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June 13, 2005 191
STAFF REPORT
To: Mayor and Members of the City Council
From: Lee Whittenberg, Director of Development Services
Subject: ADOPTION OF RESOLUTION AUTHORIZING
ISSUANCE OF SPECIAL TAX BONDS FOR THE CITY
OF SEAL BEACH COMMUNITY FACILITIES DISTRICT
NO. 2002 -01 (HERON POINTE), APPROVING AND
DIRECTING EXECUTION OF A FISCAL AGENT
AGREEMENT AND OTHER RELATED DOCUMENTS
AND ACTIONS
SUMMARY OF REQUEST
Adopt Resolution , A Resolution of the City Council of the City of Seal Beach Authorizing
the Issuance of Special Tax Bonds of the City of Seal Beach for City of Seal Beach Community
Facilities District No. 2002 -01 (Heron Pointe) and Approving and Directing the Execution of a
Fiscal Agent Agreement and Other Related Documents and Actions.
BACKGROUND
In 2002 John Laing Homes submitted a petition to form CFD No. 2002 -01. The City Council has
previously taken the following actions relative to CFD 2002 -01:
❑ Adoption of City Goals and Policia: As required by the Mello -Roos Community
Facilities Act of 1982 as amended, the City adopted "Goals and Policies for Land Secured
Financings" by City Council Resolution No. 5048 on August 12, 2002. The Goals and
Policies establish an order of priority for projects to be financed by community facilities
districts and certain credit quality requirements for bonds issued by community facilities
districts, namely a 3:1 ratio of property value to the lien of community facilities district
bonds and other bonds secured by special taxes or special assessments. Property value
may be based on an appraisal or on assessed values. Please refer to Attachment 2 to
review Resolution 5048.
AGENDA ITEM
ZA My DocumentsUohn Laing Homes \CFD\Bond Issuance Resolution. CC Staff Report.doc/LW /06 -07 -05
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe —John Laing Homes)
City Council Staff Report
June 13, 2005
❑ Resolution of Intention: On August 12, 2002, the City Council adopted Resolution No.
5049 stating its intention to establish the Community Facilities District and to authorize
the levy of a special tax therein. On the same day the City Council adopted a resolution
stating its intention to incur bonded indebtedness for the purpose of financing the
Facilities.
❑ Resolution of Formation: Immediately following a noticed public hearing on September
23, 2002, the City Council adopted Resolution No. 5063 (the "Resolution of Formation ")
which established the Community Facilities District and authorized the levy of a special
tax within the Community Facilities District.
❑ Revolution of Necessity. On September 23, 2002, the City Council adopted Resolution
No. 5064 declaring the necessity to incur bonded indebtedness in an aggregate amount
not to exceed $5,000,000.00 within the Community Facilities District and submitting that
proposition to the qualified electors of the Community Facilities District.
❑ Revolution falling Flertion: On September 23, 2002, the City Council adopted
Resolution No. 5063 calling an election by the landowners within the Community
Facilities District for the same date on the issues of the levy of the Special Tax, the
incurring of bonded indebtedness and the establishment of an appropriations limit.
❑ J.andowner Flertion and Derlaration of Results: On September 23, 2002, an election
was held within the Community Facilities District in which the qualified landowner
electors approved a ballot proposition authorizing the issuance of up to $5,000,000.00 in
bonds to finance the acquisition and construction of the Wastewater Facility, the levy of a
special tax and the establishment of an appropriations limit for the Community Facilities
District. On September 23, 2002, the City Council adopted Resolution No: 5065 under
which the City Council approved the canvass of the votes and declared the Community
Facilities District to be fully formed with the authority to levy the Special Taxes, to incur
the bonded indebtedness and to have the established appropriations' limit.
❑ Ordinance Levying.Sperial Tarps: On October 14, 2002, the City Council introduced an
Ordinance No. 1490, authorizing levying the Special Tax within the Community
Facilities District.
