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CITY OF SAN BERN. .RDINO AfREQUEST "~R COUNCIL ACTION
From:
Kenneth J. Henderson, Director
Subject:
Cl'l'lC OF smr BBRtllUlDIR) SDIm!:
PAHILY ls..KL~ RBVENtlB
RI!lI'tIlmIlG BCaDI (GIIIa ~
IlllCKED SI!lCllJUTIES, SERn:S, 1990A
Dept:
Calmmity DeIIel'''>i......llt
Date:
May 17, 1990
Synopsis of Previous Council action:
In March, 1990, the Mayor ani 0.,.,... Ca.IIx:il. authorized staff to 1u-...........d with
the issuan:le ani sale of awroximately 18.8 millicn dollars of tax-exenpt
sin;}le family 10Clrtgage revenue I:x:n:ls.
Recommended motion:
OPEN 'l'EFRll. BDRIN3
CIDSE 'l'EFRll. BDRIN3
AOOPr RESOLUTICHI
Contact person:
Ken Henderson
Phone:
5065
Supporting data attached:
staff Report; Resolutions;
Ward:
1-7
FUNDING REQUIREMENTS:
Amount:
NjA
Source: (Acct. No.)
N/A
(Acct. DescriPtion)
N/A
Finance:
Council Notes:
75-0262
Agenda Item NO.S.l~ ,'57
I
CITY OF SAN BER~ '.RDINO - REQUEST r lR COUNCIL ACTION
STAFF REPORT
In March of this year, the Mayor and 0...,.., cnmcil authorized staff
to proceed with the ;"""'JaOOe and sale of ~te1y 18.8 mi1lial
dollars of tax~L siIgle family Dm'tgage revemIe l:Jc:ms. 'Ibis
l:x:ni issue is based upcl'I a pl:U:lLCUIl jointly develcp3d by Miller and
Sdlroeder Financial, Inc., and the law finn of JCI'IeS Hall Hill and
ltIlite, that woold replace a partial of the escrow established with
the ; """'JaOOe last NoITelrt>er of the 34 mi1lial dollars collateralized
Dm'tgage obligations with the pl:<><""""'I'" of 18.8 mi1lial dollars of
new m:>rtgage m:I1eY.
~ other thin;Js, the program features certain provisions as
follows:
(a) Based al current market coniitions, a thirty (30) year fixed
rate Dr:>rtgage at ~te1y 8.0 percent;
(b) No need for an allocatial fran the state for authority to issue
the new borxls as it required for all new Dm'tgage revenue borxls
nationwide;
(e) other than HUD-designated targeted areas, the monies will be
required to be utilized by first-time haneb.tyers;
(d) ihe new borxls are net subject to the alternative mi.niJD.nn tax,
v.hich results in a lower interest rate of awroximate1y 1/2
percent;
(e) ihe City may receive fran suzplus of the prU:lLCUIl, awroxi:mate1y
3/4 percent;
(f) ihe 1990 pll'd1ase price limits for each bane will be $113,130
for exi.sti.n3' housiIg and $128,700 for new oonst:nx:tial, and
adjusted anrmally;
(g) Except: for targeted areas, an :incane limitatial of $38,500 and
$44,275 for a family of three (3) or m:>re, and;
(h) Awroxi:mate1y thirty-nine (39) m:mths to originate the new
=rtgage loans.
(Staff Report COntinued to NeId: Paqe)
05/17/1990
fII!A'IT ~ <X:If1'1MOm...
8iDr;le J'Iaily Hortqage ll8Y8nU8 BaIId 1>>....".._
Paqe -2-
Because of ~ in the tax code bralght alxut by the I"'~~'"T of
the Tax RIBfcmn Act of 1986, the ocst of ;"""UaI'Dl of alxut 2-1/4
percent cannot cxme fran the bon:i p1:\X""""'I", meani.n;J this ocst nust
be borne by the ;"''''...... or participa~ len:iin; institutialS. In
light of the attractiveness of this lJ1."':ILCUU, First Interstate
Mortgage ~ny of California has a:mnitted to payirq ~te1y
ninety percent (90%) of the ocst of iSSlJal'Xle (~y $372,600) with
the City to pay the ranainirq ten percent (10%) or $41,400. '!he
City will, however, be repaid its partial of the ocst of i~
wilen the JIDrt:gage loans are originated. Urrler this scenario, the
City will receive 1/4 percent plus 1/2 percent (for a total of 3/4
percent) as eacnll'Ortgage loan closes.
