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Home My WebLink AboutR07-Economic Development Agency . . . . . ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REOUEST FOR COMMISSION/COUNCIL ACTION From: TIMOTHY C. STEINHAUS Agency Administrator Date: March II, 1991 Subject: RESOLUTION FUNDING CORPORATION INTEREST STRIPS Synopsis of Previous Commission/Council/Committee Action: 09-25-89 Community Development Commission authorized the final form of documents in connection with certain financings. Recommended Motion: (COMMUNITY DEVELOPMENT COMMISSION) RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE RESTRUCTURING OF THAT CERTAIN ESCROW ACCOUNT AND REVISING EXHIBIT "B" TO THE ESCROW AGREEMENT. TIMOTHY C. STEINHA S, Agency Administrator Economic Development Agency Contact Person: Timothy C. Steinhaus Phone: 5081 Project Area: All Supporting Data Attached: Resolution Ward(s): All FUNDING REQUIREMENTS: Amount: NA Budget Authority: Source: Commission/Council Notes: 1407A 7 Agenda Item No: . . . . . ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Resolution Funding Corporation Interest Strips In September 1990, Resolution Number 5106 was adopted allowing for the refunding of the $34,765,000 Single Family Mortgage Revenue Bonds, 1979 Series A, and the $41,280,000 Single Family Mortgage Revenue Bonds, 1980 Series A, and authorizing the issuance of the $34,500,000 Taxable Collateralized Mortgage Bonds, Series 1989-A. At that time, the Commission also authorized the execution of the related Escrow Agreement between the Agency and Security Pacific National Bank (Trustee) establishing the escrow accounts. Recently, Standard and Poors Corporation and Moodys Investor Service have approved the usage of Resolution Funding Corporation Interest Strips (REFCO Strips) as eligible investments for escrows. SaVings will be created by substituting a new portfolio of REFCO Strips for the existing portfolio of open market securities in the unrestricted portion of the escrow account. The savings will be created by increasing the yield in the REFCO Strips over the current Treasury Strips and possibly increasing the efficiency due to the different maturity dates. The preliminary analysis indicates a savings of approximately $100,000. The attached Resolution will allow for the restructuring of the the escrow account and will revise Exhibit "B" to the Escrow Agreement to enable the Trustee to substitute REFCO Strips for open market securities. Staff recommends adoption of the attached Resolutions. T C. STEINHAUS, Agency Administrator Economic Development Agency COMMISSION MEETING Meeting Date: March 11, 1991 . . . MAR Iil5 '91 11'B3FV1 sa & GREDi . P.3 .810/0001/607/.. 