HomeMy WebLinkAboutRS06-Redevelopment Agency
000 0
REDl!VBI.OPIIBNT AGENCY.MQUBST FOR COMMISSION/COUNCIL ACTION
0":
Dept:
GLENDA SAUL
Subject:
AMENDMENT TO ORDINANCE NO. 3815
CONCERNING BOND TRUSTEES
Redevelopment Agency
Dm: JULY 31, 1986
Synopsis of Previous Commiaion/CouncillCtion:
In June, 1985, the Mayor and Common Council issued multifamily mortgage revenue
bonds in the amount $9,350,000 (Series 1985) for Fredericks Development (Pumalo
Palms).
On July 2l, 1986, the Mayor and Common Council heard the first reading of the
amendment to Ordinance No. 3815 and requested an analysis of the advantages snd
disadvantages of out-of-state trustees for municipal financings.
RlICOIIImlnded motion:
(MAYOR AND COMMON COUNCIL)
4t:) SECOND READING
ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING ORDINANCE NO. 3815 RELATING TO
THE FINANCING OF PROJECTS FOR THE ENCOURAGING OF INCREASED EMPLOYMENT WITHIN
THE CITY.
/~/k -Jul"
Signature
Contact person: GLENDA SAUL/KEN HENDERSON
Supporting dlItuttached: YES/STAFF REPORT
FUNDING REQUIREMENTS:
Amount: $ N/A
Phone: 383-5081
Ward: 1-7
Project: ALL
No edverse Impact on City:
Oil Notas:
Da~:
AUGUST 4, 1986
A_nO<. I..~ "'n !?S-IA
I
c~ OF SAN BERNARrfilfO - REQUaT FOR COUNCIL AC~ON
o
o
o
75-0264
STAFF REPORT
In June, 1986, the Mayor and Common Council authorized the issuance of
multifamily mortgage revenue bonds in the amount of $9,350,000 (series 1985)
for Fredericks Development (Paalo Palms). Ordinance No. 3815 requires trust
companies or banks haVing powers of a trust company be within the State of
California. This particular requirement has caused Fredericka a number
problems inasmuch as the original trustee was an out-of-state company.
To temporarily remedy the situation, an in-state company has been operating as
interim trustee for the Fumalo Palms project until such time as the Mayor and
COlIlIIlon Council considered an amendment to Ordinance No. 3815. The amendment
would specifically allow trust companies or banks having powers of a trust
company either within or outside the State of California to act as a trustee
for the purposes of municipal financings.
On July 21, 1986, the Mayor and COlIlIIlon Council heard the first reading of the
amendment to Ordinance No. 3815 and requested an analysis of the advantages
and disadvantages of out-of-state trustees for municipal financings.
Attached to this staff report is an analysis from Agency Bond Counsel Timothy
J. Sabo. Staff concurs with the analysis, conclusions and reCOlDlDendatioDS.
Staff recolDIDends adoption of the amendment to Ordinance No. 3815 which would
authorize out-of-state trustees for the purpose of municipal financings.
l269L
o
o
9
10
11
12
13
P 14
15
16
17
18
19
o
o
o
o
1
ORDINANCE NO.
2
ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING ORDINANCE NO. 3815
3 RELATING TO THE FINANCING OF PROJECTS FOR THE ENCOURAGING OF INCREASED
EMPLOYMENT WITHIN TIlE CITY.
4
5
6
THE MAYOR AND COMMON COUNCIL OF THE CITY SAN BE1lNARDINO DO ORDAIN AS
FOU.OWS:
SECTION 1. Amendment. The first sentence of Section 15 of Ordinance
7
No. 3815 shall be _ended to read as follows:
8
In the discretion of the City, any BOnds issued under the
provisions of this Ordinance may be secured by indenture
provisions in the Resolution of Issuance by and between the City
and a corporate trustee or trustees, which may be any trust
company or bank having tbe powers of a trust company within or
outside of the State and the Resolution of Issuance I18Y contain
such provisions which are customarily found in indentures,
including, without limitation, the provisions hereinafter set
forth.
SectiOn 2. Effective Date and Publication. Within fifteen (15) days
after its passage, the City Clerk shall cause this Ordinance to be published
at least Once in a newspaper of general circulation published and circulated
in the City of San Bernardino. This Ordinance shall take effect thirty (30)
days following the date of adoption hereof.
I HEREBY CERTIFY that the foregoing Ordinance was duly adopted by the
20 Mayor and Common Council of the City of San Bernardino at a regular meeting
21
22
23
24
thereof, held on the
day of
, 1986, by the following vote,
to wit:
AYES:
Council Members
25
26
27
28
NAYS:
ABSENT:
o
o
]
2
3
4
ABSTAIN:
41
l
_tl.
o
o
o
City Clerk
5 of
6
The foregoing Ordinance is hereby approved this
. 1986.
day
7
8 Approved as to form:
Mayor of the City of
San Bernardino
9
10 City Attorney
11 l267L
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Q
o
ij
i
_ l
~
w
--
P", '
o
Q SABO & DEITSCH n
PIIOI'!S$IONAL COIlPOllAT~
ATTORNEyS AT I.J/N
SUITS lOC
... TOl'AIlGA CANYOI< l!Ou.......c
WOODLAND HILLS. CALI_MIA 81387
....,. ..
