09-04-2012 - Prop A Fund Exchange - City of Commerce - Item 6 (2).pdfCity of West Covina
Memorandum
AGENDA
Item: 6
Date: September 4, 2012
TO: Andrew G. Pasmant, City Manager
and City Council
FROM: Tom Bachman, Assistant City Manager
SUBJECT: PROP A FUND EXCHANGE — CITY OF COMMERCE
RECOMMENDATION:
It is recommended that the City Council approve the attached agreement authorizing the sale of
Prop A Funds to the City of Commerce.
DISCUSSION:
The City just recently adopted a balanced General Fund budget for the 2012-13 fiscal year. One
of the measures the City has used over the last several years to generate additional General Fund
revenues has been the sale of Proposition A Transit Funds at a discount to other cities in
exchange for unrestricted General Fund dollars.
The City receives approximately $1.6 million in Prop A Local Return transit funds that can only
be used for public transportation purposes. The City spends these funds on fixed route and dial-
a-ride transportation services and transit related capital projects. The City also receives
approximately $1.3 million in Prop C Local Return transit funds as well as an estimated $1.1
million in Measure R Funds that can be used for similar purposes. In previous years, the City
restructured and reduced some of its transit programs to free up the funds necessary for these
exchanges. This exchange will provide the City with unrestricted General Fund dollars that can
be used for any purpose such as police and fire services.
City staff has negotiated the sale of $1 million of West Covina Prop A Funds to the City of
Commerce in exchange for $750,000 of their unrestricted general fund dollars that will be
deposited into the City's General Fund. The City of Commerce will use these funds for qualified
transportation purposes. This exchange will mitigate the need for more drastic budget cuts or
further use of the General Fund reserves.
FISCAL IMPACT:
The Exchange of Prop A Funds will generate $750,000 in General Fund revenues. This
exchange was included in the 2012-13 fiscal year adopted budget.
Assistant City Manager.
FUND TRADE AGREEMENT
BETWEEN THE CITY OF WEST COVINA
AND THE CITY OF COMMERCE, CALIFORNIA
This Assignment Agreement is made and entered into this day of
2012, by and between the City of West Covina California ("West Covina") and the City of
Commerce, California ("Commerce") with respect to the following facts:
A. Commerce proposes to provide ongoing operating funding providing fixed route, medi-
ride, and recreation services to the residents of Commerce and to provide for certain
capital projects eligible for Prop A Funds. Adequate Proposition A Local Return funding
for such services is not available given the limited amount of Commerce's Local Return
allocation.
B. West Covina has uncommitted funding authority for its Fiscal Year 2012-13 allocation of
Proposition "A" Local Return funds that can be made available to Commerce to assist in
providing the services discussed in Paragraph above. . West Covina is willing to assign
uncommitted Proposition "A" Local Return funding to Commerce for the purpose
identified in Paragraph A in exchange for the assignment by Commerce of the amount of
its general funds indicated in Section 1 below.
Now, therefore, in consideration of the mutual benefits to be derived by the parties and of the
premises herein contained, it is mutually agreed as follows:
1. Exchange. West Covina agrees to assign One Million Dollars ($1,000,000) of its Fiscal
Year 2012-13 Proposition "A" Local Return funding authority to Commerce. In return,
Commerce agrees to assign Seven Hundred and Fifty Thousand Dollars ($750,000) of its
general funds to West Covina.
2. Consideration. West Covina shall assign the agreed upon Proposition "A" Local Return
funds to Commerce in one lump sum payment. Commerce shall also assign the agreed
upon general funds to West Covina in one lump sum payment. The lump sum payment
by Commerce shall be due and payable upon approval by the Los Angeles Metropolitan
Transportation Authority (LAMTA) of West Covina' project description covering the
services discussed in Paragraph A.
3. Term. This Agreement is effective on the date above written and for such time as is
necessary for both parties to complete their mutual obligations set forth herein.
4. Termination. Termination of this Agreement may be made by either party so long as
written Notice of Intent to terminate is given to the other party at least 5 days prior to the
termination.
5. Notices. Notices shall be given pursuant to this Agreement by personal service on the
party to be notified or by written notice upon such party by certified mail deposited in the
custody of the United States Postal Service addressed as follows:
CITY OF WEST COVINA
1444 West Garvey Avenue
West Covina, CA 91790
Attn: Andrew Pasmant, City Manager
CITY OF COMMERCE
2535 Commerce Way
Commerce, CA 90040
Attn: Jorge Rifa, City Administrator
6. Assurances.
a. Commerce shall use the assigned Proposition "A" Local Return funds only for the
purpose of providing the services discussed in Paragraph A of this Agreement and
within the time limits specified in LAMTA's Proposition "A" Local Return
Program Guidelines.
b. Concurrently with the execution of this Agreement Commerce shall provide
LAMTA with the Standard Assurances and Understandings Regarding Receipt
and Use of Proposition "A" funds specified in the Guidelines regarding the use of
the assigned Proposition "A" Local Return Funds.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers, duly authorized, on the day and year above written.
CITY OF WEST COVINA CITY OF COMMERCE
By By Andrew Pasmant Lilia R. Leon
City Manager Mayor
ATTEST:
Sue Rush
Linda Kay Olivieri, MMC
Assistant City Clerk City Clerk
Approved as to Form: Approved as to Form:
Arnold M. Alvarez-Glasman Eduardo Olivo
City Attorney City Attorney