Staff Report
March 26, 2024
The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Monterey Park it is expected that that a portion of the issuanc e fee attributable to the City will be granted by the CMFA to the general fund of the City. Such grant may be used for any lawful purpose of the City.
Respectfully submitted by: Prepared by:
Inez Alvarez
City Manager
Diana Garcia
Assistant City Manager
Reviewed by:
Reviewed by:
_______________________________
Karl H. Berger
City Attorney
Martha Garcia
Finance Director
ATTACHMENTS:
1. Resolution of Council Approving the Issuance of California Municipal Authority Revenue Bonds for Monterey Park Senior Village
2. Joint Powers Authority Agreement
Staff Report
March 26, 2024
ATTACHMENT 1
Resolution of Council Approving the Issuance of
California Municipal Authority Revenue Bonds for
Monterey Park Senior Village
RESOLUTION NO._______________
RESOLUTION APPROVING, AUTHORIZING AND DIRECTING
EXECUTION OF A JOINT EXERCISE OF POWERS AGREEMENT
RELATING TO THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY
AND APPROVING THE ISSUANCE OF EXEMPT FACILITY BONDS FOR
A QUALIFIED RESIDENTIAL RENTAL PROJECT BY THE AUTHORITY
FOR THE PURPOSE OF FINANCING OR REFINANCING THE
ACQUISITION, REHABILITATION AND IMPROVEMENT OF CERTAIN
FACILITIES FOR THE BENEFIT OF MONTEREY PARK SENIOR
VILLAGE PHASE II, LP
The City Council of the City of Monterey Park resolves as follows:
SECTION 1: The City Council finds and declare as follows:
A. The California Municipal Finance Authority (the “Authority”), is authorized pursuant to Government Code §§ 6500, et seq. and the terms of a Joint Exercise of Powers Agreement, dated January 1, 2004 (the “Agreement”), among certain local agencies throughout the State of California, to issue revenue bonds for the purpose of promoting economic development in the state of California..
B. Monterey Park Senior Village Phase II, LP (the “Borrower”) a partnership of which AMG & Associates, LLC (the “Developer”) or a related person to the Developer is the general partner, requested that the Authority adopt a plan of financing providing for the issuance of exempt facility bonds for a qualified residential rental project in one or more series issued from time to time, including bonds issued to refund such exempt facility bonds in one or more series from time to time, and at no time to exceed $40,000,000 in aggregate principal amount (the “Bonds”), to finance or refinance the acquisition, rehabilitation, improvement and equipping of a senior multifamily rental housing project located at 1935 Potrero Grande Drive, Monterey Park, California (the “Project”).
C. The Bonds or a portion thereof will be “private activity bonds” for purposes of the Internal Revenue Code of 1986 (the “Code”). Pursuant to Section 147(f) of the Code, before their issuance, private activity bonds are required to be approved by the “applicable elected representative” of the governmental units on whose behalf such bonds are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by such bonds is to be located, after a public hearing held following reasonable public notice;
D. The members of this City Council (“Council”) are the applicable elected representatives of the City;
E. Notice of this public hearing was published in a newspaper of general circulation regarding the Bonds at least 14 days before the public hearing.
Such public hearing was conducted on such date, at which time an
opportunity was provided to interested parties to present arguments both for and against the issuance of the Bonds;
F. It is intended that this Resolution constitutes the approval of the issuance of the Bonds required by Section 147(f) of the Code and Section 4 of the Agreement.
G. The City Council determined that it is in the public interest and for the public benefit that the City become a Member of the Authority in order to facilitate the promotion of economic, cultural and community development activities in the City, including the financing of projects therefor by the Authority.
H. The Authority is authorized to issue and sell revenue bonds for the purpose, among others, of financing or refinancing the construction, acquisition and rehabilitation of capital projects.
Section 2. The foregoing recitals are true and correct.
Section 3. The Council approves the issuance of the Bonds by the Authority. It is the purpose and intent of the Council that this resolution consttitutes approval of the Bonds for the purposes of (a) Section 147(f) of the Code and (b) Section 4 of the Agreement.