❑ Resolution Considering Alterations to Rate and Method of Apportionment of .Special
lax: On December 8, 2003, the City Council adopted Resolution No. 5191 determining
that alterations of rate and method of apportionment of the levy of the Special Tax are
necessary and calling a public hearing for January 12, 2004 to consider whether to submit
such alteration to the electors of the District.
Bond Issuance Resolution.CC Staff Report 2
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe — John Laing Homes)
City Council Staff Report
June 13, 2005
❑ Resolution Calling Elertion — Alteration of Rate and Method of Apportionment: On
January 12, 2004, the City Council adopted Resolution No. 5197 calling an election by
the landowners within the Community Facilities District for the same date on the issue of
the alteration of rate and method of apportionment of the levy of the Special Tax.
❑ J.andowner Elertion and Declaration of Rnultc: On January 12, 2004, an election was
held within the Community Facilities District in which the qualified landowner electors
approved a ballot proposition determining that the alteration of the rate and method of
apportionment of special taxes for the district is lawfully authorized and directing the
recording of an amended notice of special tax lien for the Community Facilities District.
On January 12, 2004, the City Council adopted Resolution No. 5198 under which the City
Council approved the canvass of the votes and determined that the alteration of the rate
and method of apportionment of special taxes for the district is Lawfully authorized and
directing the recording of an amended notice of special tax lien.
Due to issues related to the Coastal Commission approval of the project, the sale of bonds related
to CFD No. 2002 -01 was delayed for most of 2003. When the process was restarted, John Laing
Homes determined that modification of the Special Tax rates was required. The modification
proceedings were approved by City Council on January 12, 2004. Additional issues related to the
Coastal Commission again required the bond sale process to be delayed for the remainder of
2004 and the first quarter of 2005.
CURRENT ACTIONS
In 2005 John Laing Homes was able to pull permits for a model complex and both the first and
second phases of the project. The City is now able to proceed with the sale of bonds for CFD
No. 2002 -01.
City staff, John Laing Homes (the developer), and the Financing Team have been meeting to
finalize the CFD financing documents.
' The attached Resolution (refer to Attachment 1) approves all the necessary documents to
complete the financing. These documents are as follows:
❑ Fiscal Agent Agreement. The Fiscal Agent Agreement establishes the terms and
conditions under which the Bonds will be issued and establishes debt service and project
funds. The Bank of New York Trust Company, N.A. will act as Fiscal Agent for the
Bonds under the Fiscal Agent Agreement.
❑ Preliminary Official Statement. The Preliminary Official Statement is the document used
by the Underwriter, Stone & Youngberg LLC (the "Underwriter ") to market the Bonds.
It describes the bonds, the nature of the Project, the CFD and other relevant information
concerning the Bonds.
Bond Issuance Resolution.CC Staff Report 3
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe — John Laing Homes)
City Council Staff Report
June 13, 2005
❑
Bond Pnrrhase Contract. The Bond Purchase Contract is the agreement by which the
Underwriter will purchase the Bonds from the City. The maximum principal amount of
the Bonds will not exceed $5,000,000, the maximum interest rate on the Bonds will not
exceed 7.00% and the Underwriter's discount will not exceed 2.25 %.
❑ Continuing Disclosure Agreement (issuer) The Continuing Disclosure Agreement is the
agreement which obligates the City to provide annual reports and current event
disclosures.
The above referenced documents are not provided as attachments to the Staff Report due to the
length of the documents, between 12 and 129 pages each. They are available at the Office of the
City Clerk and at the Department of Development Services for review by interested parties. Staff
will also have these documents available for review at the City Council meeting.
PLAN OF FINANCE:
The finance plan currently includes:
❑ Tax- Exempt Bonds in the amount of approximately $3,065,254, net proceeds. The
bonds will be used to reimburse Laing Sequoia for construction of City Facilities per
the terms of the Acquisition Agreement. The City Facilities to be acquired are
detailed in Table 1.
