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HomeMy WebLinkAbout1997-10-28; City Council; 14403; Refund Alga Rd & College Blvd AD BondsP 9 P % . . p 2 6 5 z r2 . CITY OF CARLSBAD - AGENbA BILL AB# /4,403; TITLE: RESOLUTION OF INTENTION TO REFUND THE MTG. 1 O-28-97 ALGA ROAD (88-l) AND COLLEGE BLVD (85-2) DEPT. CM ASSESSMENT DISTRICT BONDS CITY MGR RECOMMENDED ACTION: Adopt Resolution No. 93-6 5jlf making preliminary determinations, making appointments, and declaring intention to issue refunding bonds for special Assessment Districts Nos. 85-2 and 88-l and ordering a report thereon. ITEM EXPLANATION: On June 3, 1997 the City Council adopted Resolution No. 97-468 directing staff to proceed with the refunding (refinancing) of several existing debt issues. At that time the Council heard a report explaining the decline in interest rates over the past few years has provided the City with an opportunity to save hundreds of thousands of dollars by refunding some of its outstanding debt. In September the staff completed the refunding of two issues - Hosp Grove and the Carlsbad Municipal Water District (CMWD) Certificates of Participation. The total “present value” savings realized by the City as a result of these refundings exceeded $907,000. The present value savings calculation takes into consideration the time-value of money by recognizing that dollars received today are worth more than dollars received in the future. On a cash basis, the total savings related to the Hosp Grove and CMWD issues is in excess of $1,579,000. Staff is now prepared to move forward with the refunding of the Alga Road and College Boulevard Assessment District issues. Both of these issues are prime candidates for refunding with forecasted present value savings of about $2.4 million for both issues. These savings translate into lower annual assessments for every home owner or property owner within these districts. (The City is a property owner in the College Boulevard District due to the acquisition of the golf course property.) Although the City Council has previously given the staff approval to proceed with the refunding of these issues, there will be several actions the Council must take to move the process along. The first is the adoption of a Resolution of Intention to refund these issues. This resolution states the City’s intent to refund the issues, appoints the Bond Counsel - Brown Diven and Hentschke, the Assessment Engineer - Galen N. Peterson, and the Financial Advisor - Peter J. Ross, and orders the staff to prepare the necessary reports related to future assessments for each parcel within the districts. The Council had previously directed staff to work with Brown Diven and Hentschke as Bond Counsel in its June action approving the financing plan. The Council has also selected Dean Witter to act as the Underwriter for the various refunding issues approved in June. The staff is not recommending any change in the makeup of this team. Galen N. Peterson has worked with the City on several Assessment Districts in the recent past, and was selected based on his knowledge of the districts and the price for his services. Peter J. I - PAGE 2 OF AGENDA BILL NO. 14; ‘/OS Ross has worked with the City on the prior refundings and will be acting as our Financial Advisor in this refunding as well. The Calendar for the refunding of the Alga Road and College Boulevard issues calls for completing the issues by the middle of December. Although this is an aggressive schedule it can be accomplished. Staff is recommending that the City Council adopt the attached Resolution of Intention to refund the Alga Road and College Boulevard issues. Staff will then proceed with the preparation of all necessary documents for Council approval at a future meeting. ENVIRONMENTAL: Actions taken by the Council related to the financing of a project do not require environmental review, nor does this action constitute a project under CEQA/NEPA. FISCAL IMPACT: The refunding of the Alga Road and College Boulevard Assessment Districts will have the effect of lowering the annual cost to home owners and property owners within both Districts. At this time the staff cannot project the savings that will be experienced by any particular property owner within these districts, however at present interest rates the City could expect reductions in annual assessments to be between 8% and 10%. EXHIBITS: 1. Resolution No. 93 l 6 5 5 making preliminary determinations, making appointments, and declaring intention to issue refunding bonds for special Assessment Districts Nos. 85-2 and 88-1 and ordering a report thereon. 