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HomeMy WebLinkAboutAGENDA REPORT 1985 0617 CC REG ITEM 08EALBER` PHIETO Mayor JAMES D. WEAK Mayor Pro Tern THOMAS C. FERGUSON Councilmember DANNY A. WOOLARD Councilmember LETA YANCY - SUTTON Councilmember DORIS D. BANKUS City Clerk JOHN C. GEDNEY City Treasurer MOORPARK M E M O R A N D U M TO: The Honorable City Council FROM: Steven Kueny, City Manager DATE: June 12, 1985 SUBJECT: 1986 Application for Allocation to Issue Single Family Mortgage Revenue Bonds BACKGROUND: STEVEN KUENY City Manager CHERYL J. KANE City Attorney NIALL FRITZ Director of Community Development R. DENNIS DELZEIT City Engineer JOHN V. GILLESPIE Chief of Police The City recently completed the sale of $20 million in single family mortgage revenue bonds. This is considered the City's 1985 allocation. This program resulted in the ability of the participants to offer fixed interest rates of about 10 %. The five (5) participating developers in the 1985 Issue were U. S. Condominium, Griffin Homes, Unity Savings (Regal Homes), Warmington and Urban West. At the June 3, 1985 meeting, the City Council directed staff to determine the interest of the development community for participation in a 1986 issue. The attached letter was sent to the following eleven (11) developers: Pardee Construction Griffin Development Co. U. S. Condominium Corporation Urban West Communities Carlsberg Development Co. Warmington Homes Pacifica Corporation Regal Homes B. R. Morris Development Cabrillo Economic development Morvent Corporation 799 Moorpark Avenue Moorpark, California 93021 (805) 529 -6864 The Honorable June 12, 1985 Page 2 DISCUSSION: City Council As of June 12 the following developers have requested a total allocation of $42,000,000.00: Warmington Homes $ 5,000,000.00 U. S. Condominium 3,000,000.00 Urban West Communities 10,000,000.00 Pardee Construction 12,500,000.00 Charles Street Ltd. 1,500,000.00 Griffin Homes 10,000,000.00 The first $20 million of the allocation is known as "entitlement" funds. To qualify, a potential buyer(s) may not have more than 150% of the area median family income. This income limit is about $61,000.00. The maximum home selling price is limited to about $140,000.00. Amounts requested above $20,000,000.00 are known as the "supplemental" allocation and it has more stringent income requirements. It allows buyers to have family incomes not exceeding 120% of the area median family income, which is about $49,000.00. With the lower income limit the maximum sales price of the home is also lowered. Since the total allocation requested by the interested developers exceeds the $20 million of entitlement funds, the City will need to work with the participants to determine what portions of their respective allocations are entitlement funds. To enhance the City's position on the State's application list and the likelihood of receiving an allocation in 1986, it is important that the required authorization be approved as soon as possible. The allocation amount may be reduced after an application is submitted without affecting the City's position on the application list. If the allocation request is increased, it is considered a new application and the City will lose its place on the list. If the Resolution authorizing an application for an allocation to issue mortgage revenue bonds (Resolution of Intention) is approved by the Council, staff will immediately secure the Program Deposit Agreements from the participating developers and determine the allocation of the entitlement and supplemental funds. This could he accomplished to permit the filing of the application to occur prior to July 1, 1985. The Honorable City Council June 12, 1985 Page 3 RECOMMENDED ACTION: 1. Adopt Resolution No. 85- authorizing application to the Mortgage Bond Allocation Committee for an allocation of mortgage revenue bonds. 