Section 4. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents that they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing approved hereby.
Section 5. The issuance of the Bonds is subject to the approval of the Authority of all financing documents relating thereto to which the Authority is a party. The City has no responsibility or liability whatsoever with respect to the Bonds.
Section 6. The adoption of this Resolution does not obligate the City to (i) provide any financing to acquire or construct the Project or any refinancing of the Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation or operation of the Project; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) take any further action with respect to the Authority or its membership therein.
Section 7. The executing officers(s), the City Clerk and all other proper officers and officials of the City are hereby authorized and directed to execute such other agreements, documents and certificates, and to perform such other acts and deeds, as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein authorized.
Section 8. The City Clerk must forward a certified copy of this Resolution and an originally executed Agreement to the Authority in care of its counsel:
Ronald E. Lee, Esq.
Jones Hall, APLC
475 Sansome Street, Suite 1700
San Francisco, CA 941111
Section 9. This Resolution takes effect immediately upon its passage.
PASSED AND ADOPTED this 26th day of March 2024.
_____________________________________
Thomas Wong, Mayor
Attest:
___________________________________
Maychelle Yee, City Clerk
Approved as to Form:
___________________________________
Karl H. Berger, City Attorney
Staff Report
March 26, 2024
ATTACHMENT 2
Joint Powers Authority Agreement
JOINT EXERCISE OF POWERS AGREEMENT
RELATING TO THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY
THIS AGREEMENT, dated as of January 1, 2004, among the parties executing this Agreement (all such parties, except those which have withdrawn as provided herein, a re referred to as the “Members” and those parties initially executing this Agreement are referred to as the “Initial Members”):
WITNESSETH
WHEREAS, pursuant to Title 1, Division 7, Chapter 5 of the California Government Code (in effect as of the date he reof and as the same may from time to time be amended or supplemented, the “Joint Exercise of Powers Act”), two or more public agencies may by agreement jointly exercise any power common to the contracting parties; and
WHEREAS, each of the Members is a “ public agency” as that term is defined in Section 6500 of the Joint Exercise of Powers Act; and
WHEREAS, each of the Members is empowered by law to promote economic, cultural and community development, including, without limitation, the promotion of oppo rtunities for the creation or retention of employment, the stimulation of economic activity, the increase of the tax base, and the promotion of opportunities for education, cultural improvement and public health, safety and general welfare; and
WHEREAS, each of the Members may accomplish the purposes and objectives described in the preceding preamble by various means, including through making grants, loans or providing other financial assistance to governmental and nonprofit organizations; and
WHEREAS, each Member is also empowered by law to acquire and dispose of real property for a public purpose; and
WHEREAS, the Joint Exercise of Powers Act authorizes the Members to create a joint exercise of powers entity with the authority to exercise any powers common to the Members, as specified in this Agreement and to exercise the additional powers granted to it in the Joint Exercise of Powers Act and any other applicable provisions of the laws of the State of California; and
WHEREAS, a public entity establ ished pursuant to the Joint Exercise of Powers Act is empowered to issue or execute bonds, notes, commercial paper or any other evidences of indebtedness, including leases or installment sale agreements or certificates of participation therein (herein “Bon ds”), and to otherwise undertake financing programs under the Joint Exercise of Powers Act or other applicable provisions of the laws of the State of California to accomplish its public purposes; and
WHEREAS, the Members have determined to specifically authorize a public entity authorized pursuant to the Joint Exercise of Powers Act to issue Bonds pursuant to the Joint Exercise of Powers Act or other applicable provisions of the laws of the State of California; and
WHEREAS, it is the desire of the Memb ers to use a public entity established pursuant to the Joint Exercise of Powers Act to undertake the financing and/or refinancing of projects of any nature, including, but not limited to, capital or working capital projects, insurance, liability or retirement programs or facilitating Members use of existing or new financial instruments and mechanisms; and
WHEREAS, it is further the intention of the Members that the projects undertaken will result in significant public benefits to the inhabitants of the jurisdictions of the Members; and
WHEREAS, by this Agreement, each Member desires to create and establish the “California Municipal Finance Authority” for the purposes set forth herein and to exercise the powers provided herein;
NOW, THEREFORE, the Members, for and in consideration of the mutual promises and agreements herein contained, do agree as follows:
Section 1. Purpose.
