HomeMy WebLinkAbout2011-05-09 City Council Agenda Packet (2)City of Palo Alto (ID # 1679)
Palo Alto Public Improvement Corporation Staff Report
Report Type:Meeting Date: 5/9/2011
May 09, 2011 Page 1 of 2
(ID # 1679)
Summary Title: Public Improvement Corporation Board
Title: Approval of 2009-10 Public Improvement Corporation Financial Statement
From:City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the Board of Directors of the Public Improvement Corporation (PIC)
approve the 2009-10 financial statements for the Public Improvement Corporation.
Background
The Public Improvement Corporation (PIC) is a nonprofit corporation formed by the City in
1983, allowing the City to issue Certificates of Participation (COPs) to fund capital
improvements. The PIC, through a lease structure, finances the acquisition, improvement, and
construction of City facilities. The PIC uses the lease payments by the City’s General Fund to pay
the debt service on the COPs.
On July 13, 1998, Council adopted a resolution establishing itself as the Board of Directors of
the PIC. The bylaws of the PIC require the Board of Directors of the Corporation to meet at
least annually and approve the financial statements for the Corporation. Therefore, the City
Council is required to meet annually as the Board of the PIC. The City has three outstanding
COPs through the PIC. In 1983 and 1998, the City of Palo Alto issued Certificates of Participation
(COPs) to fund improvements to the Civic Center and the Golf Course, respectively. In 2002,
thee Civic Center bonds were refinanced to obtain a lower interest rate. Also in 2002, a third
series of COPs known as the Downtown Parking Improvement bonds were issued to finance the
construction of commercial space adjacent to the new parking structure on Bryant/Florence
Street.
The Golf Course bond proceeds were used to finance various improvements at the Palo Alto
Public Golf Course, including upgrading five fairways and various traps, trees and greens,
constructing new storm drain facilities, replacing the existing irrigation system, upgrading the
driving range, and installing new cart paths. The Civic Center bonds were issued to undertake
various improvements to the City’s existing Civic Center. These improvements included a third
elevator assembly and its installation in a pre-existing elevator shaft and strengthening of
certain structural and decorative elements of the building for seismic purposes. In addition,
funds were used for structural remodeling of the police headquarters and retrofitting of a
May 09, 2011 Page 2 of 2
(ID # 1679)
portion of the Civic Center for a fire sprinkler system. The Downtown Parking Improvement
bonds were used to build a two story above-ground structure of approximately 7,638 square
feet which was leased to a commercial tenant.
Discussion
The attached financial statements show the financial condition of the PIC. All debt service
payments have been made on time and all financial requirements, such as the maintenance of
reserves, have been met. At year-end, June 30, 2010, total outstanding debt principal on the
COPs equaled $6.8 million as follows:
COP Description
Principal
Outstanding
(millions)
Year Debt will
be Retired
1998 Golf Course $4.1 2018
2002A Civic Center Refinancing $0.8 2012
2002B Downtown Parking Improvements $1.9 2022
Total COPs $6.8
Staff recommends that the Board of Directors of the Public Improvement Corporation (PIC)
approve the 2009-10 financial statements for the Public Improvement Corporation.
Resource Impact
Approval of the Public Improvement Corporation’s financial statements will have no resource
impact.
Policy Implications
Approval of the Public Improvement Corporation’s financial statements is consistent with prior
Council policy direction and resolutions.
Environmental Review
This is not a project, as defined in Section 21065 of the California Environmental Quality Act
(CEQA).
Attachments:
·Attachment A Public Improvement Corporation Fiscal Year 2010 Financial Statement (PDF)
Prepared By:Tarun Narayan, Senior Financial Analyst
Department Head:Lalo Perez, Director
City Manager Approval: James Keene, City Manager