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HomeMy WebLinkAboutResolution No. 2019-C57RESOLUTION NO. 2019-057 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA AUTHORIZING THE ISSUANCE OF BONDS OF COMMUNITY FACILITIES DISTRICT NO. 2005-1 (ROSEDALE) DESIGNATED 2019 SPECIAL TAX BONDS, APPOINTING FISCAL AGENT, APPROVING FISCAL AGENT AGREEMENT AND PURCHASE CONTRACT AND AUTHORIZING NEGOTIATION OF TERMS OF THE SALE OF SAID BONDS, APPROVING PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING PREPARATION OF FINAL OFFICIAL STATEMENT AND APPROVING CONTINUING DISCLOSURE CERTIFICATE 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 June 5, 2006, 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 the amounts stated above should be incurred by and for the District for the purpose of financing certain public facilities for the benefit of the District (the "Facilities"), and more than two-thirds of the votes cast in said consolidated special elections were cast in favor of incurring such bonded indebtedness, and the District was thereby authorized to issue bonds in the amounts set forth above for the purposes set forth in said proposition; and WHEREAS, the City Council has determined (i) that it is necessary that bonds of the District designated "City of Azusa Community Facilities District No. 2005-1 (Rosedale) 2019 Special Tax Bonds (Improvement Area No. 2)" be issued in an aggregate principal amount which shall not exceed $25,000,000 (the "Bonds") to finance the design, construction and acquisition of the Facilities; and WHEREAS, the City and the Azusa Unified School District (the "School District") previously entered into that certain Joint Community Facilities Agreement dated June 1, 2005 (the "School District JCFA") which authorized certain improvements to be financed through the use of bond proceeds of the District; and WHEREAS, the School District and Rosedale Land Partners II, LLC (the "Developer"), developer of the property within the District, have agreed to a certain settlement agreement Ill which requires an amendment to the School District JCFA, and such amendment has been presented to the City Council in the form of the Amended and Restated Joint Community Facilities Agreement (the "Amended JCFA"); 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. 2 of the District (the "Special Taxes"); and WHEREAS, the District, the City and the Developer entered into that certain Funding and Acquisition Agreement dated August 1, 2005 (the "Original Funding Agreement") to govern the financing of the Facilities through proceeds of bonds of the District and levy of Special Taxes; and WHEREAS, the District, the City and the Developer amended the Original Funding Agreement pursuant to the First Amendment to Funding and Acquisition Agreement dated June 1, 2019, to permanently reduce the levy of special taxes within Improvement Area No. 1 and now desire to permanently reduce the levy of Special Taxes within Improvement Area No. 2 at the time and upon satisfaction of the conditions set forth in the Second Amendment to Funding and Acquisition Agreement dated December 1, 2019 (the "Second Amendment to Funding Agreement"), which has been presented to the City Council; 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. 2 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 2019-20, that the total gross assessed value of taxable property within Improvement Area No. 2 of the District is $167,835,099; and WHEREAS, if the Bonds are issued and sold in an aggregate principal amount that does not exceed $25,000,000, the assessed value of the taxable property in the District will be more than three (3) times such principal amount of the Bonds, and there are no other special tax or assessment bonds- of the District; and WHEREAS, there has been presented to the City Council a form of Bond Purchase Agreement (the "Purchase Contract") whereby Stifel, Nicolaus & Company, Incorporated (the "Underwriter") has offered to purchase the Bonds from the City, and a form of Preliminary Official Statement relating to the Bonds; and WHEREAS, there has also been presented to the City Council a form of Fiscal Agent Agreement (the "Fiscal Agent Agreement") with respect to the Bonds to be executed and delivered by the City and Wilmington Trust, National Association, as fiscal agent (the "Fiscal A-2 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 Continuing Disclosure Certificate to be executed and delivered by the City, 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 WHEREAS, the City Council has considered the forms of the Fiscal Agent Agreement, the Continuing Disclosure Certificate, the Purchase Contract and the Preliminary Official Statement and has determined that it is in the best interest of the owners of property in and the future residents of the District that the City Council authorize the issuance and sale of the Bonds and the execution and delivery of said agreements and approve and authorize the distribution of the Preliminary Official Statement subject to the conditions hereinafter contained; and WHEREAS, Section 5852.1 of the Government Code of the State of California ("Section 5852.1") provides that the City Council 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 Council has obtained such good faith estimates from Urban Futures, Inc., the City's municipal advisor (the "Municipal Advisor"), and such estimates are disclosed in Exhibit A attached hereto; and WHEREAS, the City Council wishes at this time to authorize all proceedings relating to the issuance and sale of the Bonds and all other agreements and documents relating thereto. NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF AZUSA AS FOLLOWS: SECTION I. 