium, prior to maturity on any date on or after October 1, 2023, at the option of the Finance Authority; and
WHEREAS, in order to achieve cash flow savings, the City wishes to prepay the lease payments payable by the City under the 2013 Lease Agreement and to cause the Finance Authority to defease and redeem the 2013 Bonds, and, for that purpose, the Finance Authority proposes to issue lease revenue bonds (the “2023 Lease Revenue Bonds”) under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Law”); and
WHEREAS, in order to accomplish the refinancing plan, (i) the City and the Finance Authority will enter into a Site and Facilities Lease (the “Site Lease”), under which the City will lease to the Finance Authority certain real property and improvements of the City (the “Leased Property”), (ii) the City and the Finance Authority will enter into a Property Lease (the “Property Lease”), under which the Finance Authority will sublease the Leased Property to the City, (iii) the City and the Finance Authority will enter into an Escrow Deposit and Trust Agreement (the “Escrow Agreement”) with U.S. Bank Trust Company, National Association, as escrow bank and trustee for the 2013 Bonds, (iv) the Finance Authority will enter into an Indenture (the “Indenture”) with U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) and (v) the Finance Authority will issue the 2023 Lease Revenue Bonds, which will be payable from the lease payments made by the City to the Finance Authority under the Property Lease; and
WHEREAS, there has been submitted to the Board of Directors (the “Board”) of the Finance Authority a form of preliminary Official Statement in connection with the marketing of the 2023 Lease Revenue Bonds and the Board, with the aid of its staff, has reviewed the preliminary Official Statement to assure proper disclosure of all material facts relating to the 2023 Lease Revenue Bonds that are in the personal knowledge of the members of the Board; and
WHEREAS, the Finance Authority and the City propose to sell the 2023 Lease Revenue Bonds to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) pursuant to a bond purchase agreement (the “Bond Purchase Agreement”), the form of which is on file with the City Clerk; and
WHEREAS, pursuant to Government Code Section 5852.1, certain information relating to the 2023 Lease Revenue Bonds is set forth in Exhibit A attached to this Resolution, and such information is hereby disclosed and made public; and
WHEREAS, as permitted by Section 12.02 of the 2012 Property Lease, the City wishes to amend the 2012 Property Lease and certain other documents related to the 2012 Bonds to release the Hesperia Branch Library and the Civic Plaza Park from the 2012 Property Lease; and
WHEREAS, the City and the Public Finance Authority intend to lease the Hesperia Branch Library and the Civic Plaza Park under the Property Lease and the Site Lease, but, in order to lease the Hesperia Branch Library, the City needs to receive from the County of San Bernardino (the “County”) a written subordination of its interests under an unrecorded lease agreement (“County Library Lease Agreement”) to the Property Lease and the Site Lease; and
WHEREAS, as a result, the City intends to lease the City Hall under the Property Lease and the Site Lease in place of the Hesperia Branch Library until the County has agreed to subordinate the County Library Lease Agreement to the Property Lease and the Site Lease, after which the City intends to substitute the Hesperia Branch Library for the Hesperia City Hall; and
WHEREAS, the Board has duly considered these transactions and wishes at this time to approve these transactions and make certain findings regarding significant public benefits to the Finance Authority’s members with respect to these transactions;
NOW, THEREFORE, BE IT RESOLVED, BY THE BOARD OF DIRECTORS OF THE HESPERIA JOINT PUBLIC FINANCE AUTHORITY, as follows:
Section 1. Findings and Determinations. Pursuant to the Act, the Board hereby finds and determines that the issuance of the 2023 Lease Revenue Bonds and the transactions related thereto will result in significant public benefits to its members.
Section 2. Issuance of Bonds; Approval of Indenture. The Board hereby authorizes the issuance of the 2023 Lease Revenue Bonds in the maximum principal amount of not to exceed $9,000,000, subject to the requirement that the issuance of the 2023 Lease Revenue Bonds result in net present value savings equal to or greater than 3% of the outstanding principal amou nt of the 2013 Bonds and the Underwriter’s discount (exclusive of any original issue discount) does not exceed 1.1% of the principal amount of the 2023 Lease Revenue Bonds . The 2023 Lease Revenue Bonds shall be issued pursuant to the Indenture. The Board hereby approves the Indenture in the form on file with the Secretary of the Finance Authority (the “Secretary”), together with such additions thereto and changes therein as the Chair, the Executive Director or the Treasurer, or the written designee of any of them (each, a “Designated Officer”), acting alone, deems necessary, desirable or appropriate upon consultation with Jones Hall, A Professional Law Corporation, as bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final form of the Indenture for and in the name and on behalf of the Finance Authority.
The Board hereby authorizes the performance by the Finance Authority of its obligations under the Indenture. The Board further hereby authorizes and directs execution and delivery by a Designated Officer of a memorandum of Indenture.
Section 3. Approval of Property Lease and Site Lease. The Board hereby approves the form of the Property Lease and the Site Lease by and between the Finance Authority and the City in the form s on file with the Secretary together with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final forms of the Property Lease and the Site Lease for and in the name of and on behalf of the Finance Authority. The Finance Authority hereby authorizes the performance by the Finance Authority of its obligations under the Property Lease and the Site Lease. The Board further hereby authorizes and directs execution and delivery by a Designated Officer of a memorandum of Property Lease.
Section 4. Approval of 2012 Lease Amendments The Board hereby approves the forms of the amendments to the site lease and the 2012 Property Lease related to the 2012 Bonds (the “2012 Lease Amendments”) on file with the Secretary, together with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the Secretary is hereby authorized to attest, as appropriate, the 2012 Lease Amendments and such other agreements, documents
and certificates as may be necessary or desirable to effectuate the purposes of the 2012 Lease Amendments. For the avoidance of doubt, the Board hereby approves and directs execution and delivery of the 2012 Lease Amendments regardless of whether the 2023 Lease Revenue Bonds are issued.
Section 5. Subordination Agreement . The Board hereby approves the form of a subordination agreement (the “Subordination Agreement”) between the City and the County on file with the Secretary, with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel. If requested by the County or another interested party, the Subordination Agreement may be updated to add the Finance Authority as a party, and execution of the Subordination Agreement by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes approved hereby. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the Secretary is hereby authorized to attest, as appropriate, the Subordination Agreement and such other agreements, documents and certificates as may be necessary or desirable to effectuate the purposes of the Subordination Agreement.
Section 6. Sale of Bonds. The Finance Authority hereby authorizes and directs a Designated Officer of the Finance Authority to enter into a contract on behalf of the Finance Authority to sell the 2023 Lease Revenue Bonds pursuant to a negotiated sale to the Underwriter.
The Finance Authority hereby approves the form of the Bond Purchase Agreement on file with the Secretary, with such additions thereto and changes therein as a Designated Officer deems necessary, desirable or appropriate upon consultation with bond counsel to the Finance Authority, the execution of which by a Designated Officer be conclusive evidence of the approval of any such additions or changes, subject to compliance with the parameters set forth in Section 2 . A Designated Officer, acting alone, is hereby authorized and directed to execute the Bond Purchase Agreement and to take all actions necessary to fulfill the Finance Authority ’s obligations thereunder.
Section 7. Official Statement. The Board hereby approves the form of Official Statement relating to the 2023 Lease Revenue Bonds (the “Official Statement”) on file with the Secretary, together with such changes or additions thereto as a Designated Officer deem s necessary, desirable or appropriate upon consultation with bond counsel to the Finance Authority , and authorizes a Designated Officer, acting alone, to deem a preliminary form of the Official Statement final within the meaning of Rule 15c2 -12 of the Securities Exchange Act of 1934, as amended, except for omissions permitted therein. Distribution of the preliminary form of Official Statement by the Underwriter is hereby approved. A Designated Officer, acting alone, is hereby authorized to execute the final form of the Official Statement with such changes or additions as the Designated Officer deem s necessary, desirable or appropriate upon consultation with bond counsel to the Finance Authority, and the execution of the final Official Statement by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. The Board hereby authorizes the distribution of the final Official Statement.
Section 8. Escrow Agreement. The Board hereby approves the form of the Escrow Agreement on file with the Secretary, with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute the Escrow Agreement. The Board hereby authorizes the performance by the Finance Authority of its obligations under the Escrow Agreement.
Section 9. Agreement with Bond Counsel and Disclosure Counsel. The Board hereby designates Jones Hall, A Professional Law Corporation, to act as bond counsel and disclosure counsel. The Designated Officers, each acting alon e, are hereby authorized and directed to execute an agreement with Jones Hall, A Professional Law Corporation, in the form on file with the Secretary.
Section 10. Official Actions. The Designated Officers, the Secretary and any and all other officers of the Finance Authority are hereby authorized and directed, for and in the name of and on behalf of the Finance Authority , to do any and all things and take any and all actions, including execution and delivery of any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the 2023 Lease Revenue Bonds, the refinancing of the 2013 Bonds, the selection of the Leased Property under the Property Lease, the removal of the Hesperia Branch Library and Civic Plaza Park as leased property with respect to the 2012 Bonds, the Subordination Agreement, the elimination of encumbrances on title to the Leased Property (including any amendments to the documents related to the 2013 Bonds), the purchase of one or more insurance policies for the 2023 Lease Revenue Bonds if determined to be in the bests interest of the Finance Authority by a Designated Officer, and the consummation of the transactions described herein, and such documents, assignments, certificates and agreements as may be required by the Indenture, the Property Lease, the Site Lease , the Refunding Instructions and any and all other documents and agreements approved hereunder.
