HomeMy WebLinkAboutR06-Redevelopment Agency
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DEVELOPMEBT DEPARTMEBT
OF TIlE CITY OF SAB BEIl1WlDIBO
REOUEST FOR COMMISSIOB/COUBCIL ACTIOB
From:
KENl'lETH J. HENDERSON
Executive Director
Subject: REFUBDIBG ABD DEFEASABCE
OF TIlE CITY'S SIBGLE
FAMILY MORTGAGE REVE!lUE
REFUBDIBG BONDS SERIES
1990 A
Date:
February 27, 1992
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SvnoDsis of Previous Commdssion/Council/Committee Action(s}:
In May 1990, the Mayor and Common Council authorized the issuance of
$18.8 million in single-family mortgage revenue bonds to finance below
market mortgage loan to first-time homebuyers.
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Recommended Motion(s}:
(Mavor .nd Common Council)
KOTIOB A
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE CURRENT REFUNDING OF A
PORTION, AND THE DEFEASANCE OF THE REMAINDER, OF THE
CITY'S OUTSTANDING $18,840,000 SINGLE FAMILY MORTGAGE
REVENUE REFUNDING BONDS (GNMA MORTGAGE-BACKED
SECURITIES), SERIES 1990A, APPROVING ESCROW TRUST
AGREEMENT RELATING TO. SUCH DEFEASANCE AND PROVIDING FOR
OTHER MATTERS PROPERLY RELATED THERETO.
...~m"
~~~~OB
Executive Director
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Contact Person(s):
Ken Henderson
Phone:
5081
Project Area(s):
All
Ward(s) :
1-7
Supporting Data Attached: Staff ReDort: Resolution
FUNDING REQUIREMENTS:
Amount: $
NIA
Source:
NIA
Budget Authority:
NIA
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Commission/Council Botes:
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KJH: :lag:0603E
COMMISSIOB MEBTIBG AGENDA
Meeting Date: 3/2/1992
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Agenda Item Bumber:
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DEVELOPMENT DEPARTMENT
OF TIlE CIn OF SAIl' BERlWlDINO
STAFF REPORT
Refundina and Defeasance of the Citv's Sina1e Fami1v
MortRS2e Revenue Refundina Bonds Series 1990 A
The City of San Bernardino issued its $18,840,000 Single Family
Mortgage Revenue Refunding Bonds (GNMA Mortgage-Backed Secrities).
Series 1990-A, dated May 1, 1990 for the purpose of current refunding
of then-outstanding bonds of the City of San Bernardino, thereby making
moneys available to implement a home mortgage financing program for
certain qualified loans.
As of the present, no Home Mortgages have been originated and the
lender is willing to collapse the issue. The Indenture therefore,
provides that the Bonds can be redeemed any time after November 1,
1991. Miller & Schroeder proposes to defease the Bonds to maturity,
which will discharge the lien of the Indenture.
Due to the reduction in mortgage market interest rates since the
implementation of the program, the tax-exempt Bond financed interest
rate offers no advantage at this time. It is recommended by the
mortgage originators designated by the City to administer this program
that the City terminate the program at this time. The City can
terminate this program by purchasing securities to defease the Bonds to
their maturity dates thus.making available a remainder of the funds for
use by the City. A resolution is attached for consideration by the
Mayor and Common Council approving the aforementioned transaction.
The estimated cost to defease the Bonds from Series 1990-A is
$18,250,000. The amount available from the Program Fund is
$18,840,000. The difference between the two is what is available to
the City and to pay Costs of Defeasance. A fee of one-percent (1%) of
Bonds outstanding will pay costs of the Financial Consultants, Bond
Counsel and Special Tax Counsel. After paying the Trustee and
Accountants, over $400,000 will remain for use by the City of San
Bernardino.
This transaction can be completed within a week after approval of a
Resolution by the City of San Bernardino.
Staff recommends adoption of the attached Resolution.
