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HomeMy WebLinkAbout1984-498 .. , 2,157-6/013IS/ks 11/20/84 RESOLUTION NO. 84-498 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA. APPROVING THE FORMATION OF THE SAN BERNARDINO-INDIO HOUSING FINANCE AGENCY AND A CERTAIN JOINT POWERS AGREEMENT AND AUTHORIZING THE EXECUTION OF SAID AGREEMENT WHEREAS, the Mayor and Common Council of the City of San Bernardino, California (the "City"). has heretofore declared its intent to issue single family mortgage revenue bonds pursuant to the provisions of Health and Safety Code Section 52000, et seq. (the "Act"). for projects to be built within the City in accordance with an ordinance, as amended, of the City to increase the housing supply; and WHEREAS, it has been proposed that the City together with the City of Indio. California, enter into a certain joint powers agreement (the "Agreement") pursuant to the provisions of Government Code Section 6500, et seq., and to form the San Bernardino-Indio Housing Finance Agency (the "Housing Finance Agency") for the purpose of combining mortgage revenue pools for qualifying developers of single family dwellings and to obtain a higher rating on the single family mortgage revenue bonds (the "Bonds") to be issued by the Housing Finance Agency and a lower interest rate on both the Bonds and the mortgage loans to be acquired by the Housing Finance Agency with the proceeds thereof; and - I - . . WHEREAS. it is now desirable for the City to consider the adoption and execution of the Agreement as attached hereto as Exhibit "A" and incorporated herein by reference and to appoint three (3) members of the Common Council to serve on the Board of Directors of the Housing Finance Agency to implement the single family mortgage revenue bond financing program of the City. NOW. THEREFORE. BE IT RESOLVED. DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO. CALIFORNIA. AS FOLLOWS: Section 1. The City hereby approves the Agreement as attached hereto as Exhibit "A" and incorporated herein for the purpose of establishing the Housing Finance Agency. Said Agreement shall be executed by the Mayor and attested to by the City Clerk of the City and shall be approved as to form by the City Attorney. Section 2. The City hereby agrees to participate in the financing to be undertaken by the Housing Finance Agency in the same manner as would have been undertaken by the City acting alone pursuant to the provisions of the Act without the assistance of the Housing Finance Agency. Section Council Member Quiel 3. The City hereby Council Member Hernandez appoints . and Mayor W. R. Holcomb, Alternate to be members of the Board of Directors of the Housing Finance Agency and said members of the Common Council - 2 - Section 6. This Resolution shall take effect upon adoption. I HEREBY CERTIFY that the foregoing resolution was duly , adopted by the Mayor and Common Council of the City of San Bernardino at an adjourned regul ar the 27th day of November meeting thereof, held on , 1984, by the following vote, to wit: AYES: Council Members Castaneda, Reilly, Hernandez, Marks Strickler NAYS: ABSENT : None Council Members Quiel, Frazier ~J?#~$ City Clerk The foregoing resolution is hereby approved this <i;?J"If.. day of November , 1984. Approved as to form: C~~PU~ - 4 - .. -~ (" ,/'1" , ,." , l '"" 2, 157-5/0130Sdm 11/20/84 AGREEMENT JOINT POWERS AGREEMENT TO CREATE THE SAN BERNARDINO - INDIO HOUSING FINANCE AGENCY TO EXERCISE COMMON POWERS OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AND THE CITY OF INDIO, CALIFORNIA TO FINANCE HOME MORTGAGES PURSUANT TO HEALTH AND SAFETY CODE SECTION 52000, ET SEQ., OF THE STATE OF CALIFORNIA ~. "'~~ // '/\ /. o '<f G THIS AGREEMENT, is made this day of 1984, by and between the City of San Bernardino, California. a municipal corporation, duly organized and existing under its City Charter. the Constitution and laws of the State of California, (herein. "San Bernardino"), and the City of Indio, California. a municipal corporation duly organized and existing under the Constitution and laws of the State of California. (herein "Indio") with respect to the following: WIT N E SSE T H: WHEREAS. San Bernardino and Indio pursuant and subject to the provisions of Health and Safety Code Section 52000. et seq. (the "Act"), are each authorized and empowered to provide. through lending institutions. long-term, low interest home mortgage loans to persons and families to finance the acquisition of homes and to issue revenue bonds to provide the funds therefor; and WHEREAS, the Act also provides that such powers may be exercised by an agency created by a joint powers agreement under Government Code Section 6500. et seq.. entered into by public - 1 - agencies for the express purpose of the joint exercise of such powers; and WHEREAS. Government Code Section 6500. et seq.. provides (a) that two or more public agencies by agreement may jointly exercise any powers common to the contracting parties. and (b) that the agency provided by the agreement to administer or execute the agreement may be a separate commission or board constituted pursuant to the agreement; and WHEREAS. San Bernardino and Indio have determined (a) that the public interest and economy will be served by. and