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HomeMy WebLinkAboutRes 06-57 and FA-54 Project Area No. 2 Issuance and Sale of Subordinate Tax Allocation RevenueCITY OF PALM DESERT/PALM DESERT FINANCING AUTHORITY STAFF REPORT REQUEST: APPROVAL OF RESOLUTION NO. 06-s7 OF THE CITY COUNCIL OF THE CITY OF PALM DESERT MAKING FINDINGS OF SIGNIFICANT PUBLIC BENEFIT IN CONNECTION WITH THE ISSUANCE AND SALE OF SUBORDINATE TAX ALLOCATION REVENUE REFUNDING BONDS (PROJECT AREA NO. 2), 2006 SERIES A, AND SUBORDINATE TAX ALLOCATION REVENUE CAPITAL APPRECIATION BONDS (PROJECT AREA NO. 2), 2006 SERIES B OF THE PALM DESERT FINANCING AUTHORITY APPROVAL OF RESOLUTION NO. FA-54 OF THE PALM DESERT FINANCING AUTHORITY ACKNOWLEDGING FINDINGS OF SIGNIFICANT PUBLIC BENEFIT IN CONNECTION WITH THE ISSUANCE AND SALE OF THE AUTHORITY'S SUBORDINATE TAX ALLOCATION REVENUE REFUNDING BONDS (PROJECT AREA NO. 2), 2006 SERIES A, AND SUBORDINATE TAX ALLOCATION REVENUE CAPITAL APPRECIATION BONDS (PROJECT AREA NO. 2), 2006 SERIES B OF THE PALM DESERT FINANCING AUTHORITY AND APPROVING THE ISSUANCE, SALE AND DELIVERY OF SUCH BONDS SUBMITTED BY: DAVE YRIGOYEN, DIRECTOR OF REDEVELOPMENT/HOUSING DATE: APRIL 27, 2006 CONTENTS: CITY COUNCIL RESOLUTION NO. 06-57 PALM DESERT FINANCING AUTHORITY RESOLUTION NO. FA - Recommendation: By Minute Motion: 1. That the City Council and Financing Authority Commission open a public hearing, receive Public Testimony, and after hearing such testimony: 2. That the City Council approve Resolution No. 06-57 , making findings of significant public benefit in connection with the issuance and sale of Subordinate Tax Allocation Refunding Revenue Bonds (Project Area No. 2), 2006 Series A, and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series B of the Palm Desert Financing Authority. G:\RDA\Arla Scott\Word Files\Staff Repts\PA2-CCPD-PDFA-Findings of Benefit.doc Staff Report Approval of Council and PDFA Resolutions — PA#2 Tax Alloc. Revenue Refunding Bonds Page 2 of 2 April 27, 2006 3. That the Palm Desert Financing Authority approve Resolution No. FA-54 , acknowledging finding of significant public benefit in connection with the issuance and sale of the Authority's Subordinate Tax Allocation Refunding Revenue Bonds (Project Area No. 2), 2006 Series A and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series B and approving the issuance, sale and delivery of such bonds. Executive Summary The attached resolutions of the City Council and the Financing Authority are preliminary steps that will further the process to issue tax-exempt and taxable refunding bonds of the Financing Authority payable from tax increment revenues from Project Area No. 2. Discussion: State law requires that a member local agency of the Financing Authority within whose boundaries the financed improvements are to be located, hold a public hearing and make a finding of significant public benefit with respect to the improvements. State law also requires the City Council to hold a public hearing in connection with certain improvements financed with tax increment revenues of the Redevelopment Agency. There will be approximately $39 million of current interest bonds and approximately $30.6 million of capital appreciation bonds issued (CABS) as well. After various costs of issuance, we will receive approximately $66 million in bond proceeds. These funds will be used for land acquisition, parking structures, widening of streets throughout the project area, parks, drainage facilities throughout the project area, arterial street undergroundings, and various other projects. Staff is recommending that the City Council hold the public hearing, adopt its resolution making the findings, and that the Financing Authority subsequently adopt its resolution acknowledging those findings. Submitted by: `Dave Yrigo/en Director of Revelopment/Housing DY:AKS:mh Approval: gtritin McC�arthy,'ACM Redevelopment Carlos L. Ortegatity Manager/CAO Paul S. Gibson, Director of Finance G:\RDA\Arla Scott\Word Files\Staff Repts\PA2-CCPD-PDFA-Findings of Benefit.doc RESOLUTION NO. 06-57 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT MAKING A FINDING OF SIGNIFICANT PUBLIC BENEFIT AND OTHER FINDINGS IN CONNECTION WITH THE ISSUANCE AND SALE BY THE PALM DESERT FINANCING AUTHORITY OF ITS SUBORDINATE TAX ALLOCATION REFUNDING REVENUE BONDS (PROJECT AREA NO. 2), 2006 SERIES A, AND SUBORDINATE TAX ALLOCATION REVENUE CAPITAL APPRECIATION BONDS (PROJECT AREA NO. 2), 2006 SERIES B RECITALS: WHEREAS, the Palm Desert Financing Authority (the "Authority") has proposed to sell and issue its Subordinate Tax