HomeMy WebLinkAboutSA Reso 2020-02 RESOLUTION NO. SA 2020-02
A RESOLUTION OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF CATHEDRAL CITY AUTHORIZING THE
ISSUANCE OF TAX ALLOCATION REVENUE REFUNDING BONDS AND
APPROVING INDENTURES, BOND PURCHASE AGREEMENTS, A
PRELIMINARY OFFICIAL STATEMENT, A CONTINUING DISCLOSURE
AGREEMENT; AND AUTHORIZING CERTAIN ACTIONS RELATING
THERETO
WHEREAS, the Redevelopment Agency of the City of Cathedral City (the "Predecessor
Agency") was a public body, corporate and politic, duly created, established and authorized to
transact business and exercise its powers under and pursuant to the provisions of the
Community Redevelopment Law (Part 1 of Division 24 (commencing with Section 33000) of the
Health and Safety Code of the State of California) (the "Health and Safety Code"), and the
powers of the Predecessor Agency included the power to issue bonds and enter into obligations
for any of its corporate purposes; and
WHEREAS, redevelopment plans for the Cathedral City Redevelopment Project Area
No. 1, Cathedral City Redevelopment Project Area No. 2 and Cathedral City Redevelopment
Project Area No. 3 in the City of Cathedral City, California (the "City") were each adopted in
compliance with all applicable legal requirements; and
WHEREAS, thereafter the Cathedral City Redevelopment Project Area No. 1, Cathedral
City Redevelopment Project Area No. 2 and Cathedral City Redevelopment Project Area No. 3
were merged together on September 27, 2006, to create a merged redevelopment project area
(the "Redevelopment Project Area"); and
WHEREAS, the Predecessor Agency previously issued its (i) 2007A Merged
Redevelopment Project Area Bonds, (ii) 2004B Project Area No. 3 Taxable Bonds, and (iii)
2007 Merged Redevelopment Project Area Subordinate Tax Allocation Bonds, Series C
(collectively, the "Refunded Bonds"); and
WHEREAS, on June 28, 2011, the California Legislature adopted ABx1 26 to, inter alia,
dissolve existing redevelopment agencies, including the Predecessor Agency; and
WHEREAS, the California Supreme Court substantially upheld the provisions of ABx1
26 on December 29, 2011, resulting in the dissolution of the Predecessor Agency on
February 1, 2012; and
WHEREAS, in anticipation of such dissolution, the Successor Agency to the
Redevelopment Agency of the City of Cathedral City (the "Successor Agency") was formed
pursuant to Resolution No. 2011-133 of the City Council, adopted on May 25, 2011, and such
formation was reaffirmed pursuant to Resolution No. 2012-153 of the City Council, adopted on
January 12, 2012; and
WHEREAS, on June 27, 2012, AB 1484 was adopted and specifically authorizes the
issuance of refunding bonds by the Successor Agency under the authority of Article 11
(commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code of the State of California and provides in Section 34177.5(a)(1) of the Health
and Safety Code that "[t]he successor agency may pledge to the refunding bonds or other
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indebtedness the revenues pledged to the bonds or other indebtedness being refunded, and
that pledge, when made in connection with the issuance of such refunding bonds or other
indebtedness, shall have the same lien priority as the pledge of the bonds or other obligations to
be refunded, and shall be valid, binding and enforceable in accordance with its terms"; and
WHEREAS, Section 34177.5(g) of the Health and Safety Code provides that "[a]ny
bonds . . . authorized by [Section 34177.5] shall be considered indebtedness incurred by the
dissolved redevelopment agency, with the same legal effect as if the bonds . . . had been
issued, incurred, or entered into prior to June 29, 2011, in full conformity with the applicable
provisions of the Community Redevelopment Law that existed prior to that date . . ." (emphasis
added); and
WHEREAS, the Successor Agency desires to achieve debt service savings and therefor
assist the local taxing entities by refunding all or a portion of the Refunded Bonds through the
issuance of its Tax Allocation Revenue Refunding Bonds (Merged Redevelopment Project Area)
in one or more series on a taxable or tax-exempt basis (collectively, the "Bonds") through a
public or private sale; and
WHEREAS, the issuance of the Bonds will comply with the provisions of
Section 34177.5(a)(1) of the Health and Safety Code;
WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California
Legislature) ("SB 450") requires that the governing body of a public body obtain from an
underwriter, financial advisor or private lender and disclose, prior to authorizing the issuance of
bonds with a term of greater than 13 months, good faith estimates of the following information in
a meeting open to the public: (a) the true interest cost of the bonds, (b) the sum of all fees and
charges paid to third parties with respect to the bonds, (c) the amount of proceeds of the bonds
expected to be received net of the fees and charges paid to third parties and any reserves or
capitalized interest paid or funded with proceeds of the bonds, and (d) the sum total of all debt
service payments on the bonds calculated to the final maturity of the bonds plus the fees and
charges paid to third parties not paid with the proceeds of the bonds; and
NOW THEREFORE, the Board resolves, determines and orders as follows:
Section 1. Findings. The Board of the Successor Agency (the "Board") hereby finds
and determines that the recitals hereto are true and correct.
