SR-203-001 (3)
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CA : RMM : 1 md 0 B 8
Citv CounCl J MeetJng lO-??-8S
Zt?3-oo/
Sant~ MonIca. Callfornla
ST~,I1:___REEORT
1'0:
Mayor and Cltv Councll
FROM'
CIty Staff
SUB,JECT:
ResolutIon Declarlnq Clty of Santa MOnlCa'q
Intention to Issue Revpnue Bonos Pertalnlno
to the Santa MonIca YMCA PrOlect
Introductlon_
ThIS Staff Reoort requpslq that thp Cltv CounCIl adoot a
resolution whereby the CIty of Santa MonIca would declare Its
Intt"ntIon to Issue revenue bonds pertalnlnq to thp Santa Monlca
YMCA ProJect.
Such resolution Indlcates the CIty's Dresent Intent to
orovlde flnanClno asslstance to the Santa Monlra Famlly YMCA
( "YMCA") t h rouqh thF' t pchn lOtH" of 1 C;SU 1 nq revpnue bond.. as
oermltted hy Ordlnance Number 134~ feeS) adoDteo on October 1:
198') [the "Qrdlnancp")
Backoround
At lts October 1, 1985 meetIna: the CIty CounCI] aoooted d
orocedural ordInance speclfYlna the powers and procedures tor
Issuance of revenue bonds for purnoses of flnanclnq faCIlIt1PS 1"
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thp CIty of Santa MonIca bv oartIcloatln9 partIes.
Such
ordInance authorIzes the C1ty to Issue bonds secured by revenues
of a nrlvate artlvIty or proJPct.
Included a~ actIvltIe~ and
prOjects are the acqUISItIon; constructIon; or expanSIon of
Industr1al. manufactur1ng; or commer'Ial facIIItIPs by prIvate
partIes.
The ordInance also em~owprs the CIty to Issue revenue
bonds backed solely by non-protlt corporatIons deSIrIng to
construct facIlltIPs of publIC benefIt
One of the proJects CIty Statf belIeves IS approprIate for
thIS form of tax exempt f1nanCln0 IS the constructIon of new
faCIlItIes and expans10n of eXIstIng faCIlItIes by the Santa
MonIca YMCA, a non-profIt corporatIon.
Santa MonIca YMCA PrOlect
The Santa Monl~a YMCA capItal development project Includes
the acqUISItIon and constructIon of Improvements Anrl addItIons to
the YMCA faCIlItIes located on SIxth Street In the CIty of Santa
ManIla, IncludIng, w1thout LImItatIon: aCQUISItIon ot property
for a parkIng SIte, constructlon of a subterranean parkIng
structure, gymnaSIum. encloqed SWImmIng pool, handball/racquet
ball courts; lo,ker and shower faCIlltl~S. as wel] as exoanSlon
and refurbIshment of eXIstIng faC1lItIes through the Issuance and
sale of rpvenue bonds 1n a orlnclpal amount not to exceed S4
mIllIon dollars.
The estImated total cost of such acqulSltIon,
construct10n, and Improvpments 15 apprOXImately $6 5 mIllIon
dollars.
~he YMCA plans to raIse $3.5 mIllIon through Dublle and
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nrIvate donatlon~, If thIs $1_5 mIllIon campaIgn goal IS not
r~allzed~ the proJect 15 structured Into varIous phases so that
.hosp fInanced by the orODosed revenue bonds could bp o~rformed
fIrst. The CItV IS awaItlna submIttal of a studv on such ohase
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devE"looment
As reqUIred by the Ordlnance~ nartlcIpatlnq part~E"S ~uch as
the YMCA may applv tor fInancIng by contactIng the CIty Manager
or other deSIanated offIcers and employees ot the CIty and
submIttIng to theIr satIsfactIon all InformatIon reqUIred to
evaluate the fInancIal reliabIlIty and stabIlity of such
parrlrIpatInq party. AddItIonally: InformatIon on the
te3s1hIlItv of the proposed prOJect must be presentpd; IncludIng
an estImate of the maXImum amOUnt of fInanCIng to be reqUIred; a
desrrIptlon or ItemIzatIon of the co~ts of the proposed prOJect~
and a wrItten agrpement to pay all admInIstratIve exppnsps for
the oroposed nroJect.
