HomeMy WebLinkAboutRDA Packet 2005/03/22
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TUESDAY, MARCH 22, 2005
6:00 P.M.
(immediately following the City Council meeting)
rnv OF
CHUlA VISTA
COUNCIL CHAMBERS
PUBLIC SERVICES BUILDING
.JOINT MEETING OF THE
REDEVELOPMENT AGENCY I CITY COUNCIL
OF THE CITY OF CHULA VISTA
CALL TO ORDER
ROLL CALL
Agency/Council Members Castaneda, Davis, McCann, Rindone; Chair/Mayor Padilla
CONSENT CALENDAR
The staff recommendations regarding the following item(s) listed under the Consent Calendar will be enacted
by the Agency/Council by one motion without discussion unless an Agency/Council member, a member of the
public or City staff requests that the item be pulled for discussion. If you wish to speak on one of these items,
please fill out a "Request to Speak Form" available in the lobby and submit it to the Redevelopment Agency or
the City Clerk prior to the meeting. Items pulled from the Consent Calendar will be discussed after Public
Hearing items. Items pulled by the public will be the first items of business.
1. WRITTEN CORRESPONDENCE
Request from Agency/Councilmember Rindone for an excused absence from
the February 15, 2005, Joint Redevelopment Agency/City Council Meeting.
Staff recommendation: Agency/Council excuse the absence.
2. JOINT RESOLUTION OF THE CITY COUNCIL AND REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA WAIVING THE CONSULTANT
SELECTION PROCESS AS IMPRACTICAL AND APPROVING AN
AGREEMENT WITH E.J. DE LA ROSA & CO. AS UNDERWRITERS FOR THE
REFUNDING OF THE CITY OF CHULA VISTA REDEVELOPMENT AGENCY
1994 SENIOR TAX ALLOCATION BONDS, SERIES A; WAIVING THE
CONSULTANT SELECTION PROCESS AND APPROVING THE FIRST
AMENDMENT TO THE AGREEMENT WITH HARRELL & COMPANY
ADVISORS, LLC TO SERVE AS FINANCIAL ADVISORS; AND AUTHORIZING
THE MAYOR TO EXECUTIVE THE CONTRACTS - With the assistance of
Harrell & Co., staff is exploring the feasibility of refunding the City of Chula
Vista Redevelopment Agency 1994 Senior Tax Allocation Refunding Bonds,
Series A. Based on preliminary projections, refunding would provide an
annual debt service savings of $185,000 or a net present value savings of
$2.3 million or 17.9% of the par amount over the life of the bonds based on
an assumed interest rate of 4.93%. [Director of Finance/Treasurer]
Staff recommendation: Agency/Council adopt the resolution.
3. CONSIDERATION OF 1) AMENDING AND RESTATING THE JOINT EXERCISE
OF POWERS AGREEMENT RELATING TO THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY; 2) APPROVING THE
BORROWING OF FUNDS BY THE REDEVELOPMENT AGENCY FROM
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY;
AND 3) EXECUTING A LOAN AGREEMENT RELATING TO THE ISSUANCE
OF CERTAIN BONDS BY THE CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY - [Director of Finance/Treasurer]
As part of the effort to balance the 2005 budget of the State of California,
redevelopment agencies are obligated to make payments totaling $250
million to the Educational Revenue Augmentation Fund (ERAF). Individual
ERAF payments were determined based on the Agency's tax increment as a
proportion of the total tax increment of all agencies throughout the State.
The City of Chula Vista Redevelopment Agency's ERAF obligation for FY
2005 is $743,358. [Director of Finance/Treasurer]
a. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA APPROVING, AUTHORIZING AND DIRECTING
EXECUTION OF AN AMENDED AND RESTATED JOINT EXERCISE OF
POWERS AGREEMENT RELATING TO THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY
b. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE BORROWING OF FUNDS BY THE REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA FROM CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY AND
PROVIDING OTHER MATTERS RELATING THERETO
c. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA AUTHORIZING AND DIRECTING EXECUTION OF LOAN
AGREEMENT RELATING TO THE ISSUANCE OF CERTAIN BONDS BY
THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY, APPROVING OFFICIAL STATEMENT RELATING TO SUCH
BONDS AND AUTHORIZING AND APPROVING OTHER MATTERS
RELATING THERETO
Staff recommendation: a) Agency adopt the resolution;
b) Council adopt the resolution;
c) Agency adopt the resolution.
Redevelopment Agency, March 22, 2005
Page 2
ORAL COMMUNICATIONS
This is an opportunity for the general public to address the Redevelopment Agency on any subject matter
within the Agency's jurisdiction that is not an item on this agenda. (State law, however, generally prohibits
the Redevelopment Agency from taking action on any issues not included on the posted agenda.) If you wish
to address the Agency on such a subject, please complete the" Request to Speak Under Oral Communications
Form" available in the lobby and submit it to the Secretary to the Redevelopment Agency or City Clerk prior to
the meeting. Those who wish to speak, please give your name and address for record purposes and follow up
action.
OTHER BUSINESS
4. DIRECTOR'S REPORT
5. CHAIR REPORT
6. AGENCY COMMENTS
ADJOURNMENT
The Redevelopment Agency will adjourn to a Regular Meeting on April 5, 2005, at
4:00 p.m., in the Council Chambers.
AMERICANS WITH DISABILITIES ACT
The City of Chula Vista, in complying with.the Americans with Disabilities Act (ADA), request individuals who
require special accommodates to access, attend, and/or participate in a City meeting, activity, or service
request such accommodation at least 48 hours in advance for meetings and five days for scheduled services
and activities, Please contact the Secretary to the Redevelopment Agency for specific information at (619)
691-5047 or Telecommunications Devices for the Deaf (TOO) at (619) 585-5647, California Relay Service is
also available for the hearing impaired.
Redevelopment Agency, March 22, 2005
Page 3
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....-.:..-:...... Chula Vista, CA 91910
CnYOF (619) 691-5044
(HUlA VISTA (619) 476-5379 FAX
Mayor and City Council
City of Chula Vista
276 Fourth Avenue
MEMO
Tuesday, March 1, 2005
TO:
FROM:
Office of the City Clerk
Monica Pedraza
SUBJECT:
REQUEST FOR EXCUSED ABSENCE
Council member Jerry Rindone has requested an excused absence
for the Joint City Council/Redevelopment Agency Meeting on
February 15, 2005,
Thank y~u,
VW~"
Monica Pedraz
Cc: Council member Rindone
1-1
Joint City Council/Redevelopment Agency
Item ,;2..
Meeting Date March 22. 2005
Item Title:
Resolution waiving the consultant selection process as
impractical and approving an agreement with EJ. De La Rosa &
Co. as undelWriters for the refunding of the City of Chula Vista
Redevelopment Agency 1994 Senior Tax Allocation Bonds, Series
A; waiving the consultant selection process and approving the first
amendment to the agreement with Harrell & Company Advisors,
LLC to serve as financial advisors; and authorizing the Mayor to
execute the contracts
Director of Finance/Treasurer-1}K
Executive Director/City Managetf .,.j (4/5ths Vote:Yes_No,lU
(~Q\
With the assistance of Harrell & Co. we are exploring the feasibility of refunding the City
of Chula Vista Redevelopment Agency 1994 Senior Tax Allocation Refunding Bonds,
Series A. Based on preliminary projections, the refunding would provide an annual debt
service savings of $185,000 or a net present value savings of $2.3 million or 17.9% of
the par amount over the life of the bonds based on an assumed interest rate of 4,93%.
Submitted By:
Reviewed By:
The 1994 Senior Tax Allocation Refunding Bonds Series A are callable on September 1,
2005 and can be refunded 90 days prior, or June 1, 2005. In order to proceed with the
refunding in a timely manner and take advantage of the current favorable interest rates,
a waiver of the consultant selection process is requested in accordance with Chula Vista
Municipal Code 2.56.070.B3.
EJ. De La Rosa & Co. has extensive experience in structuring and marketing tax
allocation obligations for California cities. Since January 1, 2000, EJ. De La Rosa & Co.
has served as senior or co-senior manager for 33 tax allocation bond issues totaling over
$1.6 billion. They possess the expertise and knowledge to assist the Agency in
providing requisite undelWriting services for this refunding.
Harrell & Co. has previously performed quite extensive reviews of the City/Agency
outstanding debt in an effort to determine if there were any economically viable
candidates for refinancing. Harrell and Co. has served as financial advisor on the 2000
Tax Allocation Bonds for the Redevelopment Agency and various City Certificates of
Participation over the past 5 years. Their knowledge of the Agency and expertise in the
area of financial consulting will as?ist the Agency in refunding these bonds.
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Recommendation:
That Council adopt the resolution waiving the consultant selection process as impractical
and approving an agreement with EJ. De La Rosa & Co. as underwriters for the
refunding of the City of Chula Vista Redevelopment Agency 1994 Senior Tax Allocation
Bonds, Series A; waiving the consultant selection process and approving the first
amendment to the agreement with Harrell & Company Advisors, LLC to serve as
financial advisors; and authorizing the Mayor to execute the contracts.
Boards/Commissions Recommendations: None
Discussion:
On September 20, 1994, the Redevelopment Agency approved a resolution authorizing
the issuance of the 1994 Senior Tax Allocation Refunding Bonds, Series A to advance
refund the 1986 Tax Allocation Bonds previously issued by the Agency for the
BayfrontjTown Centre I Redevelopment Project Area.
As of December 31, 2004, there was $12.9 million in outstanding bonds with a net
interest cost of 8.17% and a final maturity date of 2024. The 1994 Senior Tax
Allocation Refunding Bonds, Series A are callable on September 1, 2005 and can be
refunded 90 days prior, or June 1, 2005. Based on preliminary research conducted by
Harrell & Co. Advisors, strictly on a contingent fee basis, it appears that the Agency
would save approximately $185,000 per year on their annual debt service payments as a
result of a refunding under current market conditions with an assumed interest rate of
4.93%. If this resolution is approved, staff will work with Harrell and Co., EJ. De La
Rosa and the Agency's Bond Counsel firm of Stradling, Yocca, Carlson & Rauth to
analyze all facets of the potential refunding, and if necessary will proceed with
preparation of the necessary legal documents for Agency approval to authorize the sale
of the refunding bonds on a "negotiated basis".
A negotiated sale is best described as a "pre-marketed" sale given the ample time
provided to a) structure the bonds to meet (ever changing) investor preferences b)
explain the credit of the Agency to the complete satisfaction of prospective investors,
and c) create investor capacity to purchase the bonds by working with investors to sell
current holdings to generate investable cash. A negotiated sale includes a pre-selection
of an underwriter and a negotiated interest cost, based on market conditions at the time
of the sale. Due to the various complexities surrounding the Bayfront project area this
potential refunding lends itself to a negotiated sale. This will allow ample time and
opportunities to address any questions.
Aooointment of Financial Advisor
Redevelopment Agency financing is complex in nature due to the various project areas,
long-term revenue projections arid rating agency coordination. Suzanne Harrell, the
principal representative of Harrell & Co. has previously performed quite extensive
reviews of the City/Agency outstanding debt in an effort to determine if there were any
economically viable candidates for refinancing. Ms. Harrell has served as financial
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advisor on the 2000 Tax Allocation Bonds for the Redevelopment Agency and various
City Certificates of Participation over the past 5 years. In 2000, Ms. Harrell prepared the
Agency's Financial Plan used in determining the bonding capacity for the Agency by
project area. As part of this amended agreement, Ms. Harrell will provide the Agency
with an updated Financial Plan incorporating changes in the project areas and the
potential impacts related to the dismantling of the power plant.
Due to Harrell & Co's. in-depth understanding of the City and Agency, staff is requesting
Council waive the normal selection process as impractical. Harrell & Co. will assist the
Agency in negotiating the interest rates on the bonds with the underwriter to assure
that the Agency achieves market interest rates. The cost of serving as a Financial
Advisor to refund these bonds will be approximately $55,000 plus expenses. A fixed fee
of $10,000 will be incurred for updating the Agency's financial plan.
Appointment of Underwriter
E. J. De La Rosa & Co. ranks as one of the top underwriters of California municipal
bonds. Since 2000, EJ. De La Rosa & Co. has underwritten 33 tax allocation bond
financings, with a total par amount of almost $1.8 billion. Over the last four years, EJ.
De La Rosa & Co. has served as senior manager on 19 redevelopment financings. As a
result the firm has vast knowledge of redevelopment in California. Following are
examples of some of the most recent redevelopment related financings the Firm has
underwritten:
. $191,795,041 Long Beach Finance Authority Revenue Bonds, 2005 Series A (Tax
Exempt) and 2005 Series B (Taxable) (Senior Managers)
. $87,260,000 Redevelopment Agency of the City of Burbank 2003 Refunding Tax
Allocation Bonds, Series A (Golden State Redevelopment Project) (Senior
Managers)
. $300,015,000 Community Redevelopment Agency of the City of Los Angeles
Bunker Hill Project Revenue Bonds, Series A, 2004B (Taxable) and 2004L (Co-
Senior Managers)
Also, Raul Amezcua, underwriter with EJ. De La Rosa, served as the underwriter for the
San Diego Port Authority in the acquisition of the power plant. His extensive knowledge
related to the, power plant and Bayfront will be instrumental in communicating with
potential investors. The fee proposed by the Underwriter is 1.1% ofthe par amount of
the bonds based on obtaining a BBB rating (Good credit quality) for the bonds.
Fiscal Impact: There is no net impact to the, General Fund. Based on preliminary
projections, the refunding would provide an annual debt service savings to the
Redevelopment Agency of $185,000 or a net present value of $2.3 million over the
remaining 20 years of the bonds based on an assumed interest rate of 4.93%.
2-3
All costs of issuance, including the cost of the underwriter, bond counsel, disclosure
documents etc. will be paid from the bond proceeds. The fees are summarized as
follows:
Financial Advisor - A fixed fee of $10,000 will be incurred for updating the
Agency's financial plan. A fee of $55,000 is contingent on refunding of the
bonds.
Underwriter - The fee is 1.1% of the par amount of the bonds or $151,800 based
on an estimated bond sizing of $13,8 million.
Bond Counsel - A fee of approximately $65,000 based on an existing two-party
agreement.
Further detail of costs and projected savings will be provided to Council when staff
returns for final approval of the refunding proposal.
2-4
AGENCY RESOLUTION NO.
AND
COUNCIL RESOLUTION NO,
JOINT RESOLUTION OF THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
WAIVING THE CONSULTANT SELECTION PROCESS AS
IMPRACTICAL AND APPROVING AN AGREEMENT WITH EJ.
DE LA ROSA & CO, AS UNDERWRITERS FOR THE REFUNDING
OF THE CITY OF CHULA VISTA REDEVELOPMENT AGENCY
1994 SENIOR TAX ALLOCATION BONDS, SERIES A; WAIVING
THE CONSULTANT SELECTION PROCESS AND APPROVING
THE FIRST AMENDMENT TO THE AGREEMENT WITH
HARRELL & COMPANY ADVISORS, LLC TO SERVE AS
FINANCIAL ADVISORS; AND AUTHORIZING THE MAYOR TO
EXECUTE THE CONTRACTS
WHEREAS, on September 20, 1994, the Redevelopment Agency (the "Agency")
approved a resolution authorizing the issuance of the 1994 Senior Tax Allocation Refunding
Bonds, Series A (the "Bonds") to advance refund the 1986 Tax Allocation Bonds previously
issued by the Agency for the Bayfront/Town Centre I Redevelopment Project Area; and
WHEREAS, as of December 31, 2004, there was $12,9 million in outstanding bonds with
a net interest cost of8,17% and a final maturity date of2024; and
WHEREAS, the Bonds, axe callable on September 1, 2005 and can be refunded 90 days
prior, or June 1,2005; and
WHEREAS, based on preliminary reseaxch conducted by Harrell & Co., LLC ("Harrell
& Co,") Advisors, it appears that the Agency would save approximately $185,000 per year on its
annual debt service payments as a result of a refunding under current market conditions with an
assumed interest rate of 4,93%; and
WHEREAS, Agency financing is complex in nature due to various project axeas, long
term revenue projections and rating agency coordination; and
WHEREAS, Harrell & Co, principal, Suzanne Harrell, has obtained an in-depth
understanding of City and Agency financing matters through worked performed for the City and
the Agency during the past five years, including serving as financial advisor on the 2000 Tax
Allocation Bonds, preparing the Agency's Financial Plan in 2000 and reviewing outstanding
debt to determine viable candidates for refinancing; and
WHEREAS, Harrell & Co.'s' prior experience and extensive knowledge of City and
Agency bond financing matters makes it uniquely qualified to serve as the financial advisor on
refunding the Bonds; and
2-5
WHEREAS, EJ. De La Rosa & Co. ("De La Rosa") is qualified to serve as the
underwriter for refunding the Bonds, in that, it ranks among the top underwriters of California
Municipal bonds, it has served as senior manager on 19 redevelopment financings in California
over the last four years and one of its underwriters, Raul Amezcua, has experience as an
underwriter for the San Diego Port Authority; and
WHEREAS, applying the City's competitive bid process to the selections of a financial
advisor and an underwriter for the refunding would be impractical because of the short time
frame in which the City and Agency must act to take advantage of the cost savings available
under current interest rates; and
WHEREAS, it is in the City's best interest to waive the competitive bid process in
accordance with Chula Vista Municipal Code 2.56.070.B3, in order to proceed with the
refunding in a timely manner and take advantage of the current favorable interest rates.
NOW, THEREFORE, BE IT RESOLVED, that the City Council and the Redevelopment
Agency of the City of Chula Vista adopt the resolution waiving the consultant selection process
as impractical and approving an agreement with EJ. De La Rosa & Co. as underwriters for the
refunding of the City of Chula Vista Redevelopment Agency 1994 Senior Tax Allocation Bonds,
Series A; waiving the consultant selection process and approving the first amendment to the
agreement with Harrell & Company Advisors, LLC to serve as financial advisors.
BE IT FURTHER RESOLVED, that the City Council and Redevelopment Agency of the
City of Chula Vista authorize the Mayor to execute the contracts on behalf of the City of Chula
Vista,
Presented by
Approved as to form by
Maria Kachadorian
Director of Finance/Treasurer
r
oore
1\ttomey and Agency Counsel
J :Attorney/Reso/ Agreements/Joint Reso DeLaRosa
2-6
AGREEMENT BETWEEN
REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA
AND
E, J, DE LA ROSA & CO" INC.
for underwriting services related to refunding the BayfrontITown Centre I Redevelopment
1994 Senior Tax Allocation Refunding Bonds, Series A.
This agreement ("Agreement"), dated March 22, 2005 for the purposes of
reference only, and effective as of the date last executed unless another date is otherwise
specified in Exhibit A, Paragraph 1 is between the City of Chula Vista-related entity as is
indicated on Exhibit A, paragraph 2, as such ("City"), whose business form is set forth on
Exhibit A, paragraph 3, and the entity indicated on the attached Exhibit A, paragraph 4, as
Consultant, whose business form is set forth on Exhibit A, paragraph 5, and whose place
of business and telephone numbers are set forth on Exhibit A, paragraph 6
("Consultant"), and is made with reference to the following facts:
Recitals
Whereas, E. J, De La Rosa & Co., Inc., hereafter referred to as "Consultant,"
possesses the requisite expertise and knowledge to assist the City in providing requisite
underwriting services; and,
Whereas, Redevelopment Agency of the City of Chula Vista, hereafter referred
to as "City" is desirous of taking advantage of said knowledge and expertise; and,
Whereas, Consultant warrants and represents that they are experienced and
staffed in a manner such that they are and can prepare and deliver the services
required of Consultant to City within the time frames herein provided all in accordance
with the terms and conditions of this Agreement;
NOW, THEREFORE, BE IT RESOLVED that the City and Consultant do hereby
mutually agree as follows:
1. Consultant's Duties
A. General Duties
Consultant shall perform all of the services described on the attached Exhibit
A, Paragraph 7, entitled "General Duties".
