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HomeMy WebLinkAboutMINUTES - 05181999 - C99 TO: BOARD OF SUPERVISORS, RA =. { FROM: Phil Batchelor ;--'f COSTA County Administrator COUNTY DATER MAY 18, 1999 SUBJECT: SUBORDINATION OF REDEVELOPMENT PASS THROUGH FOR CITY OF CLAYTON SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: APPROVE Agreement subordinating revenues due to the County, Library, Fire District and Flood Control District for tax allocation bonds, pursuant to the 1986 agreement with the Clayton Redevelopment Agency. AUTHORIZE execution of Agreement by Board Chair. FINANCIAL IMPLICATIONS: It is expected that pass through of revenues will continue as originally agreed. The subordination agreement merely provides the Redevelopment Agency with added assurance for bond holders that agency debt will be replaced. BACKGROUND/REASONt$1 FOR RECOMMENDATION(S): On ,duly 14, 1986, the County approved a redevelopment pass through agreement with the Clayton Redevelopment Agency. Included in the agreement is a subordination clause which essentially allows the agency to put debt owed to the County lower in priority than debt owed to bond folders, as added assurance to bond Folders that their investment will be returned. The County agreed to this provision based upon the commitment that the Agency would have on hand adequate funds to pay back bond holders, thereby minimizing the real risk that subordination would be necessary. The County approved prior subordination agreement with the Agency in December, 1990 and December, 1993. This request would assist the Agency to issue up to $11,000,000 in new bonds. The Agency has provided documents to staff that demonstrate that adequate revenue commitment has been met. Therefore, it is appropriate to agree to the subordination as called for in the 1986 agreement. CONTINUED ON ATTACHMENT: _—YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF Bo-ARD COMMITTEE APPROVE —OTHER SIGNATURE(S): �& ACTION OF BOARD ON iY APPROVED AS RECOMMENDEDX OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS(ABSENT } TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ABSENT: ABSTAIN: ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact: Tony Enea,5-1094 CC: CAO ATTESTED May 18, 1999 Jim Kennedy,Redevelopment PHIL BATCHELOR,CLERK OF City of Clayton THE BOARD OF SUPERVISORS County Counsel AN OUADMI PRATOR 6 B ` -,DEPUTY t SUBORDINATION AGREEMENT This Subordination Agreement, dated as of March—, 1999, is entered into by and among the Redevelopment Agency of the City of Clayton (the "Agency"), the County of Contra Costa (the "County"), the Contra Costa County Library District (the "Library District"), the Contra Costa County Flood Control and Water Conservation District(the "Flood Control District"), and the Contra Costa Consolidated Fire District(the "Fire District"). RECITALS The parties have entered into an agreement, dated as of July 14, 1987 (the "Agreement"), providing, among other matters, for the allocation and payment of certain tax increment revenues from the Agency's Clayton'Redevelopment Project Area ("Project Area") to the County, the Library District, the Flood Control District, and the First District (collectively, the "Taxing Agencies"). The Agreement further provides that the Taxing Agencies will subordinate, under certain conditions,their rights to such tax increment revenue payments in order for the Agency to pledge such tax increment revenue to long-term bonded indebtedness to be incurred by the Agency. In furtherance of the redevelopment plan for the Project Area,the Agency desires to issue long-terra bonded indebtedness, and has requested that the Taxing Agencies subordinate their rights to receive tax increment revenue payments under the Agreement, in order for the Agency to be able to pledge such tax increment revenue to such long-term bonded indebtedness. The Agency has provided the Taxing Agencies with a report showing that the Agency's anticipated ability to repay such bonded indebtedness can be made without demand being made on the aforementioned payments due the Tax Agencies under the Agreement. The report shows that the aggregate of the tax increment revenue payments to be subordinated are contemplated to be used in the cash flow of the bonded indebtedness only for additional security (debt service coverage) and that the Agency's tax increment revenues will be adequate, over the term of the bonded indebtedness, to pay 100% of the actual debt service thereon and to pay the Agency's obligations under the Agreement, and any other obligations of the Agency, whether statutory or contractual, which are or would be superior to the Agency's obligations