HomeMy WebLinkAbout11- City Administrator CITY OF SAN BER. ARDINO - REQUEST 311 COUNCIL ACTION
'Prom: Fred Wilson Subject: Resolution authorizing approval of a
letter agreement with Muni Financial
Dept: City Administrator Services for 1915 Act Assessment and
Community Facilities District Administra-
Date: 6-11-93 tive Services
Synopsis of Previous Council action:
Recommended motion: Adopt Resolution
Signature
Contact person: Fred Wilson Phone: 5122
Supporting data attached: Ward:
FUNDING REQUIREMENTS: Amount:
Source: (Acct. No.)
(Acct. Description)
Finance:
Council Notes:
CITY OF SAN BERN....RDINO - REQUEST F_R COUNCIL ACTION
STAFF REPORT
It is recommended that the Mayor and Council authorize the attached
agreement with Muni Financial Services (MFS) to perform assessment
district services. The City currently has an agreement with MFS to
administer assessment districts; this new agreement will allow MFS
to continue their current services and to provide the additional
service of initiating foreclosure proceedings on delinquent
parcels. To accomplish this, MFS will be authorized to appoint a
trustee to collect delinquent assessments and taxes.
The City has already . formed assessment districts pursuant to
the Municipal Improvement Act of 1913, issued bonds pursuant to the
Improvement Bond Act of 1915, and levied special assessments on
property within these assessment districts as described in
Resolutions of Intention. The City has also formed a Community
Facilities District pursuant to the Mello-Roos Community Facilities
Act of 1982 and has levied special taxes on property within this
District as described in a Resolution of Intention.
By establishing the districts, the City accepts the responsibility
to levy and collect assessments and special taxes each year in
order to meet debt service payments. Pursuant to the California
Government Code, Section 53356. 1 and the California Streets and
Highways Code, Section 8834, a trustee for the bondholders may be
appointed to assist with the collection of delinquent assessments.
Currently, MFS provides 1915 Act Assessment District and Community
Facilities District administration to the City. MFS specializes in
this field and is the only consulting firm of its kind that
provides complete administrative services including federal
arbitrage rebate calculations, assessment apportionment,
delinquency management and judicial foreclosure services. By
authorizing a trustee through MFS, the City will have more leverage
in collecting late payments.
The services provided through the agreement with MFS will not
impact the General Fund. Fees for all services will be recovered
through the annual levy process for districtwide benefits.
Delinquency management, assessment apportionment and other costs
associated with a specific parcels) will be reimbursed by the
individual property owner(s) .
75-0264
W�
1 RESOLUTION NO.
2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING APPROVAL
OF A LETTER AGREEMENT WITH MUNI FINANCIAL SERVICES (MFS) FOR 1915
3 ACT ASSESSMENT DISTRICT AND COMMUNITY FACILITIES DISTRICT
ADMINISTRATION AND APPOINTMENT OF A TRUSTEE FOR THE BONDHOLDERS
4 RELATIVE TO THE COLLECTION OF DELINQUENT ASSESSMENT TAXES.
5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
6 WHEREAS, the Mayor and Common Council of the City of San
7 Bernardino, pursuant to the Improvement Bond Act of 1915 (Division
8
10 of the Streets and Highways Code of the State of California) has
9 levied special assessments upon lands within the following
10 Assessment Districts: 5861, 961R, 977A, 977B, 985, 987 and 1003 ,
11 which are described in Resolutions of Intention adopted for said
12 improvements, (hereinafter "ADs") ; and
13 WHEREAS, said proceedings provide for the issuance of bonds
14 pursuant to the Improvement Bond Act of 1915 (Division 10 of the
15 Streets and Highways Code of the State of California) , and said
16 bonds were previously issued; and,
17 WHEREAS, the Mayor and Common Council of the City of San
18 Bernardino formed a Community Facilities District pursuant to the
19 terms and provisions of the Mello Roos Community Facilities Act of
20 1982 , (Division 2 .5, Part 1, Division 2 , Title 5 of the Streets and
21 Government Code of the State of California) and has levied special
22 taxes upon lands within the Community Facilities District No. 995
23 described in a Resolution of Intention adopted for said
24 improvements, (hereinafter "CFD") ; and,
25 WHEREAS, said proceedings provide for the issuance of bonds
26 pursuant to the Mello Roos Community Facilities Act of 1982, and
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said bonds were previously issued; and,
28 / / / /
1 WHEREAS, at this time the Mayor and Common Council of the Cit
2 of San Bernardino is desirous to set forth all formal terms an
3 conditions relating to the administration of said ADs and CFD an
4 the appointment of a Trustee for the bondholders relative to the
5 collection of delinquent assessments and taxes; and,
6 WHEREAS, there has been presented for approval a letter
7 agreement setting forth formal terms and conditions relating to the
8 such administration services and appointment of a Trustee of the
9 bondholders relative to the collection of delinquent assessment
10 and taxes;
11 NOW, THEREFORE, BE IT RESOLVED that the Mayor and Common
12 Council of the City of San Bernardino does hereby resolve as
13 follows:
14 Section 1. That the above recitals are all true an
15 correct.
