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City of LA CAO report on Leimert Park station funding

City of LA CAO report on Leimert Park station funding

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Published by Metro Los Angeles
Report on using local return monies from Measure R toward Leimert Park station.
Report on using local return monies from Measure R toward Leimert Park station.

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Published by: Metro Los Angeles on May 22, 2013
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07/10/2013

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REPORT
FROM
OFFICEOFTHECITYADMINISTRATIVEOFFICER
Date:
May17,2013
CAOFileNo.0220-04533-0006CouncilFileNo.13-0337CouncilDistrict:8and15
To:TheCouncilFrom:MiguelA.Santana,CityAdministrativeOffice~
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Reference:Motion23AregardingMeasureRLocalReturnProgramming(C.F.13-0337)SUBJECT:MEASURERBONDISSUANCE-LEIMERTPARKANDWESTCHESTERRAILSTATIONSSUMMARYOnMay1,2013,theCouncildirectedthisOfficetoreportbackonaproposaltoissuebondssupportedbyMeasureRLocalReturnrevenuestofinance$55millionastheCity'scontributiontowardtworailstations(C.F.13-0337)asfollows:$40millionforanundergroundstationatLeimertPark;and,$15millionforaWestchesterstation.DISCUSSIONTheLosAngelesCountyMetropolitanTransportationAuthority(MTA)recentlyadoptedpoliciesfordebtissuancessupportedbyMeasureRLocalReturnrevenues.Theoptionsare:issuingbondsourselves;MTAissuingontheCity'sbehalf;and,borrowingfromMTA.MTApreviouslyissueddebtsupportedbyPropCrevenuesonbehalfoftheCityin1998.Afterreviewingtheoptionswithouradvisorsandbondcounsel,webelievethemostbeneficialofthethreeoptionswouldbetohaveMTAissueontheCity'sbehalf.ThisOffice,withassistancefromourFinancialAdvisors,completedapreliminaryanalysisofabondissuanceproviding$55millioninnetproceeds.Variousassumptionsaboutmarketconditionsaremadebasedonthebestinformationcurrentlyavailable.Thefinaloutcomewillbesubjecttomarketforcesandarelikelytovaryfromtheestimatesprovidedhere.TheanalysisassumesbondsaresoldinSeptember2013andsecurean"A"ratingfromtheratingagencies.Thiswouldrequirethefundingofadebtservicereservefundbasedoncurrentmarketstandards.Thetotalamountofbondsissuedwouldbe$59.3millionandwouldincludecostofissuanceandastructurethatrequirespremiumbonds.TheanalysisalsoassumesdebtservicepaymentswouldcommenceDecember2013.Basedontheseassumptions,theaverageannualdebt
 
CAOFileNo.PAGE
0220-04533-00062servicepaymentwouldbeapproximately$3.9million,payablethroughJune2039,withanall-intrueinterestcostof4.51percent.Thetotalprincipalandinterestthatwouldbepaid,assumingthesebondsreachmaturity,willbe$100.6million.Thus,theCitywouldpay$100.6milliontoreceiveaprincipalamountof$55million.IfsalestaxgrowthmatchestheprojectionsmadebyMetroandtheCityDepartmentofTransportation(DOT),asufficientamountofMeasureRfundswillexisttoprovidefundingforthesestationprojectsfromtheLocalReturnReceiptswithoutissuingbonds.WehavediscussedthiswithDOTwhohasprovidedarevisedforecastandreportdetailinghowthiscouldbeaccomplished(AttachmentA).Therefore,werecommendthattheCouncilapprovetheDOTreportandauthorizethepaymentofthe$55millioninLocalReturnReceipts,withoutissuingbonds,consistentwithDOTsrecommendations.
RECOMMENDATIONS
ThattheCouncilandMayor:1.Approve$40millionofMeasureRLocalReturnFundsforconstructionofarailtransitstationatLeimertPark;2.Approve$15millionofMeasureRLocalReturnFundsfortheconstructionofarailtransitstationinWestchester;3.ApprovetherevisedscheduleprovidedbytheDepartmentofTransportationinAttachmentAofthisreport;and,4.AuthorizetheCityAdministrativeOfficerandtheGeneralManageroftheDepartmentofTransportationtotakeanyactionsnecessarytoimplementtheapprovedfunding(including,butnotlimitedto,negotiatingandexecutinganydocumentswithMetro),subjecttoMetroapprovaltoconstructthestations,andtomakeanytechnicalcorrectionsrequiredtoimplementtheintentoftheCouncilandMayor.
FISCALIMPACTSTATEMENT
Approvaloftheserecommendationswillallowtheexpenditureof$55millioninMeasureRLocalReturnFunds.ThereisnoGeneralFundimpact.TherecommendationsareconsistentwiththeCityFiscalPoliciesandtheMeasureROrdinanceandGuidelines.
MAS:DHHISMB:06130103
Attachment
 
AttachmentA
CITYOFLOSANGELESINTER-DEPARTMENTALCORRESPONDENCE
Date:May17,2013To:MiguelSantana,CityAdministrativeOfficerFrom:JaimedelaVega,GeneralManagerLosAngelesDepartmentofTransportation
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Copy:HonorableAntonioR.Villaraigosa,MayorAttention:BorjaLeon,DeputyMayorforTransportationMoniqueEarl,DeputyMayorforBudget&FinanceSubject:
MEASURERLOCALRETURNPROGRAMMINGSUPPLEMENTALREPORT,UPDATEDFINANCIALSCHEDULE(CF13-0337),ANDREPORTBACKONLEIMERTPARKSTATIONANDWESTCHESTERSTATIONFUNDING(CF13-0337),SUMMARY
ThisreportisasupplementalreporttoCF13-0337thatupdatesthefinancialschedule(Attachment1)tobeconsistentwithCityCouncilactiontoprogramMeasureRLocalReturnFundsforstreetcaroperations(CF11-0329-S7)andidentifiesafundingstrategytopartiallyfundaLeimertParkstationandWestchesterstationontheCrenshawline(CF13-0337).
RECOMMENDATION
ThattheCityCouncil,subjecttoconcurrencebytheMayor:1.AdopttheattachedscheduleprogrammingMeasureRfundsfromfiscalyear2010throughfiscalyear2039.2.DirectthegeneralmanageroftheLosAngelesDepartmentofTransportationandtheCityAdministrativeOfficertoincludefundinginfuturebudgetsconsistentwiththeattachedscheduleandtheprioritiespreviouslyadoptedbytheCityCouncil(CF13-0337).

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