Section 11. Effective. This Resolution shall take effect immediately upon its passage and adoption.
* * * * * * * * * *
PASSED, APPROVED AND ADOPTED by the Board of Directors of the Hesperia Joint Public Finance Authority at a regular meeting held this 6th day of June, 2023.
AYES: Member:
NOES: Member:
ABSENT: Member:
ABSTAIN: Member
Brigit Bennington, Chair
ATTEST:
Erin Baum, Secretary
EXHIBIT A
REQUIRED GOOD FAITH ESTIMATES PURSUANT TO
GOVERNMENT CODE SECTION 5852.1
1. True Interest Cost of the 2023 Lease Revenue Bonds: 3.53%.
2. Finance charge for the 2023 Lease Revenue Bonds, being the sum of all fees and charges paid to third parties (Cost s of Issuance of approximately $287,744 plus estimated underwriter’s compensation of $82,280): $370,024.
3. Amount of proceeds of the 2023 Lease Revenue Bonds expected to be received by the Finance Authority, net of proceeds for Costs of Issuance described in (2) above and net of capitalized interest (if any) and reserves (if any) paid or funded with the proceed s of the 2023 Lease Revenue Bonds: $7,983,372.
4. Total payment amount for the 2023 Lease Revenue Bonds, being the sum of (a) debt service to be paid on the 2023 Lease Revenue Bonds to final maturity, plus (b) any financing costs not paid from proceeds of the 2023 Lease Revenue Bonds: $10,417,722.
*All amounts and percentages are estimates, and are made in good faith by the Finance Authority based on information available as of the date of adoption of this Resolution.
This Preliminary Official Statement and the information contained herein are subject to completion or amendment . Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any juris diction in which such offer solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Agenda Draft
PRELIMINARY OFFICIAL STATEMENT DATED __________, 2023
NEW ISSUE - FULL BOOK-ENTRY INSURED BONDS RATING: S&P: “__” UNINSURED BONDS RATING: S&P: “__”
See “RATINGS.”
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the 2023 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2023 Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See “TAX MATTERS.” $[PAR]*
HESPERIA JOINT PUBLIC FINANCE AUTHORITY
2023 Refunding Lease Revenue Bonds
Dated: Date of Delivery Due: November 1, as shown on inside cover Authority for Issuance . The Hesperia Joint Public Finance Authority (the “Authority”) is issuing the bonds captioned above (the “2023 Bonds”) pursuant to an Indenture dated as of July 1, 2023 (the “Indenture”), between the Authority and U.S. Bank Trust Company, National Association, as trustee for the 2023 Bonds (the “Trustee”).
Use of Proceeds . The proceeds of the 2023 Bonds will be used to (i) prepay in full the lease payments payable by the City under a Property Lease dated as of October 1, 2013, between the Authority as lessor and the City as lessee , and thereby cause the Authority to defease and redeem all of its outstanding 2013 Refunding Lease Revenue Bonds (Refinancing of 2005 Civic Plaza Financing), and (ii) pay the costs of issuing the 2023 Bonds. See “REFUNDING PLAN.” Security for the 2023 Bonds. Under the Indenture, the 2023 Bonds will be payable solely from and secured by Revenues and certain funds and accounts held under the Indenture. Revenues consist primarily of lease payme nts (“Base Rental”) to be made by the City pursuant to a Property Lease, dated as of July 1, 2023 (the “Lease”), between the Authority and the City, for the leasing of certain real property (the “Leased Property”). Under the Property Lease , the City covenants to take such action as necessary to include the Base Rental payments in its annual budgets and make all necessary appropriations for such payments (subject to abatement under certain circumstances as described in this Official Statement). The Au thority will not establish a debt service reserve fund for the 2023 Bonds. See “SECURITY FOR THE 2023 BONDS.” Bond Terms; Book -Entry Only . The 2023 Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on May 1 and November 1 of each year, commencing on November 1, 2023, and will be issued in fully-registered form without coupons in integral multiple s of $5,000. The 2023 Bonds will be issued in book -entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( “DTC”). Purchasers of the 2023 Bonds will not receive certificates representing their interests in the 2023 Bonds. Payments of the principal of, premium, if any, and interest on the 2023 Bonds will be made to DTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the 2023 Bonds . See “THE 2023 BONDS – General Provisions.”
Redemption. The 2023 Bonds are subject to redemption prior to maturity. See “THE 2023 BONDS – Redemption.” Bond Insurance. The scheduled payment of principal of and interest on certain maturities of the 2023 Bonds, when due, will be guaranteed under a municipal bond insurance policy to be issued by ______ (“[INSURER]”) concurrently with the delivery of the 2023 Bonds. The City will determine the maturities of the 2023 Bonds to be so insured in connection with the pricing of the 2023 Bonds. See “BOND INSURANCE,” and “APPENDIX G – SPECIMEN MUNICIPAL BOND INSURANCE POLICY.” [Bond Insurer Logo]
Additional Bonds. Under the Indenture, the Authority may establish one or more other issues of bonds on a parity with the 2023 Bonds in the future if certain conditions are satisfied. See “SECURITY FOR THE 2023 BONDS – Additional Bonds.” THE 2023 BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED BY A PLEDGE OF REVENUES AND CERTAIN FUNDS AND ACCOUNTS HELD UNDER THE INDENTURE. THE AUTHORITY HAS NO TAXING POWER. THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS UNDER THE PROPERTY LEASE
DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. NEITHER THE 2023
BONDS NOR THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS UNDER THE PROPERTY LEASE
CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS (INCLUDING ANY MEMBER OF THE AUTHORITY) IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATIONS.
MATURITY SCHEDULE
(see inside cover)
This cover page contains certain information for quick reference only. it is not a summary of this issue of 2023 Bonds.
Investors must read the entire Official Statement to obtain information essential to the making of an informed investment dec ision with respect to the purchase of the 2023 Bonds.
The 2023 Bonds are offered when, as and if issued and received by the Underwriter and subject to the approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. Certain legal matters will also be passed upon for the Authority and the City by Jones Hall, A Professional Law Corporation, as Disclosure Counsel , and the Underwriter by its counsel, Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California . Certain legal matters will be passed upon for the City and the Authority by Aleshire & Wynder LLP, as City Attorney. It is anticipated that the 2023 Bonds will be delivered in book-entry only form through the facilities of DTC in New York, New York on or about July [11], 2023.
The date of this Official Statement is: ________, 2023
* Preliminary; subject to change.
Attachment 3
MATURITY SCHEDULE
$[PAR]*
HESPERIA JOINT PUBLIC FINANCE AUTHORITY
2023 Refunding Lease Revenue Bonds
Base CUSIP†: _______
Maturity
(November 1)
Principal
Amount
Interest
Rate
Yield
Price
CUSIP†
Number
$____ - ____% Term 2023 Bonds due November 1, 20__; Yield ____%; Price ____ ; CUSIP†: ___
$____ - ____% Term 2023 Bonds due November 1, 20__; Yield ____%; Price ____ ; CUSIP†: ___
*Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Associat ion. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 202 3 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does no t serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for conveni ence of reference only. None of the Authority, the City, the Underwriter or their agents or counsel take any responsibility for the accuracy of such numbers.
HESPERIA JOINT PUBLIC FINANCE AUTHORITY
Board of Directors
Brigit Bennington, Chair
Larry Bird, Vice Chair
Rebekah Swanson, Board Member
Allison Lee, Board Member
Cameron Gregg, Board Member
CITY OF HESPERIA
City Council
Brigit Bennington, Mayor, District 4
Larry Bird, Mayor Pro Tem, District 5
Rebekah Swanson, Council Member, District 1
Allison Lee, Council Member, District 2
Cameron Gregg, Council Member, District 3
City and Authority Officials
Nils Bentsen, City Manager and Executive Director(1)
Rachel Molina, Assistant City Manager(1)
Casey Brooksher, Director of Administrative Services and Treasurer Melinda Sayre, Director of Governmental Services and Secretary
___________________________________
PROFESSIONAL SERVICES
City Attorney
Aleshire & Wynder LLP
Irvine, California
Bond Counsel and Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California
Municipal Advisor
Fieldman, Rolapp & Associates, Inc.
Irvine, California
Trustee
U.S. Bank Trust Company,
National Association
Los Angeles, California
Verification Agent
Causey Demgen & Moore P.C.
Denver, Colorado
(1) Mr. Nils Bentsen has announced that he will retire as City Manager effective June 18, 2023. The City Council of the City has appointed Ms. Rachel Molina as City Manager effective June 19, 2023.
[INSERT REGIONAL LOCATION MAPS]
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No Offering May Be Made Except by this Official Statement . No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the 2023 Bonds other than as contained in this Official Statement, and if given or made, such other information or re presentation must not be relied upon as having been authorized.
No Unlawful Offers or Solicitations . This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
Effective Date. This Official Statement speaks only as of its date, and the info rmation and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the 2023 Bonds will, under any circumstances, create any implication that there h as been no change in the affairs of the City, the Authority or any other parties described in this Official Statement since the date of this Official Statement.
Use of this Official Statement. This Official Statement is submitted in connection with the sale of the 2023 Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the 2023 Bonds.
Preparation of this Official Statement . The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The Underwriter has provided the following sentence for inclusio n in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
Document References and Summaries . All references to and summaries of the Fiscal Agent Agreement or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents.
