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HomeMy WebLinkAbout14-369 Resolution 2014-076 & Resolution PFA 2014-002CITY 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: DECEMBER 9, 2014 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, 2015 SERIES (IMPROVEMENT AREA B), APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (SUMMERLY IA B) 2015 SERIES A, THE EXECUTION AND DELIVERY OF A FISCAL AGENT AGREEMENT, AND THE PREPARATION OF 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 B), 2015 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 CFD 2006 -1 Improvement Area B December 9, 2014 Page 2 AND CONDITIONS, AUTHORIZING THE PREPARATION OF AN OFFICIAL STATEMENT, 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 Recommendations 1) City: Adopt City Resolution No. 2014 -_ authorizing issuance of the bonds and bond documents. 2) PFA Adopt PFA Resolution No. 2014 -_ authorizing issuance of bonds and bond documents. Background The City of Lake Elsinore CFD No. 2006 -1 was created pursuant to the Mello -Roos Community Facilities Act of 1982. Currently, McMillian is serving as master developer of the site. The property includes what is commonly referred to today as Summerly Improvement Area B, which includes a total of 182 residential lots /units. Residential construction is currently underway through two developers; Meritage and Ryland Homes. Of the 182 lots /units, 43 have been sold and closed, 37 are under contract or in escrow, and 131 are scheduled to be build and sold within the next 12 months. Due to the development status of the Project, and the developer's willingness to provide a "Letter of Credit" (LOC), the Series 2015 Bonds can now be Issued. This fact, along with currently attractive interest rates, provides enough financial benefit to the property owners within the District for the City of Lake Elsinore to pursue financing of CFD 2006- 1 Special Tax Bonds. Discussion The proposed 2015 Bonds would be approximately $3 million in par amount with a final maturity in 2045. The final interest rate structure will be determined when the 2015 Bonds are priced and sold. The pricing date would be targeted for some time in January 2015, assuming that interest rates are attractive. The bond closing is expected to occur the first week of February. CFD 2006 -1 Improvement Area B December 9, 2014 Page 3 The table below highlights the total savings based upon current interest rates. 'Annual Assigned Special Tax will increase at 2% per year Documents to be Prepared Approval of the attached Resolutions will authorize the City's Financing Team to prepare the following financing documents: • Indenture of Trust • Fiscal Agent Agreement (IA B) • Preliminary Official Statement • Bond Purchase Agreement • Continuing Disclosure Agreement Legal Review Bond Counsel has reviewed the related financing documents and approved them as to form. Fiscal Impact There is no cost to the City of Lake Elsinore, however, the property owners are expected to pay approximately $959.86 per parcel annually, increasing at 2% per year through 2045, as illustrated in the table above. The average estimated rate per year for FY 2044 -45 will be $1,704.56. Based on current market conditions, the bonds interest rate is estimated to be to 4.85 %. CFD 2006 -1 Improvement Area B December 9, 2014 Page 4 Prepared by: Jason Simpson Director of Administrative Services Approved by: Grant Yates City Manager/ Executive Director Attachments: 1. City Resolution No. 2014 -_ 2. PFA Resolution No. 2014 RESOLUTION NO. 2014 - 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, 2015 SERIES (IMPROVEMENT AREA B), APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS (SUMMERLY IA B) 2015 SERIES A, THE EXECUTION AND DELIVERY OF A FISCAL AGENT AGREEMENT, AND THE PREPARATION OF 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, 2015 Series (Improvement Area B)" (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 B) 2015 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 47184346.1 City Council Resolution No 2014 -_ Page 2 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: 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, 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 authorizes the preparation of the Purchase Contract, the Commitment Agreement and the Purchase Contract and the Continuing Disclosure Agreement, all relating to the sale of the Bonds or the Authority Bonds. The approval of the Purchase Contract, the Commitment Agreement and the Purchase Contract and the Continuing Disclosure Agreement in substantially final forms shall occur at a subsequent meeting of the City Council, and such approval is hereby made a condition precedent to the sale and issuance of the Bonds and the Authority Bonds. Section 5. Pursuant to Section 53344.1 of the Act, the City 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 6. 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 47154346/ 2 City Council Resolution No 2014 -_ Page 3 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 7. 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 9th day of December, 2014. NATASHA JOHNSON MAYOR ATTEST: VIRGINIA BLOOM CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY CITY OF LAKE ELSINORE 47184346.1 3 City Council Resolution No 2014 -_ Page 4 STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF LAKE ELSINORE SS I, VIRGINIA J. BLOOM, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2014 - was adopted by the City Council of the City of Lake Elsinore at a regular meeting held on the 9th day of December, 2014 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Virginia J. Bloom, CMC City Clerk 47184346.1 4 RESOLUTION NO. 2014 - 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 B), 2015 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, AUTHORIZING THE PREPARATION OF AN OFFICIAL STATEMENT, 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, 2015 Series (Improvement Area B) (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 B), 2015 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 47184351.1 City Council Resolution No 2014 -_ Page 2 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 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, 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 preparation of a Preliminary Official Statement, the Purchase Contract and the Commitment Agreement and Purchase Contract, all relating to the sale of the Bonds or the Local Obligations. The approval of the Preliminary Official Statement, the Purchase Contract and the Commitment Agreement and Purchase Contract in substantially final forms shall occur at a subsequent meeting of the Board of Directors of the Authority, and such approval is hereby made a condition precedent to the sale and issuance of the Bonds and the Local Obligations. Furthermore, to the extent 50% of the homes in Improvement Area B of the District have closed escrow, each of the respective home builders shall secure its obligations to pay special taxes with a letter of credit acceptable to an Authorized Officer in the amounts equal to 2 years of debt service for such parcels owned by the respective home builder, which letter of credit can be released when a home builder has sold and closed escrow on at least 80% of the parcels being developed by such home owner. Section 4. 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 47154351.1 2 City Council Resolution No 2014 -_ Page 3 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 5. 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 9th day of December, 2014. DARYL HICKMAN CHAIRPERSON ATTEST: VIRGINIA BLOOM SECRETARY APPROVED AS TO FORM: BARBARA ZEID LEIBOLD COUNSEL TO AUTHORITY 471843>LI 3 City Council Resolution No 2014 -_ Page 4 STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF LAKE ELSINORE SS I, VIRGINIA J. BLOOM, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2014 - was adopted by the Board of Directors of the Lake Elsinore Public Financing Authority at a regular meeting held on the 9th day of December, 2014 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Virginia J. Bloom, CIVIC City Clerk 47184351.1