HomeMy WebLinkAboutAgenda Report - September 20, 1995 (51)4` � OF
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AGENDA TITLE: Approval of Sale of $5 million Certificates of Participation under Small Issue Arbitrage
Financing Program
(MEETING DATE: September 20, 1995
PREPARED BY: Acting Finance Director
RECOMMENDED ACTION: That the City Council adopt Resolution No. 95-121 approving
the sale of $5 million Certificates of Participation under the
Small Issue Arbitrage Financing Program to finance a number
of capital projects.
BACKGROUND INFORMATION: The 1995-97 Financial Plan and Budget expressed the need to
finance a number of capital projects over the next three years,
including the Performing Arts Facility, and Downtown
Renovation. Past financing programs included the issuance
of annual Tax Revenue Anticipation Notes (TRANS) to generate
new revenue from arbitrage earnings for capital needs. The City can issue up to $5 million per year of debt
and arbitrage on an unlimited basis. The TRAN program does not reach the allowable $5 million limit. In
addition, the TRAN is a short-term program, not a permanent solution.
In the proposed small issue arbitrage financing program the City would sell a 20 year $5 million Certificate of
Participation in each of the next three calendar years. Since it would fall under the small issue exemption, the
proceeds would be arbitraged until needed. The City would sell the City Hall and/or Police Facility to the
Lodi Public Improvement Corporation which in turn would sell it back to the City under a lease purchase
agreement. The annual lease payments would be backed by the City's general fund. These payments would
be budgeted from the 30% of the property taxes allocated to the Capital Outlay Fund as approved in the
budget policies.
John Firzgerald from Seidler -Fitzgerald Public Finance will be present to answer any questions.
FUNDING: Annual payments: Capital Outlay Fund
Vicky McAthie
Acting Finance Director
APPROVED: t/ ' ✓ ��! % = s
/ THOMAS A. PETERs6N c recycled paper
City Manager
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CITY OF LODI. CALIFORNIA
RESOLUTION NO.95-121
RESOLUTION APPROVING, AUTHORIZING AND DIRECTING PREPARATION AND
EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS, APPROVING,
AUTHORIZING AND DIRECTING PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING
AND SALE OF CERTIFICATES OF PARTICIPATION RELATING THERETO, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS MM RESPECT THERETO
RESOLVED, by the City Council (the "Council") of the City of Lodi, California (the
"City"), as follows:
WHEREAS, the City, working together with the Lodi Public Improvement Corporation
(the "Corporation"), is proposing to proceed with a lease financing;
WHEREAS, in connection therewith, the City proposes to finance the acquisition and
construction of certain public improvements within the geographic boundaries of the City (the
"Improvements"), and it is in the public interest and for the public benefit that the City
authorize and direct execution of the Lease Agreement and certain other financing documents in
connection therewith;
WHEREAS, Seidler -Fitzgerald Public Finance (A Division of The Seidler Companies
Inc.) (the "Underwriter") has been directed to prepare a preliminary official statement
containing information material to the offering and sale of the Certificates described below (the
"Preliminary Official Statement"); and
WHEREAS, the documents below specified shall be filed with the City and the members
of the Council, with the aid of its staff, shall review said documents;
NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows:
Section I. Certificates of Participation (1995 Public Improvement Financing Project) (the
"Certificates") are hereby authorized to be executed and delivered pursuant to the provisions
of the Trust Agreement, as hereinafter defined.
Section 2. The below -enumerated documents be and are hereby approved, and the
Mayor, the City Manager or the Finance Director is hereby authorized and directed to execute
said documents, with such changes, insertions and omissions as may be approved by such
official, and the City Clerk is hereby authorized and directed to attest to such official's
signature:
(a) a site and facility lease, by and between the City, as lessor, and the Corporation, as
lessee;
(b) a lease agreement, by and between the Corporation, as lessor, and the City, as lessee
(the "Lease Agreement"), so long as the principal amount of the Lease Agreement does not
exceed $5,000,000, so long as the term of the Lease Agreement does not exceed thirty (30)
years, and so long as the maximum annual lease payments payable by the City under the Lease
Agreement (the "Lease Payments") does not exceed $600,000;
(c) a trust agreement, by and among the Corporation, the City and Bank of America
National Trust and Savings Association, as trustee (the "Trust Agreement"), relating to the
financing, and the execution and delivery of the Certificates, representing direct, undivided
fractional interests in the Lease Payments;
(d) a continuing disclosure agreement, by and between the City and the Trustee, as
dissemination agent, relating to the financing; and
(e) a purchase contract, by and among the Underwriter, the City and the Corporation
relating to the purchase by the Underwriter of the Certificates, so long as the Underwriter's
discount does not exceed 21/6, exclusive of any original issue discount which does not represent
compensation to the Underwriter.
