HomeMy WebLinkAboutMINUTES - 04271993 - 1.71 IN THE BOARD OF SUPERVISORS
OF
CONTRA COSTA COUNTY, STATE OF CALIFORNIA
In the Matter of: ) RESOLUTION NO. 93/202
The defeasance of certain bonds )
of the County and providing for )
the sale of related GNMA )
securities and other. assets )
The Board of Supervisors of Contra Costa County RESOLVE:
WHEREAS, the County of Contra Costa (the "County") has
heretofore issued its 1987 Home Mortgage Revenue Bonds (GNMA
Mortgage-Backed Securities Program) , hereinafter referred to as the
"Bonds;" and
WHEREAS, it may now be desirable to provide for the defeasance
of the Bonds and to provide for the sale of GNMA mortgage-backed
securities (the "GNMA Securities") and other assets held under the
indenture pursuant to which such Bonds were issued (the
"Indenture") ; and
WHEREAS, the Bonds may be defeased without the necessity of any
appropriation of funds by the County, and the County may receive
surplus amounts held under the Indentures as a result of the
defeasance of Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF
THE COUNTY OF CONTRA COSTA AS FOLLOWS:
Section 1. Subject to Section 2 hereto, the Chair of this
Board, the County Administrator, the Director of Community
Development, the Director of the Growth Management and Economic
Development Agency, and the Deputy Director-Redevelopment of the
County are hereby authorized and directed, for and in the name and
on behalf of the County, to do any and all things and to take any
and all actions and execute and deliver certificates, agreements
and other documents (including, without limitation, the retention
of Litten Financial Services as financial advisor and Arnelle &
Hastie as special counsel, execution of an agreement providing for
the sale of the GNMA Securities to Magnus Capital, Inc. at the fair •
market value thereof, execution and delivery of defeasance
instructions and a defeasance escrow agreement relating to the
Bonds, obtainment of daylight loans to facilitate the defeasance of
the Bonds and sale of assets held under the Indentures, which they,
or any of them, may deem necessary or advisable in order to
consummate the defeasance of the Bonds, the sale of the GNMA
Securities and the sale of the other assets held under the
Indenture as such officers determine to be in the best interest of
the County all in accordance with this resolution. All actions
heretofore taken by the officers and agents of the County with
respect to the defeasance or redemption of the Bonds and the sale
of the GNMA Securities are hereby approved, confirmed and ratified.
RESOLUTION NO.
93/202
Section 2 . The defeasance or redemption of the Bonds and the
sale of the GNMA Securities shall not be consummated unless the
officers of the County consummating such transactions on behalf of
the County shall, in good faith, determine that (i) such defeasance
may be consummated without any appropriation by the County, and
(ii) with respect to the defeasance of the Bonds, the County will
receive as a result of such defeasance an aggregate payment of cash
(net of expenses) of approximately $500, 000.
Section 3 . The resolution. shall take effect immediately upon
its adoption. .
ADOPTED this 27th day of April, 1993, by the following vote:
AYES: Supervisors Powers, Smith, Bishop, McPeak, Torlakson
NOES: Phone
ABSENT: None
Chair of the Board of Supervisors
ATTEST:
Phil Batchelor
County Administrator and
Clerk of the Board
of Supervisors
By: L
Deputy
JK:1h
sra8/defeasnc.res
RESOLUTION NO.
93/202
-1. Contra
.} Costa
TO: BOARD OF SUPERVISORS
coCounty
ow�
FROM: Harvey E. Bragdon
Director of Community Development
DATE: April 27, 1993
SUBJECT: 1987 Home Mortgage Revenue Bonds
SPECIFIC REQUEST(S) OR RECOMMENDATIONS (S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
Adopt resolution approving a residual asset purchase contract between
the County and Magnus Capital Corporation relative to the 1987 Home
Mortgage Revenue Bonds.
FISCAL IMPACT
The County would receive a residual asset cash payment upon completion
of the proposed defeasance of the 1987 Home Mortgage Revenue Bonds.
The magnitude of the cash residual is estimated at $500, 000. The
proceeds of the cash residual must be used for affordable housing
purposes.
BACKGROUND/REASONS FOR RECOMMENDATIONS
On August 27, 1987, the County of Contra Costa issued its 1987 Home
Mortgage Revenue Bonds. The principal amount of bonds issued was
$35.92 million. The Home Mortgage Revenue Bonds are secured by
mortgage backed securities issued by the Government National Mortgage
Association (GNMA) . Because of the GNMA securities, the bonds are
rated AAA.
CONTINUED ON ATTACHMENT: X YES SIGNATURE: /l
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDA -N OF B D COMMITT
APPROVE OTHER
SIGNATURE(S)
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS (ABSENT �— ) TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
CC: Community Development
ATTESTEDJj��Zo2 7, /cJ cf 3
PHIL ATCHELOR, 'CLERK OF
THE BOARD OF SUPERVISORS
AND COUNTY ADMINISTRATOR
BY , DEPUTY
JKIh
ara8/homebmd.boa
The proposed defeasance would replace the existing GNMA securities
with federal securities (Treasury Bills) as security for the bonds.
Because of a unique relationship that exists in the market today
between the cost of federal securities and the value of GNMA
securities, the County can realize an immediate cash return on its
asset value. While the underlying security for the Home Mortgage
Revenue Bonds will change, their rating would not. The federal
securities purchased would be sufficient to retain the AAA rating.
The actions provided for in the resolution are summarized in
Appendix A.
ATTACHMENT A
ACTIONS TO BE TAKEN
1. Approve form and authorize execution of a residual asset
purchase contract between the County of Contra Costa and
Magnus Capital Corporation (purchaser) ;
2 . Appoint Arnelle & Hastie as special counsel and Litten
Financial Consulting as financial advisor; and
3 . Authorize officers and designated parties to execute all
documents and take such actions necessary to complete the
transaction.
CERTIFICATE OF THE COUNTY OF CONTRA COSTA, CALIFORNIA
RE: INCUMBENCY
I, Phil Batchelor, the duly appointed and acting Clerk of the Board of Supervisors of
the County of Contra Costa, California (the "Issuer"), do hereby certify and declare that:
1. The Issuer is a political subdivision and a public body, corporate and
politic, duly organized and validly existing under and by virtue of the Constitution and
the laws of the State of California.
2. At the present time, and as of May 3, 1993, Tom Torlakson is (and was)
the duly qualified and acting Chair of the Board of Supervisors of the Issuer.
3. The Issuer previously issued $35,920,000 original aggregate principal
amount of its County of Contra Costa 1987 Home Mortgage Revenue Bonds (GNMA
Mortgage-Backed Securities Program) (the "Bonds"), pursuant a Trust Indenture (the
"Indenture") dated as of August 1, 1987, by and between the Issuer and Fust
Interstate Bank of California, as trustee (the "Trustee"). Such Indenture has not been
rescinded, superseded or amended, and remains in full force and effect.
4. At its meeting on April 27� 1993, 'the governing body of the Issuer
approved Resolution No. 93/202, a true, complete and correct copy of which is
attached hereto, which, among other things, approved the execution by the Issuer of
the Residual Asset Purchase Contract dated May 3, 1993 (the "Purchase Contract")
and providing for the sale of the Interest in the Residual Assets (as defined in the
Purchase Contract). Resolution No. 93/202 has as not been rescinded, superseded or
amended, and remains in full force and effect.
Dated: May 11, 1993
COUNTY OF CONTRA COSTA, CALIFORNIA
Phil Batchelor, County Administrator
and Clerk of the Board of Supervisors
By /
De�uty