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 the District, and (c) that if the Bonds are issued and sold in an aggregate principal amount that does not exceed $25,000,000, the value of the parcels of real property within Improvement Area No. 2 which will be subject to the levy of the Special Taxes to pay the principal of and interest on the Bonds, based on the assessed value of such parcels for fiscal year 2019-20 as determined by Special District Financing & Administration, LLC based on a review of Los Angeles County Assessor's Roll Assessment, i.e., $167,835,099, will be more than three (3) times the principal amount of such Bonds and all other outstanding bonds that are secured by special taxes that are to be levied on such parcels or special assessments that have been levied on such parcels. A-3 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 which shall not exceed $25,000,000. The Mayor, the City Manager and the Director of Administrative Services (each an "Authorized Representative") 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 Purchase Contract. SECTION 3. Annroval of Fiscal Anent Agreement. The form of 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 Preliminary Official Statement-, Preparation of Final Official Statement. The Preliminary Official Statement is approved, and the City Manager or the Director of Administrative Services (collectively, the "Authorized Officers," individually an "Authorized Officer") are each authorized to consent to and assist in the preparation of such modifications thereto as may be specified by Best Best & Krieger LLP, bond counsel to the City ("Bond Counsel") and the Municipal Advisor. The Authorized Officers are each authorized to determine, with the assistance of Bond Counsel, Disclosure Counsel and the Municipal Advisor when the Preliminary Official Statement is to be deemed final within the meaning of the Rule and to deliver a certificate to that effect to the Underwriter. The Underwriter is authorized to distribute the Preliminary Official Statement as approved hereby, or as modified with the consent of the Authorized Officers to prospective purchasers of the Bonds. The Authorized Officers and the Municipal Advisor are 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 Bond Counsel, Disclosure Counsel, the Municipal Advisor and the Underwriter. The Authorized Officers are each authorized to sign the Final Official Statement on behalf of the City and the District. SECTION 5. Appointment of. Professionals. The City Council hereby authorizes and approves the following professionals to provide services in connection with the issuance of the Bonds: (a) Fiscal Agent. Wilmington Trust, National Association is appointed as Fiscal Agent pursuant to the Fiscal Agent Agreement and to take any and all action provided therein to be taken by the Fiscal Agent; (b) Municipal Advisor. Urban Futures, Inc. is hereby appointed to provide municipal advisory services; A-4 (c) Bond and Disclosure Counsel. Best Best & Krieger LLP is hereby appointed as Bond and Disclosure Counsel in connection with the issuance of the Bonds; and (d) Special Tax Consultant. Special District Financing & Administration, LLC is hereby appointed as Special Tax Consultant in connection with the issuance of the Bonds. SECTION 6. Sale of Bonds; Purchase Contract. The City Council approves and authorizes the issuance and sale of the Bonds by negotiation with the Underwriter pursuant to the Purchase Contract between the City and the Underwriter in the form presented to the City Council at the meeting at which this resolution is adopted, together with any changes therein or additions thereto which are deemed advisable by the Authorized Officers upon consultation with Bond Counsel and the Municipal Advisor. The Authorized Officers are each authorized and directed to execute and deliver the final form of the Purchase Contract on behalf of the City and the District upon the submission of an offer by the Underwriter to purchase the Bonds, which offer is acceptable to the Authorized Officers and is consistent with the requirements of this resolution; provided that the true interest cost on the Bonds shall not exceed five percent (5.00%); the Underwriter's discount for the purchase of the Bonds shall not be greater than 0.85 percent (0.85%) (exclusive of original issue discount) of the aggregate principal amount of the Bonds; and the last maturity of the Bonds shall be paid and redeemed no later than December 1, 2059. When the Authorized Officers have negotiated the Purchase Contract with the Underwriter within the parameters specified above and when the other terms and conditions of the Purchase Contract are satisfactory to the Authorized Officers and Bond Counsel, the Authorized Officers are authorized to execute and deliver the Purchase Contract to the Underwriter on behalf of the City and the District. SECTION 7. Accountability Measures. Pursuant to Section 53410 of the California Government Code, the issuance of and sale of the Bonds is subject to the following accountability measures: (e) The proceeds of the Bonds shall be applied only for the specific purposes identified in the propositions regarding the authorization of the District incurring bonded indebtedness which the qualified electors of the District approved in the election held on June 5, 2006; (f) Except as otherwise provided in the Fiscal Agent Agreement, the proceeds of the sale of the Bonds shall be deposited in the funds and accounts established pursuant to the Fiscal Agent Agreement and the proceeds deposited in each such fund or account shall be expended as provided in the Fiscal Agent Agreement with respect to each such fund or account; and (g) The Authorized Officers shall file a report with the City Council at least once in each calendar year, beginning in 2020, which shall contain the information