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HomeMy WebLinkAboutSA 2018-001RESOLUTION NO. 2018-001 RESOLUTION OF THE SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA AUTHORIZING THE ISSUANCE OF ITS SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, TAX ALLOCATION REFUNDING BONDS (MERGED PROJECT AREA), SERIES 2018; APPROVING A FORM OF INDENTURE, A FORM OF ESCROW AGREEMENT, A FORM OF BOND PURCHASE AGREEMENT AND A FORM OF CONTINUING DISCLOSURE CERTIFICATE; MAKING CERTAIN DETERMINATIONS RELATING THERETO; AND AUTHORIZING CERTAIN OTHER ACTION IN CONNECTION THEREWITH WHEREAS, pursuant to the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code of the State of California and referred to herein as the "Law"), the City Council of the City of Santa Ana (the "City") created the former Community Redevelopment Agency of the City of Santa Ana (the "Former RDA"); WHEREAS, the Former RDA was a redevelopment agency, a public body, corporate and politic duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Law, and the powers of such agency included the power to issue bonds for any of its corporate purposes; WHEREAS, the Former RDA adopted six redevelopment project areas between 1973 and 1989, including the Central City Redevelopment Project Area, the Inter -City Commuter Station Redevelopment Project Area, the North Harbor Boulevard Redevelopment Project Area, the South Harbor Boulevard/Fairview Street Redevelopment Project Area, the South Main Street Redevelopment Project Area, and the Bristol Corridor Redevelopment Project Area (the "constituent Redevelopment Projects" or "Redevelopment Projects"), each of which was adopted and approved in accordance with the Law; WHEREAS, to allow tax increment revenues to be shared between Redevelopment Projects and thereby facilitate redevelopment of the Redevelopment Projects, the Redevelopment Projects were merged in 2004 in compliance with all requirements of the Law, creating the Merged Project Area; WHEREAS, the Merged Plan contemplated that the Former RDA would issue its bonds to finance and/or refinance a portion of the cost of such redevelopment; WHEREAS, California Assembly Bill No. 26 (First Extraordinary Session) ("ABX1 26") adopted on June 28, 2011, dissolved all redevelopment agencies and community development agencies in existence in the State of California, as of February 1, 2012, and designated "successor agencies" and "oversight boards" to satisfy "enforceable Resolution No. 2018-001 Page 1 of 10 obligations" of the former redevelopment agencies and administer dissolution and wind down of the former redevelopment agencies; WHEREAS, the City agreed to serve as the successor agency (referred to herein as the "Successor Agency") to the Former RDA commencing upon the dissolution of the Former RDA on February 1, 2012 pursuant to ABX1 26; WHEREAS, on June 27, 2012 as part of the Fiscal Year 2012-2013 State of California budget bill, the Governor signed into law Assembly Bill 1484 ("AB 1484"), which modified or added to some of the provisions of ABX1 26, including provisions related to the refunding of outstanding redevelopment agency bonds and the expenditure of remaining bond proceeds derived from redevelopment agency bonds issued on or before December 31, 2010; WHEREAS, in 2003, the Former RDA issued and sold $20,945,000 aggregate principal amount of its Community Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Bonds, Series 2003A, of which $12,545,000 aggregate principal amount will be outstanding as of September 2, 2018 (the "Series 2003A Bonds"), and $34,145,000 aggregate principal amount of its Community Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Refunding Bonds, Series 2003B, of which $2,820,000 aggregate principal amount will be outstanding as of September 2, 2018 (the "Series 2003B Bonds" and, together with the Series 2003A Bonds, the "2003 Bonds"), pursuant to a First Supplement to Indenture with respect to the Series 2003A Bonds, dated as of April 1, 2003 (the "2003 First Supplement"), and a Second Supplement to Indenture with respect to the Series 2003B Bonds, dated as of May 1, 2003 (the "2003 Second Supplement'), each by and between the Former RDA and BNY Western Trust Company (now known as The Bank of New York Mellon Trust Company, N.A.), as successor trustee (the "2003 Trustee") and each supplementing that Indenture dated as of August 1, 1993, by and between the Former RDA and Dai-Ichi Kangyo Bank of California (the "1993 Indenture" and, as supplemented and amended by the 2003 First Supplement and the 2003 Second Supplement, the "2003 Indenture"), secured by and payable from tax increment revenues allocated to the South Main Street Redevelopment Project, and which 2003 Bonds are subject to optional redemption at any time at a redemption price equal to the outstanding principal