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CC:HA - ACTION ITEM: (1) Approvals by the City and the Housing Authority of the Joint Exercise of Powers Agreement between the City and the Housing Authority for the Formation of the Culver City Public Finance Authority, including Adoption of Respective Related Resolutions; and (2) Other Direction to the City Manager/Executive Director as Deemed Appropriate.
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Meeting Date: April 13, 2026
Contact Person/Dept: Elizabeth Shavelson/Finance Department
Phone Number: (310) 253-5865
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No []
Attachments: Yes [X] No []
Public Notification: (Email) Meetings and Agendas - City Council (04/09/2026); (Email) Ongoing Topics - Fiscal and Budget Issues (04/09/2026)
Department Approval: Stephen Agostini, Chief Financial Officer (04/09/2026)
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RECOMMENDATION
Staff recommends that the City Council and the Housing Authority Board adopt respective resolutions (Attachments 1 and 2) for the purposes of: (1) Approval of the Joint Exercise of Powers Agreement (the "JPA Agreement") between the City and the Housing Authority for the formation of the Culver City Public Finance Authority (the “JPA”); and (2) provide other direction to the City Manager/Executive Director as deemed appropriate.
BACKGROUND
Prior to the dissolution by State law of all California redevelopment agencies in 2012, the City, along with the City’s redevelopment agency, created and utilized a joint powers authority called the Culver City Redevelopment Financing Authority. This joint powers authority was used to finance redevelopment and tax-increment funded projects. The Culver City Redevelopment Financing Authority issued tax allocation bonds to assist with the funding of capital projects from the early 1990s though its dissolution in 2012.
On March 10, 2025, the City Council directed the City Manager to include in the City’s Fiscal Year 2025-2026 Budget funding for a $20 million residual receipts loan to Community Corporation of Santa Monica (CCSM) towards the cost of construction of the affordable housing portion of the Jubilo Village Project located at 4464 Sepulveda Boulevard, Culver City.
On June 9, 2025, the City Council held a public hearing and adopted the Fiscal Year 2025-2026 Budget. The Adopted Budget included an $8 million contribution for the Jubilo Village Project which consisted of a $6 million loan from the Housing Authority Fund (Fund 476), $1,557,080 from the Affordable Housing Linkage Fee (Fund 439) and $442,920 from the General Fund. In addition, the City Council adopted a resolution amending the City Council Policy Statement 5002 (Financial Policies) to establish a committed reserve fund titled “Jubilo Village Reserve” for the remaining $12 million anticipated to be distributed in Fiscal Year 2027-2028. To fund the committed Jubilo Village Reserve, the City Council adopted a resolution authorizing a funding decrease to the City’s contingency reserve (the "Contingency Reserve") below the established target of 30% of the General Fund Operating Budget for Fiscal Year 2025-2026. Council Policy Statement 5002 (Financial Policies) states “should the Contingency Reserve commitment be used, the City Manager shall present a plan to City Council to replenish the reserve within five years.”
On February 14, 2026, the City Council held a day-long Special Strategic Planning Meeting and Financial Summit. As part of the discussion, the City Manager, along with representatives from Orrick, Herrington & Sutcliffe LLP (“Orrick”), provided a high-level overview of the process to form the JPA and how the City could use the JPA to issue lease revenue bonds (the "Lease Revenue Bonds") using one or more of the City’s or Parking Authority’s parking structures as the leased asset payable from annual rental payments from available general fund revenues or other legally available sources of the City, subject to abatement. This mechanism was introduced for City Council consideration as a way to amortize repayments and payments to the General Fund and the Housing Authority for their past and future contributions to the Jubilo Village Project and to create a separate fund for other future special projects as identified by the City Council and approved by the JPA and the City.
On March 16, 2026, the City Council authorized the City Manager to pursue the formation of a JPA, approved a professional services agreement with Orrick for the establishment of the JPA and bond counsel services, approved a professional services agreement with PFM Financial Advisors LLC ("PFM") for financial advisory services related to Lease Revenue Bonds, and approved a professional services agreement with Ernst & Young U.S. LLP for financial assistance services.
Since March 16, 2026, staff has been meeting with several underwriting banks and potential bond purchasers arranged by PFM to identify a purchaser for the Lease Revenue Bonds. As discussed further below, PFM has recommended, and staff agrees, to pursue a direct purchase by Barclays Bank PLC ("Barclays").
DISCUSSION
Joint Powers Authority Formation
Since the City Council's authorization on March 16, 2026, staff has worked with Orrick and PFM to prepare the necessary documents for the formation of the JPA between the City and the Housing Authority. The JPA Agreement has been prepared in draft, reviewed, and revised by the parties, including review by the City Attorney/Housing Authority General Counsel, and is attached hereto as Attachment 3. Staff now seeks City Council approval of the JPA Agreement and authorization for the City and Housing Authority representatives to sign and deliver the agreement.
