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HomeMy WebLinkAboutAGENDA REPORT 1994 1116 CC SPC ITEM 04AITEM CITY OF MOORPARK Agenda Report " � <(- TO: Honorable City Council '- -TION: 44ddmwo� do 0 FROM: Richard Hare, Deputy City Manage � DATE: November 15, 1994 (Special Meeting 11/16/94) SUBJECT: Sale of Single Family Residential Mortgage Revenue Bonds Residual Assets, Issue of 1985 In 1985, the City established a Single Family Residential Mortgage Revenue Bond Program. Currently, there are only three outstanding loans in the program. A review of the program assets reveals that the sale of the residual assets could be accomplished. It is estimated that the City will receive more than $100,000 from this sale. In order to move forward in a sale of this type, the City must enter into an agreement with a special counsel to prepare all necessary agreements, resolutions, notices and other documents required. The special counsel will also provide an opinion as to the tax status of the bonds. The firm of Mudge Rose Guthrie Alexander and Ferdon has submitted a proposal to provide these services for $20,000. Don Hunt a partner with the firm would work on this sale. It will also be necessary to have the services of a financial advisor to schedule the sale, coordinate the activities of the parties, make recommendation from among four to six purchasers, transfer the mortgages, calculate interest and fees, and transfer funds to the City. The proposed services are included in the attached letter from PAR Marketing. They quote a fee for their services of $15,000. PAR specializes to the sale of residual assets and is currently working with Simi Valley and Port Hueneme on similar efforts. Jerry Parham the President of PAR Marketing would work directly on this sale. The services of the financial advisor and the special counsel are dependent upon the actual sale of the residual assets. Their fees would be paid directly from the sale. In the event the assets can not be sold, then they will not receive any compensation or reimbursement for their expenses. Both will be engaged in the sale of similar issues along with this 1985 series. Other costs may be associated with the preparation of the sale. It is estimated that the trustee, First Interstate Bank will have $4,000 in charges which include the review of the transaction by their legal staff. Urban Futures will also incur some expense in the preparation of a release for the sale which could cost $2,000. The City Attorney would also provide some review of the sale and it is estimated that $5,000 would be required for the review. It is estimated that all fees and expenses will not exceed $45,000. There will remain an outstanding bond and escrow for call of the bonds which will total $145,000. The sale of the residual assets is estimated at $290,000. This would result in a transfer of $100,000 to the City upon conclusion of the transaction. The expense estimates are conservatively set high. Staff projects a savings in staff time, because the sale of the residual assets will end this program and there will no longer be quarterly review requirements and annual reporting requirements for the issue. Recommendation: Approve Mudge Rose Guthrie Alexander and Ferdon as special counsel and PAR Marketing as financial advisor for the sale of residual assets from the Single Family Mortgage Revenue Bond Issue of 1985; and, direct staff to proceed with payments of fees and expenses from the sale or professional services accounts whichever is appropriate, and authorize the City Manager or Deputy City Manager to execute all necessary documents for this purpose. Attachments: Letter from Par Marketing Bond Payoff Analysis I Letter from MRGA &F CAWPDOCS\CC. RE %BOND 19&5.001 IH0 MAIDFN LANE. NFW YOPK NEW YORK 100384996 i 1 5'0 700:) 63F� F.F1H AVENJE SUITf -650 NFW YORK, N Y '01 1 0.44 ? 2 332 160:, MORRIS CORPORATE (.ENTER 'W(; ONE UPPER POND RCA0 BLDG D PARSIPPANY. NEW JERSEY 07054 1075 20, 335 0004 DONALD L. HUNT PARTNER MUDGE RosE GUTHRIE ALEXANDER & FERDON I LOOR 333 SOL ; -E, ( ,RAND AVENUE- LOS ANGELES, (_At ! ORNIA 90071 IS25 21 E 3 111 c' I AF M1 f October 21, 1994 Mr. Richard T. Hare Deputy City Manager Finance Director City of Moorpark 799 Moorpark Avenue Moorpark, California 93021 Re: Proposal for Special Counsel Services for the City of Moorpark Sale of Residual Assets in Connection With the City of Moorpark Single Family Residential Mortgage Revenue Bonds, Issue of 1985 Dear Mr. Hare: �1 K _IGEf'.N W w J — ',70N. L) C ?003) 1898 lU2 429 9355 .. 'L 9CG NOF-- BR:DGE LENTRE v;)R• H I �.G, E R DP• E NE-,- PA— HFACH FI 3340;'4334 4(-'7 650 6 OD 7 PJE DE f.A PRIX 500? PAR:S, TRANCE 4? 61 57 7. NFINI AKASAKA H 7 S AKASAKA. MINA�O KU TOKYO 107, JAPAN .03. 