SR-203-000-01 (4)
F:\atty\muni\strpts\mox\BondRefundings’02DocumentAuthorization.doc
Council Meeting: March 26, 2002 Santa Monica, California
NOTE – ATTACHMENTS (EXCEPT FOR THE RESOLUTIONS) ARE NOT
AVAILABLE ELECTRONICALLY – PLEASE SEE THE CITY CLERK’S OFFICE FOR
THE HARD COPIES
TO: Mayor and City Council
Chairperson and Redevelopment Agency
Chairperson and Parking Authority
FROM: City Staff
SUBJECT: Resolutions Authorizing Issuance of Refunding Bonds and Approval of
Various Documents, Actions and Other Matters Related Thereto
Introduction
This staff report recommends that the City Council, the Redevelopment Agency, and
the Parking Authority adopt the respective attached resolutions which pertain to three
separate municipal bond refundings (“Bonds”). The refunding of the Bonds described
below will take advantage of the recent decline in interest rates in the bond market and
result in a net reduction of long-term debt service payments and provide additional
funds to meet various City capital improvement needs.
(1) Redevelopment Agency Lease Revenue Refunding Bonds, Series 2002
(Downtown Redevelopment Refunding Project of 2002). These Bonds will
refund the Agency’s 1992 Lease Revenue Refunding Bonds. The City
leases parking structures at Santa Monica Place Shopping Center from the
Agency and the annual lease payment is used by the Agency to pay annual
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debt service on these Bonds. The annual lease payment is financed by
General Fund revenues specified for this purpose.
(2) Parking Authority Lease Revenue Refunding Bonds, Series 2002. These
Bonds will refund the Authority’s 1992 Lease Revenue Refunding Bonds
relating to fully constructed Third Street Promenade improvements. The City
leases Authority parking structures and the annual lease payment is used by
the Authority to pay the annual debt service on these bonds. The annual
lease payment is financed by an annual assessment of Third Street
Promenade property owners.
(3) Redevelopment Agency Ocean Park Redevelopment Projects Tax Allocation
Bonds, Series 2002. These Bonds will refund the Agency’s 1992 Ocean
Park Tax Allocation Refunding Bonds and issue some additional Bonds.
Debt service on the Bonds will continue to be financed by Ocean Park
redevelopment tax increment revenues.
Discussion
The attached resolutions authorize the City, the Redevelopment Agency and the
Parking Authority to proceed with all steps necessary for issuance of each issue of
refunding Bonds described above.
The resolutions pertaining to the Redevelopment Agency Lease Revenue Bonds would
authorize the issuance of up to a maximum of $8.0 million aggregate principal amount
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of Bonds at a true interest rate not to exceed 5.25%, and would also authorize all steps
required to complete the financing, including approval, execution and delivery of all
necessary documents.
The resolutions pertaining to the Parking Authority Lease Revenue Bonds would
authorize the issuance of up to a maximum of $13.0 million aggregate principal amount
in Bonds at a true interest rate not to exceed 5.5%, and would also authorize all other
steps necessary to complete this financing, including approval, execution and delivery
of all necessary documents.
The resolutions pertaining to the Redevelopment Agency Ocean Park Redevelopment
Projects Tax Allocation Bonds would authorize the issuance of up to a maximum of
$21.0 million aggregate principal in Bonds at a true interest rate not to exceed 6%, and
would authorize all other steps necessary to complete such financing, including
approval, execution and delivery of all necessary documents.
Also attached to this staff report are copies of the following documents necessary for
the issuance of each of these bonds:
1. Redevelopment Agency Lease Revenue Refunding Bonds, Series 2002
(Downtown Redevelopment Refunding Project of 2002).
(a) Lease Agreement
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(b) Assignment Agreement
(c) Indenture
(d) Continuing Disclosure Certificate
(e) Escrow Agreement
(f) Preliminary Official Statement for use in connection with the offering
and sale of the Bonds.
(g) Official Notice Inviting Bids
(h) Bond Buyer Notice
(i) Los Angeles Times Notice
2. Parking Authority Lease Revenue Refunding Bonds, Series 2002.
(a) Lease Agreement
(b) Assignment Agreement
(c) Indenture
(d) Continuing Disclosure Certificate
(e) Escrow Agreement
(f) Preliminary Official Statement for use in connection with the offering
and sale of the Bonds.
(g) Official Notice Inviting Bids.
(h) Bond Buyer Notice
(i) Los Angeles Times Notice
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3. Redevelopment Agency Ocean Park Redevelopment Projects Tax Allocation
Bonds, Series 2002.
(a) Indenture of Trust
(b) Continuing Disclosure Certificate
(c) Escrow Agreement
(d) Preliminary Official Statement for use in connection with the offering
and sale of the Bonds.
(e) Official Notice Inviting Bids.
(f) Bond Buyer Notice
(g) Los Angeles Times Notice
The attached resolutions approve all of the above-described documents substantially in
the form presented at this meeting and authorize the execution and delivery of these
documents by specified City, Redevelopment Agency and Parking Authority officials
and employees.
The preparation, execution and delivery of final Official Statements and execution and
delivery of any additional documents as may be necessary to effect the offering, sale
and issuance of these refunding Bonds is also authorized and approved by the
attached resolutions.