Section 3. The Council hereby approves the Preliminary Official Statement describing the
financing, in substantially the form on file with the City Clerk, together with any changes therein
or additions thereto deemed advisable by the Mayor, the City Manager or the Finance Director.
The Council authorizes and directs the Mayor, the City Manager or the Finance Director, on
behalf of the City, to deem "final" pursuant to Rule 15c2-12 under the Securities Exchange Act
of 1934 (the "Rule") the Preliminary Official Statement prior to its distribution by the
Underwriter.
Section 4. The Mayor, the City Manager or the Finance Director is authorized and
directed to cause the Preliminary Official Statement to be brought into the form of a final
official statement (the "Final Official Statement") and to execute said Final Official Statement,
dated as of the date of the sale of the Certificates, and a statement that the facts contained in
the Final Official Statement, and any supplement or amendment thereto (which shall be deemed
an original part thereof for the purpose of such statement) were, at the time of sale of the
Certificates, true and correct in all material respects and that the Final Official Statement did
not, on the date of sale of the Certificates, and does not, as of the date of delivery of the
Certificates, contain any untrue statement of a material fact with respect to the City or omit to
state material facts with respect to the City required to be stated where necessary to make any
statement made therein not misleading in light of the circumstances under which it was made.
The Mayor, the City Manager or the Finance Director shall take such further actions prior to the
signing of the Final Official Statement as are deemed necessary or appropriate to verify the
accuracy thereof. The execution of the Final Official Statement, which shall include such changes
and additions thereto deemed advisable by the Mayor, the City Manager or the Finance
Director and such information permitted to be excluded from the Preliminary Official Statement
pursuant to the Rule, shall be conclusive evidence of the approval of the Final Official
Statement by the City.
Section 5. The Final Official Statement, when prepared; is approved for distribution in
connection with the offering and sale of the Certificates. _
Section 6. The Mayor, the City Manager, the Finance Director, the City Clerk and all
other appropriate officials of the City are hereby authorized and directed to execute such other
agreements, documents and certificates as may be necessary to effect the purposes of this
resolution and the financing herein authorized.
Section 7. This Resolution shall take effect upon its adoption by this Council.
-2-
I, the undersigned City Clerk of the City of Lodi, hereby certify that the foregoing is a
full, true and correct copy of a resolution duly adopted by the City Council of the City at a
meeting thereof on the 20th day of September, 1995, by the following vote of the members
thereof:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST:
City Clerk
-3-
Mayor
MEMORANDUM
DATE: July 27, 1995
TO: Dixon Flynn, City Manager
Councilmembers
Department Heads
FROM: Vicky McAthie, Acting Finance Director QY_�
SUBJECT: Timeline for sale of Certificates of Participation
In lieu of a shirtsleeve session, this memo will serve to bring interested parties up to date
on the status of the proposed sale of Certificates of Participation.
The City Council approved the 1995-97 Financial Plan and Budget on June 21, 1995
which included proposed capital projects to be funded by certificate of participation bond
proceeds.
I met with John Fitzgerald of Seidler -Fitzgerald Public Finance to follow up on prior
meetings regarding the details of a small issue arbitrage financing program which is
scheduled to go to Council on September, 20, 1995. The proposed program is needed to
finance a number of capital projects over the next three years, including the Performing
Arts Center, Indoor Sports Facility and Downtown Revitalization/Cherokee Lane. In each
of the next three calendar years the City would sell $5 million COP issue. If the City
issued any Special Assessment bonds during this period the COP issue sold during that
calendar year would be reduced to stay under the small issue exemption.
Each COP issue would be for 30 years. The City would sell the City Hall and/or Police
Facility to the Lodi Public Improvement Corporation which in turn would sell it back to
the City under a lease purchase agreement. The annual lease payments would be backed
by the City's general fund, and would be budgeted from the portion of property taxes set
aside for capital projects. The annual debt service would be approximately $379,000 for
each issue. , - . - -
Attached is a breakdown of the timeline for the sales schedule for the 1995 Certificates of
Participation. If approved by Council on the second meeting in September, the bonds
would be sold on September 26, 1995. Funds would be available for capital projects by
the middle of October. In addition, I have attached a list of the proposed Bond Council,
Underwriter, Disclosure Counsel, and Trustee.
SE\7 BY=SElDLER-FIT?,GEPL`rD i : + : 14.' ` . 11 hl, IC Fl\A"%(:E-- 2' iS '333 6807:= 21/ 4
Seidler -Fitzgerald
PLlblic L" irianc& A L,1'i-,W Ck tie a'r rA Y�7c iK tYUxv ncx� +s pY]�. New �a W. rI,—
$5,000,000
C.
