HomeMy WebLinkAboutResolution - FA 15-01 STATE OF CALIFORNIA ) RESOLUTION NO. FA 15-01
COUNTY OF RIVERSIDE)ss
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CITY OF SAN JACINTO )
RESOLUTION OF THE SAN JACINTO FINANCING AUTHORITY
APPROVING A PLEDGE AGREEMENT WITH THE COMMUNITY
FACILITIES DISTRICT NO. 2015-1 (SUPPLEMENTAL SPECIAL TAX
TO RANCHO SAN JACINTO PHASE 2) PLEDGING SPECIAL TAXES
WITHIN THE DISTRICT IN REGARD TO REPAY CERTAIN
INDEBTEDNESS OF COMMUNITY FACILITIES DISTRICT NO.2002-1
WHEREAS, the City of San Jacinto (the "City") has formed its Community Facilities
District No. 2002-1 (Rancho San Jacinto, Phase 2) ("CFD No. 2002-1") and, in connection
therewith, has issued its San Jacinto Financing Authority (the "Authority") 2002 Local Agency
Revenue Bonds, Series A (Tranches A through D) in the original principal amount of
$17,841,416.76 (the "2002 Bonds") which are secured by special taxes levied by the City on
property within the boundaries of CFD No. 2002-1;
WHEREAS, due to delinquencies in the payment of such special taxes, the City and
Tower Music City, LLC, owner of property located within CFD 2002-1 ("Owner"), entered into
a Memorandum of Understanding which permitted the Owner to sell certain parcels of property
to Eastern Municipal Water District, provided, however, that a community facilities district be
I formed on the remaining parcels owned by Owner to finance the payment of a portion of the
principal of and interest on the 2002 Bonds; and
WHEREAS, the City Council (the "City Council") of the City of San Jacinto (the
"City") received a petition from the Owner requesting that the City Council institute proceedings
for the formation of a community facilities district, pursuant to Chapter 2.5 (commencing with
Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly
known as the "Mello-Roos Community Facilities Act of 1982," for the purpose of financing
through the sale of bonds or the levy of special taxes the amounts necessary to pay debt service
on the 2002 Bonds; and
WHEREAS, on June 18, 2015, the City Council adopted a resolution authorizing the
formation of CFD No. 2015-1 (Supplemental Special Tax to Rancho San Jacinto Phase 2) ("CFD
2015-1") and a resolution authorizing the incurrence of bonded indebtedness in an amount not to
exceed $5,500,000; and
WHEREAS, pursuant to another resolution adopted on June 18, 2015, the City Council
called an election to submit to the qualified voters propositions related to the levy of special
taxes within CFD 2015-1 to finance the payment of debt service on the 2002 Bonds,the issuance
of bonds therein and the establishment of an appropriations limit there; and
WHEREAS, on qualified voters approved such propositions by a two-thirds majority
vote; and
WHEREAS, in order to fulfill the terms and conditions of the MOU, CFD 2015-1 has
determined to enter into a pledge agreement (the "Pledge Agreement") and issue a promissory
note (the "Promissory Note"), the form of which is attached hereto as Exhibit "A" to pledge to
the Authority special taxes levied within CFD 2015-1 for the payment of a portion of the
principal of and interest on the 2002 Bonds.
NOW, THEREFORE, THE GOVERNING BOARD OF THE SAN JACINTO
FINANCING AUTHORITY,DOES HEREBY RESOLVE,DETERMINE AND ORDER AS
FOLLOWS:
Section 1. Recitals. All of the recitals herein contained are true and correct and
the Board so finds.
Section 2. Approval of Pledge Agreement. The Pledge Agreement and the
Promissory Note, the forms of which are attached hereto as Exhibit "A" and incorporated
hereby by this reference, are hereby authorized and approved to be executed by the Chairman,
Executive Director and the Board Secretary, acting in their capacities as such officers of the
Authority. The Pledge Agreement and Promissory Note are approved substantially the form attached
hereto with such changes therein as the officer(s) executing the same may approve, such approval to
be conclusively evidenced by the execution and delivery thereof.