This Agreement is made pursuant to the provisions of the Joint Exercise of Powers Act.
The purpose of this Agreement is to establish a pu blic entity for the joint exercise of powers common to the Members and for the exercise of additional powers given to a joint powers entity under the Joint Powers Act or any other applicable law, including, but not limited to, the issuance of Bonds for any purpose or activity permitted under the Joint Exercise of Powers Act or any other applicable law. Such purpose will be accomplished and said power exercised in the manner hereinafter set forth.
Section 2. Term.
This Agreement shall become effective in accordance with Section 17 as of the date hereof and shall continue in full force and effect until such time as it is terminated in writing by all the Members; provided, however, that this Agreement shall not terminate or be terminated until all Bonds issued or cause d to be issued by the Authority (defined below) shall no longer be outstanding under the terms of the indenture, trust agreement or other instrument pursuant to which such Bonds are issued, or unless a successor to the Authority assumes all of the Authority’s debts, liabilities and obligastions.
Section 3. Authority.
A. CREATION AND POWERS OF AUTHORITY.
Pursuant to the Joint Exercise of Powers Act, there is hereby created a public entity to be known as the “California Municipal Finance Authority” (the “Authority”), and said Authority shall be a public entity separate and apart from the Members. Its
debts, liabilities and obligations do not constitute debts, liabilities or obligations of any Members.
B. BOARD.
The Authority shall be administered by the Board of Directors (the “Board,” or the “Directors” and each a “Director”) of the California Foundation for Stronger Communities, a nonprofit public benefit corporation organized under the laws of the State of California (the “Foundation”), with each such Director serving in his or her individual capacity as a Direct or of the Board . The Board shall be the administering agency of this Agreement and, as such, shall be vested with the powers set forth herein, and shall administer this Agreement in accordance with the purposes a nd functions provided herein. The number of Directors, the appointment of Directors, alternates and successors, their respective terms of office, and all other provisions relating to the qualification and office of the Directors shall be as provided in th e Articles and Bylaws of the Foundation, or by resolution of the Board adopted in accordance with the Bylaws of the Foundation.
All references in this Agreement to any Director shall be deemed to refer to and include the applicable alternate Director, if any, when so acting in place of a regularly appointed Director.
Directors may receive reasonable compensation for serving as such, and shall be entitled to reimbursement for any expenses actually incurred in connection with serving as a Director, if the B oard shall determine that such expenses shall be reimbursed and there are unencumbered funds available for such purpose.
The Foundation may be removed as administering agent hereunder and replaced at any time by amendment of this Agreement approved as pro vided in Section 16; provided that a successor administering agent of this Agreement has been appointed and accepted its duties and responsibilities under this Agreement.
C. OFFICERS; DUTIES; OFFICIAL BONDS.
The officers of the Authority shall be the Chair, Vice-Chair, Secretary and Treasurer (defined below). The Board, in its capacity as administering agent of this Agreement, shall elect a Chair, a Vice -Chair, and a Secretary of the Authority from among Directors to serve until such officer is re -elected or a successor to such office is elected by the Board. The Board shall appoint one or more of its officers or employees to serve as treasurer, auditor, and controller of the Authority (the “Treasurer”) pursuant to Section 6505.6 of the Joint Exercise of Powers Act to serve until such officer is re-elected or a successor to such office is elected by the Board.
Subject to the applicable provisions of any resolution, indenture, trust agreement or other instrument or proceeding authorizing or securing Bonds (ea ch such resolution, indenture, trust agreement, instrument and proceeding being herein referred to as an “Indenture”) providing for a trustee or other fiscal agent, and except as may otherwise be
specified by resolution of the Board, the Treasurer is desig nated as the depositary of the Authority to have custody of all money of the Authority, from whatever source derived and shall have the powers, duties and responsibilities specified in Sections 6505, 6505.5 and 6509.5 of the Joint Exercise of Powers Act.