Section 2. Indentures. To prescribe the terms and conditions upon which the Bonds
are to be issued, secured, executed, authenticated and held, one or more Indentures are
proposed to be executed and delivered by the Successor Agency and Wells Fargo Bank,
National Association (the "Trustee"), in substantially the forms on file with the Secretary, copies
of which have been made available to the Board, are hereby approved, and any of the
Executive Director of the Successor Agency, the Chief Financial Officer of the Successor
Agency, or their respective designees (each an "Authorized Representative") are hereby
authorized and directed, for and in the name and on behalf of the Successor Agency, to
execute, and the Secretary is authorized to attest and deliver the respective Indentures to the
Trustee in substantially such forms, with such changes (including, without limitation, changes
relating to the issuance of a municipal bond insurance policy and/or a surety bond for a debt
service reserve fund, or such changes as may be requested by a rating agency providing a
rating on the Bonds) as may be approved by any Authorized Representative, acting on behalf of
the Successor Agency, such execution thereof to constitute conclusive evidence of the approval
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of the Successor Agency of all changes from the forms of the Indentures presented to this
meeting.
Section 3. Bond Purchase Agreements. The forms of Bond Purchase Agreements
proposed to be executed and entered into by and between the Successor Agency and
Raymond James & Associates, Inc., as the Underwriter for the Bonds (the "Underwriter"), in
substantially the forms on file with the Secretary, copies of which have been made available to
the Board, are hereby approved, and any Authorized Representative is hereby authorized and
directed, for and in the name of and on behalf of the Successor Agency, to execute and deliver
one or more Bond Purchase Agreement in substantially such form, with such changes as may
be approved by any Authorized Representative, acting on behalf of the Successor Agency, such
execution thereof to constitute conclusive evidence of the approval of the Successor Agency of
all changes from the forms of the Bond Purchase Agreement presented to this meeting;
provided, that the true interest cost with respect to (i) tax-exempt Bonds shall not exceed 4.00%
per annum, (ii) taxable Bonds shall not exceed 5.05% per annum and (iii) subordinate Bonds
shall not exceed 4.00% per annum; provided further that the following parameters are satisfied:
(a) annual debt service on the Bonds of each series must be lower than annual debt service on
the Refunded Bonds being refunded by such series during every year such Bonds will be
outstanding, (b) debt service payment dates with respect to the Bonds of a series must be
August 1 and February 1, and (c) the final maturity of the Bonds of a series shall not exceed the
final maturity of the Refunded Bonds being refunded by such series. For any series of Bonds,
the underwriter's discount shall not exceed 0.65%.
Section 4. Preliminary Official Statement. The Board hereby approves the
Preliminary Official Statement (the "Preliminary Official Statement") substantially in the form on
file with the Secretary, a copy of which has been made available to the Board, with such
changes therein as an Authorized Representative may determine necessary. The Board
authorizes any Authorized Representative to deem the Preliminary Official Statement to be final
within the meaning of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as
amended, subject to completion of those items permitted by such Rule. Any Authorized
Representative is hereby authorized and directed to execute and deliver a final Official
Statement in substantially the form of the Preliminary Official Statement hereby approved, with
such additions thereto and changes therein as are consistent with this Resolution and approved
by an Authorized Representative, such approval to be conclusively evidenced by the execution
and delivery thereof. The Underwriter is hereby authorized to distribute the Preliminary Official
Statement in the form deemed final and the Official Statement.
Section 5. Continuing Disclosure Agreement. The form of Continuing Disclosure
Agreement proposed to be executed and entered into by and between the Successor Agency
and Willdan Financial Services, in substantially the form on file with the Secretary, a copy of
which has been made available to the Board, is hereby approved, and any Authorized
Representative is hereby authorized and directed, for and in the name of and on behalf of the
Successor Agency, to execute and deliver the Continuing Disclosure Agreement in substantially
such form, with such changes as may be approved by any Authorized Representative, acting on
behalf of the Successor Agency, such execution thereof to constitute conclusive evidence of the
approval of the Successor Agency of all changes from the form of the Continuing Disclosure
Agreement presented to this meeting.
