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HomeMy WebLinkAbout2011-11-08 Public Financing Authority Agenda Item No. 2 CITY OF LA E LSINOICE K �, �` DREAM EXTREME. CITY OF LAKE ELSINORE JOINT REPORT TO CITY COUNCIL AND PUBLIC FINANCING AUTHORITY TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL HONORABLE CHAIRMAN AND MEMBERS OF THE PUBLIC FINANCING AUTHORITY FROM: ROBERT A. BRADY CITY MANAGER/EXECUTIVE DIRECTOR DATE: NOVEMBER 8, 2011 SUBJECT: 1. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 95 -1 (LAKE ELSINORE CITY CENTER PUBLIC IMPROVEMENTS), AUTHORIZING THE ISSUANCE OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 95 -1 (LAKE ELSINORE CITY CENTER PUBLIC IMPROVEMENTS) SPECIAL TAX BONDS, 2011 SERIES, APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (1996 SERIES E REFUNDING), 2011 SERIES B, AND THE EXECUTION AND DELIVERY OF A FISCAL AGENT AGREEMENT, A COMMITMENT AGREEMENT AND PURCHASE CONTRACT, A PURCHASE CONTRACT AND A CONTINUING DISCLOSURE AGREEMENT; 2. A RESOLUTION OF THE BOARD OF DIRECTORS OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY APPROVING THE ISSUANCE OF LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (1996 SERIES E REFUNDING), 2011 SERIES B IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $1,500,000 PURSUANT TO AN INDENTURE OF TRUST, AUTHORIZING THE SALE OF SUCH BONDS UPON CERTAIN TERMS AND CONDITIONS, APPROVING AN OFFICIAL STATEMENT, APPROVING THE EXECUTION OF AN ESCROW AGREEMENT, A PURCHASE CONTRACT AND A COMMITMENT AGREEMENT AND PURCHASE CONTRACT FOR THE PURCHASE AND SALE OF LOCAL OBLIGATIONS OF THE CITY OF LAKE ELSINORE COMMUNITY AGENDA ITEM NO. 2 Page 1 of 12 Resolutions Re Bonds November 8, 2011 Page 2 FACILITIES DISTRICT NO. 95 -1 (LAKE ELSINORE CITY CENTER PUBLIC IMPROVEMENTS) AND TAKING OTHER ACTIONS RELATED THERETO Background Pursuant to Resolution 95 -4, the Lake Elsinore Public Financing Authority (the "Authority ") issued its 1996 Series E Local Agency Revenue Bonds (the "1996 Bonds ") in the principal amount of $1,750,000 of which $1,300,000 remains outstanding. The Authority's 1996 Bonds are secured by special taxes imposed within Community Facilities District No. 95 -1 ( "CFD No. 95-1"). The 1996 Bonds were issue to finance public improvements for the Wall -Mart shopping center although the Wall-Mart store is not part of the actual district which comprises CFD No. 95 -1. An opportunity exists to refund the Authority's 1996 Bonds that will substantially reduce the annual debt service obligation. Accordingly, staff requests that the City Council and the Authority consider refunding the 1996 Bonds. Discussion The City's Finance Team has determined it is currently feasible to refinance the Authority's 1996 Bonds at an annual savings in excess of $10,000. The 1996 Bonds have an interest rate of 7.5% and it is expected the new "2011 Bonds" will have an average interest rate of Tess than 4.98 %. The estimated percentage savings of the refunded bonds is expected to be in excess of 9 %. The "rule of thumb" in the finance industry to proceed with refunding is a 3% savings of the refunded bonds. The exact interest rate will not be known until the proposed 2011 Bonds are price and sold to the Underwriter. This is expected to occur around the third week of November. The 2011 Bonds have been structured to have a level debt service payments. The final maturity date has not been extended. The 2011 Bonds will be sized in an amount necessary to refinance the Authority's 1996 Bonds and no new money is included. Like the Authority's 1996 Bonds, the 2011 Bonds would be issued by the Authority. Documents To Be Approved Approval of the attached Resolutions will authorize the execution of the following financing documents: 1. Purchase Contract 2. Escrow Agreement 3. Indenture 4. Fiscal Agent Agreement Page 2 of 12 Resolutions Re Bonds November 8, 2011 Page 3 5. Continuing Disclosure Agreement 6. Preliminary Official Statement As provided in the attached Resolutions, these financing documents are on file with the City Clerk's Office and have been made available for public review. Legal Review Bond Counsel has reviewed the related financing documents and approved them as to form. Fiscal Impact None. Recommendation City: Adopt City Resolution No. 2011 -062 authorizing issuance of bonds and bond documents; and PFA Adopt PFA Resolution No. 2011 -03 authorizing issuance of bonds and bond documents. Prepared by: James R. Rile drii I Director of Admi ' ative Services Barbara Leibold City Attorney Approved by: Robert A. Brady City Manager /Executive Director Attachments: 