2. Direct staff to file the application material after determining the entitlement and supplemental portions of the allocation for each participant and securing the Program Deposit Agreements and accompanying deposits. attachments SK: ddb RESOLUTION NO. 85- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK AUTHORIZING APPLICATION TO THE MORTGAGE BONO ALLOCATION COMMITTEE OF THE STATE OF CALIFORNIA FOR AN ALLOCATION TO ISSUE OF MORTGAGE REVENUE BONDS AND PROVIDING OTHER MATTERS PROPERLY RELATED THERETO RESOLVED, by the City Council of the City of Moorpark, California, as follows: WHEREAS, the legislature of the State of California has, pursuant to Part 5 of Division 31 of the California Health and Safety Code (the "Act"), authorized cities to purchase long -term low- interest rate loans to finance home mortgages in order to encourage investment within and to upgrade local areas and has authorized cities to issue revenue bonds to finance the purchase of such loans; and WHEREAS, pursuant to the Act, the City of Moorpark (the "City") proposes to undertake a Home Mortgage Financing Program (the "Program ") to purchase loans (the "Mortgage Loans ") made to finance new single family owner - occupied residential units (the "Residences") to be constructed within the City and to issue Residential Mortgage Revenue Bonds (the "Bonds ") to finance the purchase of such Mortgae Loans; and WHEREAS, to obtain an allocation to issue the Bonds (the "Allocation "), the City is required to file, pursuant to the Costa -Marks Housing Bond Allocation Act of 1981, as amended (the "Costa -Marks Act"), a Submission Information Form (the "Form ") with the Mortgage Bond Allocation Committee of the State of California (the MBAC"); and WHEREAS, in order for the City to secure a position on the local entity allocation list to obtain an Allocation, the MBAC requires that this City Council adopt a resolution authorizing the application for the subject Allocation and directing the filing of the Form with the MBAC; and WHEREAS, in order for the City to obtain a position on the listing for allocations, the MBAC also requires that the City provide evidence of the deposit of a certain, amount of money or, in lieu thereof, letters of credit, securing such amount, which amount may be subject to forfeiture and application by the City to assist housing for persons of low and moderate income within the City upon the failure to sell any or only a portion of the Bonds; and WHEREAS, certain developers have provided pro -rata portions of the deposit required to be made in order for the City to obtain a position on the listing for allocations, and such deposits are subject to the terms and conditions described in the Program Deposit Agreements between such developers and the City; and 1 WHEREAS. the City will need the assistance of an investment banking firm to perform such investment banking services as will be required to sell and issue the Bonds; NOW, THEREFORE. IT IS HEREBY FOUND. DETERMINED AND ORDERED, as follows: 1. The application to the MBAC for a $50,000,000 DOAllocation of Bonds under the Costa -Marks Act is hereby authorized and approved. 2. The City Manager is authorized to deliver to the MBAC a certified copy of this resolution, the Form and a certificate signed by the City Manager certifying that the City has on deposit cash in an interest- bearing trust account and /or has on deposit letters of credit in a combined amount equaling one -half of one percent of the principal amount of Bonds requested for Allocation (such certificate to be substantially in the form attached hereto as Exhibit A and hereby made a part hereof). ATTEST: City Clerk (SEAL) -2- Mayor of the City of Moorpark, California CERTIFICATE REGARDING NOTICE TO THE MORTGAGE BOND ALLOCATION COMMITTEE The City of Moorpark hereby certifies to the Mortgage Bond Allocation Committee, pursuant to the requirements of Section 50191 of the Costa -Marks Housing Bond Allocation Act of 1981, as amended, (the "Costa -Marks Act "), as follows: I. The City is on this date requesting that the Mortgage Bond Allocation Committee grant the City a $ 5Q,00O � o0 0.00 allocation of mortgage subsidy bonds. 