If this p.l."':ILam is to be :i.nplemented, the I:x:lrDs nust be i"",,~ prior
to J\me 1, 1990. No other City or Redevel'"'l-W"l.t }qen:y funds are
ci:>ligated to pay the 1:x:lrDs. All CXJSts of the ~"':ILaw are """"DNW'I by
the nortgagors.
This i~... was tl1aced on the _I_tal ............ for tohA .......... de-
scribed in ~ ~--u.atelv or~~"'" tIar"......-..h and -- of the
H..... ........._~",., task of rwiewiM voll-~IIDIIS - .........-..
I re........w.em. adc.ption of the attached resolutialS. 1\dcption of said
resolutions authorizes the sale of the J:xnjs, approves the Final
Official statement, approves Inplemen~ 1lgreements and Documents
relatirq to the Bon:ls, approves the Purchase Contract dated May 23,
1990, approves the Trust Indenture dated May 1, 1990, and awroves
the Origination and Sezvicirq 1\greement dated May 1, 1990. these
documents are on file in the City Clerk's Office, Office of the
CuullUJll eoun::il, the 0:llIm:m eoun::il Olantlers and the Camamity Dave-
l'"'l-W"llt Departnent.
~N~~~~!j),
mlNETH J.
Direat:or of n--111~ ty D8\Telopll8l1t
KJHjlab/3913
atta<l....e./ts
May 17, 1990
29016-()2
JBHW:ACP-ig 011/11190
H9401
RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNen.
OF THE CITY OF SAN BERNARDINO APPROVING
ISSUANCE BY THE CITY OF $18,840,000 PRINCIPAL
AMOUNT OF SINGLE FAMILY MORTGAGE REVENUE
REFUNDING BONDS
WBEREAS, the City of San Bernardino (the 'City") proposes to issue its City of
San Bernardino, California, Single Family Mortgage Revenue Refunding Bonds (GNMA
Mortgage-Backed Securities) Series 1990A (the "Bonds'), in the aggregate principal
amount of $18,840,000, under and pursuant to Chapters 1-5 of Part 5 of Division 31 of
the California Health and Safety Code, to be issued to provide funds to refund the City's
outstanding $18,840,000 Single Family Residential Mortgage Revenue Bonds, 1980 Series
A (the '1980 Bonds'). Such refunding will enable the City to use the proceeds of the sale
of mortgage loans derived from the City's 1980 Bond program to provide apProDmately
$18,840,000 for new, low interest home mortgages in order to finance the purchase of
approximately 90 newly constructed homes and approximately 60 existing homes to be
located within the City (the 'Projects"). The City intends to enter into an origination and
servicing agreement with a participating lender for the origination and servicing of such
home mortgages to be guaranteed by the Government National Mortgage Association;
WBEREAS, the Mayor and Common Council of the City of San Bernardino have
heretofore called and conducted a public hearing on the issuance of the Bonds for the
purpose of financing the Projects as required by the Internal Revenue Code of 1986; and
WBEREAS, the Mayor and Common Council approve of said transactions in the
public interests of the City.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and Common Council of
the City of San Bernardino as follows:
Section 1. Findinl!'S and Declarations. The Mayor and Common Council hereby
find and declare that the financing of the Projects to be facilitated by the issuance of the
Bonds as herein described serves the public purposes of assisting persons and families of
low and moderate income within the City to afford the costs of decent, safe and sanitary
housing.