required by Section 53411 of the California Government Code with respect to the expenditure of the proceeds of the sale of the Bonds and the status of the construction and acquisition of the public facilities comprising the Project (as defined in the Fiscal Agent Agreement). A-5 SECTION 8. Findings Regarding „the Levy and Rates of Special Taxes. The City Council finds that the City will covenant in the Fiscal Agent Agreement, for the benefit of the owners of the Bonds, that it will not initiate proceedings under the Mello -Roos Community Facilities Act of 1982 to reduce the Maximum Special Tax rates on then existing Developed Property (as defined in the Fiscal Agent Agreement) in the District below the amounts which are necessary to provide Special Tax Revenues in an amount equal to estimated Administrative Expenses for the then current Fiscal Year plus an amount equal to one hundred ten percent (110%) of Maximum Annual Debt Service on the Outstanding Bonds. The City Council further finds and determines that any reduction or limitation of the Special Tax rates below the Maximum Rates would interfere with the timely retirement of the Bonds. SECTION 9. Approval of Documents. The Continuing Disclosure Certificate, Amended JCFA and Second Amendment to Funding Agreement are approved in the form submitted to the City Council at the meeting at which this resolution is adopted, and the Authorized Officers are authorized to execute and deliver said agreements on behalf of the City. SECTION 10. Modifications. The approval of the Fiscal Agent Agreement, the Continuing Disclosure Certificate, the Purchase Contract, Amended JCFA and Second Amendment to Funding Agreement 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, the Municipal Advisor and the Authorized Officers as being necessary to carry out the provisions thereof and the authorization and direction provided in this resolution. SECTION 11. Further Action. The Authorized Officers are authorized to take any and all action which is directed by Bond Counsel with respect to the execution and delivery of the Fiscal Agent Agreement, the Continuing Disclosure Certificate, the Purchase Contract, the Amended JCFA and Second Amendment to Funding Agreement 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 12. Conditions of Ap rn oval. The approvals, authorization and direction given by this resolution, excepting approval of the Amended JCFA and Second Amendment to Funding Agreement, are conditioned upon the satisfaction of the requirements of Section 6 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 Continuing Disclosure Certificate and the Purchase Contract 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 January 31, 2020, and the Bonds may be sold, and the Bonds, the Fiscal Agent Agreement, the Continuing Disclosure Certificate, the Purchase Contract, the Preliminary Official Statement and the Final Official Statement may be dated, entered into, executed and delivered or distributed, as appropriate, on any date selected by the Authorized Representatives and the Municipal Advisor and the Underwriter prior to said date. ME SECTION 13. Effective Date. This resolution shall take effect upon adoption and shall remain in effect until January 31, 2020, 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 18th day of November, 2019. Jose Romero Rocha Mayor ATTEST: f Je re aw CornCj ity Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2019-057 was duly adopted by the City Council of the City of Azusa at a regular meeting thereof, held on the 18th day of November, 2019, by the following vote of Council: AYES: COUNCILMEMBERS: GONZALES, CARRILLO, MACIAS, ALVAREZ, ROCHA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE Je e Cornejo, J ity Clerk APPROVED AS TO FORM: . Best Bet & Krieger, LP City Attorney A-7 EXHIBIT A GOOD FAITH ESTIMATES The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by the Municipal Advisor in consultation with the Underwriter. Principal Amount. The Municipal Advisor has informed the City that, based on the financing plan and current market conditions, it's good faith estimate of the aggregate principal amount of the Bonds to be sold is $19,840,000 (the "Estimated Principal Amount"), which excludes approximately $2,713,739.50 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 Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount 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 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 Bonds, is 4.3%. Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount 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 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $862,873.00. Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount 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 City, on behalf of the District, for the sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $21,690,866.00. Total Payment Amount, The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount 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 total payment amount, which means the sum total of all payments the District will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $40,987,822.00 (excluding any offsets from reserves or capitalized interest). The foregoing estimates constitute good faith estimates only. The actual principal amount of the 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 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the 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 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 Bonds and the actual principal amount of Bonds sold will be determined by the City, on behalf of the District, based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the 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 City.