16 Section 2 . That the letter agreement is hereby approved
17 substantially in the form presented herein, is to be dated the date
18 hereof, and is subject to modifications as necessary and as
19 approved by the Director of Finance.
20 Section 3 . The authorization to execute the above
21 referenced agreement is rescinded if the parties to the agreement
22 fail to execute it within sixty (60) days of the passage of this
23 resolution.
24 I HEREBY CERTIFY that the foregoing resolution was duly
25 adopted by the Mayor and Common Council of the City of San
26 Bernardino at a meeting thereof, held on the day
27 of 1993 , by the following vote, to wit:
28
-2-
xesoiution or the city of Jan bernaraino autnorizing approval of a 1cLLe1
agreement with ini Financial Services (MFS) for 1915 Act Assessment District
and Community _,:ilities District Administratio. nd appointment of a trustee
for the bondholders relative to the collection of delinquent assessment taxes.
1 Councilmembers AYES NAYS ABSTAIN ABSENT
2 NEGRETE
3 CURLIN
4 HERNANDEZ
5 OBERHELMAN
6 OFFICE VACANT
7 POPE-LUDLAM
8 MILLER
9
10 City Clerk
11
The foregoing resolution is hereby approved this day of
12 1993 .
13 Tom Mindr, Mayor
14 City of San Bernardino
15 Approved as to form
and legal content:
16 JAMES F. PENMAN
17 City torney
n
18 By:
19
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01-to.-fill O
MFS
Muni Financial Services,Inc.
CORPORATE OFFICE
28765 Single Oak Drive,Second Floor
Temecula,CA 92590-3661
(909)699-3990 FAX(909)699-.3460
NORTHERN REGION
3727 Buchanan.Suite 202
San Francisco.CA 94123-1779
(415)441-3550 FAX(415)441-1401
April 19, 1993
Ms. Barbara Pachon
Finance Director
City of San Bernardino
300 North D Street
San Bernardino, CA 92418
RE: AGREEMENT TO PROVIDE COMPREHENSIVE 1915 ACT ASSESSMENT AND
COMMUNITY FACILITIES DISTRICT ADMINISTRATION SERVICES
Dear Ms. Pachon:
Muni Financial Services, Inc. (MFS) is pleased to submit this Letter Agreement to
provide comprehensive 1915 Act Assessment District and Community Facilities District
Administration, Arbitrage Rebate consulting and related services to the City of San
Bernardino (Agency).
SCOPE OF SERVICES
A. District Administration Services
1. MFS will prepare a comprehensive Annual Levy Report. This Report will
identify all Agency administrative costs and fees recoverable through the
annual levy. MFS will also review fund balances to identify any surplus amounts
to be used as specified in the bond documents.
2. MFS will provide levy installment information for each parcel, formatted in the
required configuration on 9-track magnetic tape or other media, to the County
Auditor-Controller's Office for placement on the property tax roll.
3. MFS will research and, if possible, resubmit installment amounts that are
rejected by the County Auditor-Controller's Office. Any installment that cannot
be collected on the County property tax roll will be invoiced directly to the
property owner of record on behalf of the Agenc,,.
■ Leaders in Public Finance Administration
MFS
City of San Bernardino
CFD and Assessment District Administration Agreement
Page 2
4. MFS will provide a toll free number to field inquiries from Agency staff, property
owners, and other interested parties regarding annual installments and related
proceedings.