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Section 6. Refunding and Payment Approved. The Board hereby approves the
issuance and delivery of the Bonds in an aggregate principal amount not to exceed $62,000,000
in one or more series on a taxable or tax-exempt basis, subject to the provisions of Section 3
hereof. The refunding of all or a portion of the Refunded Bonds is hereby authorized and
approved. Any Authorized Representative is hereby authorized on behalf of the Successor
Agency to purchase federal securities acceptable to Bond Counsel and authorized for the
Refunded Bonds, including non-callable State and Local Government Series obligations of the
United States of America issued by the Bureau of Public Debt and/or certain direct obligations of
the United States of America purchased on the open market, in such amounts, maturing at such
times and bearing such rates of interest as shall be necessary to pay when due all or a portion
of the Refunded Bonds as provided in an escrow agreement or escrow instruction delivered in
connection with the refunding, and to take such other action he or she may deem necessary or
appropriate to effectuate the purchase of such obligations.
Section 7. Determinations by the Oversight Board. The Successor Agency requests
that the Countywide Oversight Board for the County of Riverside (the "Oversight Board") make
the following determinations upon which the Successor Agency will rely in undertaking the
refunding proceedings and the issuance, sale and delivery of the Bonds:
(a) The Successor Agency is authorized, as provided in Section 34177.5(f), to
recover its costs related to the issuance of the Bonds from the proceeds of the Bonds,
including the cost of reimbursing the City of Cathedral City for administrative staff time
spent with respect to the authorization, issuance, sale and delivery of the Bonds;
(b) The application of proceeds of the Bonds by the Successor Agency to the
refunding and defeasance of all or a portion of the Refunded Bonds, as well as to the
payment by the Successor Agency of all costs of issuance of the Bonds, as provided in
Section 34177.5(a), shall be implemented by the Successor Agency promptly upon sale
and delivery of the Bonds, and, notwithstanding Section 34177.3 or any other provision
of law to the contrary, no further approval of the Oversight Board, the California
Department of Finance, the County Auditor-Controller or any other person or entity other
than the Successor Agency shall be required;
(c) The Successor Agency shall be entitled to receive its full "Administrative Cost
Allowance" as defined and described under Section 34181(a)(3) without any deductions
with respect to continuing costs related to the Bonds, such as trustee's fees, auditing
and fiscal consultant fees and continuing disclosure and rating agency costs
(collectively, "Continuing Costs of Issuance"), and such Continuing Costs of Issuance
shall be payable from property tax revenues pursuant to Section 34183. In addition and
as provided by Section 34177.5(f), if the Successor Agency is unable to complete the
issuance of the Bonds for any reason, the Successor Agency shall, nevertheless, be
entitled to recover its costs incurred with respect to the refunding proceedings from such
property tax revenues pursuant to Section 34183 without reduction in its Administrative
Cost Allowance.
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Section 8. Approval of Certain Financing Team Members. The Successor Agency
hereby approves the appointment of (a) Norton Rose Fulbright US LLP, to provide Bond
Counsel and Disclosure Counsel services in connection with the Bonds, (b) Fieldman, Rolapp &
Associates, to provide services as Municipal Advisor in connection with the Bonds, (c) Raymond
James & Associates, Inc. as Underwriter for the Bonds, (d) HdL Coren & Cone, to provide
services as Redevelopment Fiscal Consultant in connection with the Bonds, (e) Bank of New
York Mellon Corporation, as Trustee in connection with the Bonds, and (f) Willdan Financial
Services, as Dissemination Agent.
Section 9. Good Faith Estimates. In accordance with SB 450, good faith estimates
of the following are set forth on Exhibit A attached hereto: (a) the true interest cost of the Bonds,
(b) the sum of all fees and charges paid to third parties with respect to the Bonds, (c) the
amount of proceeds of the Bonds expected to be received net of the fees and charges paid to
third parties and any reserves or capitalized interest paid or funded with proceeds of the Bonds,
and (d) the sum total of all debt service payments on the Bonds calculated to the final maturity
of the Bonds plus the fees and charges paid to third parties not paid with the proceeds of the
Bonds.
Section 10. General Authorization. Each Authorized Representative and any other
officer of the Successor Agency is hereby authorized to execute and deliver any and all
agreements (including, but not limited to, investment agreements, bond insurance, reserve fund
surety policies, escrow agreements, escrow instructions, private placement agreement, or
investment agreements), documents, certificates and instruments and to do and cause to be
done any and all acts and things deemed necessary or advisable for carrying out the
transactions contemplated by this Resolution, including revising series designations. Such
actions heretofore taken by such officers or their designees are hereby ratified. confirmed and
approved.
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Section 11. Effective Date. This Resolution shall take effect from and after the date of
its passage and adoption.