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 RESOLUTION NO. 97-654 RBSOWRION OP TBB CITY COUNCIL OP THB CITY OP CARLSBAD, CALIPOBWIA, NAEING PRBLIMINARY DBTERWINATIONS, WAKING APPOI~S, AND DECLARING INTRNTION TO ISSUB BBPUNDING BONDS ?OR SPECIAL ASSBSSXRNT DISTRICT8 NOS. US-2 AND 88- 18 AND ORDRRING A REPORT TERREON WHEREAS, the CITY COUNCIL of the CITY OF CARLSBAD, CALIFORNIA, did previously undertake proceedings and confirmed assessments in special assessment districts pursuant to the terms and provisions of the "Municipal Improvement Act of 1913", being Division 12 of the Streets and Highways Code of the State of California, said special assessment districts being designated as:, Assessment District No. 85-2 and Assessment District No. 88-1 (hereinaftrr referred to as the "Assessment Districts"); and, WBBBBAS, improvements bonds representing the unpaid assessments within said Assessment Districts were issued and sold in the manner provided in the "Improvement Bond Act of 1915", being Division 10 of the Streets and Highways Code of the State of California (the "1915 Act"); and, WHEREAS, at this time this legislative body is desirous of initiating proceedings to refund all outstanding improvement bonds of the Assessment Districts through the issuance, sale and delivery of liaited*obligation refunding bonds pursuant to the "Refunding :. Act of 1984. for 1915 Improvement Act Bonds", being Division 11.5 of the Streets and Highways Code of the State of California (the nRefunding Act"); NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: Section 1. That the above recitals are all true and correct. //I - 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 A. B. That the public interest and necessity require, and it is the intention of this body, pursuant to the provisions of the Refunding Act, to refund all outstanding improvement bonds for the Assessment Districts and to levy reassessments as security for such refunding bonds, and to issue refunding bonds as authorized by 1,aw. That this proposed reassessment levy and refunding of the original bonds is hereby referred to the herein after designated Assessment Engineer, who is hereby directed to make and file thi Report in writing generally containing the following: -L A schedule setting forth the unpaid principal aa@ interest on the improvement bonds of the Assessment Districts to be refunded and the total amounts thereof; A total estimated principal amount of the reassessment and of the refunding bonds and the maximum interest rate thereon, together with an estimate of costs of the reassessment and of issuing the refunding bonds, including all costs of issuing the refunding bonds, as deftned by subdivision (a) of Section 9690 of the Refunding Act.; The Auditor's Record kept pursuant to Section 8682 of the 1915 Act showing the schedule of the principal installments and interest on all unpaid original assessments and the total amounts thereof; 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 Section Section Section D. T. E. 4. The estimated amount of each reassessment, identified by reassessment number corresponding to the reassessment number on the reassessment diagram, together with a proposed Auditor's Record for the reassessment; A reassessment diagram showing the refunding * assessment district and the boundaries and dimensions of the subdivisions of land within the refunding assessment district. Each subdivision, including each separate. condominium interest as defined in Section 783 of the Civil C&e, shall be given a separate number upon the diagram. Any refunding bonds issued pursuant to these proceedings shall bear interest at the rate of not to exceed the current legal maximum rate of twelve percent (12%) per annum, or such other legal maximum rate which may be in effect at the time of issuance thereof. 5. A certified public accountant shall certify that the proceeds and investments of the refunding bonds shall be sufficient to pay the principal of and 6. . interest and redemption premiums on the refunded bonds. Immediately upon the final preparation of the "Report" as above ordered, said “Report” shall be filed with the City Clerk and presented to this legislative body for further consideration as it relates to proceedings to issue refunding bonds and . 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 confirm the reassessments. sootion 7.. All outstanding improvement bonds and original w.. assessments of the Assessment Districts shall continue and remain in full force and effect and be secured by the original assessments until superseded and replaced by reassessments and refunding bonds issued pursuant to all the terms and provisions of the Refunding Act. Section 8. Galen N. Petersen is hereby appointed the Assessment Engineer for said proceedings, and said Assessment Engineer shall perform all of the duties and responsibilities as set forth by law as thry relate to said refunding district. Soation 9. The law firm of Brown, Diven C Hentschke is hereby appointed to act as Bond Counsel for the purposes of preparing proceedings and issuing an approving opinion attesting to' the validity of the proceedings and the enforceability of the refunding bonds, pursuant to the terms and