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HomeMy WebLinkAboutResolution No. 11-C44RESOLUTION NO. 11-044 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA AUTHORIZING THE ISSUANCE OF SPECIAL TAX REFUNDING BONDS FOR CITY OF AZUSA COMMUNITY FACILITIES DISTRICT NO. 2002-1 IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $8,500,000 AND APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City Council of the City of Azusa (the ("City") has heretofore undertaken proceedings and issued bonds in the aggregate principal amount of $8,980,000 (the "2002 Bonds") on behalf of the City of Azusa Community Facilities District No. 2002-1 (Mountain Cove), County of Los Angeles, State of California (the "Community Facilities District") pursuant to the terms and conditions of the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act'); and WHEREAS, the City Council (the "City Council') has been advised that due to the interest rates at which municipal bonds are currently being sold it may be possible to issue bonds of the District for the purpose of refunding the 2002 Bonds at interest rates that will be significantly lower than the interest rates on the 2002 Bonds and to thereby provide savings to the property owners in the District through reduced special taxes that will be levied on parcels of taxable property in the District to pay the principal of and interest on the 2002 Bonds (the bonds that may be issued for the District to defease and refund the 2002 Bonds are hereinafter referred to as the "Refunding Bonds."); and WHEREAS, the Refunding Bonds of the District shall be designated "Community Facilities District No. 2002-1 (Mountain Cove) Special Tax Refunding Bonds, Series 2011; and WHEREAS, the aggregate principal amount of the Refunding Bonds that may be issued for the District shall not exceed $8,500,000; and WHEREAS, payment of the principal of and interest on the 2002 Bonds are secured by special taxes that are levied on parcels of taxable property in the District (the "Special Taxes"); and WHEREAS, payment of the principal of and interest on the Refunding Bonds that may be issued by the District will be secured by such 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 the bonds will be at least three (3) times the principal amount of the bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Mello -Roos Community Facilities Act of 1982 (Section 53311, et seq., of the California Government Code) or a special assessment levied on property within the District; and 45635.01423%15753 13.3 WHEREAS, the total assessed value of taxable property in the District, as provided by Special District Financing & Administration, LLC, the special tax consultant to the City, based on a review of the Los Angeles County Assessor's Assessment Roll for fiscal year 2010-11 is $178,680,875; and WHEREAS, upon the issuance of the Refunding Bonds of the District and the deposit of the appropriate portion of the proceeds of the sale of the Refunding Bonds in the escrow fund to be established to accomplish the defeasance and refunding of the 2002 Bonds, such 2002 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 2002 Bonds; and WHEREAS, if the Refunding Bonds of the District are issued and sold in an aggregate principal amount that does not exceed the aggregate principal amount authorized herein, then 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 such Refunding Bonds; and WHEREAS, there will be no other bonds outstanding, other than the Refunding Bonds, that are secured by a special tax or a special assessment levied on property within the District; and WHEREAS, the City Council has determined in accordance with Section 53360.4 of the California Government Code that a negotiated sale of the Refunding Bonds with Sterne,. Agee and Leach, Inc., or its successor in interest (the "Underwriter") in accordance with the terms and conditions of the Bond Purchase Agreement (the "Bond Purchase Agreement") approved as to the form by the City Council will result in a lower overall cost to the Community Facilities District than a public sale; and WHEREAS, the City on behalf of the Community Facilities District, has caused to be prepared a Preliminary Official Statement (the "Preliminary Official Statement") containing certain information with respect to the Community Facilities District. NOW, THEREFORE, the City Council of the City of Azusa resolves as follows: Section 1. Findings. The City Council finds as follows: (1) each of the above recitals is true and correct; (2) that the sale of the Refunding Bonds at a private sale will result in a lower overall cost to the Community Facilities District; and (3) based upon the report of assessed values by Special District Financing & Administration, LLC; that the value of the real property subject to the Special Tax and the improvements thereon is more than three times the aggregate principal amount of Bonds; and (4) upon the issuance of the Refunding Bonds of the District there will be no other bonds, other than such Refunding Bonds, that will be secured by a special tax or a special assessment levied on property within the District; and Section 2. Approval of Issuance of Refunding Bonds and Fiscal Agent Agreement. The issuance of the Refunding Bonds in a principal amount of not to exceed $8,500,000 is hereby authorized pursuant to the Act. The Refunding Bonds shall mature on the dates, pay interest at the rates and shall be substantially in the form set forth in the Fiscal Agent Agreement presented at this meeting. All other provisions of the Refunding Bonds shall be 45635.01423\1575313. 