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HomeMy WebLinkAbout10 - Assessment District 69 - West Newport - Sale of BondsCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 10 September 28, 2004 TO: Mayor and Members of the City Council FROM: Public Works Department Patrick Arciniega, Associate Engineer 949 - 644 -3311 parciniega @city.newport- beach.ca.us SUBJECT: SALE OF BONDS FOR UNDERGROUND ASSESSMENT DISTRICT NO. 69 WEST NEWPORT RECOMMENDATION: Adopt Resolution No. 2004- which sets forth the terms and conditions for the sale of bonds and approves the Purchase Agreement submitted by the designated underwriter for Assessment District No. 69. DISCUSSION: On July 27, 2004, Assessment District No. 69 was formed and Bond Counsel, Robert Hessell, recommended the final proposal for the sale of bonds be addressed at the September 28, 2004, Council Meeting. The confirmed assessments were based on the first installments being collected by the 2004 -2005 tax bill — with provision made for capitalized interest. All transmittals were due in the hands of the Tax Collector by August 26, 2004. The total assessment levied for the District amounted to $10,146,906 of which $9,109,926 represented the cost of the improvement project (including financing costs) and $1,036,980 represented the Income Tax Component of Construction (ITCC) portion of the assessment. To date, the City has received $4,131,427 in prepaid contributions from property owners that amounted to a total levy credit of $4,305,903 which includes the exercised financing discount of $174,476. The remaining amount of unpaid assessments, including the improvement costs, financing costs and ITCC, amounts to $5,841,003. Of this amount, $4,978,499 will be financed through the sale of the proposed bonds and represents the remaining funds needed to finance the improvement project. The remaining $862,504 represents the ITCC portion which, if needed, will be financed by a second bond issue at a later date. The bonds will be sold to an underwriter on a competitive basis on October 19, 2004, so the stated interest rate and the total interest cost of the bonds have not yet been determined. In the form presented, the resolution approves all formal terms and a condition related to the sale of bonds through approval of the Bond Indenture and approves the Bond Purchase Contract, subject to modifications as necessary and approval by the City Manager. The final pricing of bonds will be delegated to the Finance Director (Administrative Services Director). SUBJECT: SALE OF BONDS FOR UNDERGROUND ASSESSMENT DISTRICT NO.69 WEST NEWPORT September 28, 2004 Page 2 Environmental Review: This project qualifies for a Class 2 California Environmental Quality Act (CEQA) exemption under Section 15302, item "d" of the Implementing Guidelines as follows: "Conversion of overhead electric utility distribution system facilities to underground including connection to existing overhead electric utility distribution lines where the surface is restored to the condition existing prior to the undergrounding." Public Notice: Assessment District 69 was formed by Public Hearing vote on July 27, 2004. Statement of Assessment and Notice of Recordation of Assessment and Diagram was published in the Daily Pilot on August 9 & 16, 2004. Letters were mailed July 30, 2004 to residents of Assessment District No. 69 with instructions for assessment payment and the cash - payment deadline of August 27, 2004. 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W M O Z a U w w U Z¢ OO O J ZN d W U C, _ w a �- ¢M W:E a a w O r RESOLUTION NO. 2004 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING ISSUANCE OF BONDS AND APPROVING THE FORM OF CERTAIN BOND DOCUMENTS FOR ASSESSMENT DISTRICT NO. 69 (WEST NEWPORT) WHEREAS, this City Council has previously adopted its Resolution of Intention and initiated proceedings for the acquisition of certain public works of improvement, namely, the conversion of certain overhead electrical and communication facilities to underground locations, together with appurtenances and appurtenant work, in a special assessment district designated as Assessment District No. 69 (West Newport) (hereinafter referred to as the "Assessment District ") pursuant to the terms and provisions of the "Municipal Improvement Act of 1913 ", being Division 12 of the Streets and Highways Code of the State of California, as adopted and modified by Ordinance No. 2000 -17 of the City of Newport Beach (together, the "Improvement Act "); WHEREAS, this legislative body, to finance the acquisition and construction of such improvements, declared in its Resolution of Intention to issue bonds against any unpaid assessments as certified by the Treasurer, such bonds to issue pursuant to the terms and provisions of the "Improvement Bond Act of 1915 ", being Division 10 of such Code (the "Bond Act "); WHEREAS, at this time this legislative body desires to set forth the general terms and conditions relating to the authorization, sale, delivery, and administration of such bonds; WHEREAS, the bonds are to be sold by competitive bid pursuant to a notice of sale (the "Notice of Sale "); WHEREAS, the City of Newport Beach has caused to be prepared and filed with the City Clerk drafts of a bond indenture (the "Bond Indenture "), a preliminary official statement describing the Assessment District, the improvements, and the bonds (the "Preliminary Official Statement'), an agreement to provide continuing disclosure of certain information contained in the Preliminary Official Statement (the "Continuing Disclosure Agreement'), and a Notice of Sale, which drafts have been reviewed by this Council; NOW, THEREFORE, it is hereby Resolved, Determined, and Ordered as follows: SECTION 1. Recitals. The above recitals are true and correct. 