SR-900-002-01
F:\atty\muni\strpts\mox\BondRefundings?02Ordinance.doc
Council Meeting: February 26, 2002 Santa Monica, California
TO: Mayor and City Council
FROM: City Attorney
SUBJECT: Ordinance Pertaining to Approval of Leases Necessary for Bond
Financings
Introduction
This staff report recommends that the City Council introduce for first reading the
attached Ordinance relating to approval of certain lease agreements necessary for the
refunding and refinancing of the Parking Authority Lease Revenue Bonds, Series 1992
(City of Santa Monica Refunding Project of 1992) and the Redevelopment Agency
Lease Revenue Bonds, Series 1992 (Downtown Redevelopment Refunding Project).
Background
To take advantage of the decline in interest rates in the current bond market so as to
reduce the City?s annual debt service payments and realize other savings, City staff
and its consultants have reviewed and analyzed the City?s outstanding bonded
indebtedness to determine which bonds are appropriate to refund at this time.
The examination of outstanding debt resulted in a determination that by refunding three
current bond issues, the City could realize total net present value savings of
approximately $1.2 million in future debt service payments, repayment of $1.3 million of
promissory notes by the Redevelopment Agency to the City, the saving of $.7 million
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that would be set aside and used to reduce FY 2002/02 Third Street Promenade
property owner assessments, and additional bond proceeds of $12.4 million that would
also be used for low/moderate income housing projects. The three current bond issues
to be refunded are:
(1) The 1992 Parking Authority Lease Revenue Bonds pertaining to the Third
Street Promenade (the ?Mall Bonds?).
(2) The 1992 Redevelopment Agency Lease Revenue Bonds pertaining to
the Downtown area (the ?Downtown Agency Bonds?)
(3) The 1992 Redevelopment Agency Ocean Park Redevelopment Tax
Allocation Bonds (the ?Ocean Park Bonds?).
Discussion
Various procedural steps are required for the bond financings. The refunding of the
1992 Mall Bonds and the 1992 Downtown Agency Bonds require lease agreements
between the City and the Parking Authority and the City and the Redevelopment
Agency respectively. California Government Code Sections 54240 et seq. require that
prior to entering into such leases, the City must approve the act of entering into a
formal lease agreement by adoption of an ordinance.
Accordingly, the attached ordinance will approve:
(1) An amended and restated Lease Agreement between the Parking
Authority and the City for certain public parking structure sites located in
the Third Street Promenade District in connection with the refunding of
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the Mall Bonds, and
(2) An amended and restated Lease Agreement between the Redevelopment
Agency and the City for the public parking facility located adjacent to the
Santa Monica Place Shopping Center.
The Ocean Park Bonds do not require approval of any lease agreement.
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Staff will return to Council on March 26 with resolutions that authorize all
documents necessary to complete the three bond refundings, and set forth the
maximum bond amount and interest rate for each issuance.
The bond refundings are expected to be priced in April or May 2002 and be
completed by June 1, 2002.
Budget and Financial Impact
Approval of the attached ordinance does not have a budget or financial impact.
Recommendation
It is respectfully recommended that the accompanying ordinance be introduced for first
reading.
Attachments: Ordinance of the City Council of the City of Santa Monica Approving
Certain Lease Agreements
Prepared by: Marsha Jones Moutrie, City Attorney
Linda A. Moxon, Deputy City Attorney
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