8, Scope of Work and Schedule
2-7
In the process of performing and delivering said "General Duties", Consultant
shall also perform all of the services described in Exhibit A, Paragraph 8,
entitled " Scope of Work and Schedule", not inconsistent with the General
Duties, according to, and within the time frames set forth in Exhibit A,
Paragraph 8, and deliver to City such Deliverables as are identified in Exhibit A,
Paragraph 8, within the time frames set forth therein, time being of the essence
of this agreement. The General Duties and the work and deliverables required
in the Scope of Work and Schedule shall be herein referred to as the "Defined
Services". Failure to complete the Defined Services by the times indicated
does not, except at the option of the City, operate to terminate this Agreement.
C. Reductions in Scope of Work
City may independently, or upon request from Consultant, from time to time
reduce the Defined Services to be performed by the Consultant under this
Agreement. Upon doing so, City and Consultant agree to meet in good faith
and confer for the purpose of negotiating a corresponding reduction in the
compensation associated with said reduction.
D, Additional Services
In addition to performing the Defined Services herein set forth, City may require
Consultant to perform additional consulting services related to the Defined
Services ("Additional Services"), and upon doing so in writing, if they are within
the scope of services offered by Consultant, Consultant shall perform same on
a time and materials basis at the rates set forth in the "Rate Schedule' in
Exhibit A, Paragraph 11 (C), unless a separate fixed fee is otherwise agreed
upon. All compensation for Additional Services shall be paid monthly as billed.
E. Standard of Care ,
Consultant, in performing any Services under this agreement, whether Defined
Services or Additional Services, shall perform in a manner consistent with that
level of care and skill ordinarily exercised by members of the profession
currently practicing under similar conditions and in similar locations.
F. Insurance
Consultant represents that it and its agents, staff and subconsultants employed
by it in connection with the Services required to be rendered, are protected
against the risk of loss by the following insurance coverages, in the following
categories, and to the limits specified, policies of which are issued by
Insurance Companies that have a Best's Rating of "A, Class V" or better, or
E.J, DelaRosa Co, Ine,
. Page 2
(Revised 3/09/2005)
2-8
shall meet with the approval of the City:
Statutory Worker's Compensation Insurance and Employer's Liability Insurance
coverage in the amount set forth in the attached Exhibit A, Paragraph 9.
Commercial General Liability Insurance including Business Automobile
Insurance coverage in the amount set forth in Exhibit A, Paragraph 9,
combined single limit applied separately to each project away from premises
owned or rented by Consultant, which names City as an Additional Insured,
and which is primary to any policy which the City may otherwise carry ("Primary
Coverage"), and which treats the employees of the City in the same manner as
members of the general public ("Cross-liability Coverage"),
Errors and Omissions insurance, in the amount set forth in Exhibit A,
Paragraph 9, unless Errors and Omissions coverage is included in the General
Liability policy.
G. Proof of Insurance Coverage.
(1) Certificates of Insurance.
Consultant shall demonstrate proof of coverage herein required, prior to
the commencement of services required under this Agreement, by
delivery of Certificates of Insurance demonstrating same, and further
indicating that the policies may not be canceled without at least thirty (30)
days written notice to the Additional Insured.
(2) Policy Endorsements Required,
In order to demonstrate the Additional Insured Coverage, Primary
Coverage and Cross-liability Coverage required under Consultant's
Commercial General Liability Insurance Policy, Consultant shall deliver a
policy endorsement to the City demonstrating same, which shall be
reviewed and approved by the Risk Manager.
H. Security for Performance.
(1) Performance Bond.
In the event that Exhibit A, at paragraph 19, indicates the need for
Consultant to provide a Performance Bond (indicated by a check mark in
the parenthetical space immediately preceding the subparagraph entitled
"Performance Bond"), then Consultant shall provide to the City a
E.J, DeLaRosa Co, Inc.
. Page 3
(Revised 3/09/2005)
2-9
performance bond by a surety and in a form and amount satisfactory to
the Risk Manager or City Attorney which amount is indicated in the space
adjacent to the term, "Performance Bond", in said Paragraph 19, Exhibit
A.
(2) Letter of Credit.
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide a Letter of Credit (indicated by a check mark in the
parenthetical space immediately preceding the subparagraph entitled
"Letter of Credit"), then Consultant shall provide to the City an irrevocable
letter of credit callable by the City at their unfettered discretion by
submitting to the bank a letter, signed by the City Manager, stating that
the Consultant is in breach of the terms of this Agreement. The letter of
credit shall be issued by a bank, and be in a form and amount satisfactory
to the Risk Manager or City Attorney which amount is indicated in the
space adjacent to the term, "Letter of Credit", in said Paragraph 19,
Exhibit A.
(3) Other Security
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide security other than a Performance Bond or a Letter of
Credit (indicated by a check mark in the parenthetical space immediately
preceding the subparagraph entitled "Other Security"), then Consultant shall
provide to the City such other security therein listed in a form and amount
satisfactory to the Risk Manager or City Attorney.
I. Business License.
Consultant agrees to obtain a business license from the City and to otherwise
comply with Title 5 of the Chula Vista Municipal Code.
2. Duties of the City
A. Consultation and Cooperation
City shall regularly consult the Consultant for the purpose of reviewing the
progress of the Defined Services and Schedule therein contained, and to
provide direction and guidance to achi,eve the objectives of this agreement.
The City shall permit access to its office facilities, files and records by
Consultant throughout the term of the agreement. In addition, thereto, City
agrees to provide the information, data, items and materials set forth on Exhibit
E.J. DelaRosa Co, Inc.
. Page 4
(Revised 3/09/2005)
2-10
A, Paragraph 10, and with the further understanding that delay in the provision
of these materials beyond 30 days after authorization to proceed, shall
constitute a basis for the justifiable delay in the Consultant's performance of
this agreement.
B, Compensation
Upon receipt of a properly prepared billing from Consultant submitted to the
City periodically as indicated in Exhibit A, Paragraph 18, but in no event more
frequently than monthly, on the day of the period indicated in Exhibit A,
Paragraph 18, City shall compensate Consultant for all services rendered by
Consultant according to the terms and conditions set forth in Exhibit A,
Paragraph 11, adjacent to the governing compensation relationship indicated
by a "checkmark" next to the appropriate arrangement, subject to the
requirements for retention set forth in paragraph 19 of Exhibit A, and shall
compensate Consultant for out of pocket expenses as provided in Exhibit A,
Paragraph 12.
All billings submitted by Consultant shall contain sufficient information as to the
propriety of the billing to permit the City to evaluate that the amount due and
payable thereunder is proper, and shall specifically contain the City's account
number indicated on Exhibit A, Paragraph 18 (C) to be charged upon making
such payment.
3. Administration of Contract
Each party designates the individuals ("Contract Administrators") indicated on
Exhibit A, Paragraph 13, as said party's contract administrator who is authorized
by said party to represent them in the routine administration of this agreement.
4. Term
This Agreement shall terminate when the Parties have complied with all executory
provisions hereof.
5. Liquidated Damages
The provisions of this section apply if a Liquidated Damages Rate is provided in
Exhibit A, Paragraph 14.
It is acknowledged by both parties that time is of the essence in the completion of
this Agreement. It is difficult to estimate the amount of damages resulting from
delay in performance. The parties have used their judgment to arrive at a
E.J, DelaRosa Co, Inc.
. Page 5
(Revised 3/09/2005)
2-11
reasonable amount to compensate for delay.
Failure to complete the Defined Services within the allotted time period specified in
this Agreement shall result in the following penalty: For each consecutive calendar
day in excess of the time specified for the completion of the respective work
assignment or Deliverable, the consultant shall pay to the City, or have withheld
from monies due, the sum of Liquidated Damages Rate provided in Exhibit A,
Paragraph 11 ("Liquidated Damages Rate").
Time extensions for delays beyond the consultant's control, other than delays
caused by the City, shall be requested in writing to the City's Contract
Administrator, or designee, prior to the expiration of the specified time, Extensions
of time, when granted, will be based upon the effect of delays to the work and will
not be granted for delays to minor portions of work unless it can be shown that
such delays did or will delay the progress of the work.
6. Financial Interests of Consultant
A. Consultant is Designated as an FPPC Filer.
If Consultant is designated on Exhibit A, Paragraph 15, as an "FPPC filer",
Consultant is deemed to be a "Consultant" for the purposes of the Political
Reform Act conflict of interest and disclosure provisions, and shall report
economic interests to the City Clerk on the required Statement of Economic
Interests in such reporting categories as are specified in Paragraph 15 of
Exhibit A, or if none are specified, then as determined by the City Attorney.
B. Decline to Participate,
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
shall not make, or participate in making or in any way attempt to use
Consultant's position to influence a governmental decision in which Consultant
knows or has reason to know Consultant has a financial interest other than the
compensation promised by this Agreement.
C. Search to Determine Economic Interests,
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
warrants and represents that Consultant has diligently conducted a search and
inventory of Consultant's economic interests, as the term is used in the
regulations promulgated by the Fair Political Practices Commission, and has
determined that Consultant does not, to the best of Consultant's knowledge,
have an economic interest which would conflict with Consultant's duties under
E.J. DelaRosa Co, Jne,
. Page 6
(Revised 3/0912005)
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this agreement.
D. Promise Not to Acquire Conflicting Interests.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
further warrants and represents that Consultant will not acquire, obtain, or
assume an economic interest during the term of this Agreement which would
constitute a conflict of interest as prohibited by the Fair Political Practices Act.
E, Duty to Advise of Conflicting Interests.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
further warrants and represents that Consultant will immediately advise the City
Attorney of City if Consultant learns of an economic interest of Consultant's
which may result in a conflict of interest for the purpose of the Fair Political
Practices Act, and regulations promulgated thereunder.
F. Specific Warranties Against Economic Interests.
Consultant warrants and represents that neither Consultant, nor Consultant's
immediate family members, nor Consultant's employees or agents ("Consultant
Associates") presently have any interest, directly or indirectly, whatsoever in
any property which may be the subject matter of the Defined Services, or in
any property within 2 radial miles from the exterior boundaries of any property
which may be the subject matter of the Defined Services, ("Prohibited
Interest"), other than as listed in Exhibit A, Paragraph 15.
Consultant further warrants and represents that no promise of future
employment, remuneration, consideration, gratuity or other reward or gain has
been made to Consultant or Consultant Associates in connection with
Consultant's performance of this Agreement. Consultant promises to advise
City of any such promise that may be made during the Term of this Agreement,
or for 12 months thereafter.
Consultant agrees that Consultant Associates shall not acquire any such
Prohibited Interest within the Term of this Agreement, or for 12 months after
the expiration of this Agreement, except with the written permission of City.
Consultant may not conduct or solicit any business for any party to this
Agreement, or for any third party whic,h may be in conflict with Consultant's
responsibilities under this Agreement, except with the written permission of
City.
E.J, DelaRosa Co, Inc.
. Page 7
(Revised 3/0912005)
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7. Hold Harmless
Consultant shall defend, indemnify, protect and hold harmless the City, its elected
appointed officers and employees, from and against all claims for damages,
liability, cost and expense (including without limitation attorneys fees) arising out of
or alleged by third parties to be the result of the negligent acts, errors or omissions
or the willful misconduct of the Consultant, and Consultant's employees,
subcontractors or other persons, agencies or firms for whom Consultant is legally
responsible in connection with the execution of the work covered by this
Agreement, except only for those claims, damages, liability, costs and expenses
(including without limitations, attorneys fees) arising from the sole negligence or
sole willful misconduct of the City, its officers, employees. Also covered is liability
arising from, connected with, caused by or claimed to be caused by the active or
passive negligent acts or omissions of the City, its agents, officers, or employees
which may be in combination with the active or passive negligent acts or omissions
of the Consultant, its employees, agents or officers, or any third party.
With respect to losses arising from Consultant's professional errors or omissions,
Consultant shall defend, indemnify, protect and hold harmless the City, its elected
and appointed officers and employees, from and against all claims for damages,
liability, cost and expense (including without limitation attorneys fees) except for
those claims arising from the negligence or willful misconduct of City, its officers or
employees.
Consultant's indemnification shall include any and all costs, expenses, attorneys
fees and liability incurred by the City, its officers, agents or employees in
defending against such claims, whether the same proceed to judgment or not.
Consultant's obligations under this Section shall not be limited by any prior or
subsequent declaration by the Consultant. Consultant's obligations under this
Section shall survive the termination of this Agreement.
For those professionals who are required to be licensed by the state (e.g.
architects and engineers), the following indemnification provisions should be
utilized:
1. Indemnification and Hold Harmless Agreement.
With respect to any liability, including but not limited to claims asserted or
costs, losses, attorney fees, or payments for injury to any person or property
caused or claimed to be caused by the acts or omissions of the Consultant, or
Consultant's employees, agents, and officers, arising out of any services
performed involving this' project, except liability for Professional Services
E.J, DelaRosa Co, Inc,
. Page 8
(Revised 3/09/2005)
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covered under Section X.2, the Consultant agrees to defend, indemnify,
protect, and hold harmless the City, its agents, officers, or employees from and
against all liability. Also covered is liability arising from, connected with, caused
by, or claimed to be caused by the active or passive negligent acts or
omissions of the City, its agents, officers, or employees which may be in
combination with the active or passive negligent acts or omissions of the
Consultant, its employees, agents or officers, or any third party. The
Consultant's duty to indemnify, protect and hold harmless shall not include any
claims or liabilities arising from the sole negligence or sole willful misconduct of
the City, its agents, officers or employees. This section in no way alters,
affects or modifies the Consultant's obligation and duties under Section Exhibit
A to this Agreement.
2. Indemnification for Professional Services,
As to the Consultant's professional obligation, work or services involving this
Project, the Consultant agrees to indemnify, defend and hold harmless the
City, its agents, officers and employees from and against any and all liability,
claims, costs, and damages, including but not limited to, attorneys fees, losses
or payments for injury to any person or property, caused directly or indirectly
from the negligent acts, errors or omissions of the Consultant or Consultant's
employees, agents or officers; provided, however, that the Consultant's duty to
indemnify shall not include any claims or liability arising from the negligence or
willful misconduct of the City, its agents, officers and employees.
8. Termination of Agreement for Cause
If, through any cause, Consultant shall fail to fulfill in a timely and proper manner
Consultant's obligations under this Agreement, or if Consultant shall violate any of
the covenants, agreements or stipulations of this Agreement, City shall have the
right to terminate this Agreement by giving written notice to Consultant of such
termination and specifying the effective date thereof at least five (5) days before
the effective date of such termination. In that event, all finished or unfinished
documents, data, studies, surveys, drawings, maps, reports and other materials
prepared by Consultant shall, at the option of the City, become the property of the
City, and Consultant shall be entitled to receive just and equitable compensation
for any work satisfactorily completed on such documents and other materials up to
the effective date of Notice of Termination, not to exceed the amounts payable
hereunder, and less any damages caused City by Consultant's breach.
9. Errors and Omissions
E.J, DelaRosa Co. Ine,
. Page 9
(Revised 3/09/2005)
2-15
In the event that the City Administrator determines that the Consultants'
negligence, errors, or omissions in the performance of work under this Agreement
has resulted in expense to City greater than would have resulted if there were no
such negligence, errors, omissions, Consultant shall reimburse City for any
additional expenses incurred by the City. Nothing herein is intended to limit City's
rights under other provisions of this agreement.
10. Termination of Agreement for Convenience of City
City may terminate this Agreement at any time and for any reason, by giving
specific written notice to Consultant of such termination and specifying the
effective date thereof, at least thirty (30) days before the effective date of such
termination. In that event, all finished and unfinished documents and other
materials described hereinabove shall, at the option of the City, become City's sole
and exclusive property. If the Agreement is terminated by City as provided in this
paragraph, Consultant shall be entitled to receive just and equitable compensation
for any satisfactory work completed on such documents and other materials to the
effective date of such termination. Consultant hereby expressly waives any and all
claims for damages or compensation arising under this Agreement except as set
forth herein,
11. Assignability
The services of Consultant are personal to the City, and Consultant shall not
assign any interest in this Agreement, and shall not transfer any interest in the
same (whether by assignment or novation), without prior written consent of City.
City hereby consents to the assignment of the portions of the Defined Services
identified in Exhibit A, Paragraph 17 to the subconsultants identified thereat as
"Permitted Subconsultants".
12. Ownership, Publication, Reproduction and Use of Material
All reports, studies, information, data, statistics, forms, designs, plans, procedures,
systems and any other materials or properties produced under this Agreement
shall be the sole and exclusive property of City. No such materials or properties
produced in whole or in part under this Agreement shall be subject to private use,
copyrights or patent rights by Consultant in the United States or in any other
country without the express written consent of City. City shall have unrestricted
authority to publish, disclose (except as may be limited by the provisions of the
E.J, DeLaRosa Co, Ine,
. Page 10
(Revised 3/0912005)
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Public Records Act), distribute, and otherwise use, copyright or patent, in whole or
in part, any such reports, studies, data, statistics, forms or other materials or
properties produced under this Agreement.
13. Independent Contractor
City is interested only in the results obtained and Consultant shall perform as an
independent contractor with sole control of the manner and means of performing
the services required under this Agreement. City maintains the right only to reject
or accept Consultant's work products. Consultant and any of the Consultant's
agents, employees or representatives are, for all purposes under this Agreement,
an independent contractor and shall not be deemed to be an employee of City,
and none of them shall be entitled to any benefits to which City employees are
entitled including but not limited to, overtime, retirement benefits, worker's
compensation benefits, injury leave or other leave benefits. Therefore, City will not
withhold state or federal income tax, social security tax or any other payroll tax,
and Consultant shall be solely responsible for the payment of same and shall hold
the City harmless with regard thereto,
14. Administrative Claims Requirements and Procedures
No suit or arbitration shall be brought arising out of this agreement, against the
City unless a claim has first been presented in writing and filed with the City and
acted upon by the City in accordance with the procedures set forth in Chapter 1.34
of the Chula Vista Municipal Code, as same may from time to time be amended,
the provisions of which are incorporated by this reference as if fully set forth
herein, and such policies and procedures used by the City in the implementation of
same.
Upon request by City, Consultant shall meet and confer in good faith with City for
the purpose of resolving any dispute over the terms of this Agreement.
15. Attorney's Fees
Should a dispute arising out of this Agreement result in litigation, it is agreed that
the prevailing party shall be entitled to a judgment against the other for an amount
equal to reasonable attorney's fees and court costs incurred. The "prevailing
party" shall be deemed to be the party who is awarded substantially the relief
sought.
E.J, DelaRosa Co, Inc,
. Page 11
(Revised 3/09/2005)
2-17
16, Statement of Costs
In the event that Consultant prepares a report or document, or participates in the
preparation of a report or document in performing the Defined Services,
Consultant shall include, or cause the inclusion of, in said report or document, a
statement of the numbers and cost in dollar amounts of all contracts and
subcontracts relating to the preparation of the report or document.