require. the joint exercise of their common powers under the Act. and (b) to create a separate agency. which agency shall have and exercise said common powers. NOW. THEREFORE. IT IS AGREED. as follows: Section 1. Formation. San Bernardino and Indio pursuant to Government Code Section 6500 et seq. and pursuant to the Act. hereby form. establish and create the SAN BERNARDINo-INDIO HOUSING FINANCE AGENCY (the "Agency"). which shall constitute a separate and distinct public entity. Section 2. Purpose. The Agency is formed for the purpose of exercising any and all of the common powers of San Bernardino and Indio relating to the financing of home mortgages - 2 - pursuant to the Act and resulting in the issuance of the San Bernardino-Indio Housing Finance Agency Residential Mortgage Revenue Bonds. Issue of 1984 (the "Bonds"). In addition. certain lendtng institutions have been given the opportunity to participate in the home mortgage financing programs of San Bernardino and Indio (as evidenced by documentation duly on file) and the Agency shall be authorized to execute agreements with such of these lending institutions as it shall select with respect to home mortgages to be acquired with proceeds of the Bonds to be issued by the Agency under the Act. Section 3. Internal Orqanization. The Agency shall have a governing body designated as the Board of Directors of the SAN BERNARDINO-INDIO HOUSING FINANCE AGENCY (the "Board"). which shall consist of five (5) members. San Bernardino shall. by resolution. designate three (3) members of its Common Council to serve as members of the Board. Indio shall. by resolution. designate two (2) members of its City Council to serve as members of the Board. (a) Duties of the Board of Directors. The duties of the Board shall be: (1) To make all policy decisions and exercise all of the powers of the Agency; - 3 - (2) To submit full and regular reports to each of the parties to this Agreement; and (3) To adopt from time to time such rules and regulations for the conduct of Agency affairs as may be required. (b) Officers. The Agency shall have a President and Vice-President periodically elected by and from among the members of the Board. and shall have a Secretary and a Treasurer who shall be appointed by the Board. (c) Duties of Officers. duties to their office; and Officers shall perform normal (1) The President shall sign all contracts on behalf of the Agency and perform such other duties as may be imposed by the Board. (2) The Vice-President shall act in the absence of the President. (3) The Secretary shall countersign all contracts on behalf of the Agency; perform such other duties as may be required by the Board; and keep minutes of all meetings and cause a copy of the minutes to be forwarded to each of the members of the Board and each of the parties to this Agreement. - 4 - (4) The Treasurer and duties and obligations set Section 6505.5. the Auditor forth in shall have the Government Code (d) Meetinqs. Regular meetings of the Board shall be held on each Tuesday of each month at 3:00 P.M. in the Council Chambers. Ci ty of San Bernardino Ci ty Hall. 300 North "D" Street. San Bernardino. California 92481. (e) Ralph M. Brown Act. All meetings held by the Board. including regular. adjourned regular and special meetings. shall be called. not iced. held and conducted in accordance with the provisions of the Ralph M. Brown Act. Government Code Sections 54950 and 54961. (f) Quorum. Three members of the Board shall constitute a quorum and any action of the Board shall require the affirmative vote of not less than three (3) members. (g) Compensation. The members of the Board shall receive no compensation for their services. Section 4. Aqency to Administer Aqreement. As established by this Agreement. the SAN BERNARDINo-INDIO HOUSING FINANCE AGENCY is hereby designated as a public entity separate from the parties hereto. and is hereby designated as the entity to administer this Agreement. The Agency shall exercise its powers in - 5 - the manner and subject to the restrictions of the laws of the State of California. Section 5. its dwn name to: Powers. The Agency shall have the power in (a) Finance home mortgages pursuant to the provisions of the Act; and (b) Make and enter contracts; adopt a seal; employ agents. employees and consultants. including legal. fiscal and paying agents; acquire. construct. manage. maintain and operate buildings. works and improvements; acquire. hold and dispose of property; incur debts. liabilities and obligations; sue and be sued; and to do all other things reasonably necessary for the accomplishment of its purposes and the exercise of its powers. Section 6. Obliqations. The debts. liabilities and obligations of the Agency shall be the debts. liabilities and obligations of the parties to the Agreement in proportion to and arising out of the mortgages provided in their respective jurisdictions. Section 7. Finances. (a) Budqet. The Agency shall prepare an annual budget of revenues and expenses in each fiscal year. which shall be from - 6 - July 1 to June 30. Such budget shall also show the revenues and expenses anticipated in connection with each project for which reve~ue bonds. notes and other evidences of indebtedness are outstanding. (b) Accountability