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HomeMy WebLinkAboutResolution No. 2019-C17RESOLUTION NO. 2019-C17 RESOLUTION OF THE CITY COUNCIL OF CITY OF AZUSA AUTHORIZING THE ISSUANCE OF THE COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) 2019 SPECIAL TAX REFUNDING BONDS (IMPROVEMENT AREA NO. 1) IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $33,000,000, AND THE DEFEASANCE AND REFUNDING OF PRIOR SPECIAL TAX BONDS OF SUCH DISTRICT; APPROVING THE FORM OF A FISCAL AGENT AGREEMENT AND AN IRREVOCABLE REFUNDING INSTRUCTION AND AUTHORIZING EXECUTION AND DELIVERY OF THE OFFICIAL STATEMENT AND BOND PURCHASE CONTRACT AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS WHEREAS, the City of Azusa Community Facilities District 2005-1 (Rosedale) (the "District"), along with Improvement Area Nos. 1 and 2 therein, was originally established on June 5, 2006 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 Azusa (the "City") of Resolution No. 06-C39; and WHEREAS, under the provisions of the Act, on June 5, 2006, the City Council also adopted Resolution No. 06-C40 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 $110,000,000 for the District ($80,000,000 within Improvement Area No. 1 and $30,000,000 within Improvement Area No. 2); and WHEREAS, on January 2, 2007, the City Council adopted Resolution: No. 07-C2 authorizing the issuance and sale of bonds of the District, pursuant to the Bond Indenture, dated as of February 1, 2007 (the "Prior Indenture"), by and between the City, for and on behalf of the District, and Wilmington Trust, National Association, as successor trustee to Wells Fargo Bank, National Association (the "Prior Trustee"), designated the "City of Azusa Community Facilities District No. 2005-1 (Rosedale) Improvement Area No. 1 2007 Special Tax Bonds" (the "Prior Special Tax Bonds"), for the purpose of funding the design, acquisition and construction of certain public improvements for the benefit of the District; and WHEREAS, on February 7, 2007, the Prior Special Tax Bonds were issued in the aggregate principal amount of $71,125,000; and WHEREAS, the Prior Special Tax Bonds are outstanding in the aggregate principal amount of $33,000,000; 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 to be designated "City of Azusa Community Facilities District No. 2005-1 (Rosedale) 2019 Special Tax Refunding Bonds (Improvement Area No. 1)" be issued in an aggregate principal amount 45 63 5.01434\31921513.4 that will not exceed $33,000,000 (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 special taxes within Improvement Area No. 1 of 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 within Improvement Area No. 1 of 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 special assessment levied on the property within Improvement Area No. 1 of the District; and WHEREAS, Special Districts Financing & Administration, LLC, the special tax consultant to the City, has determined, based on a review of the Los Angeles County Assessor's Assessment Roll for fiscal year 2018-19, that the total gross assessed value of taxable property within Improvement Area No. 1 of the District is $593,461,961; and WHEREAS, there has also been presented to the City Council a form of Fiscal Agent Agreement (the "Fiscal Agent Agreement") to be executed and delivered by the City and Wilmington Trust, National Association, as fiscal agent (the "Fiscal Agent"), with respect to the Bonds, whereby the Fiscal Agent will authenticate and deliver such Bonds and perform certain other duties; and WHEREAS, there has also been made available to the City Council a form of Irrevocable Refunding Instructions (the "Refunding Instructions") to be executed and delivered by the City and delivered to the Prior Trustee with respect to the defeasance and redemption of the Prior Special Tax Bonds, whereby the Prior Trustee 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 the Redemption Fund established pursuant to the Prior Indenture to provide for the defeasance and redemption of the Prior Special Tax Bonds and will perform certain other duties; and WHEREAS, the City has determined that the Bonds should be offered for sale on a negotiated basis and has presented a form of a Bond Purchase Contract (the "Purchase Contract") between the City and Stifel, Nicolaus & Company, Incorporated, as lead managing underwriter (the "Underwriter") and a proposed form of Official Statement describing the Bonds to be used in connection with the marketing thereof (the "Official Statement"); and 45635.01434\31921513.4 2 WHEREAS, Section 5852.1 of the Government Code of the State of California ("Section 5852.1") provides that the City 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 Bonds, good faith estimates of. (a) the true interest cost of the Bonds, (b) the finance charge of the Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the 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 Bonds calculated to the final maturity of the Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Bonds; and WHEREAS, in accordance with Section 5852.1, the City has obtained such good faith estimates from Urban Future, Inc., the City's municipal advisor (the "Municipal Advisor"), and such estimates are disclosed in Exhibit A attached hereto; and WHEREAS, the City Council has considered the forms of the Fiscal Agent Agreement, the Refunding Instructions, the Official Statement and the Purchase Contract and has determined that it is in the best interest of the owners of property in Improvement Area No. 1 and 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 AZUSA 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 negotiated sale, without advertising for bids, will result in a lower overall cost to Improvement Area No. 1 of the District, and (c) that if the Bonds are issued and sold in an aggregate principal amount of $33,000,000, the aggregate value of the parcels of real property within Improvement Area No. 1 of the District that will be subject to the levy