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HomeMy WebLinkAbout1989-06-27; City Council; 10089; Encina financing approval of agreementcrac OF CARLSBAD — AGENDA BILL 6/27/89 DEPT..FIN TITLE: ENCINA FINANCING JOINT POWERS AUTHORITY APPROVAL OF ASSIGNMENT AGREEMENT 3 I L 5 O §_j O OO RECOMMENDED ACTION: Adopt Resolution No.approving the assignment agreement relating to the Encina Water Pollution Control Facility Expansion project. ITEM EXPLANATION The proposed expansion of the Encina Water Pollution Control Facility is estimated to cost a total of $54 million. This cost will be financed through cash contributions from Vallecitos, Encinitas and Leucadia Water Districts and bond proceeds (approximately $35 million) from the Encina Financing Joint Powers Authority (EFJPA) sewer reserve bond issue. The bond financing structure is based on an installment purchase agreement between each member of EFJPA and the EFJPA itself. Generally this agreement is based on the following concepts: 1. Each member capacity in project. of EFJPA will have a share the Encina plant following of the expanded sewer the completion of the 2. This capacity will be assigned to EFJPA by each EFJPA member. 3. The EFJPA will instantaneously enter into the installment purchase contract with each EFJPA member agency, thereby returning the capacity to the agencies in exchange for lease payments that become the revenue stream to repay the bonds. The instantaneous assignment of capacity to EFJPA technically creates a new member of the EAA family of agencies, even though this member only exists for a split second in time. Therefore, this action requires the approval of all member agencies of the EAA and JAC. The attached Resolution and assignment agreement have been drafted by Bond Counsel to approve this transfer of capacity. The assignment agreement is being approved in substantially the from presented to allow for minor changes in amounts, capacity calculations and dates. Approval of the agreement will allow the bond-issue and construction to continue on schedule. FISCAL IMPACT: The approval of the assignment agreement has no direct fiscal impact. This agreement provides the basis for the installment purchase agreement that provides the revenue stream for debt service payments. Page Two of Agenda Bill No. EXHIBITS: 1. Resolution No. °''' approving the assignment agreement. 2. Assignment agreement relating to Encina Water Pollution Control Facility Expansion. 1 RESOLUTION NO. 89~195 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE 3 ASSIGNMENT AGREEMENT RELATING TO THE ENCINA WATER POLLUTION CONTROL FACILITY EXPANSION 4 5 WHEREAS, the Encina Water Pollution Control Facility ("EWPCF") is 6 owned by the City of Carlsbad, the City of Vista, the Buena Sanitation 7 District, the Leucadia County Water District, the Vallecitos Water 8 District and the Encinitas Sanitary District (the "Member Agencies"), 9 pursuant to a Joint Exercise of Powers Agreement dated July 13, 1961, as 10 amended (the "Master JPA11); and 11 WHEREAS, the Member Agencies have agreed to an expansion of the 12 EWPCF to increase its wastewater treatment capacity and to make other 13 needed improvements, pursuant to the 39th supplement to the Master JPA 14 (the "39th Supplement") and the 43rd Supplement to the Master JPA (the 15 "43rd Supplement) (collectively, the "Expansion Project"); and 16 WHEREAS, the Cities of Carlsbad and Vista, the Buena Sanitation 17 District and the Leucadia County Water District (the "Participants") have 18 formed the Encina Financing Joint Powers Authority (the "Authority") for 19 the purpose of financing the Participants' share of the current expansion 20 of capacity of and other improvements to the EWPCF; and 21 WHEREAS, the Member Agencies that are not Participants, namely, the 22 Vallecitos Water District and the Encinitas Sanitary District, are 23 financing their share of the Expansion Project cost from other sources, 24 and the Leucadia County Water District is financing a portion of its share 25 from other sources; and 26 /// 27 /// 28 /// 1 WHEREAS, the financing structure of the Expansion Project 2 contemplates a conveyance and assignment of the Participant's capacity in 3 the Expansion Project, pursuant to an Assignment Agreement dated as of 4 June 1, 1989, by and among the Participants and the Authority, with 5 concurrent repurchase of the capacity by the Participants pursuant to the 6 Installment Purchase Agreement described below; and 7 WHEREAS, the Authority will enter into four separate Installment 8 Purchase Agreements each dated as of June 1, 1989, by and between the 9 Authority, as seller, and each of the Participants, as purchasers 10 (collectively, the "Installment Purchase Agreements"), which provide for 11 the purchase on an installment purchase basis by the Participants of their 12 respective shares of the Capacity in the Expansion Project, as described 13 in the Assignment Agreement; and 14 WHEREAS, the Authority will assign the payments obtained from the 15 Installment Purchase Agreements to a trust estate, created pursuant to an 16 Indenture of Trust dated as of June 1, 1989 by and between the Authority 17 and a trustee to be selected by the Authority (the "Indenture"); and 18 WHEREAS, the Authority will issue its Wastewater Revenue Bonds 19 (Phase IV Expansion Project) 1989 Series A (the "Bonds") secured by the 20 payments to be made by the Participants under the Installment Purchase 21 Agreements to raise money to pay for all or part of the acquisition and 22 construction of the Participants' respective shares of the Expansion 23 Project and other related expenses; and 24 WHEREAS, the Bonds will be issued and secured as provided in the 25 Indenture; and 26 WHEREAS, each of the Member Agencies have been presented with copies 27 of the basic form of agreements and documents discussed above. 