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Home My WebLink AboutAGENDA REPORT 1984 0905 CC REG ITEM 10EMOORPARK 799 MOORPARK AVENUE P.O. BOX 701. MOORPAR.K. CA 93021 (805) 629 -6864 M E M O R A N D U M TO: The Honorable City Council FROM: Steven Kueny, City Manager DATE: August 31, 1984 SUBJECT: Mortgage Revenue Bonds BACKGROUND INFORMATION /O E CITY,601fNCIL LETA YANCY- SUTTON MAYOR ALBERT PRIETO MAYOR PRO TEM ROBERT BEAULIEU CLINT HARPER. Ph. D. JERRY STRAUGHAN Five (5) developers -- Griffin, Regal Park, Urban West, U. S. Condominium and Warmington- -have expressed an interest in participating in an issuance of below market rate mortgage funds for single family homes. There is a practical limit of $20 million available for Moorpark. Amounts above this limit have more stringent income requirements to qualify potential home buyers. The five (5) developers are meeting on Friday, August 31, 1984, to work out an equitable and mutually agreed upon sharing of the $20 million fund limit known as "entitlement funds ". If they fail to reach a consensus and the City Council decides to authorize participation, the City would assign a portion of the $20 million to each developer. These funds would provide approx- imately 160 -200 below market rate mortgages. At the present time, Staff still needs to work out a few details, such as selection of an underwriter and bond counsel and execution of program deposit agreements, but is requesting that the City Council approve the Resolution of Intention authorizing sub- mission of the application to the Mortgage Bond Allocation Committee (MBAC). This does not commit the City to participate; it only permits an earlier submission and enhances our likelihood of receiving an allocation in February, 1985. During the next two (2) months the details can be worked out and the City could withdraw its application. As part of the submission process the City will collect .05% from each participating developer as a deposit to reserve their portion of the requested allocation. They will be required to provide at least one -half of this deposit in cash with the City and the other portion in another acceptable instrument, such as a letter of credit. In the event the developer withdraws from The Honorable City Council August 31, 1984 Page 2 Re: Mortgage Revenue Bonds the program prior to the date the City receives an allocation, the City decides to withdraw from the program prior to the allocation, or the developer in some way does not perform after the allocation is awarded, the developer(s) would be charged a pro -rata portion of the costs incurred and would be refunded the balance of the deposit. The underwriter and bond counsel costs would be contingent on receiving an allocation and the sale of bonds, but there would be certain up -front costs in addition to City expenditures. These include a feasibility (income and purchase).study, rating agency fee and MBAC fee. These costs would be covered by the developer deposits if the allocation request is withdrawn or otherwise terminated. RECOMMENDED ACTION Adopt Resolution No. 84- I authorizing application to the MBAC for an allocation of Mortgage Revenue Bunds, direct Staff to file the application material after securing the program deposits and related agreements, and proceed with selection of an underwriter and bond counsel. SK: ddb attachment RESOLUTION NO. � 1-13 1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK AUTHORIZING APPLICATION TO THE MORTGAGE BOND 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 $20,000,000 DOkllocation 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). PASSED AND ADOPTED on September 5, 1984. 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: 1. The City is on this date requesting that the Mortgage Bond Allocation Committee grant the City a i2n,000,000.00 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 September 5, 1984. A certified copy of said resolution accompanies this Certificate. Dated: September 5, 1984 EXHIBIT A CITY OF MOORPARK By: City Manager