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HomeMy WebLinkAbout1991-04-09 - AGENDA REPORTS - MASTER LEASE (2)AGENDA REPORT City Manager Approva ; To be presented by: , Andrea Daroca NEW BUSINESS DATE: April 9, 1991 SUBJECT: Adoption of Resolution 91-52 Option to Purchase Agreement No. Appointment of City Consultants DEPARTMENT: FINANCE 4 Approving Master Lease and 1991-1 and Resolution 91-53 At the meeting of January 8, 1991; City Council directed staff to facilitate the financing and issue a purchase order to the Gillig Corporation for the issue of thirteen (13) "Spirit" buses. As a prerequisite to this, the Council must adopt two Resolutions before such a purchase can be finalized. The City is contemplating the purchase of thirteen buses for our local transit program, as well as the eventual purchase of additional buses for use in our commuter program.. Resolution 91-52 pertains to the authorization of a master lease- agreement No. 1991-1, to be entered into by the City and Chelsea Leasing Corporation, and will approve such action. The City will be pledging Proposition A Funds toward financing such endeavors. As a consequence of the master lease, Proposition A Funds can only be committed to bus financing until the City fulfills this obligation. Additionally, the City will make a subordinate . pledge of TDA and Proposition C Funds, as a contingency plan, if a shortfall of Proposition A Funds should occur. Unlike Proposition A Funds, the master lease allows the City the leverage to finance other projects with these funds prior to committing them to bus financing. At no time will general fund revenues or any other revenues except the pledged special funds be accessed. As outlined within Resolution 91-52, Title of the property will be in the name of the City as lessee, subject to the right of the lessor under the lease. Chelsea will lease these buses to the City based upon the parameters of the master lease. The City can invoke an option to pre -pay the amount in full, otherwise it is expected that this purchase will be completed within ten (10) years. The Chelsea Leasing Corporation has assigned payment of the lease to the firm of M.L. Stern & Company, Inc., who will be acting as the underwriter for this master lease. Staff has prepared an Official Statement for Santa Clarita, which will be used by M.L. Stern when marketing the lease interest to their clients. �`�� Agenda Item: -2— Subsequently, staff will bring before the City Council two additional resolutions relating to this matter. The first of these resolutions will seek authorization approving the sale of the lease interest. The second resolution will pertain to setting the actual parameters of the lease's interest rate. This action must occur directly before the consummation of this agreement to allow the City to utilize the most current rate. Resolution 91-53 pertainstothe appointment of consultants for the proposed lease financing. in connection with the acquisition of City buses and the approval of modifications in the financial services agreement. As set forth in this Resolution, the law firm of Burke, Williams, Sorenson and Caar is hereby appointed as Special Counsel to the City in connection with the financing of this project. Additionally, pursuant to the Financial Advisor Agreement on file with the City. and this Resolution, the firm of Fieldman, Rolapp & Associates is hereby confirmed as the financial advisor to.the City in connection with the project and the entering into the Lease Agreement. Recommendation That City Council review and adopt Resolution 91-52 and Resolution 91-53. FULL COPY OF THE MASTER LEASE IS AVAILABLE IN THE CITY CLERK'S OFFICE AD/gh433 RESOLUTION No. 91-52 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF THE MASTER LEASE AND OPTION TO PURCHASE AGREEMENT NO. 1991-1 AND RELATED DOCUMENTS AND AUTHORIZING OFFICIAL ACTION. WHEREAS, the City of Santa Clarita, Los Angeles County, California (the "City"), proposes to—finance.,-the acquisition of buses to be used for public transportation (the "Project") by entering into a master lease and option to purchase agreement or other financing agreement; and WHEREAS, the City has determined that it is in the best interests and for the common benefit of the residents and landowners of the City that the Project be acquired and financed with tax-exempt financing as follows: . (a) The acquisition of the Project shall be directed and supervised by the City on behalf