1. City Resolution No. 2011 -062 2. PFA Resolution No. 2011 -03 Page 3 of 12 Page 4 of 12 RESOLUTION NO. 2011 -062 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 95 -1 (LAKE ELSINORE CITY CENTER PUBLIC IMPROVEMENTS), AUTHORIZING THE ISSUANCE OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 95 -1 (LAKE ELSINORE CITY CENTER PUBLIC IMPROVEMENTS) SPECIAL TAX BONDS, 2011 SERIES, APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (1996 SERIES E REFUNDING), 2011 SERIES B, AND THE EXECUTION AND DELIVERY OF A FISCAL AGENT AGREEMENT, A COMMITMENT AGREEMENT AND PURCHASE CONTRACT, A PURCHASE CONTRACT AND A CONTINUING DISCLOSURE AGREEMENT. WHEREAS, the City Council (the "Council ") of the City of Lake Elsinore (the "City ") has previously formed the City of Lake Elsinore Community Facilities District No. 95 -1 (Lake Elsinore City Center Public Improvements) (the "District ") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (the "Act "); and WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority ") has previously issued its 1996 Local Agency Revenue Bonds, Series E (the "Prior Authority Bonds ") for the purpose of assisting the District in financing certain public improvements (the "Facilities ") relating to the "Lake Elsinore City Center" located at the northwest quadrant of Grape Street and Railroad Canyon Road adjacent to Interstate Highway 15; and WHEREAS, the Council, as the legislative body of the District, desires to authorize the issuance of bonds designated "City of Lake Elsinore Community Facilities District No. 95 -1 (Lake Elsinore City Center Public Improvements) Special Tax Bonds, 2011 Series (the "Local Obligations ") for the purpose of refinancing the Facilities; and WHEREAS, for the purpose of assisting the District in refinancing the Facilities, the Authority has determined to issue its Local Agency Revenue Bonds (1996 Series E Refunding), 2011 Series B ( the "Authority Bonds "); and WHEREAS, the Authority intends to use a portion of the proceeds of the Authority Bonds to purchase the Local Obligations pursuant to a Commitment Agreement and Purchase Contract (the "Commitment Agreement and Purchase Contract ") to be entered into between the Authority and the District, which proceeds will be directed by the District to cause the refunding of the Prior Authority Bonds; Page 5 of 12 NOW, THEREFORE, the City Council of the City of Lake Elsinore, California, acting as the legislative body of City of Lake Elsinore Community Facilities District No. 95 -1 (Lake Elsinore City Center Public Improvements), does hereby resolve as follows: Section 1. The foregoing recitals are true and correct and the City hereby so finds and determines. Section 2. The Council, as the legislative body of the District, hereby authorizes the issuance of the Local Obligations in the aggregate principal amount not to exceed $1,500,000. Section 3. The Council, as the legislative body of the District, hereby approves the Fiscal Agent Agreement in substantially the form on file with the City Clerk. The Mayor, the City Manager, the Director of Administrative Services, and any designee of any of them (each, a "Responsible Officer ") are hereby authorized to execute the Fiscal Agent Agreement in substantially the form presented hereto, with such revisions, amendments and completions as shall be approved by any Responsible Officer, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof by any Responsible Officer. Section 4. The Council, as the legislative body of the District, hereby approves the Continuing Disclosure Agreement in substantially the form on file with the City Clerk. Any Responsible Officer is hereby authorized to execute the Continuing Disclosure Agreement in substantially the form presented hereto, with such revisions, amendments and completions as shall be approved by any Responsible Officer, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof by any Responsible Officer. Section 5. The Council, as the legislative body of the District, hereby approves the Commitment Agreement and Purchase Contract, in substantially the form on file with the City Clerk. Any Responsible Officer is hereby authorized to execute the Commitment Agreement and Purchase Contract, in substantially the form presented hereto, with such revisions, amendments and completions as shall be approved by any Responsible Officer, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof by any Responsible Officer, provided that, the Local Obligations shall bear interest at a rate not to exceed 7.0 %. Section 6. The Council, as the legislative