17. Miscellaneous
A. Consultant not authorized to Represent City
Unless specifically authorized in writing by City, Consultant shall have no
authority to act as City's agent to bind City to any contractual agreements
whatsoever.
B. Consultant is Real Estate Broker and/or Salesman
If the box on Exhibit A, Paragraph 16 is marked, the Consultant and/or their
principals is/are licensed with the State of California or some other state as a
licensed real estate broker or salesperson. Otherwise, Consultant represents
that neither Consultant, nor their principals are licensed real estate brokers or
salespersons,
C. Notices
All notices, demands or requests provided for or permitted to be given pursuant
to this Agreement must be in writing. All notices, demands and requests to be
sent to any party shall be deemed to have been properly given or served if
personally served or deposited in the United States mail, addressed to such
party, postage prepaid, registered or certified, with return receipt requested, at
the addresses identified herein as the places of business for each of the
designated parties.
D. Entire Agreement
This Agreement, together with any other written document referred to or
contemplated herein, embody the entire Agreement and understanding
between the parties relating to the subject matter hereof. Neither this
Agreement nor any provision hereof may be amended, modified, waived or
discharged except by an instrument in writing executed by the party against
which enforcement of such amendment, waiver or discharge is sought.
E.J, DelaRosa Co. Ine,
. Page 12
(Revised 3/09/2005)
2-18
E. Capacity of Parties
Each signatory and party hereto hereby warrants and represents to the other
party that it has legal authority and capacity and direction from its principal to
enter into this Agreement, and that all resolutions or other actions have been
taken so as to enable it to enter into this Agreement.
F. Governing LawNenue
This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any action arising under or relating to this
Agreement shall be brought only in the federal or state courts located in San
Diego County, State of California, and if applicable, the City of Chula Vista, or
as close thereto as possible. Venue for this Agreement, and performance
hereunder, shall be the City of Chula Vista.
E.J. DelaRosa Co, Inc,
. Page 13
(Revised 3/0912005)
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SIGNATURE PAGE
TO
AGREfMENTBETWEEN
REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA,
AND'S. J, DE LA ROSA & CO., INC.
FOR UNDERWRITING SERVICES:
IN WITNESS WHEREOF, City and Consultant have eXecuted thIs Agreement
thereby indicating that they have read and UnderstOOd same, and indicate their full and
complete consent to its tenns:
Attest:
Redevelopment City of the City of Chula Vista
By:
Stephen Padilla, Mayor
Susan Bigelow, City Clerk
Approved' as to form:
E.J. De La Rosa & Co. Ine.
Ann Moore. City Attorney
By: PAJ,..{] ~C'~ -=-
Raul Amezcua, Principal
Exhibit List to Agreement
(X) Exhibit A
?'
e.J. OllL.aRosa Co. Inc.
. Page 14
(I'leYJud :JI09I2~~)
f
2-20
EXHIBIT A
TO
AGREEMENT BETWEEN
REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA
AND
E.J. DE LA ROSA & CO., INC.
1, Effective Date of Agreement: March 22, 2005
2, City-Related Entity:
(X) Redevelopment Agency of the City of Chula Vista, a political subdivision of the
State of California ("City")
3. Place of Business for City:
City of Chula Vista,
276 Fourth Avenue,
Chula Vista, CA 91910
4. Consultant: E,J. De La Rosa & Co., Inc.
5, Business Form of Consultant:
( ) Sole Proprietorship
( ) Partnership
( X ) Corporation
6. Place of Business, Telephone and Fax Number of Consultant:
E.J. De La Rosa & Co" Inc,
11900 W. Olympic Boulevard
Los Angeles, CA 90064
(310) 207-1975
7. General Duties:
"Consultant" shall provide investment banking services to assist in the refunding of
the 1994 Series A tax allocation refunding bonds evaluate financial alternatives,
conduct due diligence and to underwrite bonds to be issued by the City. In its
capacity as the City's investment banker, Consultant will be acting as a principal in
the anticipated purchase of municipal bonds from the City and not as an advisor or
other fiduciary of the City. '
E.J, DelaRosa Co, Ine,
. Page 15
(Revised 3/0912005)
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As investment banker to the City, Consultant will commit its full resources and
energies to assist the City in developing, evaluating and implementing a refinancing
plan.
Consultant will use its best professional efforts to accomplish the formal marketing
of any securities sold to the public, which will be accomplished in a manner and on a
schedule consistent with sound investment banking and underwriting principles.
8, Scope of Work and Schedule:
A. Detailed Scope of Work
The following is a list of investment banking services to be provided by
Consultant. This list is not meant to be all-inclusive, but does represent typical
services required for the refinancing of debt.
1) Consultant will work with City staff and outside professionals to develop a
refinancing plan for the 1994 Series A tax allocation refunding bonds.
2) Completeness or accuracy of documents prepared by the City or other
professionals, consultant will review and comment on such documents
which are delivered to Consultant and are necessary for the proper
execution of Consultant's responsibilities as the City's investment banker.
Consultant, in conjunction with its counsel, will assist the City, its counsel
and advisors in preparing the Official Statement(s) (preliminary and final
versions, respectively) for sale of the securities in accordance with the
standards of Rule 15c2-12 of the Securities Exchange Commission and
other applicable securities laws. The City agrees to participate in the
preparation of the Official Statement by providing pertinent information to be
included therein and agrees to review the Official Statement(s) for accuracy
and completeness. The Official Statement(s) will include a description of
the securities, the issuer and pertinent financial and economic data relating
to the City and the surrounding area. The approval, execution and delivery
of the Official Statement(s) will be duly authorized by the City for use by
Consultant in marketing the securities.
3) Consultant will assist the City in preparing material for review by credit
rating agencies, bond insurance companies and investors as appropriate.
E.J, DelaRosa Co, Inc,
. Page 16
(Revised 3/0912005)
2-22
4) Consultant will conduct such bond marketing activities as the City
Consultant agree are necessary or desirable in marketing the bond issue.
The goal will be to distribute securities to suitable investors at the most
favorable interest rates practicable under the market conditions existing at
the time of their sale, The City agrees to assist Consultant in making
presentations and information available to investors and others as
Consultant reasonably requests.
5) Consultant will assist in the preparation and documentation necessary to
timely close each bond issue and shall timely deliver the necessary funds to
purchase each bond issue in accordance with the terms of the respective
Bond Purchase Agreements,
6) The City and Consultant will meet as required to inform each other on
economic, environmental, financial or other conditions affecting the
successful completion of the refinancing,
B, Date for Commencement of Consultant Services:
(X) Same as Effective Date of Agreement
( ) Other:
C. Dates or Time Limits for Delivery of Deliverables:
Deliverable: Consists of Items 1 -6 under detail scope of work to be completed
by September 1, 2005.
D. Date for completion of all Consultant services:
Atter completion of bond refunding or termination of agreement by thirty days
written notice from either party.
9, Insurance Requirements:
(X) Statutory Worker's Compensation Insurance
(X) Employer's Liability Insurance coverage: $1,000,000.
(X) Commercial General Liability Insurance: $1,000,000.
( ) Errors and Omissions insurance: None Required (included in Commercial General
Liability coverage).
10, Materials Required to be Supplied by City to Consultant:
EJ, DelaRosa Co, Inc,
. Page 17
(Revised 3/09/2005)
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The City agrees to make available to Consultant without cost sufficient copies of
any applicable reports, agreements, contracts, resolutions and other relevant
documents regarding the issuer of the securities as reasonably may be required
from time to time for the prompt and efficient performance by Consultant of its
obligations hereunder.
11. Compensation:
A. (X) Single Fixed Fee Arrangement.
For performance of all of the Defined Services by Consultant as herein required,
City shall pay a single fixed fee in the amounts and at the times or milestones or
for the Deliverables set forth below:
Fixed Fee Amount Payable only at closing of bond sale from bond proceeds:
1) The City and Consultant expect to enter into a Bond Purchase Agreement
relating to the bonds to be sold from the City to Consultant.
2) Consultant's underwriting fees will be 1.1 % of the par amount of the bond
issue, The City and Consultant agree to negotiate in good faith regarding
the bond interest rates and purchase price based on the size of bond
issue, credit quality, market conditions and other factors determined to be
relevant by the City and Consultant at the time of the bond sale. It is
intended that once purchased, the securities will be re-offered to the
public on the basis of an immediate bona fide public offering.
12. Materials Reimbursement Arrangement:
For the cost of out-of-pocket expenses incurred by Consultant in the performance
of services required by this Agreement, City will pay Consultant at the rates or in
the amounts set forth below:
(X) None, the compensation includes all costs,
13. Contract Administrators:
City: Maria V. Kachadoorian, Director of FinancefTreasurer
Consultant: Raul Amezcua, E.J. De La Rosa & Co., Inc.
E.J, DeLaRosa Co, Ine,
. Page 18
(Revised 3/09/2005)
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14. Liquidated Damages Rate:
( X) Other: None
15. Statement of Economic Interests, Consultant Reporting Categories, per Conflict of
Interest Code:
(X ) Not Applicable. Not an FPPC Filer.
16. () Consultant is Real Estate Broker and/or Salesman
17. Permitted Subconsultants: After consultation with City, Consultant may select and
retain legal counsel to provide legal advice related to structuring and marketing of
securities and, with approval of the City, to draft the preliminary and final Official
Statements.
18. Bill Processing:
A. Compensation is payable at bond closing out of bond proceeds.
B. City's Account Number: Bond Proceeds.
19, Security for Performance: N/A
E.J, DelaRosa Co, Inc,
. Page 19
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AGREEMENT BETWEEN
THE REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA
AND
HARRELL & COMPANY ADVISORS, LLC
(First Amendment)
for financial consulting services related to refunding the BayfrontfTown Centre I
Redevelopment 1994 Senior Tax Allocation Refunding Bonds, Series A
This agreement ("Agreement"), dated March 22, 2005 for the purposes of
reference only, and effective as of the date last executed unless another date is otherwise
specified in Exhibit A, Paragraph 1 is between the City of Chula Vista-related entity as is
indicated on Exhibit A, paragraph 2, as such ("City"), whose business form is set forth on
Exhibit A, paragraph 3, and the entity indicated on the attached Exhibit A, paragraph 4, as
Consultant, whose business form is set forth on Exhibit A, paragraph 5, and whose place
of business and telephone numbers are set forth on Exhibit A, paragraph 6
("Consultant"), and is made with reference to the following facts:
Recitals
Whereas, the City is contemplating the refunding of existing debt ("The
Financing"); and,
Whereas, the City requires assistance from a financing consultant in the
development of a sound and practical financing plan to implement the finanCing by
taking into consideration, program requirements, sources of capital funds, cash flow
requirements, annual costs, the allocation of those costs, statutory requirements and
restrictions; and,
Whereas, Consultant represents it is qualified to perform the services under this
Agreement and;
Whereas, the City, at a regular meeting held on March 22, 2005, waived the
consultant selection process as impractical based on Consultant's unique qualifications
to perform the services required hereunder, having recently completed similar services
for the City's Redevelopment City in an exemplary manner, and authorized the Mayor to
enter into this Agreement.
NOW, THEREFORE, BE It RESOLVED that the City and Consultant do hereby
mutually agree as follows:
2-26
1. Consultant's Duties
A. General Duties
Consultant shall perform all of the services described on the attached Exhibit
A, Paragraph 7, entitled "General Duties".
B. Scope of Work and Schedule
In the process of performing and delivering said "General Duties", Consultant
shall also perform all of the services described in Exhibit A, Paragraph 8,
entitled " Scope of Work and Schedule", not inconsistent with the General
Duties, according to, and within the time frames set forth in Exhibit A,
Paragraph 8, and deliver to City such Deliverables as are identified in Exhibit A,
Paragraph 8, within the time frames set forth therein, time being of the essence
of this agreement. The General Duties and the work and deliverables required
in the Scope of Work and Schedule shall be herein referred to as the "Defined ,
Services". Failure to complete the Defined Services by the times indicated
does not, except at the option of the City, operate to terminate this Agreement.
C. Reductions in Scope of Work
City may independently, or upon request from Consultant, from time to time
reduce the Defined Services to be performed by the Consultant under this
Agreement. Upon doing so, City and Consultant agree to meet in good faith
and confer for the purpose of negotiating a corresponding reduction in the
compensation associated with said reduction.
D. Additional Services
In addition to performing the Defined Services herein set forth, City may require
Consultant to perform additional consulting services related to the Defined
Services ("Additional Services"), and upon doing so in writing, if they are within
the scope of services offered by Consultant, Consultant shall perform same on
a time and materials basis at the rates set forth in the "Rate Schedule" in
Exhibit A, Paragraph 11 (C), unless a separate fixed fee is otherwise agreed
upon. All compensation for Additional Services shall be paid monthly as billed,
Harrell &Company, LLC Financial Consulting Services Agreement
. Page 2
(Revised 03/09/2005)
2-27
E. Standard of Care
Consultant, in performing any Services under this agreement, whether Defined
Services or Additional Services, shall perform in a manner consistent with that
level of care and skill ordinarily exercised by members of the profession
currently practicing under similar conditions and in similar locations.
F. Insurance
Consultant represents that it and its agents, staff and subconsultants employed
by it in connection with the Services required to be rendered, are protected
against the risk of loss by the following insurance coverages, in the following
categories, and to the limits specified, policies of which are issued by
Insurance Companies that have a Best's Rating of "A, Class V" or better, or
shall meet with the approval of the City:
Statutory Worker's Compensation Insurance and Employer's Liability Insurance
coverage in the amount set forth in the attached Exhibit A, Paragraph 8.
Commercial General Liability Insurance including Business Automobile
Insurance coverage in the amount set forth in Exhibit A, Paragraph 9,
combined single limit applied separately to each project away from premises
owned or rented by Consultant, which names City as an Additional Insured,
and which is primary to any policy which the City may otherwise carry ("Primary
Coverage"), and which treats the employees of the City in the same manner as
members of the general public ("Cross-liability Coverage").
Errors and Omissions insurance, in the amount set forth in Exhibit A,
Paragraph 9, unless Errors and Omissions coverage is included in the General
Liability policy.
G. Proof of Insurance Coverage.
(1) Certificates of Insurance.
Consultant shall demonstrate proof of coverage herein required, prior to
the commencement of services required under this Agreement, by
delivery of Certificates of Insurance demonstrating same, and further
indicating that the policies may not be canceled without at least thirty (30)
days written notice to the Additional Insured.
Harrell &Company, LLC Financial Consulting Services Agreement
. Page 3
(Revised 03/09/2005)
2-28
(2) Policy Endorsements Required.
In order to demonstrate the Additional Insured Coverage, Primary
Coverage and Cross-liability Coverage required under Consultant's
Commercial General Liability Insurance Policy, Consultant shall deliver a
policy endorsement to the City demonstrating same, which shall be
reviewed and approved by the Risk Manager.
H. Security for Performance,
(1) Performance Bond.
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide a Performance Bond (indicated by a check mark in
the parenthetical space immediately preceding the subparagraph entitled
"Performance Bond"), then Consultant shall provide to the City a
performance bond by a surety and in a form and amount satisfactory to
the Risk Manager or City Attorney which amount is indicated in the space
adjacent to the term, "Performance Bond", in said Paragraph 19, Exhibit
A.
(2) Letter of Credit.
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide a Letter of Credit (indicated by a check mark in the
parenthetical space immediately preceding the subparagraph entitled
"Letter of Credit"), then Consultant shall provide to the City an irrevocable
letter of credit callable by the City at their unfettered discretion by
submitting to the bank a letter, signed by the City Manager, stating that
the Consultant is in breach of the terms of this Agreement. The letter of
credit shall be issued by a bank, and be in a form and amount satisfactory
to the Risk Manager or City Attorney which amount is indicated in the
space adjacent to the term, "Letter of Credit", in said Paragraph 19,
Exhibit A.
(3) Other Security
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide security other than a Performance Bond or a Letter of
Credit (indicated by a check mark in the parenthetical space immediately
preceding the subparagraph entitled "Other Security"), then Consultant shall
provide to the City such other security therein listed in a form and amount
satisfactory to the Risk Manager or City Attorney.
Harrell &Company, LLC Financial Consulting Services Agreement
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I. Business License.
Consultant agrees to obtain a business license from the City and to otherwise
comply with Title 5 of the Chula Vista Municipal Code.
2. Duties of the City
A. Consultation and Cooperation
City shall regularly consult the Consultant for the purpose of reviewing the
progress of the Defined Services and Schedule therein contained, and to
provide direction and guidance to achieve the objectives of this agreement.
The City shall permit access to its office facilities, files and records by
Consultant throughout the term of the agreement. In addition thereto, City
agrees to provide the information, data, items and materials set forth on Exhibit
A, Paragraph 10, and with the further understanding that delay in the provision
of these materials beyond 30 days after authorization to proceed, shall
constitute a basis for the justifiable delay in the Consultant's performance of
this agreement.
B. Compensation
Upon receipt of a properly prepared billing from Consultant submitted to the
City periodically as indicated in Exhibit A, Paragraph 18, but in no event more
frequently than monthly, on the day of the period indicated in Exhibit A,
Paragraph 18, City shall compensate Consultant for all services rendered by
Consultant according to the terms and conditions set forth in Exhibit A,
Paragraph 11, adjacent to the governing compensation relationship indicated
by a "checkmark" next to the appropriate arrangement, subject to the
requirements for retention set forth in paragraph 19 of Exhibit A, and shall
compensate Consultant for out of pocket expenses as provided in Exhibit A,
Paragraph 12.
All billings submitted by Consultant shall contain sufficient information as to the
propriety of the billing to permit the City to evaluate that the amount due and
payable thereunder is proper, and shall specifically contain the City's account
number indicated on Exhibit A, Paragraph 18 (C) to be charged upon making
such payment.
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3. Administration of Contract
Each party designates the individuals ("Contract Administrators") indicated on
Exhibit A. Paragraph 13, as said party's contract administrator who is authorized
by said party to represent them in the routine administration of this agreement.
4. Term
This Agreement shall terminate when the Parties have complied with all executory
provisions hereof.
5. Liquidated Damages
The provisions of this section apply if a Liquidated Damages Rate is provided in
Exhibit A, Paragraph 14.
It is acknowledged by both parties that time is of the essence in the completion of
this Agreement. It is difficult to estimate the amount of damages resulting from
delay in performance, The parties have used their judgment to arrive at a
reasonable amount to compensate for delay.
Failure to complete the Defined Services within the allotted time period specified in
this Agreement shall result in the following penalty: For each consecutive calendar
day in excess of the time specified for the completion of the respective work
assignment or Deliverable, the consultant shall pay to the City, or have withheld
from monies due, the sum of Liquidated Damages Rate provided in Exhibit A,
Paragraph 14 ("Liquidated Damages Rate").
Time extensions for delays beyond the consultant's control, other than delays
caused by the City, shall be requested in writing to the City's Contract
Administrator, or designee, prior to the expiration of the specified time. Extensions
of time, when granted, will be based upon the effect of delays to the work and will
not be granted for delays to minor portions of work unless it can be shown that
such delays did or will delay the progress of the work.
6. Financial Interests of Consultant
A. Consultant is Designated as an FPPC Filer.
If Consultant is designated on Exhibit A, Paragraph 15, as an "FPPC filer",
Consultant is deemed to be a "Consultant" for the purposes of the Political
Reform Act conflict of interest and disclosure provisions, and shall report
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economic interests to the City Clerk on the required Statement of Economic
Interests in such reporting categories as are specified in Paragraph 15 of
Exhibit A, or if none are specified, then as determined by the City Attorney.
