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Current Council Agenda and Past Meeting Information

 

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
AGENDA ITEM NO. 2

Meeting Date: January 11, 2005

Subject/Title: Amendment to Site Lease and Amendment to Sublease relating to the Brentwood Infrastructure Financing Authority Infrastructure Revenue Refunding Bonds, Series 2002A and Subordinated Series 2002B

Prepared by: Brian Kelleher, Accountant II, Finance Department

Submitted by: Pamela Ehler, Director of Finance and Information Systems

RECOMMENDATION
Adopt a BIFA Resolution authorizing execution and delivery of an Amendment to Site Lease and an Amendment to Sublease in connection with the Authority’s Infrastructure Revenue Refunding Bonds, Series 2002A and Subordinated Series 2002B.

PREVIOUS ACTION
In July 2002, the BIFA issued $19,267,000 of bonds to refund CIFP’s 1998 and 1999. The BIFA refunding program is designed to generate savings to be used by the City for various public improvements. The refunding generated $1.5 Million in up front savings for the City. In conjunction with issuing the refunding bonds the city executed a site lease of a 4-acre piece of land to be used for the police station. The purpose of this action is to substitute property, APN 010-510-025, located west of and adjacent to Fairview Avenue and south of Baldwin Drive, and remove the prior lease encumbrance of the old police site.

BACKGROUND
When issuing bonds under the BIFA refunding program, the bonds are secured by the original local obligations. When the City receives its payment up front, the par amount of the refunding bonds will exceed the par amount of the local obligations. These are called non-asset bonds. In the case of the current issue, the non-asset amount is $1,140,000. As the bonds are paid off the non-asset amount will eventually decrease to zero. However, if there is a property owner prepayment of the local obligation, the City must make up the difference in the call requirements. Since the bonds were insured by FSA with an AAA rating, FSA required that the non-asset payments be secured by a general fund lease. The bond documents allow for substitution of property under the lease. Substituting the property, APN 010-510-025, located west of and adjacent to Fairview Avenue and south of Baldwin Drive for the old police station site removes the lease encumbrance.

FISCAL IMPACT
There is no direct fiscal impact to the City or BIFA. The action will, however, allow the City to proceed with a sale of the old police site.

Attachments:
Resolution
Forms of Amendment to Site Lease and Amendment to Sublease

RESOLUTION NO.
A RESOLUTION OF THE GOVERNING BOARD OF THE BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY AUTHORIZING THE EXECUTION AND DELIVERY OF AN AMENDMENT TO SITE LEASE AND AN AMENDMENT TO SUBLEASE IN CONNECTION WITH THE AUTHORITY’S INFRASTRUCTURE REVENUE REFUNDING BONDS, SERIES 2002A AND SUBORDINATED SERIES 2002B
WHEREAS, the Brentwood Infrastructure Financing Authority is a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State of California (the “Authority”); and
WHEREAS, the City of Brentwood is a municipal corporation organized and existing under the Constitution and laws of the State of California (the “City”); and
WHEREAS, the Authority and the City entered into a Site Lease and a Sublease, each dated as of June 1, 2002 (the “Leases”) in connection with the issuance of the Authority’s Infrastructure Revenue Refunding Bonds, Series 2002A and Subordinated Series 2002B; and
WHEREAS, the Lease provide that the real property leased thereunder may be substituted in accordance with the requirements of the Leases for other City-owned real property and the City and the Authority desire to make such a substitution as provided in the Amendment to Site Lease and Amendment to Sublease, each dated as of January 1, 2005 (the “Lease Amendments”), forms of which are on file with the City Clerk and Authority Secretary presented to this meeting.
NOW, THEREFORE, BE IT RESOLVED by the Governing Board of the Brentwood Infrastructure Financing Authority as follows:
Section 1. The foregoing recitals are true and correct, and this Board so finds and determines.
Section 2. The form and substance of the Lease Amendments are hereby approved. The Treasurer/Controller of the Authority (the “Treasurer/Controller”) or designee thereof is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Lease Amendments in substantially said form, with such changes therein as such officer may require or approve in consultation with the City Attorney, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 3. The officers of the Authority are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution. Such actions heretofore taken by such officers are hereby ratified, confirmed and approved.
Section 4. This resolution shall be effective immediately upon receipt by the City of a written consent of Financial Security Assurance to the execution and delivery of the Lease Amendments.
PASSED, APPROVED AND ADOPTED by the Brentwood Infrastructure Financing Authority of the City of Brentwood at a regular meeting held on the 11th day of January 2005 by the following vote:

Recording requested by
and return to:

ORRICK, HERRINGTON & SUTCLIFFE, LLP
The Orrick Building
405 Howard Street
San Francisco, CA 94105-2669

Attention: John H. Knox, Esq.
Free Recording Requested Pursuant to
California Government Code Section 6103

AMENDMENT TO SUBLEASE

by and between the

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

and the

CITY OF BRENTWOOD

RELATING TO THE
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
INFRASTRUCTURE REVENUE REFUNDING BONDS
SERIES 2002A AND SUBORDINATED SERIES 2002B

