HomeMy WebLinkAboutR-38 EDAECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Maggie Pacheco, Director SUBJECT: CALIFORNIA STATEWIDE
Housing & Community Development COMMUNITIES DEVELOPMENT
AUTHORITY REQUEST TO ISSUE
DATE: August 26, 1999 CERTIFICATES OF PARTICIPATION
ON BEHALF OF PACIFIC
SUPPORTED LIVING SERVICES. INC.
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Synopsis of Previous Commission /Council /Committee Action(s):
On June 1, 1988, the City of San Bernardino executed a Joint Powers Agreement by and between the City and the
California Statewide Communities Development Authority (CSCDA) for the purpose of facilitating the issuance of
revenue bonds for multifamily housing and other economic development activities.
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Recommended Motion(s):
OPEN PUBLIC HEARING
CLOSE PUBLIC HEARING
(Mayor and Common Council)
MOTION: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO APPROVING THE ISSUANCE OF A CERTIFICATE OF PARTICIPATION
EVIDENCING PROPORTIONATE INTEREST OF THE HOLDERS THEREOF IN AN
INSTALLMENT PURCHASE FINANCING TO BE UNDERTAKEN BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY TO BENEFIT PACIFIC
SUPPORTED LIVING SERVICE, INC.
Contact Person(s): Maggie Pacheco /Musibau Arogundade Phone: 5081
Project Area(s) Ward(s):
Supporting Data Attached: ❑x Staff Report 0 Resolution(s) ❑ Agreement(s) /Contract(s) ❑ Map(s) ❑ Letter/Memo
FUNDING REQUIREMENTS Amount: $ N/A Source:
1 Budget Authority:
SIGNATURE:
ry Va sdel, Exi5cuTive Pffector Maggi checo, Director
Econpffiic Development A ency Housing & Community Development
Commission /Council Notes:
MP:MA:lag:99 -09 -07 Pacific COMMISSION MEETING AGENDA
Meeting Date: 09/07/1999
T Agenda Item Number: 93ff
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
California Statewide Communities Development Authority Request to Issue
Certificates of Participation on Behalf of Pacific Supported Living Services. Inc.
The California Statewide Communities Development Authority (the "Authority ") is authorized
pursuant to California Government Code and the terms of an Amended and Restated Joint
Exercise of Powers Agreement, dated June 1, 1988, Section 9, by and between the City of San
Bernardino and the Authority (the "Agreement ") (see attached Agreement), to issue bonds,
notes, certificates of participation, or other evidences of indebtedness in order to promote
economic development, including the provision and maintenance of housing. Presently, over 200
California cities and counties are program participants under this joint powers arrangement,
including the City of San Bernardino.
In order for the Authority to issue bonds or other financing instruments, the Authority must be
authorized by the governing body (Mayor and Common Council) of the jurisdiction in which the
Project is located in. Accordingly, the Authority has requested (see attached letter) that the City
conduct the public hearing, required by federal law, to allow the Authority to issue Certificates
of Participation in the principal amount, not to exceed $12 million, on behalf of Pacific
Supported Living Services, Inc. a Georgia non - profit corporation (the "Borrower ") to acquire 23
group homes servicing developmentally disabled adults ( "Intermediate Care Facilities ") in
various cities in the County of San Bernardino and the City of Oxnard. These Intermediate Care
Facilities are located in Alta Loma, Rancho Cucamonga, Highland, Rialto, San Bernardino and
Oxnard. Four (4) of the Facilities are located in the City of San Bernardino: 3465 Darren Place,
2661 Mercedes Avenue, 2917 Road Runner Court and 2107 Jane Street. They will be owned
and operated by Pacific Supported Living Services, Inc. They are also currently occupied by
program participants. The Borrower appears to have extensive background in the operation and
management of Intermediate Care Facilities for the mentally disabled and presently operates
eleven other facilities in California and several others throughout the country. The Borrower
intends to invest and own the Property over an extended period of time i.e., 20 years. Please
refer to the attached summary provided by Borrower which describes their experience in this
type of project.
Moreover, curbside inspections of the Properties were conducted by staff on August 12, 1999
and all were reported to be well maintained and in good condition. There are no Code
Enforcement violations and the Police Department does not have any disturbances or crime
related records on file for any of these properties. The Business Division staff has also indicated
that all business registrations are current.
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MP:MA:1ag:99 -09 -07 Pacific COMMISSION MEETING AGENDA
Meeting Date: 09/07/1999
Agenda Item Number:
Economic Development Agency Staff Report
Certificate of Participation
August 11, 1999
Page Number -2-
It is important to note that the Certificates of Participation, together with the interest and
premium thereon do not constitute a debt of the City, or pledge of the faith and credit of the City
or the Agency. The Agreement further states that the Authority is a separate entity, separate and
apart from the City, and its debts, liabilities and obligations are not an obligation of the City or
the Agency (see Section 8). In the case of the Facilities, the real estate and project revenue will
be used to secure the indebtedness issued by the Authority on behalf of Borrower. In conclusion,
the public hearing is being held in order to fulfill the federal tax requirements pursuant to Section
147 (f) of the Internal Revenue Code of 1986.