5. MFS will provide lien pre-payment quotes (if applicable) for all interested parties
upon request. Fees for this service are paid by the requesting party. MFS will
obtain recordation document numbers for prepaid liens and coordinate the
Removal or Release of Lien.
6. MFS will perform all required bond call spreads and coordinate the early
redemption of outstanding bonds.
7. MFS will monitor delinquent installment payments in January and May of each
year and provide reports identifying all delinquent parcels and the
corresponding delinquent installment amounts to the Agency.
8. MFS will provide an annual report (if applicable to the bond issue) to the
California Debt Advisory Commission (CDAC) by October 30 of each year as
required by the California Government Code, Section 53359.5 (b).
9. MFS will prepare disclosure forms as required by the California Government
Code, Sections 53340.2 (b) and 53341.5.
The following services are available to compliment the administration consulting services
described above and may be provided at the discretion of the Finance Director.
B. Delinquency and Judicial Foreclosure Services
1. MFS will monitor outstanding delinquencies and submit periodic reports to the
Agency. Reports will include aging and status of all delinquent installments,
including parcels undergoing judicial foreclosure or other proceedings.
2. MFS will send one reminder letter to each delinquent property owner in an
attempt to cure the delinquency. If the delinquency has not been cured within
30 days of receipt of the initial notice, MFS will accept appointment as trustee
for the bondholders pursuant to California Government Code, Section 53356.1
and California Streets and Highways Code, Section 8830.
3. MFS will effect the removal of the delinquent installment(s) from the tax roll and
send a final letter to the property owner demanding immediate payment.
MFS
City of San Bernardino
CFD and Assessment District Administration Agreement
Page 3
4. MFS will attempt to negotiate an acceptable repayment schedule to cure the
delinquency and avoid initiation of judicial foreclosure. MFS will not retain any
payment received from a delinquent property holder, but will transfer all such
proceeds directly to the Agency.
5. MFS will retain legal counsel and initiate judicial foreclosure for all assigned
delinquencies as Trustee for the bond holders in accordance with bond
covenants.
C. Assessment Apportionment Services
1. MFS will assist the Agency in the establishment of a system to identify all
required assessment apportionments in accordance with Division 10, Part 10
and 10.5 of the Califomia Streets and Highways Code, and the Subdivision
Map Act, Section 66493 (d).
2. MFS will provide the Agency with appropriate assessment apportionment
application forms.
3. MFS will prepare an Amended Assessment Report for the Agency. This Report
will re-spread the assessment to the new parcels and include an Amended
Assessment Diagram with the Notice of Amended Assessment.
4. MFS will prepare the Letter and Notice to Bondholder required by theCalifomia
Streets and Highways Code.
5. MFS will be available to represent the Agency to affected property owners.
D. Arbitrage Rebate Calculations
1. MFS will prepare a comprehensive Arbitrage Rebate Calculation Report
containing all pertainent and required reporting information. MFS will be
available to present the findings and recommendations of the Report and to
review our methodology with Agency staff as needed.
2. MFS is able to provide a legal opinion from the law firm of O'Melveny & Myers
for an estimated fee of $500. This opinion may be relied upon in the same
manner as an opinion of bond counsel and provides an additional protection for
the representations of the issuer pertaining to arbitrage.
left
1VI FS W 0
City of San Bernardino
CFD and Assessment District Administration Agreement
Page 4
3. In the event of an audit, a member of our staff will be available for interpretation
of the rebate liability computations. We will provide all documents and
supporting materials which were used to prepare the computations. Our fees for
this service would be charged at the then current hourly rate.
CHARGES FOR SERVICES
The current number of parcels and districts shown below are covered under this
contract. If the actual number varies substantially it may cause a change in our fee
structure. All hourly rates, fees and expense rates are subject to increase, not-to-
exceed the Consumer Price Index within the applicable area.
A. District Administration Services
Annual Base Administration Fee for combined Districts: $26,300.00
Annual Per Parcel Fee for 1915 Act Assessment Districts: 15.00
Districts Parcels Annual Base Fee
A.D. 5861 3 $2,500
A.D. 961 R 71 2,500
A.D. 977A 277 2,500
A.D. 9778 185 2,500
A.D. 985 16 2,500
A.D. 987 652 2,500
A.D. 1003 101 2,500
CFD No. 995 298 8,800
MFS
City of San Bernardino
CFD and Assessment District Administration Agreement
Page 5
The following services are available to compliment the administration consulting services
described above and may be provided at the discretion of the Finance Director.
