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HomeMy WebLinkAboutRDA 1 ADOPT RESO NO. 10-4 DESIGNATING CONSULTANTS IN CONNECTION WITH PROPOSED ISSUANCE OF TAX ALLOCATION HOUSING BONDS 01-19-10wa,,,,, • ~ Agenda Item RDA AGENDA REPOR Reviewed: City Manager Finance Director ' MEETING DATE: JANUARY 19, 2010 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR SUBJECT: ADOPT RESOLUTION RDA NO. 10-04 DESIGNATING CONSULTANTS IN CONNECTION WITH THE PROPOSED ISSUANCE OF TAX ALLOCATION HOUSING BONDS SUMMARY: The Redevelopment Agency has an obligation with the City related to the City's write down of land use for affordable housing purposes and is considering the issuance of tax allocation housing bonds to repay the City for the obligation due. The Resolution RDA 10-04 designates consultants in connection with the proposed issuance of Tax Allocation Housing Bonds. RECOMMENDATION: It is recommended that the City Council adopt resolution RDA 10-04 designating consultants in connection with the proposed issuance of Tax Allocation Housing Bonds. FISCAL IMPACT: The fees for the consulting services are contingent upon the sale and issuance of the bonds, and all of which are expected to be paid from the proceeds of the bonds or by means of a discount on the purchase of the bonds. If for any reason the bonds are not issued, the Agency will have no financial obligation to any of these consultants for their work related to the Bonds. Financial advisors, Fieldman, Rolapp & Associates's fees are not to exceed $10,000 for services related to review, planning and evaluating financing options available to the City. Their fee for financial services performed in connection with the issuance of the tax allocation bonds is not to exceed $62,500. The fee for HDL Coren & Cone's fiscal consulting for the agency is $19,500. Piper Jaffray & Co.'s underwriter fee is $6.491 per bond, and the out-of-pocket expenses, regulatory fees and syndicate expenses are $0.2491 per bond. Therefore if the Agency issues $26,000,000 of bonds their fee will be approximately $175,240. Quint & Thimmig LLP's fee for bond counsel is approximately $75,000 and for discourse counsel services approximately $30,000. BACKGROUND: Under the Community Redevelopment Law, the Redevelopment Agency is obligated to use not less than twenty percent of the tax increment revenues that are allocated to the ADOPT RESOLUTION RDA NO. 10-04 DESIGNATING CONSULTANTS IN CONNECTION WITH THE PROPOSED ISSUANCE OF TAX ALLOCATION HOUSING BONDS JANAURY 19, 2010 Page 2 Redevelopment Agency pursuant to the Community Redevelopment Law to increase, improve and preserve the community's supply of low and moderate income housing (the "low and moderate income housing funds"). In order to refinance low and moderate income housing activities throughout the geographic boundaries of the City and, in particular, to repay a reimbursement obligation from the Agency to the City, relating to the City's write down of land use for affordable housing purposes, the Redevelopment Agency is considering the issuance of tax allocation housing bonds. The tax allocation bonds would be repaid from the low and moderate income housing funds. In order to issue the bonds, the Redevelopment Agency needs the assistance of various professionals, including a financial advisor, bond counsel, disclosure counsel and a bond underwriter. Staff recommends that the Board of Directors of the Redevelopment Agency adopt a resolution: (a) directing Staff to proceed with the preparation of documentation necessary to provide for the issuance of the tax allocation housing bonds, which documents shall in any event be subject to the approval of the Board of Directors of the Redevelopment Agency at a future Redevelopment Agency meeting; (b) designating the professionals necessary to assist Staff with the issuance of the bonds, including Fieldman, Rolapp & Associates as financial advisor, Quint & Thimmig LLP as bond counsel and disclosure counsel, HdL Coren & Cone as fiscal consultant and Piper Jaffray as bond underwriter; and (c) authorizing the Executive Director of the Redevelopment Agency to execute agreements with the professionals for their services related to the bonds in form acceptable to the Executive Director and Agency Counsel. All compensation payable to the financial advisor, bond counsel and disclosure counsel will be contingent upon the sale and issuance of the bonds, and it is expected that all of the consultants will be paid from bond proceeds (or, in the case of the underwriter, by means of a discount on the purchase of the bonds). Pamela Arends-King Finance Director Attachment(s): Resolution RDA 10-04 RESOLUTION NO. RDA 10-04 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF TUSTIN, CALIFORNIA, DESIGNATING CONSULTANTS IN CONNECTION WITH THE PROPOSED ISSUANCE OF TAX ALLOCATION HOUSING BONDS AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO The Tustin Community Redevelopment Agency (the "Agency") of the City of Tustin does hereby resolve as follows: SECTION 1: In connection with housing activities of the Agency related to its (a) Town Center Redevelopment Project, (b) South Central Redevelopment Project, and (c) MCAS Tustin Redevelopment Project (collectively, the "Redevelopment Projects"), the Agency has entered into various agreements obligating it to provide funds to assist in the development of housing for persons and families of low and moderate income, and the Agency expects that it will enter into additional agreements to provide monetary assistance to other developers of such housing. SECTION 2: In order to finance its housing activities, the Agency is considering the issuance of tax allocation housing bonds (the "Bonds"), the principal of and interest on which will be payable from tax increment revenues received by the Agency from the Redevelopment Projects that are required by the California Redevelopment Law to be used to increase, improve and preserve the supply of low and moderate income housing. SECTION 3: Officers and officials of the Agency are hereby authorized to proceed with the preparation of documents necessary to provide for the issuance and sale of the Bonds. All such documents to which the Agency will be a party shall be subject to the final approval thereof by the Agency at a subsequent meeting of the Agency. SECTION 4: Fieldman, Rolapp & Associates is hereby designated as financial advisor to the Agency; Quint & Thimmig LLP is hereby designated as bond counsel and as disclosure counsel to the Agency; and HdL Coren & Cone is hereby designated as fiscal consultant to the Agency, each in connection with the issuance and sale of the bonds. The Executive Director is hereby authorized and directed to execute agreements with such firms for their services with respect to the Bonds, in forms acceptable to the Executive Director and Agency counsel; provided that any and all compensation payable to such firms shall be contingent upon the sale and issuance of the Bonds. SECTION 5: Piper Jaffray & Co. is hereby designated as underwriter to the Agency in connection with the issuance and sale of the Bonds. Resolution No. RDA 10-04 Page 2 SECTION 6: The Chairperson, the Vice Chairperson, the Executive Director, the Treasurer, Agency Counsel, and Secretary and all other appropriate officials of the Agency are hereby authorized and directed to execute such other agreements, documents and certificates as may be necessary to effect the purposes of this Resolution and the financing herein authorized. SECTION 7: This Resolution shall be in full force and effect immediately upon its adoption. PASSED AND ADOPTED at a regular meeting of the Tustin Community Redevelopment Agency held on the 19th day of January, 2010. Jerry Amante, Chairperson ATTEST: PAMELA STOKER, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Pamela Stoker, City Clerk and ex-officio Clerk of the Tustin Community Redevelopment Agency of the City of Tustin, California, do hereby certify that the whole number of the members of the Tustin Community Redevelopment Agency of the City of Tustin is five; that the above and foregoing Resolution No. RDA 10-01 was duly passed and adopted at a regular meeting of the Tustin Community Redevelopment Agency, held on the 19th day of January, 2010 by the following vote: Resolution No. RDA 10-04 Page 3 COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSTENT: PAMELA STOKER, City Clerk