Section 3. Other Actions. The Chairman, Executive Director and the Board
Secretary, and the other officers of the Authority are hereby authorized to take any and all action(s)
which is directed by Special Counsel to the City (Best Best & Krieger LLP) with respect to the
execution, acknowledgment and delivery of the Pledge Agreement which in the opinion of Special
Counsel is necessary in order for the authorizations and directions provided in this Resolution to be
carried out.
Section 4. Ratification of Actions. All actions heretofore taken by the officers
and agents of the Corporation with respect to the transactions set forth above are hereby
approved, confirmed and ratified.
Section 5. Effective Date. This Resolution shall take effect from and after its date
of adoption.
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The procedures set forth in this section for conducting the consolidated special
elections, if they are held, may be modified as the City Council may determine to be necessary or
desirable by a resolution subsequently adopted by the City Council.
PASSED, APPROVED and ADOPTED by the Governing Board this 4`h day of
August, 2015, by the following vote:
AYES: Bartel, Kotyuk, Ledezma, Miller, Ruiz
NAYS: None
ABSENT: None
ABSTAINED: None
San Jacinto Financing Authority
Crystal uiz, Chairman
ATTEST:
Richar ,Miller, Finance Authority Secretary
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EXHIBIT"A"
FORM OF PLEDGE AGREEMENT
AGREEMENT FOR PLEDGE OF SPECIAL TAXES
COMMUNITY FACILITIES DISTRICT NO. 2015-1
(SUPPLEMENTAL SPECIAL TAX TO RANCHO SAN JACINTO PHASE 2)
AND PROMISSORY NOTE
THIS PLEDGE AGREEMENT (the "Agreement") is made and entered into by and
between the San Jacinto Financing Authority, a joint powers authority duly organized and
existing under the Constitution and laws of the State of California (the "Authority"), and
Community Facilities District No. 2015-1 (Supplemental Special Tax to Rancho San Jacinto
Phase 2) ("CFD No. 2015-1"), a community facilities district formed and operating pursuant to
the Mello-Roos Community Facilities Act of 1982, as amended (the"Act").
RECITALS:
WHEREAS, the City of San Jacinto (the "City") has formed its Community Facilities
District No. 2002-1 (Rancho San Jacinto, Phase 2) ("CFD No. 2002-1) and, in connection
therewith, has issued its San Jacinto Financing Authority 2002 Local Agency Revenue Bonds,
Series A (Tranches A through D) in the original principal amount of$17,841,416.76 (the "2002
Bonds") which are secured by special taxes levied by the City on property within the boundaries
of CFD No. 2002-1;
WHEREAS, due to delinquencies in the payment of such special taxes, the City and
Tower Music City, LLC, owner of property located within CFD 2002-1 ("Owner"), entered into
a Memorandum of Understanding which permitted the Owner to sell certain parcels of property
to Eastern Municipal Water District, provided, however, that a community facilities district be
formed on the remaining parcels owned by Owner to finance the payment of a portion of the
principal of and interest on the 2002 Bonds; and
WHEREAS, the City Council (the "City Council") of the City of San Jacinto (the "City")
received a petition from the Owner requesting that the City Council institute proceedings for the
formation of a community facilities district, pursuant to Chapter 2.5 (commencing with Section
53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known
as the "Mello-Roos Community Facilities Act of 1982," for the purpose of financing through the
sale of bonds or the levy of special taxes the amounts necessary to pay debt service on the 2002
Bonds; and
WHEREAS, on June 18, 2015, the City Council adopted a resolution authorizing the
formation of CFD No. 2015-1 and a resolution authorizing the incurrence of bonded
indebtedness in an amount not to exceed $5,500,000; and
WHEREAS, pursuant to another resolution adopted on June 18, 2015, the City Council
called an election to submit to the qualified voters propositions related to the levy of special
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taxes within CFD 2015-1 to finance the payment of debt service on the 2002 Bonds, the issuance
of bonds therein and the establishment of an appropriations limit there; and
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WHEREAS, on qualified voters approved such propositions by a two-thirds majority
vote; and
WHEREAS, in order to fulfill the terms and conditions of the MOU, CFD 2015-1 has
determined to issue a promissory note, the form of which is attached hereto as Exhibit "A" (the
"Promissory Note") to pledge to the Authority special taxes levied within CFD 2015-1 for the
payment of a portion of the principal of and interest on the 2002 Bonds.