Stabilization of and Changes to Offering Prices . The Underwriter may overallot or take other steps that stabilize or maintain the market pri ces of the 2023 Bonds at levels above those that might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the 2023 Bonds to certain securities deal ers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter. 2023 Bonds are Exempt from Securities Laws Registration . The issuance and sale of the 2023 Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sal e of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.
Estimates and Projections . Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements ” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securit ies Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.
The achievement of certain results or other expectations contained in such forward -looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by su ch forward-looking statements. The City does not plan to issue any updates or revisions to those forward -looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur.
Insurer Disclaimer . _______ (“[INSURER”]) makes no representation regarding the 2023 Bonds or the advisability of investing in the 2023 Bonds. In addition, [INSURER] has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding [INSURER] supplied by the [INSURER] and presented under th e heading “BOND INSURANCE” and “APPENDIX G – SPECIMEN MUNICIPAL BOND INSURANCE POLICY.” City Website. The City maintains an Internet website, but the information on the website is not incorporated in this Official Statement.
TABLE OF CONTENTS
Page Page
INTRODUCTION ................................................ 1 General ........................................................... 1 Security for the 2023 Bonds ........................... 2 No Debt Service Reserve Fund ..................... 2
Bond Insurance .............................................. 2 Limited Obligation........................................... 2 Additional Bonds ............................................ 3 The Authority .................................................. 3 The City .......................................................... 3 Professionals Involved in the Offering ........... 3
Forward-Looking Statements ......................... 4
Risk Factors ................................................... 4 Summaries Not Definitive ............................... 4 REFUNDING PLAN ........................................... 5 Refunding of 2013 Bonds ............................... 5 Estimated Sources and Uses of Funds .......... 6
THE LEASED PROPERTY ................................ 8
Description and Location ................................ 8 Modifications of Leased Property ................. 10
Substitution of Leased Property ................... 10
Removal of Leased Property ........................ 11
Addition of Leased Property ......................... 12 Amendments to Property Lease ................... 13
THE 2023 BONDS ........................................... 14 General Provisions ....................................... 14 Transfer, Registration and Exchange .......... 15
Redemption .................................................. 15 Book-Entry Only System .............................. 17 DEBT SERVICE SCHEDULE .......................... 18
SECURITY FOR THE 2023 BONDS ............... 19
Pledge of Revenues ..................................... 19 Allocation of Revenues by Trustee;
Application of Funds................................. 20 No Debt Service Reserve Fund ................... 21
Additional Bonds .......................................... 21 Base Rental .................................................. 22 Additional Rental .......................................... 23 Fair Rental Value.......................................... 24 Source of Payments; Covenant to
Appropriate ............................................... 24 Abatement .................................................... 24 Property Insurance ....................................... 25 Default; Remedies ........................................ 26 THE AUTHORITY ............................................ 27 THE CITY ......................................................... 27 BOND INSURANCE ......................................... 28
CONSTITUTIONAL AND STATUTORY
LIMITATIONS ON TAXES AND
APPROPRIATIONS ..................................... 29 Limitations on Revenues .............................. 29 Statutory Revenue Limitations –
Proposition 62 .......................................... 32 Proposition 1A .............................................. 32 Proposition 22 .............................................. 33 Unitary Property ........................................... 33 Possible Future Initiatives ............................ 33 BOND OWNERS’ RISKS ................................. 34 Limited Obligations ...................................... 34 Abatement .................................................... 34 Limitation on Remedies ............................... 35 Limitation on Trustee’s Obligations under
the Indenture ............................................ 35 Release of Property; Additional Bonds ........ 36
Insurance on the Leased Property ............... 36
Condemnation of the Leased Property ........ 37
Value of the Leased Property ...................... 37
No Acceleration Upon Default ..................... 37
Early Prepayment Risk ................................ 37 Bankruptcy Risks ......................................... 37 State Law Limitations on Appropriations ..... 38
Limitations on Taxes and Fees .................... 38
Additional Obligations of the City ................. 39 Property Taxes ............................................. 39 Public Health Emergencies .......................... 40 Certain Risks Associated with Sales Tax
and Other Local Tax Revenues ............... 41
Increasing Retirement Related Costs .......... 41
Hazardous Substances ................................ 42 Natural Hazards ........................................... 42 Climate Change ........................................... 43 Cyber Security ............................................. 43 Litigation ....................................................... 44 Changes in Law; Voter Initiatives ................ 44
Loss of Tax-Exemption ................................ 45 Bond Insurance ............................................ 45 Secondary Market for 2023 Bonds .............. 45
TAX MATTERS ................................................ 46 Federal Tax Status ....................................... 46 Tax Treatment of Original Issue Discount
and Premium ........................................... 46 California Tax Status .................................... 47 Other Tax Considerations ............................ 47 CERTAIN LEGAL MATTERS .......................... 47
ABSENCE OF MATERIAL LITIGATION.......... 48
FINANCIAL STATEMENTS ............................. 49
RATINGS ......................................................... 49 CONTINUING DISCLOSURE .......................... 50
UNDERWRITING ............................................. 50 PROFESSIONAL FEES .................................. 50 MUNICIPAL ADVISOR .................................... 51 EXECUTION .................................................... 51
ii
TABLE OF CONTENTS
(Continued)
APPENDIX A: CITY OF HESPERIA GENERAL DEMOGRAPHIC AND FINANCIAL INFORMATION APPENDIX B: SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
APPENDIX C: ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2022
APPENDIX D: FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX E: FORM OF OPINION OF BOND COUNSEL
APPENDIX F: DTC AND THE BOOK-ENTRY ONLY SYSTEM
APPENDIX G: SPECIMEN MUNICIPAL BOND INSURANCE POLICY
__________________________________
OFFICIAL STATEMENT
__________________________________
$[PAR]*
HESPERIA JOINT PUBLIC FINANCE AUTHORITY
2023 Refunding Lease Revenue Bonds
INTRODUCTION
The purpose of this Official Statement, which includes the cover page, inside cover page and attached appendices, is to set forth certain information concerning the sale and delivery of the bonds captioned above (the “2023 Bonds”) by the Hesperia Joint Public Finance Authority (the “Authority”). All capitalized terms used in this Official Statement, unless noted otherwise, have the meanings set forth in the Indenture (as defined below).
This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, an d is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the 2023 Bonds to potential investors is made only by means of the entire Official Statement.
General
The Authority is issuing the 2023 Bonds under Articles 10 and 11 of Part 1 of Division 2 of Title 5 of the Government Code of the State of Cali fornia (the “State”), commencing with Section 6584 (the “Bond Law”), a resolution adopted by the Board of Directors of the Authority on June 6, 202 3, a resolution adopted by the City Council (the “City Council”) of the City of Hesperia, California (the “City”) on June 6, 2023, and an Indenture (the “Indenture”), dated as of July 1, 2023, between the Authority and U.S. Bank Trust Company, National Association , as trustee (the “Trustee”).
The 2023 Bonds will be issued in fully registered form, registered in the name of The Depository Trust Company, New York, New York (“DTC”), or its nominee. DTC, or its nominee, will act as securities depository for the 2023 Bonds. Purchasers of the 2023 Bonds will not receive certificates representing the 2023 Bonds that are purchased. See “THE 2023 BONDS – Book-Entry Only System” and “APPENDIX F – DTC and the Book-Entry Only System.”
The 2023 Bonds are subject to optional, mandatory sinking fund and extraordinary redemption prior to maturity as described in this Official Statement. See the caption “THE 2023 BONDS – Redemption.”
The 2023 Bonds are being issued to (i) prepay in full the lease payments payable by the City under a Property Lease dated as of October 1, 2013 (the “2013 Property Lease”), between the Authority as lessor and the City as lessee, and thereby cause the Authority to defease and
* Preliminary; subject to change.
2 redeem all of its outstanding 2013 Refunding Lease Revenue Bonds (Refinancing of 2005 Civic Plaza Financing) (the “2013 Bonds”), and (ii) pay the costs of issuing the 2023 Bonds. See “REFUNDING PLAN.”
Security for the 2023 Bonds
The 2023 Bonds will be payable solely from and secured by Revenues and certain funds and accounts held under the Indenture. Revenues consist primarily of lease payments (the “Base Rental”) to be made by the City pursuant to a Property Lease, dated as of July 1, 2023, between the City and the Authority (the “Property Lease”) for the use and occupancy of certain real property and improvements thereon (the “Leased Property ”). See “THE LEASED PROPERTY.” Under the Property Lease, the City covenants to take such action as necessary to include the Base Rental payments in its annual budgets and to make all necessary appropriations for such Base Rental payments (subject to abatement under certain circumstances described in the Property Lease ). See “SECURITY FOR TH E 2023 BONDS – Source of Payments; Covenant to Appropriate.”
Base Rental payments are subject to complete or partial abatement in the event and to the extent that there is substantial interference with the City ’s right to use and occupy the Leased Property or any portion thereof. See “SECURITY FOR THE 2023 BONDS – Abatement” and “BOND OWNERS’ RISKS – Abatement.” Abatement of Base Rental payments under the Property Lease, to the extent payment is not made from alternative sources as described in this Official Statement , would result in all Bond Owners receiving less than the full amount of principal of and interest on the 2023 Bonds. To the extent that moneys in any of the funds and accounts established under the Indenture or procee ds of insurance are available, Base Rental payments (or a portion thereof) may be made during periods of abatement.
To provide an upfront site lease payment to facilitate the refunding plan, the City and the Authority will enter into a Site and Facilities Lease dated as of July 1, 2023 (the “Site Lease”), under which the City will lease the Leased Property to the Authority. Concurrently, the City and the Authority will enter into the Property Lease, under which the Authority will lease the Leased Property back to the City. See “THE LEASED PROPERTY.”
