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HomeMy WebLinkAboutPFA Item No. 2CITY OF LADE , LSINORE -� 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: MAY 14, 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. 2006 -1 (SUMMERLY), AUTHORIZING THE ISSUANCE OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006 -1 (SUMMERLY) SPECIAL TAX BONDS, 2013 SERIES (IMPROVEMENT AREA A), APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (SUMMERLY IA A) 2013 SERIES A, 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 (SUMMERLY IA A), 2013 SERIES A IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $4,000,000 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 A PURCHASE CONTRACT AND A COMMITMENT AGREEMENT AND PURCHASE CONTRACT FOR THE PURCHASE AND SALE OF LOCAL OBLIGATION BONDS OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006 -1 (SUMMERLY) AND TAKING OTHER ACTIONS RELATED THERETO AGENDA ITEM NO. 6 & PFA 2 Page 1 of 12 Resolutions Re Community Facilities District No. 2006 -1 Bonds May 14, 2013 Page 2 Recommendation City: Adopt City Resolution No. 2013 -021 authorizing issuance of the refunding bonds and bond documents. PFA Adopt PFA Resolution No. 2013 -002 authorizing issuance of refunding bonds and bond documents. Background The City originally formed Community Facilities District No. 2006 -1 (the "District ") in 2006 in connection with the proposed development of the Summerly project. By way of background, the Summerly project consist of approximately 1,482 proposed homes with development to occur in successive phases. In early 2011, the City went through formal change proceedings to reconfigure the District from its original three improvement areas to six new improvement areas (Improvement Areas A through F). This allowed the improvement areas to be more consistent with the phased construction for the Summerly development. As a result, Improvement Area A equates to the first residential development at Summerly. On March 8, 2011, the qualified electors within Improvement Area A approved the levy of the Special Tax in accordance with the Rate and Method of Apportionment and bonds are authorized up to $4,000,000. Discussion Improvement Area A consist of 214 residential home sites. Beginning in 2012, home construction began to accelerate. As of last month, there were 67 completed homes occupied by resident homeowners and average sales prices have exceeded $250,000. Currently, three developers are building or intend to build within Improvement Area A. Beazer Homes owns 30 parcels of which five (5) homes are complete and 25 under construction. Richmond American Homes owns 43 parcels of which six (6) homes are completed and 12 under construction. Beazer and Richmond expect to complete all construction on their remaining parcels by mid -2014. McMillin owns the remaining 74 home sites. They anticipates beginning construction of two (2) model homes in July 2013 and expect to complete the construction of the first six (6) production homes by February 2014. Floor plans are expected to range from 2,482 to 2,877 square feet with pricing in the low $300,000's. Currently, McMillin has obtained a loan from Torrey Pines Bank to finance the construction of two (2) model homes and the first 12 production homes. Given this progress and the positive outlook for continued development, the issuance of bonds for Improvement Area A is now feasible. Page 2 of 12 Resolutions Re Community Facilities District No. 2006 -1 Bonds May 14, 2013 Page 3 The proposed bonds (the "Bonds ") will not exceed the principal amount of $4,000,000 and is anticipated to be $3,650,000. The proceeds from the Bonds will be used to offset the costs of various public improvements and impact fees related to the Summerly development. Following past practice, the Public Finance Authority will acquire the Bonds in connection with the issuance of the Authority's Series A local agency revenue bonds. The Bonds prohibit the District from issuing any additional bonds for Improvement Area A 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. 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. Fiscal Impact None. Prepared by: James R. Riley Director of Admini t five Services Barbara Leibold City Attorney Approved by: Grant Yates City Manager /Ex cutive Director Attachments: 1. City Resolution No. 2013 -021 2. PFA Resolution No. 2013 -002 Page 3 of 12 Page 4 of 12 RESOLUTION NO. 2013 -021 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. 2006 -1 (SUMMERLY), AUTHORIZING THE ISSUANCE OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006 -1 (SUMMERLY) SPECIAL TAX BONDS, 2013 SERIES (IMPROVEMENT AREA A), APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (SUMMERLY IA A) 2013 SERIES A, 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. 