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HomeMy WebLinkAbout14 INTERCHANGE AG 06-05-95NO. 14 6-5-95 DATE: MAY 31, 1995 Inter-Com TO: FROM: SUBJECT: WILLIAMS. HUSTON, CITY MANAGER RONALD~LT, FINANCE DI.RECTOR JAMBOREE/EDINGER INTERCHANGE FUNDING AGREEMENT RECOMMENDATION: AuthoriZe the Mayor to sign the Jamboree/Edinger Interchange Funding Agreement between the City of Tustin and the Foothill/Eastern Transportation Corridor Agency (TCA). FISCAL IMPACT: This agreement secures the City of Tustin's commitment to pay one- third the cost of the interchange project. The current estimated total cost of the project is $16.5 million for which the City's share is $5.5 million. BACKGROUND: As the City Council is aware, staff has been negotiating with the TCA for five months on a funding alternative that will provide the TCA a secured agreement from the Cities of Tustin and Irvine to pay our share of the proposed project, but also maintain the City of Tustin's flexibility to prevent the premature issuance of long-term debt until we feel it is in our best interests. DISCUSSION: This agreement provides for the establishment of a trust account for the benefit of the TCA that the City will transfer certain securities presently held in our investment portfolio that have a current market value in excess of 102% of the City's share of the project cost. This agreement is very cost-effective to the City and fully meets the TCA needs in securing our share of the project. RAN:ab 30018-05 JHHW:BDQ:rhc 05/10/95 05/22/95 O5/26/95 TUST[N FUNDING AGREEMENT Dated as of June 1,1995 by and between the CITY OF TuSTIN, CALIFORNIA, and FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY TUSTIN FUNDING AGREEMENT This TUSTIN FUNDING AGREEMENT (this "Funding Agreement"), dated as of June 1, 1995, is by and between CITY OF TUSTIN, a municipal corporation organized and existing under the laws of the State of California (the "City"), and the FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY, a joint exercise of powers authority organized and existing under the laws of the State of California (the "Agency"). WHEREAS, in connection with the design, construction, financing and operation by the Agency of that certain toll road facility known as the Eastern Transportation Corridor (the "Project"), a portion of the Project will' connect with and terminate at the intersection of Jamboree Road and Edinger Avenue where an overcrossing and urban diamond interchange is to be constructed (the "Improvements"); WHEREAS, the City has agreed to fund an amount equal to one-third of the total construction related costs of the Improvements, which portion is estimated to be $5,500,000 (the "City's Share"); WHEREAS, to secure payment of the City's Share, the City has agreed to deposit moneys and/or securities in'a trust account, for the benefit of the Agency; WHEREAS, the City and the Agency desire to set forth their agreement regarding the City's Share; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants contained herein, the parties hereto agree as follows: Section 1. Design and Construction of the Project and the Improvement~., (a) The Agency is solely responsible for implementing all aspects of the Project and the design and completion of environmental clearances for the Improvements. Construction related costs including the acquisition of right-of-way, relocations, construction, construction engineering management and contingencies are estimated at $16.5 million and comprise the Improvements, for which the City's share is one-third or an estimated $5.5 million. (b) In the event the Agency determines that the cost of the Improvements will exceed $16.5 million, the Agency will give written notice to the City of the current estimate of the City's total share and will meet with the City to discuss the reasons for the increase in the cost of the Improvements. In order to carry out this responsibility, the Agency intends to complete the design and award a contract for the construction of the Improvements in' or about June, 1996, with anticipation that the construction of the Improvements will be completed by the end of March, 1999, which is estimated to be six months in advance of the scheduled opening of the Project. (c) In the event the construction of the Improvements is not completed by January 1, 2000, this Funding Agreement shall terminate, in which event the City shall no longer be required to honor requests for payment of the City's Share and the Agency will transfer or cause the transfer to the City of any amounts then on deposit in the Trust Account established under Section 3 hereof held for the benefit of the Agency. (d) The City agrees to cooperate with the Agency and the Agency's design consultants, construction engineering manager and contractors in connection with the design and construction of the Improvements in order to meet the Agency's schedule for design and construction of the Improvements, as such schedule may be changed from time to time at the Agency's sole discretion. Section 2. Agreement to Prov, ide Funding for the Improvements. The City agrees to pay the Agency that portion of the City s Share equal to one-third of construction related costs for the Improvements incurred by the Agency as of the date of the Agency's request therefore within 30 days of receipt of an invoice setting forth the amount and the purpose of such payment. The Agency reserves the right to make requests for payment of the