HomeMy WebLinkAboutAgenda Statement 1986/05/13 Item 11 COUNCIL AGENDA STATEMENT
Item 11
Meeting Date 5/13/86
ITEM TITLE: Resolution / /7 1 Approving the issuance of $38,655,000 in
Bayfront/Town Centre Redevelopment Project 1986 Tax Allocation
Bonds by the Redevelopment Agency
(0 SUBMITTED BY: Community Development Director
REVIEWED BY: City Manager i (14/0.--- (4/5ths Vote: Yes No )
On Thursday, May 15th, the Agency will receive bids relative to the sale of
$38,655,000 in Bayfront/Town Centre Tax Allocation Bonds. The sale was
authorized by action of the Agency in March of this year. While all the
documents relative to the sale will be handled by the Redevelopment Agency,
State law requires that the City Council ; 1 ) Be apprised of the issue, and 2)
concur in the sale.
information.
RECOMMENDATION: Approve resolution authorizing the sale of the 1986 Tax
Allocation Bond issue.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Bids for the sale will be opened at the law offices of Jones, Hall , Hill &
White on Thursday morning, May 15th. After appropriate evaluation of the
bids, the underwriter, Miller & Schroeder, and legal counsel , Jones, Hill ,
Hall & White will recommend to the Agency the acceptance of a bid (interest
rate) relative to the proposed sale. Upon Agency acceptance, the closing and
receipt of funds should follow within two weeks.
As of the time of this writing, ratings from Standard and Poors and Moody' s
have not been received. The rating coupled with the situation regarding the
Tax Reform Act now under consideration by Congress will have a great effect on
the interest rate bid for the bonds.
The bond sale will retire the 1979 Tax Allocation Bond of slightly over $7
million and will refund the $25 million of three year notes issued by the
Agency in 1984. Approximately $6.5 million of new money will be realized from
the sale. Of the total amount of funds received, $9 million, will be placed
in a special escrow fund held by Trustee. This money may be withdrawn within
three years if sufficient new projects have been developed within either of
the twe P coverage . fund
to provide for will the bonds. that there will
be
Apart from the bond
adequat 9
4. , ,;
Page 2, Item 11
Meeting Date 5/13/86
issue 20% of the tax increment received from the County will be directed to
the Agency' s low and moderate income account in accordance with the State
law. Provided as part of the Bond issue, is approximately $2.8 million for a
reserve account and discount of up to 2.25%. These figures will be firmed up
in the final official statement once the bids are received. A draft official
statement will be available for this meeting.
FISCAL IMPACT: The cost of issuance of the bonds is approximately $325,000
underwriters' services, legal services, printing, advertising, ratings and
like services connected with the issue.
WPC 2261H
b t e City Caunctl of
Chula Vista, California
Dated 5` /3