No Debt Service Reserve Fund
The Authority will not establish a debt service reserve fund for the 2023 Bonds.
Bond Insurance
The scheduled payment of principal and interest on certain maturities of the 2023 Bonds (the “Insured 2023 Bonds ”), when due, will be guaranteed under a municipal bond insurance policy (the “Insurance Policy”) to be issued concurrently with the delivery of the 2023 Bonds by ________ (“[INSURER]”). The City will determine the maturities of the 2023 Bonds to be so insured in connection with the pricing of the 2023 Bonds. See “BOND INSURANCE” and “APPENDIX G – SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”
Limited Obligation
THE 2023 BONDS ARE SPECIAL OBLIGAT IONS OF THE AUTHORIT Y PAYABLE
SOLELY FROM AND SECURED BY A PLEDGE OF REVENUES AND CERTAIN FUNDS AND ACCOUNTS HELD UNDER THE INDENTURE. THE AUTHORITY HAS NO TAXING POWER.
3 THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS UNDER THE
PROPERTY LEASE DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY FOR WHICH
THE CITY IS OBLIGATED TO LEV Y OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDG ED ANY FORM OF TAXATION. NEITHER THE 2023 BONDS NOR THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS
UNDER THE PROPERTY LEASE CONSTITUTES AN INDE BTEDNESS OF THE CITY, THE
STATE OR ANY OF ITS POLIT ICAL SUBDIVISIONS (I NCLUDING ANY MEMBER OF THE
AUTHORITY) IN CONTR AVENTION OF ANY CONS TITUTIONAL OR STATUT ORY DEBT LIMITATIONS.
Additional Bonds
Under the Indenture, the Authority may establish one or more other issues of bonds on a parity with the 2023 Bonds in the future (“Additional Bonds” and together with the 2023 Bonds, the “Bonds”), and may issue and deliver such Additional Bonds in such principal amount as shall be determined by the Authority if certain conditions are satisfied . See “SECURITY FOR THE 2023 BONDS – Additional Bonds.”
The Authority
The Authority is a joint exercise of powers authority organized and existing pursuant to the provisions of Article 1 and Article 4 of Chapter 5 of Division 7 of Title 1 of the Government code of the State of C alifornia (the “Act”) and a Joint Exercise of Powers Agreement, dated October 2, 2012 (the “Joint Powers Agreement”), by and between the City and the Hesperia Water District (the “Water District”). See “THE AUTHORITY.”
The City
The City is situated in the County. The City encompasses approximately 7 5 square miles, and is located 35 miles north of the City of San Bernardino and 90 miles northeast of the City of Los Angeles. The City is bisected by California State Highway 395 and Interstate 15.
The City is bordered to the north by the City of Victorville and on the east by the Town of Apple Valley and to the south by the San Bernardino mountains.
The City is governed by a five -member City Council under the Council-Manager form of government. For information about the City, including general demographic information and financial information relating to the General Fund of the City, see “APPENDIX A – CITY OF HESPERIA GENERAL DEMOGRAPHIC AND FINANCIAL INFORMATION.”
Professionals Involved in the Offering
Fieldman, Rolapp & Associates, Inc., Irvine, California, has acted as municipal advisor to the Authority and the City (the “Municipal Advisor”) in connection with the offering of the 2023 Bonds. U.S. Bank Trust Company, National Association , Los Angeles, California , will act as Trustee with respect to the 2023 Bonds . Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) is underwriting the 2023 Bonds.
All proceedings in connection with the issuance of the 2023 Bonds are subject to the approval of Jones Hall, A Professional Law Corporation, San Francisco, California , as Bond Counsel. Certain legal matters will be passed upon for the Author ity and the City by Aleshire & Wynder LLP, as City Attorney , and by Jones Hall, A Professional Law Corporation, San
4 Francisco, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by Stradling Yocca Carlson & Ra uth, a Professional Corporation, Newport Beach, California, as Underwriter’s Counsel.
Forward-Looking Statements
Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements. ” Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward -looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Although such expectations reflected in such forward -looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Neither Authority nor the City is obligated to issue any updates or revisions to the forward-looking statements if, or when, its expectations, or events, conditions or circumstances on which such statements are based change.
Risk Factors
Certain events could affect the ability of the Ci ty to make the Base Rental payments when due. See the caption “BOND OWNERS’ RISKS” for a discussion of certain factors that should be considered, in addition to other matters that are set forth in this Official Statement, in evaluating an investment in the 2023 Bonds.
Summaries Not Definitive
The summaries of and references to documents, statutes, reports and other instruments in this Official Statement do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by the complete do cument, statute, report or instrument. Copies of the documents described in this Official Statement will be available from the City for a reasonable copying fee at City Hall, 9700 Seventh Avenue, Hesperia, California 92345.
5 REFUNDING PLAN
Refunding of 2013 Bonds
The 2013 Bonds maturing on or after October 1, 2024 are subject to optional redemption prior to maturity on or after October 1, 2023 at the option of the Authority, as a whole or in part on any date, at a redemption price equal to the principal amount of 2013 Bond s to be redeemed, plus accrued but unpaid interest to the redemption date, without premium.
On the date the 2023 Bonds are issued, pursuant to an Escrow Deposit and Trust Agreement dated as of July 1, 2023 (the “Escrow Agreement”), among the City, the Authority and U.S. Bank Trust Company, National Association , as escrow agent (the “Escrow Agent”) and trustee of the 2013 Bonds, the Authority will cause to be delivered a portion of the proceeds of the 2023 Bonds which, together with moneys relating to the 2013 Bonds, will be deposited by the Escrow Agent in the escrow fund established under the Escrow Agreement (the “Escrow Fund”), on behalf of the City and for the benefit of the owners of the outstanding 2013 Bonds.
The Escrow Agent will invest a portion of the funds on deposit in the Escrow Fund in federal securities and will hold the remainder in cash, uninvested. From the moneys on deposit in the Escrow Fund and the investment earnings thereon , the Escrow Agent will pay (i) the regularly scheduled principal of and interest on the outstanding 2013 Bonds maturing on October 1, 2023, and (ii) the principal of the outstanding 2013 Bonds maturing after October 1, 2023, plus interest with respect thereto accrued through October __, 202 3, without premium.
The outstanding 2013 Bonds are described in the following table.
Maturity Date
(October 1)
Principal
Amount
Interest
CUSIP
(Base: 42806H)
2023 $460,000 4.000% BH2
2024* 500,000 3.750 BJ8
2025* 535,000 4.000 BK5
2026* 575,000 4.000 BL3
2027* 620,000 4.250 BM1
2028* 665,000 4.250 BN9
2031* T 2,305,000 4.750 BP4
2035* T 3,950,000 5.000 BQ2
* To be redeemed on October 1, 2023.
T: Term 2013 Bonds.
The sufficiency of the deposits in the Escrow Fund for such purposes will be verified by Causey Demgen & Moore P.C., Denver, Colorado (the “Verification Agent”). Assuming the accuracy of such computations, as a result of the deposit and application of funds as provided in the Escrow Agreement, all of the outstanding 2013 Bonds will be discharged pursuant to the provisions of the indenture relating to the 2013 Bonds as of the date of issuance of the 2023 Bonds.
The amounts held by the Escrow Agent in the Escrow Fund are pledged solely to the payment of the outstanding 2013 Bonds. Neither the funds deposited in the Escrow Fund, nor any interest thereon, will be available for the payments of principal of or interest on the 2023 Bonds.
6 Estimated Sources and Uses of Funds
The estimated sources and uses of funds relating to the 2023 Bonds are as follows:
Sources: Amount
Principal $
Plus: Original Issue Premium
Plus: Available Funds relating to 2013 Bonds
Less: Underwriter’s Discount
TOTAL SOURCES $
Uses:
Escrow Fund (1) $
Costs of Issuance (2)
TOTAL USES $
(1) To be used to defease and redeem the outstanding 2013 Bonds. See “REFUNDING PLAN – Refunding of 2013 Bonds.”
(2) Includes, among other things, the fees and expenses of Bond Counsel, Disclosure Counsel, the Trustee, and the Municipal Advisor, Insurance Policy premium, rating agency fees, and printing the preliminary and final Official Statements.
7 [INSERT PHOTOS OF PARK AND LIBRARY]
8 THE LEASED PROPERTY
Description and Location
Base Rental payments will be made by the City under the Property Lease for the use and occupancy of certain real property and improvements thereon. Initially, such property will consist of the City’s (i) City Hall and (ii) Civic Plaza Park. The Leased Property includes both the parcels on which these facilities are situated and the buildings and other improvements thereon. In the Property Lease, the City and Authority agree and determine that the total Base Rental payments represent the fair rental value of the Leased Property. See “BOND OWNERS’ RISKS – Limitations on Remedies” for a discussion of the limitations on remedies with respect to the Leased Property.
The City also owns the Hesperia Branch Library . It is maintained jointly by the City and the County and operated by the San Bernardino County Library system pursuant to an unrecorded Lease Agreement by and between the City and the County related to the Hesperia Branch Library, the term of which commenced on October 1, 2006 (the “County Library Lease Agreement”). On the date the 2023 Bonds are issued, the Hesperia Branch Library will not be part of the Leased Property subject to the leasehold interest under the Property Lease.
