AgdaPkt 2010-08-09 - Laserfiche WebLink

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O.L~ Page 3 provide for financing of approximately $12.5 million of this total. The balance of the $17 million bond authorization will cover expenses, reserves, and interest during construction. The developer will be responsible for all public infrastructure construction, regardless of the amount of bond proceeds available for reimbursement. Mello-Roos Bonds Mello-Roos Bonds are authorized pursuant to the Mello-Roos Community Facilities Act of 1982, as amended. The bonds are secured by a special tax and the tax and the bonds must be approved by a two-thirds majority vote. The vote will be a landowner vote, with the vote weighted by acreage (there is only one landowner in this District). Bonds are expected to be sold in three phases (in 2010, 2013, and 2014) as development progresses and the real estate securing the bonds increases in value and can provide sufficient security to allow the sale of bonds. Tonight's action does not obligate the City to sell bonds. It will, however, begin the process of facilitating the financing of Public Facilities and lay the groundwork for the eventual sale of bonds. The City's financial advisor and the underwriter will advise the City regarding when the Project has sufficient credit to allow the sale of bonds and how many bonds the credit will support. Special Tax Formula The proposed formula for determining special taxes, the Rate and Method of Apportionment (RMA), is attached to the Resolution of Intention to Establish the District (attachment two) and will be approved in preliminary form if the Council adopts this resolution. The RMA establishes maximum special tax rate ranges from $2,765 to $5,530 per unit (depending on location with the development) for each property which has received a building permit, $155,091 per acre of commercial property, and $162,853 per acre of hotel property. These maximum special tax rates are allowed to increase annually at 2% a year, but are not expected to increase once all of the bonds have been issued. It is expected that the special tax rate will first be levied in Fiscal Year 2011-12 and every year thereafter until the Bonds are repaid but not longer than fifty (50) years. The RMA will be approved in final form after the property owner election if the Council then elects to form the District. Financing T earn The financing team consists of the financial advisor (WEMF), bond counsel (Nossaman), disclosure counsel (Jones Hall), underwriter (Piper Jaffray) , special tax consultant (David Taussig & Associates), and the appraiser (Seevers, Jordan, & Ziegenmeyer). WEMF and Nossaman have provided bond financing services on each bond transaction completed by the City for the past ten years; Jones Hall has served as disclosure counsel on all but one bond sale during this period. Staff was very pleased with the timeliness and quality of the services each of these firms provided. Moreover, staff continues to be pleased with the support that these firms have been providing since the various bond issues on which they worked were sold and strongly recommends working with these firms on this bond sale. The other members of the financing team have considerable experience in their respective fields and are well qualified to perform their respective tasks. Staff is confident that each of these firms has the capability and expertise to successfully discharge its respective responsibilities in connection with this project. Attachment six contains a description of the responsibilities of the respective members of the financing team.