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HomeMy WebLinkAbout27 - Sale of Bonds for Assessment District 92CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 27 April 22, 2008 TO: Mayor and Members of the City Council FROM: Public Works Department Iris Lee 949 - 644 -3323 or ilee @city.newport- beach.ca.us SUBJECT: Sale of Bonds for Assessment District No. 92 - Area Generally Bounded by West Coast Highway, Tustin Avenue, Riverside Avenue and Cliff Drive Recommendation: Adopt the resolution authorizing: 1. The sale of 1915 Act Assessment bonds not to exceed $1,455,000 million for Assessment District 92; 2. The execution and delivery of one or more Indentures in substantially the form presented; 3. The execution and delivery of one or more Official Statements and Continuing Disclosure Agreement in substantially the form presented; 4. The execution and delivery of one or more Bond Purchase Contracts in substantially the form presented; and 5. Staff to take the necessary steps to provide for the sale and issuance of the bonds. Discussion: On January 22, 2008, Assessment District No. 92 was formed and Bond Counsel, Robert Hessell, recommended the final proposal for the sale of bonds be addressed at the April 22, 2008, Council Meeting. All transmittals for the 2008 -09 tax roll are due to the Tax Collector by August 10, 2008. - The total assessment levied for the District amounted to $2,048,507.96, which represents the cost of the improvement project and financing costs. To date, the City has received $548,136.48 in prepaid contributions from property owners that amounted to a total levy credit of $593,606.87, which includes the exercised financing discount of $45,470.39. The remaining amount of unpaid assessments amounts to $1,454,901.09, as depicted below. Assessment levied — cost of improvement project and financing $2,048,507.96 City received — prepaid contributions from property owners $548,136.48 Exercised financing discount $45,470.39 Remaining unpaid assessment amount $1,454,901.09 Sale of Bonds for Assessment District No. 92 Area Generally Bounded by W. Coast Highway, Tustin Avenue, Riverside Avenue, and Cliff Drive April 22, 2008 Page 2 The unpaid assessment amount will be sold as bonds to ML Stern, on a negotiated basis in May 2008, so the stated interest rate and the total interest cost of the bonds have not yet been determined. ML Stern is a qualified underwriter with extensive experience with 1915 Act assessment district bonds. On the date of the bond sale, Fieldman Rolapp & Associates, the City's Financial Advisor, will assist the City in pricing the bonds. The decision to sell the bonds, at the negotiated price, will be delegated to the Administrative Services Director. The attached 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 with approval by the City Manager. 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 92 was formed by Public Hearing vote on January 22, 2008. Statement of Assessment and Notice of Recordation of Assessment and Diagram was published in the Daily Pilot on January 28, 2008 and February 4, 2008. Letters were mailed January 23, 2008 to residents of Assessment District No. 92 with instructions for assessment payment and the cash - payment deadline of February 22, 2008. Funding Availability: Funds will be available subject to the sale of bonds for this Assessment District. Prepared by: ee Senior Civil Engineer Attachments: District No. 92 Boundary Map Resolution — Sale of Bonds Submitted by: 1 Stephen G. Badum Public Works Director Copies of the Indenture(s), Official Statement(s), and Bond Purchase Contract(s) are on file in the City Clerk's Office. PROPOSED BOUNDARIES OF ACCEPTED AND FILED AT THE ASSESSMENT DISTRICT NO. 92 REQUEST OF CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA CITY OF NEWPORT BEACH DATE f— TIME I?ES / INSTRUMENT / / PAGE Of N OF NAPS OF ASSESSMENTS AND COMMUNITY 049- 048- DISTRICTS N THE OFFICE OF THE 049- 122 -18 122 -1) 049- 122 -15 122 -18 RECORDER RECORDER OF ME COUNTY OF ORANGE, STALE 048- OF CALIFORNIA. 