under the Agreement. The report includes revenue forecasts and a debt service schedule. NOW,THEREFORE,the parties agree as follows: 1. The County, the Library District, the Flood Control District, and the Fire District, Pursuant to Section 2 of the Agreement, hereby subordinate their rights to receive tax increment revenue payments under the Agreement, in order to allow the Agency to pledge such tax M9904 i 002.2 increment revenue to the proposed long-term indebtedness (and any refunding obligations hereafter issued to refund such indebtedness)to be incurred by the Agency. This agreement to subordinate related to the following proposed indebtedness of the Agency (and any refunding obligations hereafter issued to refund such indebtedness), as more particularly set forth in the report submitted to the Taxing Agencies: a) The principal amount of the bonds to be sold shall not exceed SLI1,000,000). 00,000). D) The Agency shall issue the bonds by not later than July 31, 1999. 2. In accordance with Section 2 of the Agreement, in the event that payments to the Taxing Agencies are reduced below the amount otherwise payable to them pursuant to the Agreement as a result of such subordination,then such reductions shall be treated as advances by the respective Taxing Agencies and repaid by the Agency in accordance with the Agreement. 3. The Agency agrees to expend the proceeds of the bonded indebtedness to refund certain outstanding bonds issued in furtherance of its redevelopment plan for the Project Area. -2- TAXIING AGENCIES: AGENCY: COUNTY OF CONTRA COSTA REDEVELOPMENT AGENCY OF THE CONTRA COSTA COUNTY CITY OF CLAYTON LIBRARY DISTRICT CONTRA COSTA COUNTY FLOOD CONTROL AND ; � ' WATER CONSERVATION DISTRICT By: CONTRA COSTA COUNTY Executive Director CONSOLIDATED FIRE DISTRICT By: Ca . ers ,Board oI Supervisors ATTEST:- PHIL TTEST:PHIL BATCHELOR CLERK.OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR I! r, By: #A411i ` Deputy Clerk Approved as to Form: Victor J. Westman Cour:ty Counsel By: ---'--'-'Deputy .3_ 13160-07 JH:SGM:pb 4/23/99 REDEVELOPMENT AGENCY OF THE CITY OF CLAYTON RESOLUTION NO.99-3 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CLAYTON AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $9,000,000 PRINCIPAL AMOUNT OF THE AGENCY'S CITY OF CLAYTON REDEVELOPMENT PROJECT AREA TAX ALLOCATION BONDS, SERIES 1999; AUTHORIZING THE EXECUTION OF A PURCHASE CONTRACT, AN OFFICIAL STATEMENT, AND CERTAIN OTHER DOCUMENTS IN CONNECTION WITH THE SALE AND DELIVERY OF THE BONDS; AND AUTHORIZING AND APPROVING RELATED ACTIONS. WHEREAS, the Agency is a redevelopment agency (a public body, corporate and politic) duly created, established, and authorized to transact business and exercise its powers, all under and pursuant to the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code of the State of California) (the "Law"), and the powers of the Agency include the power to issue bonds; WHEREAS, a redevelopment plan (the "Redevelopment Plan") for a redevelopment project known and designated as the "City of Clayton Redevelopment Project" (the "Redevelopment Project") for that certain project area described in the Redevelopment Plan has been adopted and approved by Ordinance No. 243 of the City of Clayton, adopted on July 20, 1987, and all requirements of lav for and precedent to the adoption and approval of the Redevelopment Plan have been duly complied with; WHEREAS, the Agency has previously issued its City of Clayton Redevelopment Project Area Tax Allocation Bonds, Series 1990 (the 1990 Bonds"), pursuant to an Indenture and Fiscal Agent Agreement, dated as of December 1, 1990,by and between the Agency and Bankers Trust Company of California,N.A. (the"1990 Agreement"); WHEREAS, the Agency has also previously issued its City of Clayton Redevelopment Project Area Tax Allocation Bonds, Series 1993 (the "1993 Bonds") pursuant to a First Supplemental Indenture and Fiscal Agent Agreement, dated as of December 1, 1993, by and between the Agency and First Trust of California,National Association (the"1993 Agreement"); WHEREAS, the Agency has also previously issued its City of Clayton Redevelopment Project Area Refunding Tax Allocation Bonds, Series 1996A and Series 1996B (Taxable) the "1996 Bonds") pursuant to a Second Supplemental Indenture and Fiscal Agent Agreement,dated as of November 1, 1996 between the Agency and First Trust of California, National Association (the "1996 Agreement" and, together with the 1990 Agreement and the 1993 Agreement, the "Original Agreement"), WHEREAS, the Original Agreement provides that the Agency may issue and sell obligations payable from and having a lawful lien upon Pledged Tax Revenues (as defined in the Original Agreement) on a parity with the outstanding 1990 Bonds, 1993 Bonds and 1996 Bonds for the purpose of financing redevelopment activities of the Agency; WHEREAS, the Agency has determined that it is in the Agency's best interests to issue its City of Clayton Redevelopment Project Area Tax Allocation Bonds, Series 1999 (the "1999 Bonds") for the purpose of financing redevelopment activities of the Agency; WHEREAS, the Agency has determined that it is in its best interests to sell the 1999 Bonds to U.S. Bancorp Piper Jaffray Inc. (the "Underwriter") pursuant to a Purchase Contract between the Underwriter,the Clayton Financing Authority(the"Authority")and the Agency; WHEREAS,the Agency has had submitted to it and has considered the following: (1) A foam of a Third Supplemental Indenture and Fiscal Agent Agreement (the "Third Supplemental Agreement" and, together with the Original Agreement, the "Agreement") between the Agency and U.S. Bank Trust National. Association, as successor Fiscal Agent, which Third Supplemental Agreement provides for the issuance of the 1999 Bonds and the terms thereof; (2) A form of a Purchase Contract (the "Purchase Contact") between the Underwriter, the Authority and the Agency, which Purchase Contract provides for the purchase of the 1999 Bonds by the Underwriter; (3) A form of a Preliminary Official Statement (the "Preliminary Official Statement"), which Preliminary Official Statement provides potential purchasers of the 1999 Bonds with information related to the 1999 Bonds; (4) A form of a Continuing Disclosure Certificate (the "Continuing Disclosure Certificate"),which Continuing Disclosure Certificate provides for ongoing disclosure of information concerning the 1999 Bonds in order to allow the Underwriter to comply w Rule 150-12(b)(5)of the Securities Exchange Act of 1934);and (5) A form of a Subordination Agreement (the "Subordination Agreement') among the Agency, the County of Contra Costa., the Contra Costa County :Library District, the Contra Costa County Flood Control and Water Conservation District, and the Contra Costa Consolidated Fire District, which Subordination. Agreement provides for the subordination of certain rights to receive tax increment revenues to make payment of principal of and interest on the 1999 Bonds; WHEREAS,Section 265 of the Internal Revenue Code of 1986, as amended (the "Code"), provides that under certain circumstances, certain obligations, the interest on which is exempt from federal income taxation pursuant to Section 103 of the Code, may be designated by the issuer thereof as "qualified tax-exempt obligations", thereby allowing certain ,financing institutions that are holders of such qualified tax-exempt obligations a deduction for a portion of such institution's interest expense allocable to tax-exempt interest, all as determined in accordance with Sections 265 and 291 of the Code; WHEREAS,the Agency hereby finds and determines that: (1) the not to exceed $9,000,000 principal amount of 1999 Bonds authorized by this Resolution are not private activity bands within the meaning of Section 141 of the Code; (2) neither the Agency nor any of its subordinate entities reasonably anticipates issuing during calendar year 1999 more than an aggregate of $10,000,000 of obligations (other than obligations issued to currently refund outstanding tax-exempt obligations), the interest on which is exempt from federal income taxation pursuant to Section 1013 of the Code;and (3) notwithstanding paragraph (2) above, the Agency and its subordinate entities may issue in calendar year 1999 private activity bonds other than qualified 501(c)(3) bonds as defined in Section 145 of the Code; -2- WHEREAS,all acts, conditions and things required by the Law and all other laws of the State of California, to exist, have happened and have been performed precedent to and in connection with the issuance of the 1999 Bonds exist,have happened, and have been performed as required by law, and the Agency is now duly authorized and empowered, pursuant to each and every requirement of law, to issue the 1999 Bonds for the purpose, in the manner and upon their terms herein provided. NOW, THEREFORE, BE IT RESOLVED, BY THE REDEVELOPMENT AGENCY OF THE CITY OF CLAYTON,AS FOLLOWS: ction 1. Recitals True and Correct. The Agency does hereby find and declare that the above recitals are true and correct. Section 2. A1212roval of Third Suj2pftmental AZreement• 1999 Bonds Constitute Special Obligation of the Agency,. The Third Supplemental Agreement, substantially in the form submitted to this meeting, is hereby approved, and the Chairperson of the Agency (the „Chairperson"),the