28 /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, as follows: 1. That the Assignment of each Participant's financed share of capacity in the Expansion Project pursuant to the basic terms of the forms of Installment Purchase Agreement and Assignment Agreement and the actions contemplated thereby are, consented to and approved, but only to the extent required by the Master JPA and any collateral agreements or requirements. 2. That the City Clerk is hereby authorized to furnish a certified copy of this Resolution to the Authority. PASSED, APPROVED AND ADOPTED by the City Council at a regular meeting thereof held on the 2?th day of June , 1989, by the following vote, to wit: AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Larson NOES: None ABSENT: None (.LEWIS, Mayor ATTEST: ALETHA L. RAUTENKRANZ, City Cl^rk (SEAL) ASSIGNMENT AGREEMENT RELATING TO THE ENCINA WATER POLLUTION CONTROL FACILITY EXPANSION This Assignment Agreement, made and entered into as of the first day of June, 1989 by and between the Encina Financing Joint Powers Authority (the "Authority"), a joint powers agency created by the Cities of Carlsbad and Vista, the Buena Sanitation District and the Leucadia County Water District and [Member Agency], a organized and operating under the laws of the State of California (hereinafter called the "Member Agency"). WITNESSETH: In the joint and mutual exercise of their powers, in consideration of the mutual covenants herein contained, and for other valuable consideration, the parties hereto recite and agree as follows: Section 1. Recitals. (a) The terms capitalized in this Assignment Agreement not otherwise defined herein shall have the meanings ascribed to them in Section 1.02 of the Trust Agreement among the Authority and [Trustee] Relating To Encina Pollution Control Facility Expansion dated as of the date hereof (the "Trust Agreement"). (b) The Encina Water Pollution Control Facility ("EWPCF") is owned by the City of Carlsbad, the City of Vista, the Buena Sanitation District, the Leucadia County Water District, the Vallecitos Water District and the Encinitas Sanitary District (the "Member Agencies"), pursuant to a Joint Exercise of Powers Agreement dated July 13, 1961, as amended (the "Master JPA"). (c) The Member Agencies have agreed to an expansion of the EWPCF to increase its wastewater treatment capacity and to make other needed improvements, pursuant to the 39th Supplement to the Master JPA (the "39th Supplement") and the 43rd Supplement to the Master JPA (the "43rd Supplement") (collectively, the "Project"). (d) The Cities of Carlsbad and Vista, the Buena Sanitation District and the Leucadia County Water District (the "Participants") have formed the Encina Financing Joint Powers Authority (the "Authority") for the purpose of financing all or portion of the Participants' share of the current expansion of capacity of and other improvements to the EWPCF. (e) The Member Agencies have agreed the capacity of the Member Agency [or as to Leucadia, a portion of such capacity] in the Project will be initially owned by the Authority and sold to the Member Agency and that Bonds will be sold to provide funds for the Authority to meet its payment obligations for such capacity, and that proceeds of the Bonds in an amount equal to the initial obligation of the Member Agency to the Master JPA will be remitted to EAA from time to time to pay for a portion of the cost of the Project. The Member Agencies which are not Participants (as well as Leucadia, as to a portion of its capacity), are financing their share of the Project cost from other sources. (f) The financing structure of the Project contemplates a conveyance and assignment of the Participants' capacity in the Project, pursuant to this Assignment Agreement by and among the Participants and the Authority, with a concurrent respective repurchase of the capacities by the Participants pursuant to the Installment Purchase Agreements described below. (g) The Authority will enter into Installment Purchase Agreements dated as of June 1, 1989, by and among the Authority, as seller, and each of the Participants, as purchasers (the "Installment Purchase Agreements"), which provide for the purchase on an installment purchase basis by the Participants of their respective capacities in the Project, as described in the 39th Supplement and the 43rd Supplement. (h) The Authority will assign the payments obtained from the Installment Purchase Agreements to a trust estate, created pursuant to a Trust Indenture dated as of June 1, 1989 by and among the Authority and State Street Bank and Trust Company of California, N.A., as Trustee (the "Indenture"). (i) The Authority will issue its Wastewater Revenue Bonds (Phase IV Expansion Project) 1989 Series A (the "Bonds") secured by