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HomeMy WebLinkAbout2026-001 - Resolution - (S.A.) RESOLUTION NO, SA 2026-001 A RESOLUTION OF THE SUCCESSOR AGENCY TO THE RANCHO CUCAMONGA REDEVELOPMENT AGENCY APPROVING THE ISSUANCE OF REFUNDING BONDS IN ORDER TO REFUND CERTAIN OF ITS OUTSTANDING BONDS, APPROVING THE EXECUTION AND DELIVERY OF AN EIGHTH SUPPLEMENTAL INDENTURE AND IRREVOCABLE REFUNDING INSTRUCTIONS RELATING THERETO, APPROVING THE PRELIMINARY AND FINAL OFFICIAL STATEMENTS AND BOND PURCHASE CONTRACT AND REQUESTING OVERSIGHT BOARD APPROVAL OF THE ISSUANCE OF THE REFUNDING BONDS, REQUESTING CERTAIN DETERMINATIONS BY THE OVERSIGHT BOARD, AND PROVIDING FOR OTHER MATTERS PROPERLY RELATING THERETO WHEREAS, the Rancho Cucamonga Redevelopment Agency (the "Former Agency") was a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the Health and Safety Code of the State (the "Redevelopment Law"); and WHEREAS, a plan for the redevelopment project known and designated as the "Rancho Project Area Rancho Cucamonga Redevelopment Agency Plan" (the "Redevelopment Plan")for that certain project area described in the Redevelopment Plan (the "Project Area")was adopted and approved by Resolution No. RA 81-14 on December 23, 1981, as amended pursuant to Ordinance No. 316A on August 13, 1987, Ordinance No. 537 on November 16, 1994, Ordinance No. 657 on June 20, 2001, and Ordinance No. 674 on January 16, 2002, and all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan have been duly complied with; and WHEREAS, to finance and refinance redevelopment activities through the issuance of bonds the Former Agency, and subsequently the Successor Agency to the Rancho Cucamonga Redevelopment Agency (the "Successor Agency"), entered into a Trust Indenture, dated as of March 1, 1990, between the Former Agency and Computershare Trust Company, N.A. (the "Trustee"), as successor to Bank of America National Trust and Savings Association, as trustee (the "Original Indenture"), as amended and supplemented by that First Supplemental Indenture, dated as of February 1, 1994, between the former Agency and Trustee, as successor to Bank of America National Trust and Savings Association, as trustee (the "First Supplemental Indenture"), a Second Supplemental Indenture between the Former Agency and Trustee, as successor to U.S. Bank Trust National Association, as trustee (the "Second Supplement"), dated as of August 1, 1999, the Third Supplemental Indenture between the Former Agency and Trustee, as successor to Wells Fargo Bank National Association,.as trustee (the "Third Supplement"), dated as of August 1, 2001, the Fourth Supplemental Indenture between the Former Agency and Trustee, as successor to Wells Fargo Bank National Association, as trustee (the "Fourth Supplement"), dated as of March 1, 2004 for the purpose of financing and refinancing redevelopment activities with respect to the Redevelopment Resolution No. SA 2026-001 — Page 1 of 10 Project, the Fifth Supplemental Indenture between the Successor Agency and the Trustee, as successor to Wells Fargo Bank, N.A. as trustee (the "Fifth Supplement"), dated July 1, 2014, and a Sixth Supplemental Indenture between the Successor Agency and the Trustee, as successor to Wells Fargo Bank N.A., as trustee (the "Sixth Supplement") dated October 1, 2016, and a Seventh Supplemental Indenture between the Successor Agency and the Trustee, as trustee (the "Seventh Supplement," and collectively with the Indenture, First Supplement, Second Supplement, Third Supplement, Fourth Supplement, Fifth Supplement, Sixth Supplement, the "Indenture") dated as of December 1, 2024; and WHEREAS, by implementation of California Assembly Bill X1 26, which amended provisions of the California Redevelopment Law, (found at Health and Safety Code Section 33000, et.seq.) and the California Supreme Court's decision in California Redevelopment Association v. Matosantos, the Former Agency was dissolved on February 1, 2012 in accordance with California Assembly Bill X1 26 approved by the Governor of the State of California on June 28, 2011 ("AB 26"), and on February 1, 2012, the Successor Agency, in accordance with and pursuant to AB 26, assumed the duties and obligations set forth in AB 26 for the Former Agency, including, without limitation, the obligations of the Former Agency under the Indenture, the First Supplement, the Second Supplement, the Third Supplement and the Fourth Supplement and related documents to which the Former Agency was a party; and WHEREAS, Section 34177.5(a)(1) of the Dissolution Act authorizes the Successor Agency to undertake proceedings for the refunding of outstanding bonds and other obligations of the Former Agency, subject to the conditions precedent contained in said Section 34177.5; and WHEREAS, Section 34177.5 