of the Special Taxes to pay the principal of and interest on the Bonds of the District, as set forth in the Recitals hereto, will be more than three (3) times the aggregate principal amount of such 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 the aggregate principal amount of the Bonds of such District that is set forth in Exhibit "A" hereto, and the Mayor, the City Manager and the Finance Director (each an "Authorized Representatives") 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 Council are authorized to execute the Bonds for and on behalf of the City and each District by their manual or facsimile signatures. The last maturity date of the Bonds shall not be later than September 1, 2038. Pursuant to Section 53363.8 of the California Government Code, the City Council determines that the Designated Costs of Issuing the Bonds shall include (i) all expenses incident to the calling, retiring, or paying of the outstanding Prior Special Tax Bonds, and incident to the issuance of the Bonds, including the charges of any agent in connection with the issuance of the 45635.01434\31921513.4 3 Bonds or in connection with the redemption or retirement of the outstanding Prior Special Tax Bonds, (ii) the interest on the outstanding Prior Special Tax Bonds to the date upon which each of such outstanding Prior Special Tax Bonds will be paid pursuant to the Prior Indenture authorizing the issuance of such outstanding bonds, and (iii) any premium necessary in calling or retiring any of the outstanding Prior Special Tax Bonds. Section 3. Approval of Fiscal Agent Agreement. The form of 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), and (iv) the performance of other duties by the Fiscal Agent, is approved in the form provided to the City Council at the meeting at which this resolution is adopted, and the Authorized Representatives are each individually authorized to execute and deliver, on behalf of the City, such Fiscal Agent Agreement with respect to the Bonds. Section 4. Approval of Refunding Instructions. The form of the Refunding Instructions which provides for the defeasance and redemption of the outstanding Prior Special Tax Bonds is approved in the form provided to the City Council at the meeting at which this resolution is adopted, and the Authorized Representatives are each individually authorized to execute and deliver, on behalf of the City, such Refunding Instructions with respect to the outstanding Prior Special Tax Bonds. 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 the outstanding Prior Special Tax Bonds and other amounts to be deposited in the Redemption Fund with respect to the outstanding Prior Special Tax Bonds, and earnings from the investment thereof, shall be in an amount sufficient to pay the principal of and interest on such outstanding bonds on September 1, 2019, and to pay the principal and redemption premium due on such outstanding Prior Special Tax Bonds on such date, and the Designated Costs of Issuing the Bonds with respect to the Bonds of the District. Section 5.Sale of B onds; Purchase Contract. The City Council hereby approves the sale of the Bonds on a negotiated basis to the Underwriter; provided, that the Underwriter's discount for each series of Bonds shall not exceed 0.85%, not including original issue discount. Any of Authorized Representatives are authorized to execute and deliver the Purchase Contract, which provides the terms of the sale and delivery of the Bonds. Notwithstanding the preceding provisions of this section or any other section of this resolution, Bonds shall not be issued and sold unless (a) the interest rates with respect to all maturities of the Bonds will result in an individual net present value savings, in total debt service with respect to the outstanding Prior Special Tax Bonds of at least 3%, or a reduction in the amount of the Special Tax that will be levied in each fiscal year on all parcels in Improvement Area No. 1 of the District will be issued, of at least 3%, and (b) the total net interest cost to maturity of such Bonds, plus the principal amount of such Bonds will be less than the total net interest cost to maturity with respect to the outstanding Prior Special Tax Bonds, plus the principal amount of such outstanding Prior Special Tax Bonds. 45635.01434\31921513.4 4 Section 6. Official Statement; Continuing Disclosure Certificates. The City Council approves the preparation of, and hereby authorizes the Authorized Representatives to deem final within the meaning of Rule 15c2-12 of the Securities and Exchange Commission except for permitted omissions, a preliminary form of the Official Statement describing the Bonds, the forms of which are on file with the City Clerk together with such changes as may be approved by the officer executing the same. The Authorized Representatives are hereby authorized to execute the final Official Statement in the name and on behalf of the City, including any modifications resulting from additions thereto and changes therein as the City Attorney shall deem necessary, desirable or appropriate, with the execution of the final Official Statement by the Authorized Representatives to be conclusive evidence of the approval of any such additions and changes. The City Council has reviewed and approved the Continuing Disclosure Certificate, the form of which is on file with the City Clerk and the Authorized Representatives are further authorized to sign the Continuing Disclosure Certificates on behalf of the City in such form as may be approved by the officer executing the same. Section 7. Reserve Fund and Other Funds Related to tiic Outstmiding, Bonds. The Authorized Representatives are each authorized to direct the fiscal agent for the outstanding Prior Special Tax Bonds, and said fiscal agent is authorized, to transfer the amount on deposit in the reserve fund and amounts on deposit in any other funds or accounts which said fiscal agent holds under the fiscal agent agreement with respect to such outstanding bonds, to