City Council and Redevelopment Agency Supplemental Staff Report
City Council and Redevelopment Agency Meeting: May 12, 2009
Agenda Item: 5-A
To: Mayor and City Council
Chairperson and Redevelopment Agency
Subject: Redevelopment Agency Capital Funding Priorities: Supplemental Information
Staff recommends that the City Council provide direction regarding long-term redevelopment funding priorities for capital improvement projects.
The Council directed staff to address specific questions discussed at its April 14, 2009 meeting. This report summarizes the supplemental information provided in response to those questions, while clarifying certain project descriptions to provide more detail regarding leveraging opportunities, project readiness and estimated operational and maintenance costs.
On April 14, 2009, staff presented information regarding the Redevelopment Agency’s ability to fund priority capital projects, including the need to establish Agency debt by 2014 (or preferably 2012 to bond at the best possible terms), the Agency’s estimated funding capacity of $283 million and the need to refine the Agency’s funding priorities and commitments. Given the upcoming deadlines for establishing Agency debt, as well as the pending FY 2009/2010 City budget and the need to adopt a Five-Year Agency Implementation Plan by the end of 2009, staff presented preliminary funding allocation recommendations for capital improvement projects identified as potentially eligible for redevelopment funding.
Following the staff presentation and public comment, Council requested additional information to assist with its deliberations in refining priorities and funding commitments.
Provided below is supplemental information in response to the Council’s questions from the April 14, 2009 meeting.
EXPO Light Rail: Timing and Phasing
Opening of the EXPO Light Rail Transit (LRT)
It is critical that the City coordinate
station area planning with the Exposition Authority to ensure appropriate
transit connections, convenient and safe pedestrian access and continuation of
a functional bicycle path. The three
· access issues generated by transit, private vehicles, bicycles and pedestrians;
· provision of station amenities; and
· development of a desirable station footprint in relation to any future development or open space on or adjacent to the station site.
The City will be defining the improvements through a station area planning process that will commence immediately. Station area improvements could include:
Downtown Station: 1) a pedestrian plaza on the SE corner of
Memorial Park Station: 1) streetscape improvements
· Bergamot Station: 1) reestablish the street grid for vehicles, bikes and pedestrians (expected to be largely developer funded), 2) intersection improvements at 26th Street and Olympic Boulevard to enhance pedestrian access, 3) landscaped streetscape improvements with improved crossings, 4) an enhanced Olympic Boulevard median from Stewart Avenue to Cloverfield Boulevard, 5) shared parking, and 6) a bike transit facility.
Debt Capacity Analysis
In response to Council’s request for additional information regarding the Agency’s debt capacity, a study session was presented to the Council on April 28, 2009, to convey the fundamentals of bonds and debt capacity including bond issuance, types of bonds, flow and structure of bond funds, debt ratios, factors in calculating funding capacity, and the leveraging of tax increment and financing projects.
Flexibility of Funding Commitments
Council requested additional information regarding the flexibility of funding and project commitments. The debt capacity analysis provides a current snapshot of the Agency’s estimated financing capability, while the project cost estimates are based on current information regarding projects and funding sources. In the coming years, these factors may change if assessed valuation grows at a different rate than projected, construction costs vary from estimates, borrowing costs change, outside grant funding is obtained for certain projects, the State take-away is adjusted or new state laws are adopted that affect redevelopment financing. If changes in these factors indicate that additional capacity will be available for projects, staff will return to Council for direction on allocation of additional funds. Similarly, if changes in these factors indicate that the redevelopment funding capacity will be reduced, staff will return to Council for guidance and direction.
Leveraging of RDA Funds
Council requested information regarding leveraging opportunities for the proposed projects. Given limited resources and competing capital improvement needs, the City actively pursues opportunities to leverage funding in order to maximize the ability of the City to complete as many capital projects as possible. These leveraging opportunities include competitive grants, formula grants and partnerships with public or private agencies.
