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HomeMy WebLinkAboutReso 2008-241 RESOLUTION NO. 2008-241 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE EXECUTION AND DELIVERY OF A SECOND SUPPLEMENTAL BOND INDENTURE IN CONNECTION WITH THE CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 07-1 (OT A Y RANCH VILLAGE II) 2004 SPECIAL TAX BONDS AND 2006 SPECIAL TAX BONDS WHEREAS, the City ofChula Vista Community Facilities District No. 07-1 (Otay Ranch Village Eleven) (the District) has previously issued its $28,050,000 - 2004 Special Tax Bonds and its $16,950,000 - 2006 Special Tax Bonds (collectively, the Bonds) to provide for the financing of the acquisition or construction of certain public improvements relating to a residential project located in the City of Chula Vista known as Otay Ranch Village Eleven (the Project); and WHEREAS, in connection with such financings, the District and U.S. Bank National Association (the Fiscal Agent) entered into that certain Bond Indenture dated as of May I, 2004, as amended by a First Supplemental Bond Indenture dated as of May 1,2006 (as supplemented, the Indenture); and WHEREAS, pursuant to the provisions of the Indenture, $9,531,884 of the proceeds of the 2004 Bonds and $9,341,013 of the proceeds of the 2006 Bonds were deposited in the Transportation Facilities Accounts of the Project Fund established pursuant to the provisions of the Indenture for the purpose of paying Transportation Facilities Costs (as such term is defined in the Indenture); and WHEREAS, the above identified proceeds of the Bonds were deposited in the Transportation Facilities Accounts pursuant to the provisions of the Acquisition/Financing Agreement, dated as of April 20, 2004 (the Acquisition Agreement), by and between the City of Chula Vista (the City), the District, Brookfield Shea Otay, LLC (the Developer), Otay R2/3 LLC, Otay MFI LLC, Otay R7/l0 LLC and Shea Homes Limited Partnership (collectively, the Merchant Builders) to establish the terms and conditions pursuant to which acquisition or construction of the Improvements (as defined in the Acquisition Agreement), including the Traffic Facilities, would be financed from the proceeds of the Bonds; and WHEREAS, the Transportation Facilities were facilities that are otherwise eligible to be financed through the City's Traffic Development Impact Fee Program (TDIF) set forth in Chapter 3.54 of the Chula Vista Municipal Code; and WHEREAS, the Developer had requested and the Acquisition Agreement provides that the Developer or the Merchant Builders receive a credit against the development impact fee obligation for the development within the District to the extent that the proceeds of the Bonds deposited into the Transportation Facilities Account are used to finance the acquisition or construction of Traffic Facilities (defined in the Indenture as Transportation Facilities Costs); and Resolution No. 2008-241 Page 2 WHEREAS, the Indenture also provided for the deposit of other proceeds of the Bonds in the Acquisition Accounts of the Project Fund established pursuant to the provisions of the Indenture for the purpose of paying all expenses of and incidental to the construction, acquisition or both of the public improvements described in the Acquisition Agreement excluding there from the Traffic Facilities and certain other specifically identified public improvements (defined in the Indenture as Project Costs); and WHEREAS, all of the funds on deposit on the Acquisition Accounts have been disbursed to pay Project Costs and the City has received requests for the payment of additional Project Costs in the amount of $2,905,085 which the City has determined are eligible to be paid from Acquisition Account if there are funds available for such purpose; and WHEREAS, there remains on deposit in the Traffic Facilities Accounts the amount of $1,963,089 that may, pursuant to the provisions of Section 3.05C of the Indenture, be used only to pay Transportation Facilities Costs until either (a) all funds on deposit in the Transportation Facilities Accounts have been used to pay such Transportation Facilities Costs or (b) the final payment or reimbursement of all Transportation Facilities Costs to be funded from the proceeds of the Bonds has been made, in which case any such funds remaining on deposit in the Transportation Facilities Account may be transferred to the Acquisition Accounts and used to pay Project Costs (as defined in the Indenture); and WHEREAS, the Developer has requested that $1,043,352 of the funds on deposit in the Traffic Facilities Account (the Designated Funds) be transferred from such account to the Acquisition Account so that such funds may be used to pay Project Costs; and WHEREAS, because the final payment or reimbursement of all Traffic Facilities Costs to be funded from the proceeds of the Bonds has not been made and will not be made in the foreseeable future, the provisions of Section 3.05C of the Indenture prohibit the current transfer of the funds as requested without amending the provisions thereofto permit such a transfer; and WHEREAS, Section 5.01 of the Indenture authorizes the City Council, by adoption of a resolution in its capacity as the legislative body of the District, to approve a Supplemental Indenture to modify, alter, amend or supplement the Indenture in any respect which is not materially adverse to the interests of the Bondowners (as defined in the Indenture); and WHEREAS, the City Council has determined that the amendment of the Indenture to authorize the transfer of the Designated Funds from the Traffic Facilities Accounts to the Acquisition Accounts will not be materially adverse to the interests ofthe Bondowners; and WHEREAS, to proceed with the transfer of the Designated Funds from the Traffic Facilities Account to the Acquisition Account, it is necessary to amend the Indenture by entered into a Supplemental Bond Indenture in substantially the form presented at this meeting; and WHEREAS, staff worked with Warren Diven of Best Best and Krieger, LLP to prepare this item. Resolution No. 2008-241 Page 3 NOW THEREFORE BE, IT RESOLVED by the City Council of the City of Chula Vista as follows: I. The above recitals, and each of them, are true and correct. 2. The proposed form of Second Supplemental Bond Indenture presented at this meeting is hereby approved. The City Manager or the Director of Finance are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute the Second Supplemental Bond Indenture in substantially the form hereby approved, with such additions thereto and changes therein as are approved by such officers, such approval to be conclusively evidenced by the execution and delivery thereof. 3. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things to execute and deliver any and all documents and certificates which they may deem necessary or advisable in order to facilitate the execution and delivery of the Supplemental Indenture, and to otherwise to effectuate the purposes of this resolution; and such actions previously taken by such officers are herby ratified and confirmed. 4. This Resolution shall take effect immediately upon its adoption. Presented by Approved as to form by Resolution No. 2008-241 Page 4 PASSED, APPROVED, and ADOPTED by the City Council of the City ofChula Vista, California, this 21 st day of October 2008 by the following vote: AYES: Councilmembers: Castaneda, McCann, Ramirez, Rindone, and Cox NAYS: Councilmembers: None ABSENT: Councilmembers: None ChOJ./:tOC ATTEST: t1r~A- L;(Mv-( onna R. Noms, CMC, CIty Clerk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA ) I, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 2008-241 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 21 st day of October 2008. Executed this 21st day of October 2008. J~ JICjJIJ Donna R. Norris, CMC, City Clerk