City's Share in such amounts, at such times and for any portion of the construction related costs of the Improvements as it shall determine in its sole discretion; provided, that in no event will the City's Share exceed one-third of the total costs of the Improvements; and provided further, that the Agency shall be required to contribute an amount 'equal to one-third of the construction related costs for the Improvements prior to making requests for any portion of the City's Share. Section 3. Security for Payment of the City's Share. As and for security for payment of the City's Share, the Ci(y will e~tablish, for the benefit of the Agency, a Trust Account, all as hereinafter defined and described. (a) Establishment of the Trust Account. On the date of execution of this Funding Agreement, the City will establish with First Interstate Bank of California, a banking corporation organized under the laws of the State' of California (the "Custodian"), Account No. (337)8218748-000, a trust account (the "Trust Account"), for the benefit of the Agency, providing for withdrawals upon the request of the Agency or the City as hereinafter provided. Any and all costs and expenses associated with the establishment of the Trust Account shall be paid by the City. (b) Funding of the Trust Account. On the date of execution of this Funding Agreement, the City will deposit, or cause to be deposited into the Trust Account, an amount equal to the City's Share. Upon written notice by the Agency to the City that the total construction related costs of the Improvements is in excess of $16.5 million and, therefore, the City's Share increases to an amount equal to one-third of such revised total, the City agrees to deposit or cause to be deposited additional amounts into the Trust Account, such additional amount. In the event the Agency determines that the cost of the Improvements will exceed $16.5 million, the Agency will meet with the City to discuss the reasons for the increase. (c) Securities in Lieu of Cash. In lieu of depositing or causing the deposit of cash into the Trust Account, the City is authorized to deposit or cause the deposit into the Trust Account of securities which are general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury) or federal agency obligations (including Federal National Mortgage Association, Federal Farm Credit Bank and Federal Home Loan Bank obligations) ("Federal Securities"), having a market value at least equal to 102% of the City's Share, as it may be increased as permitted herein, determined quarterly by the Custodian. The City shall add securities into trust if the market value of the Federal Securities falls below 102% of the City's Share. At any time, the City shall have the right to substitute cash for any Federal Securities deposited or caused to be deposited into the Trust Account, provided that if the City has failed to make such substitution at least five business days prior to any payment date, as specified by the Agency, the Custodian shall have the authority to liquidate such Federal Securities so as to assure that moneys are available for transfer to the Agency sufficient to satisfy any such withdrawal request. -2- (d) Investment Directions; Earnings. Amounts deposited in the Trust Account shall be invested by the Custodian pursuant to written directions from the City to the Custodian. Any interest earned on amounts deposited in the Trust Account shall periodically be transferred by the Custodian to or to the order of 'the City. If Federal Securities are deposited in the Trust Account in lieu of cash, such interest earning may be transferred by the Custodian to the City only if the market value of the Federal Securities is equal to or greater than 102% of the City's Share. In absence of instructions or requests of transfer of investment earnings to the City, the Custodian shall invest amounts in the Trust Account in shares in any money market mutual fund registered under the Investment Company Act of 1940 whose investment portfolio consists solely of direct obligations of the United States Government, providing any such fund has been rated in the highest rating category by a nationally recognized rating agency. Such money market mutual funds may include funds for which First Interstate Bancorp, its affiliates or subsidiaries provide investment advisory or other management services. (e) Withdrawals from the Trust Account. (i) Withdrawals by the Agency. The Agency may submit requests to the Custodian for payment from amounts deposited in the Trust Account, for payment not earlier than fifteen business days after the Agency has requested payment from the City of the City's Share. (ii) Withdrawals by the City. Upon payment by the City of any portion of the City's Share, the Agency shall notify the Custodian of such payment and the amount required to be on deposit in the Trust Account shall be decreased by such amount and the Custodian is directed to release such sum from amounts held for the benefit of the Agency, to be transferred to or for the order of the City. The City may direct the Custodian, upon written notice, to transfer funds from the Trust Account to the Agency to satisfy payment of the City's Share. When the City's Share shall be paid in full and no amounts shall be remaining in the Trust Account for the benefit of the Agency, the Trust Account shall be closed. (f) Alternate Security. At any time prior to the payment in full of the City's Share, the City