Currently, the City is awaiting decisions on the applications for MTA Call for Projects (biannual opportunity to receive transit-related funds) and a Proposition 1C Infill Grant, while programming formula-based grants from Proposition A, Proposition C and Measure R for transit-related purposes, as well as from federal sources. The City has applied for Federal Economic Stimulus funding and regularly seeks federal allocations for regionally or nationally significant projects. Attachment A summarizes the leveraging opportunities for each proposed capital project.
Operational and Maintenance Costs
information regarding the expected operational and maintenance costs and needs
associated with the proposed capital projects.
Attachment B summarizes the estimated costs for operation and
maintenance of each proposed capital project. The costs estimates are based on assumptions
ranging from whether or not restroom facilities will be included in the projects
to whether the City will contract with third-party operators for facilities such
as the Civic Auditorium,
Operational and maintenance costs are calculated per project as they relate to utilities, facility maintenance, public landscaping, community forests, custodial services, and community programs. The estimated annual operational and maintenance costs per proposed capital project are summarized in Attachment B.
requested additional information regarding the proposed Civic Center Joint-Use
At the April 28 study
session on the Pico Library, Council was asked to consider two options for creation
of a new branch library: building in
important consideration with regard to refining priorities is project readiness
and the ability of projects to take advantage of the optimal window for issuing
debt (2012) and the final deadline for establishing Agency debt (2014.) Staff has completed a more refined analysis
of project readiness, which is reflected in Attachment E. Some of the projects are infrastructure
improvements that can move to construction quickly (e.g. street light
replacement, traffic signal master plan implementation, tree planting, Pier
improvements, etc.) Other projects are
broader in scope, but have already completed master planning and CEQA analysis
and are expected to be able to proceed forward within the optimal window (e.g.
Civic Center Specific Plan projects, Downtown Parking Strategic Plan
Implementation.) Certain projects have
not completed design or CEQA review, but are of a discrete nature to allow
their readiness for Agency funding (e.g. LRT stations, Pico Library.) Three of the projects face significant
hurdles with respect to readiness according to the Agency deadlines. The first is the Memorial Park
expansion. While the park expansion
itself could be ready according to RDA funding timelines, public landscape
operations that currently occupy the former Fisher Lumber site must be
relocated before park expansion can occur.
Finding a site and creating a facility for public landscape operations
is expected to be a lengthy process, with no funding yet identified for a
relocation project which is ineligible for redevelopment funding. In spite of these challenges, Council may
wish to consider allocating funds in the amount of $2.3 million to supplement
$1.1 million in budgeted FY 08-09 funding for the preparation of the master
plan including the identification and evaluation of sites for public landscape
operations, design of the Phase I park improvements to incorporate the former
Fisher Lumber site into the park block and associated environmental review as
necessary steps in realizing the Memorial Park expansion. The other two projects of concern are
corridor improvements for Pico and Lincoln Boulevards. Currently, improvement strategies for the
boulevards must be prepared, which would identify specific projects that need
to be designed and reviewed for environmental impacts. Staff’s assessment is
that it is unlikely that these steps will be completed within the timeline. In past years, funds were allocated for the
development of the boulevard strategies.
To allow the process to continue forward, Council may wish to consider providing
funding of $560,000 to match a Metro Grant ($800,000) for pedestrian
Cost Estimate Revisions
Attachment D is an updated summary of recommended funding allocations based on
refinements to cost estimates and project readiness of the proposed capital
The Agency funding
priorities will be reflected in the City’s Capital Improvement Program for FY 2009-10
through 2013-14, the City’s FY 2009-10 budget, and the Agency’s Implementation
Plan to be considered later this year.
Staff will continue to explore debt instruments to maximize
funding. If the Council approves funding
Financial Impacts & Budget Actions
All budget actions resulting from these funding commitments will be included in the FY 2009-2010 Budget and any approved funding commitments beyond this fiscal year will be appropriated each fiscal year thereafter. Funds for operating cost impacts will need to be identified and appropriated as well.
Attachment A: Leveraging Opportunities
Attachment B: Operational and Maintenance Costs
Attachment C-1: School District’s Response Regarding Joint-Use Project
Attachment D: Updated Summary of Recommended Funding Allocations
Attachment E: Project Readiness