440 WQT llOUIIT 'T!leU
IAN ..~o. C4IJFOR/jIAU401
\TIt) 114_
\TItlIlHa02
o
1Il1) 7OCoO,H
o "ElECOPIER: (8181 'IlM-4721
, '-
~
\.....
o
MEMOAANDllM
To: The Honorable Mayor and Comon Council of the City of
San Bernardino
FrOm:
timothy J .Sabo
Jul.)' 25. 1986
Dat.:
ae;
PropD..d Ordinance Amendina Ordinance No. 3815
.
You have requelted advice concemillf tbe rea. one for &lIItndina
Ordinance No. 3815 of the City of San lernarcUno (the "Ordinance") for
the purpo.e of pel'lllittillf the appointment of Dut-of-etate trutte.. for
the ieeuance of bonde and .imilar municipal financtDaa. ~ addition. you
bavt requllted advice conceminl the beneUt. and detl'i.Dtal effecta of
_Dd1na the OrdiDanc. for thit purpose. For the raasons ..t forth
hereinafter, it is our r'COlllllendation that the COIllllOD Council approve tbe
amendment to Ordinance No, 3815 to authorize the appointment of
out-of-state trustee., in addition to in-Itate truste...
Section 15 of tbe Ordill4Dce currently provides that afty bond.
l..uea pul'luant to tbe Ordinance "'1 De .ecurea DY indenture provielons
in a Re.olution of h.uance by and between the City and a eorporate
trustee or trustee.. wUch ...y be any trust company or bank havillf tbe
power. of . tru.t company within the State. On July 21. 1986. the Common
CouneU con4ucted tb. Hr.t rea4inl of a propo..4 Ordinanc. pUrJuant to
wbich Ordinance No. 3815 would be tIIlend.d to plmit. in addition to
in-.t.te tru.t.... . corporate tru.t.. which lilt)' b. a tru.t company or
bank havin, tb. power. of a tru.t compeny o~t.lde of Californi. to .ct a.
. trust.. with nlard to bond. h'lIed puuUAnt to the Ordinance.
In the fiut in.tance. varioua .t.tutory provhions a~thoridnl
the i..uance of bond. clearly permit a bank or tru.t company from aither
within or ollt.id. the St.te of California to act a. trustee. !!!. e.,..
Cove~nt Code S.ction P1504 and Health and S.hty Cade Section 52033.
In f.ct. appointlllnts of both in-atate .nd out-of-state trWlt... were
cl.arly contemplated by tbe drafteu of tb. variou. state reveDue bond
.tatutory provi.ion..
.
-
()-
O.
\...
C)
\".;
o
-
-
-
..LJ..
-
o
o
~ -
.
'ale 2
In o~de~ to a..ure the proper performance of either aD in-.tate
or out-of-.tate tn<e., an illuinl alene, bat the authodtJ to inc1w1e
in the re.alution authori.inl the i..uanc. of bond. or. alternativel" in
an iDdenture aecurina the boDd b.u., vadolll covenanta outUninl the
authority of the tn<... Alone with the permitted covenantl whicb ...,
b. impo..d upon out-of-.tate truatee., in particular, are tho.. a.t forth
in Califomia atatutory prov1lion. which ululat. tn< activid.. of
foreirn eorporatioDI. St., e.I.. C.1iforni. Finanei.1 Cod. Seetion 1700,
!! ..q.
In practical terlU. there are n\lllltrou. ben.UtI in permittina
the appoinUlent of an out-of-nat. truate.. Oft.n. auch tn<ee. are
located in proximity to r.l.vant financial market., th.rehy r..ultine in
lIOn COlDp.Utive rat.. for thdr .erv1c... Alana with providina
cOlIIpeUtive rat.., the, CaD be .peciaU.t. in the vadalll t,pe. af bond
i..u.. contemplate.. In addition, the location of aD out-of-.tate
t~uatee _, be helpful in faclHtatine bond tran..etion. inclwUna. but
Dot lWted to, variolll abUlaUon. requir.d to b. performed b, the
tn<ee follow1nl i..uance of th. bond.. ror exuple, a N.w York truate.
.y be fllDiUe~ with local bankinl hour. and ., bave ew:h rell.llar
buain.1I hoal'l lIO.t coDducive to bond illlll-relat.d tran..ction.
oceu~dDl in N.w York. A tn.t.. ..y I1mllar1, be IIOre readily able to
Plrfom the pa,in, a,ent aDd variable rate funct10u of a tn<ee
depend in, upon ita location. A. a further elWllpl.. in tel'llUl af .ny
n.c....r' tran.aedon. rel.ted to . bond b.ue. to be perfonlld with
r.sard to the Federal ae.erve Jank, the F.deral a..erve time .,.tem 11
Ea.cem t11111 and the appointment of an oat-of-atata t.n&Itee locat.d in
the ea.t _, provide ee~tain advaDtele..
In lilht of the foreloinl. we recommend that Ordinance No. 3815
be _ded in order to pemit the City to bave ,nateI' flexibiUty :l.n
appo:l.ntilll tn<.e. for bone! illue. by autbodli1ll the appolntllltftt of
botb in-atate aDd out-of-.tat. tn<e...
I abaU remain avanable at your requllt to provide fUt-thn
a..btance cone.min, tbb _tter, and .ball plaD to .ttend tbe CO_Ii
Council IIII.Unl on AUlu.t It, 19B6 in order to aD.wer any further
qu"t:l.on. which you may have.
TJS:nb
11B06S