RECOMMENDATION:
Based on the foregoing, it is recommended that the Mayor and Common Council adopt the
attached Resolution.
aggie Pac , Director
Housing & Community Development
-----------------------------------
MP:MA:lag:99 -09 -07 Pacific COMMISSION MEETING AGENDA
Meeting Date: 099/077/1999
Agenda Item Number: 0
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING THE ISSUANCE OF A
CERTIFICATE OF PARTICIPATION EVIDENCING PROPORTIONATE
INTEREST OF THE HOLDERS THEREOF IN AN INSTALLMENT
PURCHASE FINANCING TO BE UNDERTAKEN BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY TO
BENEFIT PACIFIC SUPPORTED LIVING SERVICE, INC.
WHEREAS, Pacific Supported Living Services, Inc., a Georgia nonprofit corporation
(the "Corporation "), has requested that the California Statewide Communities Development
Authority ( "CSCDA ") participate in an installment purchase financing for the purpose of, among
other things, financing the acquisition, renovation and equipping (the "Project "), of certain
intermediate care facilities to be owned by the Corporation (the "Facilities ") and located in the
City of San Bernardino (the "City ");
WHEREAS, in connection with the financing of the Project, CSCDA and the
will enter into an installment purchase agreement (the "Purchase Agreement ") under which the
Corporation will sell, among other things, the Facilities to CSCDA and CSCDA will agree to
make payments (the "Installment Payments ") to the Corporation and the Corporation will agree
to make payments to the CSCDA for the purchase thereof, with the result that title to the
Facilities will remain with the Corporation;
WHEREAS, simultaneously with such sale under the Purchase Agreement, CSCDA and
the Corporation will enter into an installment sale agreement (the "Sale Agreement ") under
which CSCDA will sell, among other things, the Facilities back to the Corporation and the
Corporation will agree to make payments to CSCDA for the purchase thereof, with the result
title to the Facilities will remain with the Corporation;
WHEREAS, one or more series of certificates of participation (the "Certificates ") in a
total combined aggregate principal amount not to exceed $12,000,000, representing a
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proportionate undivided interest in the Installment Payments, will be executed, delivered and
sold in connection with the financing;
WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986 (the
"Code ") the financing and the execution and delivery of the Purchase Agreement by CSCDA
must be approved by the City because the Facilities are located within the territorial limits of the
City;
WHEREAS, the Mayor and Common Council is the elected legislative body of the City
and is one of the applicable elected representatives required to approve the financing and the
execution and delivery of the Purchase Agreement under Section 147(f) of the Code;
WHEREAS, CSCDA and the Corporation have requested that the Mayor and Common
Council approve the financing and the execution and delivery of the Purchase Agreement in
order to satisfy the public approval requirement of Section 147(f) of the Code and the
requirements of Section 9 of the Joint Exercise of Powers Agreement (the "Agreement "), dated
as of June 1, 1988, among certain local agencies, including the City; and
WHEREAS, pursuant to Section 147(f) of the Code, a public hearing regarding the
financing and the execution and delivery of the Purchase Agreement has been held following
notice duly given, and now the City Council desires to approve the financing and the execution
of the Purchase Agreement;
NOW, THEREFORE, BE IT RESOLVED, by the Mayor and Common Council of the
City of San Bernardino, as follows:
1. The Mayor and Common Council hereby approve the financing described above
and the Purchase Agreement. It is the purpose and intent of the Mayor and Common Council
that this Resolution constitute approval of the financing and the execution and delivery of the
Purchase Agreement (and the execution and delivery of the Certificates) for the purposes of (a)
Section 147(f) of the Code by the applicable elected representative of the governmental unit
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having jurisdiction over the area in which the Facilities are located, in accordance with said
Section 147(f) of the Code, and (b) Section 9 of the Agreement.
2. The officers of the City are hereby authorized and directed, jointly and severally,
to do any and all things and to execute and deliver any and all documents which they deem
necessary or advisable in order to carry out, give effect to and comply with the terms and intent
of this Resolution and the financing transaction approved hereby.
3. This Resolution shall take effect immediately upon its passage.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING THE ISSUANCE OF A
CERTIFICATE OF PARTICIPATION EVIDENCING PROPORTIONATE
INTEREST OF THE HOLDERS THEREOF IN AN INSTALLMENT
PURCHASE FINANCING TO BE UNDERTAKEN BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY TO
BENEFIT PACIFIC SUPPORTED LIVING SERVICE, INC.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a meeting thereof, held
on the day of , 1999, by the following vote to wit:
Council Members: Ayes Nays Abstain Absent
ESTRADA
LIEN
MCGINNIS
SCHNETZ
VACANT
ANDERSON
MILLER
The foregoing resolution is hereby approved this
Approved as to form and Legal Content:
James F. Penman
City Attorney
In
\\EDA SAN BERDD\PUBIJC1N-1a x.enl Dep U.\R..lulim\R —P�cif. Sup L41MC .-
-4-
City Clerk
day of
Judith Valles, Mayor
City of San Bernardino
1999.
ERRICK, HERRINGTON
& SUTCLIFFE LLP
July 23, 1999
VIA FACSIMILE AND FEDERAL EXPRESS
Maggie Pacheko
City of San Bernardino
300 N. David St.
San Bernardino, CA 92418
(916) 329 -7980
C2
Re: California Statewide Communities Development Authority
Financing for Pacific Supported Living Services, Inc.
^J
c-; ri
Dear Ms. Pacheko: rn _ o M
-< ti m <
As Lawrence Tonomura has discussed with you, Pacific Suppirtecl Li_k?jng �.'
r.
