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ROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: OLIVER CHI, CITY MANAGER
DATE: MARCH 25, 2008
SUBJECT: CITY COUNCIL CHAMBERS RENOVATION - FUNDING AMENDMENT
SUMMARY
On January 12, 2008, the City Council approved a construction contract with Caltech
Construction for renovating the Council Chambers. As approved by general counsel,
the entire project was budgeted in the Rosemead Community Development
Commission's (RCDC) Special Projects budget using tax exempt bond funds as the
funding source. However, bond counsel recently advised that use of bond funds for City
Hall renovations is not allowable. Therefore, it is necessary to shift some of the costs of
renovation from RCDC to the City. The attached resolution authorizes an appropriation
increase in the General Fund for renovations to Council Chambers.
Staff Recommendation
Staff recommends that City Council accept the early repayment of $433,000 from
RCDC and approve the attached resolution appropriating $433,000 in the General
Fund.
DISCUSSION
On January 22, 2008, the City Council approved a construction contract with Caltech
Construction for the Council Chambers renovation project. Appropriations for the
project were approved as part of the FY 2007-08 RCDC Special Projects Budget with
funding to be provided by redevelopment tax exempt bond proceeds. General Counsel
advised that using tax exempt bond proceeds for City Hall renovation expenses was
allowable. However, at a later time, based on Section 33445 of the Health and Safety
(H & S) Code (Redevelopment Law) Bond Counsel advised that City Hall renovation
would not be an allowable use of tax exempt bond proceeds except for bonds issued
prior to January 1, 1994. This means that the tax exempt bond proceeds received from
the City's $34 million 1993 Series Bond" issued in 1993 are exempt from the prohibition
of City Hall renovations mandated by H & S Code Section 33445, providing the City is
able to account for any remaining proceeds from the 1993 Series Bond
Finance Department staff has identified approximately $200,000 of remaining "1993
Series Bond" proceeds which will be used to support the appropriation in the RCDC
APPROVED FOR CITY COUNCIL AGENDA:
City Council Meeting
March 25, 2008
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Special Projects budget. Therefore, of the $643,000 total amount needed to renovate
the Council Chambers (architectural - $70,000, construction - $573,000), only $200,000
can be paid for with tax exempt bond proceeds. The $443,000 difference can be
funded partially with Community Development Block Grant funding ($10,000) and the
remainder ($433,000) with funds to be appropriated in the General Fund.
To minimize the impact of using the General Fund's fund balance to pay for this
unexpected expense, staff is also recommending an early principal repayment of the
Advance from the City by the RCDC; the details have been presented separately on an
RCDC staff report. The early repayment of $433,000 will have a negligible effect on
RCDC because recent tax increment estimates from the City's property tax consultant
are projected to be higher than previously thought, there is salary savings from positions
that were not filled for the full year and interest expense to the RCDC will be reduced
due to a lower balance of outstanding Advance from City proceeds. With an early
repayment from RCDC the General Fund's fund balance and cash balance will remain
unchanged with the added expense of the Council Chamber renovation.
FINANCIAL REVIEW
The total appropriation needed to award the construction portion of the project is
$573,000, which includes a 10% amount ($52,100) for unforeseen construction
expenses. Funding for this project is to be provided for in the City's FY 2007-08 Capital
Improvement Program Budget.
ENVIRONMENTAL REVIEW
The project is categorically exempt from the California Environmental Quality Act
(CEQA) pursuant to Section 15301 (a) of the CEQA Implementing Guidelines. This
exemption covers building alterations involving partitions, plumbing, electrical, etc.
LEGAL REVIEW
This staff report has been reviewed and approved by the City Attorney.
Sub by:
B eki
Assistant City Manager
Steven Brisco
Finance Director
0
RESOLUTION NO. 2008 - 21
A RESOLUTION OF THE CITY OF ROSEMEAD APPROPRIATING $433,000 FOR
THE COUNCIL CHAMBER REMODELING PROJECT
WHEREAS, In the Rosemead Community Development Commission budget
$750,000 was budgeted for Council Chamber remodeling, and
WHEREAS, at the time the budget was prepared it was expected that bond
proceeds would be available to pay for the remodeling project, and
WHEREAS, subsequent to budget approval bond counsel advised that bond
proceeds received after 1993 could not be used for city hall construction, and
WHEREAS, with renovation commenced it would be necessary to pay for some of
the renovations with General Fund money.
NOW THEREFORE, the following appropriations and fund balance is amended to
include the amounts listed in the following table:
Or Object/Acct
Pro'/Fund
Description
Increase Decrease
Revenue:
Expenditure:
4760 4225
P70101
Architectural
70,000
4760 4905
P70101
Construction
363,000
Fund Balance:
2990
Fund 01
General Fund
433,000
The additional appropriation is made a part of the approved FY2007-08 budget as though
it were a part of the initial approved budget fully set forth and the City Manager is
authorized and empowered to expend such sum for the purpose of such account, but with
no expenditure by any office or department for any item within an account shall exceed the
amount budgeted therefore without prior written approval of the City Manager.
Page 1 of 2
RESOLUTION NO. 2008 - 21
A RESOLUTION OF THE CITY OF ROSEMEAD APPROPRIATING $433,000 FOR
THE COUNCIL CHAMBER REMODELING PROJECT (CONT.)
PASSED, APPROVED and ADOPTED this 25'h day of March 2008.
, Mayor
ATTEST:
City Clerk
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