 |
AGENDA ITEM NO. 11.
CITY OF HAWTHORNE Parking Authority AGENDA BILL For the meeting of 03/11/2025 Originating Department: City Attorney |
Exec. Director:
Legal Counsel:
SUBJECT:
RESOLUTION NO. 74 – A RESOLUTION OF THE PARKING AUTHORITY OF THE CITY OF HAWTHORNE CALIFORNIA, APPROVING AMENDMENT NO. 1 TO THE JOINT EXERCISE OF POWERS AGREEMENT FOR THE HAWTHORNE PUBLIC FINANCING AUTHORITY
RECOMMENDED MOTION:
Staff recommends that the Board of Directors Adopt Resolutions 74.
DISCUSSION:
Pursuant to the Joint Exercise of Powers Act, Government Code Section 6500, et seq. (the “Joint Powers Act”), the City and the Redevelopment Agency in 1992 created the Hawthorne Public Financing Authority (the “Financing Authority”), by entering into a Joint Exercise of Powers Agreement (the “JPA Agreement”). Under the Joint Powers Act, the Financing Authority has all of the powers common to its members, as well as additional, independent powers under the Joint Powers Act. The Joint Powers Act authorizes the Financing Authority to assist public agencies, such as the City and its related entities, in the financing and refinancing of public capital improvements.
The Financing Authority has assisted the City in the issuance of bonds for various capital improvement projects. Most recently, the Financing Authority issued its 2024 Lease Revenue Bonds (the “2024 Bonds”) in order to assist the City with financing various capital improvement projects, including the City Hall expansion and new public works yard. It is expected that the assistance of the Financing Authority may be needed again in the future to assist the City in securing financing for the construction of new projects.
The former Redevelopment Agency’s interest in the JPA Agreement was assigned to the Successor Agency to the Community Redevelopment Agency of the City of Hawthorne by operation of AB X1 26, which enacted the Dissolution Act. The Dissolution Act, as amended by AB 1484, enacted by the State Legislature on June 27, 2012, and as amended further by SB 107, enacted by the State Legislature on September 22, 2015, introduces complications to certain bond financing assisted by the Financing Authority. California Health and Safety Code Section 34187 specifies that the Successor Agency’s existence will terminate within a few months after the final payment of debt of the former Redevelopment Agency (or the disposal of all real property and resolution of all outstanding litigation). The last debt of the Successor Agency matures in 2036, and assuming that all real property has been disposed of and that there is no litigation at the time, the Successor Agency’s existence will terminate within approximately 11 years from now.
To finance or refinance public capital improvements of the City and its related entities, it is expected that additional bonded indebtedness or obligations will be issued with the assistance of the Financing Authority, and having terms and maturities extending beyond termination of the Successor Agency. Amendment of the JPA Agreement to add another member is necessary in order to preserve the continued existence of the Financing Authority after the termination of the Successor Agency’s existence. The 2024 Bonds will have a term of longer than 11 years. Therefore, it is necessary to add the Parking Authority as a member to the Financing Authority to assure the financial feasibility of these important projects proposed to be financed by bonds, as well as other future capital improvement projects of the City.
Attached Amendment No. 1 to the JPA Agreement would add the Parking Authority of the City of Hawthorne as a member of the Financing Authority and withdraw and terminate the Successor Agency as a member of the Financing Authority. Amendment No. 1 would facilitate the continued existence of the Financing Authority beyond the termination of the Successor Agency. In addition, the Successor Agency would no longer be subject to provisions of the JPA Agreement that could require the Successor Agency to contribute funds in the future. To date, no financial contributions have been required from the former Redevelopment Agency or the Successor Agency under such provisions.
The Financing Authority has assisted the City in the issuance of bonds for various capital improvement projects. Most recently, the Financing Authority issued its 2024 Lease Revenue Bonds (the “2024 Bonds”) in order to assist the City with financing various capital improvement projects, including the City Hall expansion and new public works yard. It is expected that the assistance of the Financing Authority may be needed again in the future to assist the City in securing financing for the construction of new projects.
The former Redevelopment Agency’s interest in the JPA Agreement was assigned to the Successor Agency to the Community Redevelopment Agency of the City of Hawthorne by operation of AB X1 26, which enacted the Dissolution Act. The Dissolution Act, as amended by AB 1484, enacted by the State Legislature on June 27, 2012, and as amended further by SB 107, enacted by the State Legislature on September 22, 2015, introduces complications to certain bond financing assisted by the Financing Authority. California Health and Safety Code Section 34187 specifies that the Successor Agency’s existence will terminate within a few months after the final payment of debt of the former Redevelopment Agency (or the disposal of all real property and resolution of all outstanding litigation). The last debt of the Successor Agency matures in 2036, and assuming that all real property has been disposed of and that there is no litigation at the time, the Successor Agency’s existence will terminate within approximately 11 years from now.
To finance or refinance public capital improvements of the City and its related entities, it is expected that additional bonded indebtedness or obligations will be issued with the assistance of the Financing Authority, and having terms and maturities extending beyond termination of the Successor Agency. Amendment of the JPA Agreement to add another member is necessary in order to preserve the continued existence of the Financing Authority after the termination of the Successor Agency’s existence. The 2024 Bonds will have a term of longer than 11 years. Therefore, it is necessary to add the Parking Authority as a member to the Financing Authority to assure the financial feasibility of these important projects proposed to be financed by bonds, as well as other future capital improvement projects of the City.
Attached Amendment No. 1 to the JPA Agreement would add the Parking Authority of the City of Hawthorne as a member of the Financing Authority and withdraw and terminate the Successor Agency as a member of the Financing Authority. Amendment No. 1 would facilitate the continued existence of the Financing Authority beyond the termination of the Successor Agency. In addition, the Successor Agency would no longer be subject to provisions of the JPA Agreement that could require the Successor Agency to contribute funds in the future. To date, no financial contributions have been required from the former Redevelopment Agency or the Successor Agency under such provisions.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
N/A
FISCAL IMPACT:
By withdrawal of the Successor Agency from the Financing Authority, the Successor Agency will no longer be subject to potential financial contribution requirements under the JPA Agreement. By addition of the Parking Authority of the City of Hawthorne to the JPA Agreement, the Financing Authority will continue in existence beyond the termination of the Successor Agency, thereby allowing the Financing Authority to continue to assist the City and its related entities in bond financings for significant public benefits, including (a) demonstrable savings in effective interest rate or bond issuance costs, (b) significant reductions in effective user charges levied, (c) employment benefits from undertaking the project in a timely fashion, or (d) more efficient delivery of local agency services to residential and commercial development.
NOTICING PROCEDURE:
72 hours posted notice pursuant to the Ralph M. Brown Act.