B. Delinquency and Judicial Foreclosure Services
(Paid by delinquent property owner)
Delinquency Reminder Letter $30.00
Delinquency Demand Letter 50.00
Effect Removal from Tax Roll 70.00
All Subsequent Foreclosure Services Hourly Rate
C. Assessment Apportionment Services
(Paid for by property owner)
Apportionment and Amended Assessment Diagram:
Parcel Map (4 parcels or less)* $950
Tract / Subdivision Map (5 parcels or more)* $1,950 + $25 per parcel
*per Chapter 2, Section 66426 of the Subdivision Map Act
D. Arbitrage Rebate Calculations
Initial Report Per Bond Issue: $2,000
Updates Per Bond Issue (less than 6 issues): 1,500
Updates Per Bond Issue (6 issues or more): 1,250
Additional fees may be charged for identification and separation of commingled
funds, allocation of investment earnings, analysis of transferred proceeds
associated with advanced refundings, and recalculation of bond yield as
required for variable rate issues. These services will be provided at our then
current hourly consulting rates.
MFS
City of San Bernardino
CFD and Assessment District Administration Agreement
Page 6
E. Additional Services
Additional services may be authorized by the Agency and will be billed at our
then current hourly consulting rates. Our current hourly rates are listed below.
Directors/Attorneys $150.00
Senior Associates 95.00
Associates/Paralegals 65.00
Support Staff 35.00
TERM OF AGREEMENT
The term of this Agreement is continuous, not to exceed thirty (30) years, or until the
districts are dissolved pursuant to the California Government Code and Section 8650.1
of the California Streets and Highways Code.
This service may be abandoned at any time by the City of San Bernardino. Muni
Financial Services, Inc. may cancel its obligation under this Agreement by providing
thirty days (30) notice in writing to the Agency.
AUTHORIZATION
By executing this Agreement, the City of San Bernardino authorizes the appointment of
MFS as the trustee for the bondholders with full standing to commence all judicial
foreclosure proceedings contemplated by this Agreement pursuant to the California
Government Code, Section 53356.1 and the California Streets and Highways Code,
Section 8834. MFS will, as instructed by the Agency, proceed to use its best efforts to
collect all current and future delinquent assessment installments as provided in the
preceding scope of services.
PAYMENT
MFS services for assessment district administration will be invoiced monthly in twelve
equal installments. This payment schedule will become effective July 1, 1993. Payment
for Assessment Apportionment Services, Arbitrage Rebate Calculations and any other
special projects will be invoiced monthly as they occur.
`. 0
-_MFS
City of San Bernardino
CFD and Assessment District Administration Agreement
Page 7
Attorney fees resulting from foreclosure action shall be reimbursed as a cost item and
shall be due and payable upon the earlier occurrence of (a) entry of judgment in the
action, (b) settlement of the action, or (c) redemption of the delinquency.
MFS will be reimbursed for customary out-of-pocket expenses. These expenses would
apply to, but are not limited to: Assessor parcel maps and data, postage, travel
expenses, meals, telephone expenses, county and legal fees and costs. Any out-of-
pocket expenses will be itemized on monthly invoices. Payment for services rendered,
expenses and costs pursuant to this Agreement shall be made within thirty (30) days of
the submittal of an MFS invoice.
AMENDMENT OF SCOPE
This Agreement may be amended from time-to-time by the Finance Director, or
designee, as may be required or advisable due to changes in Federal or State Law, or to
provide these same services to additional assessment districts. All other amendments
must be in writing and approved by MFS and the legislative body of the City of San
Bernardino.
ABANDONMENT AND ARBITRATION
In the event that this project is abandoned prior to its completion, the Agency will pay
MFS a fee equal to the reasonable value of services provided. Reasonable value shall
be determined based on our then current hourly consulting rates. In the event of
litigation or arbitration between the parties over the terms or performance of this
Agreement, the prevailing party shall be entitled to reasonable attorney's fees and costs.
ACCEPTED BY:
MUNI F ERVICES, INC. CITY OF SAN BERNARDINO
l
Harry Clark Name
Managing Director
Title
Approved as to form
and legal content:
JAMES F. PENMAN Date
City Attorney