Services, Inc. has requested the California Statewide Communities Development 5kuthoritL to j� c
serve as the issuer in connection with the financing of the acquisition, renovation au`d equip mg;�
of certain intermediate care facilities located in the City of San Bernardino (the "City "). nur
firm serves as counsel to the California Statewide Communities Development Authority.
The California Statewide Communities Development Authority ( "CSCDA ") is a
joint powers agency formed through the cooperation of the League of California Cities and the
County Supervisors Association of California. One of the purposes of CSCDA is to provide a
vehicle for the issuance of tax- exempt debt to finance qualified health care facilities located in the
jurisdiction of one of the members of CSCDA. Currently, over 200 cities and counties are
members of CSCDA.
Structure of the Financing
Financings through CSCDA are structured as certificate of participation financings
using the common powers of CSCDA members to buy and sell property. The structure of the
financing would involve the purchase and sale of property by CSCDA and the issuance of
certificates of participation evidencing proportionate interests in the purchase payments made by
CSCDA.
The City would not be a party to any of the financing documents, would not
execute any financing document and would have no pecuniary liability with respect to the
financing. Only CSCDA and Pacific Supported Living Services, Inc. would execute the
financing documents, and CSCDA's liability would be limited to payments made by Pacific
DOC'SSC I :_249162.1 400 Capitol Mall • Suite 3000 Sacramento, California 95814 -4407
Telephone 916 447 9200 • Facsimile 916 329 4900
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Re: California Statewide Communities Development Authority
Financing for Pacific Supported Living Services, Inc.
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Dear Ms. Pacheko: rn _ o M
-< ti m <
As Lawrence Tonomura has discussed with you, Pacific Suppirtecl Li_k?jng �.'
r.
Services, Inc. has requested the California Statewide Communities Development 5kuthoritL to j� c
serve as the issuer in connection with the financing of the acquisition, renovation au`d equip mg;�
of certain intermediate care facilities located in the City of San Bernardino (the "City "). nur
firm serves as counsel to the California Statewide Communities Development Authority.
The California Statewide Communities Development Authority ( "CSCDA ") is a
joint powers agency formed through the cooperation of the League of California Cities and the
County Supervisors Association of California. One of the purposes of CSCDA is to provide a
vehicle for the issuance of tax- exempt debt to finance qualified health care facilities located in the
jurisdiction of one of the members of CSCDA. Currently, over 200 cities and counties are
members of CSCDA.
Structure of the Financing
Financings through CSCDA are structured as certificate of participation financings
using the common powers of CSCDA members to buy and sell property. The structure of the
financing would involve the purchase and sale of property by CSCDA and the issuance of
certificates of participation evidencing proportionate interests in the purchase payments made by
CSCDA.
The City would not be a party to any of the financing documents, would not
execute any financing document and would have no pecuniary liability with respect to the
financing. Only CSCDA and Pacific Supported Living Services, Inc. would execute the
financing documents, and CSCDA's liability would be limited to payments made by Pacific
DOC'SSC I :_249162.1 400 Capitol Mall • Suite 3000 Sacramento, California 95814 -4407
Telephone 916 447 9200 • Facsimile 916 329 4900
Los Angeles • New York • San Francisco • Silicon Valley • Singapore • Tokyo • Washington, D.C.
Ms. Maggie Pacheko
July 23, 1999
Page 2
Action Requested of City
Q RRICK, HERRINGTON
& SUTCLIFFE LLP
Two actions would be requested of the City:
1. Conducting a public hearing on the question of issuance of the tax- exempt debt
following at least 14 days published notice.
2. Adoption of a resolution endorsing the financing.
The public hearing is required by Section 147(f) of the Internal Revenue Code for
all tax- exempt financings for nonprofit 501(c)(3) organizations. The resolution is required for
two reasons. First, under the CSCDA joint powers agreement, CSCDA will not approve a
financing until the governing body of the city or county in which the project is located approves
the financing. Second, Section 147(f) of the Internal Revenue Code requires public approval of
the financing following the public hearing.
I have enclosed for consideration by you and the City, a proposed draft of the
form of the resolution and a proposed draft of the notice of public hearing (which we will arrange
to have published if you decide to participate in the financing).
I would be pleased to answer any further questions concerning the financing.
Please do not hesitate to contact me at (916) 329 -7980. Thank you for your consideration, and I
look forward to working with you.
Very truly yours,
ill / -
Virginia C. Ma an
g g
Enclosures
cc: Lawrence Tonomura (w /o encl.)
DOCSSC I :2'491 62.1
EXECUTIVE SUMMARY
Introduction
DDMS of California, LLC (the "Manager ") entered into a contract on behalf of Pacific Supported
Living Services, Inc. (the "Borrower "), a California non - profit corporation, to acquire 23 group
homes servicing the mentally retarded in San Bernardino County and the City of Oxnard. To
finance the acquisition the Borrower seeks to issue tax- exempt bonds through the California
Statewide Communities Development Authority to be underwritten by Greenwich Partners, LLC
(the "Underwriter ").
Set forth below is a brief description of the Project, the proposed Bond Structure and the parties
to the financing (other than the Issuer and its counsel and advisors). Affiliates of the Borrower
and the Manager have successfully completed similar financings with the Underwriter.
The Project
The project consists of the acquisition of 23 ICF\MR group homes servicing the mentally
retarded. The homes are licensed by the state and receive funding under the state Medicaid
program. The Facilities provide 24 hour per day residential and rehabilitative care to 138
individuals in the homes under the State of California ICF \MR Medicaid program. A written
treatment plan for each client is developed identifying measurable goals and an individualized
program towards these goals. Eligible clients for the Facilities must be residents of the State,
meet income eligibility requirements, have a pre- admission diagnosis of mental retardation, and
have a psychological assessment.