However, the City currently intends to substitute the Hesperia Branch Library for City Hall, if and when it receives a written subordination from the County subordinating the County’s interests under the County Library Lease Agreement to the Property Lease and the Site Lease, subject to the satisfaction of certain other conditions precedent in the Property Lease. See “ – Substitution of Leased P roperty.” No assurance can be provided that the City will substitute the Hesperia Branch Library for City Hall or the timing thereof.
Photos of City Hall, Civic Plaza Park and Hesperia Branch Library are included in the immediately preceding pages. Descriptions of the City Hall, Civic Plaza Park and Hesperia Branch Library follow below.
City Hall. Located on a 4.6-acre parcel in the Civic Center area of Hesperia, City Hall is a two-story building totaling approximately 58,828 gross square feet. City Ha ll houses the City Manager’s Office, the City Clerk’s Office and the following additional City Departments: Building & Safety, Community Relations, Development Services, Economic Development, Engineering, Finance, Human Resources/Risk Management, Information Technology, Management Services, Planning and Purchasing. It also houses the City Council Chambers, other office space, reception area and conference rooms.
Completed in 2006, City Hall shares the architectural style of the nearby Hesperia Police Station, Hesperia Branch Library and San Bernardino County Government Center. It is constructed with reinforced concrete curtain exterior walls and a heavy steel frame, flat roof. It is served by 100% sprinkler protection, automatic and manual fire alarms and a security system.
Other building services include modern elevator, heating, air conditioning, electrical and plumbing systems. The parcel contains surface parking with approximately 226 parking stalls.
City Hall was completed at a total cost of $19,352,415, including land acquisition costs of approximately $321,383. The fair rental value of City Hall, when added to the fair rental value of the remaining Leased Property, is equal to or greater than the Base Rental payable under the Property Lease.
9 Civic Plaza Park. Located in the Civic Center area to the west of the Hesperia Branch Library and Hesperia City Hall, the Hesperia Civic Plaza Park is an outdoor community gathering place and host to a variety of activities for the community including the City’s annual Christmas tree lighting ceremony, the Hesperia Community Farmers’ Market, the Fall Safety Fair and Costume Contest, community 5k event , a free Summer Concert series and a free Movies in the Park series.
The park covers approximately five acres and incorporates Eighth Avenue as hardscape for parking and display purposes. A circular “Civic Green” lawn area is provided at the north end of the park. This area allows numerous passive and non -organized events. Other features of the park inc lude central steel -framed trellis str uctures with adjacent seating; the vacated Eighth Avenue terminates in a large circular “quad” which is used for a Farmers’ Market, car shows, and similar outdoor events; a permanent Christmas tree used for the City ’s a nnual holiday celebration; an amphitheater with seating for 800; walking paths within the park and along the perimeter used by pedestrians and their pets ( with dog-waste dispensers located in several locations); and a wind-powered generator providing “green” energy. All landscaping is irrigated using an electronic “water-budget” system, and is dual -plumbed for use of reclaimed water when it becomes available. The park also includes three fountains, one of which features a 6,200-pound, spinning, black gran ite globe as its centerpiece. The American Public Works Association’s Southern California chapter (comprising Los Angeles, San Bernardino, Riverside and Orange Counties) named the park their 2008 “Project of the Year.”
The park is owned by the City, and is jointly maintained and operated by the City and the Hesperia Recreation and Park District pursuant to a joint use agreement . The site is patrolled by on-site security personnel under contract by the City , and periodically by deputies from the Hesperia Police Station, which is located directly across Smoke Tree Street.
Completed in 2008, the final project cost was $4.6 million. The fair rental value of the park, when added to the fair rental value of t he remaining Leased Property, is equal to or greater than the Base Rental payable under the Property Lease.
Hesperia Branch Library. Located on a four-acre parcel adjacent to Hesperia City Hall at 9650 Seventh Avenue, the Hesperia Branch Library is a one -story building covering 20,102 square feet. It is the only public library in the City with the next closest public library located approximately six miles north in Victorville. In addition to a library, the building houses offices, a conference room, a community room and restrooms.
The Hesperia Branch Library is housed in a 20,000 square foot building (with expansion capabilities to 40,000 square feet) and features a 3,488 square foot patio, on-site parking, drainage detention system and landscaping. The interior of the Hesperia Branch Library includes a “Community Meeting Room” with a capacity for over 200 people; a “Heritage Room” for periodicals and city -oriented archived items; adult and children reading area s; and a fireplace among other amenities.
The Hesperia Branch Library is owned by the City, maintained jointly by the City and the County, and operated by the San Bernardino County Library system. The County Library Lease Agreement has an initial term until September 30, 2026, with two 5-year extensions available.
The building design utilizes tilt -up concrete construction techniques, and incorporates a space-frame roof line to resemble a silhouette of the nearby San Gabriel and San Bernardino mountains. The concrete tilt-up design was selected to signify permanence and continuity for all
10 city/government functions. Its north-south building alignment help frame the adjacent park, and incorporates the park features with common use of building materials. The building has a reinforced con crete curtain wall exterior and a metal, monoslope roof. It is 100% sprinkler - protected, has both automatic and manual fire alarms and carries a ISO Class fire suppression rating of “4” (Masonry Non-Combustible). Security cameras are in place along the pe rimeter of the building, and the site is patrolled by on-site security personnel under contract with the City.
Completed in 2006, the development cost of the library was approximately $8,524,000, including land acquisition of approximately $276,000 and im provement costs of approximately $8,248,000.
As previously described, on the date the 2023 Bonds are issued, the Hesperia Branch Library will not be part of the Leased Property subject to the leasehold interest under the Property Lease. However, the City currently intends to substitute the Hesperia Branch Library for City Hall, if and when it receives a written subordination from the County subordinating the County’s interests under the County Library Lease Agreement to the Property Lease and the Site Lease, and subject to the satisfaction of certain other conditions precedent in the Property Lease.
Modifications of Leased Property
Under the Property Lease, the City has the right during the term of the Property Lease to make additions, alterations or improvements or to attach fixtures, structures or signs to the Leased Property if said additions, alterations, improvements, fixtures, structures and signs are necessary or beneficial for the use of the Leased Property by the City. In addition, the City may remove any fixture, structure or sign added by the City, but such release shall be accomplished so as to leave the Leased Property in substantially the same condition as it was in before the fixture, structure or sign was attached.
The Property Lease further provides that in the event the City shall at any time during the term of th e Property Lease cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Leased Property, the City shall pay, when due, all sums of money that may become due for, or p urporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Leased Property and which may be secured by a mechanic’s, materialman’s or other lien against the Leased Property or the Authority’s interest therein, and will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall fo rthwith pay and discharge said judgment.
Substitution of Leased Property
General. Under the Property Lease, whenever the City determines that the annual fair rental value of substitute real property and impro vements thereon (the “Substitute Leased Property”) is at least equal to the maximum annual Base Rental payments and Additional Rental payments yet unpaid thereunder and that the Substitute Leased Property is available for beneficial use and occupancy by the City, the City may amend the Property Lease to establish the Substitute Leased Property as the Leased Property thereunder upon compliance with all of
11 the condition s described below. After a Substitution, all or a portion of the Leased Property originally leased thereunder shall be released from the leasehold thereunder, as appropriate.
The Authority and the City shall also make any amendments needed to be made to the Property Lease, and shall enter into any necessary site or ground leases in connection with such Substitution. Such amendments may be made without the consent of Bondowners.
The Property Lease states that n o Substitution shall take place under the Pro perty Lease until the City delivers to the Authority and the Trustee the following:
(a) A certificate of the City stating that: (i) the annual fair rental value of the Substitute Leased Property is no less than the maximum annual Base Rental and Additional Rental remaining unpaid under the Property Lease at the time of Substitution; (ii) the remaining useful life of such Substitute Leased Property is at least equal to the remaining term of the Property Lease ; and (iii) the City will, at the time of the Substitution, have beneficial use and occupancy of the Substitute Leased Property.
(b) An Opinion of Bond Counsel to the effect that the amendment described in paragraph ( c) below has been duly authorized, executed and delivered and the Property Lease as so amended represents a valid and binding obligation of the City and the Authority and that the Substitution will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes or the exemption of interest on the Bonds from State of California personal income tax.
(c) The City shall cause to be recorded in the Office of the San Bernardino County Recorder an executed amendment to th e Property Lease containing an amended Exhibit A thereto, or a memorandum reflecting such amendment to Exhibit A.
(d) A CLTA standard form policy of title insurance in substantially the same form as delivered in connection with the issuance and delivery of the Bonds in at least the amount of the aggregate principal amount of outstanding Bonds at the time of the Substitution insuring the City ’s leasehold interest in the Substitute Leased Property thereunder, together with an endorsement thereto making such policy payable to the Trustee for the benefit of the Owners, and also together with a certificate of the City to the effect that the exceptions, if any, contained in such policy do not interfere with the beneficial use and occupancy of the Substitute Leased Property by the City.
(e) The City shall provide written notice to each rating agency then rating the Bonds of the proposed Substitution.
The Property Lease further states that in connection with a substitution of the Hesperia Branch Library for the City Hall as the Substitute Leased Property in place of the City Hall, the City shall not be required to comply with the requirements described in paragraphs (b) and (e) above. See “– Description and Location.”
Release of Leased Property
Under the Property Lease, the City has the option at any time and from time to time during its term to release from the Property Lease any portion of the Leased Property; provided that the City shall satisfy all of the following requirements which conditions precedent to such release:
12 (a) No event of def ault has occurred and is continuing under th e Property Lease.
(b) The City shall file with the Authority and the Trustee an amended Exhibit A to th e Property Lease which deletes the legal description of such Leased Property.