body of the District, hereby approves the sale of the Authority Bonds to the Underwriter pursuant to and in accordance with the Purchase Contract, in substantially the form on file with the City Clerk. Any Responsible Officer is hereby authorized to execute the Purchase Contract, with such revisions, amendments and completions as shall be approved by any Responsible Officer, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof by any Responsible Officer. Section 7. Pursuant to Section 53344.1 of the Act, the Council hereby reserves to itself, in its sole discretion, the right and authority by subsequent resolution to allow Page 6 of 12 any owner of property within the District, subject to the provisions of Section 53344.1 of the Act and those conditions as it may impose, and any applicable prepayment penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the District treasurer or fiscal agent in full payment or part payment of any installment of the special taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender. Section 8. The City Manager, the Director of Administrative Services, the City Clerk and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City and the District, to do any and all things and take any and all other actions, including the publication of any notices necessary or desirable in connection with the sale of the Local Obligations and execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, deem necessary or advisable in order to consummate the lawful issuance and sale of the Local Obligations and the consummation of the transactions as described herein. Section 9. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, this 8 day of November, 2011. BRIAN TISDALE MAYOR ATTEST: VIRGINIA BLOOM CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY CITY OF LAKE ELSINORE Page 7 of 12 Page 8 of 12 RESOLUTION NO. 2011 -03 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY APPROVING THE ISSUANCE OF LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (1996 SERIES E REFUNDING), 2011 SERIES B IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $1,500,000 PURSUANT TO AN INDENTURE OF TRUST, AUTHORIZING THE SALE OF SUCH BONDS UPON CERTAIN TERMS AND CONDITIONS, APPROVING AN OFFICIAL STATEMENT, APPROVING THE EXECUTION OF AN ESCROW AGREEMENT, A PURCHASE CONTRACT AND A COMMITMENT AGREEMENT AND PURCHASE CONTRACT FOR THE PURCHASE AND SALE OF LOCAL OBLIGATIONS OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 95 -1 (LAKE ELSINORE CITY CENTER PUBLIC IMPROVEMENTS) AND TAKING OTHER ACTIONS RELATED THERETO WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority ") is a joint exercise of powers authority duly organized and existing under and pursuant to that certain Joint Exercise Powers Agreement by and between the City of Lake Elsinore (the "City ") and the Redevelopment Agency of the City of Lake Elsinore (the "Agency "), under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act "), and is authorized pursuant to Article 4 of the Act to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations to provide financing and refinancing for capital improvements of member entities of the Authority; and WHEREAS, the Authority has previously issued its 1996 Local Agency Revenue Bonds, Series E (the "Prior Authority Bonds ") for the purpose of assisting the City of Lake Elsinore Community Facilities District No. 95 -1 (Lake Elsinore City Center Public Improvements) (the "District ") in financing certain public improvements (the "Facilities ") relating to the "Lake Elsinore City Center" located at the northwest quadrant of Grape Street and Railroad Canyon Road adjacent to Interstate Highway 15; and WHEREAS, the City Council of the City of Lake Elsinore, as the legislative body of the District, has authorized the issuance of City of Lake Elsinore Community Facilities District No. 95 -1 (Lake Elsinore City Center Public Improvements) Special Tax Bonds, 2011 Series (the "Local Obligations ") for the purpose of refinancing the Facilities; and WHEREAS, for the purpose of assisting the District in refinancing the Facilities, the Authority has determined to issue its Local Agency Revenue Bonds (1996 Series E Refunding), 2011 Series B ( the "Bonds "); and WHEREAS, the Authority intends to use a portion of the proceeds of the Bonds to purchase the Local Obligations pursuant to a Commitment Agreement and Purchase Contract (the "Commitment Agreement and Purchase Contract ") to be entered into Page 9 of 12 between the Authority and the District, which proceeds will be directed by the District to cause the refunding