PASSED and ADOPTED at a regular meeting of the Successor Agency to the Redevelopment
Agency of the City of Cathedral City on this 14th day of October 2020, by the following vote:
AYES: Councilmembers Lamb, Gutierrez and Carnevale; Mayor Pro
Tem Gregory and Mayor Aguilar
NOES: None
ABSENT: None
ABSTAINED: None
%Ili . •,
•. -irperson of the uccessor Agency
• the Redevelopm-nt Agency of
the City of Cat►edral City
Attest:
.L. A # 'ISI % al;
Secre -ry of e uccess•, • •ency
Nik
to the Redevelopment Ag— y of
the City of Cathedral City
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STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) SS
CITY OF CATHEDRAL CITY )
I, Tracey R. Martinez, Secretary for the Successor Agency to the Redevelopment
Agency of the City of Cathedral, California, do hereby certify that the foregoing Resolution No.
SA 2020-02 was duly and regularly adopted at a regular meeting of the City Council of the City
of Cathedral City, held on the 14th day of October 2020 by the following vote:
AYES: Board Members Lamb, Gutierrez and Carnevale; Vice-Chairman Gregory and
Chairman Aguilar
NOES: None
ABSENT: None
ABSTAINED: None
Secretary
100949241.8
EXHIBIT A
GOOD FAITH ESTIMATES
The following information was obtained from Fieldman, Rolapp & Associates (the
"Municipal Advisor") with respect to the Successor Agency to the Cathedral City Redevelopment
Agency Tax Allocation Revenue Refunding Bonds, Series 2021 (the "2021 Bonds") approved in
the attached Resolution, and is provided in compliance with Senate Bill 450 (Chapter 625 of the
2017-2018 Session of the California Legislature) with respect to the 2021 Bonds:
1. True Interest Cost of the 2021 Bonds. Assuming an aggregate principal amount
of $59,225,000 of the 2021 Bonds are sold and based on market interest rates prevailing at the
time of preparation of this information, a good faith estimate of the true interest cost of the 2021
Bonds, which means the rate necessary to discount the amounts payable on the respective
principal and interest payment dates to the purchase price received for the 2021 Bonds, is
4.05%.
2. Finance Charge of the 2021 Bonds. Assuming an aggregate principal amount of
$59,225,000 of the 2021 Bonds are sold and based on market interest rates prevailing at the
time of preparation of this information, a good faith estimate of the finance charge of the 2021
Bonds, which means the sum of all fees and charges paid to third parties (or costs associated
with the 2021 Bonds), is $1,454,075.39, as follows:
a) Underwriters' Discount $ 384,962.50
b) Credit Enhancement 690,931.19
c) Bond Counsel Fees and Disbursements 149,400.00
d) Disclosure Counsel Fees 58,000.00
e) Municipal Advisor Fess and Disbursements 40,000.00
f) Rating Agency Fees 35,000.00
g) Other Expenses 96,287.91
Total $1,454,581.60
3. Amount of Proceeds to be Received. Assuming an aggregate principal amount of
$59,225,000 of the 2021 Bonds are sold and based on market interest rates prevailing at the
time of preparation of this information, a good faith estimate of the amount of proceeds
expected to be received by the Successor Agency for sale of the $58,396,259.10 Bonds less
the finance charge of the 2021 Bonds described in 2 above and any reserves or capitalized
interest paid or funded with proceeds of the 2021 Bonds, is $2,145,400.
4. Total Payment Amount. Assuming an aggregate principal amount of $59,225,000
of the 2021 Bonds are sold and based on market interest rates prevailing at the time of
preparation of this information, a good faith estimate of the total payment amount, which means
the sum total of all payments the Successor Agency will make to pay debt service on the 2021
Bonds plus the finance charge of the 2021 Bonds described in paragraph 2 above not paid with
the proceeds of the 2021 Bonds, calculated to the final maturity of the 2021 Bonds, is
$83,905,999.40.
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Attention is directed to the fact that the foregoing information constitutes good faith
estimates only. The actual interest cost, finance charges, amount of proceeds and total payment
amount may vary from the estimates above due to variations from these estimates in the timing
of 2021 Bonds sales, the amount of 2021 Bonds sold, the amortization of the 2021 Bonds sold
and market interest rates at the time of each sale. The date of sale and the amount of 2021
Bonds sold will be determined by the Successor Agency based on need for escrow funds and
other factors. The actual interest rates at which the 2021 Bonds will be sold will depend on the
bond market at the time of each sale. The actual amortization of the 2021 Bonds will also
depend, in part, on market interest rates at the time of sale. Market interest rates are affected by
economic and other factors beyond the Successor Agency's control. The Successor Agency
has approved the issuance of the 2021 Bonds with a maximum true interest cost of 5.05%.
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