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HomeMy WebLinkAboutPFA_2004-11-09_AgendaPacket CITY OF ATASCADERO ATASCADERO PUBLIC FINANCING AUTHORITY AGENDA Tuesday, November 9, 2004 Time: During Council Meeting that starts at 7:00 P.M. Atascadero Lake Pavilion 9315 Pismo St. Atascadero, California ROLL CALL: Chairperson Luna Vice Chairperson Scalise Council Member Clay Council Member O'Malley Council Member Pacas APPROVAL OF AGENDA: Roll Call COMMUNITY FORUM: BOARD ANNOUNCEMENTS AND REPORTS: (On their own initiative, the Board Members may make a brief announcement or a brief report on their own activities. Board Members may ask a question for clarification, make a referral to staff or take action to have staff place a matter of business on a future agenda. The Board may take action on items listed on the Agenda.) A. MANAGEMENT: 1. Initial Organizational Items and Purchase/Sale of Redevelopment Bonds  Fiscal Impact: No net fiscal impact in cash flow. There is an estimated $12,675,000 expenditure for purchase of the Bonds and an estimated $12,675,000 in revenues for proceeds from sale of bonds.  Recommendations: Authority Board: 1. Adopt the draft Resolution adopting by-laws, adopting a conflict of interest code, establishing a seal for the authority and directing the filing of a notice of formation with the Secretary of State and; 2. Adopt the draft Resolution authorizing the pu rchase and sale of tax allocation bonds of the Atascadero Community Redevelopment Agency issued to finance redevelopment activities within and for the benefit of the Agency’s Atascadero Redevelopment Project and approving related documents and actions. B. ADJOURNMENT: ITEM NUMBER: A - 1 DATE: 11/09/2004 Atascadero Public Financing Authority Staff Report – Treasurer Initial Organizational Items and Purchase/Sale of Redevelopment Bonds RECOMMENDATIONS: Authority Board: 1. Adopt the draft Resolution adopting bylaws, adopting a conflict of interest code, establishing a seal for the authority and directing the filing of a notice of formation with the Secretary of State and 2. Adopt the draft Resolution authorizing the purchase and sale of tax allocation bonds of the Atascadero Community Redevelopment Agency issued to finance redevelopment activities within and for the benefit of the Agency’s Atascadero Redevelopment Project and approving related documents and actions. DISCUSSION: In order to market the Atascadero redevelopment bonds most effectively, it is appropriate to form a Joint Financing Authority (JFA) between the City and Agency. The need for a JFA stems from the history of California finance laws. Specifically, starting in the early 1900s, whenever a new bond financing statute was adopted, accompanying legislation typically specified the procedures for the bond sale process. As a result, today we have well over 50 different bond financing acts with a relatively equal number of financing procedures. Financing procedures that made sense in the 1930s or 1950s, when markets rarely moved more that ten basis points (1/10th of 1%) in a six-month period are ill suited for the modern market in which daily movements can, unfortunately, reach fifteen basis points. Further, the advance notice procedures, advertising and use of fixed sales ITEM NUMBER: A - 1 DATE: 11/09/2004 dates as well as the risks of competitive bidding in relatively volatile markets all called for the establishment of a more effective method of marketing local government bonds. In 1986 the State Legislature adopted the Marks Roos set of laws that permit any two public agencies to form a JFA for the issuance of debt and to utilize the new, very straightforward procedures included within these new JFA laws. Over the last eighteen years, the use of the JFA procedures f or the marketing of tax allocation and various other forms of local government bonds have become increasing common. With the JFA statute the Agency basically issues its bonds through the JFA and utilizing the Marks Roos statute, Piper Jaffray purchases the bonds from the JFA for public sale. The JFA is a conduit, has no real assets, and exists simply to issue bonds for the City or Redevelopment Agency. The City may terminate the JFA, and, in which case, it will need to be reformed when the next bond issue is undertaken, or