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HomeMy WebLinkAboutResolution No. 2021-C23RESOLUTION NO.2021-C23 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA AUTHORIZING THE ISSUANCE OF A REFUNDING BOND OF COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MOUNTAIN COVE) OF THE CITY OF AZUSA FOR THE PURPOSE OF DEFEASING AND REFUNDING CERTAIN OUTSTANDING BONDS OF SUCH COMMUNITY FACILITIES DISTRICT, APPOINTING A FISCAL AGENT, APPROVING IRREVOCABLE REFUNDING INSTRUCTIONS TO BE EXECUTED IN CONNECTION WITH THE ISSUANCE OF THE REFUNDING BOND AND CERTAIN OTHER ACTIONS WHEREAS, the City Council of the City of Azusa (the "City Council") has established Community Facilities District No. 2002-1 (Mountain Cove) of the City of Azusa (the "District") pursuant to the provisions of the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the "Act"); and WHEREAS, the District previously issued its Special Tax Bonds, 2002 Series A (the "2002 Bonds") in the aggregate principal amount of $8,980,000 for the purpose of financing the construction and acquisition of certain public facilities and school facilities as permitted pursuant to Resolution No. 02-C 133, as amended by Resolution No. 02-C 142 and the Act; and WHEREAS, the District subsequently issued its $7,880,000 Special Tax Refunding Bonds, Series 2011 (the "Prior Special Tax Bonds") to refund the 2002 Bonds and the City Council has determined that it is in the best interest of the owners of property in the District that a bond (hereinafter referred to as the "Bond") be issued to defease and refund the outstanding Refunded Bonds; and WHEREAS, the Prior Special Tax Bonds were issued pursuant to a Fiscal Agent Agreement dated July 1, 2011 (the "Prior Fiscal Agent Agreement") by and between the District and Wells Fargo Bank, National Association, as fiscal agent (the "Prior Fiscal Agent"); and WHEREAS, as a result of favorable conditions in the municipal bond market, the City Council desires to authorize the issuance of the Community Facilities District No. 2002-1 (Mountain Cove) of the City of Azusa, 2021 Special Tax Refunding Bond (the "Special Tax Refunding Bond") for the purpose of defeasing and refunding the Prior Special Tax Bonds prior to the scheduled maturity thereof in order to reduce the borrowing costs on such indebtedness; and WHEREAS, a reduction in borrowing costs will 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 Special Tax Refunding Bond; and WHEREAS, payment of the principal of and interest on the Prior Special Tax 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 Special Tax Refunding Bond that may be issued by the District will be secured by such Special Taxes; and WHEREAS, upon the issuance of the Special Tax Refunding Bond and the deposit of the appropriate portion of the proceeds of the sale of such Special Tax Refunding Bond in the bond fund established to pay debt service on the Prior Special Tax Bonds, such 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 such Prior Special Tax Bonds; and WHEREAS, if the Special Tax Refunding Bond is issued and sold in an aggregate principal amount that does not exceed the amount authorized in this Resolution, 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 Special Tax Refunding Bond and any other parity bonds of the District; and WHEREAS, there has been presented to the City Council an offer for the direct purchase of the Special Tax Refunding Bond from First Foundation Public Finance, a Delaware statutory trust and wholly owned subsidiary of First Foundation Bank (and its successors and assigns, the "Purchaser"), as set forth in the letter from the Purchaser to the City dated April 7, 2021 (the "Term Sheet"); and WHEREAS, there has also been presented to the City Council a separate form of Fiscal Agent Agreement for the Special Tax Refunding Bond to be executed and delivered by the City and Wilmington Trust, National Association, as fiscal agent (the "Fiscal Agent"), setting forth the terms and conditions relating to the issuance, sale, delivery and administration of the Special Tax Refunding Bond (the "Fiscal Agent Agreement"); and WHEREAS, there has also been presented to the City Council form of Irrevocable Refunding Instructions to be executed and delivered by the City and Wells Fargo Bank, National Association, as fiscal agent for the Refunded Bonds (the "Prior Fiscal Agent"), with respect to the defeasance and redemption of the Prior Special Tax Bonds, whereby the Prior Fiscal Agent will receive a portion of the proceeds of the sale of the Special Tax Refunding Bond and certain funds related to the Prior Special Tax Bonds that will be deposited in a bond fund established pursuant to the Prior Fiscal Agent Agreement to provide for the defeasance and redemption of the Prior Special Tax Bonds and will perform certain other duties (the "Refunding Instructions"); and WHEREAS, the City Council has considered the Term Sheet, the forms of the Fiscal Agent Agreement and the Refunding Instructions 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 Special Tax Refunding Bond; and K 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 Special Tax Refunding Bond, good faith estimates of. (a) the true interest cost of the Special Tax Refunding Bond, (b) the finance charge of the Special Tax Refunding Bond, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Special Tax Refunding Bond received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the Special Tax Refunding Bond and (d) the sum total of all debt service payments on the Special Tax Refunding Bond calculated to the final maturity of the Special Tax Refunding Bond plus the fees and charges paid to third parties not paid with the proceeds of the Special Tax Refunding Bond; 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 Special Tax Refunding Bond 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 1. Recitals. The foregoing recitals are true and correct and this Council hereby so finds and determines. SECTION 2. Findings. The City Council finds (a) that the preceding recitals are true and correct, (b) that the sale of the Special Tax Refunding Bond at private sale, without