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HomeMy WebLinkAboutResolution - 2377 STATE OF CALIFORNIA ) RESOLUTION NO.2377 COUNTY OF RIVERSIDE) ss CITY OF SAN JACINTO ) RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JACINTO AUTHORIZING THE ISSUANCE OF BONDS OF CITY OF SAN JACINTO COMMUNITY FACILITIES DISTRICT NO. 2002-1 (RANCHO SAN JACINTO, PHASE 2) SPECIAL TAX BONDS, 2002 SERIES A IN AN ORIGINAL AGGREGATE PRINCIPAL AMOUNT NOT TO 'EXCEED $20,000,000 APPOINTING FISCAL AGENT APPROVING A BOND'' PURCHASE CONTRACT AND AUTHORIZING NEGOTIATION OF TERMS OF THE SALE AND EXCHANGE OF SAID BONDS WHEREAS, City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2), County of Riverside, State of California(the"District")was established on September 10, 2002, by adoption by the City Council (the "City Council") of the City of San Jacinto (the"City") of Resolution No. 2371; and WHEREAS, on September 10, 2002, 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 original aggregate principal amount not to exceed $20,000,000 should be incurred by and for the District for the purpose of providing certain public facilities for the benefit of the District, 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 is therefore authorized to issue bonds in an original aggregate principal amount not to exceed $20,000,000 for the purposes set forth in said proposition; and WHEREAS, the City has previously formed its Community Facilities District No. 2 ("CFD No. 2") and, in connection therewith, has issued its Special Tax Bonds in the original principal amount of$26,000,000 (the 1989 Bonds") which are secured by special taxes levied by the City on property within the boundaries of CFD No. 2, and because of the delinquent payment of the special taxes levied in CFD No. 2, the 1989 Bonds are currently in default in the payment of the principal and interest with respect thereto; and WHEREAS, the City Council has determined that it is in the best interest of the owners of property in the District that bonds of the District be issued in an original aggregate principal amount which shall not exceed $20,000,000 (the 'Bonds") to restructure the 1989 Bonds and provide some relief in the payment of Special Taxes of CFD No. 2 to the owners of real property in CFD No. 2; and RVPUBIKAB\637507 1 WHEREAS, pursuant to Section 53345.8 of the California Government Code, the legislative body of a community facilities district may issue and sell bonds of the District only if it determines, based on the full cash value as shown on the ad valorem Assessment Roll or upon an appraisal, 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 times the principal amount of the bonds to be secured by the special tax on property within the district, or unless the legislative body finds that the proposed bonds do not present any unusual credit risk due to the availability of credit enhancements or for other reasons specified by the legislative body; and WHEREAS, if the Bonds are issued in an original aggregate principal amount of $20,000,000, the value of the parcels of real property within the boundaries of the District that will be subject to the levy of Special Taxes (as defined in the Fiscal Agent Agreement for the Bonds) to pay the principal of and interest on the Bonds, based on the full cash value as shown on the Assessment Roll of the County of Riverside of parcels within the District, will be less than three times the aggregate principal amount of the Bonds-, and WHEREAS, the City Council finds that the issuance of the Bonds should proceed for the following reasons, (i)the Outstanding 1989 Bonds are in payment default, (ii) the issuance of the Bonds is a part of the orderly restructuring of the Outstanding 1989 Bonds, (iii) the issuance of the Series B Bonds will provide a savings in special taxes to current homeowners in CFD No. 2 , and (iv) special measures have been taken with respect to the issuance of the Bonds and the Authority Bonds, defined below, such that only sophisticated investors are eligible to own the Bonds and Authority Bonds, unless the land within the District meets certain thresholds in value or special tax revenues; and WHEREAS, pursuant to a Fiscal Agent Agreement to be entered into by the City on behalf of the District and Union Bank of California, N.A., as Fiscal Agent, the Fiscal Agent will authenticate and deliver the Bonds of the District designated "City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) Special Tax Bonds, 2002 Series A" to provide for the restructure of the 1989 Bonds; and WHEREAS, there has been presented to the City Council a form of Bond Purchase Contract whereby the San Jacinto Financing Authority (the "Authority") has offered to purchase the Bonds from the City through an exchange; and WHEREAS, the Authority wil I issue its San Jacinto Financing Authority Local Agency Revenue Bonds(the"Authority Bonds")for the purpose of exchanging subordinate refunding bonds of CFD No. 2 which will then be concurrently exchanged with the City for the Bonds and a portion of the subordinate refunding bonds of CFD No. 2 will be cancelled; and RVPUB%KAB1637507 2 - WHEREAS, the City Council has determined that it is in the best interest of the owners of property within the District and CFD No. 2 that 'Bonds be sold through exchange to the Authority on the terms and conditions hereinafter specified; and WHEREAS, the City Council has considered the form of the Fiscal Agent Agreement and the'Bond Purchase Contract and has determined that it is in the best interest of the owners of property within the District that the City Council authorize the issuance and sale of the Bonds and the execution and delivery of said agreements; NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BYTHE CITYCOUNCIL OF THE CITY OF SAN JACINTO,`CALIFORNIA,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 private sale, without advertising for bids, will result in a lower overall cost to the District, (c) that if the Bonds are issued and sold in an original aggregate principal amount not to