49- 122 -14 122 -33 W9- TOM DALY (V 122 -2 COUNTY CLERK-RECORDER (,�1J 122 13 BY Vn, 049 -10}1) S 49- 122 -12 _ 12]-02 1221 T DEPUTY 049- 2490] -n EXEMPT RECORDING PER GC 6103 \ 48 -122 -2 049- 12x04 A 48- 122 -29 12}11 049- 110 -17 425- 4)1 -01 RUED IN THE OFFICE OF THE CITY CLERK OF THE 049- 1049ag CITY OF NEWPORT BEACH TIRS _ DAY OF 049 -122 -3 122 -35 048- 425 -471-0 Do- -- 200- Oa92110- 225 1 12 }12 049 - 122 -34 _ 425 - -03 123-OB CITY CLERK 049- 122 -22 425 -1 049- 471 -04 111149- 122 -0 048- 12}0] 1 HEREBY CERTIFY THAT 7HE MAP SHOWING PROPOSED 1g0 049 - 110 -30 �t/� ` 122 -0 048_ 425- 4]1 -05 5M BOUNDARIES OF ASSESSMENT DISTRICT NO. 92 CITY OF NEWPORT BEACH, \ 122 -06 123- COUNTY OF ORANGE WAS APPROVED BY THE 42} CITY COUNCIL OF THE CITY OF NEWPORT BEACH AT A REGULAR MEETING THEREOF HELD ON THE 049- 121 -18 048- 22 -0 L 471 -06 2W- 049 - 110 -25 BY ITS RESxUTIw NO. \ \ a25- 4]t -0) \ / \ 049- 121 -24 425- 471 -08 CITY CLERK 049 - 121 -22 425 - \ 4A -08 \ 425- 4]1-12 THE BOUNDARY OF THE PROPOSED ASSESSMENT DISTRICT COINCIDES NTH THE ASSESSOR'S 049 - 121 -23 425- PARCELS WTHIN THE BOUNDARY SHOWN ON THIS 4]1 -13 MM, FOR PARTCULARS OF LINES AND \ 425- DIMENSIONS OF ASSESSMENTS OF ASSESSOR'S S% 471 -14 PARCELS, REFERENCE IS MADE TO TIE MAPS OF CO N0. 919 \ RREECAORDEEDN BOW a PA,Y:A32 ANDCT 425 - TRACT NO. 1133 RECORDED N BOOK 38 PAGES •]��YL,II','�\ 471 -14 AND MISCELLANEOUS PACE PARCEL MAPS FILED N 22. ryAy BOOK BOOK )4 PACE 22 AND 122 PAGE 48. LEGEND • 049-122-29 k 049 - 122- 30,//11L015 40 k INDICATES ASSESSMENT DISTINCT BOUNDARY OF V. N — INDICATES LOT LINE WERE CONSOUDATED INTO 1 ARCEL BY 049- 110 -25 INDICATES ASSESSORS PARCEL NUMBER 17 PARCEL MAP NO. 74/22 BUT HAVE NOT BEEN GIVEN A NEW ASSESSORS PARCEL NUMBER U \ 17.iW1 �OE • Dow a W ET1nWF9 • FAi•AY • BrnWYMW YRh 1'a 100' LN fMwA 5W 1W •YWS.GN!$ •()111 BM-ISW M1 IQ2 0 100 200 °fie 1'. 100' leer ' RESOLUTION NO. 2008 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. 92 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. 92 (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 negotiated sale to M.L. Stem & Co., LLC pursuant to the provisions of a bond purchase contract (the "Bond Purchase Contract'); WHEREAS, the City of Newport Beach has caused to be prepared and filed with the City Clerk drafts of the Bond Purchase Contract, a bond indenture (the "Bond Indenture "), a preliminary official statement describing the Assessment District, the improvements, and the bonds (the "Preliminary Official Statement "), and an agreement to provide continuing disclosure of certain information contained in the Preliminary Official Statement (the "Continuing Disclosure Agreement'), 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. 92 Limited Obligation Improvement Bonds' (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 Bond Purchase Agreement. 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 statement made therein not misleading in the light of the circumstances under 2 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. Sale of Bonds. This City Council hereby authorizes and approves the sale of the Bonds by negotiated sale. The form of the Bond Purchase Contract 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 7. 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 Bond Purchase Contract 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 8. 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 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 9. 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. iG? SECTION 10. 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 Bond Purchase Contract, the Continuing Disclosure Agreement, and any certificate, agreement, contract, and other document described in the documents herein approved. SECTION 11. 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 on the 22nd day of April, 2008 by the following vote: AYES: NOES: ABSENT: ATTEST: City Clerk rd Mayor