The bond proceeds will be used for (i) the acquisition of the Facilities, (ii) funding of a debt
service reserve fund, (iii) funding of an operating and maintenance fund, (iv) funding a deposit
into a construction fund, (v) paying the manager a development fee and (vi) paying the cost of
issuance.
The Facilities are located as follows:
Alta Loma
3 homes
Oxnard
5 homes
La Verne
4 homes
Cucamonga
1 home
Rancho Cucamonga
1 home
Rialto
2 homes
Highland
3 homes
San Bernardino
4 homes
The seller of the projects is Horrigan Enterprises, Inc., Gail Horrigan and Robert Horrigan.
Bond Structure
Par Amount:
$9,500,000
Borrower:
Pacific Supported Living Services, Inc.
Closing Date:
September 30, 1999
Security:
The bonds will be secured by a first mortgage on the properties, a
Fund
pledge and assignment of all project revenues into a lock box
Development Fee
account held by the trustee.
Rating:
Not Rated
Optional
300,000
Redemption:
The bonds will be pre - payable at the option of the borrower
commencing in the tenth year at 102% declining I% per year to par
and par thereafter.
Tax Status:
Interest on the bonds will be exempt from Federal, State of
California and local income taxes. Bond counsel shall provide an
unqualified opinion at closing.
Payment Dates:
Level annual debt service (interest payable semi - annually) with a
maturity in 2029.
(Note preliminary subject to change)
Sources and Uses
Sources: Bond proceeds
$9,330,000
Uses: Acquisition of Facilities
$7,300,000
Cost of Acquisition
150,000
Operating and Maintenance
Fund
250,000
Development Fee
305,000
Construction Fund
250,000
Cost of Issuance
300,000
Debt Service Reserve
775,000
$7,330,000
Borrower
The Borrower, Pacific Supported Living Services, Inc., is a non - profit corporation that was
organized for the sole purpose of acquiring, owning and operating the Facilities. The Borrower is
a special purpose affiliate of Resource Healthcare of America, Inc. The Corporation is exempt
from Federal income taxation under section 501(c)(3) of the Code by virtue of the fact that it has
been included in RHA's group exemption. RHA and its affiliated members provide a variety of
health care and housing services throughout the United States, including services to the
developmentally disabled, elderly (nursing homes and assisted living), and low income housing.
Approximately 1,600 individuals are served in Intermediate Care Facilities for the Mentally
Retarded and Community Based Waiver facilities; approximately 1,156 people are served in
nursing homes; and 350 people are served in assisted living facilities by RHA affiliates in the states
of Tennessee, Florida, California, Utah, North Carolina, Indiana, Colorado, New Jersey and
Pennsylvania.
The Borrower is governed by a Board of Directors, which currently consists of seven members.
The members of the Board of Directors of RHA and all subordinate entities of RHA, including the
Borrower, are the same persons. The members of the Board of Directors of RHA and of all
subordinate entities of RHA, including the Borrower are:
Robert B. Coats, Jr.
William H. Oakes
James D. Loftin
William P. Walker
The Manager
Bryant G. Coats
Chester H. Bradeen
Charles W. Northcutt
Gordon Simmons
Management support services will be provided to the Borrower by DDMS of California, LLC , a
Maryland limited liability company (the manager). The manager is affiliated by common owners
and shared services with the DDMS family of management companies. The DDMS family of
management companies provides management services to approximately 2,000 people with
developmental disabilities, with approximately $105 million in revenue under management.
DDMS and its management family provide services in the states of California, Utah, Tennessee,
Louisiana, Illinois, Florida, Alabama, and Wisconsin.
The manager is governed by the following officers:
Charles J.. Nabit, J.D.
Terry K. Swatley, CPA
Art Trunkfield
Dan Scott, CPA
John Strahm, M.Ed.
Joseph Earp, Ed.D
Chairman of the Board, Chief Executive Officer
President
Executive Vice President
Secretary and Treasurer
Chief Operating Officer
Chief Development Officer
AMENDED AND RESTATED
JOINT EXERCISE OF POWERS AGREEMENT
RELATING To THE CALIFORNIA STATEWIDE COKKUNITIES
DEVELOPMENT AUTHORITY
THIS AGREEMENT, dated as of June 1, 1988, by and
among the parties executing this Agreement (all such parties,
except chose which have withdrawn in accordance with Section
13 hereof, being herein referred to as the "Program
Participants "):
WITNESSETH
WHEREAS, pursuant to Title 1, Division 7, Chapter 5
of the Government Code of the State of California (the 'Joint
Exercise of Powers Act "), two or more public agencies may by
agreement jointly exercise any power common to the contracting
parties; and
WHEREAS, each of the Program Participants is a
public agency' as that term is defined in Section 6500 of the
Government Code of the State of California, and
WHEREAS, each of the Program Participants is
empowered to promote economic development, including, without
limitation, the promotion of opportunities for the creation or
retention of employment, the stimulation of economic activity,
and the increase of the tax base, within its boundaries; and
WHEREAS, a public entity established pursuant to
the Joint Exercise of Powers Act is empowered to issue
industrial development bonds pursuant to the California
Industrial Development Financing Act (Title 10 (commencing
with Section 91500 of the Government Code of the State of
California)) (the 'Act ") and to otherwise undertake financing
programs under the Joint Exercise of Powers Act or other
applicable provisions of law to promote economic development
through the issuance of bonds, notes, or other evidences of
;.ndebtedneea, or certificates of participation in leases or
other agreements (all such instruments being herein
collectively referred to as 'Bonds'); and
WHEREAS, in order to promote economic development
within the State of California, the County Supervisors
Association of California ( "CSAC "), together with the
California Manufacturers Association, has established the
Bonds for Industry program (the "Program').