1U5J'UUIl:~ON' Executive Director
Deve10paent Department
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KJH: :lag:0603E
CIMUSSION MEETING AGEll'DA
Meeting Date: 3/2/1992
Agenda Its Rumber: ~
FEE . '92 12:29PM SRBO & GREEN
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MAYOR AJII) COIGlOH COUNCJ:L OJ' THE
CITY OJ' SAN BBIl1QRJ)INO I CALIPORHJ:A
AClDID1
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Action to
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A RISOWTION OF THE HAYOR UD COIIIIOIf COUNCIL 01"
THE CITY 0'1 SAIf BBltIfAJU)DO AtJ'lJIORJ:ZING THE
CUBRBN'!' RB1"t1NDING OF A P02'l'IOIr, UD THE
DBI"BABAJflQB 01' THE ItBMAINDD. OJ' TBJ: CI:TY' S
OU'l'S'1'UDINO $18 I 840, 000 SmGLa PAMILY HOl\TGAQ:t
RIVBNUB RDUND:mcJ BONDS (GMHA JIOR'l'GAGB-BACDD
SllCURI'l'IES), SBlUES 1990A. APl"aOVIHG ESCROW TROST
AGRBIlIIBRT RBLA.TING '1'0 SUCH DU'EASAlfC!l UD
PROVIDING FOR OTHER HATTERS PROPERLY RELATED
TRBRB'1'O .
Adopt aesolution.
Certitied copy ot a..olution to be returned to Babo " Gr..n, A
Prote..lonal Corporation.
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FEE 211 "92 12:29PM SABO & GREEN
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RBSOLO'l'IOB NO.
A RESOLm'ION 01' mB MAYOlt AND c:oJIIION oomrcIL 01' THE
CITY 01' SAlI BBllNARDDlO Atl'):dlmIZl:BG TIm CUUBNT
RBFtJHDING OF A POR'rIOB, ANI) THE DUBASANCE 01' 'l'HJ!:
REJQDfDD, OF THB CITY'S O1lTSTANDDl'G $18,840,000 SDl'GLB
FAMILY KORTCAQB lUIvJliI'fu.15 ...uruftDING BONDS (QRMA. IIOltTGAGE-
BAClCED SECVRITIBS), SBRIES 1990A, APPROVING ESCROW
TRUST AGRBBMBIIT RBLA'l'Dl'G 'l'O SUCH DBI'BABANCE AND
PROVIDING FOR 0'l'HD HATTBRS PROPERLY RELATED mBRB'l'O.
WHllRIAS, the City of san Bernardino b a lIunicipal
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8 corporation and a charter city duly or..ted and existillCJ pursuant
9 to the Consti tutioD and the la_ of the state of California (the
10 "City").
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12 WIIDEAB, purauant to a Resolution adopted by the Kayor
13 and COJllllOll Council on behalf of the City on Kay 21, 1990, the
14. city has haretotore i.sued it. 81n91e F_ily Mo~a9'e aevenue
15 RefuncUnq Bonds (Glil'MA Mortqaqe-Backed Securitie.), Series 1990A
16 in the agqr8lJate principal lUllount of eighteen lIIillion eight
17 hundred and forty thous&ftd dollars ($18,840,000) (the "Bonds")
18 undar a 'l'rust Indenture 4ated as of Kay 1, 1990 (the
19 "Ind8llture"), between the city &!lIS Security Pacific Bational Bank
20 (the "'l'rustee") I &!lIS
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22 WJIB1UlAS, the Bono were issued for the purpo.e of
23 providinq tor the curr:.nt retUftdin'1 at a series of then-
24 outstandinll bonds ot the City, thareby IIakin9 _eya available to
25 iaplellent a bolle lIIOrt9a'1e .finanoing proqr_ (the "PrOg'r_")
26 within the City by finanoinq the purchase at certain qualifying
27 lIIOrb)aqe loans (the "HOII8 Mortqaqea") for .in9le residences
28 located in the City, throu,h the purchase by the Trustee, on
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1 behalf' ot the city, ot rully ao4ifie4 IIOng'age-backecl securities
2 guaranteecl as to tilHly paYJUlftt of principal and interest by the
S GoVft'lllllent National Hongagoe Association (the "GNIfA Securities");
4 and