Allocation Refunding Revenue Bonds (Project Area No. 2), 2006 Series A (the "Series 2006A Bonds") and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series B (the "Series 2006B Bonds," and together with the Series 2006A Bonds, the "Bonds"); and WHEREAS, proceeds of the Bonds are to be applied for the purpose of making two loans to the Palm Desert Redevelopment Agency (the "Agency") for the object and purpose of, among other things, assisting in (i) effecting a refunding of all of the Authority's remaining outstanding Tax Allocation Revenue Bonds (Project Area No. 2), Series 1995, and (ii) the financing of certain public capital improvements of benefit to Project Area No. 2, of the Agency (the "Project Area"), including : (A) the widening of portions of Gerald Ford Drive and Monterey Avenue; (B) the installation of a drainage facility at Portola Avenue and Frank Sinatra Drive; (C) arterial street utility undergroundings throughout the Project Area; (D) improvements to the on and off ramps at Monterey Avenue and Interstate 10; (E) the construction of on and off ramps at Portola Avenue and Interstate 10; (F) the installation of Freedom Park at Country Club Drive and Liberty Avenue; (G) the acquisition of open space for recreational purposes; (H) a parking structure to accommodate a hotel and related development at the Desert Willow Golf Resort; and (1) landscape improvements throughout the Project Area; and WHEREAS, pursuant to Section 6586.5 of the California Government Code and Section 33679 of the California Health and Safety Code and after notice duly published in accordance with law, this City Council held a public hearing on this date with respect to the issuance of the proposed Bonds and received evidence concerning the public benefits therefrom; and WHEREAS, there has been made available in the office of the City Clerk for two weeks prior to such public hearing for public inspection and copying, at a cost not to exceed the cost of duplication, a summary report which includes all of the P6402.1055\884011.2 1 Resolution No. 06- following: (i) estimates of the amount of such taxes allocated to the Agency from the Project Area proposed to be used to pay for the installation and construction of such public capital improvements, including interest payments; (ii) facts supporting the determinations required to be made by the City Council pursuant to California Health and Safety Code Section 33445; and (iii) the redevelopment purpose for which such taxes are being used to pay for the installation and construction. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2. Approval of Financing. The City Council hereby finds that the financing and refinancing of public capital improvements described above through the issuance by the Authority of the Bonds will result in significant public benefits to the constituents of the Agency and the City of Palm Desert, including demonstrable savings in effective interest rate and more efficient delivery of Agency and City services to residential and commercial development. The City Council hereby approves the issuance of the Bonds by the Authority. Section 3. Further Findinas. The City Council hereby finds and determines that based upon the "Summary Report Regarding Payment by the Palm Desert Redevelopment Agency for All or A Portion of the Cost of Land for Open Space and the Installation and Construction of Certain Other Public Capital Improvements of Benefit to Project Area No. 2," which Report was made available at the office of the City Clerk in connection with the public hearing described in the Recitals hereof, and other information presented to the City Council: (i) the above -described public capital improvements are of benefit to the Project Area and to the immediate neighborhood in which the project is located; (ii) the payment of funds for the cost of such public capital improvements will assist in the elimination of one or more blighting conditions inside the Project Area; (iii) the payment of funds for the cost of such improvements is consistent with the Agency's implementation plan adopted pursuant to Health and Safety Code Section 33490; and (iv) no other reasonable means of financing such improvements is available to the City. Section 4. Approval of Payment by Aaencv. The City Council hereby approves payment by the Agency for the cost of the installation and construction of the above -described improvements from tax increment revenues of the Agency from the Project Area. Section 5. Other Acts. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to effectuate the purposes of this Resolution and any such actions previously taken by such officers P6402.1055\884011.2 Resolution No. 06-52_ are hereby ratified and confirmed. Section 6. Effective Date. This Resolution shall take effect immediately upon adoption. vote to wit: APPROVED and ADOPTED this 27th day of April 2006 by the following AYES: NOES: ABSENT: ABSTAIN: ATTEST: Rachelle D. Klassen, City ClerkK Jim Ferguson, Mayor P6402.1055\884011.2 RESOLUTION NO. FA-54 A RESOLUTION OF THE PALM DESERT FINANCING AUTHORITY ACKNOWLEDGING A FINDING OF SIGNIFICANT BENEFIT AND APPROVING AS TO FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF THE AUTHORITY'S SUBORDINATE TAX ALLOCATION REFUNDING REVENUE BONDS (PROJECT AREA NO. 2), 2006 SERIES A, AND SUBORDINATE TAX ALLOCATION REVENUE CAPITAL APPRECIATION BONDS (PROJECT AREA NO. 2), 2006 SERIES B, AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO RECITALS: WHEREAS, the Palm Desert Financing Authority (the "Authority") is a joint powers authority duly organized and existing under and pursuant to Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the California Government Code (the "Act") and that certain Joint Exercise of Powers Agreement dated as of January 26, 1989, by and between the City of Palm Desert (the "City") and the Palm Desert Redevelopment Agency (the "Agency"), and is authorized pursuant to Article 4 of the Act to issue bonds for the purpose of making loans to the Agency to provide financing and refinancing for public capital improvements; and WHEREAS, the Authority desires to issue and sell its Subordinate Tax Allocation Refunding Revenue Bonds (Project Area No. 2), 2006 Series A (the "Series 2006A Bonds") and Subordinate Tax Allocation Revenue Capital Appreciation Bonds (Project Area No. 2), 2006 Series B (the "Series 2006B Bonds," and together with the Series 2006A Bonds, the "Bonds") to be issued and secured pursuant to a certain Indenture (as defined below); and WHEREAS, proceeds of the Bonds are to be applied for the purpose of making two loans to the Agency pursuant to a certain Loan Agreement (as defined below) for the object and purpose of, among other things, (i) assisting in the financing of certain public capital improvements of benefit to Project Area No. 2, of the Agency, and (ii) effecting all of the Authority's remaining outstanding Tax Allocation Revenue Bonds (Project Area No. 2), Series 1995; and WHEREAS, the City Council has made a finding, after a duly noticed public hearing pursuant to Section 6586.5 of the California Government Code, that the issuance of the Bonds will result in significant public benefit; P6402.1055\884013.2 1 Resolution No. FA-54 NOW, THEREFORE, THE PALM DESERT FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1.Recitals. The above recitals, and each of them, are true and correct. Section 2.Acknowledament of City Council Findings. The Authority hereby acknowledges and concurs with the City Council's finding of significant public benefit and hereby approves and authorizes the issuance and sale of the Bonds. Section 3.Issuance of Bonds: Indenture. The Indenture of Trust (the "Indenture"), proposed to be entered into by and between the Authority and the Trustee (defined in Section 3 below), in the form presented at this meeting and on file in the office of the Secretary of the Authority (the "Secretary"), is hereby approved. The issuance of the Series 2006A Bonds, in an aggregate principal amount not exceeding $45,000,000, and the issuance of the Series 2006B Bonds, in an aggregate initial principal amount not exceeding $35,000,000, pursuant to the Indenture are hereby approved. Subject to Section 10 below, each of the President, the Chief Administrative Officer and the Treasurer of the Authority, any deputy of such officers, and any member of the Authority Commission (each, an "Authorized Officer"), acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with such additions or changes as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Officer's execution and delivery thereof). Section 4.A000intment of Trustee and Escrow Agent. The appointment of Wells Fargo Bank, N.A., as trustee (the "Trustee") under the Indenture and as escrow agent (the "Escrow Agent") under the Escrow Agreement described in Section 6 hereof is hereby approved. Section 5.Loan Agreement. The Project Area No. 2 Loan Agreement (the "Loan Agreement"), proposed to be entered into by and among the Agency, the Authority and the Trustee, in the form presented at this meeting and on file in the office of the Secretary, is hereby approved. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Loan Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Officer's execution and delivery thereof). Section 6. Escrow Agreement. The Escrow Agreement (Project Area No. 2) (the "Escrow Agreement"), proposed to be entered into by and among the Agency, the Authority and the Escrow Agent, in the form presented to this meeting and on file in the office of the Secretary, is hereby approved. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Escrow Agreement in substantially said form, with P6402.1055\884013.2 2 Resolution No. FA- t such changes therein as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such officer's execution and delivery thereof. Section 7. Preliminary Official Statement. The Preliminary Official Statement relating to the Bonds (the "Preliminary Official Statement"), in the form presented at this meeting and on file with the Secretary, is hereby approved. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to cause the Preliminary Official Statement in substantially said form, with such changes therein as such Authorized Officer may approve, to be deemed final for the purposes of Rule 15c2-12 of the Securities and Exchange Act of 1934. The distribution by Citigroup Global Markets Inc. (the "Underwriter") of copies of the Preliminary Official Statement to potential purchasers of the Bonds is hereby approved. Section 8.Official Statement. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to cause the Preliminary Official Statement to be brought into the form of a final Official Statement (the "Official Statement"), and to execute the same for and in the name and on behalf of the Authority, with such changes therein as such Authorized Officer may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). The distribution and use of the Official Statement by the Underwriter in connection with the sale of the Bonds are hereby approved. Section 9.Purchase Agreement. The form of the Bond Purchase Agreement as presented to this meeting by the Underwriter and the sale of the Bonds pursuant thereto upon the terms and conditions set forth therein are hereby approved. Subject to Section 10 below, each of the Authorized Officers, acting singly, is authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Purchase Agreement in substantially said form, with such changes therein as the officer executing the same may require or approve, including such matters as are authorized by Section 10 hereof (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). Section 10. Terms of Sale of Bonds. Each of the Authorized Officers, acting singly, is hereby authorized and directed to act on behalf of the Authority to establish and determine (a) the aggregate principal amount of the Series 2006A Bonds, which amount shall not exceed $45,000,000, (b) the aggregate initial principal amount of the Series 2006B Bonds, which amount shall not exceed $35,000,000; (c) interest rates on the Bonds, provided that the true interest cost with respect to the Series 2006A Bonds shall not exceed 6.00 percent and the true interest cost with respect to the Series 2006B Bonds shall not exceed 6.00 percent, (d) the Underwriter's compensation (i.e., underwriter's discount) with respect to the sale of the Bonds, provided that such compensation with respect to the Series 2006A Bonds shall not exceed 1.00 percent of the aggregate principal amount of the Series 2006A Bonds, and such compensation P6402.1055\884013.2 3 Resolution No. FA-j with respect to the Series 2006B Bonds shall not exceed 1.25 percent of the aggregate initial principal amount of the Series 2006B Bonds, and (e) such provisions as may be required by the terms of the bond insurance, if any, or debt service reserve surety bond(s), if any, purchased in connection with the issuance of the Bonds. The authorization and powers delegated to such officer by this Section 10 shall be valid for a period of 120 days from the date of adoption of this Resolution. Section 11. Other Acts. The Authorized Officers and all other officers of the Authority are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Bonds, or otherwise to effectuate the purposes of this Resolution, the Indenture, the Loan Agreement, the Escrow Agreement, the Purchase Agreement and the Official Statement, and any such actions previously taken by such officers are hereby ratified and confirmed. Section 12. Effective Date. This Resolution shall take effect immediately upon adoption. APPROVED AND ADOPTED this 27th day of April 2006 by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: Rachelle D. Klassen, Secretary Jim Ferguson, President P6402.1055\884013.2 4