HomeMy WebLinkAboutCC AG PKT 2009-01-12 #UAGENDA STAFF REPORT
DATE: January 12, 2009
T0: Honorable Mayor and City Council
THRU: David Carmany, Ciry Manager
FROM: Robbeyn Bird, CPA -Director of Administrative Services
SUBJECT: SEAL BEACH LEASE REVENUE BONDS, SERIES
2009
SUMMARY OF REQUEST:
Approve Resolution No. 5832 and Resolution No. FA 08-02 designating the Seal
Beach Public Financing Authority Lease Revenue Bonds, Series 2009 as
qualified tax-exempt obligations and authorizing the City Manager to execute any
and all instruments necessary to complete this financing.
BACKGROUND:
Issuers that issue less than $10 million in tax-exempt obligations in a calendar
year may designate their bonds as "qualified tax-exempt obligations", which
would allow banks to invest in the bonds and deduct 80% of its interest cost. On
December 8, 2008, the City Council approved Resolution No. 5824 and
Resolution No. FA OS-01 which, in part, designated the sale and issuance of
these bonds as qualified tax-exempt obligations. At that time, staff intended to
complete the transaction before December 31, 2008. Due to unforeseen
circumstances, this transaction was not completed.
The designation of these bonds as qualified tax-exempt obligations is required to
be made in the same calendar year as the issuance. Therefore, we are asking
for approval of the attached resolutions.
The City has also requested that Bank of America provide a quote of the interest
rates that would be required should the City desire to have a call provision of the
outstanding bonds. Bank of America has responded to that request and it would
increase the interest rates by 70 basis points. Staff does not anticipate calling
the bonds early and; therefore, does not recommend adding a call provision to
the bond documents.
Agenda Item U
Page 2
FINANCIAL IMPACT:
If a call provisions is added to the bonds, the interest rate for the bond issuance
would go from approximately 5% to 5.7%.
RECOMMENDATION:
Approve Resolution No. 5832 and Resolution No. FA 08-02 designating the Seal
Beach Lease Revenue Bonds, Series 2009 as Qualified Tax-Exempt Obligations,
authorize certain other matters relating to this issuance and authorize staff to
execute the final documents without the call provision.
SUBMITTED BY:
NOTED AND APPROVED:
Robbeyn Bird~CPA
Director of Administrative Services
Attachments:
`~~ 1
David Carma y, Ciry Manager
A. Resolution No. 5832
B. Resolution No. FA 08-02
RESOLUTION NUMBER 5832
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL
BEACH DESIGNATING THE SEAL BEACH PUBLIC FINANCING
AUTHORITY LEASE REVENUE BONDS, SERIES 2009 AS
QUALIFIED TAX-EXEMPT OBLIGATIONS, AND AUTHORIZING
CERTAIN OTHER MATTERS RELATING THERETO
WHEREAS, the City of Seal Beach (the "City") and the Redevelopment
Agency of the City of Seal Beach (the "Agency') have heretofore executed and
delivered a joint exercise of powers agreement, dated May 8, 2000 (the "Joint
Powers Agreement'), by and between the City and the Agency, which Joint
Powers Agreement created and established the Seal Beach Public Financing
Authority (the "Authority'); and
WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of
the Government Code of the State of California and the Joint Powers
Agreement, the Authodty is authorized to issue bonds for financing costs of
certain public capital improvements; and
WHEREAS, the Authority desires to issue a new series of bonds (the
"Series 2009 Bonds") to finance the costs with respect to certain public capital
projects, including the construction of a fire station; and
WHEREAS, in connection with the issuance of the Series 2009 Bonds,
the City desires to designate the Series 2009 Bonds as "qualified tax-exempt
obligations";
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL
BEACH DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals The above recitals, and each of them, are true and
correct.
Section 2. Qualified Tax-Exemot Obligations. The Series 2009 Bonds
are hereby designated by the City as "Qualified Tax-Exempt Obligations" for
purposes of Section 265(b)(3) of the Internal Revenues Code of 1986, as
amended In that connection, the City represents and covenants that it, together
with all its subordinate entitles or entities that issue obligations on its behalf, or
on behalf of which it issues obligations, during the current calendar year, (i) has
not issued and will not issue tax-exempt obligations designated as Qualified Tax-
Exempt Obligations in an aggregate amount, including the Series 2009 Bonds,
exceeding $10,000,000, and (iI) has not issued, does not reasonably anticipate
issuing, and will not issue, tax-exempt obligations in an aggregate amount
exceeding $10,000,000 (including the Series 2009 Bonds, but excluding (a)
private activity bonds that are not qualified 501(c)(3) Bonds and (b) current
refunding issues to the extent that the amount of the current refunding issue
does not exceed the outstanding amount of the prior issue), unless the City first
obtains a written opinion of the bond counsel approving the Series 2009 Bonds
that such designation or issuance, as applicable, will not adversely affect the
status of the Series 2009 Bonds as Qualified Tax-Exempt Obligations. The City
represents and covenants that, during any time or in any manner as might affect
the status of the Series 2009 Bonds as Qualified Tax-Exempt Obligations, no
entity has been or will be formed or availed of in order to avoid the purposes of
subparegraph (C) or (D) of Section 265(b)(3) of the Internal Revenues Code of
1986, as amended. The City further represents that the Series 2009 Bonds are
not being issued as part of a direct or indirect composite issue that combines
Issues or lots of tax-exempt obligations of different issuers.