1 SECTION 2. Bonds Authorized. Pursuant to the Bond Act, this Resolution and the Bond Indenture, limited obligation improvement bonds of the City for the Assessment District designated as "City of Newport Beach Assessment District No. 69 (West Newport) Limited Obligation Improvement Bonds, Series A" (the "Bonds ") in an aggregate principal amount not to exceed the unpaid assessments are hereby authorized to be issued, sold and delivered. The date, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption and other terms, covenants and conditions of the Bonds shall be as provided in the Bond Indenture and the Notice of Sale as executed. SECTION 3. Authorization and Conditions. The City Manager, Director of Administrative Services, City Treasurer, and such other officials of the City as may be designated by the City Council, or any of them (each an "Authorized Officer"), are hereby authorized and directed to execute and deliver the various documents and instruments described in this Resolution with such additions and changes as the Authorized Officer deems advisable, provided that no additions or changes shall authorize an aggregate principal amount of Bonds in excess of the unpaid assessments. The approval of such additions or changes shall be conclusively evidenced by the execution and delivery of such documents or instruments by an Authorized Officer, upon consultation with and review by the City Attorney and bond counsel. SECTION 4. Bond Indenture. The form of Bond Indenture with respect to the Bonds as presented to this City Council and on file with the City Clerk is hereby approved. The Authorized Officer is hereby authorized and directed to cause the same to be completed and executed on behalf of the City. SECTION 5. Official Statement and Continuing Disclosure Agreement. This City Council hereby approves the forms of Preliminary Official Statement and the Continuing Disclosure Agreement on file with the City Clerk. The Authorized Officer is authorized to approve corrections and additions to the Preliminary Official Statement and to certify on behalf of the City that the approved Preliminary Official Statement is final as of its date except for the omission of certain information as permitted by Section 240.15c2- 12(b)(1) of Title 17 of the Code of Federal Regulations. The Authorized Officer is further authorized and directed to cause the completion of the Preliminary Official Statement into the form of a final official statement (the "Final Official Statement') and to execute a statement that the facts contained in the Final Official Statement, and any supplement or amendment thereto (which shall be deemed an original part thereof for the purpose of such statement) were, at the time of sale of the Bonds, true and correct in all material respects and that the Final Official Statement did not, on the date of sale of the Bonds, and does not, as of the date of delivery of the Bonds, contain any untrue statement of a material fact or omit to state material facts required be stated where necessary to make any r. statement made therein not misleading in the light of the circumstances under which it was made. The Authorized Officer shall take such further action as he deems necessary or appropriate to verify the accuracy thereof. The form of Continuing Disclosure Agreement as presented to this City Council and on file with the City Clerk is hereby approved. The Authorized Officer is hereby authorized and directed to cause the same to be completed and executed on behalf of the City, subject to Section 3 above. SECTION 6. Bond Rating: Insurance. The Authorized Officer is, with the assistance of the Financial Advisor, hereby authorized to apply for a rating on the Bonds with any nationally recognized rating agency such Authorized Officer deems advisable. Additionally, the Authorized Officer, with the assistance of the Financial Advisor, is hereby authorized to apply for and accept a commitment to provide municipal bond insurance for the Bonds, provided the Authorized Officer, in his discretion, deems the municipal bond insurance to be a financial benefit to the Assessment District. The Authorized Officer is hereby further authorized to execute any commitment letter and to do any and all other things and to deliver any and all documents necessary or advisable in order to obtain such municipal bond insurance for the Bonds. SECTION 7. Sale of Bonds. This City Council hereby authorizes and approves the sale of the Bonds by competitive bidding. The form of the Notice of Sale as presented to this City Council and on file with the City Clerk is hereby approved and the Authorized Officer is hereby authorized and directed to sell and deliver the Bonds subject to the following conditions: the aggregate principal amount of the Bonds does not exceed the unpaid assessments within the Assessment District, the underwriter's discount does not exceed two percent (2 %), and the net interest rate on the bonds shall not exceed seven percent (7 %) per annum. SECTION 8. Bonds Prepared and Delivered. Upon the sale of the Bonds, the Bonds shall be prepared, authenticated and delivered, all in accordance with the applicable terms of the Bond Act and the Bond Indenture, and the Authorized Officer and other responsible City officials are hereby authorized and directed to take such actions as are required under the Notice of Sale and the Bond Indenture to complete all actions required to evidence the delivery of the Bonds upon the receipt of the purchase price thereof from the purchaser. SECTION 9. Annual Assessment Installments. A copy of the resolution confirming the assessments, which assessments shall constitute the security for the Bonds, shall be delivered to the City Treasurer, and the City Treasurer shall keep or cause to be kept the record showing the several installments of principal and interest on the assessments which are to be collected each year during the term of the bonds. An annual portion of each reassessment, together with annual interest on said reassessment, shall be payable in the same manner and at the 3 same time and in the same installment as the general property taxes of the County of Orange and shall be payable and become delinquent at the same time and in the same proportionate amount. Each year the annual installments shall be submitted to the County Auditor for purposes of collection. SECTION 10. Covenant to Initiate Foreclosure Proceedings. This legislative body does further specifically covenant for the benefit of the bondholders to commence and prosecute to completion foreclosure actions regarding delinquent installments of the assessments in the manner, within the time limits and pursuant to the terms and conditions as set forth in the Bond Indenture as submitted and approved through the adoption of this Resolution. SECTION 11. Actions. All actions heretofore taken by the officers and agents of the City with respect to the establishment of the Assessment District and the sale and delivery of the Bonds are hereby approved, confirmed and ratified, and the proper officers of the City are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements, contracts, and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds in accordance with Bond Act, this Resolution, the Bond Indenture, the Notice of Sale, the Continuing Disclosure Agreement, and any certificate, agreement, contract, and other document described in the documents herein approved. SECTION 12. Effective Date. This resolution shall take effect from and after its adoption. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Newport Beach, held on the 28th day of September, 2004, by the following vote: AYES: NOES: ABSENT: /_1- i . k ATTEST: City Clerk 4 Mayor