0316/'1 2'10 RB80LTJ'l'I0Ir KO. USOLll'1'ION or 'l'H!: COIIIItJHITY DBVILOPJIEN'1' COJIII8SION or TBI CITY or IAN UDARDIHO, CAI.Il'OlUl'U, AUTllOItIZIHG '1'111 UI'l'RUCTDRINa or ~'1' CERTAIN UClItOW ACCOUJrr AJfI) UVISING IXIttBI'1' "8" TO !l'BB 88Cl1tOW Amlll..oQN'1' WIIBRJIAa, th. a.d.velopaen~ A9encr or the City of San Bernarcl1no, calitornia (the ..noy"), pr.viou.ly i..u~ i~. $34,765,000 Sin91. ruily Kortvage "v~u. 8on4., 117', seri.. A (the "1ll7. A9.nay Bondll") for the purpo.. of taoilita1anq and provi4inq oapi~al tor the acqui.ition of oa~ain aortga9. loane _4e to s-nOM and. roili.. of low anc1l104erate inClOlla to Purobu. .ingl. roUy bou.Ulg within the City of San larn&r4ino (the "City"); and WHDI:AS, the City previou.ly i..lled ita $41,280,000 S1nql. ruUy Mor1:9av. Itevenua Bon4a, 1"0 S.d.. A (th. "1980 Ci1:y BoneS.") tor the purpoaa of tacilitaUnv and provieSiftCl capital for th. aaquiaition of oertain aortgaga loaM !lad. to per.on. and f..ili.. ot low and IIOderat. inOOll8 to puroha.. .iftCll. tUlUy houe1nCjJ within the City; and 1IHJUU:A.S, the A9anoy i..lled it. $34,036,761 Taxable Collateralica4 XOr1:9av. Bonc!a, sari.. lla'-A (the "sari.. ltll-A Boncla") in orc!er to pay the principal, prai\l1l aneS tnt.rut ot the - 1 - l'W'IR l!l5 . 91 11 'll3'lM SAIlO & GREEN . . P.4 1980 City Bonda an4 to apply the t'Gain<lu of e\lob proceede to Ply e tIl. principal, praiua and intere.t on tile lS1'7t "Veney 80114., an4 n-ll', on or ebout 8apt:al)er 1, Itlt, the City and the Agency enter8d into an .-crow avreeaent with SeCllrlty Pacific Wational Bank, ae ..crow ag.nt (the "bcrow Agreeaent"), and P.BU, the "=ow Ag'raaent provtda4 that an ucrow account WCIl14 be utabl18hed tor tile exollld_ benefit of tIl. holdu. ot the 19711 Agency BoneSe in order to facil1tat. the reeSapUon of ..id lt7t Avancy BoneSe, and another eecrow account V0II1eS be ..tabUah8d tor the excllleive benefit of the holder. Of tha 1,.0 city BoneS. for the .... purpoee (collectiVely hareinafter l"efur.cl to a. the "J:aorow AoooIlDU"), and e WHDDS, in aooordance with section 2 ot the Bacrow Avremaant, 1IIXhibit "B" to the I.crow AvrMllent provide. a Ibt of teeteral aeouriUe. in Which the Bacrow Avent 1. in.tnet8d to inveet IIOney. in orcler to tIlDeS the repayJl8nt ob119aUona of the 1879 Avancy Bond. and 1880 City Bonde, an4 1fHDBA8, the Eacrow Agr....nt provid.. that upon the diraotion of either the Agency or the City, tile "crow Account llAy be X'..truct.ur8d, provided that .uah action 1a aupportad by an opinion ot Bond COWUlel to the effect that .Ilah tranaaotion .hall not adver.ely effect the Q4lIIptlon trOll federal .inooae tax ot .inter..t on the It71l Ag.ncy BoII4. or 1'.0 City Bonda, nor .dver.ely e - 2 - I'R< 05 '91 11:04AM . & GREEN . P.s effeat the .tatu. ot ~e !Iond. a. M1nq deued no lcmver e out.i:an41n9 Under the lloncl re.oluUon "~li.hin'l tho.e llond., and 1fIIDIAS, the "crow A9reaent turtber require. that any .uOl1 .0eUUoation. M .upport-s by a I"8pOrt ot an independent certified pu!llio aooountin9 lira Wbiah aIlall M ddlvv-s to tha ..orow AlJent verlfY1119 the .Ufficienoy of aertaln obl1gaUona ot or obl1'laUona 9UerantMCl by the United S1:atea of AIIerice in the propoaed re.tr\laturect ..crow depoeit fUnd (the wllIOZ'ow Depodt: I'uftdW) to pay the entire prinoipal, red~lon praiwa and inter..t on the 11171 AlJenoy Bonda anel 1'80 City Bond. at their aatudtia. and upon