The URL can be used to link to this page

Home My WebLink About15 RESOLUTION NO. 15-72 CFD NO. 2014-1 PRELIMINARY OFFICIAL STATEMENTMEETING DATE: OCTOBER 6, 2015 TO: JEFFREY C PARKER, CITY MANAGER FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR/CITY TREASURER SUBJECT: APPROVAL OF A RESOLUTION NO. 15-72 OF THE CITY COUNCIL OF THE CITY OF TUSTIN ACTING AS THE LEGISLATIVE BODY OF THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014-1 (TUSTIN LEGACY/STANDARD PACIFIC) AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND TAKING CERTAIN OTHER ACTIONS SUMMARY: In May 2014, the City of Tustin as the fee title owner of 100% of the real property located in the Tustin Legacy Project (the "Project") received a written request from two of its Councilpersons to commence proceedings to form a community facilities district with boundaries coterminous with the Property to be known as the City of Tustin Community Facilities District (CFD) No. 2014-1 (Tustin Legacy/Standard Pacific). After a regularly scheduled public hearing and election, on June 17, 2014, CFD No. 2014-1 (Tustin Legacy/Standard Pacific) (the "District") was formed pursuant to the provisions of the Mello -Roos Community Facilities Act of 1982 as amended to provide for financing of certain facilities and services in the Project that will be developed into 375 single family homes, a focal park, and other neighborhood amenities. In August 2014 the property was conveyed to Standard Pacific Corporation ("Standard Pacific") pursuant to the City's Development Disposition Agreement (the "DDA") with Standard Pacific dated as of March 4, 2014. On September 16, 2014 the City Council approved Resolution No. 14-60 authorizing the Issuance of Bonds. Since that time, the Project has been under construction and had its grand opening this summer. As of September 1, 2015, 123 units (in addition to the completed twelve models) are under construction and 112 units are subject to contract of sale with escrows beginning to close in November. Additionally, the City and Tustin Unified School District ("TUSD") approved a Joint Community Facilities Agreement ("JCFA") at their respective meetings in late August. RECOMMENDATION: Adopt Resolution No. 15-72, a Resolution of the City Council of the City of Tustin Acting as the Legislative Body of Community Facilities District No. 2014-1 (Tustin Approval of Resolution 15-72 of the City of Tustin Community Facilities District 2014-1 (Tustin Legacy/Standard Pacific) Authorizing the Preparation and Distribution of a Preliminary Official Statement and Taking Certain Other Actions October 6, 2015 PAGE 2 Legacy/Standard Pacific) Authorizing the Preparation and Distribution of a Preliminary Official Statement ("POS") and taking certain other actions. FISCAL IMPACT: The District is authorized to levy special taxes to repay its indebtedness, and to pay the annual costs of administration of the District. The District is only authorized to levy special taxes on land included within the boundaries of the District. The Bonds will not be obligations of the City of Tustin, but will be limited obligations of the District secured solely by the special taxes of the District and amounts held in certain funds and accounts established under the Indenture of Trust for the District. All costs of issuance of the Bonds will be paid from the proceeds of the Bonds. All administrative costs of the District and the Bonds will be paid from proceeds of the special taxes levied in the District. BACKGROUND: The City of Tustin was the fee title owner of 100% of the real property (the "Property") located in the Legacy Project described in the DDA by and between the City and Standard Pacific dated as of March 4, 2014. On December 10, 2013, the Planning Commission adopted Resolution No. 4239 recommending that the City approve the proposed project to construct 375 single family detached units, a focal park, and other neighborhood amenities ("Proposed Project"). Further, on February 4, 2014, the City Council approved the DDA, Specific Plan Amendment 2013-002 and Resolution No. 14- 14 approving the concept plan for the project. The DDA provides for the establishment of a community facilities district to provide for financing of certain facilities and services. The Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code (the "Act") is the authorizing act and pursuant to Section 53318(a) of the Act, the City Council received a written request from two of its City Councilpersons to commence proceedings to form a community facilities district with boundaries coterminous with the Property to be known as the "City of Tustin Community Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific)." On