Purpose

This ordinance provides for the addition of a new Article 20 to Chapter 14 of the Burbank Municipal Code.  The new Article 20 would allow for the establishment of a Special Tax Financing Improvement Code, which would allow for the creation by the City Council of community facilities districts to finance certain public and other improvements and certain municipal services.

Background or Discussion

The California Government Code currently permits various public entities in California to create community facilities districts to finance facilities and services specified in the Government Code.  A community facilities district allows for the levy of an annual special tax within a specified geographic area the proceeds of which is used to fund specified services or pay costs of specified improvements, or otherwise to pay debt service on bonds issued to pay the costs of the specified improvements.  The Government Code contains certain procedural requirements and imposes various limitation for the formation and use of community facilities districts.  The City, however, as a California chartered city, has the power to adopt legislation providing independent authority for the establishment of community facilities districts, which legislation may allow for variations from the Government Code provisions that may otherwise apply.

In December of 2004, the Redevelopment Agency entered into an Amended and Restated Owner Participation Agreement with Champion Realty, Ltd., which contemplated the establishment of a community facilities district to finance public parking facilities.  The agreement with Champion Realty, Ltd. contains various timing requirements and stipulations regarding the proposed community facilities district.

In order to allow for a more efficient financing structure and additional flexibility in the formation of the community facilities district specified by the Amended and Restated Owner Participation Agreement, it has been recommended that the City adopt a Special Tax Financing Improvement Code pursuant to which the community facilities district called for by the OPA would be established.  In particular, the proposed City code would allow for the community facilities district to be established on an expedited schedule, and the bonds to be issued by the community facilities district could fund capitalized interest for more than the two year period otherwise allowed under current State law.  The City code, if enacted, could also be used for future City infrastructure financings in appropriate circumstances.

Recommendation

Approve and adopt the Ordinance.

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