The Treasurer of the Authority is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond with the Secretary of the Authority in the amount specifie d by resolution of the Board but in no event less than $1,000.
The Board shall have the power to appoint such other officers and employees as it may deem necessary and to retain independent counsel, consultants and accountants.
The Board shall have the power, by resolution, to the extent permitted by the Joint Exercise of Power Act or any other applicable law, to delegate any of its functions to one or more of the Directors or officers, employees or agents of the Authority and to cause any of said Directo rs, officers, employees or agents to take any actions and execute any documents or instruments for and in the name and on behalf of the Board or the Authority.
D. MEETINGS OF THE BOARD.
(1) Ralph M. Brown Act.
All meetings of the Board, including, without limi tation, regular, adjourned regular, special, and adjourned special meetings shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act (commencing with Section 54950 of the Government Code of the State of Calif ornia), or any successor legislation hereinafter enacted (the “Brown Act”).
(2) Regular Meetings.
The Board shall provide for its regular meetings; provided, however, it shall hold at least one regular meeting each year. The date, hour and place of the hol ding of the regular meetings shall be fixed by resolution of the Board. To the extent permitted by the Brown Act, such meetings may be held by telephone conference.
(3) Special Meetings.
Special meetings of the Board may be called in accordance with the provisions of Section 54956 of the Government Code of the State of California. To the extent permitted by the Brown Act, such meetings may be held by telephone conference.
(4) Minutes.
The Secretary of the Authority shall cause to be kept minutes of the regular, adjourned regular, special, and adjourned special meetings of the Board and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each Director.
(5) Quorum.
A majority of the Board shall constitute a quorum for t he transaction of business. No action may be taken by the Board except upon the affirmative vote of a majority of the Directors constituting a quorum, except that less than a quorum may adjourn a meeting to another time and place.
E. RULES AND REGULATIONS.
The Authority may adopt, from time to time, by resolution of the Board such rules and regulations for the conduct of its meetings and affairs as may be required.
Section 4. Powers.
The Authority shall have the power, in its own name, to exercise the common powers of the Members and to exercise all additional powers given to a joint powers entity under any of the laws of the State of California, including, but not limited to, the Joint Exercise of Powers Act, for any purpose authorized under this Agreement. Such powe rs shall include the common powers specified in this Agreement and may be exercised in the manner and according to the method provided in this Agreement. The Authority is hereby authorized to do all acts necessary for the exercise of such power, including , but not limited to, any of all of the following: to make and enter into contracts; to employ agents and employees; to acquire, construct, provide for maintenance and operation of, or maintain and operate, any buildings, works or improvements; to acquire, hold or dispose of property wherever located; to incur debts, liabilities or obligations; to receive gifts, contributions and donations of property, funds, services, and other forms of assistance from person, firms, corporations and any governmental entity; to sue and be sued in its own name; to make grants, loans or provide other financial assistance to governmental and nonprofit organizations (e.g., the Members or the Foundation) to accomplish any of its purposes; and generally to do any and all things necessary or convenient to accomplish its purposes.
Without limiting the generality of the foregoing, the Authority may issue or cause to be issued Bonds, and pledge any property or revenues as security to the extent permitted under the Joint Exercise of Powers Act, or any other applicable provision of law; provided, however, the Authority shall not issue Bonds with respect to any project located in the jurisdiction of one or more Members unless the governing body of any such Member, or its duly authorize d representative, shall approve, conditionally or unconditionally, the project, including the issuance of Bonds therefor. Such approval may be evidenced by resolution, certificate, order, report or such other means of written approval of such project as m ay be selected by the Member (or its authorized representative) whose approval is required. No such approval shall be required in
connection with Bonds that refund Bonds previously issued by the Authority and approved by the governing board of a Member.
The manner in which the Authority shall exercise its powers and perform its duties is and shall be subject to the restrictions upon the manner in which a California general law city could exercise such powers and perform such duties. The manner in which the Authority shall exercise its powers and perform its duties shall not be subject to any restrictions applicable to the manner in which any other public agency could exercise such powers or perform such duties, whether such agency is a party to this Agreement or not.