32 governed by the terms and conditions set forth in such Fiscal Agent Agreement, which form of agreement is hereby approved and the Fiscal Agent Agreement, and the Mayor, City Manager or Assistant City Manager are authorized to execute and deliver said Fiscal Agent Agreement for and in the name of the City on behalf of the Community Facilities District with such additions thereto and changes therein as are recommended or approved by Bond Counsel to the Community Facilities District and the officers executing the same, with such approval to be conclusively evidenced by the execution and delivery of the Fiscal Agent Agreement. The last maturity date of the Refunding Bonds shall not be later than the last maturity date of any of the 2002 Bonds. Pursuant to Section 53363.8 of the California Government Code, the City Council determines that the Designated Costs of Issuing the Refunding Bonds shall include (i) all expenses incident to the calling, retiring, or paying of the outstanding 2002 Bond, and incident to the issuance of the Refunding Bonds, including the charges of any agent in connection with the issuance of the Refunding Bonds or in connection with the redemption or retirement of the outstanding 2002 Bonds, (ii) the interest on the 2002 Bonds to the date upon which each of such 2002 Bonds will be paid pursuant to the fiscal agent agreement authorizing the issuance of such 2002 Bonds, and (iii) any premium necessary in calling or retiring any of the outstanding 2002 Bonds. Section 3. Execution of Bonds. The Refunding Bonds shall be executed on behalf of the Community Facilities District by the manual or facsimile signature of the Mayor or the City Manager and attested with the manual or facsimile signature of the City Clerk. Section 4. Appointing of Fiscal Agent. Wells Fargo, N.A. is hereby appointed to act as Fiscal Agent for the Bonds and to assume the duties and obligations of Fiscal Agent under the Fiscal Agent Agreement. Payment of principal of and interest on the Refunding Bonds shall be made at the principal offices of the Fiscal Agent. Section 5. Approval of Escrow Agreement. The form of the Escrow Agreement which provides for (i) the defeasance and redemption of the 2002 Bonds, (ii) the creation and administration by the Escrow Agent of the Escrow Fund for the benefit of the owners of the 2002 Bonds, and (iii) the performance of other duties by the Escrow Agent, is approved in the form made available to the City Council at the meeting at which this resolution is adopted, and the Mayor, the City Manager, the Assistant City Manager, or the Chief Financial Officer/Administrative Services Director is authorized to execute and deliver, on behalf of the City and District, the Escrow Agreement. 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 Refunding Bonds and other amounts to be deposited in the Escrow Fund with respect to the 2002 Bonds, and earnings from the investment thereof, shall be in an amount sufficient to pay the principal of and interest on such outstanding bonds prior to and on September 1, 2011 (or the next appropriate redemption date) and to pay the principal and redemption premium due on the 2002 Bonds on such date, and the Designated Costs of Issuing the Refunding Bonds, as certified by a certified public accountant licensed to practice in the State of California. 45635.01423\1575313. 33 Section 6. Appointment of Escrow Agent. Wells Fargo, N.A. is appointed as Escrow Agent pursuant to the Escrow Agreements to take any and all action provided therein to be taken by the Escrow Agent. Section 7. Approval of Bond Purchase Agreement. The form of Bond Purchase Agreement presented at this meeting and the sale of the Refunding Bonds pursuant thereto upon the terns and conditions set forth therein is hereby approved and, subject to the provisions of Section 8 hereof, the Mayor, City Manager, or Chief Financial Officer/Administrative Services Director is authorized to execute and deliver the Bond Purchase Agreement in the name of and on behalf of the Community Facilities District and the City in said form with such changes therein as the officer executing the same may approve and such matters as are authorized by Section 8 hereof, such approval to be conclusively evidenced by the execution and delivery thereof. Section 8. Establishment of Final Terms of the Sale of the Refunding Bonds. The City Manager, Assistant City Manager or Chief Financial Officer/Administrative Services Director, upon such advice of staff as they may deem necessary, is hereby authorized and directed to act onibehalf of the City to establish and determine (i) the final principal amount of the Refunding Bonds, which amount shall not exceed $8,500,000 including Refunding Bonds which may be issued at an original issue discount, (ii) the final amounts of the various maturities and sinking fund payments of the Refunding Bonds the final maturity of such Refunding Bonds to be no later than the final maturity of the 2002 Bonds, (iii) the final interest rate on the Refunding Bonds, which rate shall not exceed six and one-half percent (6.50%) per annum for any maturity of the Refunding Bonds, and (iv) the Underwriter's discount for the purchase of the Refunding Bonds, which shall not exceed .95% of the aggregate principal amount of the Refunding