B. Decline to Participate.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
shall not make, or participate in making or in any way attempt to use
Consultant's position to influence a governmental decision in which Consultant
knows or has reason to know Consultant has a financial interest other than the
compensation promised by this Agreement.
C, Search to Determine Economic Interests.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
warrants and represents that Consultant has diligently conducted a search and
inventory of Consultant's economic interests, as the term is used in the
regulations promulgated by the Fair Political Practices Commission, and has
determined that Consultant does not, to the best of Consultant's knowledge,
have an economic interest which would conflict with Consultant's duties under
this agreement.
D. Promise Not to Acquire Conflicting Interests.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
further warrants and represents that Consultant will not acquire, obtain, or
assume an economic interest during the term of this Agreement which would
constitute a conflict of interest as prohibited by the Fair Political Practices Act.
E. Duty to Advise of Conflicting Interests.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
further warrants and represents that Consultant will immediately advise the City
Attorney of City if Consultant learns of an economic interest of Consultant's
which may result in a conflict of interest for the purpose of the Fair Political
Practices Act, and regulations promulgated thereunder.
F. Specific Warranties Against Economic Interests.
Consultant warrants and represents that neither Consultant, nor Consultant's
immediate family members, nor Consultant's employees or agents ("Consultant
Associates") presently have any interest, directly or indirectly, whatsoever in
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any property which may be the subject matter of the Defined Services, or in
any property within 2 radial miles from the exterior boundaries of any property
which may be the subject matter of the Defined Services, ("Prohibited
Interest"), other than as listed in Exhibit A, Paragraph 15,
Consultant further warrants and represents that no promise of future
employment, remuneration, consideration, gratuity or other reward or gain has
been made to Consultant or Consultant Associates in connection with
Consultant's performance of this Agreement. Consultant promises to advise
City of any such promise that may be made during the Term of this Agreement,
or for 12 months thereafter.
Consultant agrees that Consultant Associates shall not acquire any such
Prohibited Interest within the Term of this Agreement, or for 12 months after
the expiration of this Agreement, except with the written permission of City.
Consultant may not conduct or solicit any business for any party to this
Agreement, or for any third party which may be in conflict with Consultant's
responsibilities under this Agreement, except with the written permission of
City.
7. Hold Harmless
Consultant shall defend, indemnify, protect and hold harmless the City, its elected
appointed officers and employees, from and against all claims for damages,
liability, cost and expense (including without limitation attorneys fees) arising out of
or alleged by third parties to be the result of the negligent acts, errors or omissions
or the willful misconduct of the Consultant, and Consultant's employees,
subcontractors or other persons, agencies or firms for whom Consultant is legally
responsible in connection with the execution of the work covered by this
Agreement, except only for those claims, damages, liability, costs and expenses
(including without limitations, attorneys fees) arising from the sole negligence or
sole willful misconduct of the City, its officers, employees. Also covered is liability
arising from, connected with, caused by or claimed to be caused by the active or
passive negligent acts or omissions of the City, its agents, officers, or employees
which may be in combination with the active or passive negligent acts or omissions
of the Consultant, its employees, agents or officers, or any third party.
With respect to losses arising from Consultant's professional errors or omissions,
Consultant shall defend, indemnify, protect.and hold harmless the City, its elected
and appointed officers and employees, from and against all claims for damages,
liability, cost and expense (including without limitation attorneys fees) except for
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those claims arising from the negligence or willful misconduct of City, its officers or
employees.
Consultant's indemnification shall include any and all costs, expenses, attorneys
fees and liability incurred by the City, its officers, agents or employees in
defending against such claims, whether the same proceed to judgment or not.
Consultant's obligations under this Section shall not be limited by any prior or
subsequent declaration by the Consultant. Consultant's obligations under this
Section shall survive the termination of this Agreement.
For those professionals who are required to be licensed by the state (e.g.
architects and engineers), the following indemnification provisions should be
utilized:
1, Indemnification and Hold Harmless Agreement.
With respect to any liability, including but not limited to claims asserted or
costs, losses, attorney fees, or payments for injury to any person or property
caused or claimed to be caused by the acts or omissions of the Consultant, or
Consultant's employees, agents, and officers, arising out of any services
performed involving this project, except liability for Professional Services
covered under Section X.2, the Consultant agrees to defend, indemnify,
protect, and hold harmless the City, its agents, officers, or employees from and
against all liability. Also covered is liability arising from, connected with, caused
by, or claimed to be caused by the active or passive negligent acts or
omissions of the City, its agents, officers, or employees which may be in
combination with the active or passive negligent acts or omissions of the
Consultant, its employees, agents or officers, or any third party, The
Consultant's duty to indemnify, protect and hold harmless shall not include any
claims or liabilities arising from the sole negligence or sole willful misconduct of
the City, its agents, officers or employees, This section in no way alters,
affects or modifies the Consultant's obligation and duties under Section Exhibit
A to this Agreement.
2. Indemnification for Professional Services.
As to the Consultant's professional obligation, work or services involving this
Project, the Consultant agrees to indemnify, defend and hold harmless the
City, its agents, officers and employees from and against any and all liability,
claims, costs, and damages, including but not limited to, attorneys fees, losses
or payments for injury to any person or property, caused directly or indirectly
from the negligent acts, errors or omissions of the Consultant or Consultant's
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employees, agents or officers; provided, however, that the Consultant's duty to
indemnify shall not include any claims or liability arising from the negligence or
willful misconduct of the City, its agents, officers and employees.
8, Termination of Agreement for Cause
If, through any cause, Consultant shall fail to fulfill in a timely and proper manner
Consultant's obligations under this Agreement, or if Consultant shall violate any of
the covenants, agreements or stipulations of this Agreement, City shall have the
right to terminate this Agreement by giving written notice to Consultant of such
termination and specifying the effective date thereof at least five (5) days before
the effective date of such termination. In that event, all finished or unfinished
documents, data, studies, surveys, drawings, maps, reports and other materials
prepared by Consultant shall, at the option of the City, become the property of the
City, and Consultant shall be entitled to receive just and equitable compensation
for any work satisfactorily completed on such documents and other materials up to
the effective date of Notice of Termination, not to exceed the amounts payable
hereunder, and less any damages caused City by Consultant's breach,
9. Errors and Omissions
In the event that the City Administrator determines that the Consultants'
negligence, errors, or omissions in the performance of work under this Agreement
has resulted in expense to City greater than would have resulted if there were no
such negligence, errors, omissions, Consultant shall reimburse City for any
additional expenses incurred by the City. Nothing herein is intended to limit City's
rights under other provisions of this agreement.
10. Termination of Agreement for Convenience of City
City may terminate this Agreement at any time and for any reason, by giving
specific written notice to Consultant of such termination and specifying the
effective date thereof, at least thirty (30) days before the effective date of such
termination. In that event, all finished and unfinished documents and other
materials described hereinabove shall, at the option of the City, become City's sole
and exclusive property. If the Agreement is terminated by City as provided in this
paragraph, Consultant shall be entitled to receive just and equitable compensation
for any satisfactory work completed on such documents and other materials to the
effective date of such termination. Consultant hereby expressly waives any and all
claims for damages or compensation arising under this Agreement except as set
forth herein.
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11, Assignability
The services of Consultant are personal to the City, and Consultant shall not
assign any interest in this Agreement, and shall not transfer any interest in the
same (whether by assignment or novation), without prior written consent of City.
City hereby consents to the assignment of the portions of the Defined Services
identified in Exhibit A, Paragraph 17 to the subconsultants identified thereat as
"Permitted Subconsultants".
12, Ownership, Publication, Reproduction and Use of Material
All reports, studies, information, data, statistics, forms, designs, plans, procedures,
systems and any other materials or properties produced under this Agreement
shall be the sole and exclusive property of City. No such materials or properties
produced in whole or in part under this Agreement shall be subject to private use,
copyrights or patent rights by Consultant in the United States or in any other
country without the express written consent of City, City shall have unrestricted
authority to publish, disclose (except as may be limited by the provisions of the
Public Records Act), distribute, and otherwise use, copyright or patent, in whole or
in part, any such reports, studies, data, statistics, forms or other materials or
properties produced under this Agreement.
13. Independent Contractor
City is interested only in the results obtained and Consultant shall perform as an
independent contractor with sole control of the manner and means of performing
the services required under this Agreement. City maintains the right only to reject
or accept Consultant's work products. Consultant and any of the Consultant's
agents, employees or representatives are, for all purposes under this Agreement,
an independent contractor and shall not be deemed to be an employee of City,
and none of them shall be entitled to any benefits to which City employees are
entitled including but not limited to, overtime, retirement benefits, worker's
compensation benefits, injury leave or other leave benefits. Therefore, City will not
withhold state or federal income tax, social security tax or any other payroll tax,
and Consultant shall be solely responsible for the payment of same and shall hold
the City harmless with regard thereto.
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14. Administrative Claims Requirements and Procedures
No suit or arbitration shall be brought arising out of this agreement, against the
City unless a claim has first been presented in writing and filed with the City and
acted upon by the City in accordance with the procedures set forth in Chapter 1.34
of the Chula Vista Municipal Code, as same may from time to time be amended,
the provisions of which are incorporated by this reference as if fully set forth
herein, and such policies and procedures used by the City in the implementation of
same.
Upon request by City, Consultant shall meet and confer in good faith with City for
the purpose of resolving any dispute over the terms of this Agreement.
15. Attorney's Fees
Should a dispute arising out of this Agreement result in litigation, it is agreed that
the prevailing party shall be entitled to a judgment against the other for an amount
equal to reasonable attorney's fees and court costs incurred. The "prevailing
party" shall be deemed to be the party who is awarded substantially the relief
sought.
16, Statement of Costs
In the event that Consultant prepares a report or document, or participates in the
preparation of a report or document in performing the Defined Services,
Consultant shall include, or cause the inclusion of, in said report or document, a
statement of the numbers and cost in dollar amounts of all contracts and
subcontracts relating to the preparation of the report or document.
17. Miscellaneous
A. Consultant not authorized to Represent City
Unless specifically authorized in writing by City, Consultant shall have no
authority to act as City's agent to bind City to any contractual agreements
whatsoever.
B. Consultant is Real Estate Broker and/or Salesman
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If the box on Exhibit A, Paragraph 16 is marked, the Consultant and/or their
principals is/are licensed with the State of California or some other state as a
licensed real estate broker or salesperson. Otherwise, Consultant represents
that neither Consultant, nor their principals are licensed real estate brokers or
salespersons.
C. Notices
All notices, demands or requests provided for or permitted to be given pursuant
to this Agreement must be in writing. All notices, demands and requests to be
sent to any party shall be deemed to have been properly given or served if
personally served or deposited in the United States mail, addressed to such
party, postage prepaid, registered or certified, with return receipt requested, at
the addresses identified herein as the places of business for each of the
designated parties.
D. Entire Agreement
This Agreement, together with any other written document referred to or
contemplated herein, embody the entire Agreement and understanding
between the parties relating to the subject matter hereof. Neither this
Agreement nor any provision hereof may be amended, modified, waived or
discharged except by an instrument in writing executed by the party against
which enforcement of such amendment, waiver or discharge is sought.
E. Capacity of Parties
Each signatory and party hereto hereby warrants and represents to the other
party that it has legal authority and capacity and direction from its principal to
enter into this Agreement, and that all resolutions or other actions have been
taken so as to enable it to enter into this Agreement.
F, Governing LawNenue
This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any action arising under or relating to this
Agreement shall be brought only in the federal or state courts located in San
Diego County, State of California, and if applicable, the City of Chula Vista, or
as close thereto as possible. Venue for this Agreement, and performance
hereunder, shall be the City of Chula Vista.
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SIGNATURE PAGE
TO
AGREEMeNT BEnNEEN THE ,
REDEVELOPMENT CITY OF THE CITY OF CHULA Vl$l'A AND
HARRELL & COMPANY AoVlsORS;LLC
(FiNt Am,ndment)
FOR FINANCIAL CONSULTING SERVICes
,/
IN:. W1TNE$S WHEREOF, City- and Conliultant have executecl this 'Agreement
therecy indicating that they have read and understood same, and indiCate their full and
completeconeent to it$ tenns:..
Attest
Redevelopment City of the City of Chula VISta
By:
Stephen Padilla, Mayor
Susan Bigelow, City Clerk
Approved as to form:
Harrell & Company Advisors, LLC
Ann Moore, City Attorney
I-
ne Q. Harrell, President
exhibit List to Agreement
(X) Exhibit A
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EXHIBIT A
TO
AGREEMENT BETWEEN
REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA
AND
HARRELL & COMPANY ADVISORS, LLC
(First Amendment)
1. Effective Date of Agreement: March 22, 2005
2. City-Related Entity:
(X) Redevelopment Agency of the City of Chula Vista, a political subdivision of the
State of California ("City")
3. Place of Business for City:
City of Chula Vista,
276 Fourth Avenue,
Chula Vista, CA 91910
4, Consultant: HARRELL & COMPANY ADVISORS, LLC
5. Business Form of Consultant:
( ) Sole Proprietorship
( ) Partnership
( ) Corporation
(X) Limited Liability Company
6. Place of Business, Telephone and Fax Number of Consultant:
Harrell & Company Advisors, LLC
The City Tower
333 City Boulevard West, Suite 1430
Orange, CA 92868
(714) 939-1464
(714) 939-1462 (FAX)
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7. General Duties:
Provide all necessary financial advisory services to assist in the issuance or
refunding of debt by the City in accordance with the City's Financial Plan.
8. Scope of Work and Schedule:
A. Detailed Scope of Work:
Consultant will be responsible for performing the following:
1) Revenue Projections.
Consultant will analyze and project tax increment revenues of the City for use
in structuring debt and for presentation in the Official Statement.
2) Financing Plan.
The review of the City to address the annual financial requirements, including
payments under other bonded indebtedness, housing set-aside requirement of
the City, amounts the City may owe the City, levels of funding required for
administration etc. The financial analysis for the Financing will address sizing
considerations for any proposed bonded debt, the financial implications,
strategies for submitting the financing to the rating agencies and/or bond
insurance companies (this will include a review of the financial implications of
different bond ratings and bond insurance).
3) Bond Structure,
Size the bond issue, structure those terms and conditions which most
advantageously meets demands or current market conditions and the
objectives of the City.
4) Document Review.
Review and comment on all legal documents prepared by bond counsel to
ensure conformance with the proposed financing structure.
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5) Timing of Sale.
Advise City of market movements, trends and developments and offer
recommendations as to the timing of the sale of the bonds in relation to market
conditions,
6) Official Statement.
At the direction of the City, prepare the preliminary and final Official Statement.
The Official Statement will be prepared in conformance with the adopted
guidelines of Securities and Exchange Commission Rule 15c2-12.
7) Disclosure Issues,
Provide technical support in defining disclosure issues necessary to meet
GFOA guidelines, as well as work with the City to fulfill its continuing disclosure
responsibilities under Securities and Exchange Commission Rule 15c2-12.
8) Rating and Insurance Agencies.
Assist in submitting documents, conducting negotiations and attending
meetings with rating agencies and bond insurance companies as may be
required. Assist the City in preparing for dialogue with the rating analyst.
9) Pricing.
Review the Purchase Contract prepared by the Disclosure Counsel and advise
on the proposed pricing by the Underwriter. Revise cash flows for final pricing
information and order securities for bond defeasance escrow.
10) Bond Closing.
Review and coordinate the arrangements for closing and delivery of the bonds
paying particular attention to needed certificates and representations of other
parties to ensure certification of information relied upon in the financing.
11) Bond Administration.
Advise the City in administration of the financing after bond closing, working
closely with the Finance Department and the City's auditors.
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B. Date for Commencement of Consultant Services:
(X) Same as Effective Date of Agreement
( ) Other:
C. Dates or Time Limits for Delivery of Deliverables:
Deliverable NO.1: Consists of Items 1 -10 under detail scope of work. Delivery
of items will be completed by September 1, 2005.
Deliverable NO.2: Consists of Item 11 under detail scope of work. Delivery of
item will be on an ongoing basis as needed.
D, Date for completion of all Consultant services:
After completion of bond refunding or termination of agreement by thirty days
written notice from either party,
9, Insurance Requirements:
(X) Statutory Worker's Compensation Insurance
(X) Employer's Liability Insurance coverage: $1,000,000.
(X) Commercial General Liability Insurance: $1,000,000.
(X) Errors and Omissions Insurance: $250,000 (not included in Commercial General
Liability coverage).
10. Materials Required to be Supplied by City to Consultant:
The City agrees to make available to Consultant, without cost, sufficient copies of
any applicable reports, agreements, contracts, resolutions and other relevant
documents regarding the issuer of the securities as reasonably may be required
from time to time for the prompt and efficient performance by Consultant of its
obligations hereunder.
11, Compensation:
A. (X) Single Fixed Fee Agreement
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The fee quoted below includes performing all the tasks listed above. Consultant's
fees are contingent and payable out of bond proceeds at bond closing. In the
event that the projected bond issue does not occur for any reason, Consultant
shall not be entitled to any compensation hereunder. Consultant fees will be as
follows:
a fixed fee of $10,000 for preparation of preliminary and final official statements
(not applicable if Disclosure Counsel prepares these documents), payable at bond
closing;
a fixed fee of $45,000 paid based on an assumed par value of the bonds at $13,8
million, payable at bond closing.
a fixed fee of $10,000 for the update of Agency's financial plan, payable within 30
days after completion of the Financing Plan (as detailed in item no. 2 of section
B.A., above).
12. Materials Reimbursement Arrangement:
The City will pay from the proceeds of the securities, or otherwise, all costs and
expenses customarily paid there from including the cost of printing the securities
and the Official Statement(s), and any other documents, the fees and expenses of
its legal counsel, bond counsel, fees to rating agencies, bond insurance
companies, accountants, and costs of any other experts or consultants retained by
the City in connection with the financing.
13. Contract Administrators:
City: Maria V. Kachadoorian, Director of FinancefTreasurer
Consultant: Suzanne Q. Harrell, President.
14. Liquidated Damages Rate: Not applicable.
15. Statement of Economic Interests, Consultant Reporting Categories, per Conflict of
Interest Code:
(X ) Not Applicable. Not an FPPC Filer.
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16. () Consultant is Real Estate Broker and/or Salesman: Not applicable.
17. Permitted Subconsultants: Not applicable.
18. Bill Processing:
Submitted in accordance with payment milestones set forth in Section 11, above.
19. Security for Performance: Not applicable.
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JOINT CITY COUNCIL/REDEVELOPMENT AGENCY
ITEM ..3
MEETING DATE March 22, 2005
ITEM TITLE:
RESOLUTION APPROVING, AUTHORIZING AND DIRECTING
EXECUTION OF AN AMENDMENT AND RESTATED JOINT
EXERCISE OF POWERS AGREEMENT RELATING TO THE
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA APPROVING THE BORROWING OF FUNDS BY THE
REDEVELOPMENT AGENCY FROM CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY AND PROVIDING
OTHER MATTERS PROPERLY RELATING THERETO
A RESOLUTION OF THE CITY OF CHULA VISTA
REDEVELOPMENT AGENCY AUTHORIZING AND DIRECTING
THE EXECUTION OF LOAN AGREEMENT RELATING TO THE
ISSUANCE OF CERTAIN BONDS BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY,
APPROVING OFFICIAL STATEMENT RELATING TO SUCH
BONDS AND AUTHORIZING AND APPROVING OTHER MATTERS
RELATED THERETO
SUBMITTED BY: Director of Finance/TreasurerTl<... (4j5ths Vote:Yes_No.lL)
REVIEWED BY: Executive Directo(j; r;Y
RECOMMENDATION: That the:
Agency: Approve, authorize and direct execution of an amendment
and restated joint exercise of powers agreement relating to the
California Statewide Communities Development Authority
Agency: Authorize and direct the execution of loan agreement
relating to the issuance of certain. bonds by the California Statewide
Communities Development Authority, approving official statement
relating to such bonds and authorizing and approving other matters
related thereto '
3-1
Agency: Authorize the Mayor to execute any and all documents and
agreements on behalf of the Agency necessary to administer and
implement the Agreement.