amount thereof, plus interest due thereon to the date fixed for redemption, without premium; WHEREAS, on February 4, 2011, the Former RDA issued and sold $66,790,000 aggregate principal amount of its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2011 Series A, of which $64,840,000 aggregate principal amount will be outstanding as of September 2, 2018 (the "Series 2011 Bonds" and, together with the Series 2003 Bonds, the "Refunded Bonds"), pursuant to an Indenture of Trust, dated as of February 1, 2011 (the "2011 Indenture"), between the Former RDA and The Bank of New York Mellon Trust Company, N.A., as trustee, which Series 2011 Bonds are subject to refunding and defeasance in accordance with the 2011 Indenture but are not subject to optional redemption until March 1, 2021 and are therefore not eligible for a tax-exempt advance refunding; Resolution No, 2018-001 Page 2 of 10 WHEREAS, there is approximately $5,831,788.68 of unspent proceeds of the Series 2011 Bonds which will be applied subject to Section 34191.4(c)(2) of the Health and Safety Code of the State of California and as approved by the Department of Finance, and depending on the determination of the Department of Finance, the balance of unspent proceeds of the Series 2011 Bonds will be applied to the defeasance of the Series 2011 Bonds; WHEREAS, Health & Safety Code Section 34177.5(a)(1) authorizes successor agencies to refund outstanding bonds provided that (i) the total interest cost to maturity on the refunding bonds or other indebtedness plus the principal amount of the refunding bonds or other indebtedness shall not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded plus the remaining principal of the bonds or other indebtedness to be refunded, and (ii) the principal amount of the refunding bonds or other indebtedness shall not exceed the amount required to defease the refunded bonds or other indebtedness, to establish customary debt service reserves, and to pay related costs of issuance; WHEREAS, Senate Bill 1029 (Chapter 307 of the 2015-2016 Session of the California Legislature) ("SB 1029") amended Government Code Section 8855 to require a debt policy to be adopted by local agency issuers of public debt for any financings completed on or after January 21, 2017 and the City Council, acting as Successor Agency, wishes to specify debt management policies to guide the Successor Agency, its officers and staff regarding the issuance of Successor Agency debt; WHEREAS, on February 8, 2018, the City Council adopted a Debt Management Policy for the City, the Santa Ana Financing Authority and the Successor Agency (the "Debt Management Policy"), in the form presented at this meeting, that complies with Government Code Section 8855(1), and the Successor Agency wishes to adopt the terms of the Debt Management Policy as its local debt policies, and the Successor Agency's sale and issuance of the Refunding Bonds as contemplated by this Resolution is in compliance with the Debt Management Policy; WHEREAS, the Successor Agency has solicited a report of an independent financial advisor entitled Bond Refunding Savings Analysis (a copy of which is presented at this meeting) and employed such advisor in developing financing proposals for consideration by the Successor Agency and it is understood that such report, as it may be further revised, may be made available to the Department of Finance at its request; WHEREAS, the Successor Agency has determined to issue not to exceed $80,000,000 aggregate principal amount of its Successor Agency to the Community Redevelopment Agency of the City of Santa Ana, Tax Allocation Refunding Bonds (Merged Project Area), Series 2018 in two series, one federally tax exempt and one federally taxable, and with such other name and series designatinn as is rleemimd appropriate (the "Refunding Bonds"), for the purpose of (i) refinancing certain redevelopment activities of the Former RDA through the refunding of the Refunded Bonds, (ii) paying the costs of issuing the Refunding Bonds, (iii) funding a Reserve Account as may be required for the Refunding Bonds and (iv) if advisable, paying for the cost of municipal bond insurance and/or a surety to fund the Reserve Account for the Refunding Bonds; Resolution No. 2018-001 Page 3 of 10 WHEREAS, the Refunding Bonds will be issued, payable from amounts on deposit in the Redevelopment Property Tax Trust Fund of the Agency (the "RPTTF") and allocated to the Agency's Redevelopment Obligation Retirement Fund, pursuant to an Indenture of Trust (the "Indenture"), by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"); WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) ("SB 450") requires that the Successor Agency obtain from an underwriter, municipal advisor or private lender and disclose, prior to authorization of the issuance of