advertising for bids, will result in a lower overall cost to the District, (c) that if the Special Tax Refunding Bond is issued and sold in an aggregate principal amount that does not exceed the aggregate principal amount set forth in this Resolution, the aggregate 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 Special Tax Refunding Bond will be more than three (3) times the aggregate principal amount of such Special Tax Refunding Bond, (d) as to the Special Tax Refunding Bond, the total net interest cost to maturity of such Series of Special Tax Refunding Bond plus the principal amount of the Special Tax Refunding Bond will not exceed the total net interest cost to maturity on the Prior Special Tax Bond being defeased and refunded from the proceeds of such Special Tax Refunding Bond plus the principal amount of such Prior Special Tax Bond. SECTION 3. Authorization of the Issuance of the Special Tax Refunding Bond. The City Council authorizes the issuance and sale of the Special Tax Refunding Bond in the not to exceed aggregate principal amounts listed in Section 3. 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 Special Tax Refunding Bond pursuant to the authorization given by and the 3 conditions specified in this Resolution. The Mayor and the City Clerk of the City are authorized to execute the Special Tax Refunding Bond for and on behalf of the City and the District by their manual or facsimile signatures. The last maturity date of the Special Tax Refunding Bond shall not be later than the last maturity date of the Prior Special Tax Bonds being defeased. Pursuant to Section 53363.8 of the California Government Code, the City Council determines that the designated costs of issuing the Special Tax Refunding Bond (the "Designated Costs of Issuance") shall include (i) all expenses incident to the calling, retiring, or paying of the Prior Special Tax Bonds, and incident to the issuance of the Special Tax Refunding Bond, including the charges of any agent in connection with the issuance of the Special Tax Refunding Bond or in connection with the redemption or retirement of the Prior Special Tax Bonds, (ii) the interest on the Prior Special Tax Bonds to the date upon which each of Prior Special Tax Bonds will be paid pursuant to the Prior Fiscal Agent Agreement, and (iii) any premium necessary in calling or retiring any of the Prior Special Tax Bonds. SECTION 4. Special Tax Refunding Bond Authorized. Pursuant to the Act, this Resolution, and the Fiscal Agent Agreement, the Special Tax Refunding Bond is hereby authorized to be issued in an aggregate principal amount not to exceed $6,000,000. The date, manner of payment, interest rate or rates, interest payment dates, maturity date or dates, denomination, form of bond, registration privileges, manner of execution, place of payment, terms of redemption, and other terms, covenants, and conditions of the Special Tax Refunding Bond shall be as provided in the Fiscal Agent Agreement for the Special Tax Refunding Bond as finally executed. SECTION 5. 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 Special Tax Refunding Bond, (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 Special Tax Refunding Bond, (iii) the payment by the Fiscal Agent of the principal of and interest on the Special Tax Refunding Bond from the Special Tax Revenues (as defined therein), and (iv) the performance of other duties by the Fiscal Agent, are approved in the forms 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 Special Tax Refunding Bond. SECTION 6. Approval of Irrevocable Refunding Instructions. The form of the Irrevocable Refunding Instructions which provide for the defeasance and redemption of the 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 authorized to execute and deliver, on behalf of the City, such Irrevocable Refunding Instructions with respect to the 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 Special Tax Refunding Bond and other amounts to be deposited in the bond fund with respect to the Prior Special Tax Bonds, and earnings from the investment thereof, shall be in an amount sufficient to 4 pay the principal of and interest on such Prior Special Tax Bonds and the Designated Costs of Issuance, as certified by a certified public accountant licensed to practice in the State of California. SECTION 7. Approval of Term Sheet. The Term Sheet is approved in substantially 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 Term Sheet. SECTION 8. Appointment of Professionals. The City Council hereby authorizes and approves the following professionals to provide services in connection with the issuance of the Special Tax Refunding Bond: (a) Fiscal Agent. Wilmington Trust, National Association is appointed as Fiscal Agent pursuant to the Fiscal Agent Agreement and is authorized to take any and all action provided therein to be taken by the Fiscal Agent; (b) Municipal Advisor. Urban Futures, Inc. is hereby appointed as Municipal Advisor; (c) Bond Counsel. Best Best & Krieger LLP is hereby appointed as Bond Counsel in connection with the issuance of the Special Tax Refunding Bond; and (d) Special Tax Consultant. Special District Financing & Administration is hereby appointed as Special Tax Consultant in connection with the issuance of the Special Tax Refunding Bond. SECTION 9. Issuance of Special Tax Refunding Bond. The City Council approves and authorizes the issuance and sale of the Special Tax Refunding Bond to the Purchaser pursuant to the Term Sheet presented by the Purchaser. The Authorized Representatives are each individually authorized and directed to execute and deliver the documents on behalf of the City and the District as set forth in the Term Sheet and any modifications to the Term Sheet shall be negotiated and approved by the Authorized Representatives upon the submission of any such modifications by the Purchaser and shall be consistent with the requirements of this Resolution; provided that the true interest cost on the Special Tax Refunding Bond shall not exceed 2.50%. Notwithstanding the preceding provisions of this section or any other section of this Resolution, the Special Tax Refunding Bond shall not be issued and sold for any District unless (a) the interest rates contained in the Term Sheet, or any modification thereof, with respect to all maturities of the Special Tax Refunding Bond will result in net present value savings for the District, in total debt service with respect to the outstanding bonds of the District of at least 3%. The Authorized Representatives are authorized and directed to provide for the modification of the Term Sheet so that the Special Tax Refunding Bond will not be issued and sold for any District for which the requirements of this paragraph will not be satisfied. 