conditions of an Agreement for Bond Counsel Services submitted herewith, which Agreement is hereby accepted and ;:"; approved for execution on behalf of the City. motion 14'; Peter J. Ross is hereby appointed the Financial Advisor to the City for said proceedings as they . relate to reassessments and the issuance, sale and delivery of limited obligation refunding bonds for the refunding district. //I 6 4 . I PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of th8 City of Carlsbad, held on the 28th day of October, 1997, by th&following vote: AYES: Council Members Lewis, Finnila, Nygaard, Kulchin, and Hall NOES: None ABSENT: None ATTEST: ALET?iAL.RAuTENKRAN 2, City dl8rk 7 _- AGREEMENT FOR BOND COUNSEL ~SERVICES THIS AGREEMENT made and entered into as of October 1, 1997, by and between the CITY OF CARLSBAD (hereinafter called “City”) and BROWN, DIVEN & HENTSCHKE, Attorneys at Law (hereinafter called “Counsel “). RECITALS WHEREAS, City is a municipality organized under and existing pursuant to the laws and Constitution of the State of California; WHEREAS, City is desirous to proceed to use the proceeds of limited obligation refunding bonds (hereinafter referred to as the “Bonds”) for purposes of refunding the outstanding limited obligation improvement bonds issued for Assessment District No. 85-2 and Assessment District No. 88-1 (hereinafter referred to as the “Refunding”) pursuant to the provisions of the Refunding Act of 1984 for 1915 Improvement Act Bonds; WHEREAS, City desires to employ Counsel to perform all bond counsel legal services required by City for the proposed issuance and sale of said Bonds. COVENANTS NOW, THEREFORE, it is mutually agreed by the parties hereto as follows: 1. SERVICES TO BE RENDERED. Counsel agrees to perform bond counsel services incident to the issuance of Bonds as follows: (a> 0) (4 (4 (e> 0 Consultation and advice to the City in determining the appropriate financing structure for the Refunding; Preparation of all resolutions, ordinance, contracts,‘lease documents, notices, bond forms and other papers and documents required; Examination of the Refunding “Report”, reassessment diagram of the refunding reassessment district, the assessment roll and refunding bonds, and the giving of instructions and advice in connection with the foregoing; examination of all proceedings; Instruction and advice in connection with the foregoing; Issuance of Counsel’s legal opinion upon the validity of any proceedings, leases, contracts and Bonds; Obtain, where necessary, rulings from Federal and State authorities necessary for the authorization, issuance and sale of said Bonds. Attendance at meetings with staff or officers of City, as required; Prepare or review any continuing disclosure agreement required under SEC Rule 152-12; 1 . (i) If desired by City, provide ongoing review of and advice regarding the City’s compliance with its obligations under any applicable continuing disclosure agreement; (i) Any other customary and usual services relating to the issuance of said Bonds. 2. LEGAL FEES AND COSTS. City agrees to pay Counsel, as full consideration for performance of the foregoing professional services, a fee in the amount specified as follows: (a) Said fee shall be $40,000 and shall be due and payable upon the delivery of Bonds. (b) If the proceedings are abandoned prior to the successful sale of Bonds, Counsel shall be paid a reasonable fee based upon an hourly rate of $150.00, not to exceed $5,0.00. 3. EXTRA WORK. Tbe fees specified in Section 2 above do not include any services in connection with proceedings for validation of any proceedings or in connection with any other litigation. At the request of City, Counsel will represent City in any other matters relating to the refunding and Counsel will perform additional services at an hourly rate to be agreed upon between Counsel and City before any work is actually performed. 4. In the event that the City requests that Counsel provide ongoing review and advice regarding the City’s compliance with any applicable continuing disclosure agreement, such services shall be provided on an hourly basis at the rate of $150.00 per hour. 5. COSTS. Counsel shall pay its out-of-pocket expenses incurred in furtherance of Counsel’s obligations under this Agreement except as hereinafter stated. Expenses for copying, messenger and overnight delivery services, preparation of book-entry only bonds by Counsel (not to exceed $400), and the estimated cost of closing transcripts (not to exceed $70 per set) shall be paid out of bond sale proceeds. Expenses shall be payable only from bond sale proceeds. 6. CONFLICT OF INTEREST. Counsel hereby states that it does not represent clients with adverse interests to the City as it relates to the issuance and sale of the ,refunding bonds for the Refunding. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first hereinabove written. A BROWN, DIVEN & HENTSCHKE By: I 2 9