bonds, including debt instruments such as the Refunding Bonds, with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public: (a) the true interest cost of the Refunding Bonds, (b) the sum of all fees and charges paid to third parties with respect to the Refunding Bonds, (c) the amount of proceeds of the Refunding Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Refunding Bonds, and (d) the sum total of all debt service payments on the Refunding Bonds calculated to the final maturity of the Refunding Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Refunding Bonds; WHEREAS, in compliance with SB 450, the Successor Agency has obtained from Urban Futures, as the Successor Agency's municipal advisor, and the Underwriter, the required good faith estimates and such estimates are disclosed and set forth on Exhibit A attached hereto; WHEREAS, on June 26, 2018, the Successor Agency's Oversight Board (the "Oversight Board") approved the issuance of the Refunding Bonds by the Successor Agency, and upon approval by the Department of Finance of such approval by the Oversight Board, the Successor Agency will, with the assistance of bond counsel, disclosure counsel and its financial advisor, cause to be prepared a form of Official Statement describing the Refunding Bonds and containing material information relating to the Refunding Bonds, the preliminary form of which will be submitted to the Successor Agency for approval for distribution by Samuel A. Ramirez & Co., Inc. (the "Underwriter") to persons and institutions interested in purchasing the Refunding Bonds; and WHEREAS, there has been presented at this meeting a form of Indenture, a form of Continuing Disclosure Certificate, a form of Escrow Agreement, and a form of Purchase Contract, each to be executed in connection with the issuance of the Refunding Bonds; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA ANA ACTING AS SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA DOES HEREBY RESOLVE AS FOLLOWS: 1. Approval of Issuance of Refunding Bonds. The issuance of the Refunding Bonds, in order to refinance redevelopment activity pursuant to the Merged Plan, which is permitted by Health and Safety Code Section 34177.5(a)(1), is hereby authorized and approved. The Refunding Bonds are authorized to be executed by the manual or facsimile signature of the Mayor of the City, acting for the Successor Agency, and attested by the manual or facsimile signature of the Clerk of the Council, acting for the Successor Agency. The Refunding Bonds, when so executed, are authorized to be delivered the Resolution No. 2018-001 Page 4 of 10 Trustee for authentication. The Successor Agency confirms that the form of this Resolution, and documents approved hereunder, and Exhibit A hereto, and the Savings Analysis presented at this meeting, are each in substantially the form presented at the June 26, 2018 meeting of the Oversight Board, 2. Approval of Indenture. The form of Indenture presented at this meeting is hereby approved and the Mayor, the City Manager, the Executive Director - Finance & Management Services Agency and the Clerk of the Council (each an "Authorized Officer," acting for the Successor Agency) are each acting alone authorized and directed, for and in the name of and on behalf of the Successor Agency, to execute, acknowledge and deliver the Indenture in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. The date, maturity date or dates, interest rate or rates, interest payment dates, terms of redemption and other terms of the Refunding Bonds shall be as provided in the Indenture as finally executed. 3. Approval of Escrow Agreement. The form of Escrow Agreement, between the Successor Agency and The Bank of New York Mellon Trust Company, N.A. (the "Escrow Agreement"), presented at this meeting is hereby approved and any Authorized Officer, acting alone, is authorized and directed, for and in the name of and on behalf of the Successor Agency, to execute, acknowledge and deliver one or more Escrow Agreements with respect to the bonds to be refunded in substantially the form presented at this meeting with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. 4. Approval of Continuinq Disclosure Certificate. The form of Continuing Disclosure Certificate to be executed and delivered by the Successor Agency (the "Continuing Disclosure Certificate"), presented at this meeting is hereby approved and any Authorized Officer, acting alone, is authorized and directed, for and in the name of and on behalf of the Successor Agency, to execute, acknowledge and deliver the Continuing Disclosure Certificate in substantially the form presented at this meeting with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. 