the payments to be made by the Participants under the Installment Purchase Agreements to raise money to pay for the acquisition of the Participants' respective shares of the capacity and other related expenses. (j) The Bonds will be issued and secured as provided in the Indenture. (k) For the purpose of obtaining the monies required to be deposited by it pursuant to the 39th Supplement and the 43rd Supplement, [Member Agency] is willing to assign and transfer its rights under the Agreement to the Authority; and in consideration of such assignment, the Member Agency is entering into the Installment Purchase Agreement. (1) To provide the Authority with the funds to finance its purchase hereunder, the Authority will issue and sell the Bonds and, as security therefor, the Authority will assign its right to receive the Installment Payments from the Member Agency to the [Trustee], as Trustee. 05/28/89 4628n/2062/019 -2- (m) Each of the parties hereto has authority to enter into this Assignment Agreement, and has taken all actions necessary to authorize its officers to enter into it. Section 2. Assignment. Member Agency for Dollars ($ ) and in consideration of the Installment Purchase Agreement and other good and valuable consideration in hand received, does hereby sell, assign and transfer to the Authority all of its right, title and interest to its share of the Capacity contemplated by the 39th Supplement and the 43rd Supplement, including any adjustments thereto, as limited by and subject to revision by said 39th Supplement and 43rd Supplement. The Authority, on the Closing Date, shall deposit with the Trustee or cause to be deposited with the Trustee, the sum of $ pursuant hereto and to the Installment Purchase Agreement. This amount is required to be deposited in the Purchaser's Acquisition Account held by the Trustee pursuant to the Trust Indenture, and is in an amount ([add for Leucadia] together with the which the Member Agency hereby agrees to deposit with EAA [or any depositary therefor] on the Closing Date) which is sufficient to make available to EAA Dollars, for the construction of the Project and to pay other Costs. The Authority and the Member Agency agree that upon substantial completion of the Project, EAA will maintain and operate the Project under and subject to the terms and provisions of the Master JPA and EAA's governing documents, and such other agreements among the Member Agencies pertaining to EAA operation, management and administration of the Project. Payment of the Costs, up to the total amount in the Acquisition Fund, shall be made from the monies held by the Trustee on behalf of the Member Agency in the Member Agency Acquisition Account, which monies shall be disbursed for such purpose in accordance and upon compliance with Section 3.02 of the Trust Indenture. The Authority and the Member Agency agree that upon substantial completion of the Project, EAA will maintain and operate the Project under and subject to the terms and provisions of the Master JPA and EAA's governing documents, and such other agreements among the Member Agencies pertaining to EAA operation, management and administration of the Project. The parties agree further that no changes shall be made in the plans and specifications approved by EAA as of the Closing Date which increase the pro rata portion of the Costs attributable to the Member Agency's capacity in the Project in excess of the funds available in the Acquisition Fund and otherwise held by EAA or its agent for such purpose, unless the 05/28/89 4628n/2062/019 -3- Member Agency deposits or causes to be deposited in the Acquisition Fund or other fund held by EAA for such purpose monies in an amount deemed by the Member Agency and the Authority to be sufficient to pay such increase. Upon completion of construction of the Project, the Authority shall deliver or cause to be delivered to the Trustee an Acceptance Certificate as defined in the Indenture, executed by an Authorized Representative of the Authority, as defined in the Installment Purchase Agreement. On the date of the filing of the acceptance certificate or on , 1992, whichever is earlier, the Authority shall notify the Member Agency and the Trustee of its pro rata share of excess funds not encumbered to pay Costs then on deposit in the Acquisition Fund. All such excess funds shall be transferred to the Trustee for application in accordance with Section 302 of the Installment Purchase Agreement. Section 3. Acceptance. The Authority hereby accepts such assignment for the purpose of facilitating the issuance of the Bonds pursuant to the Trust Agreement, and subject to the provisions of the Trust Agreement. The Authority will make no disposition of this Assignment Agreement or any rights acquired hereunder, except in accordance with the Installment Purchase Agreement and the Indenture. Section 4. Conditions. This Assignment Agreement shall confer no rights and shall impose no duties upon the Authority beyond those expressly provided in the Installment Purchase Agreement and the Trust Agreement. IN WITNESS WHEREOF, the parties have executed this Assignment Agreement by their officers thereunto duly authorized as of the day and year first written above. ENCINA FINANCING JOINT POWERS AUTHORITY By: Its [Member Agency] By: Its: 05/28/89 4628n/2062/019 -4-