The Tax- Exempt Bond debt is proposed to be issued as non -rated debt with a coverage ratio of
at least 1.10 times coverage plus an amount allocable to CFD Administrative Expenses. It will
be amortized over 30 years.
e
Bond Issuance Resolution.CC Staff Report 4
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe — John Laing Homes)
City Council Staff Report
June 13, 2005
TABLE 1
lz
:Facilities Improvements ' , LProJected Cost ;
Sanitary Sewer Facilities $641,233
Water Facilities $200,383
Roadway Facilities $483,264
Park, Access, Landscape & Wall Facilities $349,000
Dry Utilities and Joint Trench $120,735
Grading $15,257
Engineering Plan Preparation $44,300
Contingency $235,417
Project Inspection $185,417
Project Management $185,417
Development Fees $604,832
Total Estimated Facilities Costs $3,065,254
•
FISCAL IMPACT
The issuance of Special Tax Bonds by CFD No. 2002 -01 will provide for the fmancing of the
public facilities to be acquired per the terms of the Acquisition Agreement. The City and John
Laing Homes have entered into a Deposit and Reimbursement agreement pursuant to which the
owner has advanced funds to the City to pay for the costs incurred by the City in undertaking
proceeding to form CFD No. 2002 -01 and the issuance of bonds by CFD No. 2002 -01. Future
expenses in the on -going administration of CFD No. 2002 -01 will be paid from Special Taxes in
the form of an annual CFD Administrative Expense Requirement.
Bond Issuance Resolution CC Staff Report 5
•
Approval of Bond Issuance by the City ofSeal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe —John Laing Homes)
City Council StaffReport
June 13, 2005
•
RECOMMENDATION .
Adopt Resolution No. , A Resolution of the City Council of the City of Seal Beach
Authorizing the Issuance of Special Tax Bonds of the City of Seal Beach for City of Seal Beach
Community Facilities District No. 2002 -01 (Heron Pointe) and Approving and Directing the
Execution of a Fiscal Agent Agreement and Other Related Documents and Actions.
NOTED AND APPROV ,
L
-e Whittenberg, Director John B. : or�ki, City Manager 1.. 0
i e
Development Services Departure
Attachments: (2)
Attachment 1: Resolution No. , A Resolution of the City Council of the City
of Seal Beach Authorizing the Issuance of Special Tax Bonds of
the City of Seal Beach for City of Seal Beach Community
Facilities District No. 2002 -01 (Heron Pointe) and Approving and
Directing the Execution of a Fiscal Agent Agreement and Other
Related Documents and Actions
•
Attachment 2: City Council Resolution 5048, A Resolution of the City Council of
the City of Seal Beach Adopting a Statement of Goals and Policies
for the Use of the Mello -Roos Community Facilities ,Act of 1982,
adopted August 12, 2002
* * * *
Bond Issuance Resolution.CC Staff Report 6
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe —John Laing Homes)
City Council Staff Report
June 13, 2005 •
ATTACHMENT 1
RESOLUTION NO. A RESOLUTION OF THE
CITY COUNCIL OF THE CITY OF SEAL BEACH
AUTHORIZING THE ISSUANCE OF SPECIAL
TAX BONDS OF THE CITY OF SEAL BEACH
FOR CITY OF SEAL BEACH COMMUNITY
FACILITIES DISTRICT NO. 2002 -01 (HERON
POINTE) AND APPROVING AND DIRECTING
THE EXECUTION OF A FISCAL AGENT
AGREEMENT AND OTHER RELATED
DOCUMENTS AND ACTIONS
Bond Issuance Resolution CC Staff Report 7
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe —John Laing Homes)
City Council Staff Report
June 13, 2005
RESOLUTION NO. 6.S I
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SEAL BEACH AUTHORIZING THE
ISSUANCE OF SPECIAL TAX BONDS OF THE CITY
OF SEAL BEACH FOR CITY OF SEAL BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002 -01
(HERON POINTE) AND APPROVING AND
DIRECTING THE EXECUTION OF A FISCAL
AGENT AGREEMENT AND OTHER RELATED
DOCUMENTS AND ACTIONS
RECITALS:
•
A. The City Council (the "City Council ") of the City of Seal Beach (the "City ")
has conducted proceedings pursuant to the Mello -Roos Community Facilities Act of 1982, as
amended, (Government Code Section 53311, et seq.) (the "Act ") to establish the City of Seal Beach
Community Facilities District No. 2002 -01 (Heron Pointe) (the "District "), to authorize the levy of
special taxes upon property in the District (the "Special Taxes "), and to issue bonds secured by the
Special Taxes to finance certain public improvements (the "Facilities "), all as described in
Resolution Nos. 5063 and 5064, adopted on September 23, 2002 and Resolution No. 5198 adopted
on January 12, 2004.
