HomeMy WebLinkAboutDissolution of the Huntington Beach Public Facilities Corpor 0 /p��
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Council/Agency Meeting Held: —xA h 7
Deferred/Continued to: 74 �
2-;(Pproved ❑ Conditionally Approved ❑ Denied City Cler s Signature
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Council Meeting Date: 10/20/97 Department ID Number: AS 97-043
CITY OF HUNTINGTON BEACH
REQUEST FOR ACTION '
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: MICHAEL T. UBERUAGA, City Administrator /
PREPARED BY: DAN T. VILLELLA, Assistant Secretary to the HBPFC '/�
SUBJECT: Approve the Assumption of Debts and Liabilities of the Huntington Beach
Public Facilities Corporation (HBPFC) Upon Dissolution of the Corporation
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s�
Statement of Issue: The Directors of the Huntington Beach Public Facilities Corporation,
at their regular meeting of July 30, 1997, elected to wind up the business, and dissolve the
Corporation. To expedite the completion of the dissolution, the City needs to agree to
assume any remaining liabilities of the Corporation.
Funding Source: Excess funds to be returned by the Corporation.
Recommended Action: Motion to approve the attached agreement facilitating the
dissolution of the Huntington Beach Public Facilities Corporation and assumption of any
remaining liabilities of the Corporation.
Alternative Action(s): Direct staff to make separate provisions for the payment of all
outstanding obligations yet to be incurred by the Huntington Beach Public Facilities
Corporation.
Analysis: The Board of Directors of the Huntington Beach Public Facilities Corporation
determined that the Corporation has fulfilled its purpose, as set forth in its Articles of
Incorporation, of providing financing and construction of the Civic Center and Library
Facllities for the City and has, therefore, determined that the Corporation shall be dissolved.
The easiest way to accomplish the dissolution is to have the City assume the Corporation's
remaining debts concurrently with the distribution of the assets to the City. Assumption of
debts by the City will facilitate processing with the Attorney General and the Franchise Tax
Board. At present, we estimate that remaining debts and obligations of the Public Facilities
Corporation will approximate $2,000. The Trustee and staff estimate that surplus balances
will approximate $57,000. This will result in a net surplus of approximately $55,000.
0 REQUEST FOR ACTION 0
MEETING DATE: 10/20/97 DEPARTMENT ID NUMBER: AS 97-043
The Corporation's attorney will give notice of the dissolution to the Attorney General and
request a waiver of objections to the distribution of assets. This should be routine, since the
distribution to the City is required by the Public Facilities Corporation Articles of
Incorporation. When the attorney receives the attached agreement, she will prepare filings
with the Secretary of State and request a clearance from the Franchise Tax Board. Since
the Corporation is exempt, this too should be routine.
At the October 6, 1997, City Council Meeting information was requested regarding the
differences between the PFC and the other non-profit legal entities that the City uses for the
issuance of long term debt. Attachment 4 provides information in response to this request.
Environmental Status: Not applicable.
Attachment Us :
NumberCity Clerk's
Page • Description
1. Agreement
2. Certificate of Dissolution
3. Certificate of Election to Wind Up and Dissolve
4. Description of Legal Entities: Debt Financing
RCA Author: Dan T.Villella
0027831.01 -2- 10/09/97 8:03 AM
ATTACHMENT # 1
II
AGREEMENT
ASSUMPTION OF DEBTS AND LIABILITIES OF THE
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
UPON DISSOLUTION OF THE CORPORATION
THIS AGREEMENT is entered into as of Utit)i R 0Z6 , 1997, by and
between the City of Huntington Beach, a municipal corporation duly organized and
existing by virtue of its charter ("CITY") and the Huntington Beach Public Facilities
Corporation, a corporation organized pursuant to the general Nonprofit Corporation Law
of the State of California ("CORPORATION").
WHEREAS, the Board of Directors of CORPORATION has determined that
CORPORATION has fulfilled its purposes, as set forth in its Articles of Incorporation, of
providing for the financing and construction of civic center and library facilities for CITY
and has therefore determined that CORPORATION shall be dissolved; AND
WHEREAS, upon dissolution of CORPORATION, in accordance with its Articles
of Incorporation, CORPORATION's assets remaining after payment of or provision for
all debts and liabilities shall be distributed to CITY,-
WHEREAS, CITY and CORPORATION wish to facilitate the dissolution process;
NOW, THEREFORE, in consideration of the matters recited herein and other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
CORPORATION does hereby agree to cause the distribution of any and all of its
remaining assets and funds to CITY, subject to making filings and receiving approvals
as may be required by law with respect to its dissolution and such distribution. CITY
agrees to accept the distribution of the remaining assets and funds of CORPORATION.
CITY does hereby assume and agree to pay all debts and liabilities of CORPORATION.