exceed$20,000,000, the value of the parcels of real property within the boundaries of the District which will be subject to the levy of Special Taxes to pay the principal of and interest on the Bonds,based on the full cash value as shown on the Assessment Roll of the County of Riverside will be less than three times such aggregate principal amount and the principal amount of 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, and (d) the sale of the Bonds should proceed, notwithstanding the value of the land for the following reasons, (i) the issuance of the Bonds together with other actions to be taken by the City and the Authority provides for the orderly restructuring of the 1989 Bonds, (ii) the issuance of the Bonds provides for the possible relief to taxpayers within CFD No. 2, and (iii) that special measures have been taken with respect to the issuance of the Bonds and the Authority Bonds such that only sophisticated investors are eligible to own the Bonds and the Authority Bonds, unless the land within the District meets thresholds specified in the Indenture for the Authority Bonds as to land value or Special Tax Revenues, Section 2. Authorization of the Issuance of the Bonds. The City Council authorizes the issuance and sale of the Bonds in an original aggregate principal amount which shall not exceed$20,000,000, and the City Manager of the City(the"City Manager") is 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 (including, but not limited to, determining the principal amount of the Bonds). The Vice Mayor or the City Manager 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 Bond Purchase Contract. The maximum rate of interest to be paid on the Bonds shall not exceed seven (7%) per annum. Section 3. Approval of Fiscal Agent Agreement for the Bonds. The Fiscal Agent Agreement which provides generally for (i) the authentication and delivery by the RVPUB''XA8\637507 3 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, the District 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 (the "Fiscal Agent Agreement"), is approved in the form made available to the City Council at the meeting at which this resolution is adopted, and the Vice-Mayor, the City Manager or the Finance Director is authorized to execute and deliver said agreement on behalf of the City with such changes therein as the Officer executing the same may approve, such approval to be conclusively evidenced by the execution thereof. Section 4. Appointment of Fiscal Agent. Union Bank of California, N.A. is appointed as Fiscal Agent pursuant to the Fiscal Agent Agreement to take any and all action provided therein to be taken by the Fiscal Agent. Section 5. Approval of Preliminary Private Placement Memorandum Preparation of Final Private Placement Memorandum, The Preliminary Private Placement Memorandum is approved, and the Finance Director is 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'). The Finance Director is authorized to determine, with the assistance of Bond Counsel, when the Preliminary Private Placement Memorandum may be distributed. The Finance Director is authorized to participate in the preparation of the Final Private Placement Memorandum, based on the Preliminary Private fi Placement Memorandum, and such modifications thereto as may be agreed to by Bond Counsel to the City and the District. The Vice-Mayor, the City Manager or the Finance Director is authorized to sign the Preliminary Private Placement Memorandum and the Final Private Placement Memorandum on behalf of the City and the District. Section 6. Sale of Bonds. The City Council approves and authorizes the issuance, sale and exchange of the Bonds by negotiation with the Authority pursuant to the Bond Purchase Contract between the City and the Authority 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 Finance Director upon consultation with Bond Counsel. The Vice-Mayor, the City Manager or the Finance Director are each authorized and directed to execute and deliver the final form of the Bond Purchase Contract on behalf of the City and the District. When the City Manager and Finance Director have negotiated the Bond Purchase Contract with the Authority, and when the other terms and conditions of the Bond Purchase Contract are satisfactory to the City Manager and Finance Director and Bond Counsel, the Vice-Mayor, the City Manager or the Finance Director are authorized to execute and deliver the Bond Exchange Agreement on behalf of the City and the District with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution thereof. RVPUB1KAB1637507 4 Section 7. 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 (a) that, to the extent it is legally permitted to do so, 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) that, to the extent it is legally permitted to avoid doing so, it will not initiate proceedings under the Mello-Roos Community'Facilities Act of 1982 (the"Act")to reduce the maximum Special Tax rates(the "Maximum Rates") on then existing Developed Property (as defined therein) within the District 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 five percent (105%) of Maximum Annual Debt Service including the funding of a reserve fund (as defined therein) on the outstanding Bonds; and that any reduction br limitation of the Special Tax rates belowthe Maximum Rates would interfere with the timely retirement of the Bonds. Section8. Modifications. The approval of the Fiscal Agent Agreement and the Bond 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, the City Manager and the Finance Director as being necessary to carry out the provisions thereof and the authorization and direction provided in this resolution. Section 9. Further Action. The Vice-Mayor, the City Manager and the Finance Director 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 and the Bond 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. APPROVED AND ADOPTED this 10th day of September, 2002. Ayes: Nays: Absent: Abstain: City of San Jacinto ,9' Jim res, Vice Mayor ATTEST: rothy L. C uinard, City Clerk RV PUB\KABi637507 5