of the Chelsea Leasing Corporation, a California corporation (the "Corporation"), of Beverly Hills, California, pursuant to an Agency Agreement (the "Agency Agreement"), dated as of May 1, 1991, by and between the City and the Corporation; and (b) The City shall acquire the Project from the Corporation pursuant to the Master Lease and Option to Purchase Agreement No. 1991-1 dated as of May 1, 1991 (the "Lease"), by and between the City and the Corporation, which Lease provides for the payment of rental payments, representing principal and tax- exempt interest components and having principal components in the aggregate sum of not to exceed $ , and said rental payments shall be made by the City from the funds in the City's Proposition A Fund, and, to the extent that such funds are insufficient, from the funds in the City's Transportation Development Act Fund and Proposition C Fund; and 0 •, 0 (c) The Corporation shall assign its interest in the Lease to M. L. Stern & Company Inc. (the "Underwriter") pursuant to an Assignment of Master Lease and Option to Purchase Agreement No. 1991-1 dated as of May 1, 1991 (the "Assignment"), by and between the Corporation and the Underwriter. . WHEREAS, there has been prepared and presented to the City Council of the City an official statement (the "Official Statement"), containing information material to the public offering and sale of undivided interests in the Lease and the rental payments to be made pursuant thereto and the City, with the aid of its staff, has reviewed the Official Statement and has made such corrections and additions as it deems proper. NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of Santa Clarita, California, as follows: SECTION 1. The above recitals are all true and correct. SECTION 2. The City hereby approves the following agreements (collectively, the "Project Agreements"): . (a) The Agency Agreement; and (b) The Lease in substantially the forms presented to the City at this meeting together with any additions thereto or changes therein as may be deemed necessary or advisable and not adverse to the City, as shall be approved by the Director of Finance of the City and Special Counsel, such approval to be conclusively evidenced by the execution thereof -by the Director of Finance or the appropriate official or officer as .herein authorized. SECTION 3. The "City hereby acknowledges and consents. to the assignment of the Lease to the Underwriter pursuant to the Assignment in substantially the form presented to the City at this meeting with such additions thereto or changes therein as may be deemednecessary or advisable and not adverse to the City as shall be approved by the Director of Finance of the City and Special Counsel. -2- 0 SECTION 4. The City hereby approves. the Official Statement in substantially the form on file with the City and undertakes to make modifications to the Official Statement to accurately disclose the financial condition of the City, the nature and extent of the Project, the terms and conditions for the sale of said undivided interests in the Lease and the rental payments and any other information material thereto. SECTION 5. The City hereby authorizes and directs the Underwriter to distribute the Official Statement to Potential purchasers of said undivided interests in the rental payments. directs: SECTION 6. The City hereby further authorizes and (a) The Director of Finance and the appropriate officials and officers of the City to execute, attest and affix the seal of the City to and deliver the Project Agreements, the Official • Statement and all closing documents in connection therewith, as appropriate, for and in the name of and on behalf of the City; (b) The appropriate officers of the City for and in the name of and on behalf of the City, to execute and deliver any and all things and to take any and all actions which may be necessary or advisable in their discretion to fulfill the actions and consummate the transactions heretofore approved by the City; and (c) The appropriate officers of the City to make such additional filings, amendments, consents, under- takings or agreements as may be required to effect and maintain the qualifications and exemptions existing or to be obtained under the laws of the State of California and the laws of the United States of America. SECTION 7. The City hereby ratifies and confirms all actions heretofore taken in connection with the authorization, execution and