City: Approving the Borrowing of Funds by the Redevelopment
Agency from California Statewide Communities Development
Authority and Providing Other Matters Properly Relating Thereto
BOARDS/COMMISSION RECOMMENDATION: Not Applicable.
As part of the effort to balance the 2005 budget of the State of California,
redevelopment agencies are obligated to make payments totaling $250 million
to the Educational Revenue Augmentation Fund (ERAF). Individual ERAF
payments were determined based on the Agency's tax increment as a
proportion of the total tax increment of all agencies throughout the State. The
City of Chula Vistas Redevelopment Agency's ERAF obligation for fiscal year
2005 is $743,358.
As part of the legislation that mandated the payment, the California
Redevelopment Association (CRA) created the CRA/ERAF Loan Program, which
allows agencies to spread the payment over the next 10 years. Under this
program, the Agency's total borrowing would not exceed $855,000. Annual
payments are not anticipated to exceed 15% of the Agency's ERAF obligation or
approximately $111,000.
DISCUSSION:
According to the authorizing statute (AB 2115, Chapter 610) the loan is payable
from any available funds of the Agency not otherwise obligated for other uses.
The obligation to repay the loan is an unsecured obligation of the Agency, not
an obligation of any particular project area. There is no specific pledge of tax
increment. The obligation to repay the loan is therefore subordinate to all
existing and future obligations of the Agency. Under this law, if the agency
fails to make a scheduled payment on the loan, the County Auditor will be
directed to transfer the first available property tax revenues of the City to
make the payment. AB 2115 establishes an ability to create a line on the
property tax revenues of the sponsoring agency, which in this case is the City
of Chula Vista. This lien is created upon establishing the loan. Therefore, the
City must adopt a resolution approving the Agency's participation in this loan
program.
California Communities was' designated as the issuing authority for the
CRA/ERAF Loan Program. California Communities will pool the ERAF
obligations of all participating agencies, resulting in a more cost effective
financing program. The Agency will enter into a loan agreement with
3-2
California Communities and will be required to join the California Communities
prior to executing the loan agreement. There is not cost to join. The Agency
will only be responsible for its share of the California Communities bonds if the
proposal is approved. The bonds issued through California Communities will be
taxable inasmuch as the proceed will ultimately be used by school districts to
cover operating costs. The financing approach, as crafted under this
authorizing stature, is anticipated to result in a highly rated and cost effective
financing program.
FISCAL IMPACT: Participating in the Loan Program, the Agency will be able to
improve it's cash flow by spreading the payment over time. This would also
avoid a loan from the General Fund of approximately $376,209 to the
Bayfront/TCII project area to meet it's ERAF obligation.
The Agency's total borrowing would not exceed $855,000. This includes
estimated cost of issuance, which is estimated at approximately $10,000. The
assumed interest rate is 5% fixed rate with an average annual debt service will
be approximately $111,000. The total principal and interest payments over the
ten year term are estimated at $1.0 million.
By pooling loan requests from several redevelopment agencies in the state and
by using standardized documents and processing procedures, the cost of this
program will be kept low for the agency's benefit.
3-3
AGENCY RESOLUTION NO,
RESOLUTION OF THE REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA APPROVING, AUTHORIZING
AND DIRECTING EXECUTION OF AN AMENDED AND
RESTATED JOINT EXERCISE OF POWERS AGREEMENT
RELATING TO THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORlTY
WHEREAS, the governing board ("Governing Board") of the Chula Vista
Redevelopment Agency (the "Agency"), has expressed an interest in participating in the economic
development financing programs (the "Programs") in conjunction with the parties to that certain
Amended and Restated Joint Exercise of Powers Agreement Relating to the California Statewide
Communities Development Authority, dated as ofJune 1, 1988 (the "Agreement"); and
WHEREAS, there is now before this Governing Board the form of the Agreement;
and
WHEREAS, the Agency proposes to participate in the Programs and desires that
certain projects to be located within the Agency be fmanced pursuant to the Programs and it is in the
public interest and for the public benefit that the Agency do so; and
WHEREAS, the Agreement has been filed with the Agency, and the members of the
Governing Board of the Agency have reviewed said document.
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BOARD OF
THE CHULA VISTA REDEVELOPMENT AGENCY, AS FOLLOWS:
Section 1. The Agreement is hereby approved and the Chairman or designee
thereof is hereby authorized and directed to execute said document, with such changes, insertions
and omissions as may be approved by said Chairman, and the Agency Secretary or such Agency
Secretary's designee is hereby authorized and directed to affix the Agency's seal to said document
and to attest thereto,
Section 2. The Chairman, the Agency Secretary and all other proper officers
and officials of the Agency are hereby authorized and directed to execute such other agreements,
documents and certificates, and to perform such other acts and deeds, as may be necessary or
convenient to effect the prnposes of this Resolution and the transactions herein authorized.
Section 3. The Agency Secretary of the Agency shall forward a certified copy
of this Resolution and an originally executed Agreement to:
Angie Sessions '
DOCSSC 1 :350706,1
3-4
Section 4.
Presented by
Orrick, Herrington & Sutcliffe LLP
400 Capital Mall, Suite 3000
Sacramento, California 95814
This resolution shall take effect immediately upon its passage.
Approved as to form by
Maria Kachadorian
Director of Finance
J:attomey/Reso/amendments/amendment & reinstatement JP A
DOCSSC!350706,!
2
3-5
/kL>>
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED' AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Id
Ann re
City Attorney
Dated: ~-k 7 /~
Amended and estated Joint Exercise
Of Powers Agreement relating to the
California Statewide Communities Development Authority
3-6
AMENDED AND RESTATED
JOINT EXERCISE OF POWERS AGREEMENT
RELATING TO THE CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
THIS AGREEMENT, dated as of June 1,1988, by and
among the parties executing this Agreement (all such parties,
except those which have withdrawn in accordance with Section
13 hereof, being herein referred to as the "Program
Participants"):
WITNESSETH
WHEREAS, pursuant to Title 1, Division 7, Chapter 5
of the Government Code of the State of California (the "Joint
Exercise of Powers Act"), two or more public agencies may by
agreement jointly exercise any power common to the
contracting parties; and
WHEREAS, each of the Program Participants is a
"public agency" as that term is defined in Section 6500 of the
Government Code of the State of California, and
WHEREAS, each of the Program Participants is
empowered to promote economic development, including,
without limitation, the promotion of opportunities for the
creation or retention of employment, the stimulation of
economic activity, and the increase of the tax base, within its
boundaries; and
WHEREAS, a public entity established pursuant to
the Joint Exercise of Powers Act is empowered to issue
industrial development bonds pursuant to the California
Industrial Development Financing Act (Titie 10 (commencing
with Section 91500 of the Government Code of the State of
Caiifornia)) (the "Act") and to otherwise undertake financing
programs under the Joint Exercise of Powers Act or other
applicable provisions of law to promote economic development
through the issuance of bonds, notes, or other evidences of
indebtedness, or certificates of participation in leases or
other agreements (all such instruments being herein
collectively referred to as "Bonds"); and
WHEREAS, in order to promote economic
deveiopment within the State of California, the County
Supervisors Association of Caiifornja ("CSAC"), together with
the Caiifornia Manufacturers Association, has established the
Bonds for Industry program (the "Program").
3-7
WHEREAS, in furtherance of the Program, certain
California counties (collectively, the "Initial Participants")
have entered into that certain Joint Exercise of Powers
Agreement dated as of November 18, 1987 (the "Initial
Agreement"), pursuant to which the California Counties
Industrial Development Authority has been estabiished as a
separate entity under the Joint Exercise of Powers Act for the
purposes and with the powers specified in the Initial
Agreement; and
WHEREAS, the League of California Cities ("LCC")
has determined to join as a sponsor of the Program and to
actively participate In the administration of the Authority; and
WHEREAS, the Initial Participants have determined
to specifically authorize the Authority to issue Bonds pursuant
to Article 2 of the Joint Exercise of Powers Act ("Article 2")
and Article 4 of the Joint Exercise of Powers Act ("Article 4"),
as well as may be authorized by the Act or other applicable
law; and
WHEREAS, the Initial Participants desire to rename
the California Counties Industrial Development Authority to
better reflect the additional sponsorship of the Program; and
WHEREAS, each of the Initial Participants has
determined that it is in the public interest of the citizens
within its boundaries, and to the benefit of such Initial
Participant and the area and persons served by such Initial
Participant, to amend and restate in its entirety the Initial
Agreement in order to implement the provisions set forth
above; and
WHEREAS, it is the desire of the Program
Participants to use a public entity established pursuant to the
Joint Exercise of Powers Act to undertake projects within their
respective jurisdictions that may be financed with Bonds
issued pursuant to the Act, Articie 2, Article 4, or other
applicable provisions of law; and
WHEREAS, the projects undertaken will result in
significant public benefits, including those public benefits set
forth in Section 91502,1 of the Act. an increased level of
economic activity, or an increased tax base, and wiil therefore
serve and be of benefit to the inhabitants of the jurisdictions
of the Program Participants;
NOW, THEREFORE, the Program Participants, for
and in consideration of the mutual promises and agreements
herein contained, do agree to restate an'd amend the Initial
Agreement in its entirel'y to provide as follows:
2
3-8
Section 1.
Puroose.
This Agreement is made pursuant to the provIsions
of the Joint Exercise of Powers Act, relating to the joint
exercise of powers common to public agencies, in this case
being the Program Participants, The Program Participants
each possess the powers referred to in the recitals hereof.
The purpose of this Agreement is to establish an agency for,
and with the purpose of, issuing Bonds to finance projects
within the territorial limits of the Program Participants
pursuant to the Act, Article 2, Article 4, or other appliable
provisions of law; provided, however that nothing in this
Agreement shall be construed as a limitation on the rights of
the Program Participants to pursue economic development
outside of this Agreement, including the rights to issue Bonds
through industrial development authorities under the Act, or as
otherwise permitted by law,
Within the various jurisdictions of the Program
Participants such purpose will be accomplished and said
powers exercised in the manner hereinafter set forth.
Section 2.
Term.
This Agreement shall become effective 85 of the
date hereof and shali continue in full force and effect for a
period of forty (40) years from the date hereof, or until such
time as it is terminated in writing by all the Program
Participants; provided, however, that this Agreement shall not
terminate or be terminated until the date on which all Bonds or
other indebtedness issued or caused to be issued by the
Authority shall have been retired, or fuli provision shall have
been made for their retirement, including interest until their
retirement date,
Section 3.
Authoritv,
A, CREATION AND POWERS OF AUTHORITY,
(1) Pursuant to the Joint Exercise of Powers Act,
there is hereby created a public entity to be known as the
"California Statewide Communities Development Authority" (the
"Authority"), and said Authority shall be a public entity
separate and apart from the Program Participants, Its debts,
liabilities and obligations do not constitute debts, liabilities
or obligations of any party to this Agreement.
B, COMMISSION,
The Authority shall be administered by a Commission
(the "Commission") which 'shall consist of seven members, each
3
3-9
serving in his or her individual capacity as a member of the
Commission, The Commission shali be the administering
agency of this Agreement, and, as such, shali be vested with
the powers set forth herein, and shall execute and administer
this Agreement in accordance with the purposes and functions
provided herein,
Four members of the Commission shall be appointed
by the governing body of CSAC and three members of the
Commission shall be appointed by the governing body of LCC,
Initial members of the Commission shall serve a term ending
June 1, 1991. Successors to such members shall be selected
in the manner in which the respective initial member was
selected and shall serve a term of three years. Any
appointment to fill an unexpired term, however, shall be for
such unexpired term. The term of office specified above shall
be applicable unless the term of office of the respective
member is terminated as hereinafter provided, and provided
that the term of any member shall not expire until a successor
thereto has been appointed as provided herein.
Each of CSAC and LCC may appoint an alternate
member of the Commission for each member of the Commission
which it appoints, Such alternate member may act as a
member of the Commission in piace of and during the absence
or disability of such regularly appointed member, All
references in this Agreement to any member of the Commission
shall be deemed to refer to and include the applicable
alternate member when so acting in piace of a regularly
appointed member,
Each member or alternate member of the
Commission may be removed and replaced at any time by the
governing body by which such member was appointed, Any
individual, including any member of the governing body or
staff of CSAC or LCC, shall be eligible to serve as a member
or alternate member of the Commission.
Members and alternate members of the Commission
shall not receive any compensation for serving as such but
shali be entitled to reimbursement for any expenses actualiy
incurred in connection with serving as a member or alternate
member, if the Commission shall determine that such expenses
shall be reimbursed and there are unencumbered funds
availabie for such purpose,
C ,OF FI C E R S; D UTI E S; 0 F F I C I A LBO N D S ,
The Commission shall elect a Chair, a Vice-Chair,
and a Secretary of the Authority from among its members to
serve for such term as shall be determined by the Commission,
The Commission shall appoint one or more of its officers or
4
3-10
employees to serve as treasurer, auditor, and controller of the
Authority (the "Treasurer") pursuant to Section 6505,6 of the
Joint Exercise of Powers Act to serve for such term as shall
be determined by the Commission.
Subject to the applicable provIsions of any
resolution, indenture or other instrument or proceeding
authorizing or securing Bonds (each such resolution,
indenture, instrument and proceeding being herein referred to
as an "Indenture") providing for a trustee or other fiscal
agent, the Treasurer is designated as the depositary of the
Authority to have custody of all money of the Authority, from
whatever source derived.
The Treasurer of the Authority shall have the
powers, duties and responsibilities specified in Section 6505,5
of the Joint Exercise of Powers Act.
The Treasurer of the Authority is designated as the
public officer or person who has charge of, handles, or has
access to any property of the Authority, and such officer shall
file an official bond with the Secretary of the Authority in the
amount specified by resolution of the Commission but in no
event less than $1,000, If and to the extent permitted by law,
any such officer may satisfy this requirement by filing an
official bond in at least said amount obtained in connection
with another pubiic office,
The Commission shall have the power to appoint
such other officers and employees as it may deem necessary
and to retain independent counsel, consultants and
accountants.
The Commission shall have the power, by resolution,
to the extent permitted by the Joint Exercise of Powers Act or
any other applicable law, to delegate any of its functions to
one or more of the members of the Commission or officers or
agents of the Authority and to cause any of said members,
officers or agents to take any actions and execute .any
documents or instruments for and in the name and on behalf of
the Commission or the Authority,
0, MEETINGS OF THE COMMISSION,
(1) Reaular Meetinas,
The Commission shail provide for its regular
meetings; provided, however, it shall hold at least one regular
meeting each year, The date, hour and place of the holding of
the regular meetings shali be fixed by resolution of the
Commission and a capy'af such resolution shali be filed with
each party hereto,
5
3-11
(2) Soecial Meetinas,
Special meetings af the Commission may be called
in accordance with the provisions of Section 54956 of the
Government Code of the State of California,
(3) Raloh M, Brown Act.
All meetings of the Commission, including, without
limitation, regular, adjourned regular, special, and adjourned
special meetings shall be called, noticed, held and conducted
in accordance with the provisions of the Ralph M, Brown Act
(commencing, with Section 54950 of the Government Code of
the State of California),
(4) Minutes,
The Secretary of the Authority shall cause to be
kept minutes of the regular, adjourned regular, special, and
adjourned special meetings of the Commission and shall, as
soon as possible after each meeting, cause a copy of the
minutes to be forwarded to each member of the Commission.
(5) Quorum,
A majority of the members of the Commission which
includes at least one member appointed by the governing body
of each of CSAC and LCC shall constitute a quorum for the
transaction of business, No action may be taken by the
Commission except upon the affirmative vote of a majority of
the members of the Commission which includes at least one
member appointed by the governing body of each of CSAC and
LCC, except that less than a quorum may adjourn a meeting to
another time and place,
E, RULES AND REGULATIONS.
The Authority may adopt, from time to time, by
resolution of the Commission such rules and regulations for
the conduct of its meetings and affairs as may be required,
Section 4.
Powers.
The Authority shall have any and all powers
relating to economic development authorized by law to each
of the parties hereto and separately to the public entity
herein created, including, without limitation, the promotion of
opportunities for the creation and retention of employment.
the stimulation of economic activity, and the increase of the
tax base, within the jurisdictions of such parties, Such
power s s h a II i n c Iud e t h 'e com man power ssp e c i fie din t his
6
3-12
Agreement and may be exercised in the manner and according
to the method provided in this Agreement. All such powers
common to the parties are specified as powers of the
Authority. The Authority is hereby authorized to do all acts
necessary for the exercise of such powers, including, but not
limited to, any or all of the following: to make and enter into
contracts; to employ agents and employees; to acquire,
construct, provide for maintenance and operation of, or
maintain and operate, any buildings, works or improvements;
to acquire, hoid or dispose of property wherever located; to
incur debts, liabilities or obligations; to receive gifts,
contributions and donations of property, funds, services and
other forms of assistance from persons, firms, corporations
and any governmental entity; to sue and be sued in its own
name; and generally to do any and all things necessary or
convenient to the promotion of economic development,
including without limitation the promotion of opportunities for
the creation or retention of employment, the stimulation of
economic activity, and the increase of the tax base, all as
herein contemplated, Without limiting the generality of the
foregoing, the Authority may issue or cause to be issued
bonded and other indebtedness, and pledge any property or
revenues as security to the extent permitted under the Joint
Exercise of Powers Act, including Article 2 and Article 4, the
Act or any other applicabie provision of law,
The manner in which the Authority shall exercise its
powers and perform its duties is and shall be subject to the
restrictions upon the manner in which a California county
couid exercise such powers and perform such duties until a
California general law city shall become a Program
Participant, at which time it shali be subject to the
restrictions upon the manner in which a California general law
city could exercise such powers and perform such duties. The
manner in which the Authority shall exercise its powers and
perform its duties shall not be subject to any restrictions
applicable to the manner in which any other public agency
could exercise such powers or perform such duties, whether
such agency is a party to this Agreement or not.
Section 5.
Fiscal Year,
For the purposes of this Agreement, the term "Fiscal
Year" shall mean the fiscal year as established from time to
time by the Authority, being, at the date of this Agreement,
the period from July 1 to and including the following June 30,
except for the first Fiscal Year which shall be the period from
the date of this Agreement to J u n e3 0, 1 9 8 8 .
7
3-13
Section 6.
Disoosition of Assets,
At the end of the term hereof or upon the earlier
termination of this Agreement as set forth in Section 2 hereof,
after payment of all expenses and liabilities of the Authority.
all property of the Authority both real and personal shall
automatically vest in the Program Participants and shall
thereafter remain the sole property of the Program
Participants; provided, however, that any surplus money on
hand shali be returned in proportion to the contributions made
by the Program Participants,
Section 7.
Bonds.
