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HomeMy WebLinkAboutMINUTES - 10042011 - C.28RECOMMENDATION(S): Acting in its capacity as the Board of Directors of the County of Contra Costa Public Financing Authority, ADOPT Resolution No. 2011/416, which approves and authorizes: (1) the execution of supplements to indentures of trust and loan agreements with the Bond Trustee and the Contra Costa County Redevelopment Agency related to the redemption, purchase, and defeasance of certain Authority bonds; and (2) related bond redemption documents and actions. FISCAL IMPACT: None to the General Fund. All costs to prepare the documents and agreements and implement the Authority Bond Redemption, Purchase and Defeasance Program will be paid by the Redevelopment Agency and the Department of Conservation and Development. BACKGROUND: The County of Contra Costa Public Financing Authority (the Authority) has issued several series of tax allocation revenue bonds (Bonds) to finance certain public improvements and housing projects of the Contra Costa County Redevelopment Agency (Agency) within or of benefit APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 10/04/2011 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Gayle B. Uilkema, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor ABSENT:Federal D. Glover, District V Supervisor Contact: Steve Goetz (925) 335-1240 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: October 4, 2011 David Twa, County Administrator and Clerk of the Board of Supervisors By: Stacey M. Boyd, Deputy cc: C.28 To:Contra Costa County Public Financing Authority From:Catherine Kutsuris, Conservation & Development Director Date:October 4, 2011 Contra Costa County Subject:Resolution 2011/416 approving and authorizing various actions for a Bond Redemption, Purchase and Defeasance Program BACKGROUND: (CONT'D) to the redevelopment project areas. The Bonds were issued pursuant to four separate Indentures of Trust (Indentures) between the Authority and U.S. Bank National Association, as trustee (Trustee). The Authority loaned the Bond proceeds to the Agency through five separate loan agreements, one for each project area. The Agency has pledged tax increment revenue from the project areas as the source of revenue to repay the loans, and the amounts paid by the Agency on the loans is the source of revenue to repay the Bonds. Due to recent economic developments beyond the control of the Agency and the Authority, the Agency has not been able to expend the proceeds from the loans on public improvements and housing projects as expected when the Bonds were issued, and tax increment revenue allocated to the Agency from several of the project areas have decreased substantially from the tax increment revenue projected to be received from these project areas when the Bonds were issued. In order to reduce the outstanding balances of some of the loans, and thereby improve the security and prospects for timely payment of the Bonds, the Authority expects to engage in a debt service reduction program (Authority Bond Redemption, Purchase and Defeasance Program) that will involve using certain unspent proceeds of the loans (a) to optionally redeem certain bonds, (b) to purchase and retire certain other bonds, and (c) to defease certain bonds that are not subject to optional redemption and that cannot be otherwise be purchased and retired, with amounts due on the related loans reduced concomitant with the redemption, retirement or defeasance of the Bonds, the proceeds of which Bonds were used to fund the respective loans. To implement the Authority Bond Redemption, Purchase and Defeasance Program, three of the Indentures and all of the loan agreements need to be amended, various disclosure and other bond tender documents need to be produced and disseminated, and certain Bond defeasance documents need to be executed and delivered. Adoption of Resolution 2011/416 approves and authorizes various actions needed to implement the Authority Bond Redemption, Purchase and Defeasance Program. A detailed description of the various actions covered by Resolution 2011/416 follows. Resolution 2011/416 approves three supplements to the Indentures, each between the Authority and the Trustee. The resolution authorizes staff to execute and deliver the supplemental Indentures, together with such additional or changes as may be determined necessary by staff. The resolution also finds that the supplemental Indentures do not materially adversely affect the interests of the owners of the Bonds. Resolution 2011/416 approves five supplements to the loan agreements, one for each project area, each between the Agency and the Authority. The resolution authorizes staff to execute and deliver the supplements, together with such additions or changes to the supplements as may be determined to be necessary by staff. The resolution also finds and determines that these supplements do not materially adversely affect the owners of the Bonds. Resolution 2011/416 approves an escrow deposit and trust agreement for the Bonds among the Authority, the Agency and the Bond Trustee. The resolution also authorizes staff to execute and deliver the agreement, together with such additions or changes to the agreement as may be determined to be necessary by staff. Resolution 2011/416 authorizes and directs staff to assist the Authority and its consultants with the preparation and dissemination of disclosure documents that are necessary or desirable to conduct an efficient tender and purchase program for outstanding Bonds. This resolution further authorizes staff to certify the accuracy of any information in such disclosure documents regarding the Authority and the Bonds as may be required. Finally, Resolution 2011/416 approves all actions taken by the Authority and staff to implement the Authority Bond Redemption, Purchase and Defeasance Program, and directs and authorizes staff to take any and all future actions which they may deem necessary or advisable in order to implement the Authority Bond Redemption, Purchase and Defeasance Program in accordance with the resolution. CONSEQUENCE OF NEGATIVE ACTION: Without approving Resolution 2011/216 which approves supplements to the Indentures, amends the loan agreements, the escrow deposit and trust agreement, and approves Bond documents, and authorizes related actions, the Authority will not be able to implement the Bond Redemption, Purchase and Defeasance Program and it will become more difficult for some redevelopment project areas to meet debt service payments or other enforceable obligations. CHILDREN'S IMPACT STATEMENT: Not applicable. ATTACHMENTS Resolution No. 2011/416