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 ’
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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
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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
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ABSENT: Council Members Stanto
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