Loading...
HomeMy WebLinkAboutCC Reso No 2007-197RESOLUTION NO. zoo7-i9~ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING A DEPOSIT AND REIMBURSEMENT AGREEMENT RELATING TO THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT N0. 2007-5 (RED KITE) WHEREAS, the City Council (the "Council") of the City of Lake Elsinore (the "City") intend5 to initiate proceedings to form City of Lake Elsinore Community Facilities District No. 2007-5 (Red Kite) (the "CFD") pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "AcY'); and WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district (including the issuance of bonds thereby); and WHEREAS, the City and the developer within the proposed CFD (the "Developer') desire to enter into an agreement in accordance with Section 53314.9 of the Act in order to provide for the advancement of funds by the Developer to be used to pay costs incurred in connection with the formation of the CFD and issuance of special tax bonds for the CFD (the "Bonds"), and to provide for the reimbursement to the Developer of such funds advanced, without interest, from the proceeds of any Bonds. NOW, THEREFORE, the City Council of the City of Lake Elsinore, California, does hereby resolve as follows: Section 1. The City Council hereby approves the Deposit and Reimbursement Agreement in substantiaily the form presented to the City Council at this meeting. The Mayor, the City Manager and the Director of Administrative Services are hereby authorized to execute the Deposit and Reimbursement Agreement with such revisions, amendments and completions as shall be approved by the officer executing the same, such approvai to be conclusively evidenced by the execution and delivery thereof. Section 2. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED at a re ular m~~ of the City Council of the City of Lake Elsinore, California, this 27th d o ov be 07. MAYOR AT ST: ~ VIVIAN M. MUNSON CITY CLERK APP OVED AS TO FORM: c B RBARA Z ID LEIBOLD CITY ATTORNEY CITY OF LAKE ELSINORE E. 2 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE )ss. CITY OF LAKE ELSINORE ) I, VIVIAN M. MUNSON, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. ~no~-~ 9~ was adopted by the City Councii of the City of Lake Elsinore, California, at a regular meeting held on the 27th day of November 2007, and that the same was adopted by the following vote: AYES: TxortAS BUCKLEY, DARYL HICKMAN, GENIE KELLEY, ROBERT E. MAGEE NOES: NONE ABSENT: xosEaT SCHIFFNER ABSTAW: NoNE Yl.. _ ~ VIVIAN M. MUNSON CITY CLERK 3 DEPOSIT AND REIMBURSEMENT AGREEMENT THIS DEPOSIT AND REIMBURSEMENT AGREEMENT (this "Deposit AgreemenY'), dated as of July 30, 2007 2007 for identification purposes only, is by and between the City of Lake Elsinore, California (the "City"), Cottage Lane, LLC (collectively, the "Owner"). RECITALS WHEREAS, the City has determined to initiate proceedings to create a community facilities district designated "City of Lake Elsinore Community Facilities District No. 2007-5 (Red Kite) (the "Community Facilities DistricY') under the Mello-Roos Community Facilities Act of 1982, as amended (the "AcY'); and WHEREAS, Owner is the owner of the real property within the proposed Community Facilities District; and WHEREAS, in accordance with City's policy regarding use of the Act, the Owner is required to compensate the City for all costs reasonably incurred in the formation of the Community Facilities District and issuance of bonds for the Community Facilities District; and WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district (including the issuance of bonds thereby); and WHEREAS, Section 53314.9 of the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest under all of the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53521 of the Act and in the resolution of formation to establish the community facilities district pursuant to Section 53325.1 of the Act (including the issuance of bonds thereby), (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special taac, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; and WHEREAS, the City and the Owner desire to enter into this Deposit Agreement in accordance with Section 53314.9 of the Act in order to provide for the advancement of funds by the Owner to be used to pay costs incurred in connection with the formation of the Community Facilities District and issuance of special tax bonds for the Community Facilities District (the "Bonds"), and to provide for the reimbursement to the Owner of such funds advanced, without interest, from the proceeds of the Bonds; NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: Section 1. The Deposits and Apqlication Thereof. (a) The Owner has previously deposited with the City the amount of $65,000 (the "Initial DeposiY'). The Ciry, by its execution hereof, acknowledges receipt of, and accepts, the Initial Deposit. (b) City hereby agrees and Owner hereby acknowledges that Union Bank of California, N.A. ("Union