3423 3970 We are pleased to submit the following proposal for special counsel services in connection with the sale by the City of Moorpark (the "City ") of the residual assets (the "Residual Assets ") held pursuant to Indenture dated as of April 1, 1985 by and between the City and First Interstate Bank of California, as Trustee, in connection with the City of Moorpark Single Family Residential Mortgage Revenue Bonds, Issue of 1985. The firm of Mudge Rose Guthrie Alexander & Ferdon, Los Angeles, California would be pleased to serve as special counsel in connection with this matter and proposes to perform the following services on the basis set forth in this letter-. We will confer and consult with the City's staff and Financial Advisor and purchaser_; of the Residual Assets on all matters relating to the above -- referenced matter. Our services will include the preparation of all agreements, resolutions, notices, and other documents required in connection with the sale of the Residual Assets. We will also review any documents prepared by the purchasers on behalf of the City and, at your request, attend all meetings in which any action Mr. Richard T. Hare October 21, 1994 Page 2 in connection with the proceedings is to be taken. Subject to the approval of the transaction by our tax department and to the completion of the financing to our satisfaction, Mudge Rose Guthrie Alexander & Ferdon will issue its approving legal opinion to the purchasers of the Residual Assets to the effect that all proceedings have been legally undertaken for the authorization and sale of the Residual Assets, and that the Sale of the Residual Assets will not adversely affect the exclusion of the interest on the Bonds from gross income for Federal and State income tax purposes. We will issue appropriate supplemental opinions and certificates as may be necessary or appropriate. The fee for the foregoing legal services with respect to the sale of the Residual Assets will be $20,000, including out of pocket expenses and disbursements. Such fees shall be payable from moneys received by the City from the purchaser of the Residual Assets. In the event that r-he Residual Assets are not sold, the City shall not be liable for ani legal services provided or costs incurred by the firm. If this arrangement is satisfactory to you, please return to us a copy of this letter - ?xecuted by an authorized officer of the City. Respectfully submitted, MUDGE ROSE GUTHRIE ALEXANDER & FERDON Hy: ; Donald L. Hunt, Partner TERMS OF SPECIAL COUNSEL EMPLOYMENT APP OVED THIS � DAY OF Authorized Officer of the City of Moorpark Richard T. Hare Deputy City Manager LA01 \1288 \18119.1 60.860 Rf: City of Moorpark. CA Redevelopment Is�,ut- Series „i I(ms If- this agreement is satisfactory to you. l lcasc return ter us a copy of' this letter executed h� as authorized officer of the City Sincerely, R G. (Je y) PI arham, .ir. President, PAR Marketing, Inc. "PERMS OF ADVISER AGREED TO THIS DA OF _�� �' -- 1994 Author 'zed Officer of the City of- Moorpark Richard T. Hare RGP/JP Deputy City Manager Attachments (3) October 21, 1994 MARKETING, INCORPORATED Mr. Richard Clare, Finance Director City Of Moorpark Finance Department 799 Moorpark Avenue Moorpark, CA 93021 Secondary Marketing RE: City of Moorpark. CA Redevelopment Issue Series of 1985 Dear Mr. Hare: We are pleased to submit the following proposal as financial advisor for the sale of the residual assets of the above- referenced issue. PAR Marketing, Inc. would be pleased to serve this function in connection with this matter and propo.es to perform the following services on the basis set forth in this letter. PAR Marketing, Inc. will consult with the city", staff, with the Special Counsel, with the tl'USIee hank and the purchaser on all matters relating to the shove- referenced matter. PAR Marketing, Inc. will collect and distribute the pertinent documents to attract the highest bid for the City of Moorpark. This endeavor wIII include copying loan files, the servicing agreement, the official statement, the trust indenture, pay histories and other relevant data that the potential purchaser would need in order to Not the OUlstanding mortgages to ultimately become the owner and servicer of the issue. Our services will include scheduling the sale. selecting the highest bid from the 6 (six) principal hidders and scheduling the closing date iliac co- ordinates with the city's schedule. PAR Marketing, Inc., will be responsible !,)r the trustee's efforts in calling the bonds and randomly selecting one hoed to be held until it,' t,itcd maturity. We will assist the trustee in acquiring the i!nited States Treasury Bond that �� ill collaterahM the outstanding bond. We �\ ill also he responsible for that collaterats' indepcndc!r authentication. Par Marketing, Inc., will schedule the c%cnt, that permit the signing of the resolution. the actual sale of the assets, the selection of the purchaser, the closing, the transfer of mortgages to the purchaser, the calculation of accrued interest and IL-C, to he paid, the transfer of the surplus to the cite. the notification of the call and the actual redcv,)ption of the hond,, the escrow 1Or the collatcralizcd out,tandin(_1 hand and the Llcli\L'' \ W th(• 1!