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HomeMy WebLinkAboutItem No. 9CITY OF LADE , LSIIYORf 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 CHAIRPERSON AND MEMBERS OF THE PUBLIC FINANCING AUTHORITY FROM: GRANT YATES CITY MANAGER /EXECUTIVE DIRECTOR DATE: APRIL 23, 2013 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. 88 -3 (WEST LAKE ELSINORE), AUTHORIZING THE ISSUANCE OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 88 -3 (WEST LAKE ELSINORE) SUBORDINATE SPECIAL TAX BONDS, 2013 SERIES, APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (COMMUNITY FACILITIES DISTRICT 88 -3), 2013 SERIES B, AND THE EXECUTION AND DELIVERY OF A FISCAL AGENT AGREEMENT, A COMMITMENT AGREEMENT AND PURCHASE CONTRACT FOR PURCHASE AND SALE OF LOCAL OBLIGATION BONDS, 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 (COMMUNITY FACILITIES DISTRICT 88 -3), 2013 SERIES B IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $6,000,000 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 OF LOCAL OBLIGATION BONDS OF THE CITY AGENDA ITEM NO. CC 9 / PFA 2 Page 1 of 12 Resolutions Re Community Facilities District No. 88 -3 Bonds April 23, 2013 Page 2 OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 88 -3 (WEST LAKE ELSINORE) AND TAKING OTHER ACTIONS RELATED THERETO Recommendation City: Adopt City Resolution No. 2013 -00 authorizing issuance of the bonds and bond documents related to Community Facilities District 88 -3. PFA Adopt PFA Resolution No. 2013 -D� authorizing issuance of bonds and bond documents related to Community Facilities District 88 -3. Background With the continued support of the City Council, the City's Finance Team has implemented an ongoing refunding /redemption program in which all Assessment Districts and Community Facilities Districts in the City are continuously evaluated with the goal of reducing or stabilizing assessments and special taxes. As part of this program, the Finance Team believes an opportunity currently exists to redeem certain bonds issued in 2008 with new bonds issued at a much lower interest rate and thereby achieve significant savings for property owners. On March 13, 1990, the City formed Community Facilities District No. 88 -3 (the "District ") by the adoption of Resolution No. 89 -76. On March 13, 1990, the qualified electors within the District approved the levy of the Special Tax in accordance with the rate and method of apportionment (the "Rate and Method of Apportionment "). The District is comprised of approximately 2,012 developed parcels. Its boundaries are Machado Street to the east, Lakeshore Drive and Mountain Avenue to the north, Alvarado Street to the south and the City boundaries to the west. In January, 2008, the District issued two related refunding bonds. The first bond issuance, in a senior priority position regarding repayment, was in the principal amount of $24,670,000 of which $17,020,000 is still outstanding (the "2008 Senior District Bonds "). The second related bond was issued concurrently with and subordinate to the 2008 Senior District Bonds. The principal amount of these bonds was $7,175,000 of which $5,985,000 is still outstanding (the "2008 Subordinate District Bonds "). This secondary subordinate position contributed to a high interest rate on the 2008 Subordinate District Bonds -- currently at 12 %. Page 2 of 12 Resolutions Re Community Facilities District No. 88 -3 Bonds April 23, 2013 Page 3 Discussion Market conditions currently exist allowing for the redemption and cancellation of the high interest 2008 Subordinate District Bonds that will lead to a significant savings on special taxes paid by property owners within the District when compared to the existing special taxes required to service the debt on the 2008 Subordinate District Bonds. The redemption of the 2008 Subordinate District Bonds by way of the proposed 2013 bonds (the "2013 Bonds ") anticipates an interest rate of approximately 2.8 %. As with the 2008 Subordinate District Bonds, the proposed 2013 Bonds will be paid off by 2020 such that there is no extension of the payback period. The 2013 Bonds are expected to yield a total debt service savings of approximately $4.1 million when compared to the existing 2008 Subordinate District Bonds. This translates into significant savings to property owners by reducing special taxes and stabilizing the special tax rate by eliminating annual 2% increases. As a result, the average savings per homeowner will be $178 in the first year and that savings will increase every year thereafter to an average of $444 in the final year (2020). Following past practice, the Public Finance Authority will acquire the 2013 Bonds in connection with the issuance of the Authority's Series B local agency revenue bonds. The 2013 Bonds prohibit the District from issuing any additional bonds except for refunding purposes. Documents To Be Approved Approval of the attached Resolutions will authorize the execution of the following financing documents: 1. Commitment Agreement and Purchase Contract (PFA) 2. Purchase Contract (Underwriter) 3. Indenture 4. Fiscal Agent Agreement 5. Continuing Disclosure Agreement 6. Escrow Agreement 7. Preliminary Official Statement These documents are on file with the City Clerk's Office and are available for public review on the City's website at www.lake - elsinore.org. Legal Review Bond Counsel has reviewed the related financing documents and approved them as to form. Page 3 of 12 Resolutions Re Community Facilities District No. 88 -3 Bonds April 23, 2013 Page 4 Fiscal Impact ►f� eMW Prepared by: James R. Rile' L 1f. /' Director of Admi trative Services Barbara Leibold City Attorney Approved by: Grant Yates City Manager /Executive Director Attachments: 1. City Resolution No. 2013 -0(01 2. PFA Resolution No. 2013 -j' Page 4 of 12 RESOLUTION NO. 2013 -019 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. 88 -3 (WEST LAKE ELSINORE), AUTHORIZING THE ISSUANCE OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 88 -3 (WEST LAKE ELSINORE) SUBORDINATE SPECIAL TAX BONDS, 2013 SERIES, APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (COMMUNITY FACILITIES DISTRICT 88 -3), 2013 SERIES B, AND THE EXECUTION AND DELIVERY OF A FISCAL AGENT AGREEMENT, A COMMITMENT AGREEMENT AND PURCHASE CONTRACT FOR PURCHASE AND SALE OF LOCAL OBLIGATION BONDS, 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. 