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HomeMy WebLinkAboutTC Res 2010-05-19 (4)RESOLUTION NO. 26-2010 RESOLUTION ORDERING CHANGE OF PROCEEDINGS TO THE DEL MAR VALLEY UTILITY UNDERGROUNDING ASSESSMENT DISTRICT (THE "ORIGINAL DISTRICT") TO REDUCE SCOPE OF UNDERGROUNDING PROJECT, DELETE PARCELS NOT BENEFITTED BY THE REDUCED PROJECT, REDUCE ASSESSMENTS ON DELETED PARCELS TO ZERO, AND ORDER A REFUND, WITH INTEREST, TO THE OWNERS OF THE DELETED PARCELS OF AMOUNTS PREVIOUSLY PAID ON ACCOUNT OF THE ORIGINAL ASSESSMENTS LEVIED ON THOSE PARCELS, ALL IN CONFORMITY WITH AND FOR THE PURPOSE OF IMPLEMENTING THE TERMS AND CONDITIONS OF THE COURT-APPROVED LITIGATION SETTLEMENT AGREEMENT PERTAINING TO THE ORIGINAL DISTRICT Town of Tiburon Del Mar Valley Utility Undergrounding Assessment District WHEREAS, by resolution adopted on May 18, 2005, this Town Council (this "Town Council") of the Town of Tiburon (the "Town") formed the Del Mar Valley Utility Undergrounding Assessment District (the "Original District"), approved the Final Engineer's Report respecting the Original District (the "Final Report"), and levied assessments (the "Original Assessments") upon the designated parcels within the Original District in accordance with the Final Report; and WHEREAS, the purpose of the Original District was to provide financing for a proposed project (the "Project") consisting of the conversion to underground locations of the existing overhead utility facilities within the Original District and related appurtenant work; and WHEREAS, by litigation initiated on June 16, 2005, the validity of the assessments levied for the Original District (the "Original Assessments") was challenged, which litigation has now been settled in March, 2010, by a court-approved litigation settlement agreement (the "Settlement Agreement"), which led to entry of a Judgment by Stipulation on March 23, 2010, thereby concluding the litigation respecting the Original District and the Original Assessments; and WHEREAS, following formation of the Original District and the completion of plans, specification and bid documents for the Project, the Town solicited sealed bids for the Project; and, on March 61 2006, the scheduled bid opening date, the Town received construction bids and determined that the best bid received was for an amount significantly higher than estimated in the Final Report, on the basis of which the amounts of the Original Assessments were calculated, with the result that levy of supplemental assessments became necessary in order to fully fund the Project; and WHEREAS, by resolution adopted on May 8, 2006, this Town Council formed the Del Mar Valley Utility Undergrounding Supplemental Assessment District (the "Original Supplemental District"), approved the Engineer's Report respecting the Original Supplemental District (the "Supplemental Report"), and levied supplemental assessments (the "Original Pagel of 5 Supplemental Assessments") upon the designated parcels in accordance with the Supplemental Report; and WHEREAS, on May 18, 2006, the Town initiated a validation action in the Marin County Superior Court (the "Superior Court") for the purpose of obtaining judicial validation of the Original Supplemental Assessments pursuant to the provisions of Sections 860 through 870.5 of the California Code of Civil Procedure (the "Validation Proceedings"); and WHEREAS, following a favorable ruling by the Superior Court in the Validation Proceedings, upholding the validity of the Original Supplemental Assessments, the First District Court of Appeals (the "DCA"), by its opinion issued on December 31, 2009 (the "DCA Decision"), reversed the Superior Court and ruled the Original Supplemental Assessments invalid; and WHEREAS, rather than pursuing an appeal of the DCA Decision to the California State Supreme Court, at substantial additional expense to the Town and entailing further substantial delay in the implementation of the reduced Project (as described in subparagraph (b) immediately below), this Town Council has, by resolution adopted this same date, abandoned the Original Supplemental District and indicated its intention to pursue implementation of an alternative program consisting of three components, as follows: (a) abandonment of the Original Supplemental District; (b) modification of the Original District, in conformity with the Settlement Agreement, by ordering certain changes of proceedings respecting the Original District, which is the purpose of this resolution, to (i) revise the boundary of the Original District to exclude those parcels listed in Exhibit B of the Settlement Agreement and identified therein as the "Deleted Parcels" (thereby creating the "Reformed Original District"), (ii) reduce the scope of the Project and the related estimated Project cost to conform to the reduced area of the Reformed Original District, (iii) reduce to zero the amount of the Original Assessments which were levied on the Deleted Parcels, and (iv) refund to the owners of the Deleted Parcels the amounts paid on account of the Original Assessments, with interest to be calculated in accordance with the Settlement Agreement; and (c) formation of a new supplemental district, to be known as the "Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District" (the "New Supplemental District"), with boundaries conforming to the Reformed Original District and with the amount of the proposed new supplemental assessments (the "New Supplemental Assessments") being calculated to supplement the moneys which will remain available for the Project following the refunds described in subparagraph (a) above to the owners of the Deleted Parcels to fully fund the Project, as reduced in scope, and to pay the incidental expenses relating to the New Supplemental District and the financing costs of the subordinate lien limited obligation improvement bonds (the "New Bonds") to be issued and sold on the security of the New Supplemental Assessments which remain unpaid following a cash payment period during which owners of the parcels upon which a New Supplemental Assessment is levied may