HomeMy WebLinkAboutR03- Economic Development ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
REQUEST FOR ('OMMIccION/COU C1L ACTIOft
From: Barbara J. Lindseth
Subject:
Acting Director SINGLE FAMILY MORTGAGE
REVENUE REFUNDING BONDS
Date: March 14, 1995
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SyRopsis of Previous Commission/Council/Committee Action(s):
On March 2, 1992, the Mayor and Common Council authorized the
defeasance of the City's outstanding Single Family Mortgage Revenue
Refunding Bonds, Series 1990A, and approved an Escrow Trust Agreement
relating to the defeasance.
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Recommended Motion(s) ---__-_---
�Mayor and Common Council)
MOTION: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AMENDMENT NO. 1 TO ESCROW
TRUST AGREEMENT IN CONNECTION WITH THE $18,840,000 CITY OF
SAN BERNARDINO, CALIFORNIA, SINGLE FAMILY MORTGAGE REVENUE
REFUNDING BONDS (GNMA MORTGAGE-BACKED SECURITIES) SERIES
1990A.
Administrator
Barbara J. Lindseth
---------- Acting Director
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Contact Person(s) : Tim Steinhaus/Barbara Lindseth
Phone: 5_ 0g1
Project Area(s): All
Ward(s) : All
Supporting Data Attached: Staff Report: Resolution; Amendment No. 1
FUNDING REQUIREMENTS: Amount: N/A
Source: N/A
- Budget-Authority: N/A
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Commission/Council Notes. -
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BJL:2042A ----------------------
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COMMISSION MEETING AGENDA
Meeting Date: 3/20/1995
Agenda Item Number: „�
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
STAFF REPORT
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Single Family Mortgage Revenue Refunding Bonds
Background:
In 1990, the City issued its $18,840,000 City of San Bernardino,
California, Single Family Mortgage Revenue Refunding Bonds (GNMA
Mortgage-Backed Securities) Series 1990A (the "Bonds") to provide for
the refunding of certain outstanding bonds in order to make funds
available for a home mortgage financing program (the "Program") .
There were no home mortgages initiated under the Program, and the Bonds
were defeased in 1992.
The bond proceeds were therefore placed in escrow in order to provide
for the payment of the Bonds at their respective maturity and sinking
fund redemption dates. Since the Bonds were escrowed to either their
maturity or sinking fund redemption dates, rather than to the first
available redemption date, the escrowed Bonds were sold and the City
was provided a one time payment of $556,436.10 for the purchase of the
escrowed Bonds.
Sabo & Green acted as Special Counsel to the City for the defeasance on
the Bonds. Sabo & Green was contacted by the agent for 81% of the
Bondholders requesting clarification by the City as to the terms of the
defeasance Escrow Trust Agreement (the "Escrow Agreement") by and
between the City and Bank of America National Trust and Savings
Association as successor escrow trustee to Security Pacific National
Bank.
Although implied in the Escrow Agreement, there is no special language
therein which states (i) that the Bonds are not subject to optional
redemption, and (ii) that the Bonds will be paid at maturity or on the
date they are subject to sinking fund redemption.
Since the requested modification involves a clarification rather than a
material alteration of the terms of the Escrow Agreement, Bondholder
consent is not required.
Recommendation:
Based upon review of the Escrow Agreement, the proposed modification
shall not affect the City or the Bonds and shall only provide further
clarification to the Bondholders. Thus, counsel and staff recommend
approval of the form motion.
Barbara Lindseth, Acting Director
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BJL:2042A COMMISSION MEETING AGENDA
Meeting Date: 3/20/1995
Agenda Item Number: —