delivery of the Project Agreements and other documents related thereto. -3- PASSED AND ADOPTED by the City Council of the.City of Santa Clarita, California, at a regular meeting held on the day of April, 1991. CITY OF SANTA CLARITA, CALIFORNIA By: MAYOR I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita, California, at a regular meeting thereof, held on the day of April, 1991, by the following vote of the Council: AYES: COUNCIL MEMBERS iNOES: COUNCIL MEMBERS ABSENT: COUNCIL MEMBERS 0 -4- CITY CLERK 0 RESOLUTION NO. 91-53 A RESOLUTION OF THE CITY COUNCIL .OF THE CITY OF SANTA CLARITA, CALIFORNIA, APPOINTING CERTAIN CONSULTANTS FOR THE PROPOSED LEASE FINANCING IN CONNECTION WITH THE ACQUISITION OF CERTAIN BUSES AND APPROVING MODIFICATIONS IN ITS FINANCIAL SERVICES AGREEMENT. WHEREAS, the City of Santa Clarita, Los Angeles County, California (the "City") proposes to finance the acquisition of buses to be used for public transportation (the "Project") and has considered the advisability and necessity of entering into such financing; and WHEREAS, the City has determined that it is in the best interests and common benefit of the residents and -the landowners of the City that the Project be acquired with tax-exempt financing andwill need certain consultants to accomplish the processing of documentation and conduct of proceedings; and WHEREAS, in connection with such tax-exempt financing, the City desires to modify that certain financial advisor letter agreement (the "Financial Advisor Agreement") dated .April 14, 1989, by and between the City and Fieldman, Rolapp & Associates, relating to the provision of financial advisory services -to the City. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Santa Clarita, California, as follows: SECTION i. The law firm of Burke, Williams, Sorensen & Gaar is hereby appointed as Special Counsel to the City in connection with the financing of the Project and the entering into of a Master Lease and Option to Purchase Agreement No. 1991-1 (the "Lease") by and between the Chelsea Leasing Corporation (the "Lessor") and the City which is expected to be executed and delivered by the City. The Director of Finance is hereby authorized to execute and deliver an agreement with said firm for services in connection with the financing of the Project; the fees of said firm to be payable from the proceeds of the financing of the Project. SECTION 2. A letter agreement amendment dated March 1, 1991,► to the Financial Advisor Agreement (the "Amendment") has been presented to the City and is hereby approved. The Director of Finance is hereby authorized to execute the Amendment. Except as modified by the Amendment, all other terms and provisions of the Financial Advisor Agreement shall remain in full force and effect. SECTION 3. Pursuant to the Financial Advisor Agreement, as amended, on file with the City, the firm of Fieldman, Rolapp & Associates, is hereby confirmed as the financial advisor to the City in connection with the financing of the Project and the entering.into of the Lease. SECTION 4. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED by the City Council of the City of Santa Clarita, California, at a regular meeting held on the day of April, 1991. CITY OF SANTA CLARITA, CALIFORNIA By: . MAYOR I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita, California, at a regular meeting thereof, held on the day of April, 1991, by the following vote of the Council: AYES: COUNCIL MEMBERS NOES: COUNCIL MEMBERS ABSENT: COUNCIL MEMBERS -2- CITY CLERK . AGREEMENT FOR SPECIAL COUNSEL SERVICES RELATING TO THE LEASE FINANCING FOR THE ACQUISITION OF BUSES BY THE CITY OF SANTA CLARITA, CALIFORNIA THIS AGREEMENT for Special Counsel Services (the "Agreement") is entered into as of the day of , 1991, by and between the CITY OF SANTA CLARITA, CALIFORNIA, a municipal corporation (the "City") and BURKE, WILLIAMS, SORENSEN & GAAR ("Special Counsel"). WHEREAS, the City wishes to enter into a tax-exempt lease financing arrangement with the Chelsea Leasing Corporation, a California corporation (the "Lessor_'-') for. -the financing_ of the acquisition of buses to be used for public transportation (the "Project") pursuant to a master lease and option to purchase agreement (the "Lease"); WHEREAS, in order to execute and deliver the Lease, the City requires the advice and assistance of qualified bond counsel; and WHEREAS, the City has determined that Special Counsel.is qualified to perform the