Executive Director of the Agency (the "Executive Director"), or the Treasurer of the Agency (the "Treasurer"), or any designee of the Chairperson, is hereby authorized and directed to execute and deliver, for and in the name of and on behalf of the Agency, the Third Supplemental Agreement with such additions, changes and corrections as any of such officials may approve upon consultation with Agency Counsel and Bond Counsel, such approval to be conclusively evidenced by the execution of the Third Supplemental Agreement with such additions,changes or corrections. The proposed form of the 1999 Bonds, as set forth in the Third Supplemental Indenture, is hereby approved, and the Chairperson of the Agency and the Secretary of the Agency are hereby authorized and directed to execute, and the Fiscal Agent is hereby authorized and directed to authenticate, the 1999 Bonds in substantially such form, and the Fiscal Agent is hereby authorized and directed to deliver the 1999 Bonds in accordance with the Purchase Contract. The date, maturity dates, interest rate or rates, interest payment dates, manner of payment for the 1999 Bonds, registration privileges, manner of execution, place of payment, terms of redemption and other terms of the 1999 Bonds shall be as provided in the Agreement, as supplemented, and the Second Supplemental Indenture as finally executed; provided, however, that the aggregate principal amount of the 1999 Bonds shall not exceed $9,000,000, the interest rate on the 1999 Bonds shall not exceed the maximum rate allowable by law, and the final maturity of the 1999 Bonds shall not be later than permitted by the Redevelopment Plan. The validity of any 1999 Bond shall not be dependent upon the completion of the Redevelopment Plan or upon the performance by anyone of his or her obligation relative to me Redevelopment Plan. Section 3. Appointment of Bond Counsel. Jones Hall, A Professional Law Corporation, San Francisco, California, is hereby appointed Bond Counsel ("Bond Counsel") for the 1999 Bond financing. The Executive Director or the Treasurer, or any designeeof the Executive Director,is hereby authorized and directed, for and in the name of and on behalf of the Agency, to enter into and execute an agreement with Jones Hall,A Professional Law Corporation for its services as Bond Counsel for the 1999 Bonds. Section 4. A_ rrR&tment of I nderwriter• A-,,^val of Purcha e Contract L.S. Bancorp Piper Jaffray Inc. is hereby appointed to act as Underwriter in connection with the delivery and negotiated sale of the 1999 Bonds. -3- A pricing Committee to consist of the Executive Director of the Agency (or his designee) and the City Treasurer (or his designee) is hereby appointed for purposes of approving the sale and delivery of the 1999 Bonds in accordance with the terns set forth in this Section. The Purchase Contract, in substantially the form submitted to this meeting, is hereby approved. The sale and delivery of the 1999 Bonds is hereby authorized and approved, subject to the conditions set forth below, and the Pricing Committee, and the Executive Director and the Chairperson, or their respective designees are hereby authorized and directed to effect such sale and delivery in accordance with this Resolution and the Purchase Contract. The Executive r Director, the Treasurer, or any designee of the Executive Director, is hereby authorized and directed, for and in the name and on behalf of the Agency, to execute and deliver to the Underwriter the Purchase Contract in substantially said form, with such changes therein as the Pricing Committee and said officials may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided, however, that (i) the underwriting discount with respect to the 1999 Bonds (exclusive of any original issue discount) shall not exceed 1.125% and (ii) the other limitations set forth in Section 2 of this Resolution shall be satisfied. If the Executive Director determines that it is advantageous to the Agency to sell the 1999 Bonds by competitive biding rather than pursuant to negotiation as described above, the Executive Director shall prepare, or cause the preparation of, an Official Notice of Sale and shall cause the 1999 Bonds to be sold on a competitive basis. ection 5. Official Statement. The form of Preliminary Official Statement is hereby approved, and the Executive Director or Chairperson of the Agency, or any designee of the Chairperson, is hereby authorized to approve the distribution of the Preliminary Official Statement in substantially said form and to certify to the Underwriter, on behalf of the Agency, that the Preliminary Official Statement is,as of its date,"deemed final by