Section 5. Fiscal Year.
For the purposes of this Agreement, the term “Fiscal Year” shall mean the fiscal year as established from time to time by resolution of the Board, being, at the date of this Agreement, the period from July 1 to and including the following June 30, except for the first Fiscal Year which shall be the period from the date of this Agreement to June 30, 2004.
Section 6. Disposition of Assets.
At the end of the term hereof or upon the earlier termination of this Agreement as set forth in Section 2, after payment of all expenses and liabilities of the Authority, all property of the Authority both real and personal shall automatically vest in the Members in the manner and amount determined by the Board in its sole discretion and shall thereafter rem ain the sole property of the Members; provided, however, that any surplus money on hand shall be returned in proportion to the contributions made by the Members.
Section 7. Bonds.
From time to time the Authority shall issue Bonds, in one or more series, for the purp ose of exercising its powers and raising the funds necessary to carry out its purposes under this Agreement.
The services of bond counsel, financing consultants and other consultants and advisors working on the projects and/or their financing shall be u sed by the Authority. The expenses of the Board shall be paid from the proceeds of the Bonds or any other unencumbered funds of the Authority available for such purpose.
Section 8. Bonds Only Limited and Special Obligations of Authority.
The Bonds, together with th e interest and premium, if any, thereon, shall not be deemed to constitute a debt of any Member or pledge of the faith and credit of the Members or the Authority. The Bonds shall be only special obligations of the Authority, and the Authority shall under no circumstances be obligated to pay the Bonds except from revenues and other funds pledged therefor. Neither the Members nor the Authority shall be obligated to pay the principal of, premium, if any, or interest on the Bonds, or other costs incidental th ereto, except from the revenues and funds pledged therefor, and neither the faith and credit nor the taxing power of the Members nor the faith and credit of the Authority shall be pledged to the payment of the
principal of, premium, if any, or interest on the Bonds nor shall the Members or the Authority in any manner be obligated to make any appropriation for such payment.
No covenant or agreement contained in any Bond or related document shall be deemed to be a covenant or agreement of any Director, or any officer, employee or agent of the Authority in his or her individual capacity and neither the Board of the Authority nor any Director or officer thereof executing the Bonds shall be liable personally on any Bond or be subject to any personal liability or accountability by reason of the issuance of any Bonds.
Section 9. Accounts and Reports.
All funds of the Authority shall be strictly accounted for. The Authority shall establish and maintain such funds and accounts as may be required by good accounting practice a nd by any provision of any Indenture (to the extent such duties are not assigned to a trustee of Bonds).
The books and records of the Authority shall be open to inspection at all reasonable times by each Member.
The Treasurer of the Authority shall caus e an independent audit to be made of the books of accounts and financial records of the Authority by a certified public accountant or public accountant in compliance with the provisions of Section 6505 of the Joint Exercise of Powers Act. In each case the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the Government Code of the State of California and shall conform to generally accepted auditing standards. When such an audit of accounts and records is made by a certified public accountant or public accountant, a report thereof shall be filed as a public record with each Member and also with the county auditor of each county in which a Member is located; provided, however, tha t to the extent permitted by law, the Authority may, instead of filing such report with each Member and such county auditor, elect to post such report as a public record electronically on a website designated by the Authority. Such report if made shall be filed within 12 months of the end of the Fiscal Year or Years under examination.
The Treasurer is hereby directed to report in writing on the first day of July, October, January, and April of each year to the Board and the Members which report shall d escribe the amount of money held by the Treasurer for the Authority, the amount of receipts since the last such report, and the amount paid out since the last such report (which may exclude amounts held by a trustee or other fiduciary in connection with an y Bonds to the extent that such trustee or other fiduciary provided regular reports covering such amounts.)
Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants in making an audit pursuant to this Section, shall be borne by the Authority and shall be a charge against any unencumbered funds of the Authority available for that purpose.