Purpose of the JPA
Pursuant to the JPA Agreement, the JPA is established to assist in the financing and refinancing of public capital improvements, working capital, certain City liabilities, and other projects whenever there are significant public benefits, as determined by the City. The JPA Agreement is authorized under Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Act”). The Act authorizes the City and the Housing Authority, through the formation of the JPA, to jointly exercise their common powers and additional revenue bond powers under the Act, including the power to provide financing for the acquisition, construction, and improvement of public capital improvements, and for working capital, liability, and other insurance needs.
Thus, the City Manager proposes that the City Council (Board of the JPA) utilizes the proceeds from the JPA to reimburse the General Fund for expenses associated with the Jubilo Village Project and to have the JPA take on any and all obligations made by the City as it relates to the Jubilo Village project (releasing the restriction of the City’s reserve fund and transferring or assigning any City contractual arrangements associated with the Jubilo Village Project to the JPA), finance additional affordable housing projects, pay for needed infrastructure improvements for the City’s parks, sidewalks, streets, alleys and other core functioning deferred maintenance projects associated with public infrastructure, economic development or public initiatives and right-of-way improvements as maybe determined by the City Council from time to time and on a one time funding basis.
Importantly, the JPA is a public entity separate and apart from its members (the City and the Housing Authority, each a "Member" and collectively, the "Members"), and the debts, liabilities, and obligations of the JPA shall not constitute debts, liabilities, or obligations of the Members. The bonds and other obligations issued by the JPA (the "Obligations") shall be special obligations of the JPA payable solely from and secured solely by the revenues, funds, and other assets pledged therefor under the applicable indenture(s) governing the terms and repayment of such bonds (each, an "Indenture") and shall not constitute a charge against the general credit of the JPA or any Member. Neither the faith and credit nor the taxing power of the State or any public agency thereof, including the Members, shall be pledged to the payment of the Obligations, and the JPA shall have no taxing power.
Although the Lease Revenue Bonds would be issued by the JPA, the lease payments used to pay debt service on the Lease Revenue Bonds would be made by the City from the City's General Fund. The amount of the annual lease payment obligations to be paid from the City's General Fund will ultimately depend on the principal amount of Lease Revenue Bonds issued and sold and the annual interest rate to be set by agreement with Barclays. This structure is intended to serve as a mechanism to repay the General Fund and the Housing Authority for their contributions to the Jubilo Village Project and create a separate fund to pay for future projects as identified and approved by the City Council and the JPA.
JPA Formation Process
The JPA Agreement becomes effective when each party - the City and the Housing Authority - has executed a counterpart of the JPA Agreement. The formation of the JPA between the City and the Housing Authority involves the following milestones:
1. The JPA Agreement is approved by the City and the Housing Authority, by separate action of the City Council and Housing Authority Board and authorized to be signed and delivered. The JPA Agreement is then signed by (i) the City Manager on behalf of the City and (ii) the Executive Director on behalf of the Housing Authority.
2. Once the JPA Agreement has been signed and delivered, City staff, acting in their capacity as staff of the new JPA, must provide notice in accordance with the Brown Act of an initial meeting of the new JPA.
3. The City Manager anticipates April 27 as the initial organizational meeting of the new JPA's governing board, at which the JPA will approve bylaws and appoint officers. Under the JPA Agreement, the Board of Directors (the "Board") will consist of the members of the City Council. The officers of the JPA shall be the Chair (the Mayor), Vice Chair (the Vice-Mayor), Executive Director (the City Manager), Treasurer (the Chief Financial Officer), and Secretary (the City Manager or a person designated by the City Manager). Confirmation of officers shall be the first order of business at the first meeting of the JPA. The Board may adopt bylaws, rules, and regulations for the conduct of its meetings as necessary. It is proposed that the issuance of the Lease Revenue Bonds and related documents be considered for approval at that meeting.
4. Initially, the Board shall conduct regular meetings on the same date, at the same time, and at the same location as the regular meetings of the City Council, with the first regular meeting of the Board scheduled for April 27, 2026. A regular City Council meeting follows (typically at a separate date) wherein discussion items on the agenda will approve the bond issuance by the City and the JPA following a noticed public hearing by the City.
Pursuant to the JPA Agreement and State law, certain notices and filings must be completed immediately after the formation of the JPA. Orrick, in consultation with the City Attorney's office, will handle these items.
In addition, the JPA is required to adopt a Conflict of Interest Code, which may be the Conflict of Interest Code of the City of Culver City as previously adopted by the City Council.