88 -3 (West Lake Elsinore) (the "District ") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, (the "Act'); and WHEREAS, the City previously authorized the issuance of $7,175,000 aggregate principal amount of City of Lake Elsinore Community Facilities District No. 88 -3 (West Lake Elsinore) Subordinate Special Tax Bonds, 2008 Series (the 'Prior Bonds "), for the purpose of refinancing the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities which the City or the District is authorized by law to construct, own or operate, which are necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within the District (the " Facilities "); and WHEREAS, the Prior Bonds secure in part the payment of debt service on the Lake Elsinore Public Financing Authority 2003 Local Agency Revenue Refunding Bonds, Series H ( the "Prior Authority Bonds "); and WHEREAS, the City desires to authorize the issuance of not -to- exceed $6,000,000 aggregate principal amount of City of Lake Elsinore Community Facilities District No. 88 -3 (West Lake Elsinore) Subordinate Special Tax Bonds, 2013 Series (the 'Bonds "), to be purchased by the Lake Elsinore Public Financing Authority (the "Authority'), for the purpose of refinancing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, the Authority intends to issue its Local Agency Revenue Bonds (Community Facilities District 88 -3), 2013 Series B (the "Authority Bonds "), the proceeds of which will be used to purchase the Bonds; and 78870809.1 Page 5 of 12 WHEREAS, proposed forms of a Fiscal Agent Agreement, a Commitment Agreement and Purchase Contract for Purchase and Sale of Local Obligation Bonds (the "Commitment Agreement and Purchase Contract'), a Purchase Contract and a Continuing Disclosure Agreement have been presented to the City Council and are on file with the City Clerk; 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. 88 -3 (West Lake Elsinore), does hereby resolve as follows: Section 1. The City Council, as the legislative body of the District, hereby authorizes the issuance of the Bonds in the aggregate principal amount not to exceed $6,000,000. Section 2. The City 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 3. The City 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 4. The City Council, acting on its behalf and 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 Bonds shall bear interest at a rate not to exceed 5.0 %. Section 5. The City Council, acting on its behalf and 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 78870809.1 2 Page 6of12 to be conclusively evidenced by the execution and delivery thereof by any Responsible Officer. Section 6. 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 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 partial 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 7. 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 Bonds 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 Bonds and the consummation of the transactions as described herein. Section 8. This Resolution shall take effect from and after the date of its passage and adoption. 78870809.1 C Page 7 of 12 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, this 23 day of April, 2013. ATTEST: VIRGINIA BLOOM CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY CITY OF LAKE ELSINORE 78870809.1 11 ROBERT E. MAGEE MAYOR Page 8 of 12 RESOLUTION NO. PFA- 2013 -001 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 (COMMUNITY FACILITIES DISTRICT 88 -3), 2013 SERIES B IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $6,000,000 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 OF LOCAL OBLIGATION BONDS OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 88 -3 (WEST LAKE ELSINORE) 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 of Powers Agreement by and between the City of Lake Elsinore 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 City Council of the City of Lake Elsinore, as the legislative body of the City of Lake Elsinore Community Facilities District No. 88 -3 (West Lake Elsinore) (the "District "), previously authorized the issuance of City of Lake Elsinore Community Facilities District No. 88 -3 (West Lake Elsinore) Subordinate Special Tax Bonds, 2008 Series (the "2008 District Bonds ") for the purpose of refinancing the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities which the City or the District is authorized by law to construct, own or operate, which are necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within the District (the "Facilities "); and WHEREAS, the 2008 District Bonds secure in part the payment of debt service on the Authority's 2003 Local Agency Revenue Refunding Bonds, Series H (the "Prior Bonds "); 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. 88 -3 (West Lake Elsinore) Subordinate Special Tax Bonds, 2013 Series (the Page 9 of 12 "Local Obligations ") for the purpose of refinancing the purchase, construction, expansion or rehabilitation of the Facilities; and WHEREAS, for the purpose of assisting the City and the District in refinancing the Facilities, the Authority has determined to authorize the issuance of its Local Agency Revenue Bonds (Community Facilities District 88 -3), 2013 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 for Purchase and Sale of Local Obligation Bonds (the "Commitment Agreement and Purchase Contract ") to be entered into between the Authority and the District and to refund the 2008 District Bonds resulting in a redemption of a portion of the Prior 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 $6,000,000, 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. 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 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. 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 5.0% per annum. The maturity date of the Bonds shall not extend beyond 40 years from their issuance date. Section 4. 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 78870815.1 2 Page 10 of 12 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 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 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 5. 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. 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 6. 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 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. 78870815.1 3 Page 11 of 12 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. PASSED, APPROVED AND ADOPTED at a regular meeting of the Board of Directors of the Lake Elsinore Public Financing Authority this day of 2013. ATTEST: VIRGINIA BLOOM SECRETARY APPROVED AS TO FORM: BARBARA ZEID LEIBOLD COUNSEL TO AUTHORITY 78870815.1 in STEVE MANOS, CHAIR Page 12 of 12