In any Fiscal Year the Board may, by resolution adopted by unanimous vote, replace the annual special audit with an audit covering a two-year period.
Section 10. Funds.
Subject to the applicable provisions of any Indenture, which may provide for a trustee or other fiduciary to receive, have custody of and disburse Authority funds, the Treasurer of the Authority shall re ceive, have the custody of and disburse Authority funds pursuant to the accounting procedures developed under Sections 3.C and 9, and shall make the disbursements required by this Agreement or otherwise necessary to carry out any of the provisions of purpo ses of this Agreement.
Section 11. Notices.
Notices and other communications hereunder to the Members shall be sufficient if delivered to the clerk of the governing body of each Member; provided, however, that to the extent permitted by law, the Authority may, provid e notices and other communications and postings electronically (including, without limitation, through email or by posting to a website).
Section 12. Additional Members/Withdrawal of Members.
Qualifying public agencies may be added as parties to this Agreement and be come Members upon: (1) the filing by such public agency with the Authority of an executed counterpart of this Agreement, together with a copy of the resolution of the governing body of such public agency approving this Agreement and the execution and deli very hereof; and (2) adoption of a resolution of the Board approving the addition of such public agency as a Member.
Upon satisfaction of such conditions, the Board shall file such executed counterpart of this Agreement as an amendment hereto, effective upon such filing.
A Member may withdraw from this Agreement upon written notice to the Board; provided, however, that no such withdrawal shall result in the dissolution of the Authority so long as any Bonds remain outstanding. Any such withdrawal shall be effective only upon receipt of the notice of withdrawal by the Board which shall acknowledge receipt of such notice of withdrawal in writing and shall file such notice as an amendment to this Agreement effective upon such filing.
Section 13. Indemnification.
To the full extent permitted by law, the Board may authorize indemnification by the Authority of any person who is or was a Director or an officer, employee of other agent of the Authority, and who was or is a party or is threatened to be made a party to a procee ding by reason of the fact that such person is or was such a Director or an officer, employee or other agent of the Authority, against expenses, including attorneys fees, judgments, fines, settlements and other amounts actually and reasonably incurred in c onnection with such proceeding, if such person acted in good faith in a manner such person reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such pe rson was unlawful and, in the case of an action by or in the right of the Authority, acted with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.
Section 14. Contributions and Advances.
Contributions or advances of public funds and of the use of personnel, equipment or property may be made to the Authority by the Members for any of the purposes of this Agreement. Payment of public funds may be made to defray the cost of any such contrib ution or advance. Any such advance may be made subject to repayment, and in such case shall be repaid, in the manner agreed upon by the Authority and the Member making such advance at the time of such advance. It is mutually understood and agreed to that no Member has any obligation to make advances or contributions to the Authority to provide for the costs and expenses of administration of the Authority, even though any Member may do so. The Members understand and agree that a portion of the funds of the Authority that otherwise may be allocated or distributed to the Members may instead be used to make grants, loans or provide other financial assistance to governmental units and nonprofit organizations (e.g., the Foundation) to accomplish any of the governmental unit’s or nonprofit organization's purposes.
Section 15. Immunities.
All of the privileges and immunities from liabilities, exemptions from laws, ordinances and rules, and other benefits which apply to the activity of officers, agents or employees of Members when performing their respective functions within the territorial limits of their respective public agencies, shall apply to the same degree and extent to the Directors, officers, employees, agents or other representatives of the Authority while engaged i n the performance of any of their functions or duties under the provisions of this Agreement.
Section 16. Amendments.
Except as provided in Section 12 above, this Agreement shall not be amended, modified, or altered, unless the negative consent of each of the Members is obtained. To obtain the negative consent of each of the Members, the following negative consent procedure shall be followed: (a) the Authority shall provide each Member with a notice at least sixty (60) days prior to the date such proposed amendment is to become effective explaining the nature of such proposed amendment and this negative consent procedure; (b) the Authority shall provide each Member who did not respond a reminder notice with a notice at least thirty (30) days prior to the date such p roposed amendment is to become effective; and (c) if no Member objects to the proposed amendment in writing within sixty (60) days after the initial notice, the proposed amendment shall become effective with respect to all Members.
