MEETING DATE: MARCH 18, 2014 TO: JEFFREY C. PARKER, CITY MANAGER FROM: PAMELA ARENDS -KING, FINANCE DIRECTOR /CITY TREASURER SUBJECT: ADOPT RESOLUTION NO. 14-23 APPOINTING CERTAIN PARTIES TO ASSIST THE CITY OF TUSTIN WITH THE PROPOSED FORMATION OF COMMUNITY FACILITIES DISTRICT No. 2014-1 ( TUSTIN LEGACY /STANDARD PACIFIC) AND PROPOSED FUTURE BOND SALE SUMMARY: The City is considering the formation of Community Facilities District No. 2014-1. Resolution No. 14-23 authorizes City Staff to proceed with appointing the consultants to assist with the formation of Community Facilities District No. 2014-1 ( Tustin Legacy /Standard Pacific) and proposed future bond sale. RECOMMENDATION: It is recommended that the City Council adopt Resolution No. 14-23 authorizing the appointment of consultants in connection with the Community Facilities District No. 2014-1 ( Tustin Legacy /Standard Pacific). FISCAL IMPACT: Any obligation of the City to pay the designated consultants' fees will be reimbursed out of the sales price of the land sold to Standard Pacific Corporation ( "Standard Pacific "). The fee of the financial advisor, Fieldman, Rolapp & Associates, for financial services performed in connection with the formation of Community Facilities District No. 2014-1 Tustin Legacy /Standard Pacific) is not to exceed $ 30, 000. The fee of bond counsel, Stradling Yocca Carlson & Rauth, a Professional Corporation, is approximately $ 20,000. The fee of special tax consultant, Albert A. Webb Associates, is approximately $ 25,000. The fee of market absorption consultant, Empire Economics, is approximately $ 22, 000. The fee of appraiser, Harris Realty Appraisal, is approximately $ 25,000. The fee of disclosure counsel, Quint & Thimmig LLP, is approximately $ 35,000. The fee of Underwriter, Stifel Nicolaus, will be incurred when Community Facilities District No. 2014-1 ( Tustin Legacy /Standard Pacific) Bonds are sold after the formation of the CFD. A Bond Purchase Agreement will be brought back to the City Council as part of the approval of the legal and financing documents required for the bond sale. It is anticipated the Underwriter' s management and average takedown fee is expected to be
ADOPT RESOLUTION NO. 14-23 APPOINTING CONSULTANTS IN CONNECTION WITH THE PROPOSED FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 2014-1 ( TUSTIN LEGACY /STANDARD PACIFIC) MARCH 18, 2014 PAGE 2 approximately $ 11. 00 per $ 1, 000 bond and their expenses are expected to be approximately $ 20, 000. Therefore if the City issues up to $ 20.0 million of bonds, their fee is expected to be approximately $ 240, 000 fully contingent on the successful sale of bonds. CORRELATION TO THE STRATEGIC PLAN: The recommendation correlates to the City's strategic plan for the establishment of a financing structure for an assessment district to aid in developing critical phases of Tustin Legacy, Goal A. BACKGROUND: The City of Tustin is the fee title owner of 100% of the real property (the " Property") located in the Legacy Project described in a Development Disposition Agreement, by and between the City and Standard Pacific Corp., a Delaware corporation dated as of March 4, 2014 (the " DDA "). In the DDA, it sets forth the terms and conditions whereby the City intends to convey the Property to Standard Pacific which will develop the Property into single family homes and provides for the establishment of a community facilities district to provide for financing of certain facilities and services. Pursuant to Section 533318(a) of the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code ( the " Act "), the City Council of the City (the "City Council ") will receive a written request from two of its City Councilpersons to commence proceedings to form a community facilities district with boundaries coterminous with the Property to be known as the " City of Tustin Community Facilities District No. 2014-1 ( Tustin Legacy /Standard Pacific) ". Staff recommends that the City Council adopt a resolution: ( a) appointing the professionals necessary to assist Staff with the formation of Community Facilities District No. 2014-1 ( Tustin Legacy /Standard Pacific) and future bond sale including Fieldman, Rolapp & Associates as Financial Advisor, Stradling Yocca Carlson & Rauth as Bond Counsel, Albert A. Webb Associates as Special Tax Consultant, Empire Economics as Market Absorption Consultant, Harris Realty Appraisal as Appraiser, Quint & Thimmig LLP as Disclosure Counsel and Stifel Nicolaus as Underwriter; and ( b) authorizing the City Manager or the Finance Director to execute agreements with Fieldman, Rolapp & Associates, Stradling Yocca Carlson & Rauth, Albert A. Webb Associates, Empire Economics, Harris Realty Appraisal, Quint & Thimmig LLP and Stifel Nicolaus for their services related to the formation of Community Facilities District No. 2014-1 ( Tustin Legacy /Standard Pacific) and future bond sale in form acceptable to the City Manager, the Finance Director and the City Attorney. All compensation payable to the financial advisor, bond counsel, special tax consultant, market absorption consultant, appraiser, disclosure counsel and underwriter will be reimbursed out of the sales price of the land sold to Standard Pacific Corporation or from future CFD Bond proceeds.
