HomeMy WebLinkAboutResolution - SA 2024-01 - 04/24/2024 RESOLUTION NO. SA-2024-01
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, in 2000, the Authority issued $12,311,000.40 of 2000 Tax Allocation
Revenue Bonds, Series A (Cathedral City Merged Redevelopment Projects) (the "2000
Authority Bonds"), which such bonds were secured by a loan agreement, dated as of April 1,
2000 (the "2000 Loan Agreement'), by and between the Authority and the Predecessor Agency;
WHEREAS, in 2002, the Authority issued $24,220,000 of 2002 Tax Allocation Revenue
Bonds, Series A (Cathedral City Redevelopment Projects) (the "2002 Authority Bonds"), which
were secured by two separate loan agreements, each dated as of 'December 1, 2002 (the "2002
Loan Agreements"), by and between the Authority and the Predecessor Agency;
WHEREAS, in 2002, the Authority issued $22,820,000 of 2002 Tax Allocation Revenue
Bonds, Series rD (Cathedral City Housing Redevelopment Projects) (the "Prior Authority Housing
Bonds"), which were secured by a loan agreement, dated as of October 1, 2002 (the
"Predecessor Agency Housing Obligations"), by and between the Authority and the Predecessor
Agency; and
WHEREAS, in 2004, the Authority issued $21,370,000 of 2004 Tax Allocation Revenue
Bonds, Series A (Cathedral City Merged Redevelopment Project Area) (the "2004A Authority
Bonds), which such bonds were secured by a series of bonds issued by the Predecessor
Agency (the "2004A Predecessor Agency Bonds");
WHEREAS, in 2005, the Authority issued $13,000,000 of 2005 Tax Allocation Revenue
Bonds, Series A (Cathedral City Redevelopment Projects) (the "2005 Bonds" and, together with
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the 2000 Authority Bonds, the 2002 Authority Bonds and the 2004A Authority Bonds, the "Prior
Authority Non-Housing Bonds," and the Prior Authority Non-Housing Bonds together with the
Prior Authority Housing Bonds shall be referred to as the "Prior Authority Bonds"), which such
bonds were secured by two separate bond issues of the Predecessor Agency (the "2005
Predecessor Agency Bonds" and, together with the 2000 Loan Agreement, 2002 Loan
Agreements, 2004A Predecessor Agency Bonds, the "Predecessor Agency Tax-Exempt Non-
Housing Obligations," and the Predecessor Agency Tax-Exempt Non-Housing Obligations
together with the Predecessor Agency Housing Obligations shall be referred to as the
"Predecessor Agency Obligations");
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
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, to achieve debt service savings and therefor assist the local taxing entities,
the Successor Agency issued its Tax Allocation Revenue Refunding Bonds, Series 2014A
(Merged Redevelopment Project Area) (the "2014A Bonds"), in the initial aggregate principal
amount of $46,140,000 and currently outstanding in the principal amount of $25,295,000, and
Tax Allocation Housing Revenue Refunding Bonds, Series 2014B (Merged Redevelopment
Project Area) (the "2014B Bonds"), in the initial aggregate principal amount of $15,630,000 and
currently outstanding in the principal amount of $9,865,000, to prepay certain Predecessor
Agency Obligations; 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 2014A Bonds and the 2014B
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Bonds (the 2014A Bonds and the 2014B Bonds selected for refunding referred to herein as the
"Refunded Bonds") through the issuance of its Tax Allocation Revenue Refunding Bonds
(Merged Redevelopment Project Area) in one or more series (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; and
WHEREAS, Government Code Section 5821.1 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 The Bank of New York
Mellon Trust Company, N.A. (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
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;
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provided, that the net present value savings with respect to the refunding effected by the Bonds
shall be not less than 5.00%; 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.
Section 6. Escrow Agreements. The forms of Escrow Agreements proposed to be
executed and entered into by and between the Successor Agency and Computershare Trust
Company, N.A., 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 the Escrow Agreements in substantially such forms, 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 Escrow Agreements presented to this
meeting.