of Funds. Reports and Audits. There shall be strict accountability of all funds and a report of all receipts and disbursements of the Agency. The Auditor shall cause annual audits of the accounts and records of the Agency to be prepared by an independent certified public accountant to be filed annually with the Treasurer of each party hereto. The annual audits shall conform to generally accepted auditing standards. the minimum requirements of which shall be as prescribed by the State Controller for special districts under Government Code Section 26909. The Agency shall establish and maintain all necessary funds and accounts which shall be open to inspection at all reasonable times by each of the parties hereto. (c) Bondinq Person Havinq Access to Property. The officers who have charge of. handle. or have access to any property of the Agency. shall be required to file an official bond with the Agency in such amount as may be established by the Board. Should an exist!ng bond of any of said officers be extended to cover the obligation provided herein. said bond shall be the official bond of said officers required to be posted herein. The premium on any such bond or bonds shall be an appropriate expense of the Agency. Section 8. Amendment. This Agreement may be amended by the mutual consent of the parties hereto, duly authorized by the designated representatives of the respective legislative bodies thereof; provided that no amendment shall be to the detr iment of , holders of outstanding bonds. notes or other evidences of indebtedness. Section 9. Period of Aqreement. This Agreement shall continue until rescinded or terminated by either mutual consent of the parties hereto duly authorized by resolution of the respective legislative bodies thereof, or by unilateral withdrawal by one of the parties hereto duly authorized by resolution of its legislative body; provided that this Agreement shall be irrevocable as long as the Agency has bonds. notes or other evidences of indebtedness outstanding. Section 10. Disposition of Property. Properties acquired by the Agency shall be held and managed by the Agency and shall not be disposed of, distributed to, or divided between the parties hereto, except in accordance with their directions. duly authorized by resolution of the respective legislative bodies thereof; provided that no disposition, distribution or division shall be made of properties acquired and/or constructed from the proceeds of outstanding bonds, notes or other evidences of indebtedness except in accordance with the resolution authorizing such bonds, notes or other evidences of indebtedness. - 8 - Section 11. Surplus. After the completion of the purposes of this Agreement. any surplus money held by the Agency shall be paid to the respective parties hereto in proportion to their participation. . Section 12. Further Assurance. San Bernardino and Indio shall execute all documents and do all things necessary to enable the Agency to execute its powers and accomplish its purposes. IN WITNESS WHEREOF. the parties hereto have caused this Agreement to be executed by their officers thereunto duly authorized the day and year first above written. CITY OF SAN BERNARDINO. CALIFORNIA By: Mayor APPROVED AS TO FORM: ATTEST: City Attorney City Clerk (SEAL) - 9 - ATTEST: City Clerk (SEAL) CITY OF INDIO, CALIFORNIA By: Mayor APPROVED AS TO FORM City Attorney - 10 - Toll Free Califomia (Consulting) (eo<J) 542-6032 (Sales) (eo<J) 542-6288 505 LolT\lls Santa Fe Drive. Suite 100 (619) 48].5894 Miller & Schroeder Municipals, Inc. Post Office Box 946. Solono Beech. California 92075-0819 November 20, 19B4 Ms. Glenda Saul Executive Director Redevelopment Agency of the City of San Bernardino City Hall 300 North "0" Street, Room 320 San Bernardino, California 9241B Dear Ms. Saul: With respect to the contemplated fonnation of a joint powers authority combining the citles of San Bernardlno and Indlo for the purpose of issulng slng1e family mortgage revenue bonds, this letter will address the reasons for and benefits of establishing such a joint powers authorlty. One lmportant factor ln structuring a successful mortgage revenue bond issue is to obtain an acceptable investment agreement. Prior to the funding of mortgage loans it ls necessary that the bond proceeds be invested with a financlal institution paying an lnterest rate generally equal to the bond yield. Such lnterest earnlngs are uti11zed to make tlme1y payments of interest to the bondholders. The problem at hand 15 that currently, short term lnterest rates are lower than long term lnterest rates making lt lmpossib1e to secure an investment agreement providlng a rate of return equal to the bond yield. One potentla1 method to alleviate or reduce thl5 lnterest rate dlfferentia1 ls to lmprove the ratlng on the bonds. As orlglnal1y proposed, a $20,000,000 City of San Bernardino mortgage revenue bond issue would likely rec.eive an "A" ratlng from Moody's Investor's Service, and, due to, among other factors, the geographic concentratlon of the houslng unlts, munlcipa1 bond insurance firms lnitia11y indlcated an unwi111ngness to lnsure such a San Bernardlno lssue. A c0l1lll1tment of such munlcipa1 bond insurance secures a "AAA" bond ratlng. Headquarters; Minneapolis. Minnesota Branch Offices: Downtown Minneapolis. SoWIna Beach, California. Northbrook.IUinois. St Paul, Minnesota. Naples. Florida. Carson City. Nevada (!