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HomeMy WebLinkAboutResolution No. 36 RESOLUTION NO. 6 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE AZUSA PUBLIC FINANCING AUTHORITY ESTABLISHING RULES AND REGULATIONS FOR ITS LOCAL OBLIGATION FINANCING PROGRAM AND PROVIDING OTHER MATTERS PROPERLY RELATING THERETO. RESOLVED, by the Azusa Public Financing Authority: WHEREAS, Pursuant to Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, the City of Azusa and the Redevelopment Agency of the City of Azusa have by Joint Exercise of Powers Agreement, dated as of January 2, 1990, created the Azusa Public Financing Authority (the "Authority") for the purposes, among other things, of assisting the City and the Agency in the financing of Public Capital Improvements, as defined below, pursuant to the Marks -Roos Local Bond Pooling Act of 1985, being Article 4 of the Act (commencing with Section 6584); and WHEREAS, the Authority has determined to implement a program (the "Program") for the financing of Public Capital Improvements for and on behalf of the City and the Agency by the purchase of local obligations of the City and Agency, or otherwise as authorized by the Agreement and the Bond Law, with the proceeds of the issuance of initially not to exceed $13,000,000 of local agency revenue bonds and of subsequent local agency revenue bonds in an undetermined amount (the 'Bonds"), the Bonds to be issued in series and sold and delivered from time to time as funds are required for the financing of such Public Capital Improvements; and WHEREAS, the Bond Law and the Agreement authorizes the Authority to establish rules and regulations for the Program and the Authority desires to implement such authorization in order to carry out the purposes of the Bond Law and the Agreement, namely (i) to avoid duplication of effort, inefficiencies in administration and excessive cost in the acquisition and financing of such Public Capital Improvements, (ii) to own Public Capital Improvements to be conveyed to the City or the Agency, as applicable, and (iii) to participate in financing arrangements for the purpose of acquisition by the City or the Agency of any such Public Capital Improvements; NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. Unless the context otherwise requires, the words and terms defined in this Article shall, for the purpose hereof, have the meanings herein specified. "Act" means Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California. "Agency" means the Redevelopment Agency of the City of Azusa, a public body, corporate and politic, duly organized and existing under the laws of the State of California. "Agreement" means the Joint Exercise of Powers Agreement, by and between the City and the Agency, dated as of January 2, 1990, creating the Authority for the purposes, among other things, of assisting the City and the Agency in the financing of Public Capital Improvements. "Assessment Bond Laws" means (a) the Municipal Improvement Act of 1913, constituting Division 12 (commencing with Section 10000) of the Streets and Highways Code of the State of California, (b) the Improvement Bond Act of 1915, constituting Division 10 (commencing with Section 8500) of the Streets and Highways Code of the State of California or (c) to any other assessment bond law of the State of California. "Assessment Bonds" means any bonds issued by a Local Agency under and pursuant to the Assessment Bond Laws which Assessment Bonds shall be "Limited Obligation" bonds as defined in the Assessment Bond Laws. "Authority" means the Azusa Public Financing Authority established pursuant to the Agreement. "Bond Law" means the Marks -Roos Local Bond Pooling Act of 1985, being Article 4 of the Act (commencing with Section 6584), as now or hereafter amended, or any other law hereafter legally available for use by the Authority in the authorization and issuance of bonds to finance the acquisition of Obligations and/or Public Capital Improvements. "Board" means the Board of Directors referred to in the Agreement, which is the governing body of the Authority. "Bonds" means the initial not to exceed $13,000,000 principal amount of Local Agency Revenue Bonds and the subsequent Local Agency Revenue Bonds in an undetermined principal amount to be issued by the Authority pursuant to Section 6590 or 6591 of the Bond Law for the purpose of financing Public Capital Improvements for or on behalf of the City or the Agency. "City" means the City of Azusa, a general law city and municipal corporation, organized and existng under the laws of the State of California. "Commitment Agreement" means an agreement between the Authority and a Local Agency pursuant to which the Authority commits to purchase Local Obligations from the Local Agency