HomeMy WebLinkAbout07 RESOLUTION AUTHORIZING THE COMMENCEMENT OF PROCEEDINGS IN CONNECTION WITH THE PROPOSED REFUNDINGDocusign Envelope ID: 783D7024-27D3-4446-8EF6-DAE31 E21 DA51
MEETING DATE
TO:
FROM:
SUBJECT:
SUMMARY:
Agenda Item
AGENDA REPORT Reviewed:
City Manager
Finance Director
APRIL 1, 2025
ALDO E. SCHINDLER, CITY MANAGER
JENNIFER KING, FINANCE DIRECTOR/CITY TREASURER
ass
RESOLUTION AUTHORIZING THE COMMENCEMENT OF
PROCEEDINGS IN CONNECTION WITH THE PROPOSED
REFUNDING OF THE OUTSTANDING CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1 (TUSTIN
LEGACY/STANDARD PACIFIC) SPECIAL TAX BONDS, SERIES
2015A; CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO.
06-1 (TUSTIN LEGACY/COLUMBUS VILLAGES) SPECIAL TAX
REFUNDING BONDS, SERIES 2015A; AND CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 06-1 (TUSTIN
LEGACY/COLUMBUS VILLAGES) SPECIAL TAX BONDS, SERIES
2015B, CONFIRMING THE APPOINTMENT OF PROFESSIONAL
SERVICES AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
Staff is seeking City Council approval to authorize the initiation of proceedings to issue
bonds (the "2025 Refunding Bonds") to refund the outstanding City of Tustin Community
Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific) Special Tax Bonds, Series
2015A; City of Tustin Community Facilities District No. 06-1 (Tustin Legacy/Columbus
Villages) Special Tax Refunding Bonds, Series 2015A; and City of Tustin Community
Facilities District No. 06-1 (Tustin Legacy/Columbus Village) Special Tax Bonds, Series
2015B (collectively, the "2015 CFD Bonds"), to take advantage of lower interest rates to
reduce the annual debt service payments and lower property owners' special tax payments
starting in Fiscal Year 2025-2026.
RECOMMENDATION:
It is recommended that:
THE CITY COUNCIL ADOPT CITY COUNCIL RESOLUTION 25-17 ENTITLED:
RESOLUTION AUTHORIZING THE COMMENCEMENT OF PROCEEDINGS IN
CONNECTION WITH THE PROPOSED REFUNDING OF THE OUTSTANDING CITY OF
TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014-1 (TUSTIN
LEGACY/STANDARD PACIFIC) SPECIAL TAX BONDS, SERIES 2015A; CITY OF
TUSTIN COMMUNITY FACILITIES DISTRICT NO. 06-1 (TUSTIN LEGACY/COLUMBUS
Docusign Envelope ID: 783D7024-27D3-4446-8EF6-DAE31 E21 DA51
City Council Agenda Report
Authorization to Initiate Proceedings to Refund CFD Bonds
April 1, 2025
Page 2
VILLAGES) SPECIAL TAX REFUNDING BONDS, SERIES 2015A; AND CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 06-1 (TUSTIN LEGACY/COLUMBUS
VILLAGES) SPECIAL TAX BONDS, SERIES 2015B, CONFIRMING THE APPOINTMENT
OF PROFESSIONAL SERVICES AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
FISCAL IMPACT:
The issuance of the 2025 Refunding Bonds to refinance the 2015 CFD Bonds will have no
financial impact on the City, as all payments of principal and interest on the Bonds will be
paid solely from special tax assessments levied and collected from properties located in
the affected community facilities districts. The debt service savings generated by the
refinancing will benefit the districts' property owners. It is estimated that the refinancing of
the 2015 CFD Bonds will reduce annual debt service payments by approximately $575,000
per year, totaling over $5.1 million in net present value saving over the remaining term of
the Bonds based on market conditions as of March 14, 2025.
The recommendation correlates to the strategic plan by implementing Goal E.
Organizational Excellence and Customer Services. Specifically, the City continues to fulfill
its obligations as the Community Facilities District's administrator by proactively identifying
opportunities to generate measurable long-term savings for property owners.
BACKGROUND AND DISCUSSION:
History of Community Facilities Districts No. 06-1 and 2014-1
On July 17, 2006, the City Council, pursuant to the Mello -Roos Community Facilities Act of
1982, adopted Resolution No. 06-89 to form the Community Facilities District (CFD) No.