The Santa MonIca FamIly YMCA haq fl led an
a~p]l\atIon WIth the CIty for fInanCIng aSSIstance WhICh IS
currently beIng reVIewed by Clty Staff It 15 antJcIpated that
addItIonal fInanCIal and other data WIll be necessary before CIty
Staff can make a determInatIon whether to recommpnd proceedlnq
WIth thIS proJect
AdoptIon of thI~ r~solutIon do~~ not constItute a leQal
commIttment bv the CIty to Jssue revenue bonds on behalf ot the
Santa MonIca YMCA; nor doe~ It alve fInal approval for the
propo~ed proJect. As thIS resolutIon clearly states; the terms
of Issuance and sale as to these revenue bond~ must bp mutually
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agreed UDon by the CIty and YMCA and authorIzed hy further
resolutIons by the CIty CounCIl ~fter the effect1ve date of the
ordJnance. At thIS DOlnr In tIme, the terms and COndJtIons of
any Issuance and sale of revenue bonds are stIll 1n the early
nlannlng stages.
Many dptaIl~ wIll need to be worked out and
vartOUs contlnaenclPs must be satIsfIed prIor to proceedlnq WIth
thIS ~ropospd proJect.
Among the condltlon~ and reqUIrements whIch must be
satIsfIed nrIor to proceedIng WIth this oroposed proJP,t are the
tollowlna:
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Loan Aareement.
The CIty would enter Into an aareement
WIth the YMCA to lend the net proceeds of the revenue bonds to
the YMCA for purposes of paYIng the costs of the proJect. A loan
repayment schedule would be structured to meet scheduled debt
serVIce oayments on the bonds
The CIty may WIsh to take a
spcurIty Interest In thp fInanced property a~ collateral for the
loan
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BOl'}d ResolutlQ.!l.
The CIty would adopt a resolutlon or
ap~rove a~ Indenture authorlZlna Issuance of the bonds and
settlnq forth the term~ thpreof: appolntlna a trustee and
asslqnlng to the trustee Its rIghts under the loan agrpement and
any collateral documents as securIty for the bonds The bond~
would not constItute a debt of the CIty. but would be oavable
s_q) f""--UL..-.f rom revenu~s der I v?d JJ!lger _ t h~loalL...~el'llen t
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OffICIal Statement.
If the bonds are to be sold to thp
publIc, the CIty would approvp a PrelImInary and FInal OftIcIal
Statement for use by the underwrIter In markptInq the bonds,
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Bond Purchase Aareement
The CIty would enter Into an
agreement to ~ell the bonds to the underwrIter or ]n a prIvate
placement; to an Investor
ThIS aqreement e~tabllshps the
purchase prICP and Interest ratp~ on the bond~,
CredIt Enhancement.
In order to be marketable: the
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bonns would ~robably be addItIonally secured eIther hy bond
Insurance or a letter of credIt. If a letter of credIt I~
utIlIzed: It would be obtaIned from an approprIate bank or other
fInanCIal InstitutIon at the request of the YMCA: would run to
the benefIt of the trustee, and would absolutely guarantee the
tImply repayment of prInCIpal and Interest on the bonds. The
YMCA: under an agreement WIth the letter of credIt Issuer: would
be responsIble for all fees of the letter of credlt lssuer for
r~lmburglnq the latter for any draws under the letter of credIt
Addltlonal collateral documents mlght be requlred by the letter
of credlt I~suer to secure It~ rlqhts under the reImbursement
agreement
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Once the refprendum oprlod has exoIrpd a~ to
the procedural ordInance, and all other condltlons precedent to
closIna, as set forth ~n the bond purchase agreement; have been
fulfllled; the bonds would bp del~v~red to thp underwrIter or
ourchaqet and thp Drocpeds receIved by thp trustee and dlsbursed
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~n accordance with the loan agreement and bond resolution.
Var~ous cert~f~cates, opin~ons of counsel, and other closing
papers would be exchanged among the part~es at such t~me.
7. Acquis~t~on and Construction of the Project; Payment of
the Bonds. Follow~ng the clos~ng, the trustee would adm~nister
the construct~on fund, making disbursements on requis~t~on to pay
authorized project costs, and any debt serVlce funds, and mak~nq
scheduled paYMents of prlnclpal and interest on the bonds. It
should be apparent that numerous conditions which must be sat1sf~ed
before the proposed prOJect moves forward.
C1ty Staff ant1c1pates that it will be able to make
reco~mendat~ons by November 1, 1985, based upon rev~ew of the
financ1al ~nformatlon subm~tted by the YMCA.
Fls~al/Budgetary Impact
The Santa Monica YHCA has del~vered a check payable to the
C~ty ~n the amount of $25,000 as a deposit towards expenses WhlCh
wlll be 1ncurred by the Clty in connectlon w~th the proposed
Project. These funds currently held ~n trust at account number
80-975-178-000-000 Nust be appropriated to account number
01-200-261-000-506 1n order to be ut~llzed.
The Clty Attorney's offlce, subJect to Councll approval,
has selected the 1a\o1 firm of Horrison & Foerster to act as bond
counsel for thlS proposed ProJect. Morrison & Foerster's pro-
posal for employment on this matter is 1n an amount not to
exceed $25,000 plus expenses.