(c) The City shall cause to b e recorded in the Office of the San Bernardino County Recorder a copy of an executed amendment to the Property Lease containing an amended Exhibit A thereto, or a memorandum reflecting such amendment to Exhibit A. (d) The City shall cause to be filed wit h the Trustee an Opinion of Bond Counsel to the effect that the amendment described in paragraph (c) above has been duly authorized, executed and delivered and the Property Lease as so amended represents a valid and binding obligation of the City and the A uthority and that the release of Leased Property will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes or the exemption of interest on the Bonds from State of California personal income tax. (e) The City shall file with the Authority and the Trustee a certificate stating that (i) the annual fair rental value of the remaining Leased Property, taking into consideration the release of the applicable portion of the Leased Property, is no less than the maximum annual Base Rental and Additional Rental remaining unpaid under the Property Lease at the time of such release and (ii) the useful life of the remaining Leased Property is at least as long as the remaining term of the Property Lease. (f) The City shall provide written notice to each rating agency then rating the Bonds of the proposed release.
Addition of Leased Property
Under the Property Lease, t he City may, at any time it deems it necessary or advisable, amend the Property Lease, and enter into any necessary or advisable site or ground lease, to add additional property to the property originally leased thereunder. No such addition shall take place thereunder until the City delivers to the Authority and the Trustee the opinion described in paragraph (b) under the subcaption “– Substitution of Leased Property” above, provided that in such instance the opinion shall relate to the addition of Leased Property and not the substitution of Leased Proper ty. If the addition to the Leased Property (the “Addition”) is being done in connection with the issuance of Additional Bonds, the following requirements will apply:
(a) A certificate of the City with respect to clauses (i) and (ii) below stating that: (i) the annual fair rental value of the Leased Property (including the Addition) is no less than the maximum annual Base Rental and Additional Rental remaining unpaid under the Property Lease at the time of such Addition; (ii) the remaining useful life of such Leased Property (including the Addition) is at least equal to the remaining term of the Property Lease; and (iii) the City will, at the time of the Addition, have beneficial use and occupancy of all of the Leased Property.
(b) An Opinion of Bond Counsel to the effect that the amendment to the Property Lease has been duly authorized, executed and delivered and the Property Lease as so amended represents a valid and binding obligation of the City and the
13 Authority and that the Add ition will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes or the exemption of interest on the Bonds from State of California personal income tax.
(c) The City shall cause to be recorded in the Office of the San Bernardino County Recorder an executed amendment to th e Property Lease containing an amended Exhibit A thereto, or a memorandum reflecting such amendment to Exhibit A.
(d) A CLTA standard form policy of title insurance in substantially the same form as delivered in connection with the issuance and delivery of the Bonds in at least the amount of the aggregate principal amount of outstanding Bonds at the time of the Addition insuring the City ’s leasehold interest in the Addition to the Lea sed Property thereunder, together with an endorsement thereto making such policy payable to the Trustee for the benefit of the Owners, and also together with an opinion of counsel to the City to the effect that the exceptions, if any, contained in such policy do not interfere with the beneficial use and occupancy of the Leased Property by the City.
(e) The City shall provide written notice to each rating agency then rating the Bonds of the proposed addition.
Amendments to Property Lease
The Authority and the City may at any time amend or modify any of the provisions of the Property Lease , but only: (a) with the prior written consents of the Owners of a majority in aggregate principal amount of the Outstand ing Bonds; or (b) without the consent of the Trustee or any of the Bond Owners, but only if such amendment or modification is for any one or more of the following purposes:
(i) to add to the covenants and agreements of the City contained in the Property L ease, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power reserved to or conferred upon the City in the Property Lease;
(ii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained therein, to conform to the original intention of the City and the Authority;
(iii) to modify, amend or supplement the Property Lease in such manner as to assure that the interest on the Bonds remains excluded from gross income under the Code;
(iv) to amend the description of the Leased Property to reflect accurately the property originally intended to be included therein, or in connection with any substitution, release or addition of property under the Property Lease;
(v) to obligate the City to pay additional amounts of Base Rental in connection with the issuance of Additional Bonds in accordance with the Indenture; or
(vi) in any other respect whatsoever as the Authority and the City deem necessary or desirable, if in the opinion of Bond Counsel such
14 modifications or amendments do not materially adversely affect the interests of the Owners of the Bonds.
No such modification or amendment may (a) extend or have the effect of extending any Base Rental payment date or reducing any Base Rental payment or any premium payable upon the prepayment thereof, without the express consent of the Owners of the affected Bonds, or (b) modify any of the rights or obligations of the Trustee without its wri tten assent thereto. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.”
THE 2023 BONDS
General Provisions
The 2023 Bonds will be dated their date of delivery and issued in fully registered form without coupons in denominations of $5,000 or any integral multiple of $5,000. The 2023 Bonds will mature in the amounts and on the dates, and bear interest at the annual rates (calculated on the basis of a 360-day year of twelve 30-day months), set forth on the inside cover page of this Official Statement.
Interest on the 2023 Bonds will be payable on May 1 and November 1 in each year, beginning November 1, 2023 (each an “Interest Payment Date”). Principal on the 2023 Bonds will be payable on the dates and in the amounts set forth on the inside front cover of this Official Statement.
Interest with respect to each 2023 Bond shall accrue from the Interest Payment Date next preceding the date of authentication thereof, unless (i) it is authenticated after a Record Date and before the close of business on the immediately following Interest Payment Date, in which event interest with respect thereto shall be payable from such I nterest Payment Date, or (ii) it is authenticated on or before the Record Date immediately preceding the first Interest Payment Date in which event interest with respect thereto shall be payable from its dated date; provided, however, that if at the time o f authentication of any 2023 Bond, interest with respect thereto is in default, interest with respect thereto shall be payable from the Interest Payment Date to which interest has previously been paid or made available for payment or from its dated date if no interest has been paid or made available for payment.
Interest with respect to any 2023 Bond shall be payable on each Interest Payment Date to the Owner thereof as of the close of business on the Record Date, such interest to be paid by check of the Trustee, sent on such Interest Payment Date to the Owner by first -class mail, postage prepaid, at his address as it appears on the registration book maintained by the Trustee, or, upon written request of an Owner of at least $1,000,000 in aggregate princi pal amount of 2023 Bonds received by the Trustee on or prior to the Record Date, by wire transfer in immediately available funds to an account with a financial institution within the continental limits of the United States of America designated by such Own er. Payments of defaulted interest shall be paid by check to the Owners as of a special record date to be fixed by the Trustee, notice of which special record date shall be given to the Owners by first class mail not less than 10 days prior thereto.
The Indenture defines “Record Date ” to mean the 15th day of the calendar month immediately preceding the month in which an Interest Payment Date occurs regardless of whether or not such day is a Business Day.
15 Notwithstanding the foregoing, w hile the 2023 Bonds are subject to the book -entry system, the principal and interest and any prepayment premium with respect to the 2023 Bonds will be paid by the Trustee to DTC for subsequent disbursement to beneficial owners of the 2023 Bonds. See “– Book-Entry Only System” below.
Transfer, Registration and Exchange
See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS ” for a description of the provisions of the Indenture relating to the transfer, registration and exchange of the 2023 Bonds.
Redemption*
Optional Redemption. The 2023 Bonds maturing on or before November 1, _____, are not subjec t to optional redemption prior to maturity. The 2023 Bonds maturing on or after November 1, ____ are subject to optional redemption prior to maturity on or after November 1, ____, at the option of the Authority, as a whole or in part on any date, as set forth in a Request of Authority, from such maturities as are selected by the Authority, from amounts deposited with the Trustee by the Authority from any funds available therefor ot her than those described in the subcaption “– Mandatory Redemption from Insurance or Condemnation Proceeds ” below, at a redemption price equal to the principal amount of 2023 Bonds to be redeemed, plus accrued but unpaid interest to the redemption date, without premium.
Mandatory Redemption from Insurance or Condemnation Proceeds . The Trustee shall, on such date as is set forth in a Request of the Authority, redeem the Bonds, including the 2023 Bonds, as a whole, or in part by lot within any maturity if l ess than all of the Bonds of a particular maturity are to be redeemed, from proceeds of insurance or proceeds of eminent domain proceedings, upon the terms and conditions of, and as provided for in the Indenture at the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium.
Mandatory Sinking Fund Redemption . The 2023 Bonds maturing on November 1, 20__ (the “Term Bonds ”) shall be subject to mandatory redemption from mandatory Sinking Account Payments, in part, by lot, on November 1, 20__, and on each November 1 thereafter to and including November 1, 20__, from money on hand in the Principal Fund at a redemption price equal to the principal amount of the Term Bonds to be redeemed, plus accrued interest on the Term Bonds to be redeemed to the redemption date, without premium. The principal amount of the Term Bonds to be redeemed and the redemption dates are set forth in the following schedule:
Redemption Date
(November 1)
Principal
Amount
*
_______________
*Maturity
* Preliminary; subject to change.
16 Mandatory Sinking Account Payments shall be adjusted as directed by the Authority in the event of a partial redempt ion as described under the subcaptions “– Optional Redemption” and “– Mandatory Redemption from Insurance or Condemnation Proceeds.”