and the Local Agency commits to sell such Local Obligations to the Authority and which sets forth the matters required by Section 2.02 hereof. "Fitch" means Fitch Investors Service, Inc., its successors and assigns. "Independent Financial Consultant" means any financial consultant or firm of such financial consultants appointed by the Authority and approved by the Underwriter, and who, or each of whom (a) is judged by the Authority to have experience with respect to the financing of public capital improvement projects; (b) is in fact independent and not under the domination of the Authority; (c) does not have any substantial interest, direct or indirect, with the Authority; and (d) is not connected with the Authority as an officer or employee of the Authority, but who may be regularly retained to make reports to the Authority. "Local Agency" means the City of Azusa, the Azusa Redevelopment Agency of the City of Azusa, and any other entity which constitutes a local agency under and within the meaning of the Bond Law and which constitutes a "governmental unit" within the meaning of Section 142(b)(1)(a) of the 1986 Tax Code and whose obligations are permitted to be acquired by the Authority. "Local Obligation" means any obligation of or loan to the City or the Agency which the Authority is authorized to acquire or to make under the Agreement and the Bond Law. "Minimum Credit Requirement" means (a) with respect to any issue of Local Obligations constituting Assessment Bonds or Special Tax Bonds, the requirement that such Local Obligations be assigned a Minimum Rating or the requirement that the current market values of lands and parcels subject to the -2- 0 0 respective liens of such issue of Assessment Bonds or upon which a special tax is to be imposed for the security of such issue of Special Tax Bonds, as the case may be, as determined by an appraisal rendered by an MAI certified real estate appraiser selected by the Authority, is at least three times the sum of (i) the aggregate amount of all liens imposed on such land under the Assessment Bond Laws, plus (ii) the aggregate principal amount of all outstanding Special Tax Bonds; (b) with respect to Tax Allocation Bonds, the requirement that such Local Obligations be assigned a Minimum Rating or the requirement that Tax Revenues equal at least one hundred percent (100%) of maximum annual debt service on the Tax Allocation Bonds and (c) with respect to any other Local Obligations, the requirement that such Local Obligations be assigned a Minimum Rating. "Minimum Rating" means a rating of "BBB" or better by Moody's or Fitch or "BBB" or better by S&P, determined without regard to whether such rating is qualified by a provisional or conditional modifier. "Moody's" means Moody's Investors Service, Inc., its successors and assigns. "Program Expenses" means all costs and expenses of the Authority incurred in connection with the issuance and administration of the Bonds. "Proportionate Share" means, with respect to any issue of Local Obligations, the fraction obtained by dividing the aggregate principal amount of such issue of Local Obligations by the original aggregate principal amount of the Bonds, all as determined by the Underwriter or an Independent Financial Consultant. "Purchase Agreement" means an agreement by and among the Authority, the trustee for the Bonds and the City or the Agency in form and substance acceptable to the parties thereto, whereby the City or the Agency agrees either (a) to sell an issue of Local Obligations to the Authority and the Authority agrees to acquire such issue from the City or the Agency, or (b) the City or the Agency agrees to borrow proceeds of the Bonds and the Authority agrees to lend such proceeds to the City or the Agency, as applicable. "Public Capital Improvements" has the meaning given to such term in Section 585(8) of the Act, as in effect on the date hereof, and as hereinafter amended. "Resolution" means this Resolution No. 89-_ adopted by the Authority on January 2, 1990. "S&P" means Standard & Poor's Corporation, its successors and assigns. "Special Tax Bonds" means any bonds or other obligations issued by a Local Agency under and pursuant to the Mello -Roos Community Facilities Act of 1982, constituting Chapter 2.5 (commencing with Section 53311) of Article 1 of Division 2 of Title 5 of the Government Code of the State of California. "Tax Allocation Bonds" means any bonds or other obligations, payable in whole or in part from Tax Revenues, issued by the Agency under and pursuant to the Community Redevelopment Law, constituting Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of California. "Tax Revenues" means all taxes annually allocated within the limit contained in the applicable redevelopment plan and