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HomeMy WebLinkAbout14-005 - Resolutions RESOLUTION NO. 14-005 RESOLUTION OF THE CITY COUNCIL OF CITY OF RANCHO CUCAMONGA AUTHORIZING THE ISSUANCE OF THE COMMUNITY FACILITIES DISTRICT NO. 2004-01 (RANCHO ETIWANDA ESTATES) SPECIAL TAX REFUNDING BONDS, SERIES 2014 IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $37,000,000, AND THE DEFEASANCE AND REFUNDING OF PRIOR SPECIAL TAX BONDS OF SUCH DISTRICT APPROVING THE FORM OF A FISCAL AGENT AGREEMENT AND AUTHORIZING THE DIRECT SALE OF THE BONDS TO WAB INVESTMENTS, INC. AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS WHEREAS, the City of Rancho Cucamonga Community Facilities District No. 2004-01 (Rancho Etiwanda Estates) (the "District') was established on September 15, 2004 pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the California Government Code) (the "Act"), by adoption by the City Council (the "City Council") of City of Rancho Cucamonga (the "City") of Resolution No. 04-295; and WHEREAS, under the provisions of the Act, on September 15, 2004, the City Council also adopted Resolution No. 04-296 which resolution, among other matters, expressed the determination of the City Council of the necessity to issue special tax bonds in the maximum aggregate principal amount of$45,000,000 for the District; WHEREAS, on September 15, 2004, consolidated special elections were held within the District and there was submitted to the qualified voters of the District, among other propositions, the proposition of whether a bonded indebtedness in an aggregate principal amount not to exceed $45,000,000 should be incurred by and for the District for the purpose of providing public facilities for the benefit of the District, and more than two-thirds of the votes cast in such consolidated special elections were cast in favor of incurring such bonded indebtedness, and the District was therefore authorized to issue bonds in an aggregate principal amount not to exceed $45,000,000 for the purposes set forth in said proposition; and WHEREAS, on May 7, 2006, the City Council adopted Resolution No. 06-185 authorizing the issuance and sale of bonds of the District pursuant to the Fiscal Agent Agreement, dated as of May 1, 2006 (the "Prior Fiscal Agent Agreement'), by and between the City, for and on behalf of the District, and Wells Fargo Bank, National Association, as fiscal agent (the "Prior Fiscal Agent'), designated the "City of Rancho Cucamonga Community Facilities District No. 2004-01 (Rancho Etiwanda Estates) 2006 Special Tax Bonds (the 'Prior Special Tax Bonds"), for the purpose of funding the acquisition, rehabilitation and construction of certain public improvements for the benefit of the District; and WHEREAS, on June 13, 2006, the Prior Special Tax Bonds were issued in the aggregate principal amount of$43,545,000; and WHEREAS, the Prior Special Tax Bonds are outstanding in the aggregate principal amount of$36,230,000; and WHEREAS, as a result of a combination of more favorable conditions in the municipal bond market and the level of development and increase in value of the properties within the District, the City Council has determined that it is necessary that bonds of the District Resolution No. 14-005 - Page 1 of 8 to be designated "City of Rancho Cucamonga Community Facilities District No. 2004-01 Special Tax Refunding Bonds, Series 2014" be issued in an aggregate principal amount that will not exceed $37,000,000 (the 'Bonds") for the purpose of defeasing and refunding the Prior Special Tax Bonds in order to provide debt service savings and reduce the levy of the special taxes within the District; and WHEREAS, the Bonds shall be issued pursuant to the terms and provisions of the Act and the statement of goals and policies of the City Council regarding the establishment of community facilities districts, as amended to date (the "Goals and Policies"); and WHEREAS, payment of the principal of and interest on the Bonds will be secured by special taxes to be levied on parcels of taxable property in the District (the "Special Taxes"); and WHEREAS, pursuant to Section 53345.8 of the California Government Code, the City Council, as the legislative body of the District, may sell bonds of the District only if it determines prior to the award of the sale of such bonds that the value of the real property that would be subject to the special tax to pay debt service on such bonds will be at least three (3) times the principal amount of such bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District; and WHEREAS, David Taussig & Associates, the special tax consultant to the City, has determined, based on a review of the San Bernardino County Assessor's Assessment Roll for fiscal year 2013-2014, that the total assessed value of taxable property in the District is $279,263,038; and WHEREAS, upon the issuance of the Bonds and the deposit of the appropriate portion of the proceeds of the sale of the Bonds in the escrow fund to be established to accomplish the defeasance and refunding of the Prior Special Tax Bonds, the Prior Special Tax Bonds will be defeased and the property in the District will no longer be subject to the levy of special taxes to pay debt service on the Prior Special Tax Bonds; and WHEREAS, if the Bonds are issued and sold in an aggregate principal amount that does not exceed $37,000,000, the value of the parcels