Section 17. Effectiveness.
This Agreement shall become effective and be in full force and effect and a legal, valid and binding obligation of each of the Members on the date that the Board shall have received from two of the Initial Members an executed counterpart of this Agreement, togethe r with a certified copy of a resolution of the governing body of each such Initial Member approving this Agreement and the execution and delivery hereof.
Section 18. Partial Invalidity.
If any one or more of the terms, provisions, promises, covenants or conditions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions of this Agreement s hall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law.
Section 19. Successors.
This Agreement shall be binding upon and shall inure to the benefit of the successors of the parties hereto. Except to the extent expres sly provided herein, no Member may assign any right or obligation hereunder without the consent of the other Members.
Section 20. Miscellaneous.
This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
The section headings herein are for convenience only and are not to be construed as modifying or governing the language in the section referred to.
Wherever in this Agreement any consent or approval is required, the sa me shall not be unreasonably withheld.
This Agreement shall be governed under the laws of the State of California.
This Agreement is the complete and exclusive statement of the agreement among the Members, which supercedes and merges all prior proposals, understandings, and other agreements, whether oral, written, or implied in conduct, between and among the Members relating to the subject matter of this Agreement.
[SIGNATURE PAGE FOR JPA AGREEMENT]
IN WITNESS WHEREOF, the City of Monterey Park has caused this Agreement to be executed and attested by its duly authorized representatives as of the 26th day of March 2024.
Member:
CITY OF MONTEREY PARK
By
Name:
Title:
ATTEST:
__________________________________
Maychelle Yee, City Clerk
Approved as to Form:
___________________________________
Karl H. Berger, City Attorney
City Council Staff Report
DATE: March 26, 2024
AGENDA ITEM NO:
TO: The Honorable Mayor and City Council
FROM: Inez Alvarez, City Manager
Karl H. Berger, City Attorney
SUBJECT: Business Attraction Program
RECOMMENDATION:
It is recommended that the City Council consider:
1. Receiving and filing this report;
2. Providing direction as may be desirable; and
3. Taking such additional, related, action that may be desirable.
EXECUTIVE SUMMARY
After dissolving redevelopment agencies, the California Legislature adopted “Economic Opportunity” legislation in 2014 which allows use of public funds to promote economic development (SB 470, Wright 2013). Depending on the type of economic development a city is seeking to promote, a city may be required to make findings to demonstrate that the development of the property is likely to create jobs, improve tax revenues, or satisfy a need for affordable housing. Additionally, cities may acquire, sell, or lease real property in furtherance of economic development (AB 806, Dodd and Frazier 2015).
The City Council’s 2023-24 Strategic Plan includes a goal of Economic Development within the City. Utilizing elements of the Economic Opportunity legislation may help advance this goal.
BACKGROUND
Government Code §§ 52200 to 52203 generally allow cities to expend public monies to help private enterprise for “economic opportunity.” To be classified as an “economic opportunity,” an agreement or project must fall under any one of the following categories:
• Development agreements and other agreements that create new jobs, provided that the city council finds that the agreement will create at least one new job for every $35,000 spent;
• Development agreements that increase property tax revenues, provided that the city council finds that the agreement will increase the total property tax resulting from the project “at full implementation” at least 15% when compared to the year before acquiring property;
• Projects leading to the creation of affordable housing, provided that there New Business - 5A
Staff Report
March 26, 2024
is a demonstrated need for affordable housing in the community;
• Projects that meet the goals of the “Sustainable Communities and Climate Protection Act of 2008” and are also a component of a sustainable communities or alternative planning strategy; and
• Transit priority projects.
For these economic opportunities, cities may assist a private enterprise as follows:
Option 1: Acquire, sell, or lease real property. Real property, however, cannot be acquired via eminent domain for an economic opportunity. Moreover, real property that was acquired by eminent domain (for purposes other than an economic opportunity) cannot be sold or leased for less than fair market value.