Section 3. 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
5729fi-1123\I105465v1 dac
Resolution Number 5832
any and all instruments which they may deem necessary or proper in order to
effectuate the purposes of this Resolution and to assist the Authority with respect
to the issuance and sale of the Series 2009 Bonds, and any such actions
previously taken by such officers are hereby ratified and confirmed.
Section 4. Effective Date. This resolution shall take effect from and after
its passage and adoption by the City.
PASSED, APPROVED AND ADOPTED by the City Council of Seal Beach, at a
meeting hereof held on the 12th day of Januanr , 2009 by the following vote:
AYES: COUNCILMEMBERS
NOES: COUNCILMEMBERS
ABSENT. COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of Seal Beach, California, do hereby certify that the
foregoing resolution is the original copy of Resolution Number 5832 on file in
the office of the City Clerk, passed, approved, and adopted by the City Council of
the City of Seal Beach, at a regular meeting thereof held on the 12th day
of January , 2009
City Clerk
s~z9a.nz~~i ~asa6s.~ a«
RESOLUTION NUMBER FA 08-02
A RESOLUTION OF THE SEAL BEACH PUBLIC FINANCING
AUTHORITY DESIGNATING THE LEASE REVENUE BONDS AS
QUALIFIED TAX-EXEMPT OBLIGATIONS AND AUTHORIZING
CERTAIN OTHER MATTERS RELATING THERETO
WHEREAS, the City of Seal Beach (the "City") and the Redevelopment
Agency of the City of Seal Beach (the "Agency') have heretofore executed and
delivered a joint exercise of powers agreement, dated May 8, 2000 (the "Joint
Powers Agreement"), by and between the City and the Agency, which Joint
Powers Agreement created and established the Seal Beach Public Financing
Authorty (the "Authority'); and
WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of
the Government Code of the State of California and the Joint Powers
Agreement, the Authority is authorized to issue bonds for financing costs of
certain public capital improvements; and
WHEREAS, the Authority desires to issue a new series of bonds (the
"Series 2009 Bonds") to finance the costs with respect to certain public capital
projects, including the construction of a fire station; and
WHEREAS, in connection with the issuance of the Senes 2009 Bonds,
the Authority desire to designate the Series 2009 Bonds as "qualified tax-exempt
obligations"; and
NOW, THEREFORE, THE GOVERNING BOARD OF THE SEAL BEACH
PUBLIC 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. Qualified Tax-Exemot Oblications. The Series 2009 Bonds
are hereby designated by the Authority as "Qualified Tax-Exempt Obligations" for
purposes of Section 265(b)(3) of the Internal Revenues Code of 1986, as
amended. In that connection, the Authority represents and covenants that it,
together with all its subordinate entities or entities that issue obligations on its
behalf, or on behalf of which it issues obligations, during the current calendar
year, (i) has not issued and will not issue tax-exempt obligations designated as
Qualified Tax-Exempt Obligations in an aggregate amount, including the Series
2009 Bonds, exceeding 310,000,000, and (ii) has not issued, does not
reasonably anticipate issuing, and will not issue, tax-exempt obligations in an
aggregate amount exceeding $10,000,000 (including the Series 2009 Bonds, but
excluding (a) private activity bonds that are not qualified 501(c)(3) Bonds and
(b) current refunding issues to the extent that the amount of the current refunding
issue does not exceed the outstanding amount of the prior issue), unless the
Authority first obtains a written opinion of the bond counsel approving the Senes
2009 Bonds that such designation or issuance, as applicable, will not adversely
affect the status of the Series 2009 Bonds as Qualified Tax-Exempt Obligations.
The Authority represents and covenants that, during any time or in any manner
as might affect the status of the Series 2009 Bonds as Qualified Tax-Exempt
Obligations, no entity has been or will be formed or availed of in order to avoid
the purposes of subparagraph (C) or (D) of Section 265(b)(3) of the Internal
Revenues Cade of 1986, as amended The Authority further represents that the
Series 2009 Bonds are not being issued as part of a direct or indirect composite
issue that combines issues or lots of tax-exempt obligations of different issuers.
s~2ss-ttzarttas~n
Resolution Number FA 08-02
Section 3. Other Acts. The officers of the Authority are hereby authorized
and directed, jointly and severally, to do any and all things and to execute and
deliver any and all instruments which they may deem necessary or proper in
order to effectuate the purposes of this Resolution, and the issuance, sale and
delivery of the Series 2009 Bonds and any such actions previously taken by such
officers are hereby ratified and confirmed.
Section 4. Effective Date. This resolution shall take effect from and after
its passage and adoption by the Authority.
PASSED, APPROVED AND ADOPTED by the Public Financing Authority of Seal
Beach, at a special joint meeting hereof held on the 12th day of January ,
2009 by the following vale:
AYES: COUNCILMEMBERS
NOES: COUNCILMEMBERS
ABSENT: COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
ATTEST:
Mayor
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of Seal Beach, California, do hereby certify that the
foregoing resolution is the onginal copy of Resolution Number FA 08-02 on file
in the office of the City Clerk, passed, approved, and adopted by the Public
Financing Authority of the City of Seal Beach, at a special joint meeting thereof
held on the 12th day of January , 2009
Secretary/City Clerk
i r os~n 2