paid to the Agency with respect to such redevelopment plan pursuant to Article 6 of Chapter 6 (commencing with Section 33670) of the Redevelopment Law and Section 16 of Article XVI of the Constitution of the State and other applicable State laws, including that portion of such taxes (if any) otherwise required by Section 33334.2 of the Community Redevelopment Law to be deposited in a low and moderate income housing fund, but only to the extent necessary to repay that portion of the -3- proceeds of the Local Obligation (including costs) used to increase or improve the supply within or of benefit to the Project Area; but taxes required to be deposited into any such fund and excluding taxes (if any) otherwise 0 applicable reserves and financing of low and moderate income housing excluding all other amounts of such low and moderate income housing required to be paid to any taxing agency pursuant to an agreement entered into pursuant to Section 33401 of the Community Redevelopment Law. "Underwriter" means Chilton & O'Connor, Inc. as to the initial not to exceed $13,000,000 of Local Agency Revenue Bonds and any underwriter or group of underwriters appointed by the Authority with respect to a negotiated sale of the Bonds or a portion of the Bonds, or any underwriter or group of underwriters awarded the sale of the Bonds or a portion of the Bonds with respect to a competitive sale thereof, and who, or each of whom: (a) is judged by the Authority to have experience with respect to the financing of public capital improvement projects; (b) is, in fact, independent and not under the domination of the Authority; (c) does not have any substantial interest, direct or indirect, with the Authority; and (d) is not connected with the Authority as an officer or employee of the Authority, but who may be regularly retained to make reports to the Authority. ARTICLE II CERTAIN TERMS OF LOCAL OBLIGATIONS TO BE ACQUIRED BY THE PROGRAM AND COMMITMENT PROCEDURES Section 2.01. Terms of Local Obligations. All Local Obligations purchased by the Authority shall satisfy the following terms (unless any such term is specifically waived or modified by action of the Board). (a) Credit Requirements. An issue of Local Obligations may only be acquired with the proceeds of the Bonds if the Underwriter of the Bonds (or if the Underwriter is unable or unwilling to act, then an Independent Financial Consultant) does determine that such issue of Local Obligations satisfies the Minimum Credit Requirement. (b) Interest Rate Requirements. Subject to applicable federal tax laws, an issue of Local Obligations may only be acquired with the proceeds of the Bonds if the interest rate payable with respect to such issue of Local Obligations is not less than one percent (1%) greater, than the interest rate payable with respect to the Bonds, provided that the Authority may by resolution approve a lesser rate of interest with respect to an issue of Local Obligations based on the then applicable circumstances, provided further that, any such lesser rate of interest is first determined by the Underwriter of the Bonds (or if the Underwriter is unable or unwilling to act, then an Independent Financial Consultant) to not adversely impact the ability of the Authority to repay the Bonds. (c) Payment of Program Expenses. The City or Agency, as applicable, shall be required under the Purchase Agreement relating to any issue of Local Obligations to pay, from the proceeds of the sale of such Local Obligations or from any other source of legally available funds, amounts which are sufficient to pay when due all Program Expenses allocable to such issue of Local Obligations. (d) Application of Proceeds; Additional Terms and Provisions. The documents pursuant to which an issue of Local Obligations is issued shall require that the proceeds thereof shall be expended for such purposes as the City or Agency may deem necessary or desirable and as may be authorized under the Bond Law, including payment of the costs and expenses of issuing such Local Obligations, any required debt service reserve fund deposit and the Program Expenses allocable to such issue of Local Obligations. The proceeds -4- 0 0 of an issue of Local Obligations may be held and administered by or on behalf of the City or Agency, as may be specified in such documents. Such documents may contain such additional terms and provisions with respect to such issue of Local Obligations as the Authority, the City or Agency, as applicable, may deem necessary or advisable and not inconsistent with the provisions of this Resolution or the Bond Law. Section 2.02. Commitments to Sell Local Obligations. Prior to the delivery of any series of the Bonds, all Local Obligations to be acquired by the Authority with the proceeds of