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HomeMy WebLinkAboutCC AG PKT 2009-11-09 #HAGENDA STAFF REPORT DATE: November 9, 2009 TO: Honorable Mayor and City Council THRU: David Carmany, City Manager FROM: Terrence L. Belanger, Interim Director of Public Works SUBJECT: APPROVAL OF RESOLUTION OF INTENT TO ISSUE PRIVATE ACTIVITY BONDS (PAB) FOR AMONIX EXPANSION SUMMARY OF REQUEST: The City Council to adopt a Resolution of Intent to issue private activity bonds to assist Amonix, Inc. in expanding its manufacturing capacity, in Seal Beach. BACKGROUND: Amonix, Inc. is the world leading designer and proprietary manufacturer of patented, high concentration photovoltaic (HCPV) solar - powered panels, for large commercial and industrial users. Its Seal Beach facility is located on Apollo Court. The Amonix business plan forecasts the expansion of capital investment and manufacturing capacity. The company plans to spend several million dollars, at the Seal Beach facility. If Amonix decides to consolidate all cell and package finishing at the Seal Beach Facility, the company will spend approximately $20 million on the expansion. The company's projections for the Amonix Seal Beach facility indicate that the capital investment will generate 180 jobs, as well as, generate additional sales tax and property tax revenue; and, otherwise improve economic and physical conditions in the City. In order to assist Amonix Inc. in financing the Seal Beach expansion, the City would use its ability to issue revenue bonds or other obligations in an aggregate amount of up to $10 million, which proceeds would be loaned to Amonix, subject to various conditions, indemnifications and obligations. The annual Amonix loan repayment would, at the very least, cover the annual debt service on the revenue bonds. Agenda Item H Page 2 FINANCIAL IMPACT: The proposed financial assistance will not impact the City's current revenue base. The annual debt service on the revenue bonds would be covered by the annual loan repayment to be paid by Amonix, Inc. RECOMMENDATION: City Council to approve and adopt Resolution No. 5936 entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH DECLARING ITS INTENT TO CAUSE TO BE ISSUED BONDS OR OTHER OBLIGATIONS PERTAINING TO THE FINANCING OF THE COSTS OF ACQUIRING, IMPROVING, AND EQUIPPING REAL AND PERSONAL PROPERTY TO BE USED IN THE MANUFACTURE OF SOLAR POWERED PANELS, AND DECLARING ITS INTENT TO REIMBURSE ADVANCES MADE FOR EXPENDITURES PRIOR TO THE ISSUANCE OF SUCH BONDS OR OTHER OBLIGATIONS" SUBMITTED BY: 4 tA&,,,,, � - fi&, Terrence L. Belanger Interim Director of Developme ervices Attachments: NOTED AND APPROVED: David Carmany City Manager A. Proposed Resolution of Intent — Resolution No. 5936 RESOLUTION NUMBER 5936 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH DECLARING ITS INTENT TO CAUSE TO BE ISSUED BONDS OR OTHER OBLIGATIONS PERTAINING TO THE FINANCING OF THE COSTS OF ACQUIRING, IMPROVING, AND EQUIPPING REAL AND PERSONAL PROPERTY TO BE USED IN THE MANUFACTURE OF SOLAR- POWERED PANELS, AND DECLARING ITS INTENT TO REIMBURSE ADVANCES MADE FOR EXPENDITURES PRIOR TO THE ISSUANCE OF SUCH BONDS OR OTHER OBLIGATIONS RECITALS: A. The City Council of the City of Seal Beach intends to take the necessary actions to cause the issuance of revenue bonds or other obligations in order to assist Amonix Inc., in the financing of the costs of acquiring, improving, and equipping real and personal property to be used in the manufacture of high concentration, photovoltaic solar - powered panels to be located at 1709 Apollo Court, and on an adjacent parcel, in the City. Representatives of Amonix Inc. have made certain representations to City staff regarding job creation, and sales and property tax revenues to be generated for the City. B. United States Treasury Regulations Section 1.150 -2 prescribe conditions under which proceeds of bonds or other obligations used to reimburse advances made for certain expenditures paid before the issuance of such obligations will be deemed to be expended (or properly allocated to expenditures) for purposes of Sections 103 and 141 -150 of the Internal Revenue Code of 1986, as amended, so that upon such reimbursement the proceeds so used will not further be subject to requirements or restrictions under those sections of the Code. C. Certain provisions of the Treasury Regulations require that there be a declaration of official intent not later than 60 days following payment of the expenditure expected to be reimbursed from proceeds of such bonds or other obligations, and that the reimbursement occur within prescribed time periods after the expenditure is paid or after the property is placed in service. D. The City wishes to take steps for compliance with such Treasury Regulations in connection with the project described in paragraph A of these Recitals and to take other preliminary actions in connection with the issuance of bonds or other obligations. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. In order to assist Amonix Inc. in financing the project described in paragraph A of the Recitals hereof, the City Council shall exercise its best efforts to cause to be issued revenue bonds or other obligations, in one or more series, in the maximum aggregate face amount of $10,000,000, and to lend the proceeds thereof to Amonix Inc., subject to satisfaction of the conditions and pursuant to the provisions contained in the documents authorizing the issuance and providing for the sale of such bonds or other obligations. Section 2. The City Council hereby declares its intention to cause to be reimbursed from the proceeds of such bonds or other obligations advances made for certain expenditures paid in connection with the project described in paragraph A of the Recitals hereof, all in accordance with provisions of the Treasury Regulations. S7296-0001\1 182578 v 1. doc Resolution Number 5936 Section 3. Amonix Inc. shall indemnify the City and the issuer of such bonds or other obligations against any and all loss, cost, expense, claims or actions arising out of or connected with the issuance or sale thereof. Section 4. A duly authorized officer of Amonix Inc. has executed and delivered to the City a letter acknowledging the provisions of this Resolution. Section 5. This Resolution shall take effect immediately upon its adoption. PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal Beach at a regular meeting held on this 9th day of November 2009 by the following vote: AYES: Council Members NOES: Council Members ABSENT: Council Members ABSTAIN: Council Members Mayor ATTEST: City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Linda Devine, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution Number 5936 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 9th day of November , 2009. City Clerk