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HomeMy WebLinkAboutS07-Community Development 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 -2- 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 -3-