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HomeMy WebLinkAbout1993-08-24; City Council; 12375; Housing & Redevelopment Tax Allocation BondsCl”-v OF CARLSBAD - AGEr-SA BILL $& :’ RECOMMENDED ACTION: Adopt Resolution No. Cr?-244 approving the issuance by the CarIsbad Housing and Redevelopment Commission of $15495,000 principal amount of 1993 Tax AUocation Bonds. ITEM EXPLANATION: On July 13,1993 the Housing and Redevelopment Commission adopted Resolution No. 233 author-king the issuance and sale of Village Redevelopment Project 1993 Tax AIlocation Bonds (the 1993 Bonds) in a principal amount not to exceed $17,000,000, and authorixing the competitive sale of the bonds on August lo,1993 as weII as author-king various other related matters. The 1993 Bonds were being issued to refund the tax allocation bonds which are currently outstanding (the 1988 Bonds) and to obtain additional money for redevelopment projects. On August 10,1993, the sale commenced and the five bids which had been received were opened. The Bonds were awarded to Smith Barney whose bid provided the lowest true interest cost of 5.44%. The principal amount of the bonds sold was $15,495,000 with a final maturity in 2023 (30 years). The attached resolution, in which the City Council approves the issuance and sale of the bonds by the Commission, is required in order to close the bond sale on September 1,1993. At that time, an escrow fund wiIl be set up to calI the 1988 Bonds, funds wilI be set aside for payment of ail services associated with the bond issue and the Agency wiIl receive approximately $2.5 million for projects. FISCAL IMPACT: The sources and uses of funds for the sale are detailed on Exhibit A. This exhibit shows that the Agency will receive $2.5 million in net bond proceeds (see note e of the exhibit) and have $1.2 million set aside for capitalked interest. The capitalixed interest wilI allow the Agency an 18 month period in which no payments will be required on the 1993 Bonds. Thus, approximately $1.2 million in tax increment will be available for other uses (redevelopment projects, repay City debt, operations, etc.). The result is a total of $3.7 milhon that will be available over the next 18 months for Agency projects. In addition, annual debt service on the bonds wiU be reduced from an average of $1,160,000 per year on the 1988 Bonds to $1,055,000 per year on the 1993 Bonds. This results in annual debt service savings of $105,000 per year. The costs of issuance of the 1993 Bonds is estimated to be $185,000. This amount includes payments for bond counsel ($SS,OOO), the fiscal consultant ($19,000), the financial advisor ($37,500) and a reimbursement to the City for administrative costs ($10,000). EXHIBITS: A. Sources and Uses of Funds B. Resolution No. ? ? -aqY approving the issuance by the CarIsbad Housing and Redevelopment Commission of $15,495,000 principal amount of 1993 Tax Ahocation Bonds. ces and Um of Fb Sources: Bond Note Proceeds Proceeds Par Amount of Bonds $15,495,000.00 Accrued Interest (a) 36,237.33 Less Original Issue Discount (b) 173,640.50 Less Underwriter’s Discount (c) 136,259.50 - 1988 Bonds Reserve Fund (d) 1,161,166.59 1988 Bonds P&c I Accounts (d) -- 347.60 1988 Bonds Special Fund (d) 5 81242LT Total Sources $15,221,337.33 %1,7409,777.34 l.hi: Redevelopment Fund (e) 2,505,718.08 Refunding Escrow (0 10,964,371.92 Cost of Issuance Fund (g) 185,OOO.OO Cost of Issuance: Insurance (h) 270,OOO.OO Reserve Account (i) 37,ooo.oo Interest Account: Cap. Int. (i) 1,223,OlO.OO Interest Account (a) 36 277.33 Total Uses $15,221,337.33 1,709,777.34 %1,709,777.34 Total $15,495,000.00 36,237.33 173,640.50 136,259.50 1,161,166.50 347.60 2,505,718.08 12,674,149.26 185,OOO.OO 2170,00.00 37,ooo.oo 1,223,010.00 36.237.33/ %16,931,114.67 Notes for Sources and Uses of Funds: (a) Represents accrued interest on the Bonds from the August 15, 1993 dated date through the September 1, 1993 delivery date. (b) Represents the Original Issue Discount on the Bonds. See Attachment A. (c) The underwriting discount is the difference between 2% of the par amount of the Bonds bid and the OID. (d) Reserve Fund and other monies held by the Escrow Agent (Bank of America) and Special Fund monies held by the Agency. See Attachment B. (e) Monies available for the Agency projects. (f, Represents the C&I provided from Bond proceeds and funds held by the Escrow Agent used for the purchase of the refinding escrow securities. See Section VI and Attachment C. (g) ‘See Section I. (h) Represents the MBIA bond insurance premium of 86 basis points on principal and interest, rounded to the nearest thousand dollars. (i) The Reserve Surety is equal to the Reserve Requirement (maximum annual debt service) times 3.5%, rcuulcd to the nearest thousand dollars. (j) Represents capitalized interest from September 1, 1993 through March 1, 1995. PALi 81 I6/93 carlsbad\ClosMemo.doc RESOLUTION NO. 93 - 2 4 4 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD APPROVING THE ISSUANCE BY THE CARLSBADHOUSINGANDREDEVELOPMENTCOMMIS- SION OF $15,495,000 PRINCIPALAMOUNTOF 1993 TAXALLOCATIONBONDSRJXATINGTOTHEVILLAGE REDEVELOPMENT PROJECT WHEREAS, the Carlsbad Housing and Redevelopment Commission (the “Commission”) is undertaking the redevelopment of the Village Project in the City of Carlsbad (the “Redevelopment Project”), and for such purpose . the Commission has previously issued its Village Redevelopment Project Area Tax Allocation Bonds, Series A, in the aggregate principal amount .of $12,000,008 (the “1988 Bonds”); and WHEREAS, the Commission has determined that it is in the financial interests of the Commission at this time to advance refund the 1988 Bonds, and in order to provide for such refunding and to provide additional . fimcling for the Redevelopment Project, the Commission has authorized the issuance of, and has previously sold, its Carlsbad Housing and Redevelopment Commission Village Redevelopment Project 1993 Tax Allo&on Bonds in the aggregate principal amount of $15,495,000 (the “BondS?I under the provisions of the California Community Redevelopment Law, the principal of and interest on which will be payable from tax increment revenues derived fkom the Redevelopment Project; and ’ 1 2 3 4 5 WHEREAS, in accordance with the requirements of Section 33640 of tk California Health and Safety Code, the City Council wishes at this time to approve the issuance and sale of the Bonds by the Commission. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, that the issuance and sale of the Bonds by the 6 Commission, in the aggregate principal amount of $15,495,0OO, be and is 7 hereby approved. The City Clerk shall cert@ to the adoption of this 8 Resolution and shall cause this Resolution and certification to be filed in the 9 10 11 12 13 14 Office of the City Clerk. special PASSED, APPROVED AND ADOPTED at ahg&r meeting of the City Council on the 24th day of August, 1993, by the following vote, to wit: AYES: Council Members Lewis, Nygaard, Finnila NOES: None 15 16 ABSENT: Council Members Stanto 17 18 19 11 AI-I-EST: 20 II 23 24 25 26 27 28