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Home My WebLink About17 SELECTION OF FINANCING TEAMf Agenda Item 1 ~ 't~,~ ~~ -~ = AGENDA REPORT Reviewed: City Manager 7 Finance Director MEETING DATE: SEPTEMBER 7, 2010 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR SUBJECT: ADOPT RESOLUTION RDA NO. 10-07 DESIGNATING CONSULTANTS IN CONNECTION WITH THE PROPOSED REFINANCING OF TOWN CENTER PROJECT AREA TAX ALLOCATION BONDS SUMMARY: The Redevelopment Agency issued Tax Allocation Refunding Bonds in 1998 specifically for the Town Center Project Area and due to attractive interest rates is considering refinancing the Tustin Community Redevelopment Agency (Town Center Area Redevelopment Project) Tax Allocation Refunding Bonds, 1998 Series A. The Resolution RDA No. 10-07 designates consultants in connection with the proposed refinancing of the Tax Allocation Refunding Bonds, 1998 Series A. RECOMMENDATION: It is recommended that the Board of Directors of the Redevelopment Agency adopt resolution RDA No. 10-07 designating consultants in connection with the proposed refinancing of the Tustin Community Redevelopment Agency (Town Center Area Redevelopment Project) Tax Allocation Refunding Bonds, 1998 Series A(1998 Bonds). FISCAL IMPACT: The fees for the consulting services are contingent upon the sale and issuance of the bonds, 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' fee for financial services performed in connection with the refinancing of the 1998 Bonds are not to exceed $27,500. Fiscal consultant, David Taussig & Associates' fee is not to exceed $12,500. Underwriter, Stone & Youngberg LLC's fee is $4,234 per bond, and the out-of-pocket expenses, regulatory fees and syndicate expenses are $0.417 per bond. Therefore if the Agency issues $7,520,000 of bonds their fee will be approximately $34,974. Bond counsel and disclosure counsel, Quint & Thimmig LLP's fee is approximately $38,800 and $30,000, respectively. ADOPT RESOLUTION RDA NO. 10-07 DESIGNATING CONSULTANTS IN CONNECTION WITH THE PROPOSED REFINANCING OF TOWN CENTER PROJECT AREA TAX ALLOCATION BONDS SEPTEMBER 7, 2010 PAGE 2 BACKGROUND: The 1998 Bonds average coupon is 4.88610% with a maturity date of December 2016. Refinancing the 1998 Bonds to take advantage of the current market interest rates, will lower the average coupon to approximately 3.253°/0. The estimated savings in debt service costs through refinancing will be $270,000 annually. The cost savings will be used for future projects and development in the Town Center Project Area. The maturity date of the new tax allocation bonds would not exceed the maturity date of the 1998 Bonds of December 2016. The tax allocation bonds would be repaid from annual tax increment. 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 refinance redevelopment activities for the benefit of the Redevelopment Project and, in particular, to refund the Agency's outstanding Tustin Community Redevelopment Agency (Town Center Area Redevelopment Project) Tax Allocation Refunding bonds, 1998 Series A, 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, David Taussig & Associates as fiscal consultant and Stone & Youngberg LLC 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). ~~' c~i1lG/;/lit v~it_E_-yr~%~cL' ~~- - _._ Pamela Arends-King ~' ~ Finance Director Attachment(s): Resolution RDA 10-07 RESOLUTION NO. 10-07 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF TUSTIN, CALIFORNIA AUTHORIZING THE COMMENCEMENT OF PROCEEDINGS IN CONNECTION WITH THE PROPOSED ISSUANCE OF TAX ALLOCATION BONDS RELATING TO THE AGENCY'S TOWN CENTER REDEVELOPMENT PROJECT AREA, DESIGNATING CONSULTANTS, 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: WHEREAS, the Agency is a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the California Health and Safety Code (the "Law"), including the power to issue bonds for any of its corporate purposes; WHEREAS, a redevelopment plan for the Town Center Redevelopment Project Area (the "Redevelopment Project") has been adopted in compliance with all requirements of the Law; WHEREAS, the Agency has determined that, due to prevailing financial market conditions, it is in the best interests of the Agency, at this time, to refinance redevelopment activities of the benefit of the Redevelopment Project and, in particular, to refund the Agency's outstanding Tustin Community Redevelopment Agency (Town Center Area Redevelopment Project) Tax Allocation Refunding Bonds, 1998 Series A (the "1998 Bonds"); WHEREAS, to provide moneys to refund the 1998 Bonds, the Agency has determined to issue its Tustin Community Redevelopment Agency 2010 Tax Allocation Refunding Bonds (Town Center Redevelopment Project Area) (the "Bonds"); and WHEREAS, it is appropriate that the Agency formally authorize the commencement of proceedings to issue the Bonds and to appoint a financial advisor, bond counsel, disclosure counsel, a fiscal consultant and an underwriter in connection therewith; NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: SECTION 1. 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. RDA Resolution 10-07 Page 1 of 3 SECTION 2. 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 David Taussig & Associates 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 3. Stone & Youngberg LLC is hereby designated as underwriter to the Agency in connection with the issuance and sale of the Bonds. SECTION 4. The Chairperson, the Vice Chairperson, the Executive Director, the Treasurer, Agency Counsel, the 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 5. This Resolution shall take effect upon its adoption. PASSED AND ADOPTED at a regular meeting of the Tustin Community Redevelopment Agency held on the 7t" day of September, 2010. Jerry Amante, Chairperson ATTEST: PAMELA STOKER, Recording Secretary STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) RDA Resolution 10-07 Page 2 of 3 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 10-7 was duly passed and adopted at a regular meeting of the Tustin Community Redevelopment Agency, held on the 7th day of September, 2010 by the following vote: AGENCYMEMBER AYES: AGENCYMEMBER NOES: AGENCYMEMBER ABSTAIN: AGENCYMEMBER ABSENT: PAMELA STOKER, Recording Secretary RDA Resolution 10-07 Page 3 of 3