services of bond counsel in the execution and delivery of the Lease, and Special Counsel is willing to provide such services. NOW, THEREFORE, IT IS AGREED as follows: 1. Duties. Special Counsel will provide the following services: (a) Consultation and cooperation with the City Attorney, financial advisor and other consultants, underwriters, staff and employees of the. City and assist such consultants, underwriters, staff and employees in the formulation of a coordinated financial and legal financing program; (b) Draft or review all resolutions, notices and other documents required by California law for the authorization of the Lease and for the execution and delivery of the Lease; (c) Preparation of and/or rendering service and instruction to the City regarding all legal proceedings for the authorization, execution and delivery of the Lease relating to the Project, including review of the Lease; certifying the terms and conditions upon which the same is to be executed*, preparation of the resolution authorizing the. execution and delivery of the Lease; preparation and/or review of all other documents required, for the execution and delivery of the Lease, and supervising such delivery; preparation and/or review of all other proceedings incidental to or in connection with the delivery of the execution and delivery of the Lease relating to the Project; (d) Assist the City's staff, financial advisor and underwriter in the preparation and review of an official statement and other disclosure documents to be used. in connection with the offering and sale of the beneficial interests in the Lease, Special Counsel will provide an opinion on the accuracy, completeness and fairness of the statements contained therein; (e) Provide,'tax advice, including the review of a non -arbitrage certificate for federal income tax purposes; (f) Determine the need for obtaining' a permit to execute and deliver the Lease under the securities laws (state or federal) or no -action letters from the Securities Exchange Commission and California Corporations Commission and render the Securities Act opinion required by Regulation 15c2-12; (g) Review a certified transcript of the legal proceedings taken by the City for the authorization, execution and delivery of the Lease, and review such other reports. and documents as the City deems necessary for. the purposes of the opinion described below; (h) Preparation and/or review of closing documentation for the Lease; provision to the City and its counsel of two (2) complete transcripts of the proceedings and financing documentation related to the delivery of ..the Lease and a copy of the same to the- .Lessor; (i) Upon completion of proceedings to the satisfaction of Special Counsel,. provide an unqualified legal opinion approving in all regards the validity of the Lease and the Rental Payments thereunder. (as defined in the Lease), the legality of all proceedings for the authorization, execution and delivery of the.Lease and all other transactions relating to the Project, and stating that the.interest portion of the Rental Payments is excluded from gross income for federal tax purposes and exempt from state personal income taxation (subject to certain qualifications), which opinion shall inure to the benefit of the Lessor and the purchasers of the beneficial interest in the Lease; and, -2- . (j) Such other and further services as are normally performed by bond counsel. 2. Duties -- Exceptions. The following services are excepted from the services to be rendered for the fees set forth in Section 3 of this Agreement: (a) Any services to be rendered in anylitigation involving the City; and (b) Any services required to obtain federal, state or other subventions or loans other than the sale and delivery of municipal securities to any federalor state agency. 3. Compensation and Payment. (a) Compensation for the services shall be for a base -legal -fee of $21,000. (b) In addition to the base legal fee, Special Counsel shall be compensated for direct out-of-pocket expenses such as travel costs, messenger and delivery services, photocopying, long distance telephone calls and • transcript binding, such out-of-pocket expenses not to exceed $3,000. (c) Any and all fees and expenses under this Agreement shall be paid only from the financial proceeds of the Project when and if the Lease is executed. In the event the Lease is not executed, the City will not be obligated for any compensation or reimbursement of any kind. E '4. Responsibilities of the City. The City shall reasonably cooperate with Special Counsel and shall furnish Special Counsel, as requested, with copies of all proceedings taken by the City, and such other matters as are reasonably deemed necessary by Special Counsel to render an opinion upon the validity of such proceedings. 