Loading...
HomeMy WebLinkAbout17 IMPROV. BONDS 10-15-01AGENDA REPORT NO. 17 10 15 01 MEETING DATE: TO: FROM: SUBJECT: OCTOBER 15, 2001 340-25 WILLIAM A. HUSTON, CITY MANAGER RONALD A. NAULT, FINANCE DIRECTOR CITY OF TUSTIN LIMITED OBLIGATION IMPROVEMENT BONDS REASSESSMENT DISTRICT 95-1 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. 01-97 authorizing the issuance of not to exceed $2,245,000 aggregate principal amount of City of Tustin Limited Obligation Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch), Fixed Rate Bonds, Group Four, approving the execution and delivery of a Fifth Supplemental Fiscal Agent Agreement, a Bond Purchase Agreement and a Continuing Disclosure Agreement (Series E), and the preparation of an Official Statement and other matters related thereto, approving forms of the enclosed Fifth Supplemental Fiscal Agent Agreement; Bond Purchase Agreement for City Bonds; Continuing Disclosure Agreement (Series E) and a Preliminary Official Statement. . Recess the City Council meeting and convene a meeting as the Tustin Public Financing Authority. FISCAL IMPACT: None. DISCUSSION: The City of Tustin Reassessment District 95-2 is supported by variable rate debt, with liens applied to vacant and commercial parcels within the District. The City Council's policy as stated in the East Tustin Development Agreement requires that as parcels are developed as owner occupied residential property, the Developer will convert the outstanding variable rate for said parcels in Assessment District 95-2 to fixed rate debt, and the.parcels are transferred to Assessment District No. 95-1. The Developer, The Irvine Company, has requested that certain parcels with variable rate liens totaling approximately $2.25 million be converted to fixed rate and transferred to Assessment District 95-1. This is the fourth conversion from variable to fixed rate in the Reassessment District. Net of this conversion, there will be approximately $26.0 million outstanding Reassessment District 95-2 Bonds with maturities in 2011 and 2013. This conversion will not extend the outstanding bonds beyond the final maturity date of September, 2013. Finance Director RAN:ts Attachments RAN:TPFA2001 ReassessmentStaffReport.doc ] RESOLUTION NO. 01-97 l0 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $2,245,000 AGGREGATE PRINCIPAL AMOUNT OF CITY OF TUSTIN LIMITED OBLIGATION IMPROVEMENT BONDS REASSESSMENT DISTRICT NO. 95-2 (TUSTIN RANCH), FIXED RATE BONDS, GROUP FOUR, APPROVING THE EXECUTION AND DELIVERY OF A FIFTH SUPPLEMENTAL FISCAL AGENT AGREEMENT, A BOND PURCHASE AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT (SERIES E), AND THE PREPARATION OF AN OFFICIAL STATEMENT AND OTHER MATTERS RELATED THERETO WHEREAS, pursuant to a Fiscal Agent Agreement, dated as of February 1, 1996 (the "Original Agreement"), by and between the City and the Fiscal Agent, the City issued its Limited Obligation Improvement Bonds, Reassessment District No. 95-2 (Tustin Ranch), Series A (the "Series A Bonds") in the aggregate principal amount of $41,500,000; WHEREAS, the Original Agreement was amended and supplemented pursuant to a First Supplemental Fiscal Agent Agreement, dated as of September 1, 1996, by and between the City and the Fiscal Agent, a Second Supplemental Fiscal Agent Agreement, dated as of November 1, 1997, by and between the City and the Fiscal Agent, a Third Supplemental Fiscal Agent Agreement, dated as of November 1, 1998, by and between the City and the Fiscal Agent and a Fourth Supplemental Fiscal Agent Agreement, dated as of November 1, 1999, by and between the City and the Fiscal Agent (as so amended and supplemented, the "Fourth Amended Original Agreement") (all capitalized terms used in these recitals shall have the meanings ascribed thereto in the "Fourth Amended Original Agreement"); WHEREAS, the Series A Bonds were originally issued as Adjustable Rate Bonds; WHEREAS, in accordance with the provisions of the Fourth Amended Original Agreement, all or a portion of the Series A Bonds may, and in certain circumstances are required to be, converted to Fixed Rate Bonds; WHEREAS, $1,946,088.64 aggregate principal amount of Series A Bonds are now being converted to Fixed Rate Bonds (the "Group Four Fixed Rate Bonds"); WHEREAS, the Fourth Amended Original Agreement provides that the Fourth Amended Original Agreement and the rights and obligations of the City, the Fiscal Agent and the Owners of Fixed Rate Bonds, but only as such rights and obligations relate solely to such Fixed Rate Bonds, may be modified or amended, as of the Conversion Date for such Fixed Rate Bonds, by a Supplemental Agreement which the City and the Fiscal Agent may enter into without the consent of any Bond Owners, but only if such Fixed Rate Bonds have been remarketed by the Remarketing Agent with such modified or amended rights and obligations; WHEREAS, the City desires to amend and modify the Fourth Amended Original Agreement with respect to certain of the rights and obligations relating solely to Group Four Bonds as of Conversion Date for the Group Four Fixed Rate Bonds; DOCSLAl:397376.2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, the Fourth Amended Original Agreement provides that, in connection with the conversion of each group of Series A Bonds to Fixed Rate Bonds pursuant to the Fourth Amended Original Agreement, the City may, subject to the requirements of the Act, by Supplemental Agreement establish one or more Series of Bonds, and the City may issue and the Fiscal Agent may authenticate and deliver Bonds of any Series so established, in such principal amount as shall be determined by the City in said Supplemental Agreement, but only upon compliance by the City with the provisions of the Fourth Amended Original Agreement; WHEREAS, in connection with the conversion of the Group Four Fixed Rate Bonds, the City desires to establish an additional Series of Bonds (the "Series Four Bonds", together with the Group Four Fixed Rate Bonds, the "Group Four Bonds") for one or more of the purposes specified in the Fourth Amended Original Agreement; and WHEREAS, the Bonds of such additional Series (the "Series Four Bonds") are to be issued in an aggregate principal amount of not to exceed $298,911.36; WHEREAS, in