May 6th, 2014, the City Council approved the Resolution of Intention for CFD No. 2014-1 and set the time and place for the Public Hearing for the contemplated CFD No. 2014-1. The Public Hearing and Election were held on June 17, 2014, at which time the City formed CFD No. 2014-1 (Tustin Legacy/Standard Pacific) and introduced for first reading an ordinance authorizing the levy of special taxes in CFD No. 2014-1. The second reading of the'special tax ordinance was held on July 1, 2014 and the ordinance went into effect on July 15, 2014. In August 2014 the land was conveyed to Standard Pacific. On September 16, 2014 the City Council approved Resolution No. 14-60 authorizing the Issuance of Bonds. Since that time the project has been under construction and had its grand opening this summer. As of September 1, 2015, 123 units (in addition to the completed twelve models) are under construction and 112 units Approval of Resolution 15-72 of the City of Tustin Community Facilities District 2014-1 (Tustin Legacy/Standard Pacific) Authorizing the Preparation and Distribution of a Preliminary Official Statement and Taking Certain Other Actions October 5, 2015 PAGE 3 are subject to contract of sale with escrows beginning to close in November. Additionally, the City and TUSD approved a JCFA in late August at their respective meetings. The City now would like to proceed with the bond issuance to fund infrastructure for the Tustin Legacy/Standard Pacific Project. Bond proceeds will also be set aside for the Tustin Unified School District for construction of school facilities benefitting the CFD. The term of the Bonds will be for up to 35 years and the Bonds are expected to be issued in an aggregate principal amount not to exceed $29.0 million. The Bonds will require a reserve fund and the estimated interest rates for the various maturities of the Bonds will not exceed 7.00%. The property was recently appraised as of September 1, 2015 by Harris Realty and is valued at $178,215,000. The estimated par size of the bonds is $27,045,000 with an estimated Value to Lien Ratio of 6:59 toll well in excess of the minimum of three times the secured indebtedness. TONIGHT'S ACTIONS: The Bonds for CFD No. 2014-1 are proposed to be issued pursuant to an Indenture of Trust setting forth the various terms and provisions for the Bonds. The Indenture was originally approved on September 16, 2014, but has been updated to reflect the current proposed structure for the Bonds. The revised form of the Indenture is attached to tonight's report. The proceeds from the Bonds will be used to finance certain facilities within CFD No. 2014-1. The Bonds are expected to be offered for sale to investors pursuant to the POS prepared by the City's Disclosure Counsel (Quint & Thimmig). The POS is attached to tonight's report and contains specific information about CFD No. 2014-1 to enable potential investors to make an informed decision about purchasing the Bonds. The POS was prepared pursuant to the City's adopted Continuing Disclosure Procedures approved by the City on December 16, 2014. The Bonds are expected to be sold to Stifel, Nicolaus & Company, Incorporated, the underwriter for the Refunding Bonds, subject to parameters set forth in the resolution of issuance for the Bonds adopted on September 16, 2014. Those parameters allow for the issuance of up to $29,000,000 of Bonds for the District, interest rate of the Bonds does not exceed 7.00% per annum and the underwriter's discount (without regard to any original issue discount) is not in excess of 1.75% of the principal amount of the Bonds. The City will enter into a Continuing Disclosure Agreement ("CDA") for the Bonds, which will require that the City provide certain ongoing information for the District on an annual basis until the Bonds have been paid in full. The CDA is attached to tonight's report. City Staff and consultants have reviewed the financing and legal documents described above and they are now in form ready for approval by the City Council so the issuance of the Bonds will be authorized. NEXT STEPS: Following tonight's action, the proposed schedule to complete the bond sale is as follows: * October 15, 2015: Bond Sale date * November 5, 2015: Bond Closing date Approval of Resolution 15-72 of the City of Tustin Community Facilities District 2014-1 (Tustin Legacy/Standard Pacific) Authorizing the Preparation and Distribution of a Preliminary Official Statement and Taking Certain Other Actions October 6, 2015 PAGE 4 Pamela Arends-King Finance Director/City Treasurer Attachments: Resolution No. 15-72 Indenture of Trust Preliminary Official Statement