Title
Recommendation to Authorize the City Manager to Execute a 12-Month Service Provider Agreement with Harris & Associates, a California Corporation, for Reimbursement Audit Services for Infrastructure Improvements to be Financed by Community Facilities District No. 13-1 (Alameda Landing Public Improvements) in an Amount Not to Exceed $134,900. (Community Development)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
On January 7, 2014, City Council adopted Resolution No. 14880 forming Community Facilities District No. 13-1 (Alameda Landing Public Improvements) (CFD) and on January 21, 2014 the City Council adopted Ordinance No. 3084 authorizing the City to levy annual special taxes on property in the CFD to be used to finance the costs of specified Alameda Landing public improvements and the costs of administering the CFD.
In connection with the formation of the CFD, the City and Catellus Alameda Development LLC (Catellus) entered into an Acquisition Agreement pursuant to which the City agreed to use proceeds of the special taxes and proceeds of special tax bonds issued for the CFD, to reimburse Catellus for the costs of specified public infrastructure improvements authorized to be financed by the CFD.
In 2015, the City Council conducted proceedings to authorize the issuance of up to $40,000,000 in CFD Special Tax Bonds for the CFD. On March 17, 2016, the City issued Special Tax Bonds in the amount of $15,415,000. In connection with the issuance of the Bonds, Harris & Associates (Harris) was chosen through a Request for Proposals (RFP) process to provide CFD cost reimbursement auditing services.
Catellus, master developer of the Alameda Landing project, has commenced construction of the final phase of backbone infrastructure. It is anticipated that in 2021, pursuant to the Alameda Landing Disposition and Development Agreement (DDA), Catellus will request that the City issue the remaining authorized bonds ($24,585,000) for the CFD. The proceeds of the Bonds will be used to reimburse Catellus for the cost of constructing certain public improvements, as specified in the Acquisition Agreement, as amended.
Based on Harris’ prior work auditing the status of the relevant public improvements and the associated costs as part of the 2016 bond issue for the CFD, staff recommends City Council authorize the City Manager to execute a 12-month agreement with Harris, in an amount not to exceed $134,900, for CFD reimbursement auditing services for the proposed bond issue. Pursuant to the Alameda Landing DDA, the cost of these services will be reimbursed to the City by Catellus.
BACKGROUND
In connection with the development of Alameda Landing, the City established CFD No. 13-1 (Alameda Landing Public Improvements) and entered into an Acquisition Agreement, dated November 1, 2013, between the City and Catellus. The Acquisition Agreement allowed for the use of special taxes levied on property in the CFD, and the proceeds of bonds issued by the City for the CFD, to be used to pay costs of specified public improvements required by the development of the Alameda Landing project to be constructed by Catellus.
In April of 2015, the City Council conducted proceedings to add territory to the CFD, expand the description of the facilities authorized to be funded by the CFD, and increase the bonded indebtedness limit of the CFD from $20,000,000 to $40,000,000. The City Council also approved a Supplement No. 1 to Acquisition Agreement with Catellus to include the annexed area in the CFD and revise the budgeted public improvements to be constructed by Catellus, the costs of which were to be reimbursed to Catellus with CFD special taxes and proceeds of bonds issued by the City for the CFD.
On March 17, 2016, the City issued Special Tax Bonds for the CFD in the amount of $15,415,000. The proceeds were used to reimburse Catellus for the cost of public improvements pursuant to the Acquisition Agreement, as supplemented by Supplement No. 1. Harris, who was selected through a RFP process, provided CFD reimbursement auditing services for the first phase of work reimbursed by the bond proceeds and CFD special taxes.
In December 2017, Catellus sold 17 acres located in the CFD to a wholly owned subsidiary of Bay Ship and Yacht (BSY), which renovated two existing warehouses for maritime and other manufacturing and commercial uses. As a result of that transaction, some of the public improvements that were included in Supplement No. 1 to the Acquisition Agreement were no longer required to be constructed by Catellus. Therefore, City Council adopted Resolution 15569 on July 17, 2019, approving Supplement No. 2 to the Acquisition Agreement with Catellus, and eliminating some of the improvements added by Supplement No. 1 and reducing the budgeted cost of the improvements.
DISCUSSION
Catellus has commenced construction of the final phase of backbone infrastructure at Alameda Landing. It is anticipated that in 2021, pursuant to the Alameda Landing DDA, Catellus will request that the City issue Special Tax Bonds for the remaining authorized CFD bonds ($24,585,000). Proceeds of the bonds will be used to reimburse Catellus for eligible project costs, as provided in the Acquisition Agreement, as supplemented. It is recommended that Harris be retained by the City to audit the public improvements and the associated costs to ensure that the bond proceeds are used in a manner that is consistent with the requirements of the Acquisition Agreement and the laws governing the CFD. Harris has been selected to provide these services due to its prior experience with the audit of costs reimbursed with the 2015 CFD bond issue.
The proposed service provider agreement with Harris for reimbursement auditing services (Exhibit 1) has a maximum compensation not to exceed $134,900 and a term of twelve (12) months. Pursuant to the Alameda Landing DDA, the cost of these services will be reimbursed to the City by Catellus.
ALTERNATIVES
• Authorize the City Manager to execute a 12-month service provider agreement 2 in an amount not to exceed $134,900 for reimbursement audit services for Community Facilities District No. 13-1 Phase.
• Revise the recommended term and/or maximum compensation.
• Decline to approve the service provider agreement.
FINANCIAL IMPACT
There is no impact to the General Fund from approving the agreement with Harris. The funds for this project are budgeted in the Community Development Department’s Economic Development Fund [Fund 256]. Under the DDA, Catellus is required to reimburse the City for all of its staff costs as well as third party costs. Therefore, the cost of retaining Harris to conduct the required auditing services will be fully reimbursed by Catellus.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action does not affect the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
On December 5, 2006, the City Council certified the Final Environmental Impact Report (EIR) for the Alameda Landing Mixed Use Development Project (a Supplement to the 2000 Catellus Mixed-Use Development Project EIR) in accordance with the California Environmental Quality Act (CEQA) (State Clearinghouse #2006012091). The City approved a First Addendum to the EIR in 2007, a Second Addendum to the EIR in 2008, and a Third Addendum to the EIR in 2012.
CLIMATE IMPACTS
This action has no anticipated climate impacts.
RECOMMENDATION
Authorize the City Manager to execute an twelve (12) month service provider agreement with Harris & Associates, a California corporation, for reimbursement audit services for infrastructure improvements to be financed by Community Facilities District No. 13-1 (Alameda Landing Public Improvements) in an amount not to exceed $134,900.
CITY MANAGER RECOMMENDATION
The City Manager requests authorization of the City Manager to execute an twelve (12) month service provider agreement with Harris & Associates, a California corporation, for reimbursement audit services for infrastructure improvements to be financed by Community Facilities District No. 13-1 (Alameda Landing Public Improvements) in an amount not to exceed $134,900.
Respectfully submitted,
Debbie Potter, Community Development Director
By,
Lorie Curtis, Real Estate Technician
Financial Impact section reviewed,
Nancy Bronstein, Interim Finance Director
Exhibit:
1. Service Provider Agreement
cc: Eric Levitt, City Manager