order to provide for the authentication and delivery of the Group Four Fixed Rate Bonds and the Series Four Bonds (collectively, the "Group Four Bonds"), to establish and declare the terms and conditions upon which the Group Four Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the City proposes to enter into a Fifth Supplemental Fiscal Agent Agreement with the Fiscal Agent (such Fifth Supplemental Fiscal Agent 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 "Fifth Supplemental Agreement"); WHEREAS, the Tustin Public Financing Authority (the "Authority") intends to issue its Revenue Bonds (Tustin Ranch), Series E (the "Authority Bonds"), and use a portion of the proceeds of the sale thereof to purchase the Group Four Bonds from the City; WHEREAS, the Authority has presented the City with a proposal, in the form of a Bond Purchase Agreement, to purchase the Group Four Bonds (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 "Bond Purchase Agreement"); WHEREAS, UBS PaineWebber Incorporated, as underwriter (the "Underwriter"), has submitted to the Authority a proposal to purchase the Authority Bonds; WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12") requires that, in order to be able to purchase or sell the Authority Bonds, the Underwriter must have reasonably determined that an obligated person has undertaken in a written agreement or contract for the benefit of the holders of the Authority Bonds to provide disclosure of certain financial information and certain material events on an ongoing basis; WHEREAS, in order to cause such requirement to be satisfied, the City desires to enter into a Continuing Disclosure Agreement (Series E) with State Street Bank and Trust Company of California, N.A., as Trustee for the Authority Bonds (such Continuing Disclosure Agreement (Series E) 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 "Continuing Disclosure Agreement"); DOCSI.A1:397376.2 -2- l0 ll 12 13 14 15 1'6 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Fifth Supplemental Agreement; (b) the Bond Purchase Agreement; (c) the Continuing Disclosure Agreement; and (d) the Preliminary Official Statement to be used in connection with the offering and sale of the Authority Bonds, which contains certain information about the City, the Fourth Amended Original Agreement, the Fifth Supplemental Agreement, the Group Four Bonds, the City's Reassessment District No. 95-1, the City's Reassessment District No. 95-2 and the proceedings relating thereto (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 City desires to proceed to issue and sell the Group Four 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 Group Four Bonds; NOW, THEREFORE, BE IT RESOLVED by the CitY Council of the City of Tustin as follows: Section 1. Subject to the provisions of Section 2 hereof, the conversion and issuance of the Group Four Fixed Rate Bonds, in the aggregate principal amount of not to exceed $1,946,088.64, and the issuance of the Series Four Bonds, in the aggregate principal amount of not to exceed $298,911.36 on the terms and conditions set forth in, and subject to the limitations specified in, the Fourth Amended Original Agreement, as amended and supplemented by the Fifth Supplemental Agreement (as so amended and supplemented, the "Fiscal Agent Agreement"), are hereby authorized and approved. The Group Four 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 Fiscal Agent Agreement. Section 2. The Fifth Supplemental Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Mayor of the City, the Mayor Pro Tem of the City, or such other member of the City Council as the Mayor may designate, the City Manager of the City and the Director of Finance of the City, or such other officer of the City as the City Manager or the Director of Finance may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the City, to execute and deliver the Fifth Supplemental Agreement in the form submitted 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 Fifth Supplemental Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of Group Four Bonds in excess of $2,245,000, shall not result in a final maturity date of the Group Four Bonds later than September 2, 2013 and shall not result in a true interest cost on the Group Four Bonds in excess of 8.17%. DOC SLA 1: 397376.2 -3- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 3. The Bond 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 City, to execute and deliver the Bond 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 Bond Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate purchaser's discount (not including any original issue discount) from the principal amount of the Group Four Bonds in excess of 1.5% of the aggregate principal amount of the Group Four Bonds. Section 4. The Continuing Disclosure 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 City, to execute and deliver the Continuing Disclosure 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 Continuing Disclosure Agreement by' such Authorized Officer. 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 Authority 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 City, to certify to the Underwriter that the Preliminary Official Statement has been "deemed final" for purposes of Rule 15c2-12. 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 Authority 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 City. Section 7. The Authorized Officers are hereby authorized and directed to investigate, or cause to be investigated, the availability and economic viability of bond insurance for the Group Four Bonds and/or the Authority 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 Group Four Bonds and the transactions contemplated by the Fiscal Agent Agreement, the Bond Purchase Agreement, the Continuing Disclosure Agreement, the Official Statement and this Resolution. DOCSLAl:397376.2 -4- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 9. All actions heretofore taken by the officers and employees of the City with respect to the issuance and sale of the Group Four 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 City Council of the City of Tustin October 15, 2001. on Tracy Wills Worley Mayor ATTEST' Pamela Stoker City Clerk DOCSI,Al:397376.2 -5-