HomeMy WebLinkAbout1987-05-19; City Council; 8859-5; HOSP GROVE ACQUISITION SELECTION OF BANK FOR SHORT TERM FINANCINGAB# 88s94h- TITLE:
MTG. 5/19/87
DEPT. FIN
HOSP GROVE ACQUISITION
SELECTION OF BANK FOR SHORT
TERM FINANCING
DEPT.
CITY I
CITY 1
. v
9 > 0 2 c% Irt
2 0 F 0 4 5 z 3 s
- /,e @ CIYOF CARLSBAD - AGENWBILL
RECOMMENDED ACTION:
Adopt Resolution No. yo$a authorizing City representatives
enter into a loan agreement with San Diego Trust and Savings
Bank.
ITEM EXPLANATION:
At the meeting of March 17, 1987 the City Council directed c
to proceed with the purchase of Hosp Grove by implementing E
step financing program using 1) Bank loans, 2) Bond Anticipz
Notes and 3) either General Obligation Bonds or Certificate:
Participation depending on the outcome of the November 1987
election. The staff has taken the first of several steps ir
implementing this program by reviewing proposals from three
banking institutions for funding the initial acquisition of
Grove on June 1, 1987.
The following banks have submitted proposals to the Finance
Director offering to provide short term funding:
San Diego Trust and Savings Bank, Carlsbad
Union Bank, Carlsbad
Security Pacific, Los Angeles
The terms and conditions of these proposals are generally o
lined below:
San Diego Trust and Savings Bank
-7% loan for up to 45 days
-Renewable at 90% of prime
-Secured by pledge of Certificates of Deposit
or securities
Union Bank
-Secured loan @ 1/8% to 1/4% below prime rate: secured by pledge of Certificates of Deposit.
-Unsecured loan @ prime rate: no security pledge
required.
Security Pacific Bank
-short term financing is proposal as part of
an overall underwriting agreement for financ-
ing the Grove acquisition.
Staff recommends that the City Council accept the proposal
San Diego Trust and Savings Bank and authorize the Mayor, (
Clerk, City Treasurer and City Attorney to sign the necess?
documents to initiate the loan on or before June 1, 1987.
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In addition to the Bank loan financing plan staff has
worked with the City Treasurer to guarantee that suffi-
cient funds are available in short term negotiable
instruments to provide for a cash settlement in the event
that problems of a legal or procedural nature should
occur prior to funding the loan. Staff is asking that
Council grant approval for the temporary use of interfund
loans as descrived in previous Agenda bills should the
City or bank be unable to execute the proposed loan
agreement.
to exceed 61 days.
The attached exhibits describe the loan documents to be
signed by the City representatives.
FISCAL IMPACT:
The proposed financing involves the borrowing of $6,457,000 for a period of up to 45 days. The cost for this borrowing
is limited to interest and minor fees as described below:
This interfund loan would be for a period not
Interest - $6,457,000 13 7% for 45 days = $56,500
Bank fees - Less than $1,000
This borrowing constitutes a short term Bond Anticipation
Note held by San Diego Trust and Savings Bank which will be
paid off from the proceeds of a second short term note issuf as soon as staff can work with the underwriter to prepare
the issue.
due to market conditions.
All interest and fees shall be financed by the issue of a
second Bond Anticipation Note as soon as possible.
EXHIBITS:
Resolution No. 90p4 authorizing representatives of
the City of Carlsbad to execute loan documents with San
Diego Trust and Savings Bank.
Loan Document package.
Council should allow for some change in timing
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RESOLUTION NO. 9082
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING
VARIOUS CITY OFFICIALS TO SIGN LOAN
DOCUMENTS FOR THE PURPOSE OF ENTERING
INTO A SHORT TERM BORROWING AGREEMENT
WITH SAN DIEGO TRUST AND SAVINGS BANK
FOR THE PURCHASE OF HOSP GROVE.