the Agency within the meaning of Rule 15c2-12 ("Rule 15c2-12") promulgated under the Securities and Exchange Act of 1934 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). The Executive Director or Chairperson of the Agency, or any designee of the Chairperson, is hereby authorized and directed, for and in the name and on behalf of the Agency, to execute and deliver to the Underwriter the OfficialStatement, which shall be in substantially the form of the Preliminary Official Statement with such additions thereto or changes therein as such officer shall require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, and the .Underwriter is hereby authorized to distribute copies of the Official Statement to persons who may be interested in the purchase of the 1999 Bonds,and the Underwriter is directed to deliver such copies to all actual purchasers of the 1999 Bonds. ti Approval of Continuing disclosure Certificate., The Continuing Disclosure Certificate (which provides for ongoing disclosure of information concerning the 1999 Bonds in order to allow the underwriter of the 1999 Bonds to comply with Rule 15c2-12(b)(5) of the Securities Exchange Act of 1934), substantially in the form submitted to this meeting, is hereby approved, and the Chairperson, the Executive Director, or the Treasurer, or any designee of the Chairperson, is hereby authorized and directed to execute and deliver, for and in the name and on behalf of the Agency, the Continuing Disclosure Certificate with such additions, changes and corrections as any of said officials ..may approve upon consultation with Agency Counsel and Bond Counsel, such approval to be conclusively evidenced by the execution sof the Continuing Disclosure Certificate with such additions,changes or corrections. Section. Approval of Subordination Agreement. The Subordination Agreement, substantially in the form submitted to this meeting, is hereby approved, and the Chairperson, -4- the .Executive Director, or the Treasurer, or any designee of the Chairperson, is hereby authorized and directed to execute and deliver, for and in the name and on behalf of the Agency, the Subordination Agreement with such additions, changes and corrections as any of said officials may approve upon consultation with Agency Counsel and Bond Counsel, such approval to be conclusively evidenced by the execution of the Subordination Agreement with such additions,changes or corrections. Section-8. Municipal and Insurance Policy. The Executive Director, the Treasurer, or any designee of the Executive Director,upon the advice and approval of the Pricing Committee, is hereby authorized to negotiate and procure a municipal bond insurance policy .for the 1999 Bonds so long as such policy, in the opinion of such parties, will result in present valve debt service savings to the Agency. The Executive Director,the Treasurer, or such designee is hereby authorized to negotiate such additional covenants and agreements to be observed by the Agency as may be required by such municipal bond insurer,and such covenants and agreement shall be reflected in the Third Supplemental Agreement. Ee_,tion 9. Designation as Qgalified Tax-Exempt. The Agency hereby designates the 1939 Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986,as amended. Section 10. Action Re Qualified Tax-Exempt 2bli anon. The Executive Director, the Chairperson, the Treasurer, and such other person or persons designated by the Chairperson are hereby authorized and directed to take such other actions as may be necessary to designate the 1999 Bonds as "qualified tax-exempt obligations", including placing a legend to such effect on the 2999 Bonds in such form as deemed necessary or appropriate. Section 11. Additional Actions. The officers of the Agency are hereby authorized and directed,jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the 1999 Bonds and otherwise to effectuate the purposes of this Resolution, including, without limitation, executing and delivering documents required to be delivered pursuant to the Purchase Contract and the obtaining of a municipal bond insurance policy with respect to the 1999 Bonds,and such actions previously taken by such officers are hereby ratified and approved. -5- I hereby certify that the forgoing is a full, true and correct copy of a resolution duly and regularly passed and adopted by the Redevelopment Agency of the City of Clayton, California, at a regular meeting thereof held on the 4th day of May, 1999,by the following vote: AYES,and in favor thereof,Members: Agency Members Laurence, Littorno, Manning, Pierce, Chair Peterson NOES,Members: None ABSENT,Members: None Chairperson ATTEST: Secretary :µs -6-