The Authority shall issue Bonds for the purpose of
exercising its powers and raising the funds necessary to carry
out its purposes under this Agreement. Said Bonds may, at
the discretion of Authority. be issued in series.
The services of bond counsel, financing consultants
and other consultants and advisors working on the projects
and/or their financing shall be used by the Authority, The
fees and expenses of such counsel, consultants, advisors, and
the expenses of CSAC, LCC, and the Commission shall be paid
from the proceeds of the Bonds or any other unencumbered
funds of the Authority available for such purpose,
Section 9.
Local Aooroval.
A copy of the application for financing of a project
shall be filed by the Authority with the Program Participant in
whose jurisdiction the project is to be located, The Authority
shall not issue Bonds with respect to any project unless the
governing body of the Program Participant in whose
jurisdiction the project is to be iocated, or its duly authorized
designee, shall approve, conditionally or unconditionally, the
project, including the issuance of Bonds therefor. Action to
approve or disapprove a project shall be taken within 45 days
of the filing with the Program Participant. Certification of
approval or disapproval shall be made by the clerk of the
governing body of the Program Participant, or by such other
officer as may be designated by the applicable Program
Participant, to the Authority,
Section 8, Bonds Onlv Limited and Soecial
Oblioations of Authoritv.
The Bonds, together with' the interest and premium,
if any, thereon, shall not be deemed to constitute a debt of
any Program Participant, CSAC, or LCC or pledge of the faith
and credit of the Program Participants, CSAC, LCC, or the
8
3-14
Authority, The Bonds shall be only speciai obligations of the
Authority, and the Authority shall under no circumstances be
obligated to pay the Bonds or the respective project costs
except from revenues and other funds pledged therefor.
Neither the Program Participants, CSAC, LCC, nor the
Authority shali be obligated to pay the principal of, premium,
if any, or interest on the Bonds, or other costs incidental
thereto, except from the revenues and funds pledged therefor,
and neither the faith and credit nor the taxing power of the
Program Participants nor the faith and credit of CSAC, LCC, or
the Authority shali be pledged to the payment of the principal
of, premium, if any, or Interest on the Bonds nor shall the
Program Participants, CSAC, LCC, or the Authority in any
manner be obligated to make any appropriation for such
payment.
No covenant or agreement contained in any Bond or
Indenture shali be deemed to be a covenant or agreement of
any member of the Commission, or any officer, agent or
empioyee of the Authority in his individual capacity and
neither the Commission of the Authority nor any officer thereof
executing the Bonds shall be liable personally on any Bond or
be subject to any personal liability or accountability by reason
of the issuance of any Bonds,
Section 10.
Accounts and Recorts.
All funds of the Authority shall be strictly accounted
for, The Authority shall establish and maintain such funds and
accounts as may be required by good accounting practice and
by any provision of any Indenture (to the extent such duties
are not assigned to a trustee of Bonds), The books and
records of the Authority shall be open to inspection at all
reasonable times by each Program Participant.
The Treasurer of the Authority shall cause an
Independent audit to be made of the books of accounts and
financial records of the Agency by a certified public
accountant or public accountant in compliance with the
provisions of Section 6505 of the Joint Exercise of Powers
Act. In each case the minimum requirements of the audit shall
be those prescribed by the State Controller for special
districts under Section 26909 of the Government Code of the
State of California and shall conform to generally accepted
auditing standards. When such an audit of accounts and
records is made by a certified public accountant or public
accountant, a report thereof shall be filed as public records
with each Program Participant and also with the county auditor
of each county in which a Program Participant is located,
Such report shall be filed within 12 months of the end of the
F i sea lYe a r 0 rYe a r s u n'd ere x ami n at ion.
9
3-15
Any costs of the audit, including contracts with, or
employment of, certified public accountants or public
accountants in making an audit pursuant to this Section, shall
be borne by the Authority and shall be a charge against any
unencumbered funds of the Authority available for that
purpose,
In any Fiscal Year the Commission may, by
resolution adopted by unanimous vote, replace the annual
special audit with an audit covering a two-year period,
The Treasurer of the Authority, within 120 days
after the close of each Fiscal Year, shall give a complete
written report of all financial activities for such Fiscal Year to
each of the Program Participants to the extent such activities
are not covered by the reports of the trustees for the Bonds,
The trustee appointed under each Indenture shall establish
suitable funds, furnish financial reports and provide suitable
accounting procedures to carry out the provisions of said
Indenture. Said trustee may be given such duties in said
Indenture as may be desirable to carry out this Agreement.
Section 11.
Funds.
Subject to the applicable provisions of each
Indenture, which may provide for a trustee to receive, have
custody of and disburse Authority funds, the Treasurer of the
Authority shall receive, have the custody of and disburse
Authority funds pursuant to the accounting procedures
developed under Section 10 hereof, and shall make the
disbursements required by this Agreement or otherwise
necessary to carry out any of the provisions or purposes of
this Agreement.
Section 12,
Notices,
Notices and other communications hereunder to the
Program Participants shall be sufficient If delivered to the
clerk of the governing body of each Program Participant.
Section 13.
Withdrawal and Addition of Parties.
A Program Participant may withdraw from this
Agreement upon written notice to the Commission; provided,
however, that no such withdrawal shall result in the
dissoiution of the Authority so long as any Bonds remain
outstanding under an Indenture, Any such withdrawal shall be
e f fee t I v eon I y u po n r e c e i p t of the no tic e 0 f w it h d raw a I by the
Commission which shall acknowledge receipt of such notice of
withdrawal in writing and shall file such notice as an
amendment to this Agreement effective upon such filing,
10
3-16
Qualifying public agencies may be added as parties
to this Agreement and become Program Participants upon: (i)
the filing by such public agency of an executed counterpart of
this Agreement, together with a certified copy of the
resolution of the governing body of such public agency
approving this Agreement and the execution and delivery
hereof; and (ii) adoption of a resoiution of the Commission
approving the addition of such public agency as a Program
Participant. Upon satisfaction of such conditions, the
Commission shall file such executed counterpart of this
Agreement as an amendment hereto, effective upon such filing,
Section 14.
Indemnification.
To the full extent permitted by law, the Commission
may authorize indemnification by the Authority of any person
who is or was a member or alternate member of the
Commission, or an officer, employee or other agent of the
Authority, and who was or is a party or is threatened to be
made a party to a proceeding by reason of the fact that such
person is or was such a member or alternate member of the
Commission, or an officer. employee or other agent of the
Authority, against expenses, judgments, fines, settlements and
other amounts actualiy and reasonably incurred in connection
with such proceeding, if such person acted in good faith and
in a manner such person reasonably believed to be in the best
interests of the Authority and, in the case of a criminal
proceeding. had no reasonable cause to beiieve the conduct of
such person was unlawful and, in the case of an action by or
in the right of the Authority, acted with such care, including
reasonable inquiry, as an ordinarily prudent person In a like
position would use under similar circumstances.
Section 15.
Contributions and Advances.
Contributions or advances of public funds and of the
use of personnel, equipment or property may be made to the
Authority by the parties hereto for any of the purposes of this
Agreement. Payment of public funds may be made to defray
the cost of any such contribution, Any such advance may be
made subject to repayment, and in such case shall be repaid,
in the manner agreed upon by the Authority and the party
making such advance at the time of such advance,
Section 16.
Immunities.
All of the privileges and immunities from
liabiiities, exemptions from laws, ordinances and rules, all
pension, relief, disability, workers' compensation, and other
benefits which apply to the activity of officers, agents or
employees of Program Participants when performing their
11
3-17
respective functions within the territorial limits of their
respective public agencies, shali apply to them to the same
degree and extent while engaged as members of the
Commission or otherwise as an officer, agent or other
representative of the Authority or while engaged in the
performance of any of their functions or duties
extraterritorially under the provisions of this Agreement.
Section 17.
Amendments,
Except as provided in Section 13 above, this
A 9 r e e men t 5 h a I J not b e a men d ed, mod j,t i ed, 0 r a I t ere d e x c e p t
by a written instrument duly executed by each of the Program
Participants,
Section 18.
Effectiveness.
This Agreement shail become effective and be in full
force and effect and a legal, valid and binding obligation of
each of the Program Participants at 9:00 a.m" California time,
on the date that the Commission shall have received from each
of the Initial Participants an executed counterpart of this
Agreement, together with a certified copy of a resolution of
the governing body of each such Initial Participant approving
this Agreement and the execution and delivery hereof,
Section 19,
Partial Invaliditv.
If anyone or more of the terms, provisions,
promises, covenants or conditions of this Agreement shall to
any extent be adjudged invalid, unenforceable, void or
voidable for any reason whatsoever by a court of competent
jurisdiction, each and all of the remaining terms, provisions,
promises, covenants and conditions of this Agreement shall
not be affected thereby, and shall be valid and enforceable to
the fullest extent permitted by law,
Section 20,
Successors.
This Agreement shall be binding upon and shail
inure to the benefit of the successors of the parties hereto,
Except to the extent expressly provided herein, no party may
assign any right or obilgation hereunder without the consent of
the other parties.
Section 21,
Miscellaneous.
T h j sAg r e e men t may b e a'x e cut e din 5 eve r a I
counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
12
3-18
The section headings herein are for convenience
only and are not to be construed as modifying or governing the
language in the section referred to,
Wherever in this Agreement any consent or approval
is required, the same shall not be unreasonably withheld,
This Agreement is made in the State of California,
under the Constitution and laws of such state and is to be so
construed.
This Agreement is the complete and exclusive
statement of the agreement among the parties hereto, which
supercedes and merges all prior proposals, understandings,
and other agreements, including, without limitation, the Initial
Agreement, whether oral, written, or implied in conduct,
between and among the parties relating to the subject matter
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed and attested by their
proper officers thereunto duly authorized, and their official
seals to be hereto affixed, as of the day and year first above
w ritte n.
Program Participant:
[SEAL]
By
Name:
Title:
ATTEST:
By
Name:
Title:
13
3-19
COUNCIL RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE BORROWING OF FUNDS
BY THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA FROM CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY AND
PROVIDING OTHER MATTERS RELATING THERETO
WHEREAS, the California Statewide Communities Development Authority (the
"Authority") is a j oint powers authority duly organized and existing under and pursuant to that
certain "Amended and Restated Joint Exercise of Powers Agreement Relating to the Califomia
Statewide Communities Development Authority", dated as of June 1, 1988, and under the
provisions of Articles I through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of
Title I of the Government Code of the State of California (the "Act"), and is authorized pursuant
to Article 4 of the Act (the "Bond Law") to issue bonds, notes and other obligations; and
WHEREAS, the Redevelopment Agency of the City of Chula Vista (the "Agency") is a
public body, corporate and politic, duly established and authorized to transact business and
exercise powers under and pursuant to the provisions of Part 1 of Division 24 of the Health and
Safety Code of the State ofCalifomia; and
WHEREAS, Section 33681.15 of the California Health and Safety Code authorizes the
Authority to issue bonds, notes or other obligations to provide funds to make loans to
redevelopment agencies to make the payments required by Section 33681.12 of the California
Health and Safety Code, namely payments to the applicable county auditor for deposit in the
county's Educational Revenue Augmentation Fund (the "ERAF Payment"); and
WHEREAS, in order to make loans for such purpose to redevelopment agencies, the
Authority has determined to issue its California Statewide Communities Development Authority
2005 Taxable Revenue Bonds, Series A (CRA/ERAF Loan Program) in the aggregate principal
amount of not to exceed $50,000,000 (the "Bonds"); and
WHEREAS, in order to make its ERAF Payment for fiscal year 2004-05, the Agency
desires to obtain a loan from the Authority from the proceeds of the Bonds in the amount of not
to exceed $855,000 (the "Loan") pursuant to the terms and conditions set forth in the Loan
Agreement, dated as of April 1, 2005, by and between the Agency and the Authority (the "Loan
Agreement"); and
WHEREAS, as a condition precedent to entering into the Loan Agreement, said Section
33681.15 requires that the Agency obtain the prior approval of this City Council, which City
Council is a "legislative body" for purposes of Section 33681.15, by resolution adopted by a
majority of this City Council that recites that a first lien will be created on property tax revenues
ofthe City to secure repayment of the Loan; and
WHEREAS, this City Council desires to make the recitals set forth below and to approve
the making of the Loan by the Authority to the Agency pursuant to the Loan Agreement
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City ofChula Vista
(the "City") that:
Section 1. Acknowledgment with respect to First Lien on Property Tax
Revenues, In fulfillment of the requirements of Section 33681.15 of the California Health and
Safety Code, the City Council hereby acknowledges that, in order to secure repayment of the
Loan by the Authority to the Agency, a first lien is created by said Section 33681.15 on the
property tax revenues allocated to the City pursuant to Chapter 6 (commencing with Section 95)
of Part 0.5 of Division 1 of the Revenue and Taxation Code. This lien will arise by operation of
said Section 33681.15 automatically upon the making ofthe Loan without the need for any action
on the part of any person, This lien will be valid, binding, perfected, and enforceable against this
City Council, its successors, creditors, purchasers, and all others asserting rights in those property
tax revenues, irrespective of whether those persons have notice of the lien, irrespective of the fact
that the property tax revenues subject to the lien may be commingled with other property, and
without the need for physical delivery, recordation, public notice, or any other act. This lien shall
be a first priority lien on such property tax revenues,
Sectiou 2. Approval of Loan. The City Council hereby approves the Loan in the
amount of not to exceed $855,000 to be made by the Authority to the Agency pursuant to the
Loan Agreement, as above described,
Section 3, Official Statement. The City Council hereby approves the information that
describes the City and the Agency contained in the form of the Official Statement relating to the
Bonds on file with the City Clerk. Distribution by the purchaser of the Bonds of the final
Official Statement containing such information is hereby approved.
Section 4. Official Actions. The Mayor, the City Manager, the Finance Director, the
City Attorney, the City Clerk and any and all other officers of the City are hereby authorized and
directed, for and in the name and on behalf of the City, to do any and all things and take any and
all actions, and to execute and deliver all certificates and other documents, which they, or any of
them, may deem necessary or advisable in order to consummate the sale, issuance and delivery of
the Bonds by the Authority and the making of the Loan by the Authority to the Agency pursuant
to the Loan Agreement.
Section S. Effective Date. This Resolution shall take effect from and after the date of its
passage and adoption,
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Presented by
Approved as to form by
Maria Kachadorian
Director of Finance
J:attorneylReso/FinancelboITowing funds
3-22
~
AGENCY RESOLUTION NO.
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA AUTHORIZING AND DIRECTING
EXECUTION OF LOAN AGREEMENT RELATING TO THE
ISSUANCE OF CERTAIN BONDS BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY,
APPROVING OFFICIAL STATEMENT RELATING TO SUCH
BONDS AND AUTHORlZING AND APPROVING OTHER
MATTERS RELATING THERETO
WHEREAS, the California Statewide Communities Development Authority (the
"Authority") is a joint powers authority duly organized and existing under and pursuant to that
certain "Amended and Restated Joint Exercise of Powers Agreement Relating to the California
Statewide Communities Development Authority", dated as of June I, 1988, and under the
provisions of Articles I through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of
Title 1 of the Government Code of the State of California (the "Act"), and is authorized pursuant
to Article 4 of the Act (the "Bond Law") to issue bonds, notes and other obligations; and
WHEREAS, the Redevelopment Agency of the City of Chula Vista (the "Agency") is a
public body, corporate and politic, duly established and authorized to transact business and
exercise powers under and pursuant to the provisions of Part I of Division 24 of the Health and
Safety Code of the State of California; and
WHEREAS, Section 33681.15 of the California Health and Safety Code authorizes the
Authority to issue bonds, notes or other obligations to provide funds to make loans to
redevelopment agencies to make the payments required by Section 33681.12 of the California
Health and Safety Code, namely payments to the applicable county auditor for deposit in the
county's Educational Revenue Augmentation Fund (the "ERAF Payment"); and
WHEREAS, in order to make loans for such purpose to redevelopment agencies, the
Authority has determined to issue its California Statewide Communities Development Authority
2005 Taxable Revenue Bonds, Series A (CRAlERAF Loan Program) in the aggregate principal
amount of not to exceed $50,000,000 (the "Bonds"); and
WHEREAS, in order to make its ERAF Payment for fiscal year 2004-05, the Agency
desires to obtain a loan from the Authority from the proceeds of the Bonds in the amount of not
to exceed $855,000 (the "Loan") pursuant to the terms and conditions set forth in the Loan
Agreement, dated as of April 1, 2005, by and between the Agency and the Authority (the "Loan
Agreement"), a form of which Loan Agreement is on file with the Secretary of the Agency; and
WHEREAS, the Agency is a member of the Authority; and
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WHEREAS, in connection with the issuance of the Bonds by the Authority, Section 6586
of the Act requires that the Agency make certain determinations with respect to the significant
public benefits to the Agency resulting from the issuance of the Bonds by the Authority, as
hereinafter set forth;
WHEREAS, as a condition precedent to entering into the Loan Agreement, said Section
33681.15 requires that the Agency obtain the prior approval of the City Council of the City of
Chula Vista (the "City"), by resolution (the "City Council Resolution") adopted by a majority of
said Council that recites that a first lien will be created on property tax revenues of the City to
secure repayment of the Loan; and
WHEREAS, the City Council Resolution has been duly adopted in full compliance with
the requirements of said Section 33681.15; and
WHEREAS, the Authority has caused to be prepared a form of Official Statement
describing the Bonds and containing, among other matters, information describing the Agency
and the City, the form of which Official Statement is on file with the Secretary (the "Official
Statement"), which will be used by Stone and Youngberg LLC, E J. De La Rosa & Co. Inc. and
RBC Dain Rauscher Inc (together, the "Underwriters") in the sale of the Bonds; and
WHEREAS, the Agency, with the aid of its staff, has reviewed the form of the Loan
Agreement and the information in the Official Statement relating to the Agency and the City, and
wishes at this time to approve the forgoing in the public interests of the Agency.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the
Redevelopment Agency ofthe City of Chula Vista as follows:
Section 1. Determination of Significant Public Benefits. Based on the information
provided to the Agency by Agency staff and others in connection with these proceedings, the
Agency determines that there will be significant public benefits accruing to the Agency from the
issuance of the Bonds by the Authority and the loan of portion of the proceeds thereof to the
Agency, consisting of demonstrable savings in effective interest rates and financing costs
resulting from (i) the efficiencies of pooling the Loan, together with the loans to other
redevelopment agencies to be made from the proceeds of the Bonds, into one issuance of bonds
by the Authority and (ii) the creditworthiness of the lien on the property tax revenues of the City
under said Section 33681.15 to secure the repayment of the Loan by the Agency.
Section 2. Approval of Loan Agreement. The Agency hereby authorizes and approves
the making of the Loan to the Agency pursuant to the Loan Agreement in the amount of not to
exceed $855,000. The Agency hereby approves the Loan Agreement in substantially the form on
file with the Secretary together with any additions thereto or changes therein (including, but not
limited to, the final principal amount of the Loan and the final payment schedule on the Loan)
deemed necessary or advisable by the attorney of the Agency; provided that the average annual
interest rate on the Bonds does not exceed seven percent (7.00%) per annum. The Executive
Director is hereby authorized and directed to execute the final form of the Loan Agreement for
and in the name and on behalf of the Agency and the execution thereof shall be conclusive
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conclusive evidence of the Agency's approval of any such additions and changes to the Loan
Agreement. The Agency hereby authorizes the delivery and performance of the Loan Agreement.
