Report to Mayor and City Council
Tuesday, January 24, 2017
Discussion
SUBJECT:
Title
CONSIDER RESOLUTION NO. 17-014, A RESOLUTION OF THE CITY OF CARSON CITY COUNCIL AMENDING THE FISCAL YEAR 2016-17 BUDGET IN THE GENERAL FUND FOR PURCHASE OF AN APPEAL BOND RELATED TO THE CITY'S DEFENSE IN A LAWSUIT FILED BY THE OWNER OF THE COLONY COVE MOBILE HOME PARK
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I. SUMMARY
Staff recommends a budget amendment to provide for the purchase of an appeal bond filed with federal court, related to the City's defense of Colony Cove v. City of Carson et al.
II. RECOMMENDATION
Recommendation
WAIVE further reading and adopt Resolution No. 17-014, A RESOLUTION OF THE CITY OF CARSON CITY COUNCIL AMENDING THE FISCAL YEAR 2016-17 BUDGET IN THE GENERAL FUND.
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III. ALTERNATIVES
TAKE another action deemed appropriate by City Council.
IV. BACKGROUND
The City is aggressively defending itself in a lawsuit filed by the owner of the Colony Cove Mobile Home Park (Colony Cove v. City of Carson et al). The lawsuit challenges the constitutionality of how the City applied its mobile home park rent control law to the plaintiff's mobile home park.
The plaintiff received an initial judgment of $7,464,719 against the City. The City has filed a notice of appeal and expects a federal court decision in early 2018.
In order to move forward with the appeal, the City was required to deposit the amount of the judgment in an escrow account, purchase an appeal bond in lieu of an escrow deposit, or furnish some other form of financial guarantee to satisfy the plaintiff.
On November 14, 2016, in closed session, the City Council directed Staff to purchase an appeal bond. Subsequently, the City acquired a bond from Bond Services of California, LLC for an annual premium of $33,338.
At this time, Staff recommends a General Fund budget amendment to provide for the initial annual premium.
V. FISCAL IMPACT
The estimated Unassigned General Fund Balance (available to spend) at June 30, 2017 is ...
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