such series of Bonds shall have been committed to be sold to the Authority pursuant to a Commitment Agreement, which shall meet all of the following requirements: 1.. The Local Agency shall have irrevocably committed to sell the Local Obligations to the Authority; 2. The Local Agency will have agreed to issue no other bonds or obligations to finance the Public Capital Improvements to be financed with the proceeds of such Local Obligations, unless and until the proceeds of such Public Capital Improvements have been expended or committed for expenditure for such Local Obligations or unless and until there is an agreement between the Authority and the Local Agency for substitution of other Public Capital Improvements to be financed with such Local Obligations; 3. The Local Agency confirms that there are no substantial conditions precedent to the issuance by the Local Agency and to the sale and delivery to the Authority of such Local Obligations; 4. The Local Agency shall specify a date for sale of the Local Obligations to the Authority and shall confirm that the Authority reasonably expects that such sale will occur on such date; 5. The Local Agency shall confirm the expected sufficiency of revenues to repay in a timely manner the principal of and interest on the Local Obligations; 6.. The Local Agency shall confirm that, in entering into the Commitment Agreement, it has not taken into account either the potential or subsequent interest changes in the municipal bond market or the potential or subsequent changes in the federal tax laws, and shall set forth its business reasons for so entering into the Commitment Agreement; and 7. The Local Agency shall cause to be attached to the Commitment Agreement the acquisition and construction disbursement schedule that it reasonably expects to be used with respect to the Financing of the Public Capital Improvements with the proceeds of the Local Obligations. ARTICLE III APPLICATION OF AUTHORITY REVENUES Section 3.01. Application of Authority Revenues. It is a fundamental purpose of the Authority to assist the City and the Agency to expand, upgrade and otherwise improve public capital facilities necessary to support the rehabilitation and construction of residential and economic development. Therefore, all surplus revenues generated by the Authority, including, without limitation, revenues generated by the difference in interest rates between the Authority's Bonds and Local Obligations, as provided for in Article II hereof, shall be used by the -5- Authority on behalf of the City and the Agency in one or more of the following ways: (a) to finance, in whole or in part, Public Capital Improvements for or of benefit to the City and the Agency; (b) to assist the City or the Agency in the financing, in whole or in part, engineering, architectural, planning, development and other costs related to specific Public Capital Improvements; and (c) to subsidize, in whole or in part, payments of principal and interest on obligations incurred by the City and the Agency to finance Public Capital Improvements, whether or not such Public Capital Improvements are financed with the proceeds of the Bonds. ARTICLE IV ADOPTION, WAIVER, AMENDMENT OF RULES AND REGULATIONS Section 401. Authority for Adoption of Rules and Regulations. This Resolution setting forth the foregoing rules and regulations for the Authority's Program is adopted pursuant to the authority granted to the Authority by the Agreement and the Bond Law. Section 4.02. Waiver of any Rule or Regulation. The Authority by resolution may waive or vary the application of particular provisions of the foregoing rules and regulations, when determined by the Authority to be. necessary or appropriate. Section 4.03. Amendment to Rules and Regulations. The foregoing rules and regulations may be amended or supplemented by the Authority by resolution at such time and in such manner as it may determine, to the extent that any such amendment or supplement is not inconsistent with the Agreement, the Bond Law or with other applicable provisions of law. Section 4.04. Severability. If any clause, sentence, paragraph, section or part of the foregoing rules and regulations shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall- not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered. Section 4.05. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 2nd day of Tanvary , 1990. ATTEST: cretary AZUSA PUBLIC FINANCING AUTHORITY By : ,1?30 Chairman -6- P. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Azusa Public Financing Authority at a regular meeting thereof, held on the 2ndday of January , 1990, by the following vote of the Authority: AYES: DIRECTORS AVUA, STUVIUCH, NARANJO, LATTA:, MOSES NOES: DIRECTORS NONE ABSENT: DIRECTORS NONE -7-