5. Approval of Purchase Contract. The form of Bond Purchase Agreement, between the Successor Agency and the Underwriter (the "Purchase Agreement"), presented at this meeting is hereby approved and any Authorized Officer acting alone is authorized and directed, for and in the name of and on behalf of the Successor Agency, to execute, acknowledge and deliver the Purchase Agreement in substantially the form presented at this meeting with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof, �nrnviriAH however, that the true interns+ cost of the Refund— Ronds shall not exceed 3.979%, the underwriters' discount (exclusive of original issue discount) shall not exceed 0.38%, the maturity of the Refunding Bonds date shall not exceed the maximum permitted under the Law, and, as required by Health & Safety Code Section 34177.5, (i) the total interest cost to maturity on the Refunding Bonds plus the principal amount of the Refunding Bonds shall not exceed the total remaining interest cost to maturity on the bonds to be refunded plus the remaining principal of the bonds to be refunded, and (ii) Resolution No. 2018-001 Page 5 of 10 the principal amount of the Refunding Bonds shall not exceed the amount required to defease and refund the refunded bonds, to establish customary debt service reserves, and to pay related costs of issuance. 6. Bond Insurance and Surety Bond. If an Authorized Officer determines that it will be advantageous to the Successor Agency to purchase municipal bond insurance or a debt service reserve fund surety bond with respect to some or all of the Refunding Bonds, such officer is hereby authorized (a) to purchase such insurance or surety bond on behalf of the Successor Agency at market rates, and (b) to make such changes to the agreements and documents relating to the Refunding Bonds as may be needed to obtain such insurance or surety bond. In connection with any such surety bond, each Authorized Officer is hereby severally authorized and directed to execute and deliver an agreement on behalf of the Successor Agency, in such form as approved by such Authorized Officer, with the provider of such surety bond pursuant to which the Successor Agency would agree to reimburse such provider for any draws under such surety bond and to pay such provider any other fees and expenses related thereto as such Authorized Officer shall approve, such approval (and the approval by the Authorized Officer of the form of such agreement) to be conclusively evidenced by the execution and delivery of such agreement. 7. Recovery of Costs. The Successor Agency is hereby authorized to recover its costs of issuance with respect to the Refunding Bonds including the cost of reimbursing the City for staff time and costs spent with respect to the Refunding Bonds. 8. Approval of Debt Management Policy. With the passage of this Resolution, the Successor Agency hereby certifies that the form of Debt Management Policy presented at this meeting complies with Government Code Section 8855(1), and that the Refunding Bonds authorized to be issued pursuant to this Resolution are consistent with such policy, and instructs Orrick, Herrington & Sutcliffe LLP, as Bond Counsel, on behalf of the Successor Agency, with respect to the Refunding Bonds issued pursuant to this Resolution, (a) to cause notices of the proposed sale and final sale of the Refunding Bonds to be filed in a timely manner with the California Debt and Investment Advisory Commission pursuant to Government Code Section 8855, and (b) to check, on behalf of the Successor Agency, the "Yes" box relating to such certifications in the notice of proposed sale filed pursuant to Government Code Section 8855. 9. Good Faith Estimates of Costs of Finance. In accordance with SB 450, good faith estimates of the following have been obtained from the Underwriter and the Municipal Advisor and are set forth on Exhibit A attached hereto: (a) the true interest cost of the Refunding Bonds, (b) the sum of all fees and charges paid to third parties with respect to the Refunding Bonds, (c) the amount of proceeds of the Refunding Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Refunding Bonds, and (d) the sum total of all debt service payments on the Refunding Bonds calculated to the final maturity of the Refunding Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Refunding Bonds. 10. Bond Issuance Services, The Bank of New York Mellon Trust Company, N.A. is hereby appointed as Trustee and Escrow Bank, Samuel A. Ramirez & Co., Inc. is Resolution No. 2018-001 Page 6 of 10 hereby appointed as Underwriter, Orrick, Herrington and Sutcliffe LLP is hereby appointed as Bond Counsel, Best Best & Krieger LLP is hereby appointed as Disclosure Counsel, Keyser, Marston & Associates is hereby appointed as Fiscal Consultant and Urban Futures is hereby appointed as Financial Advisor. Either the City Manager or the Executive Director - Finance & Management Services Agency, acting for the Successor Agency, is authorized to execute contracts for such services and any other related services as may be required to defense and/or refund all or a portion of the Refunded Bonds. 