B. For the purpose of financing the Facilities, the City Council, as the
legislative body of the District, proposes to issue City of Seal Beach Community Facilities District
No. 2002 -01 (Heron Pointe) Special Tax Bonds, Series 2005 (the "Bonds ").
C. The City Council, as the legislative body of the District, desires to enter into
a Fiscal Agent Agreement, a Continuing Disclosure Agreement, and a Purchase Contract, and to
deliver a Preliminary Official Statement and a final Official Statement with respect to the Bonds.
The foregoing have been submitted to the City Council for its approval and the City Council, with
the assistance of City Staff, has reviewed the foregoing documents and has found them to be in
proper order.
D. All conditions, things and acts required to exist, to have happened and to
have been performed precedent to and in the issuance of the Bonds and the levy of Special Taxes as
contemplated by this Resolution and the documents referred to herein exist, have happened and
have been performed in due time, form and manner as required by the laws of the State of
California, including the Act. '
Bond Issuance Resolution.CC Staff Report 8
Approval of Bond Issuance by the City of Seal Beach
• CFD No. 2002 -01 Special Tax Bonds (Heron Pointe — John Laing Homes)
City Council Staff Report
June 13, 2005
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH
DOES HEREBY RESOLVE, FIND, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The foregoing recitals are true and correct and the City Council hereby so
fmds and determines.
Section 2. Pursuant to the Act, this Resolution and the Fiscal Agent Agreement, the
issuance of not to exceed $5,000,000 aggregate principal amount of the Bonds is hereby authorized,
with the exact principal amount of the Bonds to be determined by the officer signing the Bond
Purchase Contract in accordance with Section 6 hereof. The Bonds shall be executed substantially
in the form set forth in and otherwise as provided in the Fiscal Agent Agreement. The Bank of
New York Trust Company, N.A. is hereby appointed to act as fiscal agent for the Bonds (the
"Fiscal Agent ").
Section 3. The City Council, as the legislative body of the District, has determined
that it is prudent in the management of its fiscal affairs to issue the Bonds.
Section 4. The City Council hereby fmds and determines that, based on the appraisal
of the real property subject to the Special Taxes to pay debt service on the Bonds performed by
Stephen G. White, MAI, dated May 13, 2005, the Bonds have in excess of a one to three lien to
value ratio as required by the City's Statement of Local Goals and Policies Concerning the Use of
the Mello -Roos Community Facilities Act of 1982, As Amended, adopted by the City Council by
its Resolution No. 5048 on August 12, 2002 (the "Goals and Policies ") and as determined in
accordance with Section 53345.8 of the Act. The City Council hereby fmds and determines that the
Bonds, when issued pursuant to the Fiscal Agent Agreement, will be in accordance with the Goals
and Policies. The City Council hereby further finds and determines pursuant to Section 53360.4 of
the Act that the sale of the Bonds at a negotiated sale to Stone & Youngberg LLC (the
"Underwriter ") as contemplated by the Purchase Contract will result in a lower overall cost than a
public sale.