of the Prior Authority Bonds; NOW, THEREFORE, the Board of Directors of the Lake Elsinore Public Financing Authority does hereby resolve as follows: Section 1. The foregoing recitals are true and correct and the Authority hereby so finds and determines. Section 2. The Authority hereby approves the issuance of the Bonds in the aggregate principal amount not to exceed $1,500,000, pursuant to the Indenture of Trust (the "Indenture "), in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, which is also hereby approved. Any one of the Chairman, the Executive Director and the Secretary of the Authority, and • each of them, and any designee of any of them (collectively, the "Authorized Officers "), is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 3. The Authority hereby approves the Escrow Agreement, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Escrow Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 4. The Authority hereby authorizes the sale of the Bonds to the Underwriter pursuant to and in accordance with the Purchase Contract, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, which is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Purchase Contract, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. The underwriter's discount for the Bonds specified in the Purchase Contract shall not exceed 2.0 %, exclusive of original issue discount. The Bonds shall bear interest at a rate or rates not to exceed 7.0% per annum. Section 5. The Authority hereby approves the form of the Preliminary Official Statement (the "Preliminary Official Statement "), in substantially the form on file with the Authority Secretary, with such changes and modifications as shall be necessary or appropriate for completion to the satisfaction of the Executive Director of the Authority, and approval by Fulbright & Jaworski L.L.P., the Authority's Disclosure Counsel. The Executive Director is authorized and directed, on behalf of the Authority to deem the Preliminary Official Statement "final" pursuant to Rule 15c2 -12 under the Securities and Page 10 of 12 Exchange Act of 1934. The Authority further approves distribution of the Preliminary Official Statement by the Underwriter to persons who may be interested in purchasing the Bonds. The Board hereby approves the final Official Statement (the "Official Statement ") describing the Bonds. Distribution of the final Official Statement by the Underwriter is hereby approved. The Executive Director, subject to approval by the Authority's Disclosure Counsel, is hereby authorized and directed to approve any changes in or additions to the final form of the Official Statement to conform to the requirements of the Purchase Contract and the Indenture, as applicable. Section 6. The Authority hereby approves the purchase of the Local Obligations pursuant to the Commitment Agreement and Purchase Contract in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, which is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Commitment Agreement and Purchase Contract, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 7. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to evaluate and select one or more municipal bond insurers for all or any portion of the Bonds and to execute and deliver such contracts and agreements with such bond insurers as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 8. The Authorized Officers, the other officers and employees of the Authority, the members of the Authority's Board of Directors, Bond Counsel, Disclosure Counsel and the other consultants to and agents of the Authority, are each hereby authorized and directed to do all things and take all actions necessary or desirable to effectuate the transactions contemplated by this Resolution, and to execute such other assignments, agreements, certificates, receipts, endorsements, orders, opinions and other documents in connection with such transactions, including, without limitation, closing documents in connection with the issuance of the Bonds, and all actions heretofore taken by the officers, employees and agents of the Authority in connection with the issuance of the Bonds are hereby ratified, approved and confirmed in every respect. Section 9. This Resolution shall become effective immediately upon adoption. Page 11 of 12 PASSED, APPROVED AND ADOPTED at a regular meeting of the Board of Directors of the Lake Elsinore Public Financing Authority this 8 th day of November, 2011. DARYL HICKMAN CHAIRMAN ATTEST: VIRGINA J. BLOOM SECRETARY APPROVED AS TO FORM: BARBARA LEIBOLD AUTHORITY COUNSEL Page 12 of 12