WHEREAS, in furtherance of the Program, certain
California counties (collectively, the "Initial Participants")
have entered into that certain Joint Exercise of Powers
Agreement dated as of November 18, 1987 (the -Initial
Agreement'), pursuant to which the California Counties
Industrial Development Authority has been established as a
separate entity under the Joint Exercise of Powers Act for the
purposes and with the powers specified in the Initial
Agreement; and
KHEREAS, the League of California Cities ('LCC-)
has determined to join as a sponsor of the Program and to
actively participate in the administration of the Authority;
and
WHEREAS, the Initial Participants have determined
to specifically authorize the Authority to issue Bonds
pursuant to Article 2 of the Joint Exercise of Powers Act
( "Article 2 ") and Article 4 of the Joint Exercise of Powers
Act ( "Article 40), as well as may be authorized by the Act or
other applicable law; and
WHEREAS, the Initial Participants desire to rename
the California Counties Industrial Development Authority to
better reflect the additional sponsorship of the Program; and
WHEREAS, each of the Initial Participants has
determined that it.is in the public interest of the citizens
within its boundaries, and to the benefit of such Initial
Participant and the area and persons served by such Initial
Participant, to amend and restate in its entirety the Initial
Agreement in order to implement the provisions set forth
above; and
WHEREAS, it is the desire
Participants to use a public entity
the Joint Exercise of Powers Act to
their respective jurisdictions that
issued pursuant to the Act, Article
applicable provisions of law; and
of the Program
established pursuant to
undertake projects within
may be financed with Bonds
2, Article 4, or other
wHMREAS, the projects undertaken will result in
significant public benefits, including those public benefits
set forth in Section 91502.1 of the-Act, an increased level of
economic activity, or an increased tax base, and will
therefore serve and be of benefit to the inhabitants of the
jurisdictions of the Program Participants;
", THERE ORE, the Program Participants, for and
in consideration of the mutual promises and agreements herein
contained, do agree to amend and restate the Initial Agreement
in its entirety to provide as follows:
Section I. Purpose.
This Agreement is made pursuant to the provisions of
the Joint Exercise of Powers Act, relating to the joint
exercise of powers common to public agencies, in this case
being the Program Participants. The Program Participants each
possess the powers referred to in the recitals hereof. The
purpose of this Agreement is to establish an agency for, and
with the purpose of, issuing Bonds to finance projects within
the territorial limits of the Program Participants pursuant to
the Act, Article 2, Article 4, or other applicable provisions
of law; provided, however that nothing in this Agreement shall
be construed as a limitation on the rights of the Program
Participants to pursue economic development outside of this
Agreement, including the rights to issue Bonds through
industrial development authorities under the Act, or as
otherwise permitted by law.
Within the various jurisdictions of the Program
Participants such purpose will be accomplished and said powers
exercised in the manner hereinafter set forth.
Section 2. Term.
This Agreement shall become effective in accordance
with Section lA as of the date hereof and shall continue in
full force and effect for a period of forty (40) years from
the date hereof, or until such time as it is terminated in
writing by all the Program Participants; provided, however,
that this Agreement shall not terminate or be terminated until
the date on which all Bonds or other indebtedness issued or
caused to be issued by the Authority shall have been retired,
or full provision shall have been made for their retirement,
including interest until their retirement date.
Section 3. Authority.
A. CREATION AND POWERS OF AUTHORITY.
(1) Pursuant to the Joint Exercise of Powers Act, there
is hereby created a public entity to be known as the
'California Statewide Communities Development Authority' (the
'Authority *), and said Authority shall be a public entity
separate and apart from the Program Participants. Its debts,
liabilities and obligations do not constitute debts,
liabilities or obligations of any party to this Agreement.
B. COMMISSION.
The Authority shall be administered by a Commission
(the 'Commission') which shall consist of seven members, each
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serving in his or her individual capacity as a member of the
Commission. The Commission shall be the administering agency
of this Agreement, and, as such, shall be vested with the
powers set forth herein, and shall execute and administer this
Agreement in accordance with the purposes and functions
provided herein.
Four members of the Commission shall be appointed by
the governing body of CSAC and three members of the Commission
shall be appointed by the governing body of LCC. Initial
members of the Commission shall serve a term ending June 1,
1991. Successors to such members shall be selected in the
manner in which the respective initial member was selected and
shall serve a term of three years. Any appointment to fill an
unexpired term, however, shall be for such unexpired term.
The term of office specified above shall be applicable unless
the term of office of the respective member is terminated as
hereinafter provided, and provided that the term of any member
shall not expire until a successor thereto has been appointed
as provided herein.
Each of CSAC and LCC may appoint an alternate member
of the Commission for each member of the Commission which it
appoints. Such alternate member may act as a member of the
Commission in place of and during the absence or disability of
such regularly appointed member. All references in this
Agreement to any member of the Commission shall be deemed to
refer to and include the applicable alternate member when so
acting in place of a regularly appointed member.