Section 3. Official Statement. The Agency hereby approves the information that
describes the Agency and the City contained in the form of the Official Statement on file with the
Secretary. Distribution by the purchaser of the Bonds of the final Official Statement containing
such information is hereby approved.
Section 4. Officer's Certificate. The Executive Director (or in his absence, the
Treasurer) is hereby authorized and directed to promptly execute and deliver, together with a
certified copy of this Resolution, to Stone and Youngberg LLC, on behalf of the Underwriters,
the Officer's Certificate in form attached hereto as Exhibit A and hereby made a part hereof,
containing representations warranties of the Agency with respect to the making of the Loan and
the issuance of the Bonds. The Agency understands that the Underwriters will rely on the
representations and warranties contained in the Officer's Certificate in the sale and delivery of
. the Bonds by the Underwriters.
Section 5. Official Actions. The Chair, the Executive Director, the Treasurer, the
Agency Counsel, the Secretary and any and all other officers of the Agency are hereby authorized
and directed, for and in the name and on behalf of the Agency, to do any and all things and take
any and all actions, and to execute and deliver all certificates and other documents, which they,
or any of them, may deem necessary or advisable in order to consununate the sale, issuance and
delivery of the Bonds by the Authority and the making of the Loan by the Authority to the
Agency pursuant to the Loan Agreement. In the event the Executive Director shall be unavailable
to execute the Loan Agreement, then the Treasurer is hereby authorized to act in the Executive
Director's stead.
Section 6. Effective Date. This Resolution shall take effect from and after the date of its
passage and adoption.
Presented by
Approved as to form by
oore
Cit Attorney
Maria Kachadorian
Director of Finance
J :attorney/Reso/agreements/Loan Agreement bonds
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3-25
13138-170
JH:ACH:brf
02/25/05
EXHIBIT A
California Statewide Communities Development Authority
2005 Taxable Revenue Bonds, Series A
(CRA/ERAF Loan Program)
OFFICER'S CERTIFICATE REGARDING CRA/ERAF LOAN PROGRAM
RECITALS:
A. The California Statewide Communities Development Authority (the "Authority") is a
joint powers authority authorized under Section 33681.15 of the California Health and Safety
Code to issue bonds, notes or other obligations to provide funds to make loans to
redevelopment agencies to make the payments required by Section 33681.12 of the California
Health and Safety Code, namely payments to the applicabie county auditor for deposit in the
county's Educational Revenue Augmentation Fund (the "ERAF Payment");
B. In order to make loans for such purpose to redevelopment agencies, the Authority
has determined to issue its California Statewide Communities Development Authority 2005
Taxable Revenue Bonds, Series A (CRA/ERAF Loan Program) (the "Bonds"); and
C. The Agency is a public body, corporate and politic, duly established and authorized
to transact business and exercise powers under and pursuant to the provisions of Part 1 of
Division 24 of the Health and Safety Code of the State of California (the "Redevelopment Law");
and the Agency in order to make its ERAF Payment desires to obtain a loan (the "Loan") from
the Authority from the proceeds of the Bonds pursuant to the terms and conditions set forth in
the Loan Agreement, dated as of April 1, 2005, by and between the Agency and the Authority
(the "Loan Agreement"), the form of which Loan Agreement is on fiie with the Secretary of the
Agency;
The undersigned hereby states and certifies:
(i) that the undersigned is the duly appointed, qualified and acting [insert Executive
Director or Treasurer] of the Redevelopment Agency of the City of Chula Vista, a public body,
corporate and politic, duly organized and existing under the laws of the State of California (the
"Agency") and as such, is familiar with the facts herein certified and is authorized to certify the
same;
(Ii) that the Agency has been duly created and authorized to transact business and
exercise its powers under and pursuant to the Redevelopment Law and no action has been
taken by the City Council (the "Council") of the City of Chula Vista, California (the "City")
pursuant to the Redevelopment Law to dissolve said Agency or to suspend its powers;
(iii) that, by all necessary action, the Agency has duly authorized and approved the
execution and delivery of, and the performance by the Agency of the obligations on its part
contained in, the Loan Agreement;
3-26
(Iv) that no action is pending attacking or otherwise questioning the validity of the
Agency or the authority of the Agency to obtain the Loan and to enter into the Loan Agreement
or the authority of the City to approve the obtaining of the Loan by the Agency;
(v) that the Agency and the City Council of the City have duly adopted the following
respective resolutions relating to the Loan and the Loan Agreement (collectively, the
"Resolutions"), which Resolutions were duly adopted by the members of the Agency or the City
Council, as applicable, at open public meetings which were called, noticed and conducted in
accordance with all applicable requirements of California law, at which a quorum was present
and acting throughout, and the Resolutions have not been amended, modified, supplemented
(except as noted below), rescinded or repealed and are in full force and effect as of the date
hereof:
(a) Resolution No. , entitled "A Resolution of the Redevelopment
Agency of the City of Chula Vista Authorizing And Directing Execution Of Loan
Agreement Relating To The Issuance Of Certain Bonds By The California Communities
Statewide Development Authority, Approving Official Statement Relating To Such Bonds
And Authorizing And Approving Other Matters Relating Thereto", adopted March 15,
2005; and
(b) Resolution No. , entitled "A Resolution Of The City Of Chula Vista
Approving the Borrowing of Funds By The Redevelopment Agency of the City of Chula
Vista From the California Communities Statewide Development Authority An Providing
Other Matters Relating Thereto", adopted March 15, 2005;
(vi) that the representations and warranties of the Agency contained in the approved
form of the Loan Agreement are true and correct in all material respects as of the date hereof
and the Agency and the Agency shall, concurrently with the delivery of the Bonds, reaffirm that
such representations and warranties are true and correct in all material respects as of the date
of delivery of the Bonds;
(vii) that, as of the date hereof, the information relating to the Agency and the City in
the form of the approved Preliminary Official Statement relating to the Bonds (the "Official
Statement") does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misieading;
(viii) that the Agency shall, concurrently with the delivery of the Bonds, reaffirm that no
event affecting the Agency or the City has occurred since the date hereof which has not been
disclosed therein or in any supplement or amendment thereto which event should be disclosed
in the final Official Statement in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ix) that the Agency's Low and Moderate Income Housing Fund established pursuant
to Section 33334.3 of the Redevelopment Law does not, on, the date hereof and will not on the
date of delivery of the Bonds, contain an "excess surplus" (within the meaning of Section
33334.12 of the Redevelopment Law) that would cause the Agency to be subject to the
sanctions contained in Section 33334:12(e)(1) of the Redevelopment Law; and
(x) that the Agency does not on the .date hereof have "major audit violations" (within
the meaning of Section 33080.8(i) of the Redevelopment Law) so as to be subject to a court
order prohibiting the activities set forth in Section 33080.8(e)(3) of the Redevelopment Law.
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Dated: March _,2005
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Redevelopment Agency of the City of Chula
Vista
By
[Executive Director of Treasurer]
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Dated: ~/;(,/as-
Loan Agreement relating to the Issuance of Certain Bond
By the California Statewide Communities Development
Authority
3-29
2513138-170
JH:ACH:brf
02/25/05
C~ERAFLOANPROGRAM
2005 LOAN AGREEMENT
Dated as of April 1, 2005
by and between the
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA,
and
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
Relating to
$[Bond Amount]
California Statewide Communities Development Authority
2005 Taxable Revenue Bonds, Series A
(CRA/ERAF Loan Program)
3-30
Section 1.01.
Section 1.02.
Section 1.03.
Section 1.04.
Section 2.01.
Section 2.02.
Section 2.03.
Section 2.04.
Section 2.05.
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 4.01.
Section 4.02.
Section 4.03.
Section 4.04.
Section 5.01.
Section 5.02.
Section 5.03.
Section 5.04.
Section 5.05.
Section 5,06.
Section 5.07.
Section 5.08.
Section 5 09.
Section 5.10.
Section 5.11.
.>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; REPRESENTATIONS
Definitions. .................................................................................................................... 3
Rules of Construction. .................................................................................................. 5
Representations of the Authority. .................................................................................5
Representations of the Agency.....................................................................................6
ARTiCLE II
THE LOAN; ESTABLISHMENT OF FUNDS
Authorization........................................................ ......................................................... 8
Terms of Loan. .............................................................................................................8
No Prepayment. ............................................................................................................ 9
Application of Loan Proceeds and Certain Other Moneys. ........................................... 9
Validity of Loan. ............................................................................................................9
ARTICLE III
OTHER COVENANTS OF THE AGENCY
Punctual Payment................................. ........... ........................................................... 10
Payment By County Auditor. .......................................................................................10
Financial Statements, Continuing Disclosure. ............................................................ 10
Protection of Security and Rights. ..............................................................................10
Further Assurances. ................................................................................................... 10
ARTICLE IV
EVENTS OF DEFAULT AND REMEDIES
Events of Default . ...................................................................................................... 11
Application of Funds Upon Default. ............................................................................ 11
No Waiver. .................................................................................................................. 11
Remedies Not Exclusive. ............................................................................................ 12
ARTICLE V
MISCELLANEOUS
Benefits Limited to Parties. .........................................................................................13
Successor is Deemed Included in All References to Predecessor. ...........................13
Discharge of Loan Agreement. ...................................................................................13
Rebate of Surplus Funds. ........................................................................................... 13
Amendment. ............................ ................................................................................... 14
Waiver of Personal Liability. .......................................................................................14
Indemnification of Authority and Trustee. ................................................................... 14
Notices. ....................... ................................................................................................ 15
Partial Invalidity. .......................................................................................................... 15
Governing Law...................................... ...................................................................... 16
Term of this Loan Agreement. .................................................................................... 16
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CRA/ERAFLOANPROGRAM
2005 LOAN AGREEMENT
THIS CRAlERAF LOAN PROGRAM 2005 LOAN AGREEMENT (the "Loan Agreement")
is made and entered into as of April 1, 2005, by and between the CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY, a joint powers authority organized and existing
under the laws of the State of California (the "Authority") and the REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA a public body corporate and politic duly organized and
existing under the laws of the State of California (the "Agency");
RECITALS:
A. The Authority is a joint powers authority duly organized and existing under and
pursuant to that certain "Amended and Restated Joint Exercise of Powers Agreement Relating
to the California Statewide Communities Development Authority", dated as of June 1, 1988, and
under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of
Division 7 of Title 1 of the Government Code of the State of California (the "Act"), and is
authorized pursuant to Article 4 of the Act (the "Bond Law") to issue bonds, notes and other
obligations; and
B. The Agency is a public body, corporate and politic, duly established and authorized
to transact business and exercise powers under and pursuant to the provisions of Part 1 of
Division 24 of the Health and Safety Code of the State of California (the "Redevelopment Law");
and
C. Section 33681.15 of the California Health and Safety Code authorizes certain joint
powers entities, such as the Authority, to issue bonds, notes or other obligations to provide
funds to make loans to redevelopment agencies to make the payments required by Section
33681.12 of the California Health and Safety Code, namely payments to the applicable county
auditor for deposit in the county's Educational Revenue Augmentation Fund (the "ERAF
Payment"); and
D. In order to make loans for such purpose to redevelopment agencies, the Authority
has determined to issue its California Statewide Communities Development Authority 2005
Taxable Revenue Bonds, Series A (CRA/ERAF Loan Program) in the aggregate principal
amount of $[Bond Amount] (the "Bonds"); and
E. The Agency desires obtain a loan (the "Loan") from the Authority from the proceeds
of the Bonds in order to make its ERAF Payment; and
F. In order to state and declare the terms and conditions upon which the Loan is to be
made, secured and repaid, the Agency and the Authority wish to enter into this Loan
Agreement; and
G. All acts and proceedings required by law necessary to make this Loan Agreement,
when executed by the Agency and the Authority, the valid, binding and legal obligation of the
Agency and the Authority, and to constitute this Loan Agreement a valid and binding agreement
for the uses and purposes herein set forth in accordance with its terms, have been done and
3-32
taken, and the execution and delivery of this Loan Agreement have been in all respects duly
authorized;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto do hereby agree as follows:
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ARTICLE I
DEFINITIONS; REPRESENTATIONS
Section 1.01. Definitions. Unless the context clearly otherwise requires or unless
otherwise defined herein, the capitalized terms in this Loan Agreement shall have the
respective meanings which such terms have in the Indenture. In addition, the following terms
defined in this Section 1.01 shall, for all purposes of this Loan Agreement, have the respective
meanings herein specified.
"Act" means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4
(commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code
of the State of California, as amended.
" Aqencv" means the Redevelopment Agency of the City of Chula Vista, or its
successors or assigns.
"Authoritv" means the California Statewide Communities Development Authority, or its
successors or assigns.
"Bond Insurance Policv" means the Financial Guaranty Insurance Policy No.
issued by the Insurer insuring when due the payment of the Bonds as
provided therein.
"Bonds" means $[Bond Amount] aggregate principal amount of California Statewide
Communities Development Authority 2005 Taxable Revenue Bonds, Series A (CRA/ERAF Loan
Program), authorized by and at any time Outstanding pursuant to the Bond Law and the
Indenture.
"Bond Year" means each twelve-month period extending from August 2 in one calendar
year to August 1 of the succeeding calendar year, both dates inclusive, except that the first
Bond Year shall commence on the Closing Date, and end on August 1, 2005.
"Borrower" means the Agency and its successors and assigns.
"Certificate of the Aqency" means a certificate in writing signed by the Executive
Director, Treasurer or Secretary of the Agency or by any other officer of the Agency duly
authorized by the Agency for that purpose.
"Closinq Date" means the date of original issuance of the Bonds.
"Community" means the city or county of which the Agency is a subordinate entity.
"Continuinq Disclosure Certificate" shall mean that certain Continuing Disclosure
Certificate executed by the Authority and dated as of the Closing Date relating to the Bonds, as
originally executed and as may be amended from time to time in accordance with the terms
thereof.
"Countv Auditor" means the County Auditor-Controller of the county in which the Agency
is located.
"ERAF Pavment" means the payment required to be made by the Agency by May 10,
2005, pursuant to Section 33681.12 of the California Health and Safety Code to a county
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auditor for deposit in the Educational Revenue Augmentation Fund created for such county
pursuant to Article 3 (commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the
California Revenue and Taxation Code.
"Event of Default" means any of the events described in Section 4.01.
"Fiscal Year" means any twelve-month period extending from July 1 in one calendar
year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-
month period selected and designated by the Agency as its official fiscal year period.
"Indenture" means the Indenture of Trust, dated as of April 1, 2005, by and between the
Authority and Wells Fargo Bank, National Association, as trustee, providing for the issuance of
the Bonds.
"Independent Accountant" means any accountant or firm of such accountants duly
licensed or registered or entitled to practice and practicing as such under the laws of the State,
appointed by the Agency, and who, or each of whom:
(a) is in fact independent and not under the domination of the Agency;
(b) does not have any substantial interest, direct or indirect, with the Agency; and
(c) is not connected with the Agency as an officer or employee of the Agency, but
who may be regularly retained to make reports to the Agency.
"Insurer" means
as the issuer of the Bond Insurance Policy.
, its successors and assigns,
"Interest Pavment Date" shall have the meaning set forth in the Indenture.
"Loan" means the loan made to the Agency by the Authority pursuant to Section 2.01
with a portion of the proceeds of the Bonds.
"Loan Aqreement" means this Loan Agreement by and between the Agency and the
Authority, as originally entered into or as amended or supplemented pursuant to the provisions
hereof.
"Loan Fund" means the fund by that name established by the Indenture.
"Loan Pavment" means a scheduled payment on the Loan as set forth in Section 2.02.
"Plan Limitations" means the limitations contained in the Redeveiopment Plan on the
incurrence of the Loan and the repayment of the Loan, including, without limitation, any
limitation on outstanding bonded indebtedness of the Agency.
"Redevelopment Law" means the Community Redevelopment Law of the State,
constituting Part 1 of Division 24 of the Health and Safety Code of the State, and the acts
amendatory thereof and supplemental thereto.
"Redevelopment Pian" means the duly adopted Redevelopment Plan or Redevelopment
Plans authorizing the undertaking of redevelopment activities by the Agency together with any
amendments thereof heretofore or hereafter duly enacted pursuant to the Law.
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"Redevelopment Proiect" means the undertaking of the Agency pursuant to a
Redevelopment Plan.
"Reauest of the Aaencv" means a request in writing signed by the Executive Director,
Treasurer or Secretary of the Agency or by any other officer of the Agency duly authorized by
the Agency for that purpose.
Section 1.02. Rules of Construction. All references herein to "Articles," "Sections"
and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Loan
Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Loan Agreement as a whole and not to any particular Article, Section or subdivision
hereof.
Section 1.03. Representations of the Authority. The Authority makes the following
representations as of the date of the execution and delivery of this Loan Agreement as the
basis for the undertakings on its part herein contained (such representations to remain
operative and in full force and effect regardless of the issuance of the Bonds or any
investigations by or on behalf of the Agency or the results thereof):
(a) The Authority is a joint powers authority duly organized and existing under the
laws of the State, and constitutes a political subdivision of the State.
(b) Under the Act, the Authority has the power to enter into the transactions
contemplated by this Loan Agreement and the Indenture and to carry out its obligations
hereunder and thereunder, including the issuance and sale of the Bonds. By proper action, the
Commission of the Authority has duly authorized the execution and delivery by the Authority of
this Loan Agreement and the Indenture, and the issuance and sale of the Bonds by the
Authority.
(c) There is no action, suit, proceeding, inquiry or investigation pending or, to the
knowledge of the Authority, threatened against the Authority by or before any court,
governmental agency or publiC board or body, which: (i) affects or questions the existence or
the territorial jurisdiction of the Authority or the title to office of any member of the Authority; (Ii)
affects or seeks to prohibit, restrain or enjoin the execution and delivery of this Loan Agreement
or the Indenture, or the issuance, execution or delivery of the Bonds; (Iii) affects or questions
the validity or enforceability of this Loan Agreement, the Indenture or the Bonds; or (iv)
questions the power or authority of the Authority to perform its obligations under this Loan
Agreement, the Indenture or the Bonds or to carry out the transactions contemplated by this
Loan Agreement, the Indenture or the Bonds.
(d) Neither the execution and delivery of this Loan Agreement nor the
consummation of the transactions herein or therein contemplated nor compliance with the terms
and provisions hereof or thereof, conflicts with or results or will result in a breach of any of the
terms, conditions or provisions of any law, order, rule, regulation, writ, injunction or decree of
any court or governmental authority, or any other agreement or instrument to which the
Authority is a party, or to or by which it or its assets are subject or bound, or constitutes or will
constitute a default thereunder, or results or will result in the creation or imposition of any lien of
any nature whatsoever upon any of its property or assets pursuant to the terms of any such
agreement or instrument except the liens created by this Loan Agreement.
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(e) No authorization, consent, approval, order, registration, declaration or
withholding of objection on the part of, or filing of or with any governmental authority, not
already obtained or made, is required for the execution and delivery of this Loan Agreement or
the Indenture or the issuance of the Bonds or the performance of the terms and provisions
hereof or thereof by the Authority.
Section 1.04. Representations of the Agency. The Agency makes the following
representations as of the date of the execution and delivery of this Loan Agreement as the
basis for the undertakings on its part herein contained (such representations to remain
operative and in full force and effect regardless of the issuance of the Bonds or any
investigations by or on behalf of the Authority or the results thereof):
(a) The Agency is a public body, corporate and politic, duly organized and existing
under the Redevelopment Law.