Section 7. Refunding and Payment Approved. The Board hereby approves the
issuance and delivery of the Bonds in an aggregate principal amount not to exceed $35,000,000
in one or more series, subject to the provisions of Section 3 hereof. The refunding 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
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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 the Refunded Bonds as provided in the Escrow Agreements
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 8. 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 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.
Section 9. 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) The Bank of
New York Mellon Trust Company, N.A., as Trustee in connection with the Bonds, and (f) Willdan
Financial Services, as Dissemination Agent.
Section 10. Good Faith Estimates. In accordance with Government Code
Section 5821.1, 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
61268159.4 5
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 11. 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, 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.
Section 12. Effective Date. This Resolution shall take effect from and after the date of
its passage and adoption.
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61268159.4 6
PASSED and ADOPTED at a regular meeting of the Successor Agency to the Redevelopment
Agency of the City of Cathedral City on this 24th day of April 2024, by the following vote:
AYES: Board Members Lamb, Gutierrez and Gregory, Vice-Chair Ross and Chair
Carnevale
NOES: None
ABSENT: None
ABSTAINED: None
1(
Chasirperson oft Successor Agency
to the Redevelopment Agency of
the City of Cathedral City
Attest:
CUK12/ J( LA IY�i ill te)
Secret ry of the Successor Agency
to the Redevelopment Agency of
the City of Cathedral City
61268159.4
7
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) SS
CITY OF CATHEDRAL CITY )
I, Tracey R. Hermosillo, Secretary for the Successor Agency to the Redevelopment
Agency of the City of Cathedral, California, do hereby certify that the foregoing Resolution No.
SA-2024-01 was duly and regularly adopted at a regular meeting of the City Council of the City
of Cathedral City, held on the 24th day of April 2024 by the following vote:
AYES: Board Members Lamb, Gutierrez and Gregory; Vice-Chair Ross and Chair
Carnevale
NOES: None
ABSENT: None
ABSTAINED: None
l if I )S(i j0(4A/WI A) C t
U -SeCretary
61268159.4
EXHIBIT A
GOOD FAITH ESTIMATES
The following information was obtained from Fieldman, Rolapp & Associates, Inc. (the
"Municipal Advisor") with respect to the Successor Agency to the Cathedral City Redevelopment
Agency Tax Allocation Revenue Refunding Bonds, Series 2024A and Series 2024B (the "2024
Bonds") approved in the attached Resolution, and is provided in compliance with Government
Code Section 5821.1 with respect to the 2024 Bonds:
1. True Interest Cost of the 2024 Bonds. Assuming an aggregate principal amount
of $30,180,000 of the 2024 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 2024
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 2024 Bonds, is
3.22%.
2. Finance Charge of the 2024 Bonds. Assuming an aggregate principal amount of
$30,180,000 of the 2024 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 2024
Bonds, which means the sum of all fees and charges paid to third parties (or costs associated
with the 2024 Bonds), is $721,657, as follows:
a) Underwriters' Discount $ 196,170
b) Credit Enhancement 192,334
Debt Service Reserve Fund Surety 57,763
c) Bond and Disclosure Counsel Fees and 110,000
Disbursements
d) Municipal Advisor Fees and Disbursements 49,500
Redevelopment Fiscal Consultant 25,000
e) Rating Agency Fees 38,000
f) Other Expenses 52,890
Total $721,657
3. Amount of Proceeds to be Received. Assuming an aggregate principal amount of
$30,180,000 of the 2024 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 Bonds less the finance charge
of the 2024 Bonds described in 2 above and any reserves or capitalized interest paid or funded
with proceeds of the 2024 Bonds, is $32,285,600.
4. Total Payment Amount. Assuming an aggregate principal amount of $30,180,000
of the 2024 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 2024
Bonds plus the finance charge of the 2024 Bonds described in paragraph 2 above not paid with
the proceeds of the 2024 Bonds, calculated to the final maturity of the 2024 Bonds, is
$38,466,833.
61268159.4
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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 2024 Bonds sales, the amount of 2024 Bonds sold, the amortization of the 2024 Bonds sold
and market interest rates at the time of each sale. The date of sale and the amount of 2024
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 2024 Bonds will be sold will depend on the
bond market at the time of each sale. The actual amortization of the 2024 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 2024 Bonds with a minimum net present value savings of
5.00%.
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