authorizes the Successor Agency to issue refunding bonds pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code (the "Refunding Law") for the purpose of achieving debt service savings within the parameters set forth in Section 34177.5(a)(1) (the "Savings Parameters"); and WHEREAS, the Successor Agency issued its $56,860,000 Successor Agency to the Rancho Cucamonga Redevelopment Agency Rancho Redevelopment Project Area Tax Allocation Refunding Bonds, Series 2016 (the "Prior Bonds") for the purpose of refinancing the certain outstanding bonds of the Successor Agency pursuant to the Indenture and the Sixth Supplement; and WHEREAS, to determine compliance with the Savings Parameters for purposes of the issuance by the Successor Agency to the Rancho Cucamonga Redevelopment Agency of its Rancho Redevelopment Project Area Tax Allocation Refunding Bonds, Series 2026 (the "Refunding Bonds"), the Successor Agency has caused its municipal advisor, Fieldman, Rolapp & Associates, Inc. (the "Municipal Advisor"), to prepare an analysis of the potential savings that will accrue to the Successor Agency and to applicable taxing entities as a result of the use of the proceeds of the Resolution No. SA 2026-001 — Page 2 of 10 Refunding Bonds to repay all or a portion of the Prior Bonds and, thereby, to refund all or a portion of the Prior Bonds (the "Debt Service Savings Analysis"); and WHEREAS, Section 5852.1 of the Government Code of the State of California ("Section 5852.1") provides that the Successor Agency obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Refunding Bonds, good faith estimates of: (a) the true interest cost of the Refunding Bonds, (b) the finance charge of the Refunding Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Refunding Bonds received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the Bonds and (d) the sum total of all debt service payments on the Refunding Bonds calculated to the final maturity of the Refunding Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Refunding Bonds; and WHEREAS, in accordance with Section 5852.1, the Successor Agency has obtained such good faith estimates from the Municipal Advisor and such estimates are disclosed in Exhibit A attached hereto; and WHEREAS, in order to refund the Prior Bonds, the Successor Agency wishes at this time to approve the issuance of the Refunding Bonds pursuant to the Original Indenture and to approve the form of and authorize the execution and delivery of the Eighth Supplemental Indenture, expected to be dated as of the first day of the month such bonds are issued, by and between the Successor Agency and Computershare Trust Company, N.A., as trustee, providing for the issuance of the Refunding Bonds(the "Eighth Supplemental Indenture") and the Irrevocable Refunding Instructions (the "Irrevocable Refunding Instructions"); and WHEREAS, in order to provide for the authentication and delivery of the Refunding Bonds, to establish and declare the terms and conditions upon which the Refunding Bonds are to be issued and secured and to secure the payment of the principal thereof and interest and redemption premium (if any)thereon, the Successor Agency and the Trustee will duly authorize the execution and delivery of the Eighth Supplemental Indenture; and WHEREAS, the Successor Agency, with the assistance of its disclosure counsel, Best Best & Krieger LLP, has prepared a draft of the Official Statement for the Refunding Bonds (the "Official Statement"), which contains information regarding the Refunding Bonds, the Former Agency, the Successor Agency, and the Rancho Redevelopment Project Area, the preliminary form of which is on file with the City Clerk; and WHEREAS, there has also been presented a form of Continuing Disclosure Certificate to be executed and delivered by the Successor Agency, for the benefit of the owners of the Bonds and in order to assist the Underwriter in complying with Rule 15c2- 12(b)(5) of the Securities and Exchange Commission, as amended (the "Rule"); and Resolution No. SA 2026-001 — Page 3 of 10 WHEREAS, pursuant to Section 34179 of the Dissolution Act, an oversight board (the "Oversight Board") has been established for the Successor Agency; and WHEREAS, the Successor Agency requests that the Oversight Board approve the issuance of the Refunding Bonds pursuant to this Resolution, the Original Indenture and the Eighth Supplemental Indenture; and WHEREAS, the Successor Agency further requests that the Oversight Board make certain determinations described below on which the Successor Agency will rely in undertaking the refunding proceedings and the issuance of the Refunding Bonds; and WHEREAS, the Successor Agency has determined to sell the Refunding Bonds on a negotiated basis to Raymond James & Associates, Inc. (the "Underwriter"). NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the City Council of the City of Rancho Cucamonga, acting in its capacity as the legislative body of the Successor Agency to the Rancho Cucamonga Redevelopment Agency, as follows: Section 1. Determination of Savings. The Successor Agency has determined that there are significant potential savings available to the Successor Agency and to applicable taxing entities in compliance with the Savings Parameters by the issuance by the Successor Agency of the Refunding Bonds to provide funds to refund and defease all or a portion of the outstanding Prior Bonds, all as evidenced by the Debt Service Savings Analysis on file with the of the Successor Agency, which Debt Service Savings Analysis is hereby approved. Section 2. Approval of Issuance of the Bonds. The Successor Agency hereby authorizes and approves the issuance of the Refunding Bonds under Health and Safety Code Section 34177.5, the Refunding Law, the Original Indenture and the Eighth Supplemental Indenture in the aggregate principal amount of not to exceed $40,000,000, provided that the Refunding Bonds are in compliance with the Savings Parameters at the time of sale and delivery. Section 3. Approval of Eighth Supplemental_ Indenture. The Successor Agency hereby approves the Eighth Supplemental Indenture prescribing the terms and provisions of the Refunding Bonds and the application of the proceeds of the Refunding Bonds. Each of the Mayor, as the Chair and presiding officer of the Successor Agency, or the City Manager of the City of Rancho Cucamonga, as the chief administrative officer of the Successor Agency (each, an "Authorized Officer"), is hereby authorized and directed to execute and deliver, and the Secretary of the Successor Agency is hereby authorized and directed to attest to, the Eighth Supplemental Indenture for and in the name and on behalf of the Successor Agency, in substantially the form on file with the Secretary of the Successor Agency, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer executing the same shall approve, such approval to be conclusively evidenced by the execution and delivery of the Resolution No. SA 2026-001 -- Page 4 of 10 Eighth Supplemental Indenture. The Successor Agency hereby authorizes the delivery and performance of the Eighth Supplemental Indenture. Section 4. Approval of Irrevocable Refunding Instructions. The form of the Irrevocable Refunding Instructions on file with the Secretary is hereby approved and the Authorized Officers are, each acting alone, hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to execute and deliver the Irrevocable Refunding Instructions. The Successor Agency hereby authorizes the delivery and performance of its obligations under the Irrevocable Refunding Instructions by the Authorized Officers. Section 5. Oversight Board Approval of the Issuance of the Bonds. The Successor Agency hereby requests the Oversight Board as authorized by Section 34177.5(f) and Section 34180 to approve the issuance of the Refunding Bonds pursuant to Section 34177.5(a)(1) and this Resolution and the Eighth Supplemental Indenture. Section 6. Determinations by the Oversight Board. The Successor Agency requests that the Oversight Board make the following determinations upon which the Successor Agency will rely in undertaking the refunding proceedings and the issuance of the Refunding Bonds: (a) The Successor Agency is authorized, as provided in Section 34177.5(f), to recover its costs related to the issuance of the Refunding Bonds from the proceeds of the Refunding Bonds, including the cost of reimbursing the City for administrative staff time spent with respect to the authorization, issuance, sale and delivery of the Refunding Bonds; (b) The application of proceeds of the Refunding Bonds by the Successor Agency to the refunding and defeasance of all or a portion of the Prior Bonds, as well as the payment by the Successor Agency of costs of issuance of the Refunding Bonds, as provided in Section 34177.5(a), shall be implemented by the Successor Agency promptly upon sale and delivery of the Refunding Bonds notwithstanding Section 34177.3 or any provision of law to the contrary without the approval of the Oversight Board, the California Department of Finance, the San Bernardino County Auditor-Controller or any other person or entity other than the Successor Agency; (c) The Successor Agency shall be entitled to receive its full Administrative Cost Allowance under Section 34181(a)(3) without any deductions with respect to continuing costs related to the Refunding Bonds, such as trustee's fees, auditing and fiscal consultant fees and continuing disclosure and rating agency costs (collectively, "Continuing Costs of Issuance"), and such Continuing Costs of Issuance