be used for the redemption of such outstanding Prior Special Tax Bonds. Section 8. Notice of Redemption. The Authorized Representatives are each authorized and directed to provide for the mailing and publication, and the Fiscal Agent, in its capacity as fiscal agent for the outstanding Prior Special Tax Bonds, is authorized to mail and publish, notice of the redemption of the outstanding Prior Special Tax Bonds to the registered owners thereof as required by Section 53365 of the California Government Code and the fiscal agent agreements for such bonds. Section 9. Modifications. The approval of the forms of the Fiscal Agent Agreement, the Refunding Instructions and the Purchase Contract given by this resolution shall apply to any modification or amendment of any of said agreements which is agreed upon and approved by Bond Counsel and the Authorized Representatives, as being necessary to carry out the provisions thereof and the authorization and direction provided in this resolution. Section 10. Further Action. The Authorized Representatives are authorized to take any and all action with respect to the execution and delivery of the Fiscal Agent Agreement, the Refunding Instructions, and the Purchase Contract and the issuance, sale and delivery of the Bonds, which in the opinion of Bond Counsel is necessary in order for the authorization and direction provided in this resolution to be carried out. Section 11. Conditions of Approval,. The approvals, authorization and direction given by this resolution are conditioned upon the satisfaction of the requirements of Section 5 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, the Refunding Instructions, and the Purchase Contract or the issuance, sale and delivery of the Bonds unless and until such conditions are satisfied; provided, however, that upon 45635.01434\31921513.4 5 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, 2019, and the Bonds may be sold, and the Bonds, the Fiscal Agent Agreement, the Refunding Instructions and the Purchase Contract may be dated, entered into, executed and delivered or distributed, as appropriate, on any date selected by the Authorized Representatives and the Underwriter prior to said date. Section 12. Effective Date. This resolution shall take effect upon adoption and shall remain in effect until December 31, 2019, or if the Bonds are issued prior to said date, until all of the Bonds are paid at or redeemed prior to maturity. PASSED, APPROVED and ADOPTED this 3rd day of June, 2019. !, 144 J eph Romero Rocha Mayor ATTEST: 0 C;;�� ;2 J .a ce Corne' , Jr. City Cler 45635.01434\31921513.4 6 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2019-C17 was duly adopted by the City Council of Azusa at a regular meeting thereof, held on the 3rd day of June, 2019, by the following vote of Council: AYES: COUNCILMEMBERS: GONZALES, CARRILLO, MACIAS, ALVAREZ, ROCHA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE J, re w • Cornejo . City lerk APPROVED AS TO FORM: Best Be.51 & Krieger, tLP City Attorney 45635.01434\31921513.4 7 EXHIBIT A GOOD FAITH ESTIMATES 4563 5.01434\31921513.4 GOOD FAITH ESTIMATES The good faith estimates set forth herein are provided with respect to the 2019 Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the District by Urban Futures, Inc., the District's Municipal Advisor (the "Municipal Advisor") in consultation with Stifel Nicolaus (the "Original Purchaser"). Principal Amount. The Municipal Advisor has informed the District that, based on the District's financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the 2019 Bonds to be sold is $29.0 million (the "Estimated Principal Amounts"). True Interest Cost of the Bonds. The Municipal Advisor has informed the District that, assuming that the respective Estimated Principal Amounts of the 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 2019 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 2019 Bonds, is 3.34/0. Finance Charge of the Bonds. The Municipal Advisor has informed the District that, assuming that the Estimated Principal Amounts of the 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 2019 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the 2019 Bonds), is $463,000. Additionally, there will be an annual Trustee fee of $1,800 for as long as the 2019 Bonds are outstanding. Amount of Proceeds to be Received. The Municipal Advisor has informed the District that, assuming the Estimated Principal Amounts of the 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 District for sale of the 2019 Bonds, less the finance charge of the 2019 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the 2019 Bonds, is $28.5 million. Total Payment Amount, The Municipal Advisor has informed the District that, assuming that the Estimated Principal Amounts of the 2019 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 District will make to pay debt service on the 2019 Bonds, plus the finance charge for the 2019 Bonds, as described above, not paid with the respective proceeds of the 2019 Bonds, calculated to the final maturity of the 2019 Bonds, is $43.1 million. Additionally, there will be an annual Trustee fee of $1,800 for as long as the 2019 Bonds are outstanding. The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the 2019 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 2019 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of 2019 Bonds sold being different from the respective Estimated Principal Amounts, (c) the actual amortization of the 2019 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 2019 Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the District's financing plan, or a combination of such factors. The actual date of sale of the 2019 Bonds and the actual principal amount of 2019 Bonds sold will be determined by the District based on various factors. The actual interest rates borne by the 2019 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the 2019 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 District.