their redUlpt;1on; and e WIIBR.IAS, th. AcJenoy and th. City now dbire to dir.ot the :leerow AlJent to r..tr\lotura the ..crow AoooWlt.. NOW, TH!RIPOJtI, TIll COIIMtJIfITY DIYBU)PMBNT COICIIISSION ACTING OK IBRALP 01' THB JtBDBVBLOPIID'l' AGIIHCY 01' TRB CITY OF 8M IIlUrARDINO 0018 B!RDY JtISOLVB, DJr:rIRllINI Am') OJmD AS FOLLOWS: Saction ~. The lleOital. bera1n~ are true and correct and era iDcorporated berain by thi. ref.rence. e Sem;ioft 2. The coami..10n hereby autheria.. th. raa1:ruoturinq of th. -crow aocounu in &aClOl'danoa with the baitBl. hereot and authoril.. th. .w.1:1tutioft in the ..crow Aocount of .\lob Other Ob119at1on. of or obl1gation. paranteed by the united state. ot "Aaerloa cr ob119ationa of any other a9aney or - 3 - I'W'IR 05 '91 l1'04AM SABO & GREEN . P.6 . lnRt'WIantality tIlereof Wblch "ill allow tor tile oontinued . defe..lUl~ Of 1:be 1I7ll Agency Bondi! and tile 11.0 City Bonda .. aball be deaonatrated by t:ha oontimae4 ratll\9 bein, ..intained on the l117ll Avengy Bonch and tIla lll'O city Bonde. .eMion :I. 'tha raatruoturinq of tile ..crow Aooount. by tIla AfenaY' 1. In OOIIpUanca with tile requir...nt. of Seation II of tile Bacrow Aqr"'ent atell a. of leptabe' 1, 11". S.atie" ,. 'the CoIIIIJ...ion bullby' appro.,.. the .uJ;)atitution of JlXhlblt ItB" to the "OZ'OW Aqre_ent with. revi..4 JlXhibit ".", . copy of "blch 1. attaClbecS blll'ato anet lnCOzoporatect herein by tIli. raterence. . S.Mi.... 5. TIll. bIlolutlon lIhall ~e etrect troa ancS after the data of ita pa..aqe and adoption. . - .. - e e e !'FIR "'" -:>L 11 'e5AM SAIlO USox.lrOH or TIm COIPMII'l'Y DBVBLO~ COIIIIISSIOH OF TO CI'l'Y 01' 8AN BDMARDIlfO, CAL.IJ'OlUfIA, Atl'l'BORIIIJfQ DB USTRUC':UIU:KQ OF '1'BM' CIaTAIW Iscaow ACC01:JRT AKD RlVISIOJfS '1'0 n-.I'1' .B" '1'0 TD I_CROW AGllIIHBN'l'. P.? I JlDBBy CBR'lIFY tlutt tha torqo1n9 "~lu'tion va. duly adopt~ by the ~ity Devalopunt COb1uion of the Citr of San BlImardino at a ..etinCZ thareOf, held on the day of , 111111, by the tOl1OWincz vote, to v1t. ~ft.-i..iftn ...karat . Am. DXI ........rN B8TIlADA - - UILLlC FLORIS - KAODSt.IY - - JaNOR - - POPB-LODLAM - IIILLBR - - - - day of Sacratazy Tha tor~oint Z'e.olution i. hU'aby approvalS 'Chi. , 1111. Approved .. to torm and l~al content. w. a. BOIClOllJ), Cball'11Ul ~lllli1:y DavalopMllt "--i..ion of tha City of Ian hrnarcSino By: Aganoy eoun.al __\DOC\olCI7 - IS - e !e e I'I'lR as '91 11'05AM SABO & GREEN . STATIOI' CALIPORlfU ) COtnrl'Y or SAN URlfAllODlO) aa CITY 01' lIAR IIIRlfARDINO ) I, &.cll"etuy or the C~1ty DevelopJMmt CoD18a1on of the C1qo ot Ian hrnu'diDo, DO amumY CBaTIPY that the for8IJoilllr and attaclHld copy ot Caaunity Developalant eo..l..ion Of the City ot Ian 8~ino "'olution 11'0. ia a tUll, tru. and OOZTeOt oopy ot that now Oft fUa in b,1. oftia. P.8 . IN IftTN188 WHERIOI', :I: have hereunto .at ay hancl and aftixecl t:ha official ...1 of the ~ity Dev.lapunt Coambaion of the city of 8an Bernarclino thia day ot , 19t1. ..cretary Of the ~ty Devel~t --fHion of the city of 8an lerftazoclino - II -