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22 WHEREAS, Article X of the Indenture provides that upon
2S the deposit in trust of noncallule direct Obligations of, or
24 obl1CJations tully guaranteed as to principal and intarest by, the
25 1l'n!tecl State. or llIIY alifency or iNltr1mentality thereof when such
26 obligatio.. are backecl by the full taith and credit of ths united
Z1 State. (the "Escrow securities"), to provide for the payment of
28 any BOM, then all liability ot the city in r.-pect of such Bond
WHJ:RQS, HOlle Kortqage. ..y be originatecl und.er the
PrO\ifJ:'U1 during the 80lIl8 Mortgage Origination Period ending on
February 1, 1"31 and
WHBREAS, as of the date hereot no HOllIe HortcJage. have
been originated; and
1fIIWII.BAS, Section 4.04 of the Indenture provide. that
the Bonds are subject to reclUlp1;ion at the .ion of the city, as
a whole or in part., on any date on or atter November 1, 1991, at
a rael.-ption ~i~ equal to .the principal llIIIOunts of the Bonde to
be rede.ael, together with accrue4 intere.t to the redelllption
date, without pr_iua, to the extant that aoney. r_inin9 in the
Progr_ Fund (e.tabl1shecl under the Indenture) have not bean uSeel
to acquire GIOQ Securiti..; and
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'92: 12:: 3ElPM SA80 & GREEN
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1 shall c...., terminate and be OOIIpl.t.ly elischarg.d, and the
2 owner ther.Of na1l ther..f~ be entitled only to payment frOll
3 auch .ecuriti..; and
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5 WHEREAS, due to the deor.a.. in 1II0rtga'l8 lIIIlrket
6 inter..t rat.. since the illp18llllmtation of the Provraa, the city
7 consiclers it desirable and in its best interut to terIlinat.e the
8 Provr- at thi8 ti...
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10 NOW, ",i"JUiKd'OlUI, BB IT RESoLVED BY TIll: MAYOR AND COIQION
11 COWCIL OF 'l'RE CITY 01' SAN BERNARDIIl'O, AS FOLLOWS:
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13 SBCl'ION 1. The city hereby appro".. th. t:ermlnaUon
14 ot the Proqr_ and author h.. the Mayor or the "-""iatrator ot
]5 the Bconoaic Development .lgency of the City of San Bernardino
]6 (the "Agency Administrator") to direct the Truatee to transfer
17 appropriate alllOW\ts froll ~ Provr- Fund to the Redeaption Fund,
18 qive the r~ire4 red8llptioQ notice pursuant to the Indenture,
]9 and r.d... on the earli..t practical date under the Indenture the
20 Doneb -turift9 on Novlllllber 1, 2000.
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22 SECTION 2. After final calculations are made and
23 certified to ~ the underwriter .. to the money. necessary to
24 discharge the li.n of the Indenture with r..pect to the Bonds
25 _turing on November 1, 200!S and by 1, 2023, the City her~
26 authorize. the Kayor or the Agency Administrator to cllrect the
71 Truste. to withdraw 8ald monay. from the Progr_ Fund and
28 tralUlfer SUch 1I0neys to SMNrity Pacific ...1:10nal Bank, as escrow
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FEB 2 f 1'92 12:31PM SABO & GREEN
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1 truSt:_, pursuant: to ~. .scrow Truat Agr._ent attached as
2 Exbibit A hereto.
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4 SBCT:ION 3. Ths Bscrow Trust Agre8llleftt ill