Section 2. Approval of Issuance and Sale of Bonds. The Mayor and Common
Council hereby authorize the issuance of the Bonds as hereinabove contemplated.
Section 3. Effective Date. This resolution shall take effect from and after its
adoption.
0[,/17/90
. . . . * . .
PASSED AND ADOPl'ED this day of May, 1990, by the following vote:
AYES:
NOES:
ABSENT:
Attest:
City Clerk
Approved as to fonn and legal content:
James F. Penman
City Attorney
BY:~)
./
05/17/90
Mayor
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29105-02
JHHW~CH"dg 05/11/90
'dg 05/15190
H9398
RESOLUTION NO. 90- _
A RESOLUTION OF THE CITY OF SAN BERNARDINO
AUTBORlZING THE ISSUANCE OF $18,840,000
PRINCIPAL AMOUNT OF SINGLE FAMll..Y MORTGAGE
REVENUE REFUNDING BONDS (GNMA MORTGAGE-
BACKED SECURITIES) SERIES 199OA, SUCH BONDS TO
BE ISSUED PURSUANT TO A TRUST INDENTURE
DATED AS OF MAY 1, 1990, AUTHORIZING THE SALE OF
BONDS, APPROVING FINAL OFFICIAL STATEMENT
RELATING TO THE BONDS, APPROVING
IMPLEMENTING AGREEMENTS AND DOCUMENTS
RELATING TO THE BONDS AND PROVIDING OTHER
MA'n'J<a(8 PROPERLY RELATING THERETO
SINGLE F.AMILYMORTGAGE REVENUE BONDS (GNMA
MORTGAGE-BACKED SECURITIES) SERIES 1990A
WHEREAS, Chapters 1-5 of Part 5 of Division 31 of the Health and Safety Code
of the State of California (herein called the "Act") authorizes cities and counties to issue
revenue bonds for the purpose of financing home mortgages authorized by the Act, and
the Act provides a complete, additional and alternative method for doing the things
authorized thereby;
WHEREAS, the City has heretofore determined by ordinance to implement a
home mortgage financing program (the "Program") within the City of San Bernardino by
financing home mortgages made to qualified persons and families pursuant to the Act,
and has now determined to borrow money for such purpose by the issuance of revenue
bonds as authorized by the Act;
WHEREAS, the Bonds described in Section 1 below (the "Bonds") are to be issued
in the aggregate principal amount of Eighteen Million Eight Hundred Forty Thousand
Dollars ($18,840,000) for the purpose, among others, of providing moneys to finance
home mortgages by the purchase of an investment to refund certain outstanding bonds of
the City, such outstanding bonds of the City being designated as the City's "Single
Family Residential Mortgage Revenue Bonds, 1980 Series A", The Bonds authorized
under this Resolution are to be issued and secured by a Trust Indenture (the "Trust
Indenture"), and the proceeds of the refunding (by the sale of such investment) are to be
used to purchase from a participating lending institution (the "Lender") certain fully-
modified mortgage-backed securities (the "GNMA Securities) issued by the Lender with
respect to home mortgages (the "Home Mortgages") made to finance single-family
dwelling units intended for use as the permanent place of residence by qualified persons
(the "Homes") and guaranteed as to timely payment of principal and interest by the
Government National Mortgage Association ("GNMA"), which Home Mortgages are to be
originated and serviced by the Lender pursuant to an Origination and Servicing
Agreement (the" Agreement");
05/17 /90
WHEREAS, Miller & Schroeder Financial, Inc., Stifel, Nicolaus & Co., Inc. and
Meridian Capital Markets, Inc. (the ""Underwriters") intend to submit an offer to purchase
the Bonds pursuant to a purchase contract between the City and the Underwriters (the
"Purchase Contract") and in connection with the offering of the Bonds, have assisted the
City in the preparation of a final Official Statement describing the Bonds, the wnear final"
form of which, for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934,
as amended (waule 15c2-121, is on file with the City Clerk; and
WlIEREAS, forms of the Trust Indenture, the Agreement and the other necessary
implementing documents have been presented to and reviewed by the City, with the aid
of ita stafJ; and such documents shall be conformed to the terms and requirements of the
Purchase Contract and the final Official Statement and are thereupon approved for
execution in final form;
NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED AND ORDERED, as
follows:
1. The City of San Bernardino, California Single Family Mortgage Revenue