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Attachment A to this staff report is a list of questions which various national
associations and the Federal Securities and Exchange Commission recommend that
public officials ask when approving the issuance of bonds. For your convenience, staff
and the City’s Financial Advisor and Bond Counsel have provided answers to each
question. City staff, Financial Advisor and Bond Counsel are prepared to expand on
these answers if requested by the Council.
Budget and Financial Impact
Issuance of the Refunding Bonds will have the following beneficial financial impacts:
(a) Redevelopment Agency of the City of Santa Monica Lease Revenue
Refunding Bonds, Series 2002 (Downtown Redevelopment Refunding
Project of 2002) --Net present value of all future reduced annual General
Fund lease (debt service) payments is approximately $3.0 million. In
addition, the General Fund will realize FY 2001/02 and FY 2002/03 savings
of approximately $1.4 million due to the structure of the refunding. These
savings will flow to the General Fund as the Agency pays these funds
against an outstanding Promissory Note. Staff recommends that these
payments be used to help finance the Main Library Expansion Project,
which will require more funds than anticipated in the three-year CIP plan.
(b) The Parking Authority Lease Revenue Bonds,Series 2002 -- Net present
value of all future reduced annual General Fund lease (debt service)
payments is approximately $.8 million. This savings will result in the
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elimination of the FY 2002/03 assessment and a reduction in the FY
2003/04 assessment for the Third Street Promenade property owners.
(c) The Redevelopment Agency Ocean ParkRedevelopment Projects Tax
Allocation Bonds, Series 2002 -- Net present value of all future reduced
annual debt service payments is approximately $1.0 million. Further
savings of about $.6 million will be realized due to the structure of the
refunding. These savings will flow to the General Fund as the Agency pays
these funds against an outstanding Promissory Note. The General Fund
will also use this payment to help finance the Main Library Expansion
project. In addition to the refunding Bonds, up to approximately $ 7.5 million
of additional bonds will be issued. The total $7.5 million in bond proceeds
will be budgeted in FY 2001/02 for new low/moderate income housing
projects
Specific budget actions necessary at this time are listed at Attachment B. Budget
actions necessary for next fiscal year will be reflected in the City’s Proposed Budget for
FY 2002/03.
Recommendations
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It is recommended that the actions described below be taken by the City Council, the
Redevelopment Agency, and the Parking Authority with respect to each of the three
refunding bond issues:
1. City Council Actions:
(a) Adopt the attached City Council resolution authorizing the issuance of the
Redevelopment Agency Lease Revenue Refunding Bonds, Series 2002
(Downtown Redevelopment Refunding Project) and approve proposed
budget adjustments related thereto;
(b) Adopt the attached City Council resolution authorizing the issuance of the
Parking Authority Lease Revenue Refunding Bonds, Series 2002 and
approve related budget adjustments related thereto.
(c) Adopt the attached City Council resolution authorizing the issuance of
Redevelopment Agency Ocean Park Redevelopment Project Tax
Allocation Bonds, Series 2002 and approve proposed budget adjustments
related thereto.
2. Redevelopment Agency Actions:
(a) Adopt the attached Redevelopment Agency resolution authorizing the
issuance of Redevelopment Agency Lease Revenue Refunding Bonds,
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Series 2002 (Downtown Redevelopment Refunding Project of 2002) and
approve budget adjustments related thereto.
(b) Adopt the attached Redevelopment Agency resolution authorizing the
issuance of Redevelopment Agency Ocean Park Redevelopment Project
Tax Allocation Bonds, Series 200s and approve budget adjustments
related thereto.
3. Parking Authority Actions:
(a) Adopt the attached Parking Authority resolution authorizing the issuance
of Parking Authority Lease Revenue Refunding Bonds, Series 2002 and
approve budget adjustments related thereto.
Attachments:
1. Redevelopment Agency Lease Revenue Refunding Bonds, Series
2002 (Downtown Redevelopment Refunding Project of 2002)
(a) Council Resolution
(b) Redevelopment Agency Resolution
(c) Lease Agreement
(d) Assignment Agreement
(e) Indenture
(f) Continuing Disclosure Certificate
(g) Escrow Agreement
(h) Preliminary Official Statement for use in connection with the
offering and sale of the Bonds.
(i) Official Notice Inviting Bids
(j) Bond Buyer Notice
(k) Los Angeles Times Notice
2. Parking Authority Lease Revenue Refunding Bonds, Series 2002
(a) City Council Resolution
(b) Parking Authority Resolution
(c) Lease Agreement
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(d) Assignment Agreement
(e) Indenture
(f) Continuing Disclosure Certificate
(g) Escrow Agreement
(h) Preliminary Official Statement for use in connection with the
offering and sale of the Bonds.
(i) Official Notice Inviting Bids
(j) Bond Buyer Notice
(k) Los Angeles Times Notice
3. Redevelopment Agency Ocean Park Redevelopment Project Tax
Allocation Bonds, Series 2002
(a) City Council Resolution
(b) Redevelopment Agency Resolution
(c) Indenture of Trust
(d) Continuing Disclosure Certificate
(e) Escrow Agreement
(f) Preliminary Official Statement for use in connection with the
offering and sale of the Bonds.
(g) Official Notice Inviting Bids
(h) Bond Buyer Notice
(i) Los Angeles Times Notice
Attachment A – Questions For Public Officials To Ask Before Approving
a Bond Issue
Attachment B - Implementing Budget Actions
Prepared by: Marsha Jones Moutrie, City Attorney
Mike Dennis, Director of Finance
Linda A. Moxon, Deputy City Attorney
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