HomeMy WebLinkAbout2015-03-02 City Council Agenda Packet (2) BOARD OF DIRECTORS
PALO ALTO PUBLIC IMPROVEMENT CORPORATION
MARCH 2, 2015
Special Meeting
Council Chambers
6:00 PM
Agenda posted according to PAMC Section 2.04.070. A binder containing supporting materials is
available in the Council Chambers on the Friday preceding the meeting.
1 March 2, 2015
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA
PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITYCLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE.
DURING NORMAL BUSINESS HOURS.
Call to Order
Oral Communications
Action Items
1. Approval of 2013-14 Public Improvement Corporation Financial
Statement
Adjournment
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City of Palo Alto (ID # 5536)
Palo Alto Public Improvement Corporation Staff Report
Report Type: Action Items Meeting Date: 3/2/2015
City of Palo Alto Page 1
Summary Title: Public Improvement Corporation Board
Title: Approval of 2013-14 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 2013-14 financial statement for the Public Improvement Corporation.
Motion: Board of Directors of the Public Improvement Corporation (PIC) adopt the attached
2013-14 PIC Annual Financial Report
Background
The Public Improvement Corporation (PIC) is a nonprofit corporation that was formed by the
City of Palo Alto in 1983. This corporation can issue Certificates of Participation (COPs) which
allow the City to raise funds for the acquisition, improvement, and construction of General
Fund facilities. Via a lease structure, the PIC receives lease payments from the City’s General
Fund to pay annual debt service on the COPs.
On July 13, 1998, Council adopted a resolution establishing itself as the Board of Directors of
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, the Civic
Center COPs were refinanced due to a lower interest rate environment and, at the same time,
COPs were issued to finance the construction of commercial space adjacent to the new parking
structure on Bryant Street and Lytton Avenue. The bylaws of the PIC require the Board of
Directors of the Corporation to meet at least annually and approve the financial statement for
the Corporation.
Former Golf Course COPs (principal amount of $3.7 million) were privately placed with JP
Morgan Chase Bank in order to realize net present savings of $239,000 or 6.47 percent on the
refinanced COPs. Civic Center COPs that were issued in 1983 to undertake various
improvements to the City’s Civic Center were fully amortized and paid in 2012. The new 2002
City of Palo Alto Page 2
taxable COPs were used to build a two story above-ground structure that is now leased to a
commercial tenant (a fitness center). Rents from this facility are at a level sufficient to cover
debt service on the COPs and to provide revenue for City teen programs.
Discussion
The attached financial statement shows the financial condition of the PIC. The debt service
payments have been made on time and all financial requirements, such as the maintenance of a
reserve, have been met. At year-end, June 30, 2014, total outstanding debt principal on the
COPs equaled $1.43 million as follows:
COP Description
Principal
Outstanding
(millions)
Year Debt will
be Retired
2002B Downtown Parking Improvements $1.43 2022
Total COP $1.56
Staff recommends that the Board of Directors of the Public Improvement Corporation (PIC)
approve the 2013-14 financial statement 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 2014 Financial Statement
(PDF)