Section 5. The form of the Fiscal Agent Agreement by and between the District and
The Bank of New York Trust Company, N.A., as Fiscal Agent, presented at this meeting and on file
with the City Clerk and incorporated herein by reference, is hereby approved. The City Manager of
the City of Seal Beach (the "City Manager ") and the Director of Administrative Services/Treasurer
of the City of Seal Beach (the "Director of Administrative Services/Treasurer "), or either of them,
are hereby authorized and directed to execute and deliver the Fiscal Agent Agreement in
substantially the form hereby approved, with such additions, deletions, or changes therein as may be
approved by such officer upon consultation with Richards, Watson & Gershon, A Professional
Corporation ( "Bond Counsel ") (such approval to be conclusively evidenced by such officer's
execution and delivery of the Fiscal Agent Agreement). The pledge or assignment of any revenues
of the District to the repayment of the Bonds, manner of investment of any Bond proceeds and other
Bond Issuance Resolution CC Staff Report 9
r
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe —John Laing Homes)
City Council StaffReport
June 13, 2005
revenues, rebate provisions, date or dates, maturity or maturities, 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 of the Bonds shall be as provided in the
Fiscal Agent Agreement as finally executed.
Section 6. The form of the Purchase Contract relating to the Bonds by and between
the District and the Underwriter presented at this meeting and on file with the City Clerk and
incorporated herein by reference, is hereby approved. The City Manager and the Director of
Administrative Services/Treasurer, or either of them, are hereby authorized and directed to accept
the offer of the Underwriter to purchase the Bonds contained in the Purchase Contract and to
execute and deliver the Purchase Contract in substantially the form hereby approved, with such
additions, deletions or changes therein as may be approved by such officer upon consultation with
Bond Counsel (such approval to be conclusively evidenced by such officer's execution and delivery
of the Purchase Contract); provided, however, that such additions, deletions or changes shall not
result in (a) an aggregate principal amount of the Bonds in excess of $5,000,000, (b) the true
interest cost of the Bonds in excess of 7.0 %, (c) an underwriter's discount in excess of 2.25% of the
aggregate principal amount of the Bonds, or (d) a final maturity later than September 1, 2035.
Section 7. The form of Preliminary Official Statement relating to the Bonds,
presented at this meeting and on file with the City Clerk and incorporated herein by reference, is
hereby approved with such additions, deletions, or changes therein as may be approved by the City
Manager or Director of Administrative Services/Treasurer in consultation with Bond Counsel and
Jones Hall, A Professional Law Corporation ( "Disclosure Counsel ") and the City Manager and the
Director of Administrative Services/Treasurer, or either of them, are hereby authorized to execute a
certificate deeming such Preliminary Official Statement final as of its date, except for certain final
pricing and related information, pursuant to Securities and Exchange Commission Rule 15c2 -12
(with the execution of such certificate by the City Manager or Director of Administrative
Services/Treasurer constituting conclusive evidence of approval of any such additions, deletions, or
changes thereto). The Underwriter is hereby authorized to distribute said Preliminary Official
Statement as so deemed final to prospective purchasers of the Bonds. The City Manager and the
Director of Administrative Services/Treasurer, or either of them, are hereby authorized and
directed, for and in the name and on behalf of the District, to execute a final Official Statement in
substantially the form of such deemed final Preliminary Official Statement, including such final
pricing and related information and with such additions thereto or changes therein as hereafter
become necessary in the 'interest of the District and which are approved by such officer in
consultation with Bond Counsel and Disclosure Counsel (such approval to be conclusively
evidenced by such officer's execution of such Official Statement). The Underwriter is hereby
authorized to distribute copies of such final Official Statement to all purchasers of the Bonds.
Section R. The form of Continuing Disclosure Agreement relating to the Bonds by
and between the District and The Bank of New York Trust Company, N.A., as Dissemination
Agent, presented at this meeting and on file with the City Clerk and incorporated herein by
reference, is hereby approved. The City Manager and the Director of Administrative
Bond Issuance Resolution. CC Staff Report 10
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe —John Laing Homes)
City Council Staff Report
June 13, 2005
Services/Treasurer, or either of them, are hereby authorized and directed to execute and deliver the
Continuing Disclosure Agreement in substantially the form hereby approved, with such additions,
deletions, or changes therein as may be approved by such officer upon consultation with Bond
Counsel and Disclosure Counsel (such approval to be conclusively evidenced by such officer's
execution and delivery of the Continuing Disclosure Agreement).