shall be payable from property tax revenues pursuant to Section 34183. In addition and as provided by Section 34177.5(f), if the Successor Agency is unable to complete the issuance of the Refunding Bonds for any reason, the Successor Agency shall, nevertheless, be entitled to recover its costs incurred with Resolution No. SA 2026-001 - Page 5 of 10 respect to the refunding proceedings from such property tax revenues pursuant to Section 34183 without reduction in its Administrative Cost Allowance. Section 7. Filing of Debt Service Savings Analysis and Resolution. The Secretary of the Successor Agency is hereby authorized and directed to file the Debt Service Savings Analysis, together with a certified copy of this Resolution, with the Oversight Board, and, as provided in Section 34180(j) with the San Bernardino County Administrative Officer, the San Bernardino County Auditor-Controller and the California Department of Finance. Section S. Sale of Refunding Bonds. The form of the Bond Purchase Contract by and between the Successor Agency and the Underwriter (the "Bond Purchase Contract") on file with the Secretary is hereby approved and the Authorized Officers are, each acting alone hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to execute and deliver the Bond Purchase Contract. The Successor Agency hereby authorizes the delivery and performance of its obligations under the Bond Purchase Contract by the Authorized Officers; provided, however, the Underwriter's discount(not including issue discount) may not exceed 0.5% of the principal amount of the Refunding Bonds. Section 9. Issuance of Refunding Bonds in Whole or in Part. It is the intent of the Successor Agency to sell and deliver the Refunding Bonds in whole, provided that there is compliance with the Savings Parameters. However, the Successor Agency will initially authorize the sale and delivery of the Refunding Bonds in whole or, if such Savings Parameters cannot be met with respect to the whole, then in part; provided that the Refunding Bonds so sold and delivered in part are in compliance with the Savings Parameters. The sale and delivery of the Refunding Bonds in part will in each instance provide sufficient funds only for the refunding of that portion of the Refunding Bonds that meet the Savings Parameters. In the event the Refunding Bonds are initially sold in part, the Successor Agency intends to sell and deliver additional parts of the Refunding Bonds pursuant to an additional supplement to the Indenture without the prior approval of the Oversight Board provided that in each such instance the Refunding Bonds so sold and delivered in part are in compliance with the Savings Parameters. Section 10. Municipal Bond Insurance and Surety Bonds. The Authorized Officers, each acting alone, are hereby authorized and directed to take all actions necessary to obtain a municipal bond insurance policy for the Refunding Bonds and reserve account surety bonds for the Refunding Bonds from a municipal bond insurance company if it is determined, upon consultation with the Municipal Advisor to the Successor Agency and the Underwriter, that such municipal bond insurance policy and/or surety bonds will reduce the true interest cost or increase cash flow savings with respect to the Refunding Bonds. Section 11. Approval of Official Statement. The Successor Agency hereby approves the preliminary Official Statement in substantially the form on file with the Secretary. Distribution of the preliminary Official Statement by the Successor Agency and the Underwriter is hereby approved, and, prior to the distribution of the preliminary Resolution No. SA 2026-001 - Page 6 of 10 Official Statement, the Authorized Officers, each acting alone, are authorized and directed, on behalf of the Successor Agency, to deem the preliminary Official Statement "final" pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). The execution of the final Official Statement, which shall include such changes and additions thereto deemed advisable by an Authorized Officer, and such information permitted to be excluded from the preliminary Official Statement pursuant to the Rule, is hereby approved for delivery to the purchasers of the Refunding Bonds, and the Authorized Officers, each acting alone, are authorized and directed to execute and deliver the final Official Statement for and on behalf of the Successor Agency and to deliver to the Underwriter a certificate with respect to the information set forth therein. Section 12. Approval of the Continuinq Disclosure Certificate. The form of the Continuing Disclosure Certificate on file with the Secretary of the Successor Agency and appended to the Official Statement is hereby approved and the Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to execute and deliver