06-1 (Tustin Legacy/ Columbus Villages) and to authorize the levy of special taxes within
the CFD to finance certain public facilities and services. In August 2007, the City Council
adopted Resolution No. 07-62 authorizing the issuance of Series 2007 CFD bonds to
finance the district's public facilities. In October 2010, the City Council approved additional
CFD bonds to finance the remaining public facilities within the district. In November 2015,
the City Council approved the issuance of CFD No. 06-1 Special Tax Series 2015A bonds
to refinance the 2007 and 2010 bond issues. Additionally, Council also approved the
issuance of CFD No. 06-1 Special Tax Series 2015B bonds to finance roadway
improvements within the district.
On June 17, 2014, the City Council adopted Resolution No. 14-40 to form the Community
Facilities District (CFD) No. 2014-1 (Tustin Legacy/Standard Pacific), authorize the levy of
special taxes, and issue Series 2015A bonds to finance authorized facilities for the
Standard Pacific project.
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City Council Agenda Report
Authorization to Initiate Proceedings to Refund CFD Bonds
April 1, 2025
Page 3
The CFD bonds are not the obligations of the City. They are the liabilities of the property
owners within the affected CFD and secured by liens against the assessed property. The
City serves as the CFD administrator and is responsible for on -going reporting and other
administrative matters, including acting as an agent for the collection of principal and
interest by the property owners via annual property tax assessments, and remittance of
such monies to the bondholders. As CFD administrator, the City has fiduciary responsibility
for the best interest of the district's property owners.
2025 CFD Bond Refunding
The City, working with its Municipal Advisor, Fieldman, Rolapp & Associates, Inc., has
determined that, due to prevailing financial market conditions, it is in the best interests of
the property owners currently to refinance the 2015 CFD Bonds. Information on the existing
bond issues and their outstanding balances are listed on the table below.
06-1 Series 2015A
06-1 Series 2015B
2014-1 Series 2015A
Issued Amount
$49.74 million
$2.74 million
$27.67 million
Outstanding at 3/4/2025
$39.4 million
$1.8 million
$25.5 million
Final Maturity Year
2039
2037
2045
Special Tax Assessments are levied and collected from CFD property owners annually to
support CFD bond debt service payments. During a CFD bond refunding process,
proceeds from the new bonds will be used to pay down the outstanding balance of the old
bonds and to fund certain costs associated with new debt issuance. The newly issued
bonds will have reduced debt service payments, and therefore require less annual
payments from affected district property owners over the remaining bond years.
Refundina Process and Next Ste
It is anticipated that the refunding will take approximately three months to complete. The
key milestones to complete the refunding are identified below:
1. Public Meeting - City Council approves the initiation of proceedings to refinance the
outstanding 2015 CFD Bonds and approve the engagement of the following
professionals (Tonight's Action):
o Stradling, Yocca, Carlson & Rauth LLP, bond/disclosure counsel;
o Fieldman, Rolapp & Associates, Inc., municipal advisor;
o Webb & Associates, special tax consultant; and
o Stifel, Nicolaus & Company, underwriter.
2. Secure underlying credit rating from Standard & Poor's (April 2025)
3. Public Hearing - City Council approval of the Preliminary Official Statement,
remaining financing documents, and legal documents (May 2025)
4. Negotiated sale of Bonds (May 2025)
5. 2025 Refunding Bonds closing (June 2025)
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City Council Agenda Report
Authorization to Initiate Proceedings to Refund CFD Bonds
April 1, 2025
Page 4
6. New special tax assessments submitted to the County of Orange for fiscal year
2025-2026 property tax roll (August 2025)
7. 2015 CFD Bonds called (September 2025)
Resolution No. 25-17 presented for approval tonight is step 1 of this process. It authorizes
the initiation of refunding proceedings and approves the engagement of professional
consultants to assist staff during this process. If approved tonight, staff plans to bring back
the draft financing documents for the City Council's consideration and approval in May
2025. The proposed refunding transaction will not extend the final maturity year of each
bond issue.
As stated in the previous section, the proposed refinancing transaction will generate
savings for CFD's property owners. The current estimated savings for a property range
from $350 to $750 annually, which are subject to change depending on market conditions
at the time of finalizing the transaction. If approved, new special tax assessments will be
reflected on the fiscal year 2025-2026 property tax bills.