Section 9. Pursuant to Section 53356.1 of the Act, the City hereby covenants, for the
benefit of the Bondowners, to commence and diligently pursue any foreclosure action regarding
delinquent installments of any amount levied as a Special Tax for the payment of interest or
principal of the Bonds, such foreclosure action to be commenced and pursued as more completely
set forth in the Fiscal Agent Agreement.
Section 10. The Bonds, when executed, shall be delivered to the Fiscal Agent for
authentication. The Fiscal Agent is hereby requested and directed to authenticate the Bonds by
executing the Fiscal Agent's certificate of authentication and registration appearing thereon, and to
deliver the Bonds, when duly executed and authenticated, to or on behalf of, the Underwriter in
accordance with written instructions executed by the City Manager or the Director of
Administrative Services/Treasurer, which instructions each such officer is hereby authorized and
directed to execute and deliver to the Fiscal Agent.
Section 11. The City is a governmental unit with general taxing powers. No Bond is a
"private activity bond" within the meaning of that term under Section 141 of the Internal Revenue
Code of 1986 (the "Code "). Ninety-five percent or more of the net proceeds of the Bonds are to be
used for local governmental activities of the City. The total aggregate principal amount of tax -
exempt bonds and qualified tax- exempt obligations (within the meaning of such terms under
Section 148(f)(4)(D) and 265(b)(3), respectively, of the Code), including the Bonds, issued or
reasonably expected and anticipated to be issued during this calendar year by the City and any other
subordinate entities of the City does not exceed $5,000,000 or $10,000,000. The Bonds are
designated as "qualified tax- exempt obligations."
Section 17. All actions heretofore taken by the officers and agents of the City with
respect to the establishment of the District, the issuance and sale of the Bonds, or in connection
with or related to any of the agreements or documents referenced herein are hereby approved,
confirmed and ratified. 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 and deliver any and all certificates,
agreements and other documents, which they, or any of them, may deem necessary or advisable for
carrying out the issuance of the Bonds and the transactions contemplated by the Fiscal Agent
Agreement, the Continuing Disclosure Agreement, the Purchase Contract, the Official Statement
and this Resolution.
Section 13. This Resolution shall take effect upon its adoption.
Bond Issuance Resolution.CC Staff Report 11
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe —John Laing Homes)
City Council Staff Report
June 13, 2005
PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal Beach at a
meeting thereof held on the day of , 2005 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 the City of Seal Beach, California, do hereby certify that the
foregoing resolution is the original copy of Resolution Number 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 day of , 2005.
City Clerk
Bond Issuance Resolution.CC Staff Report 12
i
Approval of Bond Issuance by the City of Seal Beach
CFD No. 2002 -01 Special Tax Bonds (Heron Pointe —John Laing Homes)
City Council Staff Report
June 13, 2005
ATTACHMENT 2
CITY COUNCIL RESOLUTION 5048, A
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SEAL BEACH ADOPTING A
STATEMENT OF GOALS AND POLICIES FOR
THE USE OF THE MELLO -ROOS COMMUNITY
FACILITIES ACT OF 1982, ADOPTED AUGUST 12,
2002, ADOPTED AUGUST 12, 2002
Bond Issuance Resolution.CC Staff Report 13
• I!
•
RESOLUTION NO. 4175
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SEAL BEACH ---- -- _
ADOPTING A STATEMENT OF GOALS AND POLICIES FOR THE •
USE OF THE MELLO -ROOS COMMUNITY FACILITIES ACT OF 1982
•
• . ' RECITALS: .
WHEREAS, the CITY COUNCIL (the "City Council ") of the CITY OF SEAL BEACH
(the "City ") proposes to undertake proceedings pursuant to the Mello -Roos Community Facilities
Act of 1982, as amended, commencing with Section 53311 of the California Government Code _
(the "Act "), to form a community facilities district; and
WHEREAS, the Act provides that the City Council may initiate proceedings to establish
a community facilities district pursuant to the Act only if it has first considered and adopted local
goals and policies concerning the use of the Act.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS. FOLLOWS:
- Section 1. The City Council finds that the Statement of Goals and Policies for the
Use of the Mello -Roos Community Facilities Act of 1982, attached hereto and incorporated
herein as Exhibit "A" (the "Goals and Policies "), meet the requirements of the Act and the City
Council hereby adopts the Goals and Policies for purposes of complying with the Act.