Bonds. Notwithstanding the preceding provisions of this section or any other section of this resolution, Refunding Bonds shall not be issued and sold unless (a) the interest rates which will be contained in the Bond Purchase Agreement with respect to all maturities of the Refunding Bonds will result in a net present value savings in total debt service with respect to the outstanding bonds of such District of at least two and one-half percent (2.50%), or a reduction in the amount of the Special Tax that will be levied in each fiscal year, excluding the return of amounts held in the Reserve Fund, on all parcels in the District of at least eight percent (8.00%), and (b) the total net interest cost to maturity of such Refunding Bonds, plus the principal amount of such Refunding Bonds will be less than the total net interest cost to maturity with respect to the 2002 Bonds, plus the principal amount of such outstanding bonds. Section 9. Approval of Preliminary Official Statement, Preparation of Final Official Statement. The Preliminary Official Statement is approved, and the City Manager or Assistant City Manager, is authorized to consent to and assist in the preparation of such modifications thereto as may be specified by Disclosure Counsel. The City Manager or Chief Financial Officer/Administrative Services Director, are authorized to determine, with the assistance of Bond Counsel, when the Preliminary Official Statement is to be deemed final within the meaning of Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 and to deliver a certificate to that effect to the Underwriter. The City Manager or Chief Financial Officer/Administrative Services Director, may authorize 4563 5.01423k l 575313. 34 the Underwriter to distribute the Preliminary Official Statement as approved hereby, or as modified with the consent of the City Manager or Assistant City Manager, to prospective purchasers of the Refunding Bonds. The City Manager or Chief Financial Officer/Administrative Services Director, is authorized to participate in the preparation of the Final Official Statement, based on the Preliminary Official Statement, and such modifications thereto as may be agreed to by Disclosure Counsel and the Underwriter. The City Manager or Chief Financial Officer/Administrative Services Director, is authorized to sign the Final Official Statement on behalf of the' City and the Community Facilities District. Section 10. Findings Regarding the Levy and Rates of Special Taxes. The City Council finds that the Community Facilities District will covenant in the Fiscal Agent Agreement, for the benefit of the owners of the Refunding Bonds, that to the extent it is legally permitted to do so (a) it will levy the Special Taxes for the payment of the Administrative Expenses (as defined therein) which are expected to be incurred in each fiscal year, and (b) it will not initiate proceedings under the Mello -Roos Community Facilities Act of 1982 to reduce the maximum Special Tax Rates (the "Maximum Rates") on property below the amounts which are necessary to pay such Administrative Expenses and to provide Special Tax Revenues (as defined therein) in an amount equal to one hundred ten percent (110%) of Maximum Annual Debt Service (as defined therein) on the outstanding Bonds. Section 11. Approval of Continuing Disclosure Certificate. The Continuing Disclosure Certificate is approved in the form submitted to the City Council at the meeting at which this resolution is adopted, and the City Manager or Chief Financial Officer/Administrative Services Director is authorized to execute and deliver said certificate on behalf of the Community Facilities District. Section 12. Covenants. The covenants set forth in the Fiscal Agent Agreement to be executed in accordance with Section 10 above shall be deemed to be covenants of the City in its capacity of the legislative body of the Community Facilities District. Section 13. Engagement of Professional Services. The City Council hereby approves the engagement of the firm Best Best & Krieger LLP, as bond counsel and disclosure counsel, and the firm of Urban Futures, as financial advisor to the City in connection with the issuance and sale of the Refunding Bonds. Section 14. Other Acts. All actions heretofore taken by officers and agents of the City and the Community Facilities District with respect to the sale and issuance of Bonds are hereby approved, confirmed and ratified, and the City Manager, Assistant City Manager, the Chief Financial Officer/Administrative Services Director and the City Clerk and other appropriate officials of the City and the Community Facilities District are hereby authorized and directed to take any actions and execute and deliver any and all documents as are necessary to accomplish the issuance, sale and delivery of the Bonds in accordance with the provisions of this Resolution. 45635.01423\1575313. 35 I PASSED, APPROVED and adopted by the City Council of the City Council of the City of Azusa at a regular meeting thereof held June 20, 2011, and approved by the following vote: Mayor ATTEST: City Clerk I HEREBY CERTIFFY that the foregoing Resolution No. 11-C44 was duly adopted at a regular meeting of said City Council on the 20th day of June 2011, by the following vote of the Council: AYES: COUNCILMEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA NOES: COUNCILMEMBERS: NONE ABSENT: -'COUNCILMEMBERS: NONE Vera Mendoza, City Clerk 45635.01423\1575313. 36