\ember of the Securities Investor Protection Corporetion On the other hand, two mun1c1pal bond 1nsurance f1rms expressed an interest in providing an insurance conm1tment for a financing comb1n1ng the cities of San Bernardino and Ind1o. Besides diversifying the geographic locat10n of the housing units, the increased size of the mortgage pool inherently strengthens the cash flows compared to solely a San Bernardino issue. Obtaining a "AAA" rating will enable the bonds to be sold at 1nterest rates approximately .50% less than an "A" rated bond issue. Such would not only substantially improve the potent1al of securing an acceptable investment agreement, but would also provide a mortgage loan interest rate approximately .25% less than could be achieved assum1ng an "A" rated bond 1ssue. Moreover, establishing a San Bernard1no-Ind1o joint powers authority would result in lower developer fees due to the economy of scale provided by a larger bond issue. In add1t10n, in connection w1th obtaining a workable investment agreement, a key determ1nate is the average life of the mortgage money. That 1s, the average length of time which the financial institution providing the investment agreement will have to utili ze the mortgage money before funding mortgage loans pursuant to developer takedown schedules. The longer a financial institution has to utilize/invest the mortgage money, the better (higher) the 1nvestment agreement interest rate. The Ind10 developers generally intend to drawdown their mortgage funds later than the San Bernardino developers. Combining the San Bernard1no and Ind10 developer drawdown schedules provides an average life for such funds which 1s approximately three months longer than the average life of the San Bernardino mortgage money per the San Bernardino developer's drawdown schedules. The longer average life of the mortgage money achieved by including the Ind10 developers w1ll enable us to secure higher investment agreement rates than San Bernardino could obtain as the sole issuer. Moreover, the larger mortgage pool and reserve fund amounts will improve the attract1veness of the investment agreement producing more compet1t1on in the b1dd1ng process among financial 1nst1tut10ns wh1ch would likely result in more favorable 1nvestment agreement rates. Another factor to cons1der is that San Bernard1no's $20,000,000 allocat1on to issue mortgage revenue bonds expires on December 31, 1984. The 1nmed1acy of this deadline further necessitates the development of an issue structure and bond program which provides a viable housing finance program meet1ng the object1ves of the developers and issuers by increasing the supply of affordable housing units with mortgage loans at below-market interest rates. The status of the municipal bond market and certain market, legal and t1m1ng requirements are important factors which must be evaluated in determ1n1ng the optimal bond structure/program. Considering the factors discussed here1n, the formation of a joint powers authority comb1n1ng San Bernardino and Ind10 for the purpose of issuing single family mortgage revenue bonds is the most feasible and beneficial issue structure/program to enable San Bernardino to successfully complete its pend1ng mortgage revenue bond 1ssue. We apprec1ate the C1ty's cooperat1on and w1ll1ngness to pursue the format1on of the jo1nt powers author1ty. If you have any quest10ns regard1ng the subject matter of th1s letter, or 1f we can prov1de you w1th add1tional 1 nformati on regard1ng the sUbject housing financ1ng, please feel free to contact us. Very truly yours, ~ Gregory B. Ballenger Ass1stant V1ce Pres1dent GBB:sko fA- . -- 2. 157-10/0133S/ds 11/25/84 NOTICE OF THE FORMATION OF THE SAN BERNARDINO- INDIO HOUSING FINANCE AGENCY Pursuant to Government Code Section 6503.5 the San Bernardino-Indio Housing Finance Agency (the "Agency") hereby causes notice of the execution of a certain agreement. dated November 21. 1984 (the "Agreement"). creating said Agency to be filed with the Secretary of State of the State of California. The following public agencies are parties to said Agreement: (i) City of San Bernardino. a municipal corporation being a charter city duly organized and existing pursuant to the Constitution and laws of the State of California; and (ii) City of Indio. a municipal corporation duly organized and existing pursuant to the laws of the State of California. The Agreement authorizes the Agency to exercise any and all of the common powers of the City of San Bernardino and the City of Indio relating to the financing of home mortgages pursuant to the provisions of Health and Safety Code Section 52000. et seq. (the "Act"). and resulting in the issuance of the San Bernardino-Indio - 1 - t_._.-li' Housing Finance Agency. Single Family Mortgage Revenue Bonds. 1984 Series A (the "Bonds"). The Agency is also authorized to execute any agreements which may be necessary or convenient in connection with the Agreement. the Act and the Bonds. THIS NOTICE IS GIVEN this day of . 1984. SAN BERNARDINO-INDIO HOUSING FINANCE AG By: By: . ~ By: ~~~. !fLd Director , , By: Director - 2 -