Purchase In-Lieu of Redemption. In lieu of redemption of the 2023 Bonds, amounts on deposit in the Revenue Fund (to the extent not required to be deposited by the Trustee in the Interest Fund or the Principal Fund pursuant to the Indenture during the current Bond Year) may also be used and withdrawn by the Authority, upon the Request of the Authority delivered to the Trustee, at any time for the purchase of such Bonds at public or private sale as and when and at such prices (includi ng brokerage and other charges and including accrued interest) as the Authority may in its discretion determine. The par amount of any of Term Bonds so purchased by the Authority in any twelve-month period ending on November 1 in any year shall be credited towards and shall reduce the par amount of such Term Bonds required to be redeemed pursuant to the Indenture on the next succeeding November 1.
Selection of Bonds for Redemption. For purposes of selecting Bonds for redemption, Bonds will be deemed to be composed of $5,000 portions or any integral multiple thereof.
Unless otherwise directed by the Authority, whenever less than all of the Outstanding Bonds of more than one series are called for redemption at any one time, the Trustee will select the Outstanding Bonds or portions thereof to be redeemed from the Outstanding Bonds on a pro rata basis among series.
Whenever less than all the Outstanding Bonds of the same issue maturing on any one date are called for redemption as describ ed in the subcaptions “– Optional Redemption” and “– Mandatory Redemption from Insurance or Condemnation Proceeds” above at any one time, the Trustee will select the Bonds or portions thereof to be redeemed from the Outstanding Bonds maturing on such date not previously selected for redemption, on a pro rata basis.
Notice of Redemption . Notice of redemption shall be mailed by the Trustee by first class mail, not less than 20 nor more than 60 days prior to the redemption date to (i) the respective Owners of Bonds designated for redemption at their addresses appearing on the Bond registration books of the Trustee, (ii) the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access website and (iii) the Securities Depositories.
Each notice of redemption shall state the date of such notice, the Bonds to be redeemed, the date of issue of such Bonds, the redemption date, the redemption price, the place or places of redemption (including the name and appropriate address or addresses an d telephone number or numbers of the Trustee), the CUSIP number (if any) of the maturity or maturities, the interest rate and maturity date of each Bond to be redeemed, and, if less than all of any such maturity, the distinctive certificate numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on e ach of such Bonds the redemption price thereof or of said specified portion of the principal amount thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the address or addresses of the Trustee specified in the redemption notice. Each notice relating to optional redemption or mandatory redemption from insurance or condemnation proceeds as described in the subcaptions “– Optional Redemption ” and “– Mandatory Redemption from Insurance or Condemnation Proceeds ” above, respectively, shall
17 further state that such redemption may be rescinded by the Authorit y on or prior to the date set for redemption.
The Trustee will mail by certified mail with return receipt requested a second notice of redemption 60 days after the scheduled redemption date to Owners who failed to surrender their Bonds on such redemption date.
Failure by the Trustee to give notice pursuant to the Indenture to the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access website or any one or more of the Securities Depositories or the insufficiency of any such notice will not affect the sufficiency of the proceedings for redemption. The failure of any Bondowner to receive any redemption notice mailed to such Bondowner and any de fect in the notice so mailed will not affect the sufficiency of the proceedings for redemption.
The Authority will have the right to provide a conditional redemption notice and to rescind any notice of optional redemption or mandatory redemption from insu rance or condemnation proceeds by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payme nt in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. The Trustee shall mail notice of rescission of redemption in the same manner notice of redemption was originally provided.
Partial Redemption. Upon surrender of any Bond redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bond surrendered and of the same interest rate and maturity.
Effect of Redemption . When notice of redemption has been duly given, and moneys for payment of the redemption price are deposit ed with the Trustee, the Bonds so called for redemption shall, on the redemption date designated in such notice, become due and payable at the redemption price specified in such notice, and from and after the date so designated interest on the Bonds so cal led for redemption shall cease to accrue, said Bonds shall cease to be entitled to any lien, benefit or security under the Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof.
Book-Entry Only System
The 2023 Bonds will be issued as fully registered bonds in book -entry only form, registered in the name of Cede & Co. as nominee of DTC, and will be available to ultimate purchasers in the denomination of $5,000 or any integral multiple of $5,000, under the book - entry system maintained by DTC. While the 2023 Bonds are subject to the book -entry system, the principal, interest and any prepayment premium with respect to a Bond will be paid by the Trustee to DTC, which in turn is obligated to remit such payment to its DTC P articipants for subsequent disbursement to Beneficial Owners of the 2023 Bonds . Purchasers of the 2023 Bonds will not receive certificates representing their interests therein, which will be held at DTC.
See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM” for further information regarding DTC and the book-entry system.
18 DEBT SERVICE SCHEDULE
The table below shows annualized debt service payments on the 2023 Bonds, assuming no optional redemption or special mand atory redemption from insurance or condemnation proceeds.
Year Ending
June 30
Principal
Interest
Total
Debt Service
Total:
19 SECURITY FOR THE 2023 BONDS
The principal of and interest on the 2023 Bonds are not a debt of the Authority (except to the limited extent described in this Official Statement) or the City , nor a legal or equitable pledge, charge, lien or encumbrance, upon any of their respective property, or upon any of their income, receipts, or revenues except the Revenues and other amounts pledged under the Indenture. This section provides summaries of the security for the 2023 Bonds and certain provisions of the Indenture and the Property Lease . See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS ” for a more complete summary of the Indenture and the Property Lease.
Pledge of Revenues
Under the Indenture, the Authority pledges and assigns to the Trustee and grants to the Trustee a lien on and security interest in all right, title and interest of the Authority in and to all of the following, which lien and security interest, except as otherwise expressly set forth in the Indenture, shall be prior in right to any other pledge, lien or security interest created by the Authority therein:
(i) the Revenues,
(ii) all moneys a nd investments (excluding amounts required to pay rebate ) held from time to time by the Trustee under the Indenture, and
(iii) earnings on amounts included in provisions (i) and (ii) above, subject to any limitations under the Code
for the equal and proportionate benefit and security of the Bonds, all of which, regardless of the time or times of their authentication and delivery or maturity, shall be, with respect to the security provided thereby, of equal rank without preference, priority or distinction as to any Bond over any other Bond or Bonds, except as to the timing of payment of the Bonds. The Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding, except that out of Revenues there may be apportioned and paid such sums, for such purposes, as are expressly permitted by the provisions of the Indenture concerning the allocation of Revenues to special funds.
“Revenues” are defined in the Indenture as (i) the Base Rentals set forth in the Property Lease which are received by the Trustee for the benefit of the Owners of the Bonds and (ii) other amounts received by the Trustee for the benefit of the Owners of the Bonds.
Except as otherwise provided in the provisions of the Indenture concerning the investment of moneys in funds, all Revenues to which the Authority may at any time be entitled shall be paid directly to the Trustee and all of the Revenues collected o r received by the Authority shall be deemed to be held in trust and to have been collected or received by the Authority as the agent of the Trustee, and if received by the Authority at any time shall be deposited by the Authority with the Trustee within one Business Day after the receipt thereof. All such Revenues shall be immediately deposited by the Trustee upon the receipt thereof in a special fund, designated as the “Revenue Fund.” The Revenue Fund shall be maintained by the Trustee, separate and apart from all other funds, so long as any of the Bonds remain Outstanding. All moneys at any time deposited in the Revenue Fund shall be held by the Trustee in trust for the benefit of the Owners from time to time of the Bonds and shall be
20 disbursed, allocated and applied solely for the uses and purposes set forth in the Indenture, as described below under the subcaption “ – Allocation of Revenues by Trustee; Application of Funds.”
THE 2023 BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY PAYABLE
SOLELY FROM AND SECURED BY A PLEDGE OF REVENUES AND CERTAIN FUNDS AND ACCOUNTS HELD UNDER THE INDENTURE. THE AUTHORITY HAS NO TAXING POWER.
THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS UNDER THE
PROPERTY LEASE DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY FOR WHICH
THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. NEITHER THE 2023 BONDS NOR THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS
UNDER THE PROPERTY LEASE CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE
STATE OR ANY OF ITS POLITICAL SUBDIVISIONS (INCLUDING ANY MEMBER OF THE
AUTHORITY) IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATIONS.
Allocation of Revenues by Trustee; Application of Funds
Transfers from the Revenue Fund . Under the Indenture, upon receipt of Revenues, the Trustee shall deposit all Revenues in the Revenue Fund. The Trustee shall deposit all moneys in the Revenue Fund in one or more of the funds set forth below, each of which the Trustee shall establish, maintain and hold in trust, and the moneys in each of which shall be disbursed and applied only as authorized in the Indenture. Revenues shall be so deposited in the following order of priority, the requirements of each such fund at the time of deposit to be satisfied before any transfer is made to any fund subsequent in priority:
(a) Interest Fund . The Trustee, on or before the Business Day next preceding each Interest Payment Date, shall deposit in the Interest Fund an amount which, together with any balance then on deposit in the Interest Fund, shall be sufficient to pay the aggregate amount of int erest becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date.
Any moneys in the Interest Fund not then required for the payment of interest on the next succeeding Interest Payment Date shall be carried forward and a pplied to the payment of interest on any subsequent Interest Payment Date. Moneys in the Interest Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds when due and payable (including accrued interest o n any Bonds redeemed or purchased prior to maturity), subject, however, to the provisions of the Indenture regarding reimbursement of rental.
(b) Principal Fund . The Trustee, on or before the Business Day next preceding each Principal Payment Date and on or before each Sinking Account Payment Date, after making the deposit into the Interest Fund on such date, shall deposit in the Principal Fund an amount which, together with any balance then on deposit in the Principal Fund, equals the principal of the Bo nds then due or required to be paid on such Principal Payment Date or Sinking Account Payment Date with respect to the Bonds in accordance with the terms of the Indenture.