PASSED, APPROVED AND ADOPTED this 12th day of August, 2002.
• Mayor • . • .
ATTEST:
pE SEA 84
•
- � /�t / � �,coa
0 City frk %9 o d 1 ,-
9 y �F CpUNT V � P � \�J ; •
• L',
STATE OF CALIFORNIA)
' - COUNTY OF ORANGE ) SS ... ,
CITY OF SEAL BEACH) . ' .
I, Joanne M. Yeo, City Clerk of the City of Seal Beach, California, d2..b er� certify that
• the foregoing Resolution is the original copy of Resolution NumberJO4fZon file in the
office of the City Clerk, passed, approved, and adopted by • - ity Coil it of the City of
Sea Beach at a meeting thereof held on the /'L!,day of - • i , 2002.
dr
C /Clerk - • • .
•
Resolution Number ca1i8
EXHIBIT A
•
CITY OF SEAL BEACH - • • •
STATEMENT OF LOCAL GOALS AND POLICIES
CONCERNING THE USE OF THE
MELLO -ROOS COMMUNITY FACILITIES ACT
OF 1982, AS AMENDED
Pursuant to Section 53312.7 of the California Government Code, the City'Council of the City
of Seal Beach (the "City Council ") hereby states its goals and policies conceming the use of
Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the
"Act ") in providing public infrastructure improvements permitted to be financed pursuant to the Act
for property within the City of Seal Beach (the "City, ") and for the refunding of existing debt on land
within the City. In addition, the Act may be used to provide for the maintenance, repair, •
reconstruction and replacement of any of the foregoing infrastructure improvements. The following
goals and policies shall apply to each community facilities district (a "CFD ") hereafter formed by the
City. Any policy or goal stated herein may be supplemented or amended or deviated from, and new
goals and policies may be added hereto, from time to time upon a determination by the City Council -
that such supplement, amendment, deviation or addition is necessary or desirable; and any policy or
goal stated herein shall be deemed amended or supplemented in the event, and as of the date, if ever,
that such amendment or supplement is required to ensure compliance with the Act or any other laws
of the State of California or federal laws of the United States of America.
I. Priority that Various Kinds of Public Facilities Shall have for Financing Through the
Use of the Act.
It is the policy of the City to give first priority to the financing, through the use of the
Act, of public infrastructure improvements directly benefiting the City, which improvements may
include, but are not limited to, streets, roads, water facilities, sewer facilities, storm drain facilities,
libraries, parks, open space and golf courses and for the refunding of existing debt on land within a
CFD. It is also the policy of the City to assist in the financing of other public facilities when to do so
will, in the sole discretion of the City Council, acting as the legislative body of the affected CFD,
result in a savings to residents or property owners within the City boundaries, for example, by
reducing costs of bond issuance atu (or administrative expenses; provided that such assistance does
not interfere with the financing o$publ1Q infrastructure improvements directly benefiting the City. In
addition to any other form of assistance; imissible under the law and under these goals and policies,
the City may assist in financliig o'fa lities by using the proceeds of a special tax or a special tax
bond to pay development fees; •ihe pr'gceeds of which will be used by the City or by another public
agency to finance public mfiastrncture movements.
II. Credit Ouality to bait' - uired of Bond Issues, Including Criteria to be Used in
EvaluatinMMthe -Csedi Ouality.