2006 -1 (Summerly) (the "District') pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (the "Act'); and WHEREAS, the District desires to issue not to exceed $4,000,000 aggregate principal amount of bonds designated "City of Lake Elsinore Community Facilities District No. 2006 -1 (Summerly) Special Tax Bonds, 2013 Series (Improvement Area A)" (the 'Bonds "), to be purchased by the Lake Elsinore Public Financing Authority (the "Authority'), for the purpose of financing 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 Authority intends to issue its Local Agency Revenue Bonds (Summerly IA A) 2013 Series A (the "Authority Bonds "), the proceeds of which will be used to purchase the Bonds; and WHEREAS, the City has heretofore held a public hearing pursuant to Section 6586.5 of Articles 1 through 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the 'Bond Law "); and WHEREAS, proposed forms 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 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. 2006 -1 (Summerly), does hereby resolve as follows: 78872485.1 2 Page 5 of 12 City Council Resolution No. 2013 -021 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 $4,000,000. Section 2. The City hereby finds and determines that (i) the Facilities are to be located within the boundaries of the City and (ii) there are significant public benefits arising from the Authority's issuance of the Authority Bonds to finance the Facilities, including, but not limited to, employment benefits from undertaking the acquisition of the Facilities in a timely fashion, as contemplated by Section 6586 of the Bond Law. Section 3. 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 4. 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 5. 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 5.75 %. Section 6. 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 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 78872485.1 III Page 6 of 12 City Council Resolution No. 2013 -021 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 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 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 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 14th day of May, 2013. ATTEST: VIRGINIA BLOOM CITY CLERK BARBARA ZEID LEIBOLD CITY ATTORNEY CITY OF LAKE ELSINORE 78872485.1 2 ROBERT E. MAGEE MAYOR Page 7 of 12 Page 8 of 12 RESOLUTION NO. PFA 2013 -002 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 (SUMMERLY IA A), 2013 SERIES A IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $4,000,000 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 A PURCHASE CONTRACT AND A COMMITMENT AGREEMENT AND PURCHASE CONTRACT FOR THE PURCHASE AND SALE OF LOCAL OBLIGATION BONDS OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006 -1 (SUMMERLY) 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 City Council of the City of Lake Elsinore, as the legislative body of the City of Lake Elsinore Community Facilities District No. 2006 -1 (Summerly) (the "District'), has authorized the issuance of City of Lake Elsinore Community Facilities District No. 2006 -1 (Summerly) Special Tax Bonds, 2013 Series (Improvement Area A) (the "Local Obligations ") for the purpose of financing 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, for the purpose of assisting the City and the District in financing the Facilities, the Authority has determined to issue its Local Agency Revenue Bonds (Summerly IA A), 2013 Series A ( 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 WHEREAS, the City, as one of the members of the Authority, has heretofore held a public hearing pursuant to Section 6586.5 of the Act and in connection therewith 78872483.1 Page 9 of 12 Public Financing Authority Resolution No. 2013 -002 has approved the Authority's financing of the Facilities and has found and determined that (i) the Facilities are to be located within the boundaries of the City and (ii) there are significant public benefits arising from the Authority's issuance of the Bonds to finance the Facilities, including, but not limited to, employment benefits from undertaking the acquisition of the Facilities in a timely fashion, as contemplated by Section 6586 of the Act; 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 $4,000,000 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 Chairperson, 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 5.75% 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 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 (the "Official Statement ") describing the Bonds. Distribution of the final Official Statement by the 78872483.1 2 Page 10 of'] 2 Public Financing Authority Resolution No. 2013 -002 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. 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 7. 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. 78872483.1 3 Page 11 of 12 Public Financing Authority Resolution No. 2013 -002 Section 8. 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 14th day of May, 2013. ATTEST: VIRGINIA BLOOM SECRETARY BARBARA ZEID LEIBOLD COUNSEL TO AUTHORITY 78972483.1 I STEVE MANOS CHAIRPERSON Page 12 of 12