SR - - REPORT FROM FINANCE DIRECTOR V���oFPo����
�!' �`a AGENDA ITEM
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�0�►►��A December 11, 2018
TO: Honorable Chairman and Members of the Board of Directors of the
Industrial Development Authority of the City of Orange
THRU: Rick Otto, Executive Director
FROM: Will Kolbow, Finance Director�,�..
REVIEW: City Manag inance�� �
1. SUBJECT
Report from the Finance Director of the Industrial Development Authority of the City of
Orange.
2. SUMMARY
The Bylaws of the Industrial Development Authority require that a report of the Authority's
activities for the prior fiscal year be presented to the Board of Directors each December.
3. RECOMMENDED ACTION
Receive and file.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
e: Create an environment to attract, retain and expand economic opportunities.
6. DISCUSSION AND BACKGROUND
The California lndustrial Development Financing Advisory Commission (CIDFAC)
administers the State's Industrial Development Bond Financing Program and approves
issuance of Industrial Development Bonds (IDB). IDBs provide manufacturing and
processing companies low-cost, low-interest financing for capital expenditures. Eligible
capital expenditures include the acquisition of land, building construction, building
renovation and the purchase of machinery and equipment. CIDFAC is a state agency
within the California State Treasurer's Office.
ITEM �� 3�a' � 12/11/2018
The Industrial Development Authority (IDA) of the City of Orange was established in 1997
to provide an alternate method of financing for Control Air Conditioning (Control Air) to
relocate its manufacturing facility into Orange. The IDA was the issuer for tax-exempt
industrial development bonds in the amount of$5 million on behalf of Control Air in May
1997. The IDA only acted as a conduit for issuance of the bonds. It was the sole
responsibility of Control Air to repay the bondholders.
In 2004, Control Air needed to expand its operation but was unable to find a suitable
expansion location in Orange. In November 2004, Control Air relocated its manufacturing
facility to Anaheim and subsequently sold its property in Orange. Control Air,was required
to repay the bonds in full. In December 2004, the bonds were repaid.
In 2018, there were no outstanding bonds issued by the IDA. Staff recommends the
continuation of the IDA as it is a unique economic development tool that offers industrial
and manufacturing businesses an alternative source of financing for land acquisition,
co.nstruction, and rehabilitation in Orange through the State's Industrial Development
Bond Financing Program.
Agency staff continues to promote the IDA program and benefits through the city's
Economic Development website, outreach to the brokerage community specializing in
industrial and manufacturing tenants, and ongoing communication with local
manufacturing businesses in Orange.
7. ATTACHMENT
None.
ITEM 2 12/11/2018