Each member or alternate member of the Commission
may be removed and replaced at any time by the governing body
by which such member was appointed. Any individual, including
any member of the governing body or staff of CS&C or LCC,
shall be eligible to serve as a member or alternate member of
the commission.
Members and alternate members of the Commission
shall not receive any compensation for serving as such but
shall be entitled to reimbursement for any expenses actually
incurred in connection with serving as a member or alternate
member, if the Commission shall determine that such expenses
shall be reimbursed and there are unencumbered funds available
for such purpose.
C. OFFICERS; DUTIES; OFFICIAL BONDS.
The Commission shall elect a Chair, a Vice- Chair,
and a Secretary of the Authority from among its members to
I serve for such term as shall be determined by the Commission.
The Commission shall appoint one or more of its officers or
I
employees to serve as treasurer, auditor, and controller of
the Authority (the "Treasurer ") pursuant to Section 6505.6 of
the Joint Exercise of Powers Act to serve for such term as
shall be determined by the Commission.
Subject to the applicable provisions of any
resolution, indenture or other instrument or proceeding
authorizing or securing Bonds (each such resolution,
indenture, instrument and proceeding being herein referred to
as an 'Indenture ") providing for a trustee or other fiscal
agent, the Treasurer is designated as the depositary of the
Authority to have custody of all money of the Authority, from
whatever source derived.
The Treasurer of the Authority shall have the
powers, duties and responsibilities specified in
Section 6505.5 of the Joint Exercise of Powers Act.
The Treasurer of the Authority is designated as the
public officer or person who has charge of, handles, or has
access to any property of the Authority, and such officer
shall file an official bond with the Secretary of the
Authority in the amount specified by resolution of the
Commission but in no event less than $1,000. If and to the
extent permitted by law, any such officer may satisfy this
requirement by tiling an official bond in at least said amount
obtained in connection with another public office.
i
The Commission shall have the power to appoint such
other officers and employees as it may deem necessary and to
retain independent counsel, consultants and accountants.
The Commission shall have the power, by resolution,
to the extent permitted by the Joint Exercise of Powers Act or
any other applicable law, to delegate any of its functions to
one or more of the members of the Commission or officers or
agents of the Authority and to cause any of said members,
officers or agents -to take any actions and execute any
documents or instruments for and in the name and on behalf of
the Commission or the Authority.
D. MEETINGS OF THE COMMISSION.
AROEWX �.
The Commission shall
meetings; provided, however, it
regular meeting each year. The
holding of the regular meetings
of the Commission and a copy of
with each party hereto.
5
I7ChC
provide for its regular
shall hold at least one
date, hour and place of the
shall be fixed by resolution
suc.`i resolution shall be f i le-i
I
(2)
SiOeg l Meetings.
Special meetings of the Commission may
accordance with the provisions of Section 54956
Government Code of the State of California.
•• ;- M �
be called in
of the
All meetings of the Commission, including, without
limitation, regular, adjourned regular, special, and adjourned
special meetings shall be called, noticed, held and conducted
in accordance with the provisions of the Ralph M. Brown Act
(commencing with Section 54950 of the Government Code of the
State of California).
(9) minutes -
The Secretary of the Authority shall cause to be
kept minutes of the regular, adjourned regular, special, and
adjourned special meetings of the Commission and shall, as
soon as possible after each meeting, cause a copy of the
minutes to be forwarded to each member of the Commission.
A majority of the members of the Commission which
includes at least one member appointed by the governing body
of each of CSAC and LCC shall constitute a quorum for the
transaction of business. No action may be taken by the
Commission except upon the affirmative vote of a majority of
the members of the Commission which includes at least one
member appointed by the governing body of each of CSAC and
LCC, except that less than a quorum may adjourn a meeting to
another time and place.
E. RULES AND REGULATIONS.
The Authority may adopt, from time to time, by
resolution of the Commission such rules and regulations for
the conduct of its meetings and affairs as may be required.
Section t. powers.
The Authority shall have any and all powers relating
to economic development authorized by law to each of the
parties hereto and separately to the public entity herein
created, including, without limitation, the promotion of
opportunities for the creation and retention of employment,
the stimulation of economic activity, and the increase of the
tax base, within the jurisdictions of such parties. Such
powers shall include the common powers specified in this
iAgreement and may be exercised in the manner and according to
the method provided in this Agreement. All such powers common
j to the parties are specified as powers of the Authority. The
Authority is hereby authorized to do all acts necessary for
the exercise of such powers, including, but not limited to,
any or all of the Following: to make and enter into
contracts; to employ agents and employees; to acquire,
construct, provide for maintenance and operation of, or
maintain and operate, any buildings, works or improvements; to
acquire, hold or dispose of property wherever located; to
incur debts, liabilities or obligations; to receive gifts,
contributions and donations of property, funds, services and
other Forms of assistance from persons, firms, corporations
and any governmental entity; to sue and be sued in its own
name; and generally to do any and all things necessary or
convenient to the promotion of economic development, including
without limitation the promotion of opportunities for the
creation or retention of employment, the stimulation of
economic activity, and the increase of the tax base, all as
herein contemplated. without limiting the generality of the
foregoing, the Authority may issue or cause to be issued
banded and other indebtedness, and pledge any property or
j revenues as security to the extent permitted under the Joint
i Exercise of Powers Act, including Article 2 and Article 4, the
Act or any other applicable provision of law.
