For City Council Meeting [August 13, 2019]
TO: Honorable Mayor and City Council
APPROVAL: Rod Foster, City Administrator
FROM: Robb R. Steel, Assistant CA/Development Services Director
Title
Request City Council to Receive and File the Statement of Income and Expense for June 2019 related to the Construction Reimbursement Agreement with Ayala@210LLC for Off-Site Improvements on Renaissance Parkway.
Body
BACKGROUND:
On March 14, 2017, the City Council approved an Option to Purchase and Develop Site Agreement by and between the City of Rialto and Ayala@210LLC (“Developer”) for a commercial development on an 8-acre site situated east of Ayala Avenue and north of Renaissance Parkway/Easton Avenue for the proposed Cracker Barrel, Sonic, and hotel (“Project”).
On March 28, 2017, the City Council approved a Construction Reimbursement Agreement (CRA) by and between the City of Rialto and Developer for a maximum cost of $1,321,491 (“Approved Budget”). The CRA funds the improvements on Renaissance Parkway adjacent to the Site using development impact fees and other funds (“Off-Site Improvements”). The City established the initial CRA budget before receipt of land use entitlements and preparation of construction drawings.
On January 23, 2018, the City Council approved Amendment #1 to the CRA and adopted Resolution No. 7279 increasing the Approved Budget to $4,080,227 for the Off-Site Improvements. Additional improvement scope and actual construction costs based upon competitive bidding increased the Approved Budget.
On January 24, 2018, the City, Developer, and First American Trust FSB (FSB) entered into separate Joint Escrow Instructions for the administration of funds related to the Off-Site Improvements. FSB will hold the funding for the project, subject to periodic releases by the City to pay for authorized project related expenses.
ANALYSIS/DISCUSSION:
On February 9, 2018, the City deposited the amount of $3,806,718 in the FSB Escrow Account (“Fund”). The deposit included contributions from Drainage Development Impact Fees ($200,915), Regional Traffic Development Impact Fees ($1,958,795), Sewer Collection Facility Funds ($202,625), Water Distribution Facility Funds ($210,101), and Redevelopment Agency Bonds ($1,234,282).
The City had expenditures of $290,420.38 in June 2019 for All American Asphalt ($239,734.40), KEC Engineers ($29,240.05), Kimley Horn ($3,182.12), Aramexx ($5,263.81), and Ayala/210 Partners ($13,000.00). The City earned income of $2,016.89 for this account in June 2019.
A detailed income and expense report showing all previous activity through the month ending June 30, 2019 is included as Exhibit A. The table below summarizes the FSB Escrow Account activity from inception through June 30, 2019:
Total authorized expenditures are $3,806,718. To date, the City has expended $3,112,008.30 with remaining required expenditures of $694,709.70.
The City Treasurer invests the fund balances in the Fidelity Government Portfolio. The latest monthly statements from Fidelity and FSB are attached hereto as Exhibit B. The fund earned 2.3% on the invested balance.
ENVIRONMENTAL IMPACT:
Pursuant to Section 15378 of the California Environmental Quality Act, a “Project’ means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. A Project does not include the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project that June result in a potentially significant physical impact on the environment.
GENERAL PLAN CONSISTENCY:
The proposed action is consistent with the following Guiding Principle of the General Plan:
“Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.”
LEGAL REVIEW:
The City Attorney has reviewed and approved the staff report.
FINANCIAL IMPACT:
Operating Budget Impact
There is no financial impact associated with the approval of this item.
Capital Improvement Budget Impact
This report summarizes various capital expenditures in accordance with the Construction Reimbursement Agreement and Amendment #1 with Ayala@210LLC for off-site improvements on Renaissance Parkway, each of Ayala Drives (Project # 180703).
RECOMMENDATION:
Staff recommends that the City Council Receive and File the Statement of Income and Expense related to the Construction Reimbursement Agreement with Ayala@210LLC for off-site improvements on Renaissance Parkway for the months ending June 30, 2019.