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MAYOR AND COMMON COUNCIL
OF THE
CITY OF SAN BERNARDINO
AGENDA Auqust 15, 1994
STAFF REPORT
TO:
Mayor and Common Council
FROM:
Staff
DATE:
August 9, 1994
RE:
[Not to Exceed] $3,500,000 Community Facilities
District No. 995 of the City of San Bernardino
(Verdemont Area) Special Tax Refunding Bonds
Backqround
On August 1, 1994, the City of San Bernardino (the
"City") ratified certain judicial foreclosure actions filed on
January 14, 1994 and January 24, 1994 bearing San Bernardino
Superior Court Case Nos. SCV09593, SCV09594, SBCI09793 and
SCV09790, authorized the filing of an action for judicial
foreclosure of the delinquent special tax liens associated with
certain undeveloped parcels in the City's Community Facilities
District No. 995 (the "District") and approved a form of Mutual
Release and Settlement Agreement in connection with the District.
There have been certain modifications to the Mutual
Release and Settlement Agreement in order to meet the requests of
all of the parties thereto. The revised Mutual Release and
Settlement Agreement (the "Settlement Agreement") is on file with
the City Clerk.
The Settlement Agreement was modified in large part to
reflect the agreement between the San Bernardino Unified School
District (the "School District"), the City and the Developers of
the District to enter a Mitigation Agreement (the "Mitigation
Agreement") under which prior bond proceeds held on behalf of the
School District shall be released in return for the School
District allowing such funds to be disbursed to the City in order
for the City to redeem a portion of its $7,440,000 Community
Facilities District No. 995 (Verdemont Area) Special Tax Bonds
(the "Prior Bonds"). The Mitigation Agreement further provides
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for the reimbursement of said funds when certain amounts are
received by the City.
On August 1, 1994, the City also approved the issuance
of not to exceed $3,500,000 of special tax bonds (the "Bonds") in
order to refund a portion of the Prior Bonds and approved the
appointment of Bank of America as Trustee. Bank of America
declined to accept such appointment and City consultants have
contacted First Trust of California, N.A., which has agreed to
provide services as Trustee and Escrow Agent upon the approval of
the Mayor and Common Council.
City staff and consultants have determined that the
only feasible method to pay and redeem the Prior Bonds is as
follows: (1) utilize the funds loaned by the School District to
purchase and cancel approximately $1,000,000 of the Prior Bonds;
and (2) deposit with the Escrow Agent for defeasance of the
remaining Prior Bonds to September 1, 1998, with a 2% premium,
(a) $500,000 from amounts disbursed to the City by the School
District, (b) approximately $800,000 from the School District
Subacccount of the Prior Bonds, and (c) approximately $3,000,000
from Bond proceeds.
Recommendation
Staff recommends that the Mayor and Common Council
approve the following resolutions at this time:
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AUTHORIZING THE PURCHASE
OF A ?ORTION OF CERTAIN BONDS ENTITLED COMMUNITY
FACILITIES DISTRICT NO. 995 OF THE CITY OF SAN
BERNARDINO (VERDEMONT AREA) SPECIAL TAX BONDS,
APPROVING THE CANCELLATION OF A PORTION OF SAID
BONDS AND THE DEFEASANCE OF THE REMAINDER,
APPROVING THE FORM OF ESCROW AGREEMENT RELATED
THERETO AND AUTHORIZING AND DIRECTING
PREPARATION, EXECUTION AND DELIVERY OF THE FINAL
FORM THEREOF
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING A CERTAIN MUTUAL
RELEASE AND SETTLEMENT AGREEMENT AND A CERTAIN
MITIGATION AGREEMENT IN CONNECTION WITH COMMUNITY
FACILITIES DISTRICT NO. 995
SBEO\012S\DOC\22
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Item:
Action to
be Taken:
MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO
AGENDA
August 15, 1994
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AUTHORIZING THE PURCHASE
OF A PORTION OF CERTAIN BONDS ENTITLED COMMUNITY
FACILITIES DISTRICT NO. 995 OF THE CITY OF SAN
BERNARDINO (VERDEMONT AREA) SPECIAL TAX BONDS,
APPROVING THE CANCELLATION OF A PORTION OF SAID
BONDS AND THE DEFEASANCE OF THE REMAINDER,
APPROVING THE FORM OF ESCROW AGREEMENT RELATED
THERETO AND AUTHORIZING AND DIRECTING
PREPARATION, EXECUTION AND DELIVERY OF THE FINAL
FORM THEREOF
Adopt Resolution.