of real property within the District that will be subject to the levy of the Special Taxes will be more than three (3) times the principal amount of the Bonds and the principal amount of all other bonds outstanding, if any, that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District; and WHEREAS, there will be no other bonds outstanding, other than the Bonds, that are secured by a special tax or a special assessment levied on property within the District; and WHEREAS, the City financing team is recommending the direct sale of the Bonds to WAB Investments, Inc. (the "Purchaser") pursuant to the preliminary terms set forth in the letter dated December 13, 2013 (the "Term Letter") from Western Alliance Public Finance ("Western Alliance") and the Purchaser, as an affiliate of Western Alliance, subject to the terms and conditions set forth in this Resolution; and WHEREAS, there has also been presented to the City Council a form of Fiscal Agent Agreement with respect to the Bonds (the "Fiscal Agent Agreement") to be executed and Resolution No. 14-005 - Page 2 of 8 delivered by the City, acting for and on 'behalf of the District, and Wells Fargo Bank, National Association, as Fiscal Agent, whereby the Fiscal Agent will authenticate and deliver the Bonds and perform certain other duties; and WHEREAS, there has also been presented to the City Council a form of Escrow Deposit and Trust Agreement with respect to the Prior Special Tax Bonds (the "Escrow Agreement") to be executed and delivered by the City, the District and Wells Fargo Bank, National Association, as Escrow Bank and Prior Fiscal Agent, whereby the Escrow Bank will receive a portion of the proceeds of the sale of the Bonds and certain funds related to the Prior Special Tax Bonds that will be deposited in an escrow fund to provide for the defeasance and redemption of the Prior Special Tax Bonds, and will perform certain other duties; and WHEREAS, the City Council has considered the forms of the Fiscal Agent Agreement and the Escrow Agreement, and has determined that it is in the best interest of the owners of property in and the residents of the District that the City Council authorize the issuance and sale of the Bonds and the execution and delivery of said agreements, subject to the conditions hereinafter contained; NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the City Council of the City of Rancho Cucamonga, acting for and on behalf of the City and in its capacity as the legislative body of the District, as follows: Section 1. Findings. The City Council finds (a) that the preceding recitals are true and correct, (b) that the sale of the Bonds at private sale, without advertising for bids, will result in a lower overall cost to the District, (c) that if the Bonds are issued and sold in an aggregate principal amount that does not exceed $37,000,000, the value of the parcels of real property within the District that will be subject to the levy of the Special Taxes to pay the principal of and interest on the Bonds will be more than three (3) times the aggregate principal amount of the Bonds, and (d) that upon the issuance of the Bonds there will be no other bonds, other than the Bonds, that will be secured by a special tax or a special assessment levied on property within the District. In furtherance of the issuance of the Bonds, the City Council hereby makes the following further findings and determinations: (i) that it is prudent in the management of the fiscal affairs of the City, the City Council and the District to issue the Bonds for the purpose, inter alia, of refunding the Prior Special Tax Bonds on an current basis, (ii) that the total net interest cost to maturity on the portion of the Bonds being issued to refund the Prior Special Tax Bonds plus the principal amount of the portion of the Bonds being issued to refund the Prior Special Tax Bonds will not exceed the total net interest cost to maturity on the Prior Special Tax Bonds plus the principal amount of the Prior Special Tax Bonds, and (iii) that the issuance of the Bonds is in compliance with the City's Goals and Policies. For purposes of Section 53363.2 of the Act, the City Council hereby further finds and determines: (i) that it is expected that the purchase of the Bonds will occur on or before February 15, 2014, (ii) that the date, denomination, maturity dates, places of payment, terms of redemption and form of the Bonds shall be as set forth in the Fiscal Agent Agreement, as executed, (iii) that the maximum true interest cost to be paid on the Bonds shall not five percent (5.00%) with the actual interest rate or rates to be set forth in the Fiscal Agent Agreement as executed; (iv) the place of payment for the Prior Special Tax Bonds shall be as set forth in the Prior Fiscal Agent Agreement; and (v) the designated costs of issuing the Bonds shall be as described in Sections 53363.8(a) and 53363.8(b) of the Act, and as otherwise described in the Resolution No. 14-005 - Page 3 of 8 Fiscal Agent Agreement and in the closing certificates for the Bonds, including Bond Counsel, placement agent, Special Tax Consultant and Financial Advisor (defined below) fees and expenses, escrow verification costs, initial fiscal agent fees, and costs of City staff incurred in connection with the sale and issuance of the Bonds. Section 2. Authorization of the Issuance of the Bonds. The City Council authorizes