NOW, THEREFORE, BASED ON THE FOREGOING AND THE TERMS AND
CONDITIONS CONTAINED HEREIN, THE PARTIES HERETO DO AGREE AS
FOLLOWS:
Section 1. Recitals. The foregoing recitals are true and correct and are incorporated
herein by this reference.
Section 2. Definitions. The terms defined in this Section 2 shall, for all purposes of
this Agreement,have the meanings herein specified.
"2002 Bonds" shall be as defined in the recitals hereto.
112002 Indenture" means the Indenture of Trust executed by and between the Authority
and 2002 Trustee dated October 1, 2002 executed in connections with the issuance of the 2002
Bonds.
112002 Revenue Fund" means the revenue fund established pursuant to the 2002
Indenture.
"2002 Trustee" means Union Bank of California,N.A.
"Administrative Expenses" means the expenses of CFD No. 2015-1 which are
necessary to the calculation, collection, administration and documentary requirements relating to
the annual levy of the Special Taxes, the administering of CFD No. 2015-1 and related costs and
expenses.
"Agreement" means this Pledge Agreement.
"CFD No.2015-1" shall be as defined in the recitals hereto.
"Promissory Note" means the promissory note executed by CFD No. 2015-1, in
substantially the same form set forth in Exhibit"A" attached hereto .
"Rate and Method" means the Rate and Method of Apportionment of Special Tax of
CFD No. 2015-1.
"Special Taxes" means the special taxes levied and collected by CFD No. 2015-1.
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Section 3. Collection and Application of Special Taxes. CFD No. 2015-1 shall take
all actions necessary to annually cause the levy and collection of the Special Taxes, pursuant to
the Rate and Method. When collected, such Special Taxes, after deduction of Administrative
Expenses, will be transferred by CFD No. 2015-1 to the Authority to be applied as provided for
in Section 4 of this Agreement. CFD No. 2015-1 further agrees to take no action(s) which would
impair or impede its ability to levy, collect and apply the Special Taxes as provided for in this
Agreement. CFD No. 2015-1 also agrees to undertake to commence foreclosure actions as
against properties which are delinquent in payment of Special Taxes upon such circumstances as
CFD No. 2015-1 shall direct.
Section 4. Pledge of Special Tax Revenues. The Special Taxes received by CFD
No. 2015-1, after deduction of Administrative Expenses, are hereby irrevocably pledged by the
District to the payment of the Promissory Note. The Authority shall provide for the special taxes,
pledged under this Section, upon receipt, to be transferred to the 2002 Trustee for deposit in the
2002 Revenue Fund for the payment of principal and interest on the 2002 Bonds in accordance
with the 2002 Indenture. No pledge of Special Taxes shall be made on on a parity basis to the
Promissory Note, unless such parity obligations are authorized by the Authority and CFD No.
2015-1. CFD No. 2015-1 further agrees that the Special Tax revenues shall not be used for any
other purpose during the term of this Agreement. This pledge shall become effective upon the
execution and delivery of the Promissory Note. The Authority agrees to use the Special Tax
revenues delivered by CFD No. 2015-1 to pay the principal of and interst on the 2002 Bonds in
accordance with the 2002 Indenture.
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Section 5. Term. The term of this Agreement shall commence upon the execution
and delivery of the Promissory Note. The term of this Agreement shall continue until: (i) all the
Promissory Note is fully repaid; or(ii) June 30, 2045.
Section 6 Headings. The paragraph headings contained herein are for convenience
and reference and are not intended to define or limit the scope of any provision of this
Agreement.
Section 7. Alternation or Amendment. No alteration or amendment to this
Agreement shall be deemed binding upon the parties unless the same has been executed thereby
the Authority and CFD No. 2015-1 provided, however, that no amendment, addition or alteration
shall be effective as regard to Sections 3, 4, 5 and 6 hereof, except an amendment to provide for
a subordinate pledge of Special Taxes relative to parity obligations as provided for in Section 4,
hereof.
Section 8. Notices. All notices, requests or communications required or permitted to
be given in this Agreement shall be in writing and mailed or delivered to the respective party as
follows:
To CFD No. 2015-1: Community Facilities District No. 2015-1 of the City of San Jacinto
595 S. San Jacinto Ave
San Jacinto, CA 92583
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To Authority: San Jacinto Financing Authority
} 595 S. San Jacinto Ave
San Jacinto, CA 92583
The Authority and CFD No. 2015-1 may, by notice given hereunder, designate any
further or different address to which subsequent notices and other communications shall be sent.