prepay, without interest, and discharge the lien of the New Supplemental Assessment prior to issuance of the New Bonds; and Page 2 of 5 WHEREAS, by removing the Deleted Parcels from the Original District, this Town Council avoids retention in the Reformed Original District of any defects similar to those defects that, according to the DCA Decision, caused the DCA to rule that the Original Supplemental Assessments were invalid; and WHEREAS, it is the intention of this Town Council that, except as to the changes ordered by this resolution, the Original District shall remain in full force and effect, to be known as the Reformed Original District, and the Original Assessments which are not being reduced to zero shall remain in full force and effect to secure the original limited obligation improvement bonds (the "Original Bonds") which will remain outstanding in a principal amount corresponding to the principal amount of the remaining, unpaid Original Assessments; provided however that, if for any reason, this Town Council is unable to form the proposed New Supplemental District as described above and to issue and sell the New Bonds so as to establish full funding for the Project, as reduced in scope by this resolution, this Town Council reserves the right, as it shall determine in the exercise of its absolute discretion, to abandon the Reformed Original District and to abandon its efforts to implement the Project, as reduced in scope by this resolution, by any lawful means which provides for the redemption of any remaining outstanding Original Bonds and New Bonds, if New Bonds are issued; and WHEREAS, by this resolution this Town Council wishes to order the changes to the Original District summarized above in furtherance of implementing the Settlement Agreement; NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF TIBURON HEREBY FINDS, DETERMINES AND RESOLVES as follows: 1. The foregoing recitals are true and correct, and this Town Council hereby expressly so finds and determines. 2. This Town Council hereby orders the following change of proceedings to the Original District: (a) The boundary of the Original District is hereby revised to exclude the Deleted Parcels, and the reduced area shall be referred to hereafter in this resolution as the "Reformed Original District." (b) The scope of the Project is hereby ordered reduced, to the fullest extend determined by the City Engineer to be feasible, in consultation with the affected public utilities, and still provide for the conversion to underground locations of the existing overhead utility facilities situated within the Reformed Original District. (c) The proportional Project cost and expense to be funded by proceeds of the Original Assessments which will remain outstanding and by proceeds of sale of the Original Bonds which will remain outstanding (the "Proportional Cost") shall be calculated so as to provide that only moneys representing either cash payments on account of Original Assessments which will remain outstanding or proceeds of sale of Original Bonds which will remain outstanding will remain available to pay for Project cost and expense and to fund the bond reserve fund for the Original Bonds (the "Original Reserve Fund"). The amounts on deposit in the improvement fund for the Original Page 3 of 5 District (the "Original Improvement Fund") in excess of the Proportional Cost shall be transferred to the redemption fund for the Original Bonds (the "Original Redemption Fund") and utilized for the purpose of redeeming or otherwise achieving the cancellation of the portion of the Original Bonds which exceeds the principal amount of the Original Assessments which will remain outstanding. The amount to be withdrawn from the Original Improvement Fund and transferred to the Original Redemption Fund shall bear the same ratio to the total amount then on deposit in the Original Improvement Fund as the principal amount of the Original Assessments initially levied on the Deleted Parcels bears to the total initial principal amount of all of the Original Assessments. Similarly, the amounts on deposit in the Original Reserve Fund which exceed the reduced amount of the "Reserve Requirement," as determined in accordance with Resolution No. 33-2005, adopted by this Town Council on July 13, 2005 (the "Bond Resolution"), shall be transferred to the Original Redemption Fund and utilized for the same purpose. (d) The Original Assessments levied upon the Deleted Parcels are hereby ordered reduced to zero, and the Town shall refund to the owners of the Deleted Parcels, from any source of funds legally available for such purpose, including but not limited to the amounts to be withdrawn from the Original Improvement Fund and the Original Reserve Fund, all amount previously paid on account of either cash prepayment of Original Assessments prior to issuance of the Original Bonds or on account of annual installment payments of Original Assessments as collected on the Marin County property tax bills. 3. Pursuant to Section 3113 of the California Streets and Highways Code, the Town Clerk is hereby authorized and directed to provide for the preparation and recording in the official records of the Marin County Recorder of an amended boundary map, showing a boundary conforming to the Reformed Original District, and otherwise conforming to the provisions of said Section 3113. 4. Pursuant to Section 3114.3 of the California Streets and Highways Code, the Town Clerk is hereby authorized and directed to provide for the recording in the official records of the Marin County Recorder of a Notice of Discharge of Assessment Liens with respect to the Deleted Parcels. Town Council. 5. This resolution shall take effect immediately upon adoption by this Page 4 of 5 PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Tiburon, State of California, held this 19th day of May, 2010, by the following vote: AYES: COUNCILMEMBERS: Collins, Fraser, Fredericks, O'Donnell, Slavitz NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ATTEST: DIANE CRANE IACOPI, TOWN CLERK None None JEF S V: Z, Vje~ MAYOR TO TIB Page 5 of 5