the issuance and sale of the Bonds in an aggregate principal amount that shall not exceed $37,000,000, and the City Manager and the Assistant City Manager are authorized and directed to take all steps and actions which are necessary to accomplish the issuance, sale and delivery of the Bonds pursuant to the authorization given by and the conditions specified in this resolution. The Mayor and the City Clerk of the City are authorized to execute the Bonds for and on behalf of the City and the District by their manual or facsimile signatures. The Bonds shall be dated as of their date of delivery pursuant to the Fiscal Agent Agreement. The last maturity date of the Bonds shall not be later than the last maturity date of any of the Prior Special Tax Bonds. Each of the Mayor (and in the absence of the Mayor, the Mayor Pro Tem) and the City Manager (and in the absence of the City Manager) (each, an "Authorized Representative"), acting singly and on behalf of the City or the District, as applicable, is hereby authorized and directed to execute and deliver the final form of the various agreements described in this Resolution, with such additions thereto or changes therein as such Authorized Representative may deem necessary and advisable; provided, however, that no additions or changes shall authorize an aggregate principal amount of the Bonds in excess of the amount specified in the preceding paragraph. The approval of such additions or changes shall be conclusively evidenced by the execution and delivery of such agreements by an Authorized Representative, following consultation with and review by Best Best & Krieger LLP, as bond counsel ("Bond Counsel'). Section 3. Approval of Fiscal Agent Agreement. The Fiscal Agent Agreement which provides generally for(i) the authentication and delivery by the Fiscal Agent of the Bonds, (ii) the establishment and administration by the Fiscal Agent of certain funds and accounts for the benefit of the City and the owners of the Bonds, (iii) the payment by the Fiscal Agent of the principal of and interest on the Bonds from the Special Tax Revenues (as defined therein), (iv) the performance of other duties by the Fiscal Agent and (v) the documents to be delivered upon the delivery of the Bonds to the Purchaser, is approved in substantially the form submitted to the City Council at the meeting at which this resolution is adopted, subject only to such changes as are authorized pursuant to Section 2 of this resolution. Section 4. Approval of Escrow Agreement. The Escrow Agreement which provides for (i) the defeasance and redemption of the Prior Special Tax Bonds, (ii) the creation and administration by the Escrow Bank of the Escrow Fund for the benefit of the owners of the Prior Special Tax Bonds, and (iii) the performance of other duties by the Escrow Bank, is approved substantially in the form presented to the City Council at the meeting at which this resolution is adopted, subject only to such changes as are authorized pursuant to Section 2 of this resolution. Notwithstanding the preceding provisions of this section, as required by Section 53363.9 of the California Government Code, the amount of the proceeds of the sale of the Bonds and other amounts to be deposited in the Escrow Fund, shall be in an amount sufficient to pay the principal of and interest on the Prior Special Tax Bonds on March 1, 2014 (or such other may redemption date as be determined in accordance with the terms of this resolution) P Y Resolution No. 14-005 - Page 4 of 8 and to pay the principal and redemption premium due on the Prior Special Tax Bonds on such date, and the designated costs of issuing the Bonds. Section 5. Issuance of Bonds. The City Council approves and authorizes the issuance and direct sale of the Bonds to the Purchaser pursuant to the Fiscal Agent Agreement and the Term Letter, together with any changes therein or additions thereto which are deemed advisable by the City Manager, the Assistant City Manager, the Deputy City Manager/Administrative Services or the Finance Director, upon consultation with Bond Counsel. An Authorized Representative is authorized and directed to execute and deliver the final form of the Fiscal Agent Agreement on behalf of the City and the District upon the submission of an offer by the Purchaser to purchase the Bonds, which offer is acceptable to the City Manager, the Assistant City Manager, the Deputy City Manager/Administrative Services or the Finance Director and is consistent with the requirements of this resolution; provided that the interest rate on any maturity of the Bonds shall not exceed five percent (5.00%) per annum; and the last maturity of date of the Bonds shall not be later than the last maturity date of the Prior Special Tax Bonds. No Authorized Representative shall approve the offer to purchase the Bonds, however, unless the total net interest cost to maturity of the Bonds plus the principal amount of the Bonds will be less than the total net interest cost to maturity with respect to the Prior Special Tax Bonds, plus the principal amounts of the Prior Special Tax Bonds, and before approving such offer, the Authorized Representative shall receive verbal verification from Fieldman Rolapp & Associates, as the financial advisor to the City and the District (the "Financial Advisor"), that such a total net interest cost and principal amount with respect to the Bonds