| | | | | | | | Agenda Item - 3.a.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | Lisa L. Kim
| | Dept.: | Director
| Dept.: | Community and Economic Development
| | Subject: | Receive and file the annual report for the Industrial Development Authority. (Action Item) | Date: | 12/13/2022 |
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| | | | | | | | OBJECTIVE
The purpose of this report is to provide the Garden Grove Industrial Development Authority (IDA) an annual report on the activities of the California Debt Limit Allocation Committee (CDLAC) for 2022. |
| | | | | | | | BACKGROUND
In 1982, the City of Garden Grove formed the IDA. Under the State of California guidelines, the IDA acts as the official local coordinating body for low-cost development bonds for industrial companies seeking expansion. The IDA’s role is to assist industrial-related businesses by facilitating their request for tax-exempt Industrial Development Bonds (IDB).
Although the IDA can call a Special Meeting promptly to facilitate IDB financing, the IDA must meet yearly as stated in its By-Laws. At the annual meeting, the IDA reviews actions of the CDLAC, which administers the tax-exempt activity bond program for California and approves the issuance of IDB’s as a partner with local government, and the actions of the California Debt and Investment Advisory Committee (CDIAC), which provides policy guidance with respect to public debt and investment activities.
The City has not had any IDB applicants over the last several years. |
| | | | | | | | DISCUSSION
The IDA can assist the issuance of tax-exempt bonds provided that the company uses the bond proceeds to:
- Foster job retention and expansion;
- Fund industrial, manufacturing, or agricultural projects that create tangible products for sale;
- Fund land, building construction, new equipment or furnishings; and
- Fund cost of architects, engineers, attorneys and permits.
The IDA program is an economic development tool offering industrial and manufacturing businesses alternative sources of financing for land acquisition, construction, rehabilitation, and infrastructure improvements for businesses in the city of Garden Grove.
CDLAC temporarily has no funding available for IDB financing.
Staff recommends the continuation of the IDA program. Once funding is made available again, Economic Development staff will promote the IDA program as part of its economic development strategy. |
| | | | | | | | FINANCIAL IMPACT
None. If an industrial company applied for IDB financing, the IDA would only act as a liaison in the State bond process. Therefore, there is no financial impact to the City. |
| | | | | | | | RECOMMENDATION
It is recommended that the Industrial Development Authority:
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Receive and file the 2022 update of the California Debt Limit Allocation Committee, the 2022 update of the California Debt and Investment Advisory Committee, and the 2022 Industrial Development Bond Project Program Summary.
By: Monica Covarrubias, Sr. Project Manager
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