()\ernruent, that secure that one hand. The fec for the forcgoing services with ICII)Cct 01'111C sale of tfte residual assets will he S 15,000. Such fees shall he payable from nlonc�,, received by the City from they purchasers of the residual assets In the event that the residual a„et,, are not ,t)Id. the city ,hall not he liable for any services provided or costs incurred by Par In, TELEPHONE 310/545 -0048 • MOBILE 310/990 -3948 • FAX 310/545 -4849 232 281h Street • Manhattan Beach, CA 90266 RE: City of Moorpark, CA Redevelopment Issue, Series of 1985 BOND PAYOFF ANALYSIS I SALE OF UNDERLYING LOAN PORTFOLIO: Total loan Portfolio Principal Balance Outstanding (100/94) $257,145 Market Price — Loan Portfolio 90.41% Market Value of Portfolio $232,485 Bond Fund ICA Master Market 51,188 Bond Fund ICA Master Market $3,097 Bond Account ICA Master Market $6,823 Bond Fund ICA Master Market $621 Bond Fund First Chicago Corp. $45,913 Subtotal 1 $57,642 No Accrued Interest Calculated or Added Market Value of Portfolio $232,485 Reserves + value of Mortgages $290,127 Legal $20,000 Advisor $15,000 Trustee Fee $1,500 Misc. Expense $500 Less expenses $37,000 Subtotal 2 $253.127 Escrow for T Bond $6,000 Escrow for Call $138,504 Escrow for interest (1 6% $3,578 Subtotal Expenses $148,082 Total Surplus 5105,045 Remaining Mortgage Term 248 Months 20.7 Years Projected Final Maturity 1- Apr -18 Maturity Note Rate Compound Interest BOND PAYOFF SCHEDULE: Accrued Amount Interested from Maturity Date Outstanding Interest Rate 4/1/95 1- Apr -18 $145,000 Compound interest $138,504 x $4776 per &x)f Total bond Payoff $138,504 3 RE: City of Moorpark, CA Redevelopment Issue, Series of 1985 SCHEDULE CALENDAR 1994/95 1 2 9 16 23 30 M 3 10 17 24 31 October T W T 4 5 6 11 12 13 18 19 20 25 26 27 7 7 14 21 28 1 1 8 15 22 29 1 6 13 20 27 M 7 14 21 28 November T W T 1 2 5 8 9 10 15 16 1? 22 23 74 29 30 7 4 11 18 25 1 5 12 19 26 1 4 11 18 25 M 5 12 19 26 December T W T 1 6 7 8 13 14 15 20 21 22 27 28 29 7 2 9 16 23 30 1 3 10 17 24 31 anuary Febraary March S M T W T 7 f S M T W T 7 S S M T W T 7 S 1 2 3 4 5 6 7 1 3 4 1 2 3 4 8 9 10 11 12 13 14 5 6 7 8 4 10 11 5 6 7 8 9 10 it 15 16 17 18 19 20 21 12 13 14 15 16 17 18 12 13 14 15 16 17 18 22 23 24 25 26 27 28 19 20 21 22 13 24 25 19 20 21 22 23 24 25 29 30 31 26 27 28 26 27 28 29 30 31 April - S M T W T 2 $ 1 2 3 4 5 6 Z 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 RE: City of Moorpark, CA Redevelopment Issue, Series of 1 985 5 Date Activity Responsible Party Nov. 16 City Approves the concept of Par Marketing Agency and hires Don Hunt as Special Counsel Nov. 16 Proposals are accepted and resolution Agency, BC, PAR signed Nov. 17 Bids accepted for Mortgages WG Nov. 22 Closing at Mudge Rose, Fees Paid WG Transfer of mortgages to purchaser Agency, PAR, FI Purchaser Dec 1 Calculation of accrued interest, Trustee FI, Purchaser, forwards surplus funds to Cite Agency, PAR, BC Dec 1 Excess funds are invested, Purchase of U S F1, PAR, Agency Treasury's, Trustee will escrow money for the call and interest Dec. 15 Date for servicing transfer and interest Purchaser, FI settlement March 21, Trustee notifies all bond holders of the call Agency, FI 1995 April 1, Bonds are Called, Random Bond i; FI, PAR 1995 Collateralized PARTIES: Agency City of Moorpark (Seller) BC Mudge Rose i Bond Council) F1 First Interstate (Trustee) PAR Financial Ad\iser Purchaser Purchaser W G Working Group (All) DISTRIBUTION LIST: CITY City of Moorpark Moorpark Redevelopment Agency Moorpark Finance Department 799 Moorpark Avenue Moorpark, CA 93021 (805)539 -6864 Fax (805)529 -8270 Richard Hare, Finance Director CITY COUNSEL Burke, Williams and Sorenson 611 West Sixth Street, Ste. 2500 Los Angeles, Ca. 90071 (213) 236 -0600 Fax: (213) 236 -2700 SPECIAL COUNSEL Mudge Rose Guthrie Alexander & Ferdon 333 S. Grand Avenue, 21 St Floor Los Angeles, CA 90071 (213) 613 -1112 Fax: (213) 680 -1358 Don L. Hunt, Esq. TRUSTEE First Interstate Bank Corporate Trust 707 Wilshire Blvd W-1 1-1 Los Angeles, CA 90017 Norman Litts, Trust Officer FINANCIAL ADVISER PAR Marketing, Inc. 232 28th Street Manhattan Beach, CA 90266 (310) 545 -0048 Fax: (310) 546 -1466 R. G. (Jerry) Parham, Jr.