will be achieved. Section 6. Reserve Fund and Other Funds Related to the Prior Special Tax Bonds. The City Manager, the Assistant City Manager, the Deputy City Manager/Administrative Services or the Finance Director is authorized to direct the Prior Fiscal Agent, and said fiscal agent is authorized, to transfer the amount on deposit in the funds and accounts that are held by the Prior Fiscal Agent pursuant to the Prior Fiscal Agent Agreement, including project fund and the reserve fund established for the Prior Special Tax Bonds, in such amounts as shall be specified in written instructions, to be executed by such officer providing direction, to the Fiscal Agent for deposit in the Project Fund to be established pursuant to the Fiscal Agent Agreement and to the Escrow Bank for deposit in the Escrow Fund to be used to defease and redeem the Prior Special Tax Bonds. Section 7. Notice of Redemption. The City Manager, the Assistant City Manager, the Deputy City Manager/Administrative Services or the Finance Director is authorized and directed to cause to be provided for mailing, and the Prior Fiscal Agent, is authorized to mail notice, of the redemption of Prior Special Tax Bonds to the registered owners thereof as required by Section 53365 of the California Government Code and the Prior Fiscal Agent Agreement. Pursuant to said Section 53365, the City Manager, the Assistant City Manager, the Deputy City Manager/Administrative Services or the Finance Director shall also provide for the mailing of, and the Prior Fiscal Agent shall mail notice of the redemption of the Prior Special Tax Bonds to the investment banking firm which was the original purchaser and underwriter of the Prior Special Tax Bonds. Section 8. Bond Issuance Services. The following entities are hereby appointed to provide professional services pertaining to the issuance of the Bonds: Wells Fargo Bank, National Association is appointed as Fiscal Agent pursuant to the Fiscal Agent Agreement and as Escrow Bank pursuant to the Escrow Agreement; Best Best & Krieger LLP is Resolution No. 14-005 - Page 5 of 8 appointed as Bond Counsel; Fieldman, Rolapp & Associates is appointed as Financial Advisor; Stifel, Nicolaus & Company, Incorporated, is appointed as Placement Agent; David Taussig & Associates is appointed as Special Tax Consultant and Causey, Demgen & Moore Inc., certified public accountants, is appointed as Verification Agent. Section 9. Action. All actions heretofore taken by the City Manager, the Assistant City Manager, the Deputy City Manager/Administrative Services, the Finance Director and the other officers and agents of the City, acting for and on behalf of the City or the District, with respect to the establishment of the District, and the sale and issuance of the Bonds are hereby approved, confirmed, and ratified, and the proper officers of the City, acting for and on behalf of the City or the District, as applicable, are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds in accordance with the Act, this Resolution, the Fiscal Agent Agreement, the Escrow Agreement, and any certificate, agreement, contract, and other document described in the documents herein approved. Section 10. Conditions of Approval. The approvals, authorization and direction given by this resolution are conditioned upon the satisfaction of the requirements of Section 7 hereof with respect to the issuance and sale of the Bonds. The officers of the City designated above shall not take any action with respect to the execution and delivery of the Fiscal Agent Agreement and the Escrow Agreement, or the issuance, sale and delivery of the Bonds unless and until such conditions are satisfied; provided, however, that upon satisfaction of such conditions, this resolution shall be fully effective and shall be carried out by such officers without further approval or action of the City Council. The approvals, authorization and direction provided by this resolution shall continue, subject to the satisfaction of such conditions, until December 31, 2014, and the Bonds may be sold, and the Bonds, the Fiscal Agent Agreement and the Escrow Agreement, may be dated, entered into, executed and delivered or distributed, as appropriate, on any date selected by the City Manager, the Assistant City Manager, the Deputy City Manager/Administrative Services or the Finance Director and the Purchaser prior to said date. Resolution No. 14-005 - Page 6 of 8 Section 13. Effective Date. This resolution shall take effect upon adoption and shall remain in effect until December 31, 2014, or if the Bonds are issued prior to said date, until all of the Bonds are paid at or redeemed prior to maturity. Resolution No. 14-005 - Page 7 of 8 PASSED, APPROVED, AND ADOPTED this 15th day of January 2014. AYES: Alexander, Michael, Spagnolo, Steinorth, Williams NOES: None ABSENT: None ABSTAINED: None t L. Dennis ichael, Mayor ATTEST: 2! 0 a ice C. Reynolds, City C erk I, JANICE C. REYNOLDS, CITY CLERK of the City of Rancho Cucamonga, California, do hereby certify that the foregoing Resolution was duly passed, approved and adopted by the City Council of the City of Rancho Cucamonga, California, at a Regular Meeting of said City Council held on the 15th day of January 2014. Executed this lVh day of January 2014, at Rancho Cucamonga, California. �/ILCC.<, � A�icfN�d9 ice C. Reynolds, City Clerk Resolution No. 14-005 - Page 8 of 8