WHEREAS, the City Council has determined that the Cit
acquire the property known as Hosp Grove by depositing the
price of $6,457,000 into an Escrow account on June 1, 1987,
WHEREAS, funds for such deposit may be obtained by en1
into a short term loan agreement with a lending institution
WHEREAS, such short term loan shall constitute a shori
Bond Anticipation Note to be redeemed by the issue of a long
term Bond Anticipation Note or long term debt, upon the exp:
of said note, and
WHEREAS, the City Council has determined that San Diet
and Savings Bank can best provide such short term financing
City, and
I WHEREAS, the term of said borrowing shall not exceed 1
with the option to extend said borrowing upon Council appro\
/terms and conditions, and
~
WHEREAS, interest rates and fees for said borrowing sf
as shown in the exhibits attached hereto,
NOW, THEREFORE, BE IT RESOLVED by the City Council of
I
251City of Carlsbad as follows:
1. That the Mayor, City Clerk, City Treasurer, and Cj
Attorney are hereby authorized to sign the attached document
behalf of the City of Carlsbad subject to such revisions in
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1-as may be necessary to meet short term borrowing laws (Secti
2--of the Government Code) as approved by the City Attorney.
2. That the pledge of securities or certificates of d
as a guarantee of faithful performance by the City is hereby
approved.
3. That the City shall deposit proceeds of said loan
into an Escrow account on or before June 1, 1987 as necessar
the purchase of Hosp Grove, as directed by the City Attorney
4. That the referenced loan of note may be extended 1:
the initial 45 day period upon Council approval of terms anc
conditions.
5. That the attached corporate resolution to borrow :
hereby adopted.
,' PASSED, APPROVED AND ADOPTED at a regular meeting of 1
Council of the City of Carlsbad held the 19th day of May
1987, by the following*vote, to wit:
AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Larz
NOES: None
ABSENT: None
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~THA LJ w
0 c”st.
’ $ 6.457.000~00 NoteNr Name City of Carlsbad
Single Payment Note Cdsbad ., California June 19
On DEMAND, or if no demand, then on July 16 3 1987 ,for value received. the undersigi
pay to the order of the SAN DlEGO TRUST& SAViNGS BANK at its
the sum of Six Million Four Hundred Fifty Seven Thousand OO/l~lla,s [$ 6,457,000.00
from date of disbursement at the rate of 7 .OO with interest payable -
shail be paid per annum, but a rninirnurn finance charge of $ 75 * 00
Carlsbad
Should interest not be paid when due, the whole sum thereof shall, at holder’s option, become immediately due and payable. If payr
when do% the undersigned agrees to pay all costs of collection, including reasonable attorney’s fees Costs shall bear interest at t herein Principal and interest are payable in lawful rnoney of the United States The obligations under this Note, if there is inore thai jcint and several Any married person signing this Note as an individual rnaker consents to the 1iab:lity of his or her separate propertyi
this Note The makers, endorsers and guarentors of this Note hereby waive diligence. demand, presentment, protest and notice of n
consent to renewals and extensions of time at or afterrnaturity hereof The pleading of any statute of lirnitations as a defense to anya
hereunder is hereby waived
“If repayrnent hereof is secured by a Deed of Trust Gn real property. the Deed of Trust contains the following provision
In the event of any sale. transfer, conveyance. or further encumbrance of the real property covered by this Deed of Trust or any part tl voluntary or involuntary, without the prior written consent of the BENEFICIARY. the entire balance of the principal and interest of tt hereby shall, at the option of the BENEFICIARY hereof, be declared immediately due and payable.”
“For any property or liability insurance written in connection with this loan.
obtained. subject to Bank’s right to aporove the insurer Such insurance may not be o
1200 Elm Ave.
Carlsbad. Ca. 92008
u
CL 540 (REV 1 /E21
Note to be signed by City officials
.