Refunding Bonds (GNMA Mortgage-Backed Securities), Series 1990A, in the principal
amount of $18,840,000 are hereby authorized to be issued pursuant to a Trust Indenture
dated as of May I, 1990, in form substantially as submitted at this meeting, which Trust
Indenture shall be conformed in final form to the provisions of the Purchase Contract and
the final Official Statement and the Mayor or his written designee, is authorized and
directed to execute the Trust Indenture for and on behalf of the City end the City Clerk is
authorized and directed to attest his signature thereto;
2. The Mayor and Co=on Council hereby approve the sale of the Bonds by
negotiation with the Underwriters, pursuant to the Purchase Contract by and among the
City and the Underwriters, in substantially the form on file with the City Clerk, together
with any changes therein or additions thereto approved by the City Atlm;ni"trator or an
authorized representative of the City Atlm;n;"trator, upon consultation with bond
counsel, whose execution thereof shall be conclusive evidence of approval of any such
additioDS and changes. The Purchase Contract shall be executed in the name and on
behalf of the City by the City Atlm;n;"trator, who is hereby authorized and directed to
execute and deliver said form of Purchase Contract on behalf of the City; provided that
the purchase price to be received by the City for the Bonds shall be not less than
percent <--.%) of the par amount thereof, exclusive of original
issue discount, and the average annual stated interest rate to be borne by the Bonds
shall not exceed percent <--.%) per annum.
3. The Mayor and Co=on Council hereby approve the "near final" Official
Statement describing the Bonds, in substantially the form submitted to the Underwriters
heretofore and on file with the City Clerk. The City Atlm;n;"trator is authorized and
directed, on behalf of the Issuer, to deem the near final Official Statement "final"
pursuant to Rule 15c2-12. The execution of the final Official Statement, which shall
include such changes and additions thereto deemed advisable by the City Administrator,
upon consultation with bond counsel, and such information permitted to be excluded from
the near final Official Statement pursuant to Rule 15c2-12, is hereby approved for
delivery to the purchasers of the Bonds, and the City Administrator is authorized and
directed to execute the final Official Statement for and on behalf of the City and to
05/17/90
-2-
deliver to the Purchaser a "lOb-5" certificate with respect to the .information set forth
therein.
4. All actions heretofore taken by the officere and agents of the City with respect
to the establishment of the Program, including the criteria established for lenders
participating in the Program as set forth in the mailed notice therefor, and in the
issuance, sale and delivery of the Bonds, are hereby approved, confirmed and ratified,
and the Mayor, the City Anm;ni"trator, the City Attorney and the City Clerk and any
and all other officers of the City are hereby authorized and directed, for and in the name
and on behalf of the City, to do any and all things and take any and all actions and
execute and deliver any and all documents, certificates, requisitions, agreements and
other documents described in the Trust Indenture and the final Official Statement,
including, without limitation, the Origination and Servicing Agreement dated as of May
1,1990 between the Lender, the Trustee with respect to the Bonds, and the City, and the
Investment Agreement for investment of various funds to be held under the Trust
Indenture.
5. The City Administrator, or his designee, is hereby authorized and directed to
anm;ni"ter the Program within the City, and such such City Anmin;"trator, or his
designee, is hereby authorized to act on behalf of the City in such capacity. Any designae
pursuant to this or any other Section of this Resolution shall be designated in writiDf
signed by the person making such designation.
6. This resolution shall take effect from and after its adoption.
* * * * * * *
ADOPTED and APPROVED this _ day of May, 1990
AYES:
NOES:
ABSENT:
Mayor
AT1'EST:
City Clerk
Approved as to fonn and legal content:
James F. Penman
City Attorney
/~J
05/17/90
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