Executed and Entered Into as of January 1, 2005

AMENDMENT TO FACILITIES LEASE

This Amendment to Facilities lease (the "Amendment to Sublease"), executed and entered into as of January 1, 2005, by and between the BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY (the “Issuer”), a joint exercise of powers authority established pursuant to the laws of the State of California, as lessor, and the CITY OF BRENTWOOD (the “City”), a municipal corporation organized and validly existing under the Constitution of the State of California and its charter, as lessee;

WITNESSETH:

WHEREAS, the Issuer and the City duly executed and entered into a Sublease (the "Sublease") as of June 1, 2002, which was recorded on July 17, 2002, in the Official Records of Contra Costa County (Document No. 2002-0248357), whereby the City and the Issuer have agreed to enter into a lease-leaseback arrangement of that certain real property and improvements thereon described in Exhibit A1 (“Description of Demised Premises”) to the Sublease in order to raise funds to pay the cost of certain public capital improvements; and

WHEREAS, under the terms of the Sublease, the City will be obligated to make base rental payments to the Issuer for the lease of the Demised Premises; and

WHEREAS, under the terms of the Sublease, the City and the Issuer have determined to release that real property described in Exhibit A1 to the Sublease and to lease as substitute real property that real property described in Exhibit A attached hereto; and

WHEREAS, in order to accomplish the foregoing, it is desirable and necessary to amend Exhibit A1 to the Sublease, as hereinafter provided in this Amendment to Sublease;

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE that the Sublease is amended to reflect the release of the real property described in Exhibit A1 to the Sublease and to lease as substitute real property that real property described in Exhibit A attached hereto, and to modify the description of the Demised Premises, such Demised Premises as so modified being more particularly described in Exhibit A attached hereto and made a part hereof.

IN WITNESS WHEREOF, the parties hereto have executed and entered into the Amendment to Sublease by their officers thereunto duly authorized as of the day and year first written above.

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

By
Treasurer/Controller

ATTEST:

By
Secretary

CITY OF BRENTWOOD

By
City Manager
(SEAL)

ATTEST:

Clerk of the City of Brentwood

APPROVED:

U.S. BANK NATIONAL ASSOCIATION.

By______________________________
Authorized Officer

Exhibit A

Description:

The land referred to herein is situated in the State of California, County of Contra Costa, City of Brentwood, and is described as follows:

LOT QQ, AS SHOWN ON THE MAP OF SUBDIVISION 7940, FILED JUNE 1, 1999 IN BOOK 410 OF MAPS, PAGE 35, CONTA COSTA COUNTY RECORDS.

APN: 010-210-025

STATE OF CALIFORNIA )
) ss.
COUNTY OF __________________ )

On , before me, ,
Date Name and Title of Officer (e.g. “Jane Doe, Notary Public”)
personally appeared ,
Name of Signer(s) ¨personally known to me – OR – ¨ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature of Notary Public

OPTIONAL

Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.

CAPACITY(IES) CLAIMED BY SIGNER(S) DESCRIPTION OF ATTACHED DOCUMENT
¨
Individual
¨
Corporate Officer

Title(s) Title or Type of Document
¨
Partner(s) ¨
Limited
¨
General
¨
Attorney-In-Fact Number of Pages
¨
Trustee(s)
¨
Guardian/Conservator
¨
Other:
Signer is Representing:
Name of Person(s) or Entity(ies) Date of Document

Signer(s) Other Than Named Above
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT

Brentwood Infrastructure Financing Authority
Infrastructure Revenue Refunding Bonds
Series 2002A and Subordinated Series 2002B

Certificate of the City
regarding
Substitution of Leased Property

The undersigned, City Manager of the City of Brentwood (the “City”), and Executive Director of the Brentwood Infrastructure Financing Authority (the “Authority”), hereby certifies as follows in connection with the substitution of real property pursuant to that certain Sublease, dated as of June 1, 2002 (the “Sublease”) by and between the Authority, as lessor, and the City, as lessee and that certain Site Lease, dated as of June 1, 2002, (the “Site Lease”) by and between the City, as lessor and the Authority. All capitalized terms not otherwise defined herein shall have the meanings attributed thereto in the Sublease.

1. I am a duly authorized officer of the City and the Authority with full power and authority to execute and deliver this Certificate.

2. The Amendment to Sublease, and the Amendment to Site Lease, each by and between the City and the Authority and of even date therewith (collectively, the “Lease Amendments”), have been duly authorized executed and delivered by the City and the Authority and constitute the legally binding and enforceable agreements of the City and the Authority. The Lease Amendments have been duly recorded in the office of the County Recorder for the County of Contra Costa.

3. The useful life of the Demised Premises after giving effect to the Lease Amendments will be at least as long and the useful life of the Demised Premises prior to such Lease Amendments.

4. Based upon the written appraisal of Michael Kirby, entitled “Opinion of Value” attached hereto and delivered concurrently herewith, the fair rental value of the Demised Premises after giving effect to the Lease Amendments is at least equal to 100% of the maximum annual amount of Base Rental Payments due under the Sublease.

Dated: __________________, 2004

CITY OF BRENTWOOD, CALIFORNIA
__________________________________
City Manager

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
__________________________________
Executive Director

Attachment: Opinion of Value

City Administration
City of Brentwood City Council
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Brentwood, CA 94513
(925) 516-5440
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E-mail allcouncil@brentwoodca.gov