Dollar Amount 1. Loan proceeds provided to you by
$ I O Cash received
0 Check
-0 Deposit to your account
$ ! Initials Initials
I $
I
D
0
0
0
o
$
$ I
$ I
$ 1 .
$ I
4. Loan proceeds paid to others:
O Insurance Companies
0 Appraisers m
o
0
0
$ I
$ I
I
$ I
I
I $ 6,457,000 100
$
I $
5. Less amounts paid by you
6 Amount Financed (1 + 2 + 3 + 4 - 51
$[ !I
$ 6-457.000 100
I
0 Loan Fees
0
o
0
$ I
I
$ I
$
I $
$ I
I
m 0
CORPORATE RESOLUTIOM TO BORROW
WtMBLRFI1IC
Resolved, that this corporation City of Carlsbad
borrow from SAN DlEGO TRUST 6. SAVINGS BANK hereinafter called the “Bank,” from time to time. such sums of mor
iudgment of the officer or officers hereinafter authorized, this corporation may require; provided that the aggregate am
borrowing, pursuant to this resolution,shall not at any one time exceed the principal sum of Seven Million Four H
[$ 7,457,000.00 1, in addition to such amount or amounts as may have heretofore been authori&%%!?a
and such amounts as may hereafter be authorized by this corporation,
Resolved Further, that any 2 of the following named officers Specify Number
Claude T,ewis the Mavor
Aletha L. Rautenkranz the City Clerk
the
the
of this corporation [the officer or officers or officers acting in combination, authorized to act pursuant hereto being
designated as “authorized officers”1, be and they are hereby authorized and empowered, for and on behalf and in n
corporation (1 1 to execute and deliver to the Bank such notes or other evidences of indebtedness of this corporation for tt
borrowed, with interest thereon, as the Bank may require, and to execute and deliver, from time to time. renewals
or modifications of such notes or other evidences of indebtedness, [21 to grant a security interest in, transfer, orotherw
cate or deed in trust for Bank’s benefit and deliver by such instruments in writing or otherwise as may bedemanded by t
of the property of this corporation as may be required by the Bank to secure the payment of any notes or other indebtec
corporation to the Bank, whether arising pursuant to this resolution or otherwise; and [31 to perform all acts and execut
all instruments which the Bank may deem necessary to carry out the purposes of this resolution;
Resolved Further, that said authorized officers be and they are hereby authorized and empowered, and that any
authorized officers be and he is hereby authorized and empowered (1 I to discount withor sell to the Bank. conditional sale
notes, acceptances, drafts, bailment agreements, leases, receivables and evidences.of indebtedness payable to this L
upon such terms as may be agreed upon by them and the Bank, and to endorse in the name of this corporation said not
ances, drafts, bailment agreements, leases, receivables and evidences of indebtedness30 discounted, and to guarantee t
of the same to the Bank, and (21 to apply for and obtain from the Bank letters of credit and in connection therewith to e)
agreements, applications, guarantees, indemnities and other financial undertakings as Bank may require;
Resolved Further, that this resolution will continue in full force and effect until the Bank shall receive official notice ink
this corporation of the revocation thereof by a resotution duly adopted by the Board of Directors of this corporation, a
certification of the Secretary of this corporation as to the signatures of the aboye named persons shall bebinding on this c
City Ckrk
$BE+- of the above named corporation, duly or
correct copy of a resolution of the Board of Directors of said corporation, duly 8nd regularly passed and adopted at a mE
Board of Directors of said corporation which was duly and regularly called and held on thebtfbyofSeDt
19 85 , at which meeting a quorum of the Board of Directors of sad corporation was at all times present a
I further certify that said resolution is still in full force and effect and has not been amended or revoked, and that th