11. Other Acts. The officers and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, including refunding escrow agreements or instructions, which in consultation with Orrick, Herrington & Sutcliffe LLP, the Successor Agency's bond counsel, they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Refunding Bonds, or otherwise effectuate the purposes of this Resolution, and any and all such actions previously taken by such officers or staff members are hereby ratified and confirmed. 12. Effective Date. This Resolution shall take effect upon adoption. ADOPTED this 17th day of July, 2018. APPROVED AS TO FORM: Sonia C,"ho,,,City Attorney By:_L Ryan C AYES: Councilmembers Benavides, Pulido, Sarmiento.Tinajero Ville -gas (5) NOES: Councilmembers None (0) ABSTAIN: Councilmembers None (0) NOT PRESENT: Councilmembers Martinez, Solorio (2) Resolution No. 2018-001 Page 7 of 10 CERTIFICATION OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of Council, do hereby attest to and certify the attached Resolution No. 2018-001 to be the original resolution adopted by the City Council of the City of Santa Ana on July 17th, 2018. Date: 7 1;2-y %o/6 Maria D. Huizar Clerk of Council City of Santa Ana Resolution No. 2018-001 Page 8 of 10 laan:3rr_� GOOD FAITH ESTIMATES The good faith estimates set forth herein are provided with respect to the Refunding Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the Successor Agency by Samuel A. Ramirez & Co., Inc., as underwriter (the "Underwriter") and Urban Futures, as municipal advisor to the Successor Agency (the "Municipal Advisor"), each with respect to the Refunding Bonds. Principal Amount. The Underwriter and the Municipal Advisor have informed the Successor Agency that, based on the Successor Agency's Savings Analysis and current market conditions, its good faith estimate of the aggregate principal amount of the Refunding Bonds to be sold is $80,000,000 (the "Estimated Principal Amount"). True Interest Cost of the Refunding Bonds. The Underwriter and the Municipal Advisor have informed the Successor Agency that, assuming that the Estimated Principal Amount of the Refunding 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 Refunding 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 Refunding Bonds, is 3.479%. Finance Charge of the Refunding Bonds. The Underwriter and the Municipal Advisor have informed the Successor Agency that, assuming that the Estimated Principal Amount of the Refunding 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 Refunding Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Refunding Bonds), is $1,278,564 (assuming $278,407 underwriter's discount, $700,157 municipal bond insurance and debt service reserve policy premiums, and $300,000 additional costs of issuance). Amount of Proceeds to be Received. The Underwriter and the Municipal Advisor have informed the Successor Agency that, assuming that the Estimated Principal Amount of the Refunding 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 Successor Agency for sale of the Refunding Bonds, less the finance charge of the Refunding Bonds, as estimated above, and any reserve fund funded with proceeds of the Refunding Bonds, is $73,632,675. Total Payment Amount, The Underwriter and the Municipal Advisor have informed the Successor Agency that, assuming that the Estimated Principal Amount of the Refunding 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 Successor Agency will make to pay debt service on the Refunding Bonds, plus the finance charge for the Refunding Bonds, as described 4154-5855-2844.7 above, not paid with the proceeds of the Refunding Bonds, calculated to the final maturity of the Refunding Bonds, is $88,911,277. The foregoing estimates constitute good faith estimates only. The actual principal amount of the Refunding 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 Refunding Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Refunding Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Refunding 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 Refunding Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the Successor Agency's financing plan, or a combination of such factors. The actual date of sale of the Refunding Bonds and the actual principal amount of Refunding Bonds sold will be determined by the Successor Agency based on the timing of the need for proceeds of the Refunding Bonds and other factors. The actual interest rates borne by the Refunding Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Refunding 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 Successor Agency Resolution No. 2018-001 Page 10 of 10