The manner in which the Authority shall exercise its
powers and perform its duties is and shall be subject to the
restrictions upon the manner in which a California county
could exercise such powers and perform such duties until a
California general law city shall become a Program
Participant, at which time it shall be subject to the
restrictions upon the manner in which a California general law
city could exercise such powers and perform such duties. The
manner in which the Authority shall exercise its powers and
perform its duties shall not be subject to any restrictions
applicable to the manner in which any other public agency
could exercise such powers or perform such duties, whether
such agency is a party to this Agreement or not.
Section S. rfAcal year.
For the purposes of this Agreement, the term "Fiscal
Year' shall mean the fiscal year as established From time to
time by the Authority, being, at the date of this Agreement,
the period From July 1 to and including the following June 30.
except for the first Fiscal Year Which shall be the period
from the date of thi. Agreement to June 30, 1 988.
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379h5
Section 6. nisvogition ofAssets.
At the end of the term hereof or upon the earlier
termination of this Agreement as set forth in Section 2
hereof, after payment of all expenses and liabilities of the
Authority, all property of the Authority both real and
personal shall automatically vest in the Program Participants
and shall thereafter remain the sole property of the Program
Participants; provided, however, that any surplus money on
hand shall be returned in proportion to the contributions made
by the Program Participants.
Section 7. Boad,q.
The Authority shall issue Bonds for the purpose of
exercising its powers and raising the funds necessary to carry
out its purposes under this Agreement. Said Bonds may, at the
discretion of Authority, be issued in series.
The services of bond counsel, financing consultants
and other consultants and advisors working on the projects
and /or their financing shall be used by the Authority. The
fees and expenses of such counsel, consultants, advisors, and
the expenses of CSAC, LCC, and the Commission shall be paid
from the proceeds of the Bonds or any other unencumbered funds
of the Authority available For such purpose.
Section 8. Bonds Only- Limited and sp ;a1
.Ob ivatinn of Authority.
The Bonds, together with the interest and premium,
if any, thereon, shall not be deemed to constitute a debt of
any Program Participant, CSAC, or LCC or pledge of the faith
and credit of the Program Participants, CSAC, LCC, or the
Authority. The Bonds shall be only special obligations of the
Authority, and the Authority shall under no circumstances be
obligated to pay the Bonds or the respective project costs
except from revenues and other funds pledged therefor.
Neither the Program Participants, CSAC, LCC, nor the Authority
shall be obligated to pay the principal of, premium, if any,
or interest on the Bonds, or other coats incidental thereto,
except from the revenues and funds pledged therefor, and
neither the faith and credit nor the taxing power of the
Program Participants nor the faith and credit of CSAC, LCC, or
the Authority shall be pledged to the payment of the principal
o£, premium, if any, or interest on the Bonds nor shall the
lrcgram Participants, CSAC, LCC, or the Authority in any
manner be obligated to make any appropriation For such payment.
No covenant or agreement contained in any Bond or
Indenture shall be deemed to be a covenant or agreement of any
member of the Commission, or any officer, agent or employee of
the Authority in his individual capacity and neither the
Commission of the Authority nor any officer thereof executing
the Bonds shall be liable personally on any Bond or be subject
to any personal liability or accountability by reason of the
issuance of any Bonds.
Section 9. local Apgroyal.
A copy of the application for financing of a project
shall be filed by the Authority with the Program Participant
in whose jurisdiction the project is to be located. The
Authority shall not issue Bonds with respect to any project
unless the governing body of the Program Participant in whose
jurisdiction the project is to be located, or its duly
authorized designee, shall approve, conditionally or
unconditionally, the project, including the issuance of Bonds
therefor. Action to approve or disapprove a project shall be
taken within 45 days of the filing with the Program
Participant. Certification of approval or disapproval shall
be made by the clerk of the governing body of the Program
Participant, or by such other officer as may be designated by
the applicable Program Participant, to the Authority.
• • 1 ; • • . • • : •�•
All funds of the Authority shall be strictly
accounted for. The Authority shall establish and maintain
such funds and accounts as may be required by good accounting
practice and by any provision of any Indenture (to the extent
such duties are not assigned to a trustee of Bonds). The
books and records of the Authority shall be open to inspection
at all reasonable times by each Program Participant.
The Treasurer of the Authority shall cause an
independent audit to be made of the books of accounts and
financial records of the Agency by a certified public
accountant or public accountant in compliance with the
provisions of Section 6505 of the Joint Exercise of Powers
Act. In each case the minimum requirements of the audit shall
be those prescribed by the State Controller for special
districts under Section 26909 of the Government Code of the
State of California and shall conform to generally accepted
auditing standards. When such an audit of accounts and
records is made by a certified public accountant or public
accountant, a report thereof shall be filed as public records
with each Program Participant and also with the county auditor
of each county in which a Program Participant is located.
Such report shall be filed within 12 months of the end of the
Fiscal Year or Years under examination.
0
Any costs of the audit, including contracts with, or
employment of, certified public accountants or public
accountants in making an audit pursuant to this Section, shall
be borne by the Authority and shall be a charge against any
unencumbered funds of the Authority available for that purpose.
In any Fiscal Year the Commission may, by resolution
adopted by unanimous vote, replace the annual special audit
with an audit covering a two -year period.
The Treasurer of the Authority, within 120 days
after the close of each Fiscal Year, shall give a complete
written report of all financial activities for such Fiscal
Year to each of the Program Participants to the extent such
activities are not covered by the reports of the trustees for
the Bonds. The trustee appointed under each Indenture shall
establish suitable funds, furnish financial reports and
provide suitable accounting procedures to carry out the
provisions of said Indenture. Said trustee may be given such
duties in said Indenture as may be desirable to carry out this
Agreement.