Section 9. Governing Law; Venue. The laws of the State of California shall govern
this Agreement, the interpretation thereof and any right or liability arising hereunder. Any action
or proceeding to enforce or interpret any provision of this Agreement shall be brought,
commenced or prosecuted in the court or appropriate jurisdiction within Riverside County,
California.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the 1st day of
August, 2015.
CITY OF SAN JACINTO ON BEHALF OF
COMMUNITY FACILITIES DISTRICT NO.
2015-1 OF THE CITY OF SAN JACINTO:
By:
MAYOR
By:
CITY CLERK
SAN JACINTO FINANCING AUTHORITY
By:
CHAIRMAN
By:
SECRETARY
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EXHIBIT A
PROMISSORY NOTE
CFD NO.2015-1 (SUPPLEMENTAL SPECIAL TAX
TO RANCHO SAN JACINTO PHASE 2)
$5,500,000 August 1, 2015
San Jacinto, California
For value received, COMMUNITY FACILITIES DISTRICT NO. 2015-1
(SUPPLEMENTAL SPECIAL TAX TO RANCHO SAN JACINTO PHASE 2) (the
"District"), a community facilities district organized and operating under the laws of the State of
California ("Maker"), pursuant to the provisions of this Promissory Note ("Note"), promises to
pay to the San Jacinto Financing Authority, a joint powers authority organized and operating
under the laws of the State of California ("Holder"), the amount of Five Million Five Hundred
dollars ($5,500,000) in accordance with the terms of this Note. This Note is secured by an
assignment to Holder of Maker's right to receive the special taxes levied within the boundaries of
the District ("Installment Agreement"). This Note is being delivered to Holder in connection
with the Pledge Agreement, pursuant to which Maker agreed to supplement special taxes for the
repayment of debt service on outstanding bonds of the Holder, as further described therein.
1. Terms and Conditions of Payment.
1.1 Interest. This Note shall bear no interest.
1.2 Payments.
1.2.1 Annual Note Payments. Commencing on September 1, 2016, and
continuing until the Maturity Date (as defined below), annual payments due on September 1 of
each year in the amounts set forth on the attached Schedule 1 incorporated herein shall be due by
Maker under this Note (each, a "Note Payment"). All payments made under this Note shall be
payable in lawful money of the United States of America.
1.2.2 Balance on Maturity Date. The final Note Payment under this Note shall
be due and payable on the date that is September 1, 2033 (the "Maturity Date").
2. Prepayment. In the event that Maker desires to prepay and defease payments
hereunder,then Maker shall be authorized to do so without premium.
3. Security. This Note is secured by the right by Maker to receive special taxes levied
within the District.
4. Nonrecourse. Holder agrees that it will look solely to the Pledge Agreement as
collateral hereunder to secure the repayment of the indebtedness evidenced hereby. No other
property or assets of Maker, or any agency, city,partner, member, or principal of Maker, shall be
subject to levy, execution or other enforcement procedure for the satisfaction of the remedies of
Holder, or for any payment required to be made under this Note or any other documents related
to this Note. Holder acknowledges that Maker's revenue is limited to special taxes levied within
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the District that no other funds may be used to repay the Promissory Note. This Note does not
constitute a general pledge of the faith and credit of the Maker, but rather is a special limited
obligation of Maker payable solely from special taxes levied within the District. Neither the
credit nor the taxing power of the City is pledged to the payment of this Note and no Holder will
have any right to demand payment by the Maker out of any funds or revenue other than special
taxes levied within the District.
5. Default. The failure by Maker to make any payment due under this Note within
thirty (30) days after written notice from Holder shall be deemed an "Event of Default" under
this Note.
6. Remedies Upon Default. Upon the occurrence of an Event of Default under this
Note, Holder's sole and exclusive remedy, in lieu of any other remedies available to Holder at
law or in equity. Holder shall not have the right at any time to accelerate any payments due in
the future under this Note.
