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HomeMy WebLinkAbout55A - VEHICLE LICENSE FEES REQUEST FOR COUNCIL ACTION ~ ~ CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: FEBRUARY 7, 2005 TITLE: FINANCING RELATED LICENSE FEES TO VEHICLE APPROVED 0 As Recommended 0 As Amended 0 Ordinance on 151 Reading 0 Ordinance on 2nd Reading 0 Implementing Resolution 0 Set Public Hearing For ¡ ~. /..--- ì .. ! u~ ;1(2~~ CITY MANAGER CONTINUED TO FILE NUMBER RECOMMENDED ACTION 1. Adopt a resolution authorizing the execution of a Joint Exercise of Powers Agreement related to the California Statewide Communities Development Authority. 2. Adopt a resolution authorizing the execution of a purchase and sale agreement for the City of Santa Ana Vehicle License Fee receivables from the State of California and approving all related documents and actions. DISCUSSION Over the past 14 years, the State's approach to addressing its own fiscal crisis has resulted in a decrease of over $117 million in city revenues such as vehicle license fees (VLF) , property taxes, and mandated reimbursements. During FY 03-04, in an attempt to reduce its deficit by $1.2 billion, the State redirected three months of VLF paYments from cities and counties to fund other State obligations. The impact of this action was a reduction of $5.9 million to the City of Santa Ana. Due to subsequent State and local government budget negotiations, the State agreed to reimburse the cities and counties by making a lump sum paYment on August 15, 2006. Additionally, the legislature enacted a bill which permits the local agencies to declare the amount loss by this action as a receivable which may be sold, less capitalized interest and issuance costs, in order to accelerate the receipt of the funds. The State would remain liable for all paYments to the new owners of the receivable. With its financial crisis not yet resolved, there remain doubts that the State will honor the repaYment to cities and counties by August 2006. The sale of the receivable mitigates the risk to the city and establishes the amount as debt for the State in the financial marketplace. 55A-1 Financing Related February 7, 2005 Page 2 to Vehicle License Fees The California Statewide Communities Development Authority (CSCDA) has developed a program whereby the Authority issues bonds in order to purchase VLF receivables from cities and counties. The CSCDA program enables local governments to sell their VLF receivable for a minimum sale price of 90.86 of its value. Currently, 137 cities and counties in California have expressed an interest in participating in this program. For the City of Santa Ana, the maximum cost of issuance, including capitalized interest costs, credit enhancement and fees, will be $539,830 which will result in a minimum return of $5.36 million. If at the time of sale the market permits a higher sale price, the city will receive a higher amount. In order to participate in this program, the City must join CSCDA by adopting the subject resolution for a Joint Exercise of Powers Agreement and the resolution for the purchase and sale agreement. FISCAL IMPACT As the maximum cost of issuance for the City of Santa Ana's participation in this program is $539,830, approval of the recommended actions will generate an estimated $5.36 million in revenues that will be dedicated to addressing the projected budget deficit in the 2005-2006 year. Funds from this transaction will be deposited in general fund revenue account (account no. 011-01-5321-02). ~~~~~) ~Á~ Francisco Gutierrez Executive Director Finance & Management Services Agency GS/RC 55A-2 (JWF, 1/26/05) RESOLUTION NO. 2005-009 A RESOLUTION APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF AN AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY THEREWITH. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. The City of Santa Ana, California (the "City"), 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 of June 1, 1988 (the "Agreement"); and B. There is now before this City Council the form of the Agreement; and C. The City proposes to participate in the Programs and desires that certain projects to be located within the City be financed pursuant to the Programs and it is in the public interest and for the public benefit that the City do so; and D. The Agreement has been filed with the City, and the members of the City Council of the City, with the assistance of its staff, have reviewed said document; Section 2. The Agreement is hereby approved and the Mayor or the City Manager or designee thereof is hereby authorized and directed to execute said document, with such changes, insertions and omissions as may be approved by said Mayor or City Manager and City Attomey. Section 3. The Mayor, the City Manager, the Clerk of the Council and all other proper officers and officials of the City 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 purposes of this Resolution and the transactions herein authorized. RESOLUTION No. 2005- PAGE 1 OF 3 55A-3 Section 4. The Clerk of the Council shall forward a certified copy of this Resolution and an originally executed Agreement to: Angie Sessions Orrick, Herrington & Sutcliffe LLP 400 Capital Mall, Suite 3000 Sacramento, California 95814 Section 5. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of ,2005. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney AYES: Councilmembers NOES: Council members ABSTAIN: Councilmembers NOT PRESENT: Councilmembers RESOLUTION No. 2005- PAGE 2 OF 3 55A-4 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution NO.2005-009 to be the original resolution adopted by the City Council of the City of Santa Ana on Date: RESOLUTION No. 2005- PAGE 3 OF 3 Clerk of the Council City of Santa Ana 55A-5 (JWF, 1/26/05) RESOLUTION NO. 2005-010 A RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S VEHICLE LICENSE FEE RECEIVABLE FROM THE STATE; AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Certain public agencies within the State of California (the "State") are entitled to receive certain payments payable by the State to each such local agency on or before August 15, 2006, in connection with vehicle license fees pursuant to Section 10754.11 of the California Revenue and Taxation Code ("VLF Gap Repayments"); The City of Santa Ana (the "Seller") is entitled to and has determined to sell all right, title and interest of the Seller in and to the "VLF Receivable", as defined in Section 6585(i) of the California Government Code (the "VLF Receivable"), namely, the right to payment of moneys due or to become due to the Seller out of funds payable in connection with vehicle license fees to a local agency pursuant to Section 1 0754.11 of the California Revenue and Taxation Code; B. C. The California Statewide Communities Development Authority, a joint exercise of powers authority organized and existing under the laws of the State (the "Authority"), has been authorized pursuant to Section 6588(w) of the California Government Code to purchase the VLF Receivable; D. The Authority desires to purchase the VLF Receivable and the Seller desires to sell the VLF Receivable pursuant to a purchase and sale agreement by and between the Seller and the Authority in the form presented to this City Council (the "Sale Agreement") for the purposes set forth herein; RESOLUTION No. 2005- PAGE 1 oF4 55A-6 E. In order to finance the purchase price of the VLF Receivable from the Seller and the purchase price of other VLF Receivables from other local agencies, the Authority will issue its taxable and tax-exempt notes (the "Notes") pursuant to Section 6590 of the California Government Code and an Indenture (the "Indenture"), by and between the Authority and Wells Fargo Bank, National Association, as trustee (the "Trustee"), which Notes will be payable solely from the proceeds of the VLF Receivable and such other VLF Receivables; The Seller acknowledges that the Authority will grant a security interest in the VLF Receivable to the Trustee and any credit enhancer to secure payment of the Notes; and F. G. A portion of the proceeds of the Notes will be used by the Authority to, among other things, pay the purchase price of the VLF Receivable; The Seller will use the proceeds received from the sale of the VLF Receivable for any lawful purpose as permitted under the applicable laws of the State; H. NOW THEREFORE, the City Council of the City of Santa Ana hereby resolves as follows: Section 2. All of the recitals set forth above are true and correct, and this City Council hereby so finds and determines. Section 3. The Seller hereby authorizes the sale of the VLF Receivable to the Authority for a price no less than the Minimum Purchase Price set forth in Appendix A. The form of Sale Agreement presented to the City Council is hereby approved. An Authorized Officer (as set forth in Appendix A) is hereby authorized and directed to execute and deliver the Sale Agreement on behalf of the Seller, which shall be in substantially the form presented to this meeting, with such changes therein, deletions therefrom and additions thereto, as such Authorized Officer shall approve, which approval shall be conclusively evidenced by the execution and delivery of the Sale Agreement. Section 4. Any Authorized Officer is hereby authorized and directed to send, or to cause to be sent, an irrevocable written instruction to the State Controller notifying the State of the sale of the VLF Receivable and instructing the disbursement pursuant to Section 6588.5(c) of California Government Code of the VLF Receivable to the Trustee, on behalf of the Authority. Section 5. The Authorized Officers and such other Seller officers, as appropriate, are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents, including but not limited to one or more tax certificates, if required, appropriate escrow instructions relating to the delivery into escrow of executed documents prior to the closing of the Notes, and such RESOLUTION No. 2005- PAGE 2 OF 4 55A-7 other documents mentioned in the Sale Agreement or the Indenture, which any of them may deem necessary or desirable in order to implement the Sale Agreement and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution; and all such actions heretofore taken by such officers are hereby ratified, confirmed and approved. Section 6. All consents, approvals, notices, orders, requests and other actions permitted or required by any of the documents authorized by this Resolution, whether before or after the sale of the VLF Receivable or the issuance of the Notes, including without limitation any of the foregoing that may be necessary or desirable in connection with any default under or amendment of such documents, may be given or taken by an Authorized Officer without further authorization by this City Council, and each Authorized Officer is hereby authorized and directed to give any such consent, approval, notice, order or request, to execute any necessary or appropriate documents or amendments, and to take any such action that such Authorized Officer may deem necessary or desirable to further the purposes of this Resolution. Section 7. The City Council acknowledges that, upon execution and delivery of the Sale Agreement, the Seller is contractually obligated to sell the VLF Receivable to the Authority pursuant to the Sale Agreement and the Seller shall not have any option to revoke its approval of the Sale Agreement or to determine not to perform its obligations thereunder. Section 8. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of ,2005. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney RESOLUTION No. 2005- PAGE 3 OF 4 55A-8 AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers Councilmembers Councilmembers Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2005-010 to be the original resolution adopted by the City Council of the City of Santa Ana on Date: RESOLUTION No. 2005- PAGE4oF4 Clerk of the Council City of Santa Ana 55A-9 Minimum Purchase Price: Authorized Officers: RESOLUTION No. 2005- PAGE 5 OF 4 APPENDIX A CITY OF SANTA ANA An amount equal to or greater than $5,363,732.72 (the" Minimum Purchase Price"). City Manager Assistant City Manager Executive Director Finance and Management Services City Attorney Any designee of any of them, as appointed in a written certificate of such Authorized Officer delivered to the Trustee 55A-1 0