Each of the officers of CITY and CORPORATION is authorized and directed, acting
singly, to take any and all actions necessary and appropriate to carry out the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Huntington Beach
Public Facilities Corporation City of Huntington Beach
Buck L. Perkins, President Ralph M. Bauer, Mayor
Attest: Attest:
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Dan T. Villella, Asst. Secretary Connie Brockway, City Clerk
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Approved as to Form
Cj x-/
Gail Hutton, City Attorney
ATTACHMENT #2
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CERTIFICATE OF DISSOLUTION
The undersigned certify that:
1. They constitute a majority of the Directors now in office of the
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION, a corporation
organized pursuant to the general Nonprofit Corporation Law of the State of
California (HBPFC).
2. HBPFC has been completely wound up.
3. HBPFC's known debts and liabilities have been adequately provided for
by their assumption by the City of Huntington Beach, 2000 Main Street, Huntington
Beach, California.
4. The known assets of HBPFC have been distributed to the City of
Huntington Beach, a municipal corporation, being the person entitled thereto.
5. HBPFC is dissolved.
We further declare under penalty of perjury under the laws of the State of California that
the matters set forth in this Certificate are true and correct of our own knowledge.
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Dated:.
BUCK L. PERKINS, Director
Huntington Beach Public Facilities Corporation
DAVID J. &I ON, Director
Huntington Beach Public Facilities Corporation
ME LE R. MC CORMICK, Director
Huntington Beach Public Facilities Corporation
40064/27827
ATTACHMENT #3
CERTIFICATE OF ELECTION
TO WIND UP AND DISSOLVE
The undersigned certify that:
1. They are the President and Secretary, respectively, of the
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION, a corporation
organized pursuant to the general Nonprofit Corporation Law of the State of
California (HBPFC).
2. HBPFC has elected to wind up and dissolve.
3. The Directors of HBPFC are the only members of HBPFC. The election
to wind up and dissolve was made by the Board of Directors of HBPFC together with
the vote of a majority of the members voting on the election to wind up and dissolve.
We further declare, under penalty of perjury under the laws of the State of
California that the matters set forth in this Certificate are true and correct of our own
knowledge.
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Dated: of
BUCK L. PERKINS, President
Huntington Beach Public Facilities Corporation
DAVID J. IL ON, Secretary
Huntington each Public Facilities Corporation
40062/27827
ATTACHMENT #4
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ATTACHMENT 4
Debt Financings: Legal Structure
City of Huntington Beach
Public Financing Corporation (PFC): Formed under State and Federal Law in the early 1970's to
issue tax exempt debt to finance the construction of City Hall and the Central Library (two separate
debt financings). The City Council appointed the initial Board of Directors. As vacancies occur, the
Board selects replacement Directors subject to the right of the City Council to disapprove
appointments.
State/Federal Law was changed subsequent to the above described financings in recognition of the
increased use of such financing mechanisms. The City has formed two legal entities under the
modified procedures of Law:
1. City of Huntington Beach Civic Improvement Corporation (HBCIC): Formed in 1986.
The Board of Directors for the HBCIC are the members of the City Council, The
Corporation has completed the following financings:
a. 1986: $20,000,000 of debt used to pay off the Civic Center (PFC) debt, (see above)
provide new proceeds for the acquisition of land and construction of the Main
Promenade parking structure.
b. 1989: $15,025,000 of debt proceeds used for additional costs of the above projects,
the Library expansion, a restaurant building on the Pier, and Pier Plaza.
c. 1993 (Two Issues): $16,350,000 and $21,895,000. Proceeds were used to pay off
the above two debt issues and lower annual debt service costs to the City due to
lower interest rates.
2. Huntington Beach Public Financing Authority (HBPFA): Formed in 1988 under State
Law permitting the joint exercise of powers between the City and Redevelopment Agency.
The Board of Directors are the members of the City Council and the members of the
governing body of the Redevelopment Agency ex officio. The HBPFA has completed the
following financings:
a.. 1988: $26,775,000 of debt to finance redevelopment projects.
b. 1989: $5,510,000 of debt to finance acquisition of computer equipment, telephone
system and public safety dispatch system for the City.
c. 1992: $33,495,000 of debt to pay off 1988 debt issue listed above (2.a) and issue
new debt of $5,000,000 to finance redevelopment agency obligations related to the
Waterfront Project. The refinanced portion of the issue resulted in lower debt service
costs due to lower interest rates.
d. 1994: $15,000,000 of tax and revenue anticipation notes. Due to the one time only
15 month fiscal year (to transition to an October 1 - September 30 fiscal year), legal
counsel recommended using the HBPFA for a 15 month TRAN instead of the normal
12 month TRAN issue by the City.
e. 1997: $8,070,000 of debt used to finance the Pier Plaza Project and the County-
wide 800 MHz communication system.
0028200.01 10/09/97 11:35 AM