Public Outreach
The public communication strategy includes the following notices to all affected property
owners:
1. April 2025: A letter to notify property owners of the upcoming refunding process, if
approved by the City Council tonight.
2. May 2025: A letter to notify property owners of the public hearing at which the
Council will consider the refunding transaction.
3. July 2025 or August 2025: If the refunding is approved, a letter to notify property
owners of the specific savings that will be applicable to their 2025-2026 property tax
assessment because of the refunding transaction.
4. A dedicated email address will be set up to respond to property owner inquiries and
included in all notifications.
Signed by-
9 6"
4D86AFAFFF77473—
Jennifer King
Finance Director/City Treasurer
Attachment: Resolution No. 25-17
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RESOLUTION 25-17
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN,
CALIFORNIA, AUTHORIZING THE COMMENCEMENT OF PROCEEDINGS IN
CONNECTION WITH THE PROPOSED REFUNDING OF THE OUTSTANDING
CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014-1 (TUSTIN
LEGACY/STANDARD PACIFIC) SPECIAL TAX BONDS, SERIES 2015A, AND
CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 06-1 (TUSTIN
LEGACY/COLUMBUS VILLAGES) SPECIAL TAX REFUNDING BONDS,
SERIES 2015A AND 2015B, CONFIRMING THE APPOINTMENT OF
PROFESSIONAL SERVICES AND AUTHORIZING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
WHEREAS, the City proposes to refund its outstanding City of Tustin Community
Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific) Special Tax Bonds, Series
2015A, and its City of Tustin Community Facilities District No. 06-1 (Tustin
Legacy/Columbus Villages) Special Tax Refunding Bonds, Series 2015A and 2015B
(collectively, the "2015 CFD Bonds"), for debt service saving; and
WHEREAS, it is proposed that the 2015 CFD Bonds will be refunded from the
proceeds of refunding bonds (the "Bonds"); and
WHEREAS, it is appropriate that the Council formally authorize commencement of
proceedings, to appoint a municipal advisor, a bond counsel, a disclosure counsel and
an underwriter and to approve certain preliminary actions in connection with the
authorization, issuance and sale of the Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF TUSTIN, THAT:
Section 1. The foregoing recitals are hereby incorporated and adopted as the
findings of the City Council.
Section 2. The City Council authorizes appropriate officers and officials of the
City to proceed with the preparation of the necessary documents in connection with the
issuance and sale of the Bonds, subject to the final approval thereof by the Council at a
subsequent meeting.
Section 3. The City Council hereby confirms the appointment of Fieldman,
Rolapp & Associates, Inc. as municipal advisor to the City in connection with the
authorization, issuance and sale of the Bonds.
Section 4. The City Council hereby confirms the appointment of Stradling Yocca
Carlson & Rauth LLP as bond counsel and disclosure counsel in connection with the
authorization, issuance and sale of the Bonds.
Resolution 25-17
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Section 5. The City Council hereby confirms the appointment of Stifel, Nicolaus
& Company Inc. as underwriter in connection with the authorization, issuance and sale of
the Bonds.
Section 6. All actions of the officers, agents and employees of the City that are
in conformity with the purposes and intent of this resolution, whether taken before or after
the adoption hereof, are hereby ratified, confirmed and adopted.
Section 7. The Mayor, the City Manager, the Finance Director and other
appropriate officers and officials of the City are hereby authorized and directed to take
such action and to execute such documents as may be necessary or desirable to
effectuate the intent of this resolution.
Section 8. This Resolution shall take effect immediately upon its adoption by
the City Council of the City of Tustin, and the Clerk of the City Council shall attest to and
certify the vote adopting this Resolution.
APPROVED AND ADOPTED at a regular meeting of the City Council of the City
of Tustin on the 1 st day of April 2025.
AUSTIN LUMBARD,
Mayor
ATTEST:
ERICA N. YASUDA,
City Clerk
APPROVED AS TO FORM:
Docu Signed by:
"Z7
DA 3I3E17KEWDIG
City Attorney
Resolution 25-17
Page 2 of 3
Docusign Envelope ID: 783D7024-27D3-4446-8EF6-DAE31 E21 DA51
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council of
the City of Tustin is five; that the above and foregoing Resolution No. 25-17 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 1st day
of April, 2025, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
COUNCILMEMBER RECUSED:
ERICA N. YASUDA,
City Clerk
Resolution 25-17
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