5 SECTION 10. Reserve Fund and Other Funds Related to the Prior Special Tax Bonds. The Authorized Representatives are each authorized to direct the Prior Fiscal Agent, and the Prior 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 the Prior Fiscal Agent holds under the Prior Fiscal Agent Agreement with respect to the Prior Special Tax Bonds, for deposit in the bond fund established under the Prior Fiscal Agent Agreement to be used to defease and redeem such Prior Special Tax Bonds or to the reserve fund for the Special Tax Refunding Bond of such District, whichever the Authorized Representatives determine is most appropriate. SECTION 11. Notice of Redemption. The Authorized Representatives are each authorized and directed to provide for the mailing and publication, and the Prior Fiscal Agent, in its capacity Prior Fiscal Agent for the Prior Special Tax Bonds, is authorized to mail and publish, notice of the redemption of the 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 for the Prior Special Tax Bonds. SECTION 12. Modifications. The approval of the forms of the Fiscal Agent Agreement and the Irrevocable Refunding Instructions 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 City Manager or the Director of Administrative Services as being necessary to carry out the provisions thereof and the authorization and direction provided in this Resolution. SECTION 13. Further Action. The Authorized Representatives 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, Irrevocable Refunding Instructions and Term Sheet, and the issuance, sale and delivery of the Special Tax Refunding Bond, 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 14. Conditions of Approval. The approvals, authorization and direction given by this Resolution are conditioned upon the satisfaction of the requirements of Section 10 hereof with respect to the issuance and sale of the Special Tax Refunding Bond. The officers of the City designated above shall not take any action with respect to the execution and delivery of the Fiscal Agent Agreement, or the issuance, sale and delivery of the Special Tax Refunding Bond 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. SECTION 15. Effective Date. This resolution shall take effect immediately upon its passage. 0 PASSED, APPROVED and ADOPTED this 171h day of May, 2021. Robert Gonzdfes Mayor ATTEST: ff L Wn7ce Cornejo, r. City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2021-C23 was duly adopted by the City Council of the City of Azusa, at a meeting thereof held on the 17th day of May 2021, by the following vote of the Council: AYES: COUNCILMEMBERS: GONZALES, MACIAS, ALVAREZ, AVILA, MENDEZ NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE APPROVED AS TO FORM: Marco artinez City Attorney Best Best & Krieger LLP %1 EXHIBIT A GOOD FAITH ESTIMATES The good faith estimates set forth herein are provided with respect to the Special Tax Refunding Bond in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by the Municipal Advisor, and consistent with the terms of the Term Sheet. Principal Amount. The Municipal Advisor has informed the City that, based on the financing plan and current market conditions, its good faith estimate of the principal amount (the "Estimated Principal Amount"), of the Special Tax Refunding Bond is $5,476,266. True Interest Cost of the Special Tax Refunding Bond. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Special Tax Refunding Bond are 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 the Special Tax Refunding Bond, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the Estimated Principal Amount is 2.16%. Finance Charges of the Special Tax Refunding Bond. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Special Tax Refunding Bond are sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charges for the Special Tax Refunding Bond, which means the sum of all fees and charges paid to third parties (or costs associated with the Special Tax Refunding Bond), is $95,000. Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, 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 for each Series of Special Tax Refunding Bond, less the finance charges, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $5,239,413. Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Special Tax Refunding Bond, 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 City will make to pay debt service on the corresponding the Special Tax Refunding Bond, calculated to the final maturity of the Bond, which excludes any reserves or capitalized interest funded or paid with proceeds of such Bond (which may offset such total payment amount) is $6,241,523. The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing and information available at the time of preparation of such estimates. The actual principal amount of the Special Tax Refunding Bond issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total A-1 payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Special Tax Refunding Bond being different than the date assumed for purposes of such estimates, (b) the actual principal amount of the Special Tax Refunding Bond being different from the Estimated Principal Amount, (c) the actual amortization of the Special Tax Refunding Bond being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Special Tax Refunding Bond being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the financing plan, or a combination of such factors. Market interest rates are affected by economic and other factors beyond the control of the City. A-2