shall have the right to secure its obligations to the Agency, in whole or in part, by an irrevocable letter of credit or other credit enhancement vehicle, subject to the prior written approval of the Agency and in such form as the Agency may require. Section 4. Indemnification. In the event the Custodian becomes involved in arbitration or litigation in connection with the Trust Account, the Agency and the City agree to indemnify and hold the Custodian harmless from all losses, costs, damages, expenses, liabilities, judgments and attorneys' fees suffered or incurred by the Custodian as a result thereof, except this indemnity shall not apply to any arbitration or litigation in which relief is obtained for the gross negligence or willful misconduct of the Custodian. Section 5. Right to Rely on Notices as Genuine. The Custodian shall not be responsible for the sufficiency of the form, execution, validity or genuineness of notices, documents or securities' now~or hereafter deposited hereunder, or of any endorsement thereon, or any lack of endorsement thereon, or for any description therein nor shall the Custodian be responsible or liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any such documents, security or endorsement. Section 6. Compensation. The Custodian shall receive for compensation an annual administration fee of Three Thousand Dollars and 00/100 ($3,000) for its services hereunder. All fees, costs or expenses of this Funding Agreement and any transaction carried out hereunder shall be billed by the Custodian to the City. In the event that any fees or costs or expenses shall -3- remain unpaid in excess of 30 days from the date due, the Custodian may withhold such unpaid amount from the trust assets; provided, however, such amount may not be paid from the trust assets if such payment would cause the amount therein to total less than 102% of the amounts due the Agency. The initial annual fee is to be paid upon the funding of the trust Account. Section 7. Termination. The Agency, the City or the Custodian shall have the right to terminate this Funding Agreement by thirty (30) days written notice to the other parties. The City shall appoint a successor Custodian by notice in writing, which successor custodian shall be bound by all of the terms of this Funding Agreement. Thereupon, the Custodian shall deliver all assets in the Trust Account, after deducting all fees and expenses owing to the Custodian, to such successor custodian and all responsibility of the Custodian under this Funding Agreement shall terminate. No termination may occur until such time as a successor custodian shall be appointed or an alternate securities arrangement has been made. Section 8. Successors and Assigns. This Funding Agreement shall bind and the benefits hereof shall inure to the parties hereto and their respective successors and assigns. The Agency may assign its rights under this Funding Agreement in favor of any financial institution acting on behalf of the holders of its toll road revenue bonds issued in order to provide financing of the Project. Section 9. Governing Law. This Funding Agreement and the rights and obligations of the parties hereunder shall be governed by and construed and interpreted in accordance with the laws of the State of California. Section 10. Severability. In the event any provision of this Funding Agreement is declared. invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provisions hereof. Section 11. Counterparts. This Funding Agreement may be executed in any number of copies and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument. Section 12. Integration of Terms. This Funding Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto. Section 13. Descriptive Headings. The descriptive headings of the various articles and sections of this Funding Agreement are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. Section 14. Term. This Funding Agreement shall be in effect from the date and year first mentioned above until all of the Improvements have been completed and all payments of the City's Share have been made by the City.. Section 15. Notices. All written notices, requests, demands and other communications hereunder shall be deemed to have been duly given or made when actually received. All such communications shall be addressed to the attention of the person listed below, or to such other address or to the attention of such other person as such party shall have designated to the other parties hereto. -4- If to the City: If to the Agency: If to the Custodian: City of Tustin 300 Centennial Way Tustin, CA 92680 Attention: Finance Director/City Treasurer Telephone: (714) 573-3061 Telecopier: (714) 832-0825 Foothill/Eastern Transportation Corridor Agency 201 East Sand Point Avenue, Suite 200 Santa Ana, CA 92707 Attention: Chief Executive Officer Telephone: (714) 436-9800 Telecopier: (714) 436-9848 First Interstate Bank of California Corporate Trust Department 707 Wilshire Boulevard, W11-1 Los Angeles, CA 90017 Attention: Rose Bystrom Telephone: (213) 614-2987 Telecopier: (213) 614-2456 -5- IN WITNESS WHEREOF, the parties hereto have caused this Funding Agreement to be duly executed and delivered as of the date first above written. CITY OF TUSTIN Attest: By Mayor City Clerk Approved as to form: City Attorney FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY Attest: By President Secretary APPROVED: FIRST INTERSTATE BANK OF CALIFORNIA, AS CUSTODIAN By Title -6-