HomeMy WebLinkAboutCC RESO 2012-98RESOLUTION 2012 — 98
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
AUTHORIZING THE DEVELOPMENT OF NECESSARY DOCUMENTS
TO REFINANCE CITY OF NATIONAL CITY OUTSTANDING GENERAL
OBLIGATION BONDS, ELECTION OF 2002, SERIES A FOR THE PURPOSE
OF REDEEMING ALL BONDS, PAY TRANSACTION COSTS RELATED TO
AND TO LOWER THE CURRENT TAX ASSESSMENT TO PROPERTY
OWNERS WITHIN THE CITY OF NATIONAL CITY, AND APPROVING
ITS EXISTING FINANCIAL ADVISOR URBAN FUTURES,
ESTRADA HINOJOSA AS UNDERWRITER, AND JONES HALL
AS BOND/DISCLOSURE COUNSEL TO PROVIDE
SERVICES NECESSARY TO COMPLETE THIS TASK
WHEREAS, the City's outstanding General Obligation Bonds, Election of 2002,
Series A, were issued pursuant to an Indenture of Trust, dated May 15, 2003, by the City of
National City (the "Issuer") in order to match State grant funds to fund design and construction
of the City's Library located in the City of National City at 1401 National City Boulevard; and
WHEREAS, the bonds are secured by a General Obligation property tax
assessment approved by the voters in 2002; and
WHEREAS, because the bonds were issued with MBIA bond insurance, the
Bonds were rated "AAA" by MBIA when investors purchased the bonds. Unfortunately MBIA
has been downgraded to "BBB", and as a result the bonds also received a downgrade from
Standard & Poor's to "A" on June 5, 2009. The current rating represents the City underlying
rating.
WHEREAS, Municipal bond funds have experienced inflows in all but two weeks
in the last six months. Because of the fluid nature of the bond market, the City must respond to
these opportunities in a timely manner to refinance outstanding callable bonds for saving to our
tax payers; and
WHEREAS, the City's financial advisor has reviewed the City's outstanding debt
and noted the City's 2002A Bonds can be refinanced for savings in today's market.
WHEREAS, should the City complete the refunding prior to August, savings will
appear on the tax rolls starting in FY 2012-13; and
WHEREAS, staff recommends the City work with the financial firms listed below
(the "financing team") who are familiar with the City and the subject transaction, previously
included in the request for proposal process and those firms selected by the City Council to
provide bond related services to the City and CDC:
FINANCING RESPONSIBILITY
FIRM NAME FIRM LEAD
Underwriter :
Bond / Disclosure Counsel:
Financial Advisor:
Estrada Hinojosa & Co
Jones Hall
Urban Futures Inc
Ruben Mendoza
Dave Fama
Michael Busch
Resolution No. 2012 — 98
May 1,2012
Page Two
WHEREAS, based on current interest rates, a refunding of the 2002A Bonds
would generate overall net present value ("NPV") savings of roughly $235,000, or 4.6% of the
refunded par amount of the bonds. Average annual savings to all affected property owners is
equal to approximately $17,800, totaling $286,000 in savings over the life of the bonds. The
savings is calculated after paying related financing fees and will be spread among the City's
approximate 10,000 parcel owners based on taxable assessed values; and
WHEREAS, the cost of financing, often referred to as the cost of issuance, is
broken down below. The proposed fees are within the contractual rates for each of the firms
included on the finance team
COST OF ISSUANCE AMOUNT
Underwriter 34,620
Financial Advisor 30,000
Bond/Disclosure Counsel 36,000
Trustee & Counsel 3,500
Standard & Poor's Rating Fees 15,000
Verification Agent 2,000
Printing of Official Statement 2,500
California Debt Investment Advisory 750
Commission (CDIAC)
Miscellaneous 5,000
TOTAL 129,370
; and
WHEREAS, the City desires to work with the financing team to develop all the
necessary documents to refinance the City's outstanding General Obligation Bonds, Election of
2002, Series A for the purposes of redeeming all bonds, pay transaction costs related and to
lower the current tax assessment to property owners within the City of National City; and
WHEREAS, the City also desires continue to work with its existing Financial
Advisor, Urban Futures, Jones Hall as Bond & Disclosure Counsel, and Estrada Hinojosa &
Company as Underwriter, to provide services necessary to complete this task.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City hereby authorizes the development of necessary documents to refinance the City
of National City's outstanding General Obligation Bonds, Election of 2002, Series A for the
purpose of redeeming all bonds, pay transaction costs related to, and to lower the current tax
assessment to property owners within the City of National City.
Resolution No. 2012 — 98
May 1,2012
Page Three
BE IT FURTHER RESOLVED that the City Council hereby authorizes the City's
existing financial advisor Urban Futures, Estrada Hinojosa as Underwriter, and Jones Hall as
Bond/Disclosure Counsel, to provide the services necessary to complete the refinancing of the
City's outstanding General Obligation Bonds, Election of 2002, Series.
PASSED and ADOPTED this 1st day of May, 201
on Morrison, Mayor
ATTEST:
-11.jeti A 4/
h el R. Dalla, Cit
Mich Clerk
PROVED AS TO FORM:
'adia Gac L a Silva
City Attorne
Passed and adopted by the Council of the City of National City, California, on May 1,
2012 by the following vote, to -wit:
Ayes: Councilmembers Morrison, Natividad, Rios, Sotelo-Solis, Zarate.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Mayor of the City of National City, California
i
jCityrk of the City National City, California
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2012-98 the City of National City, California, passed and adopted
by the Council of said City on May 1, 2012.
City Clerk of the City of National City, California
By:
Deputy