City: City of Lodi
JHHWI Jones Hall Hill & White (Special Counsel)
S -F.• Seldler-FR2gerald Public Finance (Underwriter)
MR. Mudge Hose Guthrie Alexander & Ferdon (Disclosure Counsel)
Belk, Bank of America NT & SA (Trustee)
5 is South Figueroa street - Los Angeles. CA 90071-3306 * 2134524-4232 • FaX 213.6P -15..9
Jt1-24-1995 13:09 213 66B 1559 P.02
$5,000,0 0
CrN OF LODI
199 Cart;ficates of Participation
(Capital Prolaets)
Sales Schedule
(es of July 27, 1995)
Responsible
Date
Activity
Party
8/21/95
Distribute first draft of Preliminary Official
S -F, JHHW
Statement (P.O.S.) and legal documents
8126/95
Notify California Deist Advisory Commission of sale
JHHW
8131195
Receive comments on P.O.S. and legal documents
All Parties
9/6/95
Distribute second draft of P.O.S. and legal documents,
S -F, JHHW
including to rating agencies and Insurance companies
918/95
Receive final comments on P,O.S. and legal documents
All Parties
9/12195
Distribute P.O.S. and legal documents (20 copies) to
S -F, JHHW
City Clerk for inclusion in agenda packet for
September 20 City Council meeting
9118195
Receive ratings and/or insurance commitment
S -F
8120/95
City Council approves financing. financing team, P.O.S.
City
and legal documents, authorizes distribution of P.O.S.
and authorizes City Manager and Rnance Director to execute
purchase contract subject to certain nDt-l"irceed parameters
9/21/95
Print and mail P.Q.S.
S -F
9/25/95
Price Issue
S -F
9/26/95
Sale of Certificates, purchase contract executed
Ckyr, S -F
141111195
Preclosing (2 p.m. at Jones Hall Hill & White offices)
JHHW
10/12/95
Closing (8 a.m. at Jones Hall Hill & White offices;
All Parties
proceeds received by City)
AUGUST 1995 SEPTEMBER 1995 OCTOBER 1995
S N T Y T F S S M T U T F S S M T V T F S
1 2 3 1 5 1 2 1 2 3 4 5 6 7
6 7 a 9 10 11 12 3 4 5 6 7 8 9 8 910 11 12 1314
1314 15 16 17 16 19 loll 1Z 13 14 15 16 13 1617 18 19 20 21
2021 22 23 24 25 26 1713 19 20 21 22 23 22 23 24 2S 26 27 28
27 281 29 30 31 24 25 Z6 27 23 29 30 29 30-31 -- -
City: City of Lodi
JHHWI Jones Hall Hill & White (Special Counsel)
S -F.• Seldler-FR2gerald Public Finance (Underwriter)
MR. Mudge Hose Guthrie Alexander & Ferdon (Disclosure Counsel)
Belk, Bank of America NT & SA (Trustee)
5 is South Figueroa street - Los Angeles. CA 90071-3306 * 2134524-4232 • FaX 213.6P -15..9
Jt1-24-1995 13:09 213 66B 1559 P.02
SENT BY.Sc1F)L.FR-F1T.7jT ALD : 7-27-05 : 1121 . PURL 1C F11k%ME 2:19 333 6507:7 11• 4
Seidler -Fitzgerald
PtIbliC Finance tx.hs►x a Tr a Se aer COer{�ar,ies Ytn0�r 016d• MU[YYirr: s kw 1Y,rit 5,acic Fa�i►vt,�c, t x..
$6,000,000
CITY OF LORI
1995 Certificates of Participation
(Capital Projects)
Distribution List
July 27, 1995
Issuer
City of Lodi
City Hall
Cali Box 3006 (95241-1910)
221 West Pine Street
Dodi, CA 95240
(2081333-6807 (EM
Mr. Dixon Flynn, City Manager, (209) 333-6700
Ms. Vicky McAthie, Acting Finance Director,
(209) 333-6761 Ext. 618
5jX&lal Counsel
Jones Halt Hill & white
Four Ernbarcadero Center
i9th Floor
San Francisca, CA 94117
(416) 391-5780
L41 §) 391-5784 (FAX)
Brian D. Ouint, Esq.
Underwriter
Seidier-Fitzgerald Public Finance
615 South Figueroa Street
Suite 1100
Los Angeles, CA 90071
(213) 624-4232
(213) 888-1559 (FA7(),
Mr, John C. Fitzgerald, Managing Director
Mr. Erec J. Fitzgerald, F=inancial Analyst
Ms. Pamela Flores, Senior Analyst
Disclosure Counsel
Mudge Rasa Guthrie Alexander & Ferdon
180 Maiden Lane
New York, NY 10438
(212) 610-7224
L212) 509-0437 (FAX]
Martin Dockery, Esq.
Trustee
Bank of America
1 Embarcadero Center
20th Floor
San Francisco, CA 94111
(415) 953-4042
(415) _963-4169 (FAX)
Mr. Agazia Catania
Ms, Millie Canessa
51 S South Figueroa Street -Los Angeles. CA 90071 3396 - 2 13.8241232 • Pax 213.688-1559
JUL-27-1995 1309 213 6W 1559 P.01