5 sul:lst:ant1ally the tOrlll as on tUe with the Aqanoy Adaillistrator
6 and containing sul:lstantially the t8r118 and provisions s.t torth
7 therein is hereby approved, and the Avency Administrator is
8 hereby authorized and directed to execlate and deliver th. Escrow
9 'l'rulIt Agre_ent, on behalf ot the citlf, with such chanqes therein
10 from the tOrlll of the Bscrow 'rrIlat Aqre8lllent: as on fU. as shall
11 be approved lIy Saba , Green, a Prof.ssional Corporation, and. the
12 Aqency Administrator, the ex.~ion thereot to establish
13 conclusive evid.nce of such approval. The City Clerk is hereby
14 authorized. and directed. to attest the execut.ion of the Escrow
15 Trust: Agre_ent.
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17 SECT:IOlf ". The lIllyor, the A'1ency Administrator, the
18 cit.y Clerk, and other city staff, a. nec...ary, are hereby
19 authorized. and directed to execute any and all dOCWlent. and
20 papers and to perform and do any and all actll and thin'18 de_ad
21 ftecessary or convaniQllt. in order to effect the exeCl\ltion and
22 del1very of the Bscrow TrwIt Agreeaent. and the performance of any
23 other action which ..y ~ nece.sary or desirable in connection
2( therewith, or to carry out the intent. and purpo..s of this
25 a.solut.ion, inclucUnq the .x.Cl\Ition ot a cert1ticate authorizing
26 an iIlv..bant banking CJroup ..tablished. by Hiller fr Schroeder
27 Financial, :Inc.. to purCha.., on benalf of the City, certa1n
28 Escrow S8Cl\Iri til!l!l and to provide COIIpmlsat:ion therefor.
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FEE II '92 12: 31PM SABO & GREEN
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1 A RESOLUTION 01" THE IfJI.YOR AND COMMON COUNCJ:L OJ' THE CITY OJ' SAN
BEltNUDINO Atl'l'JIOJUZZNG THB CDRRD1'r UPUNDDfO OJ' A POR'l'IOJI', AND
2 THE D:uBABANCB or '.l'IIE RQJlI1fDD, 01' 'l'HB CITY'S OtJ'l'S'l'ANDIR
$18,840,000 SXJlGLE FAMILY ~J: _vudJE REFUNDING DOMeS (QIlKA
3 ltIORTGAGE-BACKBD SBCURl:TIBS), SDJ:U 1S1S10A, APPRDVDrQ BSCROW TRUST
AGREDIENT RELATING '1'0 SUCH DBFEASAJrCJ: AND PROVl:DINC FOR OTHER
4 MA'l'TBRS PROPERLY llELA'l'ED THERBTO.
5 SECTIOJI' 5. The finclin9. ancl deterainationa herein
6 sha1l be final and conclusive. This R..olution shall take effect
7 upon the date of i1:8 adoption.
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to adopted by the Mayor and COllllllon Council of the City of
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IS
I HEREBY CERTIFY that the foregoinq ae_lution wae duly
San Bernardino at a
meeting-
thereof, beld on the
day of
,
1992, by the tollowinq vat_, to wit:
14 Council M..har_:
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HAD
ABSTAYN A'BRKNT
15 ESTRADA
REILLY
16 HBRNAHDBZ
IfJI.C1)SLEY
17 MINOR
POPB-LUDLAK
18 HILLER
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City Clerk
The foregoing- r.eolution is her~ approved thi.
day of
, 15192.
Mayor ot the City of
San BemaNino
Approved a. to fora and llMjJal content:
JAIIBS F. PBNJW(
City Attorney
Byl
_IADOC\I
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1 STA1'B OF CALIl'OlUfIA )
COUH'l'Y OF lWf BIltHA1U)INO )
2 CITY OF lWf BOBRIWtDDO )
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IS
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I, . City Clerk o~ the City or
San 8ernardiho, DO JU'.iKQr ",mc.l'II'Y t:bat the torec;JOinq and attached
copy o~ Kayor and COIIIIOn COUncil at the city at San Bernardino
".olution Wo. i. . tull, true and correct copy ot that
now an tile in thi. ottica.
:IN WITNESS WRIODW'l:V, r bave hueeunto .at my band and
attixed the otticial .aal of the Mayor and CClllllllon Council of the
city at San Bernardino thb day of ,
11192.
City Clerk
City o~ San Bernardino
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