5. Termination of Agreement. Notwithstanding any other provisions of this Agreement, this Agreement may be terminated, with or without cause, by the City or the Special Counsel at any time.by giving written notice to the other party. In the event of termination, all finished and unfinished documents, exhibits, project data, reports and evidence shall, at the option of the City, become its property and shall be delivered to it by Special Counsel. -3- . IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed by their respective officers and representatives duly authorized, on the day and year first above written. 0 0 • CITY OF SANTA CLARITA, CALIFORNIA By: _ Title: BURKE, WILLIAMS, SORENSEN & GAAR By: Norman E. Gaar,,Esq. -4- r�r Fieldman, Rolapp & Associates :v lc% INDEPENDENT FINANCIAL ADVISORS TO LOCAL GOVERNMENT March 1, 1991 Ms. Andrea Daroca Director of Finance City of Santa Clarita 23920 Valencia Boulevard, Suite 300 Santa Clarita, CA 91355 Dear Andrea: William L. Fieldman R. Michael McNamara Lawrence G. Rolapp Principals DRAFT Your attention is invited to that certain agreement for financial advisory services between the City of Santa Clarita and Fieldman, Rolapp & Associates, a copy of which is attached for easy reference. Pursuant to your discussion with Jennifer Twogood on Tuesday September 11, 1990, and our discussion on February 28, 1991, we are amending that agreement to reflect a modification of our fee arrangement. The fee arrangement and payment set forth on pages 6 and 7 of the April 14, 1989 Agreement are amended, effective as of September 1, . 1990, to read as follows: FEES 1) For all services to be rendered under Phase I and III, the City will pay us a fee based on our then current hourly rates. Recent schedules of current hourly rates are attached hereto. 2) For all services to.be rendered under Phase II resulting in a sale of bonds, the City will pay us a fee for each sale of bonds based upon the following schedule: Par Value of the Bonds Fees $ -0- to $2,999,999 $19,500 $ 3,000,000 to $6,999,999 $25,900 $.7,000,000 to $11,999,999 $29,800 $12,000,000 to $19,999,999 $34,000 $20,000,000 to $29,999,999 $41,500 $30,000,000 to $49,999,999 $46,200 Over $50,000,000 To be negotiated 2100 S.E. MAIN STREET SECOND FLOOR IRVINE, CA 92714 (714) 6604500 FAX (714) 474.8773 PAYMENT Payment for all services rendered and expenses incurred under Phase I will be payable at the closing unless funds have been advanced by landowners or other third parties for the payment of Project costs, in which case payment will be monthly. Payment for all services rendered and expenses incurred pursuant to Phase II above shall be paid at the closing. Payment for all services rendered and expenses incurred under Phase III shall be billed and payable monthly. In the event of abandonment of a Project, abandonment fees shall be due and payable immediately after such abandonment unless we and the City agree to include such abandonment fees in a subsequent City financing. If the foregoing amendments are agreeable to you, please acknowledge by signing and returning the duplicate copy hereof. It has been a pleasure to work with you over the past two years. We look forward to a long and fruitful relationship with you and the City as your financial advisors. Very truly yours, FIELDMAN, ROLAPP & ASSOCIATES Lawrence G. Rolapp President LGR:sgr j:sanclar2 ACCEPTANCE Executed on : behalf of the , 1991. By: _ Title: Date: ATTEST: By: Title: Date: INDEPENDENT FINANCIAL ADVISORS TO LOCAL GOVERNMENT this day of SCHEDULE OF FEES EFFECTIVE JANUARY 1. 1991 Principals of the Firm $175.00 Per Hour Officers of the Firm $125.00 Per Hour Senior Associates $ 95.00 Per Hour Associates $ 75.00 Per Hour Administrative Assistants $ 45.00 Per Hour Secretarial Staff $ 25.00 Per Hour SCHEDULE OF FEES • EFFECTIVE JULY 1. 1990 I• Principals of the Firm $135.00 Per Hour Officers of the Firm $115.00 Per Hour Senior Associates $ 95.00 Per Hour Associates $ 75.00 Per Hour Administrative Assistants $ 45.00 Per Hour Secretarial Staff':. $ 25.00 Per Hour INDEPENDENT FINANCIAL ADVISORS TO LOCAL GOVERNMENT n