Any moneys in the Principal Fund not then required for the payment of such principal on such Principal Payment Date or Sinking Account Payment Date shall be
21 carried forward and applied to the payment of principal on any subsequent Principal Payment Date or Sinking Account Payment Date. Moneys in the Principal Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds when due and payable, subject, however, to the provisions of the Indenture regarding reimbursement of rental.
(c) Surplus Revenue Fund . After making the deposits to the Inte rest Fund and the Principal Fund described above, the Trustee, on or before the Business Day immediately preceding each Principal Payment Date, shall deposit any remaining Revenues in the Surplus Revenue Fund. The Trustee shall, immediately upon making each deposit in the Surplus Revenue Fund, determine if any moneys then in the Surplus Revenue Fund are required for the payment of principal of or interest on the Bonds on such Principal Payment Date or the next succeeding Interest Payment Date or for the replenishment of a debt service reserve fund (if any) so that amounts on deposit therein are not less than the required amount, and shall hold any such moneys in the Surplus Revenue Fund for transfer to the Interest Fund, the Principal Fund or such debt service reserve fund as so needed. Except as provided above, moneys in the Surplus Revenue Fund are not pledged to the Bonds and shall be paid to, or at the direction of, the City within 60 Business Days after each Principal Payment Date.
(d) Insurance and Eminent Domain Proceeds Fund . The net proceeds resulting from any insurance claim or eminent domain proceedings and payable to the Trustee shall be deposited in the Insurance and Eminent Domain Proceeds Fund and applied as set forth in the Indenture.
No Debt Service Reserve Fund
The Authority will not establish a debt service reserve fund for the 2023 Bonds.
Additional Bonds
Under the Indenture, in addition to the 2023 Bonds, th e Authority may, by Supplemental Indenture, establish one or more other issues of Additional Bonds on a parity with the 2023 Bonds, and may issue and deliver such Additional Bonds in a principal amount as may be determined by the Authority, but only upon c ompliance by the Authority with the provisions of the Indenture regarding the proceedings for issuing Additional Bonds, and subject to the following specific conditions which are conditions precedent to the issuance of Additional Bonds:
(a) Such Additiona l Bonds shall have been authorized to finance or refinance acquisition and/or construction of additional capital assets for the City, and the issuance thereof shall have been determined and declared by the Authority, in a Supplemental Indenture, to be necessary for that purpose.
(b) The Authority and the City shall be in compliance with all covenants and undertakings set forth in the Indenture, the Property Lease and the Site Lease.
(c) The aggregate principal amount of Bonds issued and at any time Outstanding under the Indenture may not exceed any limit imposed by law, by the Indenture or by any Supplemental Indenture.
22 (d) Such Additional Bonds shall be equally and ratably secured by the Revenues with all other Bonds authorized under the Indenture. A series of Additional Bonds may be issued without a corresponding deposit into a debt service reserve fund.
(e) The Authority shall have entered into an amendment to the Property Lease, in and by which the City obligates itself in the manner provided in the Property Lease to make Base Rental payments for the lease of the Leased Property at the times and in the amounts sufficient to provide for the payment of the principal of and interest on such Additional Bonds as such principal and interest become due and to make all other payments in the manner provided in the Property Lease, and the City must certify in writing that such Base Rental payments, as amended, in any Lease Year shall not exceed the fair rental value of the Leased Property.
(f) If necessary to ensure that the Base Rental payable after the issuance of Additional Bonds does not exceed the fair rental value of the Leased Property in any Lease Year, the Authority and the City must amend the Property Lease to add additional property to the Leased Property.
(g) In the event that the Additional Bonds are being issued to finance the construction of a to -be-built project, such project is to be part of the Leased Property prior to its completion and the City has determined that the project must be completed for the Base Rental payments after the issuance of the Additional Bonds to not exceed the fair rental value of the Leased Property in any Lease Year, the Supplemental Indenture authorizing the issuance of such Additional Bonds shall require the depo sit into a separate account an amount sufficient to pay interest on such Additional Bonds through a date which is not less than six months after the anticipated completion date of the project.
In addition, the Indenture requires the City to send written notice of the issuance of such Additional Bonds to each rating agency then rating the Bonds.
Base Rental
Requirement to Make Base Rental Payments . Under the Property Lease, t he City is required to pay to the Authority, as Base Rental for the use and occupancy of the Leased Property (subject to the provisions of the Property Lease concerning the extension of the lease term, fair rental value, rental abatement and eminent domain) the amounts at the times specified in and in accordance with the Base Rental Payment Schedule set forth in the Property Lease.
Base Rental shall be payable on each “Base Rental Payment Date” (defined as April 15 and October 15 of each year, beginning October 15, 2023 ) during the term of the Property Lease.
Base Rental shall be for the use and occupancy of the Leased Property for the Lease Year in which such April 15 and October 15 occurs, provided that the Base Rental paid on any April 15 and October 15 shall only be for that portion of the applicable period that the City has use and occupancy of all or a portion of the Leased Property. If the term of the Property Lease is extended, the payments of Base Rental shall continue to and including such time as the Property Lease terminates in accordance with its terms.
23 Payment in Installments. Each installment of Base Rental payable under the Property Lease and each installment of Additional Rental (as described below) payable under the Property Lease shall be paid in lawful money of the United States of A merica to or upon the order of the Authority at the principal corporate trust office of the Trustee in Los Angeles , California, or such other place as the Authority designates.
Except as otherwise provided in the Property Lease, any installment of Base Rental or Additional Rental accruing under the Property Lease which is not paid when due shall bear interest at the highest interest rate on any outstanding Bond or such lesser rate as may be permitted by law. Notwithstanding any dispute between the Authority and the City, the City shall make all rental payments when due without deduction or offset of any kind and shall not withhold any rental payments pending the final resolution of such dispute. In the event of a determination that the City was not liab le for said rental payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent rental payments due under the Property Lease or, at the City ’s option, refunded at the time of such determination.
Offsets and Credits. Notwithstanding any dispute between the Authority and the City, the City is obligated to make all rental payments when due under the Property Lease without deduction or offset of any kind and may not withhold any rental payments pending the final resolution of such dispute. The City will receive a credit for any Base Rental payment if and to the extent a credit is due to the City due to abatement.
Additional Rental
Under the Property Lease, the City is also required to pay to the Authority (but only after payment of Base Rental), as Additional Rental thereunder, such amounts as are required by the Authority for the payment of the following:
(a) All taxes, assessments or governmental charges of any type or nature charged to the Authority or affecting the Leased Property or the respective interests or estates of the Authority or the City therein, or affecting the amount available to the Authority from rentals received under the Property Lease for the retirement of the Bonds (including taxes, assessments or governmental charges assessed or levied by any governmental agency or district having power to levy taxes, assessments or governmental charges ), and any and all costs and expenses incurred by the Authority in taking whatever steps may be necessary, upon written request by the City, to contest any proposed valuation, the amount of any proposed tax or assessment, or to take steps necessary to recover any tax or assessment paid.
(b) To the extent permitted by law, all reason able administrative costs of the Authority relating to the Leased Property including, but without limiting the generality of the foregoing, salaries, wages, all expenses, compensation and indemnification of the Trustee payable by the Authority under the In denture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Bonds or of the Indenture or to defend the Authority and its members, officers, agents and employees.
24 (c) Insurance premiums for all insurance required under the Property Lease and not obtained by the City.
(d) Amounts, if any, required to be rebated by the Auth ority to the United States of America under the Indenture.
Fair Rental Value
The payments of the Base Rental and Additional Rental during the term of the Property Lease shall constitute the total rental for the City ’s use and occupancy of the Leased Property for the Lease Year in which such payments are scheduled to be made, and the City and the Authority have agreed and determined that such total rental represents the fair rental value of the Leased Property. In making su ch determination, consideration has been given to the costs of financing and leasing of the Leased Property by the Authority, the uses and purposes which may be served by the Leased Property, and the benefits which shall accrue to the Authority, the City and the general public therefrom.
The Property Lease further states that, n otwithstanding any other provision thereof, in the event that rental payments due thereunder shall be abated partially for any period of time, the rental payments due for such perio d of time shall not exceed the fair rental value of that portion of the Leased Property available for use and occupancy by the City during such period of time. See “– Abatement” below.
Source of Payments; Covenant to Appropriate
Under the Property Lease, the City will covenant to take such action as may be necessary to include all Base Rental payments and Additional Rental due under the Property Lease in its annual budgets and to make necessary annual appropriations for all such rental payments. These covenants shall be deemed to be and be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements agreed to be carried out and performed by the City in the Property Lease.
Abatement
During any period in which by reason of material damage to or destruction of the Leased Property, or condemnation of or defects in the title of the Leased Property , there is substantial interference with the use and occupancy by the City of any portion of the Leased Property, or the City is otherwise not able to use or enjoy the benefit of the Leased Property, rental payments due under the Property Lease shall be su bject to abatement proportionately. Under the Property Lease, the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Property Lease by virtue of any such interference or lack of use and the Property Lease shall continue in full force and effect.
Subject to the provisions of the Property Lease concerning fair rental value, in the case of abatement relating to the Leased Property, the amount of abatement shall be in that proportion which the value of that portion of the Leased Property rendered unusable bears to the value of the whole of the Leased Property. The City shall calculate the amount to be abated and shall provide the Authority and the Trustee with a certificate setting fort h its calculation and the basis for such calculation. Such abatement shall continue for the period commencing with