II is the policy of the City to comply with all provisions of the Act including, but not
limited to, Section 53345.8, as such Section may be amended from time to time. All CFD bond
issues should have at least a three to one property value to public lien ratio after calculating the value
of the financed public infrastructure improvements to be installed, unless otherwise specifically •
.approved by the City Council as provided in Section 53345.8(b) or (c) of the Act. Property value •
may be based on either an appraisal or on full cash values as indicated on the county assessor's tax
roll. The appraiser shall be selected by or otherwise acceptable to the City, and the appraisal shall be
based on standards promulgated by the State of California and otherwise determined applicable by
City staff and consultants. The date of value set forth in the appraisal must be within nine months of
the date the bonds are issued. The public lien amount shall include the bond issue currently being
sold plus any public indebtedness secured by a lien on real property currently existing against the -
properties to be taxed. Bond issues need not be rated by nationally recognized rating agencies, so
long as all of the requirements of this Section II are met.
It is the policy of the City to refrain from the issuance of any CFD bonds unless at the
time of issuance of any CFD bonds each of the following conditions is met:
A. Special tax revenues from the CFD issuing the bonds are reasonably expected
to provide at least one hundred ten percent (110 %) debt service coverage for each year of the term of
such bonds; and
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B. The CFD has established, and has covenanted to cause to be levied,
covenant a special tax in an amount sufficient to maintain, for the term of such bonds (provided,
however, that depletion may occur to pay debt service in the last two (2) years of such term), a -
reserve fund securing such bonds in an amount equaling the lowest of (i) ten percent (10 %) of the
original proceeds of such bonds, or (ii) the largest amount, for any bond year during the term of such
bonds, of principal and interest payable on such bonds, or (iii) one hundred twenty -five percent
(125 %) of the average amount payable, for any bond year, of principal and interest on the
outstanding bonds of such bond issue.
III. Steps to be Taken to Ensure that Prospective Property Purchasers are Fully Informed
• About Their Taxpaying Obligations.
It is the goal of the City that all taxpayers residing within, or owning property within,
the boundaries of a CFD heretofore or hereafter established by the City will receive the form of
. notice required by Section 53341.5 of the Act, at the time set forth therein, as such Section maybe
amended from time to time. In order to comply with this goal, it is the policy of the City to provide
Section 53340.2 notice of special tax to any individual requesting such notice or any owner of
property subject to a special tax levied by the City within five (5) working days of receiving a request 1'
for such notice.
IV. Criteria for Evaluating the Equity of Tax Allocation Formulas, and Concerning
Desirable and Maximum Amounts of Special Tax to be Levied Against Any Parcel.
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It is the goal of the City that each taxpayer residing within, or owning property
within, the boundaries of any CFD hereafter established by the City pay special taxes which
generally reflect such taxpayer's fair and reasonable share of their projected benefit from, and/or
burden upon, the facilities to be constructed and/or maintained or of any refunding of existing debt
within the CFD by such CFD: It is the goal of the City that maximum Mello -Roos special taxes on
residential owner - occupied property, when taken together with ad valorem taxes, any other special
taxes levied pursuant to the Act and assessments applicable to such property, do not exceed in any
year two percent (2 %) of the greater of the full cash value indicated on the County Assessor's tax roll
or appraised value of such property. Nevertheless, special taxes, when taken together with ad
. valorem taxes, any other special taxes levied pursuant to the Act and assessments applicable to such
property, may exceed in any year two percent (2 %) of the greater of the full cash value, or the
appraised value of such property if the City determines at the time of formation of a CFD that over
the term of the bonds, the special taxes, ad valorem taxes and assessments are expected to average
two percent (2 %) or less per year of the greater of the full cash value or appraised value of such
property. It is further the policy of the City to comply with the provisions of Section 53321 of the
Act with respect to the escalation of maximum taxes.
V. Definitions. Standards, and Assumptions to be Used in Appraisals Required by
Section 53345.8.
It is the goal of the City to conform, as nearly as practicable, to the California Debt
and Investment Advisory Commission's Appraisal Standards for Land - Secured Financings, as such
standards may be amended from time to time, provided, however, that this City Council may
additionally amend such standards from time to time as it deems necessary and reasonable, in its own
discretion, to provide needed infrastructure improvements within the City, while still accomplishing
the goals set forthherein:
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