7. Miscellaneous.
7.1 Notices. All notices, demands, consents, requests or other communications
required to or permitted to be given pursuant to this Agreement shall be in writing, shall be given
only in accordance with the provisions of this Section, shall be addressed to the parties in the
manner set forth below, and shall be conclusively deemed to have been properly delivered:
(a) upon receipt when hand delivered during normal business hours (provided that notices which
are hand delivered shall not be effective unless the sending party obtains a signature of a person
at such address that the notice has been received); (b)upon receipt when sent by facsimile to the
number set forth below (provided, however, that notices given by facsimile shall not be effective
unless the sending party delivers the notice also by one other method permitted under this
Section); (c)upon the day of delivery if the notice has been deposited in an authorized receptacle
of the United States Postal Service as first-class, registered or certified mail, postage prepaid,
with a return receipt requested(provided that the sender has in its possession the return receipt to
prove actual delivery); or (d) one (1) business day after the notice has been deposited with either
FedEx or United Parcel Service to be delivered by overnight delivery (provided that the sending
party receives a confirmation of actual delivery from the courier).
If to the Authority: San Jacinto Public Financing Authority
595 S. San Jacinto Avenue
San Jacinto,CA 92583
Attention: Chairman
If to CFD No. 2015-1: CFD No. 2015-1
595 S. San Jacinto Avenue
San Jacinto, CA 92583
Attention: City Manager
Each party shall make an ordinary, good faith effort to ensure that it will accept or receive
notices that are given in accordance with this Section, and that any person to be given notice actually
receives such notice. Any notice to a party which is required to be given to multiple addresses shall only
be deemed to have been delivered when all of the notices to that party have been delivered pursuant to
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this Section. If any notice is refused, the notice shall be deemed to have been delivered upon such
refusal. Any notice delivered after 5:00 p.m. (recipient's time) or on a non-business day shall be deemed
delivered on the next business day. Notices delivered by electronic mail shall not be deemed properly
delivered, even if the electronic mail addresses of the parties appear above or otherwise are provided for
convenience. A party may change or supplement the addresses given above, or designate additional
addressees, for purposes of this Section by delivering to the other party written notice in the manner set
forth above.
7.2 Governing Law. The terms of this Note were negotiated in the State of California and it
is understood and agreed that the legality, enforcement and construction of this Note shall be governed
by California law applicable to agreements made in California.
7.3 Successor Interests. The terms of this Note shall be binding upon Maker, its heirs,
personal representatives, successors and assigns, and shall inure to the benefit of Holder and its
successors and assigns. This Note shall not be assigned or transferred by the Holder without prior
written consent of Maker.
7.4 SeverabiliV. If a court of competent jurisdiction or arbitration tribunal finds any
provision in this Note to be invalid, such invalidity shall not affect the remainder of the Note. In such
event, the invalid provision shall be deemed severed therefrom and the remainder of the Note shall
remain enforceable in accordance with its terms and of full force and effect.
7.5 Weekends and Holidays. Whenever any payment to be made under this Note is due on
a Saturday, Sunday, or public holiday, such payment may be made on the next succeeding business
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day, and such extension of time shall be included in computing interest in connection with such
payment.
IN WITNESS WHEREOF, Maker, on the day and year first above written,has
caused this Note to be duly executed.
MAKER:
COMMUNITY FACILITIES DISTRICT NO.2015-
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By:
Name: Tom Prill
Title:Finance Director
Date:
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SCHEDULEI
Payment Schedule
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Year CFD No. 2015-1 Maximum
(September l) Special Tax')
2016 $ 757,307.13
2017 772,453.27
2018 787,902.34
2019 803,660.38
2020 819,733.59
2021 836,128.26
2022 852,850.83
2023 869,907.85
2024 887,306.00
2025 905,052.12
2026 923,153.17
2027 941,616.23
2028 960,448.55
2029 979,657.52
2030 999,250.68
2031 1,019,235.69
2032 1,039,620.40
2033 1,060,412.81
2034 1,081,621.07
The CFD No. 2015-1 Maximum Special Tax is based upon the current
parcel classification and parcel size of the parcels within the boundaries of
CFD No. 2015-1. This amount is preliminary and subject to change based
upon changes in the parcels within the boundaries of the district and their
parcel classifications as assigned by the Rate and Method of Apportionment.
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