sig for this corporation by virtue of said
IN WITNESS WHEREOF. i have hereunto set my hand as such $EomZ-nd affixed the corporate seal of said corpc 1st day of June ,19- 87
I, Aletha L. Rautenkranz
existing under the laws of the State of C21 i fornia , do hereby certify that the foregoing is a f
signatures appearing below are the signatures of the officers auth rized eity &erR
AUTHORIZED SIGNATURES
Claude Lewis 'Signature'
Aletha L. Raute&F%E’
[Signature)
(Signature) [Si atu I (Secretary1 Aletha “fll Eautenkranz C.. 350 [JEV 5/871
r BOND OR , THE FOLLOWING DESCRIBED SECURITIES WITH UNMATURED COUPONS ATTACHED EXCEPT A& NOTED - - z CyuTralCCfi DESCRIPTION OF ISSUE m
1
-LE: emT&.F2
n.‘5 To be assisnek4
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1 9-
SHARES OR
DCPOSlTLD PAR VALUE
INSTRUCTIONS FOR RETURN OF COLLATERAL AND DISPOSITION OF COUPONS
CL 415 ORIGINAL
OFFlCE (No 1
SAN DIEGO TRUST AND SAVINGS BANK
BY
BY
W e=NM-pI
ESTAaLlSHED 1889
CARLSBAD OFFICE I 3'50 EL CAMlNO PEAL I p 0 BOX 428 I CARLSBAD CA 92008 1 (619) 445-331 6
May 7, 1987
Notice sent by SDT & S to eash bank or
holding certificates of deposit a
by the City.
BANK ADDRESSED
Gentlemen:
We have been granted a security-interest this date in the amount of
$ in savings account !/ by the City of Carlsbad whose authorized signatures appear below.
Please acknowledge notification and confirmation of this security
interest by signing and returning the enclosed copy of this letter.
Depositors Signatures :
Very Truly Yours;
SAN DIEGO TRUST AND SAVINGS BAM
I---_ --- -----.
Kathleen M. Blair, Manager
ACKNOWLEDGEMENT
We acknowledge notification of the security interest of San Diego Trust
and Savings Bank in the savings account described above and confirm that
no prior interest, lien, or claim of offset exists.
BANKS NAME
By :
Bank Official (Authorized SI
,(_, --- __--_ -.----- - - ,.- -,.T"^D2Tnr,
0 c2 NWTL rE. 4- ,.
ASSIGNMENT OF DEPOSIT ACCOUNT
8
MEMBER FDIC
To secure and in consideration of such credit as has been or is granted hereafter and from t
time by SAN DIEGO TRUST 6 SAVINGS BANK, hereinafter referred to as the “Bank”,
undersigned or to any one or more of the undersigned if there be more than one, Vwe assign
Bank
Account Number
now standing in the name of
including all amounts now or at any time hereafter deposited in that Account, and all interest
payable with respect to the Account.
At any time after default in the payment or performance of any credit obligation secured
Agreement, the Bank may, upon five [51 days’ notice to the undersigned, withdraw all or any pari
Account and apply its proceeds to payment of such obligation in whole or in part, whether or r
Account is payable without penalty for early withdrawal.
This is a Continuing Agreement which shall remain in full force until the branch of the Bank
the Account is maintained receives written notice that it has been revoked or written notice
death, incapacity or bankruptcy of the undersigned or any of them. Revocation shall be effect
after all credit secured hereby at the time the notice IS received has been satisfied and shall ap
as to the credit extended after the receipt of such notice.
, California
,IS-
City Treasurers notice of assignment - To be sent to each bank
savings and loan holding certificates of deposits assigned I
San Diego Trust and Savings to secure this loan.
CL 453 CREJ 9 e’’
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1 1200 ELM AVENUE
CARLSBAD, CA 92008-1989 (t
aitp of aarrs’bab
FINANCE DEPARTMENT
May 8, 1987
San Diego Trust & Savings Bank
3150 El Camino Real
Carlsbad, CA 92008
PLEDGE OF CERTIFICATES OF DEPOSIT AND SECURITIES
The certificates of deposit and/or securities shown
on the attached list are not presently restricted
by a previous pledge or assignment to any institution.
VINCENT F. BIONDO
City Attorney