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HomeMy WebLinkAboutNO. 1 T.P.F.A. T.R. 10-15-01AGENDA REPORT TPFA NO. 1 10-15- 01 MEETING DATE' TO' 'FROM' SUBJECT: OCTOBER 1'5, 2001 340-25 WILLIAM A. HUSTON, EXECUTIVE DIRECTOR, TUSTIN PUBLIC FINANCING AUTHORITY RONALD A. NAULT, FINANCE DIRECTOR TUSTIN PUBLIC FINANCING AUTHORITY REVENUE BONDS' (TUSTIN RANCH) SERIES E SUMMARY: In 1985 and 1986 the City created Assessment Districts 85-1 and 86-2 for the purpose of providing a tax-exempt financing vehicle for constructing the infrastructure necessary for the build-out of Tustin Ranch. In February of 1996 the City Council approved the formation of the Tustin Public Financing Authority to facilitate the reorganization of Assessment Districts 85-1 and 86-2, and the concurrent refinancing of the outstanding debt of the two Districts into Reassessment District 95-1, made up of owner occupied residential property with fixed rate bond assessments, and Reassessment District No. 95-2, made up of commercial and vacant parcels with variable rate assessments. In keeping with the City Council's policy as stated in the East Tustin Development Agreement, as vacant parcels are developed as owner occupied residential property, the variable rate debt is converted to fixed rate debt for the remaining life of the original issue and the parcels become part of Reassessment District 95-1. RECOMMENDATION: 1. Adopt Resolution No. TPFA 01-01 of the Tustin Public Financing Authority authorizing the issuance of not to exceed $2,245,000 aggregate principal amount ofTustin Public Financing Authority Bonds (Tustin Ranch), Series E, approving the execution and delivery of a Fourth Supplemental Indenture of Trust and Bond Purchase Agreements, and preparation of an Official Statement and other matters related thereto, approving forms of the enclosed Fourth Supplemental Indenture of Trust; Bond Purchase Agreement for .City Bonds; Bond Purchase Agreement for Authority Bonds; and the preliminary Official Statement. 2. Adjourn the Tustin Public Financing Authority meeting and reconvene as the City Council. FISCAL IMPACT: None. DISCUSSION: The Tustin Public Financing Authority was established for the purpose of providing for the financing or refinancing of public capital improvements of any local agency through the purchase by the Authority of obligations of such local agency pursuant to a bond purchase agreement. The Authority issued $35,705,000 of bonds on February 1, 1996. The proceeds of the bonds were used to purchase $35,705,000 of City of Tustin Limited Obligation Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch). This is the Fourth Supplemental Indenture of Trust that authorizes the Authority to issue additional debt to facilitate the conversion of Reassessment District No. 95-2 variable rate debt to Reassessment District No. 95-1, fixed rate debt. The action of the Authority will not extend the maturity of the existing debt beyond the final maturity date of September, 2013. Re ,,(~nald_A. Nault Finance Director RAN:ts Attachments RAN:TPFA2001SedesEConversionStaffReport. doc 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. TPFA 01-01 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TUSTIN PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $2,245,000 AGGREGATE PRINCIPAL AMOUNT OF TUSTIN PUBLIC FINANCING AUTHORITY REVENUE BONDS (TUSTIN RANCH), SERIES E, APPROVING THE EXECUTION AND DELIVERY OF A FOURTH SUPPLEMENTAL INDENTURE OF TRUST AND BOND PURCHASE AGREEMENTS AND THE PREPARATION OF AN OFFICIAL STATEMENT AND OTHER MATTERS RELATED THERETO WHEREAS, the Tustin Public Financing Authority (the "Authority") was established for the purpose, among others, of providing for the financing or refinancing of public capital improvements of any local agency through the purchase by the Authority of obligations of such local agency pursuant to a bond purchase agreement; WHEREAS, pursuant to the Indenture of Trust, dated as of February 1, 1996 (the "Original Indenture"), by and between the Authority and State Street Bank and Trust Company of California, N.A., as trustee (the "Trustee"), the Authority issued its Revenue Bonds (Tustin Ranch), Series A (the "Series A Bonds") in the aggregate principal amount of $35,705,000; WHEREAS, the Original Indenture was amended and supplemented pursuant to the First Supplemental Indenture of Trust, dated as of November 1, 1997 by and between the Authority and the Trustee, the' Second Supplemental Indenture of TrUst, dated as of~ November 1, 1998, by and between the Authority and the Trustee, and the Third Supplemental Indenture of Trust, dated as of November 1, 1999, by and between the Authority and the Trustee; WHEREAS, the proceeds of the Series A Bonds were used to purchase $35,705,000 aggregate principal amount of City of Tustin Limited Obligation Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch); WHEREAS, the Original Indenture provides that, in order to provide the funds required to acquire certain other fixed rate assessment bonds of the City of Tustin (the "City"), in addition to the Series A Bonds, the Authority may, subject to the requirements of the Bond Law, by Supplemental Indenture establish one or more Series of Bonds payable from Revenues on a parity with the Series A Bonds and secured by a lien upon and pledge of Revenues equal to the lien and pledge securing the Series A Bonds, and that the Authority may issue and the Trustee may authenticate and deliver Bonds of any Series so established, in such principal amount as shall be determined by the Authority in said Supplemental Indenture, but only upon compliance by the Authority with the provisions of the Original Indenture; WHEREAS, in order to refinance certain public capital improvements, the City of Tustin "City") is issuing not to exceed $2,245,000 of its Limited Obligation Improvement Bonds, Reassessment District No. 95-2 (Tustin Ranch), Fixed Rate Bonds Group Four (the "Group Four Bonds"); ' DOCSLAl:397392.2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, the Authority desires to assist the City with the Group Four Bonds refinancing by purchasing the Group Four Bonds from the City; WHEREAS, in order to provide the funds necessary to purchase the Group Four Bonds from the City, the Authority desires to authorize the issuance of the Tustin Public Financing Authority Revenue Bonds (Tustin Ranch), Series E (the "Series E Bonds"), in an aggregate principal amount of not t° exceed $2,245,000; WHEREAS, in order to provide for the authentication and delivery of the Series E Bonds, to establish and declare the terms and conditions upon which the Series E Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Authority proposes to enter into a Fourth Supplemental Indenture of Trust with the Trustee (such Fourth Supplemental Indenture of Trust, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Fourth Supplemental Indenture"); WHEREAS, the Authority proposes to purchase the Group Four Bonds pursuant to a Bond Purchase Agreement between the City and the Authority (such Bond Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "City Purchase Ag eement ); WHEREAS, the Authority has found and determined that the purchase of the Group Four Bonds by the Authority will result in substantial public benefits, namely, the interest savings with respect to the Group Four Bonds to be achieved by reason of the credit rating to be assigned to the Series E Bonds; WHEREAS, UBS PaineWebber Inc. (the "Underwriter") has presented the Authority with a proposal, in the form of a Bond Purchase Agreement, to purchase the Series E Bonds from the Authority (such Bond Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Authority Purchase Agreement"); WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Fourth Supplemental Indenture; (b) the City Purchase Agreement; (c) the .Authority Purchase Agreement; and (d) the Preliminary Official Statement to be used in connection with the offering and sale of the Series E Bonds (such Preliminary Official Statement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Preliminary Official Statement"); and WHEREAS, the Authority desires to proceed to issue and sell the Series E BOnds and to authorize the execution of such documents and the performance of such acts as may be necessary or desirable to effect the offering, sale and issuance of the Series E Bonds; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Tustin Public Financing Authority as follows: DOCSLAl:397392.2 2 12 Section 1. Subject to the provisions of Section 2 hereof, the issuance of the Series E Bonds, in the aggregate principal amount of not to exceed $2,245,000 on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture, is hereby authorized and approved. The Series E Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be issued in the form, and shall be as otherwise provided in the Fourth Supplemental Indenture, as the same shall be completed as provided 'in this Resolution. Section 2. The Fourth Supplemental Indenture, in 'substantially the form submitted to 5 this meeting and made a part hereof as though set forth herein, be and the same is hereby 6 approved. The Chairperson of the Board of Directors, or such other member of the Board of Directors as the Chairperson may designate, the Executive Director of the Authority, the 7 Assistant Executive Director of the' Authority and the Treasurer of the Authority (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the 8 Authority, to execute and deliver the Fourth Supplemental Indenture in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing 9 the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Fourth Supplemental Indenture by such Authorized Officer; provided, 10 however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of Series E Bonds in excess of $2,245,000, shall not result in a final maturity 11 date of the Series E Bonds later than September 2, 2013 and shall not result in a true interest cost on the Series E Bonds in excess of 7.0%. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28. Section 3. The City Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Authority, to-execute and deliver the City Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the City Purchase Agreement by such Authorized Officer. Section 4, The Authority Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Authority, to execute and deliver the Authority Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Authority Purchase Agreement by such Authorized Officer; provided, ho,wever, that such changes, insertions and omissions shall not result in an aggregate underwriter s discount (not including any original issue discount) from the principal amount of the Series E Bonds in excess of 1.5% of the aggregate principal amount of the Series E Bonds. Section 5. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Series E Bonds is hereby authorized and approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Authority, to certify to the Underwriter that the Preliminary Official Statement has been "deemed final" for purposes of Rule 15c2-12 promulgated by the Securities and Exchange Commission. D OCSLA 1:397392.2 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 6. The preparation and delivery of a final Official Statement (the "Official Statement"), and its use in connection with the offering and sale of the Series E Bonds, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are, and each of them is, hereby authorized and directed to execute the final Official Statement and any amendment or supplement thereto, for and in the name of the Authority. Section 7. The Authorized Officers are hereby authorized and directed to investigate, 6 or cause to be investigated, the availability and economic viability of bond insurance for the 7 Series E Bonds and, if such insurance is determined to be cost effective, to select a bond insurer and to negotiate the terms of such bond insurance. Section 8. The Authorized Officers are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the issuance of the Series E Bonds and the transactions contemplated by the Indenture, the City Purchase Agreement, the Authority Purchase Agreement, the Official Statement and this Resolution. Section 9. All actions heretofore taken by the officers and employees of the Authority with respect to the issuance and sale of the Series E Bonds, or in connection with or related to any of the agreements or documents referenced herein are hereby approved confirmed and ratified. ' , Section 10. This Resolution shall take effect immediately upon its adoption. . APPROVED and ADOPTED by the Board of Directors of the Tustin pUblic Financing Authority on October 15, 2001. Tracy Wills Worley Chairperson ATTEST: Pamela Stoker Secretary D OCSLA1:397392.2 · TUSTIN PUBLIC FINANCING AUTHORITY REVENUE BOND'S (TUSTIN RA. NCH SERIES E PLEASE SEE CITY COUNCIL AGENDA IT'EM NO. 17 FOR ADDITIONAL ATTACHMENTS.