Bank") shall hold the Initial Deposit and any subsequent deposits pursuant to (c) hereof as agent for the City. City shall, concurrently with the execution hereof, deposit the Initial Deposit in an account ("Deposit AccounY') at Union Bank, 120 S. San Pedro Street, 4th Floor, Los Angeles, California 90012. Upon its receipt of the Initial Deposit, Union Bank shall be entitled to deduct therefrom its fee for holding and disbarsing the Initial Deposit and any subsequent deposits pursuant to the terms of this Deposit Agreement. (c) The Initial Deposit, together with any subsequent deposit required to be made by the Owner pursuant to the terms hereof (collectively, the "Deposits"), are to be used to pay for any costs incurred for any authorized purpose in connection with the formation of the Community Facilities District and the issuance of the Bonds including, without limitation, (i) the fees and expenses of any consultants to the City employed in connection with the formation of the Community Facilities District and the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel, disclosure counsel and issuer's counsel, and any other consultant reasonably deemed necessary or advisable by the City, (ii) the costs of appraisals, market absorption and/or feasibility studies and other reports reasonably deemed necessazy or advisable by the City in connection with the formation of the Community Facilities District and issuance of the Bonds, (iii) the costs of publication of notices, preparation and mailing of ballots and other costs related to any hearing, election or other action or proceeding undertaken in connection with the formation of the Community Facilities District and issuance of the Bonds, (iv) reasonable charges for City staff time incurred in connection with the formation of the Community Facilities District and the issuance of the Bonds by the Community Facilities District, including a reasonable allocation of City overhead expense related thereto, and (v) any and all other actual costs and expenses incurred by the City in connection with the formation of the Community Facilities District and the issuance of the Bonds (collectively, the "Initial Costs"). The City may draw upon the Deposits from time to time to pay the Initial Costs. Union Bank shall have no duty or responsibility to confirm that amounts withdrawn at the direction of the City have been or will be spent on Initial Costs. (d) At such time the Owner requests the City to initiate proceedings to issue Bonds, the Owner shall make an additional deposit in the amount determined by the City. If, at any time, the unexpended and unencumbered balance of the Deposits is less than $10,000, the City may request, in writing, that the Owner make an additional deposit in an amount estimated to be sufficient, together with any such unexpended and unencumbered balance, to pay for all 2 Initiai Costs. The Owner sha11 make such additional deposit with the City within two weeks of the receipt by the Owner of the City's written request therefor. If the Owner fails to make any such additional deposit within such two week period, the City may cease all work related to the issuance of the Bonds. (e) The Deposits shall be kept separately at Union Bank and sha11 be invested in a money market fund selected by the City and the City shall at all times maintain records as to the expenditure of the Deposits. (fl The City shall draw upon the Deposits to pay the Initial Costs by presentation of a disbursement request (the "RequesY') to Union Bank in the form attached hereto as Exhibit A and by this reference incorporated herein. The City shall cause Union Bank to pay such Initial Costs pursuant to the Request. (g) The City shall provide the Owner with a written monthly suinmary of expenditures made from the Deposits, and the unexpended balance thereof, within ten business days of receipt of the City of a written request therefor submitted by the Owner. The cost of providing any such summary shall be charged to the Deposits. Section 2. Return of Deposits; Reimbursement. (a) As provided in Section 53314.9 of the Act, the approval by the qualified electors of the Community Faciliries District of the proposed special tax to be levied therein is a condition to the repayment to the Owner of the funds advanced by the Owner pursuant hereto. Therefore, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied thereon, the City shall have no obligation to repay the Owner any portion of the Deposits expended or encumbered to pay Initial Costs. In accordance with Section 53314.9 of the Act, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied therein, the City shall cause Union Bank to return to the Owner any portion of the Deposits which have not been expended or encumbered to pay Initial Costs by the time of the election on said proposed special tax. (b) If proceedings for the issuance of the Bonds are terminated, the City shall, within ten business days after official