Agenda

Return

SD. 3

To:	Board of Supervisors
From:	Catherine Kutsuris, Conservation & Development
Date:	December 11, 2012

Contra

Costa

County

Subject:

Issuance of Community Facilities District No. 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 12/11/2012

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Mary N. Piepho, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Kristen Lackey, 4-7888

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: December 11, 2012
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

ADOPT Resolution No. 2012/515 authorizing the issuance of Community Facilities District No. 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds (“Bonds”), and approving related documents and actions, including:


1) a) authorizing the issuance of 2013 Special Tax Refunding Bonds in an amount not to exceed $6,500,000;

RECOMMENDATION(S): (CONT'D)

b) finding and determining that it is prudent to issue the Bonds for the purpose of refunding the 2001 Special Tax Bonds (“Prior Bonds”), that the total net interest cost on the Bonds will not exceed the Prior Bonds, that the assessed value of the land in the District is more than three times the principal amount of the Bonds, that the issuance will result in lower annual special taxes levied, and that the negotiated sale of the Bonds to Stifel, Nicolaus & Company, Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus (“Underwriter”) will result in lower overall costs;

c) approving the form of Fiscal Agent Agreement between Contra Costa County and the Bank of New York Mellon Trust Company, N.A., including the authorization of the Chair of the Board of Supervisors, the Vice-Chair of the Board of Supervisors, the County Administrator, the Director of the Department of Conservation and Development, and the Community Development Bond Program Manager (collectively, the “Designated Officers”), to execute the Fiscal Agent Agreement;

d) For purposes of Section 53363.2 of the Mello-Roos Community Facilities Act of 1982, as amended, it is expected that the Bonds will be sold after December 12, 2012 with a minimum rate of interest of 0.25%, the specifics of the Bonds, payment of the Prior Bonds, and costs of issuance will be as set forth in the Fiscal Agent Agreement, Official Statement, and closing certificates;

e) approving the form of Escrow Agreement between Contra Costa County and the Bank of New York Mellon Trust Company, N.A., including the refunding of the Prior Bonds with the proceeds of the Bonds, and authorizing the Designated Officers to execute the Escrow Agreement;

2) directing the Fiscal Agent to authenticate the Bonds and deliver the Bonds to the Underwriter;

3) approving the form of Bond Purchase Agreement between Contra Costa County and Underwriter including the sale of the Bonds to the Underwriter provided that the true interest cost of the Bonds does not exceed 5.0% and the Underwriter’s Discount does not exceed 1.0% of the principal amount of the Bonds, and authorizing the Designated Officers to execute the Bond Purchase Agreement;

4) a) approving the form of Preliminary Official Statement and authorizing the Designated Officers to deem the Preliminary Official Statement as final;

b) authorizing the Underwriter to distribute the Preliminary Official Statement;

c) authorizing the Designated Officers to assist Disclosure Counsel in causing the Preliminary Official Statement to be brought into the form of Final Official Statement, and execute the Final Official Statement;

d) approving the distribution of the Final Official Statement;

5) approving the form of Continuing Disclosure Certificate and authorizing the Designated Officers to execute the Continuing Disclosure Certificate;

6) covenanting to pursue foreclosure action regarding delinquent special tax levies as set forth in the Fiscal Agent Agreement; and

7) approving, confirming and ratifying actions taken with respect to the sale and issuance of the bonds, and authorizing and directing Designated Officers to take actions necessary to issue the Bonds and refund the Prior Bonds as contemplated by the documents approved by this Resolution.

FISCAL IMPACT:

At the closing for the Bonds, the County will be reimbursed for costs incurred in the issuance process. The Bonds will be payable from and secured solely by special taxes levied on land within Community Facilities District No. 2001-1 (Norris Canyon). (100% Community Facilities District Special Tax Bonds)

BACKGROUND:

In June 2001, Contra Costa County (the “County”) issued $7.22 million of Community Facilities District No. 2001-1 2001 Special Tax Bonds ("2001 Bonds") to finance infrastructure and road improvements along Norris Canyon Road in association with the Norris Canyon Estates, a 300 acre, 361 unit residential development built by Toll Brothers. The debt service on the 2001 Bonds is paid from special property taxes levied on the parcels within the District. Of the 2001 Bonds, $5,720,000 principal amount remains outstanding with maturities through September 1, 2031. The average interest rate on the outstanding bonds is 6.034%.

The current municipal bond market has seen significant decreases in interest rates, and there is an opportunity to refinance the 2001 Bonds. The proposed refinancing results in an average interest rate of 4.62% with an estimated net present value savings of approximately $592,000 (10.354%). At this savings level, the annual Special Tax per parcel would decrease by $241. These financing estimates are based on the refunding bonds being sold without a rating. The financing team is seeking a rating from Standard & Poor's, which would decrease interest rates and increase the savings levels even further. If approved by the Board, the 2013 Special Tax Refunding Bonds would be sold during mid-December or early January, financial conditions permitting.

The Board's Debt Affordability Advisory Committee considered the proposed financing at its November 30, 2012 meeting, and found that it complies with the County's adopted Financing Policies for Community Facilities Districts. The Committee recommends approval of Resolution No. 2012/___ authorizing the issuance of 2013 Special Tax Refunding Bonds in an amount not to exceed $6,500,000, and approving related documents and actions.

Attachments
A - Fiscal Agent Agreement
B - Escrow Agreement
C - Bond Purchase Agreement
D - Preliminary Official Statement
E - Continuing Disclosure Certificate

CONSEQUENCE OF NEGATIVE ACTION:

Negative action would prevent the County from issuing 2013 Special Tax Refunding Bonds in order to reduce the special tax levy on land within Community Facilities District No. 2001-1 (Norris Canyon).

CHILDREN'S IMPACT STATEMENT:

No impact.