Issuance of the JPA's Inaugural Lease Revenue Bonds
Staff anticipates the Lease Revenue Bonds can be issued and sold by June 30, 2026, assuming there are no delays in obtaining a credit rating for the Lease Revenue Bonds or completing the formation of the JPA. For reference, an attached chart describing the Lease Revenue Bond structure, which is common in California, has been included in Attachment 4 (see page 5). The Lease Revenue Bond structure involves several interlocking lease agreements and an Indenture, as described below.
First, under the site lease between the City and the JPA (the "Site Lease"), the City would lease to the JPA its parking garage and in return the JPA would pay to the City the net bond proceeds. In the Site Lease, the City would direct the JPA to send the money to the trustee appointed under the Indenture (the "Trustee") to be held in the project fund and applied to pay costs of issuance.
Then, under the facility lease between the JPA and the City (the "Facility Lease"), the JPA would then lease the parking garage back to the City, and the City would pay base rent payments for use of the parking garage in an amount equal to the debt service on the bonds. The City would pay the base rent out of its General Fund or other legally available sources of the City. Pursuant to the Facility Lease, the base rent payments made by the City would go directly to the Trustee and be used to pay debt service on the bonds.
Under the Indenture, the mechanics for repayment of the Lease Revenue Bonds and management of the project fund would be established. The net bond proceeds would be held in the project fund. From some of those proceeds, the City would repay to the JPA the outstanding loan amount due to the Jubilo borrower and, in exchange, transfer the City's rights, title, and interest in the Jubilo project to the JPA. This transaction would occur outside of the bond transaction and is therefore not reflected on the referenced chart.
Term Sheet with Barclays
The City proposes that the JPA issue approximately $35,850,000 in fixed-rate Lease Revenue Bonds: consisting of approximately $27,540,000 in taxable bonds and approximately $8,310,000 in tax-exempt bonds, plus $543,817 of tax-exempt premium generated to fully pay for the proposed project accounts, capitalized interest, and costs of interest. Proceeds from the tax-exempt bonds are expected (after consultation with Orrick, as bond counsel) to fund various capital projects, while proceeds from the taxable bonds will reimburse the City for prior affordable housing expenditures and other economic development activities as determined by the City, including for the Jubilo project. The Lease Revenue Bonds will be secured by lease payments made by the City to the JPA, with the City-owned Ince and Watseka parking structures serving as the leased assets.
Rather than a public offering, the Lease Revenue Bonds will be sold through a direct purchase by Barclays. This approach allows for a streamlined sale process estimated to close within 90 days of execution of the Term Sheet and prior to June 30, 2026 - faster than a public offering due to certain documents being delivered post-close. Lease payment obligations are subject to annual appropriation and abatement risk consistent with the City's General Fund obligation structure. The City intends to seek a credit rating from S&P Global Ratings.
The Lease Revenue Bonds will carry fixed interest rates negotiated by PFM and Barclays approximately two business days before closing. Tax-exempt bond rates will be benchmarked to prevailing municipal market conditions; taxable bond rates will be priced relative to comparable U.S. Treasury rates, with spreads reflecting the City's credit quality and market conditions at the time of pricing. In both cases, a direct purchase premium will apply to reflect the private placement nature of the transaction. Final rates cannot be determined in advance and will depend on market conditions at the time of execution.
FISCAL ANALYSIS
The costs associated with the formation of the JPA and the issuance of the Lease Revenue Bonds, including the fees for Orrick, PFM, and Barclays, can be paid from bond proceeds as part of the costs of issuance. However, if the City does not move forward with the bond issuance, the City will not be responsible for paying the amount of the fees incurred. If the JPA is established and Lease Revenue Bonds are sold, the City will be required to make lease payments from the City's General Fund (Fund 101). The amount of the City's lease payments used to pay debt service on the Lease Revenue Bonds and the timing of the initial payment will depend on the principal amount of Lease Revenue Bonds sold and the terms of the related agreements.
ATTACHMENTS
1. 2026-04-14_ATT_1 - City Resolution Authorizing JPA Agreement
2. 2026-04-13_ATT_2 - Housing Authority Resolution Authorizing JPA Agreement
3. 2026-04-13_ATT_3 - JPA Agreement Between the City and the Housing Authority
4. 2026-04-13_ATT_4 - Presentation regarding JPA and Lease Revenue Bonds
recommended action
MOTIONS
That the City Council and Housing Authority:
1. Adopt respective Resolutions approving the Joint Exercise of Powers Agreement between the City and the Housing Authority for the formation of the Culver City Public Finance Authority;
2. Authorize the City Manager, or designee, to sign and deliver the JPA Agreement on behalf of the City, and authorize the Executive Director to sign and deliver the JPA Agreement on behalf of the Housing Authority; and
3. Authorize the City Manager to transfer or assign any and all Jubilo Village Project agreements and related City obligations to the JPA as set forth in the City Resolution; and
4. Provide other direction to the City Manager as deemed appropriate.