(b) The Agency has the power to enter into the transactions contemplated by this
Loan Agreement and to carry out its obligations hereunder. By proper action, the Agency has
duly authorized the execution and delivery of this Loan Agreement. The officers of the Agency
executing this Loan Agreement are duly and properly in office and are fully authorized to
execute this Loan Agreement.
(c) The incurrence and repayment of the Loan does not, and will not, violate any
Plan Limitations.
(d) This Loan Agreement, when assigned to the Trustee pursuant to the Indenture,
will constitute the legal, valid and binding agreements of the Agency enforceable against the
Agency by the Trustee in accordance with its terms for the benefit of the owners of the Bonds,
and any rights of the Authority and obligations of the Agency not so assigned to the Trustee
constitute the legal, valid, and binding agreements of the Agency enforceable against the
Agency by the Authority in accordance with its terms; except in each case as enforcement may
be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights
generally, by the application of equitable principles regardless of whether enforcement is sought
in a proceeding at law or in equity and by public policy.
(e) There is no action, suit, proceeding, inquiry or investigation pending or, to the
knowledge of the Agency, threatened against the Agency by or before any court, governmental
agency or public board or body, which (i) affects or seeks to prohibit, restrain or enjoin the
execution and delivery of this Loan Agreement (Ii) affects or questions the validity or
enforceability of this Loan Agreement or (iii) questions the power or authority of the Agency to
perform its obligations under this Loan Agreement or to carry out the transactions contemplated
by this Loan Agreement.
(f) Neither the execution and delivery of this Loan Agreement nor the
consummation of the transactions herein or therein contemplated nor compliance with the terms
and provisions hereof or thereof, conflicts with or results or will result in a breach of any of the
terms, conditions or provisions of any law, order, rufe, regulation, writ, injunction or decree of
any court or governmental agency, or any other agreement or instrument to which the Agency
is a party, or to or by which it or its assets are subject or bound, or constitutes or will constitute
a default thereunder, or results or will result in the creation or imposition of any lien of any
nature whatsoever upon any of its property or assets pursuant to the terms of any such
agreement or instrument.
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(g) No authorization, consent, approval, order, registration, declaration or
withholding of objection on the part of, or filing of or with any governmental agency, not already
obtained or made, is required for the execution and delivery of this Loan Agreement or the
performance of the terms and provisions hereof by the Agency.
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ARTICLE liTHE LOAN; ESTABLISHMENT OF FUNDS
Section 2.01. Authorization Pursuant to Section 33601 and Section 33681.15 of the
Redevelopment law and under and subject to the terms of this Loan Agreement, the Indenture,
the Bond Law and the Redevelopment Law, the Authority agrees to lend to the Agency on the
Closing Date, a portion of the proceeds of the Bonds in the aggregate principal amount of
Million Hundred Thousand Dollars ($[Loan Amount]), which amount
includes the Agency's pro rata share of (i) the underwriter's discount on the sale the Bonds, (ii)
the original issue discount upon the sale of the Bonds, (iii) the premium for the Bond Insurance
Policy, (iv) the deposit into the Reserve Account and (v) Costs of Issuance of the Bonds and
which amount is the aggregate principal amount of the Loan, as set forth in Section 2.02. The
Agency agrees to repay the Loan by causing all payments when due to be made directly to the
Trustee for the account of the Authority under the Indenture. This Loan Agreement constitutes
a continuing agreement by the Agency with the Authority to secure the full and final payment of
the Loan, subject to the covenants, agreements, provisions and conditions herein contained.
Section 2.02. Terms of Loan.
(a) The principal amount of the Loan and the interest thereon shall be payable in
installments from any available moneys of the Agency not obligated for other uses, each March
1, and November 1, commencing November 1, 2005, in each of the years and in the amounts,
as follows:
Date
Principal
Interest
Total Principal
and Interest
[To Come]
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(b) Interest on each installment of principal of the Loan has been calculated at the
annual interest rate payable by the Authority on the Bonds on the basis of 'a 360-day year of
twelve 3D-day months, and shall accrue on the unpaid principal of the Loan from the Closing
Date, but not including the date with respect to which such installment of principal is payable.
Interest on the Loan shall be payable on the dates specified above. Any installment of principal
or interest which is not paid when due shall, to the extent permitted by law, continue to accrue
interest from and including the date with respect to which such principal or interest is payable to
but not including the date of actual payment.
Payments on the Loan shall be payable by the Agency to the Trustee, as assignee of
the Authority under the Indenture, in immediately available funds which constitute lawful money
of the United States of America.
Section 2.03. No Prepayment. The Loan is not subject to early prepayment by the
Agency.
Section 2.04. Application of Loan Proceeds and Certain Other Moneys. On the
Closing Date, the Authority shall cause the Trustee to disburse the proceeds of the Loan in
accordance with the provisions of the Indenture, as follows:
(a) The Trustee shall deposit the Agency's pro rata share of the Costs of
Issuance in the amount of $ in the Costs of Issuance Fund (which
amount, together with $ , being the Agency's pro rata share of the
credit for the payment by the Original Purchaser to the Insurer of the Bond Insurance
Policy premium, represents a total credit of the Agency's pro rata share to the Costs of
Issuance Fund of $ ); and
(b) The Trustee shall from the amount of Bond proceeds deposited in the
Loan Fund pay the amount of $ to the County
Auditor, being the amount of the Agency's ERAF Payment.
Section 2.05. Validity of Loan. The validity of the Loan shall not be dependent upon
the completion of the Redevelopment Project or upon the performance by any person of its
obligation with respect to the Redevelopment Project.
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ARTICLE III
OTHER COVENANTS OF THE AGENCY
Section 3.01. Punctual Payment. The Agency will punctually payor cause to be paid
all amounts payable under the terms of this Loan Agreement in strict conformity with the terms
of this Loan Agreement, and it will faithfully observe and perform all of the conditions,
covenants and requirements of this Loan Agreement.
Section 3.02. Payment By County Auditor. The Agency acknowledges that Section
33681.15 of the Redevelopment Law provides that, in the event that the Agency shall fail to pay
timely the Loan in accordance with the schedule of Loan Payments provided by the Trustee to
the County Auditor (as such schedule is set forth in Section 2.02), the Trustee shall cause the
County Auditor to pay the amount of the delinquency from property taxes allocated to the
legislative body of the Agency's Community. The Agency further acknowledges that Section
3.05 of the Indenture provides that the Trustee, after ten (10) Business Days of the date upon
which the Agency shall be delinquent in the timely payment of a Loan Payment (and if such
Loan Payment has not been received by the Trustee by the end of such ten (10) Business Day
period), the Trustee shall promptly notify the County Auditor, by certified mail, of the fact and
amount of such Loan Payment that is past due and shall direct such County Auditor to pay such
amount to the Trustee from the next available property taxes of the applicable city or county, all
as provided in Section 33681.15 of the Redevelopment Law. Any such payment by the County
Auditor on behalf of the Agency shall be deemed to be timely payment by the Agency
hereunder and shall not give rise to an Event of Default hereunder.
Section 3.03. Financial Statements, Continuing Disclosure. (a) The Agency will
cause to be prepared and filed with the Insurer annually, within one hundred and eighty (180)
days after the close of each Fiscal Year so long as any of the Bonds are Outstanding, complete
audited financial statements with respect to such Fiscal Year showing the financial condition of
the Agency as of the end of such Fiscal Year. The Agency will furnish a copy of such
statements, upon reasonable request, to any Bond Owner.
(b) If the Agency shall have knowledge of any "material event" relating to the Agency
within the meaning of such term in Rule 15c2-12 of the Security and Exchange Commission,
the Agency shall promptly file a notice of such material event in accordance with the
requirements of Section _of the Continuing Disclosure Certificate.
Section 3.04. Protection of Security and Rights. The Agency will preserve and
protect the security of the Loan and to contest any action affecting the validity of this Loan
Agreement. From and after the Closing Date, the Loan shall be incontestable by the Agency.
Section 3.05. Further Assurances. The Agency will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Loan
Agreement and for the better assuring and confirming unto the Trustee, the Authority and the
Owners of the Bonds of the rights and benefits provided in this Loan Agreement.
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ARTICLE IV
EVENTS OF DEFAULT AND REMEDIES
Section 4.01. Events of Default. (a) The following events shall constitute Events of
Default hereunder with respect to the Loan:
(i) Failure by the Agency to pay when due any amounts required to be paid
hereunder with respect to the Loan.
(Ii) Any representation or warranty made by the Agency hereunder shall
prove to have been incorrect in any material respect when made.
(iii) Failure by the Agency to observe and perform any of the covenants,
agreements or conditions on its part contained in this Loan Agreement with respect to
the Loan and any Parity Debt, other than as referred to in the preceding clause (i), for a
period of thirty (30) days after written notice specifying such failure and requesting that it
be remedied has been given to the Agency and the Insurer by the Trustee; provided,
however, that if in the reasonable opinion of the Agency the failure stated in such notice
can be corrected, but not within such thirty (30) day period, the Trustee shall not
unreasonably withhold its consent to an extension of such time if corrective action is
instituted by the Agency within such thirty (30) day period and diligently pursued until
such failure is corrected.
(iv) The filing by the Agency of a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the United
States of America, or if a court of competent jurisdiction shall approve a petition, filed
with or without the consent of the Agency, seeking reorganization under the federal
bankruptcy laws or any other applicable law of the United States of America, or if, under
the provisions of any other law for the relief or aid of debtors, any court of competent
jurisdiction shall assume custody or control of the Authority or of the whole or any
substantial part of its property.
(b) If an Event of Default has occurred and is continuing under Section 4.01 (a), the
Trustee may (with the consent of the Insurer), or at the written direction of the Owners of a
majority in aggregate principal amount of the Outstanding Bonds (with the consent of the
Insurer) shall, subject to the provisions of the Indenture, exercise any remedies available to the
Trustee in law or at equity. Notwithstanding anything herein or in the Indenture to the contrary,
neither the Authority nor the Trustee may accelerate the installment payments on the Loan or
otherwise declare any installment payments on the Loan not then in default to be immediately
due and payable.
Section 4.02. Application of Funds Upon Default. Upon default, all amounts
received by the Trustee pursuant to any right given or action taken by the Trustee under the
provisions of this Loan Agreement shall be applied by the Trustee as provided in the Indenture.
Section 4.03. No Waiver. Nothing in this Article IV or in any other proviSion of this
Loan Agreement, shall affect or impair the obligation of the Agency, which is absolute and
unconditional, to pay the Loan Payments or affect or impair the right of action, which is also
absolute and unconditional, of the Trustee to institute suit to enforce such payment by virtue of
the contract embodied in this Loan Agreement.
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A waiver of any default by the Trustee shall not affect any subsequent default or impair
any rights or remedies on the subsequent default. No delay or omission of the Trustee to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence therein, and every
power and remedy conferred upon the Trustee by the Redevelopment Law or by this Article IV
may be enforced and exercised from time to time and as often as shall be deemed expedient by
the Trustee.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be
abandoned or determined adversely to the Trustee, the Agency and the Trustee shall be
restored to their former positions, rights and remedies as if such suit, action or proceeding had
not been brought or taken.
Section 4.04. Remedies Not Exclusive. No remedy herein conferred upon or
reserved to the Trustee is intended to be exclusive of any other remedy. Every such remedy
shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without
exhausting and without regard to any other remedy conferred by the Redevelopment Law or
any other law.
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ARTICLE V
MISCELLANEOUS
Section 5.01. Benefits Limited to Parties. Nothing in this Loan Agreement,
expressed or implied, is intended to give to any person other than the Agency, the Trustee, the
Insurer and the Authority, any right, remedy or claim under or by reason of this Loan
Agreement. All covenants, stipulations, promises or agreements in this Loan Agreement
contained by and on behalf of the Agency shall be for the sole and exclusive benefit of the
Authority, the Insurer and of the Trustee acting as trustee for the benefit of the Owners of the
Bonds.
Section 5.02. Successor is Deemed Included in All References to Predecessor.
Whenever in this Loan Agreement either the Agency, the Authority, the Insurer or the Trustee is
named or referred to, such reference shall be deemed to include the successors or assigns
thereof, and all the covenants and agreements in this Loan Agreement contained by or on
behalf of the Agency, the Authority, the Insurer or the Trustee shall bind and inure to the benefit
of the respective successors and assigns thereof whether so expressed or not.
Section 5.03. Discharge of Loan Agreement. If the Agency shall pay and discharge
the indebtedness evidenced by the Loan in full, in anyone or more of the following ways:
(a) by well and truly paying or -causing to be paid all installment payments on the
Loan, as and when the same become due and payable;
(b) by irrevocably depositing with the Trustee, in trust, at or before maturity, cash in
an amount which, together with any available amounts then on deposit in any of the funds and
accounts established pursuant to the Indenture, is fully sufficient to pay all installment payments
on the Loan, as and when the same become due and payable; or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in trust,
Defeasance Obligations (as defined in the Indenture) in such amount as an Independent
Accountant shall determine will, together with the interest to accrue thereon and any available
moneys then on deposit in the funds and accounts established pursuant to the applicable
Indenture, be fully sufficient to pay all installment payments on the Loan, as and when the
same become due and payable;
then, at the election of the Agency but only if all other amounts then due and payable
hereunder shall have been paid or provision for their payment made, all obligations of the
Trustee, the Authority and the Agency under this Loan Agreement with respect to the Loan shall
cease and terminate, except only the obligation of the Agency to payor cause to be paid to the
Trustee and the Authority, from the amounts so deposited with the Trustee or such other
fiduciary, all sums due with respect to the Loan and all expenses and costs of the Trustee and
the Authority and all sums due the Insurer. Notice of such election shall be filed with the
Authority, the Insurer and the Trustee.
Section 5.04. Rebate of Surplus Funds. (a) Promptly following each August 1,
commencing August 1, 2006, after having paid or provided for payment of all amounts then due
and payable, any surplus funds remaining in the Revenue Fund established by the Indenture
shall be rebated to the Agency and to all other redevelopment agencies that received loans
from the proceeds of the Bonds, pro rata based on the respective principal amounts of such
loans, including the Loan to the Agency.
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(b) Upon payment of the Bonds in full and after having paid or provided for payment of
all amounts payable to the Trustee and the Insurer under the Indenture, any surplus funds
remaining in the funds and accounts established by the Indenture shall be rebated to the
Agency and to all other redevelopment agencies that received loans from the proceeds of the
Bonds, pro rata based on the respective principal amounts of such loans, including the Loan to
the Agency.
Section 5.05. Amendment. This Loan Agreement may be amended by the parties
hereto but only under the circumstances set forth in, and in accordance with, the provisions of
Section 5.07 of the Indenture.
Section 5.06. Waiver of Personal Liability. No member, officer, agent or employee of
the Authority or any member, officer, agent or employee of the Agency shall be individually or
personally liable for the payment of any principal or interest on the Bonds or any other sum
hereunder or be subject to any personal liability or accountability by reason of the execution and
delivery of this Loan Agreement; but nothing herein contained shall relieve any such member,
officer, agent or employee from the performance of any official duty provided by law or by this
Loan Agreement.
Section 5.07. Indemnification of Authority and Trustee.
(a) To the fullest extent permitted by law, the Agency agrees to indemnify, hold
harmless and defend the Authority, the Trustee, and each of their respective officers, governing
members, directors, officials, employees, attorneys and agents (collectively, the "Indemnified
Parties"), against any and all losses, damages, claims, actions, liabilities, costs and expenses
of any conceivable nature, kind or character (including, without limitation, reasonable attorneys'
fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge
judgments) to which the Indemnified Parties, or any of them, may become subject under or any
statutory law (including federal or state securities laws) or at common law or otherwise, arising
out of or based upon or in any way relating to:
(i) any act or omission of the Agency or any of its agents, contractors,
servants, employees, tenants) or licensees in connection with the Loan or this Loan
Agreement; or
(ii) any untrue statement or misleading statement or alleged untrue
statement or alleged misleading statement of a material fact relating to the Agency
contained in the Official Statement approved by the Agency for distribution in connection
with the sale of the Bonds or contained in any continuing disclosure with respect to the
Bonds provided by the Agency, or any omission or alleged omission from such Official
Statement or such continuing disclosure of any material fact relating to the Agency
necessary to be stated therein in order to make the statements relating to the Agency
made therein, in the light of the circumstances under which they were made, not
misleading;
except (A) in the case of the foregoing indemnification of the Trustee or any of its respective
officers, members, directors, officials, employees, attorneys and agents, to the extent such
damages are caused by the negligen'ce or willful misconduct of such Indemnified Party; or (B)
in the case of the foregoing indemnification of the Authority or any of their officers, members,
directors, officials, employees, attorneys and agents, to the extent such damages are caused
by the negligence or willful misconduct of such Indemnified Party. In the event that any action
or proceeding is brought against any Indemnified Party with respect to which indemnity may be
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sought hereunder, the Agency, upon written notice from the Indemnified Party, shall assume
the investigation and defense thereof, including the employment of counsel selected by the
Indemnified Party, and shall assume the payment of all expenses related thereto, with full
power to litigate, compromise or settle the same in its sole discretion; provided that the
Indemnified Party shall have the right to review and approve or disapprove any such
compromise or settlement. Each Indemnified Party shall have the right to employ separate
counsel in any such action or proceeding and participate in the investigation and defense
thereof, and the Agency shall pay the reasonable fees and expenses of such separate counsel;
provided, however, that such Indemnified Party may only employ separate counsel at the
expense of the Agency if in the judgment of such Indemnified Party a conflict of interest exists
by reason of common representation or if all parties commonly represented do not agree as to
the action (or inaction) of counsel.
(b) The rights of any persons to indemnity hereunder and rights to payment of fees
and reimbursement of expenses pursuant to this Section 3.06 shall survive the final payment or
defeasance of the Bonds and in the case of the Trustee any resignation or removal. The
provisions of this Section shall survive the termination of this Loan Agreement.
Section 5.08. Notices. Any notice, request, complaint, demand, communication or
other paper shall be sufficiently given and shall be deemed given when delivered or mailed by
first class mail, postage prepaid, or sent by telecopy, addressed as follows:
If to the Agency:
Redevelopment Agency of the City of Chula
Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Executive Director
If to the Authority:
California Statewide Communities
Development Authority
1100 K Street
Sacramento, California 95814
Attention: Executive Director
If to the Trustee:
Wells Fargo Bank, National Association
707 Wilshire Boulevard, 1ih Floor
Los Angeles, California 90017
Attention: Corporate Services
If to the Insurer:
[To Come]
Section 5.09. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase
of this Loan Agreement shall for any reason be held illegal, invalid or unenforceable, such
holding shall not affect the validity of the remaining portions of this Loan Agreement. The
Agency and the Authority hereby declare that it would have entered into this Loan Agreement
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and each and every other Section, paragraph, sentence, clause or phrase hereof and
authorized the Loan irrespective of the fact that anyone or more Sections, paragraphs,
sentences, clauses, or phrases of this Loan Agreement may be held illegal, invalid or
unenforceable.
Section 5.10. Governing Law. This Agreement shall be construed and governed in
accordance with the laws of the State of California.
Section 5.11. Term of this Loan Agreement. This Loan Agreement shall be in full
force and effect from its date to and including such date as all of the obligations of the Agency
incurred under this Loan Agreement shall have been fully paid (or provision for such payment
shall have been made as provided in this Loan Agreement).
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IN WITNESS WHEREOF, the REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA and the CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY,
have caused this Loan Agreement to be signed by their respective officers, all as of the day and
year first above written.
REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA
By:
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
By:
Member
Attest:
By:
Secretary
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