2. The City has on deposit in an interest- bearing trust account and/or there are letters of credit posted with the City in a combined amount equal to one -half of one percent to the dollar amount set forth in paragraph 1 hereof, which deposit is subject to the forfeiture provisions of the Costa -Marks Act. 3. The undersigned City Manager of the City of Moorpark has been duly authorized and directed to execute and deliver this Certificate pursuant to a resolution of the City Council duly adopted on A certified copy of said resolution accompanies this Certificate. Dated: EXHIBIT A CITY OF MOORPARK By: City Manager ALBERT PRIETO Mayor JAMES D. WEAK Mayor Pro Tern THOMAS C. FERGUSON Councilmember DANNY A. WOOLARD Councilmember LETA YANCY - SUTTON Councilmember DORIS D. BANKUS City Clerk JOHN C. GEDNEY City Treasurer TO: FROM: DATE: SUBJECT: MOORPARK M E M O R A N D U M THE HONORABLE CITY COUNCIL y STEVEN KUENY, CITY MANAGER MAY 29, 1985 &�- ioD STEVEN KUENY City Manager CHERYL J. KANE City Attorney NIALL FRITZ Director of Community Development R. DENNIS DELZEIT City Engineer JOHN V. GILLESPIE Chief of Police The City recently completed the sale of $20 million in single family mortgage revenue bonds. This is considered the City's 1985 allocation. The five (5) participating developers received the following allocations: U. S. Condcninium Griffin Unity Savings (Regal) Warmington Urban West $2,874,750.00 5,270,375.00 1,916,500.00 2,874,750.00 6,228,625.00 $19,165,000.00 The balance of $835,000.00 was the cost of issuance for the bonds. The developers have approximately three (3) years to use the allocation. An interest rate of approximately 10% will be available to qualified buyers. The City may request another allocation for 1986. It would be the same procedure as for the first issue: 1) solicitation of developer interest, 2) Resolution of Intention authorizing submission of the application to the Mortgage Bond Allocation Committee (MBAC) which is a State agency, 799 Moorpark Avenue Moorpark, California 93021 (805) 529.6864 Single Family Revenue Bond City Council June 3, 1985 Page 2 3) Deposit of .05% of the requested allocation amount by each participating developer. At least 1/2 of the required deposit is in cash. The City is then placed on a priority list along with other public agencies for allocations in 1986. Before proceeding further the City should determine the interest of developers working in the City. In the past, Pardee Construction and the developer of the proposed 28 unit condominium at the southeast corner of Charles and Moorpark Road have expressed an interest in this program. To enhance the'City's likelihood of receiving an allocation for 1986, the process should be pursued as quickly as possible. Reocnven3ed Action Direct staff to detennine the interest of the development commx ity in participating in a 1986 issue of single family mortgage revenue bonds and to report back to the Council. ALBERT PRIETO Mayor JAMES D. WEAK Mayor Pro Tern THOMAS C. FERGUSON Councilmember DANNY A. WOOLARD Councilmember LETA YANCY•SUTTON Councilmember DORIS D. BANKUS City Clerk JOHN C. GEDNEY City Treasurer June 5, 1985 MOORPARK STEVEN KUENY City Manager CHERYL J. KANE City Attorney NIALL FRITZ Director of Community Development R. DENNIS DELZEIT City Engineer JOHN V. GILLESPIE Chief of Police The City has recently completed the issuance of $20 million in single family mortgage revenue bonds. The City is considering whether to proceed with a similar issue for 1986. Pamela Wiget from Stone and Youngberg will be contacting you in the next few days to determine if your company is interested in participating in such an issue. She will be able to review the program with you. Any questions concerning the actual process should be directed to her. General questions concerning the City's role in the issue may be addressed to the undersigned. If the City is to receive an allocation in 1986, it is important that the necessary Resolution of Intention be forwarded to the State at the earliest possible date. You are requested to respond in writing to me by Tuesday, June 11, 1985, if you intend to participate. The letter should include a statement that you will enter into the required program Deposit Agreement (copy attached) and deposit the amount of .05% of the requested allocation. At least one -half (1/2) of this required deposit will have to be in cash. If the letters are received by the June 11 deadline, this matter could be scheduled for the June 17 City Council meeting. I look forward to hearing from you. Sincerely, STEVEN KUINY CITY MANAGER SK /bin cc Pamela Wi et 799 Moorpark Avenue Moorpark, California 93021 (805) 529 -6864