it can simply be allowed to continue to exist in a dormant state. One annual meeting is required to keep the JFA “active” and the annual cost should not exceed $5,000. In communities that issue assessment, redevelopment, general obligation and COP financings on a semi- regular basis the JFA is typically kept active, however we will consult with bond counsel to determine the most cost-effective fate of the JFA after the Series 2004 bonds are issued. The JFA structure will permit the most efficient and expeditious method of selling the Atascadero redevelopment bonds. The JFA structure will also permit a negotiated sale that can be structured in the most flexible manner. The JFA negotiated sale structure will permit pre-marketing of the bonds, which is critical for a new credit. In order to fully create the Financing Authority and to approve the purchase and immediate re-sale of the Bonds, the Authority board must adopt two resolutions. Since this is the first meeting of the newly created Financing authority, certain procedural matters need to be accomplished including the adoption of by-laws and a conflict of interest code, the establishment of a seal and authorizing certain required filings. The first resolution does these things. State law requires that tax allocation bonds issued for new projects be sold on a competitive basis or, if negotiated, through a sale -resale process with another public entity. The Authority will purchase the Bonds from the Agency for re -sale. This resolution authorizes the execution and delivery by the Authority of the following document: 1. Bond Purchase Agreement- Under this document, the Agency agrees to sell the Bonds to the Authority, for immediate re-sale to Piper Jaffray, Inc., the underwriter, for sale to its clients and other investors. The Bonds will be sold to the underwriter at a price not less than 99% of the par amount thereof. (This document is available for review in the City Clerk’s office.) Please see the letter from Piper Jaffray attac hed to the Redevelopment Agency staff report for additional information. ITEM NUMBER: A - 1 DATE: 11/09/2004 FISCAL IMPACT: No net fiscal impact in cash flow. There is an estimated $12,675,000 expenditure for purchase of the Bonds and an estimated $12,675,000 in revenues for proceeds from sale of bonds. ALTERNATIVES: 1. Don’t approve bonds, but staff does not recommend this due to loss of future Agency tax increment and loss of capital funding for projects. ATTACHMENTS: 1. Draft Resolutions 2. Draft By-Laws 3. Draft Conflict of Interest Code for the Atascadero Public Financing A uthority DRAFT RESOLUTION RESOLUTION OF THE BOARD OF DIRECTORS OF THE ATASCADERO PUBLIC FINANCING AUTHORITY ADOPTING BYLAWS, ADOPTING A CONFLICT OF INTEREST CODE, ESTABLISHING A SEAL FOR THE AUTHORITY AND DIRECTING THE FILING OF A NOTICE OF FORMATION WITH THE SECRETARY OF STATE BE IT RESOLVED, by the Board of Directors of the Atascadero Public Financing Authority SECTION 1. Bylaws. The Bylaws in the form on file with the Atascadero Public Financing Authority (the “Authority”) Secretary are hereby approved as the Bylaws of the Authority. SECTION 2. Seal. The Authority shall have an Official Seal consisting of two (2) concentric circles with the words “Atascadero Public Financing Authority” within the outer circle and the date of formation of the Authority within the inner circle. SECTION 3. Conflict of Interest Code. The Conflict of Interest Code for the Authority in the form on file with the Authority Secretary is hereby adopted and promulgated. Following adoption of this Resolution, the Authority Secretary shall submit said Conflict of Interest Code to the California Fair Political Practices Commission for approval. SECTION 4. Secretary of State. The Secretary shall cause a notice of the formation of the Authority to be filed with the Secretary of State of the State of California as soon as practicable. SECTION 5. Effect. This Resolution shall take effect immediately. On motion by Board Member _______________ and seconded by Board Member _____________, the foregoing Resolution is hereby adopted in its entirety on the following roll call vote: AYES: NOES: ABSENT: ADOPTED: ATASCADERO PUBLIC FINANCING AUTHORITY By: Dr. George Luna, Chairperson ATTEST: ____________________________________ Marcia McClure Torgerson, Secretary APPROVED AS TO FORM: ____________________________________ Thomas R. Gibson, Legal Advisor DRAFT RESOLUTION RESOLUTION OF THE BOARD OF DIRECTORS OF THE ATASCADERO PUBLIC FINANCING AUTHORITY AUTHORIZING THE PURCHASE AND SALE OF TAX ALLOCATION BONDS OF THE ATASCADERO COMMUNITY REDEVELOPMENT AGENCY ISSUED TO FINANCE REDEVELOPMENT ACTIVITIES WITHIN AND FOR THE BENEFIT OF THE AGENCY’S ATASCADERO REDEVELOPMENT PROJECT AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, a Redevelopment Plan for the Atascadero Redevelopment Project in the City of Atascadero, California (the “Redevelopment Project”), has been adopted in compliance with all requirements of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the California Health and Safety Code ( the “Law”); WHEREAS, the Atascadero Community Redevelopment Agency (the “Agency”) has determined that, due to prevailing financial market conditions, it is in the best interests of the Agency at this time to finance redevelopment activities within and for the benefit of the Redevelopment Project; WHEREAS, to provide moneys for such purposes, the Agency has determined to issue its Atascadero Community Redevelopment Agency (Atascadero Redevelopment Project), 2004 Tax Allocation Bonds, in the aggregate principal amount of not-to-exceed $14,000,000 (the “Bonds”); and WHEREAS, the Atascadero Public Financing Authority (the “Authority”) has duly considered such transactions and wishes at this time to authorize the purchase and sale of the Bonds and to approve the form and authorize execution of a bond purchase agreement in connection therewith; NOW, THEREFORE BE IT RESOLVED, by the Board of Directors of the Atascadero Public Financing Authority SECTION 1. Purchase and Sale of the Bonds. The Board of Directors of the Atascadero Public Financing Authority (the “Board”) hereby authorizes the purchase by the Authority of the Bonds from the Agency for concurrent re-sale to Piper Jaffray & Co., as underwriter (the “Underwriter”), so long as the Underwriter’s discount, excluding original issue discount which does not constitute compensation to the Underwriter, does not exceed 1%. The Authority hereby approves the bond purchase agreement, by and among the Underwriter, the Agency and the Authority, in substantially the form on file with the Secretary (the “Bond Purchase Agreement”), together with such additions thereto and changes therein as the Chairman, the Vice Chairman, the Executive Director or the Treasurer shall deem necessary, desirable or appropriate, and the execution thereof by the Chairman, the Vice Chairman, the Executive Director or the Treasurer shall be conclusive evidence of the approval of any such additions and changes. In addition to the foregoing, the Board hereby approves such changes to the Bond Purchase Agreement as the Chairman, the Vice Chairman, the Executive Director or the Treasurer shall deem necessary, -2- desirable or appropriate to provide for the direct purchase of all or a portion of the Bonds by Fannie Mae or other institutional purchaser that is precluded by its charter or otherwise from purchasing bonds through underwriters. The Chairman, the Vice Chairman, the Executive Director or the Treasurer is hereby authorized and directed to execute the final form of the Bond Purchase Agreement for and in the name and on behalf of the Authority. SECTION 2. Official Actions. The Chairman, the Vice Chairman, the Executive Director, the Treasurer and the Secretary of the Authority, and any and all other officers of the Authority, are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the Bonds as described herein. Whenever in this resolution any officer of the Authority is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. SECTION 3. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. On motion by Board Member _______________ and seconded by Board Member _____________, the foregoing Resolution is hereby adopted in its entirety on the following roll call vote: AYES: NOES: ABSENT: ADOPTED: ATASCADERO PUBLIC FINANCING AUTHORITY By: Dr. George Luna, Chairman ATTEST: ________________________________ Marcia McClure Torgerson, Secretary APPROVED AS TO FORM: _________________________________ Thomas R. Gibson, Legal Advisor