Certified copy of Resolution to be returned to Sabo & Green, A
18 Professional Corporation.
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AUTHORIZING THE PURCHASE
OF A PORTION OF CERTAIN BONDS ENTITLED COMMUNITY
FACILITIES DISTRICT NO. 995 OF THE CITY OF SAN
BERNARDINO (VERDEMONT AREA) SPECIAL TAX BONDS,
APPROVING THE CANCELLATION OF A PORTION OF SAID
BONDS AND THE DEFEASANCE OF THE REMAINDER,
APPROVING THE FORM OF ESCROW AGREEMENT RELATED
THERETO AND AUTHORIZING AND DIRECTING
PREPARATION, EXECUTION AND DELIVERY OF THE FINAL
FORM THEREOF
WHEREAS, the City of San Bernardino (the "City") is a
charter city and municipal corporation organized and existing
under and pursuant to California law; and
WHeREAS, the City issued its $7,440,000 Community
15 Facilities District No. 995 (Verdemont Area) Special Tax Bonds
16 (the "Prior Bonds") in order to finance the acquisition and
17 construction of certain facilities within its Community
18 Facilities District No. 995; and
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20 WHERE1".S, the Prior Bonds are dated November 15, 1990,
21 and the last scheduled maturity of the Prior Bonds is
22 September 1, 2015; and
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24 WHEREAS, certain property owners are in default on the
25 payment of the special taxes securing the Prior Bonds and if a
26 portion of the Prior Bonds are either purchased and canceled, or
27 defeased, there will be substantial benefits to the Prior
28 Bondowners and the City; and
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1 WHEREAS, the City desires to use certain amounts
2 -received from the San Bernardino Unified School District (the
3 "School District") to cancel a portion of the Prior Bonds and use
4 bond proceeds from its not to exceed $3,500,000 Community
5 Facilities District No. 995 (Verdemont Area) Special Tax
6 Refunding Bonds (the "Bonds"), together with amounts on deposit
7 from Prior Bond proceeds, to refund the remaining portion of the
8 Prior Bonds; and
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10 WH>':REAS, the Prior Bonds shall be paid at the principal
11 trust office of First Interstate Bank, Ltd., in Los Angeles,
12 California; and
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14 WHEREAS, the City has duly considered such transactions
15 and desires at this time to approve said transactions in the
16 public interests of the City.
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18 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE
19 CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE,
20 DETERMINE AND ORDER AS FOLLOWS:
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22 Section 1. Recitals. The above mentioned recitals
23 are correct and are incorporated herein as if fully set forth.
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25 Sect ion 2. Findinqs and Determinations. The Mayor
26 and Common Council hereby find and determine that the purchase
27 and cancellation of a portion of the Prior Bonds and the
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1 defeasance of a portion of the Prior Bonds will result in
2 significant public benefits to the City and the Prior Bondowners.
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4 Section 3. Purchase. Defeasance and Redemotion.
5 The Mayor and Common Council hereby authorize the purchase of
6 approximately $1,000,000 of Prior Bonds for cancellation from
7 amounts disbursed from the School District, and the defeasance of
8 the remaining Prior Bonds to the first call date on September 1,
9 1998 at 102%.
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11 Sect ion 4. Aooroval of Escrow Aareement; Escrow
12 Aaent and Trustee. The Mayor and Common Council hereby approve
13 the Escrow Agreement and further authorize and direct that the
14 form of Escrow Agreement presently on file with the City Clerk be
15 converted into the final form of Escrow Agreement, together with
16 such changes or modifications as deemed necessary or desirable by
17 the Mayor upon the recommendation of Sabo & Green, a Professional
18 Corporation ("Bond Counsel"). The Mayor, City Administrator or
19 such other authorized officer of the City is hereby authorized
20 and directed to execute and deliver, and the City Clerk is hereby
21 authorized and directed to attest to, the final form of Escrow
22 Agreement when the same has been prepared for and in the name of
23 the City, and such execution and delivery shall be deemed to be
24 conclusive evidence of the approval thereof. The Mayor and
25 Common Council hereby authorize the delivery and performance of
26 the Escrow Agreement.
27 III
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1 The Mayor and Common Council hereby further approve
2 designating, and hereby designate, First Trust of California,
3 National Association, as Trustee for the Bonds and Escrow Agent
4 for the defeasance of the Prior Bonds.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE PURCHASE OF A PORTION OF CERTAIN BONDS
ENTITLED COMMUNITY FACILITIES DISTRICT NO. 995 OF THE CITY OF SAN
BERNARDINO (VERDEMONT AREA) SPECIAL TAX BONDS, APPROVING THE
CANCELLATION OF A PORTION OF SAID BONDS AND THE DEFEASANCE OF THE
REMAINDER, APPROVING THE FORM OF ESCROW AGREEMENT RELATED THERETO
AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY
OF THE FINAL FORM THEREOF
Section 5.
Effective Date.
This
Resolution
shall take effect from and after its passage and adoption.
I HEREBY CEkTIFY that the foregoing Resolution was duly
10 adopted by the Mayor and Common Counc~l of the City of
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San Bernardino at a
meeting
thereof, held on the
day of
1994, by the following vote, to wit:
AYES:
Cot;ncil Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day of , 1994.
Mayor of the City of
San Bernardino
Approved as to form and legal content:
JAMES F. PENMAN
City Attorney
By:
SBEO\0125\DOC\19
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STATE OF CALIFORNIA
COUNTY OF
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies) , and t.hat by his/her/their
signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature_
(Seal)