action by the City or the Community Facilities District to ternunate said proceedings, cause Union Bank to retum the then unexpended and unencumbered portion of the Deposits to the Owner, without interest. (c) If the Bonds are issued by the Community Facilities District, the City shall reimburse the Owner, without interest, far the portion of the Deposits that has been expended or encumbered, said reimbursement to be made within ten business days after the issuance of such Bonds, solely from the proceeds of such Bonds and only to the extent otherwise permitted under the Act. The City shall, within ten business days after the issuance of such Bonds, return the then unexpended and unencumbered portion of the Deposits to the Owner, without interest. Section 3. Abandonment of Proceedin~s. The Owner acknowledges and agrees that the issuance of the Bonds shall be in the sole discretion of the City. No provision of this Deposit Agreement shall be construed as an agreement, promise or warranty of the City to issue the Bonds. 3 Section 4. Deposit A~reement Not Debt or Liabilitv of Citv. As provided in Section 53314.9(b) of the Act, this Deposit Agreement does not constitute a debt or liability of the City, but shall constitute a debt and liability of the Community Facilities District upon its formation. The City shall not be obligated to advance any of its own funds to pay Initial Costs or any other costs incurred in connection with the formation of the CFD and issuance of the Bonds. No member of the City Council of the City and no officer, employee or agent of the City shall to any extent be personally liable hereunder. Section 5. Notices. Any notices, requests, demands, documents, approvals or disapprovals given or sent under this Deposit Agreement from one Party to another (collectively, "Notices") may be personally delivered, transmitted by facsimile (FAX) transmission, or deposit with the United States Postal Service for mailing, postage prepaid, to the address of the other Party as stated in this Section, and shall be deemed to have been given or sent at the time of personal delivery or FAX transmission or, if mailed, seventy-two hours following the date of deposit in the course of transmission with the United States Postal Service. Notices shall be sent as follows: If to City City of Lake Elsinore Attn: Director of Administrative Services 130 S. Main Street Lake Elisnore, CA 92530 FAXNo. (951) 674-2392 With copies to: Leibold, McClendon & Mann, P.C. Attn: Barbara Zeid Leibold, City Attorney 23422 Mill Creek Drive, Suite 105 Laguna Hills, CA 92653 FAX No. (949) 457-6305 If to Owner: Cottage Lane LLC Attn : Dorian Johnson Wesco Homes & Development 20100 S. Western Ave. Torrance, CA 90501 FAX No : (310) 533-2340 4 If to Union Bank: Union Bank of California, N.A. Atn: Corporate Trust Dept. 120 S. San Pedro Street, 4th Floor Los Angeles, California 90012 FAX No. (213) 972-5694 Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier upon the sender's receipt of an appropriate answerback or other written acknowledgement, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier chazges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Section 6. California Law. This Deposit Agreement shall be governed and construed in accordance with the laws of the State of Califomia. The Parties shall be entitled to seek any remedy available at law and in equity. All legal actions must be instituted in the Superiar Cout[ of the County of Riverside, State of California, in an appropriate municipal court in Riverside County, or in the United States District Court for the District of California in which Riverside County is located. Section 7. Successors and Assiens. This Deposit Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. Section 8. Counterparts. This Deposit Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. Section 9. Other Agreements. The obligations of the Owner hereunder shall be that of a party hereto. Nothing herein shall be construed as affecting the City's or Owner's rights, or duties to perform their respective obligations, under other agreements, use regulations or subdivision requirements relating to the development. This Deposit Agreement shall not confer any additional rights, or waive any rights given, by either party hereto under any development or other agreement to which they are a party. Section 10. Titles and Caations. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Deposit Agreement or of any of its terms. Reference to section numbers are to sections in this Deposit Agreement, unless expressly stated otherwise. Section 11. Internretation. As used in this Deposit Agreement, masculine, feminine or neuter gender and the singular or plnral number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Deposit Agreement sha11 be interpreted as though prepared jointly by both Parties. Section 12. No Waiver. A waiver by either Party of a breach of any of the covenants, conditions ar agreements under this Deposit Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Deposit Agreement. Section 13. Modifications. Any alteration, change or modification of or to this Deposit Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party. Section 14. Severabilitv. If any term, provision, condition or covenant of this Deposit Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Deposit Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. Section 15. Legal Advice. Each Party represents and warrants to the other the following: they have carefully read this Deposit Agreement, and in signing this Deposit Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Deposit Agreement, ar have knowingly chosen not to consult legal counsel as to the matters set forth in this Deposit Agreement; and, they have freely signed this Deposit Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or their respective agents, employees, or attorneys, except as specifically set forth in this Deposit Agreement, and without duress or coercion, whether economic or otherwise. Section 16 Cooneration. Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Deposit Agreement including, but not limited to, releases or additional agreements. Section 17. Contiicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Deposit Agreement, nor shall any such member, official or employee participate in any decision relating to the Deposit Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. Section 18. Regardine the Agent. In acting hereunder, Union Bank is acting solely as agent for the City and not in its proprietary capacity. The duties and responsibilities of Union Bank shall be limited to those expressly set forth in this Deposit Agreement. In no event shall the Union Bank be liable for any special, indirect or consequential damages. Union Bank will not be liable for any action taken or neglected to be taken by it in good faith in any exercise of reasonable care and believed by it to be within the discretion of power conferred upon it by this 6 Deposit Agreement, including without limitation, disbursement of funds from the Deposit Account upon receipt of instructions reasonably believed by Union Bank to have been executed by the person set forth therein. Union Bank shall receive compensation for its services as agreed between Union Bank and the City. To the extent permitted by law, the City agrees to indemnify and hold Union Bank harmless from all loss, cost, damages, expenses, liabilities, judgments and attorneys' fees (including without limitation, allocated costs of in-house counsel) suffered or incurred by Union Bank arising out of or in connection with this Deposit Agreement, except that this indemnity obligation shall not apply in the event of the gross negligence or willful misconduct of the indemnified parties or any of them. This indemnity obligation sha11 survive termination of this Deposit Agreement. This Deposit Agreement will terminate upon the earlier of disbursement of all funds in the Deposit Account ar upon the direction of the City. 7 IN WITNESS WHEREOF, the Parties have executed this Deposit Agreement as of the date set forth on the first page hereof. °~CITY" CITY OF LAKE ELSINORE, a municipal corpa By: Title: "OWNER" COTTAGE LANE LLC BY: WESCO HOMES & DEVELOPMENT, MANAGEING MEMBER VICE ACCEPTED BY: UNION BANK OF CALIFORNIA, N.A. Rv: Title: Authorized Officer EXHIBIT A City of Lake Elsinore Community Facilities District No. 2007-5 (Red Kite) WRITTEN REQUEST NO. _ FOR DISBURSEMENTS PURSUANT TO THE DEPOSIT AND REIMBURSEMENT AGREEMENT The undersigned hereby states and certifies: (1) that he/she is the duly qualified City Manager of the City of Lake Elsinore, a municipal corporation duly organized and existing under the laws of the State of California (the "City") and as such, is familiar with the facts herein certified and is authorized and qualified to execute and deliver this certificate; (2) that he is authorized pursuant to the Deposit and Reimbursement Agreement, dated as of , 2007 (the "AgreemenY'), by and between the City of Lake Elsinore, Makenna Court, LLC, and CI/WAH, LLC relating to the formation of City of Lake Elsinore Community Facilities District No. 2007-5 (Red Kite) (the "CFD"); (3) that pursuant to Section 1(e) of the Agreement, Union Bank is hereby directed to disburse this date from Account No. (the "Account") to the payees, designated on Exhibit 1 attached hereto and by this reference incorporated herein, the respective sums set forth opposite such payees, in payment of certain expenses related to the CFD; (4) that each obligation shown on Exhibit 1 has been properly incurred and is a proper charge against the Account; (5) that no item to be paid pursuant to this Written Request has been previously paid or reimbursed from the Account; and (6) that capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Agreement. Dated: CITY OF LAKE ELSINORE, a municipal corporation By: Title: City Manager