Notice and Hearing Requirements for Real Property:
Acquisition, sale or lease of real property must be approved by City Council resolution after a public hearing. Notice must be published for two successive weeks before the public hearing; the City must make a report related to real property transaction available for inspection including, without limitation, a copy of the proposed agreement; information relating to the cost of the agreement to the city; the estimated value of the property interest; and an explanation as to why the sale or lease of the property would benefit economic development.
Option 2: Issue loans to owners or tenants for rehabilitating commercial buildings or structures.
Notice and Hearing Requirements for Programs and Agreements for Rehabilitation of Commercial Buildings:
The Government Code allows a city to create programs for loaning funds to owners or tenants for the purpose of rehabilitating commercial buildings or structures. Such loans must be memorialized in loan agreements.
Additionally, loans may only be authorized after a public hearing after which the city council finds that such “assistance is necessary for the economic feasibility of the development and that the assistance cannot be obtained on economically feasible terms in the private market. ” This is the same
process for public assistance with developing or rehabilitating industrial or manufacturing properties.
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March 26, 2024
Option 3: Finance facilities or capital equipment needed for industrial or manufacturing purposes.
Ø Notice and Hearing Requirements for Development Subsidies of $100,000 or More
A city may also issue an economic development subsidy, such as a bond, loan, or incentive. Doing so requires a city to comply with certain notice and hearing requirements before granting an “economic development subsidy” in the amount of $100,000 or more, and must provide a report showing the efficacy of the subsidy.
An “economic development subsidy” is defined as:
“any expenditure of public funds or loss of revenue to a local agency in the amount of one hundred thousand dollars ($100,000) or more, for the purpose of stimulating economic development within the jurisdiction of a local agency including, without limitation, bonds, grants, loans, loan guarantees, enterprise zone or empowerment zone incentives,
1 fee waivers, land price subsidies, matching
funds, tax abatements, tax exemptions, and tax credits.”2 3
Before approving an economic development subsidy, a city must provide certain information in a publicly available written form and on the city website. That information must remain available during the term of the subsidy. That information includes identifying information pertaining to entities (aside from sole proprietorships) receiving the subsidy; a description of the subsidy and its purpose; and the estimated number of tax revenue and jobs generated by the subsidy. The city also must provide public notice and a hearing before the subsidy may be granted.
Within the term of the grant of the subsidy, but not later than five years following the grant of an economic development subsidy, a city must issue a report regarding the subsidy.
That report must be available to the public and posted on the city website. The report must contain the same information provided when the subsidy was first approved. In addition, it must include information related to the success of the subsidy, such as tax revenue and number of jobs created. During that time, the city must also hold a hearing to consider oral commentary on the report. If a particular economic development subsidy has a term of ten years or longer, the city must also hold a hearing when the term of the subsidy concludes.
1 Note that the Enterprise Zone Act was repealed, and enterprise zones were dissolved as of January 2014 by AB 93 (Committee on Budget, 2013).
2 Gov’t. Code § 53083.
3 Note that for the purposes of reporting requirements, expenditures related to the provision of low-income housing are not considered “economic development subsidies.”
Staff Report
March 26, 2024
Ø Advancing the City Council’s Strategic Plan
To advance the Strategic Plan, the City Council may wish to consider directing the City Manager and City Attorney to draft a Business Attraction Plan (“BAP”) utilizing one or more of the above economic opportunity categories. As an initial matter, it is recommended that the City Council consider combining Option 2 and Option 3 into an overall BAP; Option 1 could be accomplished on a case-by-case basis should the need arise.
Any BAP would need to be considered and adopted following a noticed public hearing. A preliminary budget should also be considered.
2023-2024 STRATEGIC PLAN GOAL:
Drafting a BAP helps meet the City Council’s 2023-24 Strategic Plan goal of Economic Development.
FISCAL IMPACT:
The proposed action does not result in an immediate fiscal impact to the City. Should the City Council adopt a BAP, it would consider its funding methods, sources, and amounts.
Respectfully submitted and prepared by:
_____________________________ _____________________________ Inez Alvarez, City Manager Karl H. Berger, City Attorney