ADOPT RESOLUTION NO. 14-23 APPOINTING CONSULTANTS IN CONNECTION WITH THE PROPOSED FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 2014-1 ( TUSTIN LEGACY /STANDARD PACIFIC) MARCH 18, 2014 PAGE It is anticipated that Community Facilities District No. 2014-1 ( Tustin Legacy /Standard Pacific) will be formed in July of 2014 and the transfer of property will occur in August of 2014. It is anticipated that the CFD bond sale would occur in late 2014. Pamela Arends -King Finance Director /City Treasurer Attachment: Resolution No. 14-23
RESOLUTION NO. 14-23 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, APPOINTING CERTAIN PARTIES TO ASSIST THE CITY OF TUSTIN WITH THE PROPOSED FORMATION OF THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014-1 ( TUSTIN LEGACY /STANDARD PACIFIC) AND PROPOSED FUTURE BOND SALE THEREBY The City Council of the City of Tustin does hereby resolve as follows: WHEREAS, the City of Tustin, California ( the " City ") is the fee title owner of 100% of the real property ( the " Property ") described in Attachment 2 to that certain Development Disposition Agreement ( the " DDA "), by and between the City and Standard Pacific Corp., a Delaware corporation ( "Standard Pacific "); and WHEREAS, pursuant to the terms and conditions set forth in the DDA, the City intends to convey the Property to Standard Pacific which will develop the Property as set forth therein; and WHEREAS, the DDA provides for the establishment of a community facilities district and bond sale thereby to provide for financing of certain facilities and services described therein; and WHEREAS, pursuant to Section 53318(a) of the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code ( the " Act'), the City Council of the City ( the " City Council') has received a written request from two of its City Councilpersons to commence proceedings to form a community facilities district with boundaries coterminous with the Property to be known as the " City of Tustin Community Facilities District No. 2014-1 ( Tustin Legacy /Standard Pacific)" (the " Community Facilities District'); and WHEREAS, the City desires to retain the firm of Fieldman, Rolapp & Associates, Inc. ( the Financial Advisor ") to assist in the formation of the Community Facilities District and future bond sale thereby as Financial Advisor; and WHEREAS, the City desires to retain the firm of Stradling Yocca Carlson & Rauth, a Professional Corporation (' Bond Counsel'), to assist in the formation of the Community Facilities District and future bond sale thereby as Bond Counsel; and WHEREAS, the City desires to retain the firm of Albert A. Webb Associates to act as Special Tax Consultant for the formation of the Community Facilities District and future bond sale thereby; and WHEREAS, the City desires to retain the firm of Empire Economics, Inc. ( " Empire Economics ") to provide a market absorption study and price point information for the formation of the Community Facilities District and future bond sale thereby; and WHEREAS, the City desires to retain the firm of Harris Realty Appraisal ( "Harris Realty ") to provide an appraisal report for the Community Facilities District in preparation for a bond sale by the Community Facilities District; and Resolution No. 14-23 Page 1 of 3
WHEREAS, the City desires to retain the firm of Quint & Thimmig LLP ( " Disclosure Counsel'), to act as Disclosure Counsel with respect to the future bond sale by the Community Facilities District; and WHEREAS, the City desires to retain the firm of Stifel, Nicolaus & Company, Incorporated Underwriter"), to act as Underwriter with respect to the future bond sale by the Community Facilities District. NOW, THEREFORE, it is hereby ORDERED and DETERMINED by the City Council of the City of Tustin that: SECTION 1: Each of the above recitals is true and correct. SECTION 2: To assist with the potential formation and bond sale of the Community Facilities District, Stradling Yocca Carlson & Rauth, a Professional Corporation, is hereby appointed as Bond Counsel to the City, Fieldman, Rolapp & Associates, Inc., is hereby appointed as Financial Advisor to the City, Albert A. Webb Associates is hereby appointed as Special Tax Consultant to the City, Empire Economics is hereby appointed as Market Absorption Consultant to the City, Harris Realty is hereby appointed as Appraiser to the City, Quint & Thimmig LLP is hereby appointed as Disclosure Counsel to the City, and Stifel, Nicolaus & Company, Incorporated is hereby appointed as Underwriter for the future bond sale by the Community Facilities District. The Mayor, City Manager and City Treasurer, or their designees, are authorized to provide for all services necessary to effect the formation of the Community Facilities District, including Financial Advisor services, Bond Counsel services, Special Tax Consultant services, Market Absorption Consultant services, Real Estate Appraiser services, Disclosure Counsel services, Underwriter services and any other services deemed appropriate by the City Manager or his designee. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 18th day of March 2014. Elwyn A. Murray, Mayor ATTEST: Jeffrey C. Parker, City Clerk Resolution No. 14-23 Page 2 of 3
STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF TUSTIN ) I, Jeffrey C. Parker, City Clerk and ex- officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council is five; that the above and foregoing Resolution No. 14-23 was duly passed and adopted at a regular meeting of the City Council, held on the 18th day of March 2014 by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: Jeffrey C. Parker, City Clerk Resolution No. 14-23 Page 3 of 3