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VOTE: Affirmative:
Negative:
Abstain:
Absent:
2 ~ PROOF VOTE~ WITH ANOTHER PERSON BEFORE A~~THING
~ viSlKiouliuN: uKIGi~AL LO be signed, sealed and
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BEFORE DIST~IBUTION CHECK CONTENT OF ALL FOR CITY C~ERK'S ACTION
DISTRIBUTION OF RESOLUTION # 7/1' 0 ORDINANCE #
Council Meeting Date /c:J/?,;;; /j:>5~ Introduced:
Agenda Item #
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Was it amended?
Adopted:
AIl-YAYS PUBLISH AOOPTtJ.J ORDINANC'J:;'.C:: *
*Cross out Attorney I 5 approval
filed 1n Vault.
NEWSPAPER PUBLICATION (Date:
)
)
Department or1ginating staff report (
Management SeTv.~se? Lynne Barrette
urdinances only
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Agency mentioned in document or staff report
(certified?)
SubJect file (agenda packet) 1
Counter file 1
Others:
Airport Parking Auth.
Audltorum Personnel
Building Dept. Planning
EnvlTon. Servo Police (en-
forcement?)
Finance
Purchasing .
Fire
Recr/par1cs
General Servo
Transportation
Library
Treasurer
Manager
SE~D FOU~ COPIES OF ALL ORDINANCES TO:
COD~D SYSTEMS, Attn Peter Maclearie
120 \taln .!"~r~et
AV0~1 N~w Jersey,07?17
SEND FOUR COPIES OF Al.l. ORf)TNANr.P.~ TO:
PRESIDING JUDGE
SANTA MO~ICA MUNICIPAL COURT
~725 MAIN STREET
SA~nA MONICA, CA 90401
*Check code Sectl0ns before sending.
TOTAL COPIES
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CA:RMM:lmd083/hpw
CIty CounCIl MeetIng 10-22-85
Santa MonIca: CalIfornIa
RESOLUTION NUMBER
7110{CCS)
[CIty CounCIl SerIes)
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA DECLARING ITS INTENTION TO
ISSUE REVENUE BONDS (YMCA PROJECT)
WHEREAS, on October 1: 1985, the CIty CounCIl of the CIty
of Santa MonIca adopted OrdInance Number 1345 rCCS) [the
"OrdInance"] speCIfYIng the powers and procedures for the
Issuance of revenue bonds to fInance faCIlities for partICIpatIng
partIes In the CIty of Santa MonIca; and
WHEREAS: the Santa MonIca FamIly YMCA [the "YMCA") has
flIed an appllcatlon WIth the CIty for fInanCIng aSslstance
pursuant to the OrdInance; and
WHEREAS, the CIty CounCIl WIshes to declare Its IntentIon
to prOVIde such aSSIstance, subject to certaIn condItIons,
fOllOWIng the effectIve date of the Ordlnance,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
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SECTION 1
The CIty CouncIl ot the CIty of Santa MonIca
hereby declares Its IntentIon to aSsIst In fInancIng the
acquIsItIon and constructIon of Improvements and addItIons to the
YMCA facIlItIes located In the CIty of Santa MonIca; IncludIng:
wIthout lImItatIon] a subterranean parkIng structure, gymna~lum;
SWImmIng pool; handball/racquet ball courts and locker rooms; and
the remodelIng of eXIstIng faCIlltIe~, through the ls~uance and
sale of revenue bonds In a prInCIpal amount not to exceed
S4;OOO;OOO
SECTION 2
The I~suance and ~ale of such revenue bonds
shall be upon such terms and condItIons as may be mutually aareed
UDon by the CIty and the YMCA; and shall be authorIzed by
resolutIon of the CIty CouncIl of the CIty of Santa MonIca at a
meetIng to be held for such purpo~e on or after the effectIve
date of the Ordlnance.
SECTION 3.
The CIty Clerk shall certIfy to the adoptIon
of thIS ResolutIon, and thenceforth and thereafter the same shall
be In full force and effect.
APPROVED AS TO FORM'
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ROBERT M MYERS
CIty Attorney
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Adopted and approved thIs 22nd day of October, 1985.
,rJ~)t:,- j, X~p.
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I hereby certIfy that the foregoIng ResolutIon No. 7110(CC3)
was duly adapted by the CIty CouncIl of the CIty of Santa MonIca
at a meetIng thereof held on October 22,1985 by the fallowIng
CouncIl vote:
Ayes: Councilmembers: Conn, EpsteIn, JennIngs, A. Katz,
H. Katz, lane and Reed
Noes: Councllmembers: None
AbstaIn: Councllmembers: None
Absent: Councilmembers: None
ATTEST:
~~'M,~
CIty Clerk