the Continuing Disclosure Certificate with such changes therein, deletions therefrom and additions thereto as the Authorized Officer executing the same shall approve, such approval to be conclusively evidenced by the execution and delivery of Continuing Disclosure Certificate. The Successor Agency hereby authorizes the delivery and performance of its obligations under the Continuing Disclosure Certificate. Section 13. Official Actions. The Authorized Officers and any and all other officers of the Successor Agency are hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to do any and all things and take any and all actions, which they, or any of them, may deem necessary or advisable in obtaining the requested approvals by the Oversight Board and the California Department of Finance and in the issuance, sale and delivery of the Refunding Bonds. Whenever in this Resolution any officer of the Successor Agency is directed to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 14. Effective Date. This Resolution shall take effect immediately upon its adoption. Resolution No. SA 2026-001 — Page 7 of 10 PASSED, APPROVED, and ADOPTED this 21It day of May, 2026, tj s Michael, Arisicri ATTEST: O �[ i A�y' Secreta STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) ss CITY OF RANCHO CUCAMONGA ) I, Kim Sevy, Secretary of the Successor Agency to the Rancho Cucamonga Redevelopment Agency, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the Successor Agency of the City of Rancho Cucamonga Redevelopment Agency, at an Adjourned Regular Meeting of said Successor Agency held on the 21s1 day of May, 2026. AYES: Hutchison, Kennedy, Michael, Scott, Stickler NOES: None ABSENT: None ABSTAINED: None Executed this 21s1 day of May, 2026, at Rancho Cucamonga, California. ai��n 5�p� Ki Sevy, Secretary Resolution No. SA 2026-001 -- Page 8 of 10 EXHIBIT A GOOD FAITH ESTIMATES The good faith estimates set forth herein are provided with respect to the Refunding Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the Successor Agency by the Municipal Advisor in consultation with the Underwriter. Principal Amount. The Municipal Advisor has informed the Successor Agency that, based on the financing plan and current market conditions, it's good faith estimate of the aggregate principal amount of the Refunding Bonds to be sold is $36,080,000 (the "Estimated Principal Amount"), which excludes approximately $2,434,531 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of the bonds. True Interest Cost of the Refunding Bonds. The Municipal Advisor has informed the Successor Agency that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Refunding Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Refunding Bonds, is 2.94%. Finance Charge of the Refunding Bonds. The Municipal Advisor has informed the Successor Agency that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Refunding Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Refunding Bonds), is $683,247. Amount of Proceeds to be Received. The Municipal Advisor has informed the Successor Agency that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the Successor Agency, on behalf of the City, for the sale of the Refunding Bonds, less the finance charge of the Refunding Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Refunding Bonds, is $37,831,284. Total Payment Amount. The Municipal Advisor has informed the Successor Agency that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the Successor Agency will make to pay debt service on the Refunding Resolution No. SA 2026-001 — Page 9 of 10 Bonds, plus the finance charge for the Refunding Bonds, as described above, not paid with the proceeds of the Refunding Bonds, calculated to the final maturity of the Refunding Bonds, is $45,581,644 (excluding any offsets from reserves or capitalized interest). The foregoing estimates constitute good faith estimates only. The actual principal amount of the Refunding Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Refunding Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Refunding Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Refunding Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Refunding Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the financing plan or finance charges, or a combination of such factors. The actual date of sale of the Refunding Bonds and the actual principal amount of Refunding Bonds sold will be determined by the Successor Agency, on behalf of the City, based on the timing of the need for proceeds of the Refunding Bonds and other factors. The actual interest rates borne by the Refunding Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Refunding Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Successor Agency. Resolution No. SA 2026-001 — Page 10 of 10