Section 11. Funds.
Subject to the applicable provisions of each
Indenture, which may provide for a trustee to receive, have
custody of and disburse Authority funds, the Treasurer of the
Authority shall receive, have the custody of and disburse
Authority funds pursuant to the accounting procedures
developed under Section 10 hereof, and shall make the
disbursements required by this Agreement or otherwise
necessary to carry out any of the provisions or purposes of
this Agreement.
Section 12. Notices.
Notices and other communications hereunder to the
Program Participants shall be sufficient if delivered to the
clerk of the governing body of each Program Participant.
.. ..
A Program Participant may withdraw from this
Agreement upon written notice to the Commission; provided,
however, that no such withdrawal shall result in the
dissolution of the Authority so long as any Bonds remain
outstanding under an Indenture. Any such withdrawal shall b
effective only upon receipt of the notice of withdrawal by the
Commission which shall acknowledge receipt of such notice of
Withdrawal in writing and shall file such notice as an
amendment to this Agreement effective upon such filing.
in
Qualifying public agencies may be added as parties
to this Agreement and become Program Participants upon: (i)
the filing by such public agency of an executed counterpart of
this Agreement, together with a certified copy of the
resolution of the governing body of such public agency
approving this Agreement and the execution and delivery
hereof; and (ii) adoption of a resolution of the Commission
approving the addition of such public agency as a Program
Participant. Upon satisfaction of such conditions, the
Commission shall file such executed counterpart of this
Agreement as an amendment hereto, effective upon such filing.
Section 14. Indemnification.
To the full extent permitted by law, the Commission
may authorize indemnification by the Authority of any person
who is or was a member or alternate member of the Commission,
or an officer, employee or other agent of the Authority, and
who was or is a party or is threatened to be made a party to a
proceeding by reason of the fact that such person is or was
such a member or alternate member of the Commission, or an
officer, employee or other agent of the Authority, against
expenses, judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with such
proceeding, if such person acted in good faith and in a manner
such person reasonably believed to be in the best interests of
the Authority and, in the case of a criminal proceeding, had
no reasonable cause to believe the conduct of such person was
unlawful and, in the case of an action by or in the right of
the Authority, acted with such care, including reasonable-
inquiry, as an ordinarily prudent person in a like position
would use under similar circumstances.
Contributions or advances of public funds and of the
use of personnel, equipment or property may be made to the
Authority by the parties hereto For any of the purposes of
this Agreement. Payment of public funds may be made to defray
the cost of any such contribution.. Any much advance may be
made subject to repayment, and in such case shall be repaid,
in the manner agreed upon by the Authority and the party
making such advance at the time of such advance.
Section 16. T=unnies.
All of the privileges and immunities from
liabilities, exemptions from laws, ordinances and rules, all
pension, relief, disability, workers' compensation, and other
benefits which apply to the activity of officers, agents or
employees of Program Participants when performing their
1 1
i
respective functions within the territorial limits of their
respective public agencies, shall apply to them to the same
degree and extent while engaged as members of the Commission
or otherwise as an officer, agent or other representative of
the Authority or while engaged in the performance of any of
their functions or duties extraterritorially under the
provisions of this Agreement.
Section 17. A. en =nts.
Except as provided in Section 13 above, this
Agreement shall not be amended, modified, or altered except by
a written instrument duly executed by each of the Program
Participants.
section 1s. P fectivenet±.
This Agreement shall become effective and be in full
Force and effect and a legal, valid and binding obligation of
each of the Program Participants at 9:00 a.m., California
time, on the date that the commission shall have received from
each of the Initial Participants an executed counterpart of
this Agreement, together with a certified copy of a resolution
of the governing body of each such Initial Participant
approving this Agreement and the execution and delivery hereof.
Section 19. pmt, al Invalidity.
If any one or more of the terms, provisions,
promises, covenants or conditions of this Agreement shall to
any extent be adjudged invalid, unenforceable, void or
voidable for any reaeon whatsoever by a court of competent
jurisdiction, each and all of the remaining terms, provisions,
promises, covenants and conditions of this Agreement shall not
be affected thereby, and shall be valid and enforceable to the
fullest extent permitted by law.
Section 20.
This Agreement shall be binding upon and shall inure
to the benefit of the successors of the parties hereto.
Except to the extent expressly provided herein, no party may
assign any right or obligation hereunder without the consent
of the other parties.
Section 21. Miscellaneous.
This Agreement may be executed in several
counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
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The section headings herein are for convenience only
and are not to be construed as modifying or governing the
language in the section referred to.
wherever in this Agreement any consent or approval
is required, the same shall not be unreasonably withheld.
This Agreement is made in the State of California,
j under the Constitution and laws of such state and is to be so
construed.
This Agreement is the complete and exclusive
statement of the agreement among the parties hereto, which
supercedes and merges all prior proposals, understandings, and
other agreements, including, without limitation, the Initial
Agreement, whether oral, written, or implied in conduct,
between and among the parties relating to the subject matter
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed and attested by their proper
officers thereunto duly authorized, and their official seals
to be hereto affixed, as of the day and year first above
written.
Program Participant:
CITY OF SAN BERNARDINO
(SEAL]
BY .•
f
Name: Tom Minor
Title: Mayor
ATTES
' Hy
Name: Rachel Clark
Title: City Clerk
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