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BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
AGENDA ITEM NO. 14

Meeting Date: November 14, 2006

Subject/Title: Approve a resolution to refund CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003 and CIFP 2004-1 Infrastructure Revenue Bonds, Series 2004

Prepared by: Brian Kelleher, Accountant II

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

RECOMMENDATION
Approve a Resolution of the Brentwood Infrastructure Financing Authority appointing Financing Team, authorizing the issuance, sale and delivery of its infrastructure revenue refunding bonds, Series 2006A and the subordinated Series 2006B in the aggregate principal amount of not to exceed $40,000,000 and authorizing the execution and delivery of an amended and restated trust agreement, an official statement, a bond purchase agreement and certain other actions in connection with the issuance, sale and delivery of such bonds.

PREVIOUS ACTION
None.

BACKGROUND
The City of Brentwood and the Brentwood Infrastructure Financing Authority have previously issued bonds to finance improvements for CIFP 2003-01, which comprised approximately 1,218 residential units in the City, and 5.66 acres of commercial property and CIFP 2004-01, which comprised approximately 1,251 residential units in the City.

Due to favorable market interest rates and the fact that approximately 70% of those units are now completed and occupied, it is possible to refinance those bonds and achieve lower interest rates. It is also possible to substitute a surety bond for a portion of the reserve fund which was originally funded with cash. In all, based on today’s market interest rates, the refinancing and substitution of the reserve fund can produce up to $345,000 per year over the remaining life of the financing (2033) in new proceeds which can be used for additional capital improvements. This method of generating new proceeds through refinancing was successfully used by the City with CIFP 1994-1, CIFP’s 98-1 and 99-1, CIFP 2000 and CIFP 2002-1.

The Refunding Bonds will be issued in a senior series, which will be insured and rated “AAA”. The subordinate series will be issued non rated. The refinancing will not affect the assessment installments payable by any property owner in the district and their assessments will remain the same, although the change in the reserve fund amount for the bonds may reduce or eliminate any reserve fund credits available.
FISCAL IMPACT
This action could generate up to $9.3 million in new funding for public capital improvements without raising assessments or taxes or using the City’s other funds.

Attachments:
Resolution
Form of Amended and Restated Trust Agreement
Form of Escrow Agreement
Form of Bond Purchase Agreement
Form of Preliminary Official Statement

RESOLUTION NO.

A RESOLUTION OF THE BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY APPOINTING FINANCING TEAM, AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF ITS INFRASTRUCTURE REVENUE REFUNDING BONDS, SERIES 2006A AND SUBORDINATED SERIES 2006B IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $40,000,000 AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN AMENDED AND RESTATED TRUST AGREEMENT, AN OFFICIAL STATEMENT, A BOND PURCHASE AGREEMENT, AND CERTAIN OTHER ACTIONS IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF SUCH BONDS

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 is empowered under the provisions of Article 4, Chapter 5, Division 7, Title 1 of the California Government Code (the "Law") to issue its bonds for the purpose of purchasing various local obligations issued by certain local agencies, including the City, and to issue bonds for the purpose of refunding bonds previously issued by the Authority under the Law; and
WHEREAS, the Authority issued its CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003 and its CIFP 2004-1 Infrastructure Revenue Bonds, Series 2004 (collectively, the "Prior Bonds") for the purpose of financing certain public capital improvements, which were in turn funded by the City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1 (the “2003 Local Obligations”) and the City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2004-1 (the “2004 Local Obligations,” and together with the 2003 Local Obligations, the “Local Obligations”) which were pledged as security for the Prior Bonds; and
WHEREAS, interest rates are now such that the Authority can achieve interest savings by refunding the Prior Bonds; and

WHEREAS, the Authority has determined to issue its Infrastructure Revenue Refunding Bonds, Series 2006A and its Infrastructure Revenue Refunding Bonds, Subordinated Series 2006B (collectively, the "Bonds") in order to refund the outstanding Prior Bonds, to fund a reserve fund for the Bonds and to pay costs of issuance of the Bonds; and
WHEREAS, the Authority has determined that the estimated amount necessary to finance the refunding of the outstanding Prior Bonds, to fund a reserve fund and to pay costs of issuance of the Bonds will require the issuance of the Bonds in the aggregate principal amount not to exceed Forty Million Dollars ($40,000,000); and
WHEREAS, the Authority and the City have determined that all things necessary to make the Bonds, when authenticated by the Trustee and issued as provided in that certain amended and restated trust agreement (the "Trust Agreement"), entered into by and among the Authority, the City and U.S. Bank National Association (the "Trustee"), the valid, binding and legal obligations of the Authority according to the import thereof and hereof have been done and performed; and
WHEREAS, in furtherance of implementing the refinancing, there have been filed with the Secretary for consideration and approval by this Board forms of the following documents:
(a) an Amended and Restated Trust Agreement under the terms of which the Bonds are to be issued for the purpose of refunding the outstanding Prior Bonds, funding a reserve fund and paying for the costs of issuance of the Bonds;
(b) an Escrow Agreement, under the terms of which the Prior Bonds are to be refunded;
(c) a Bond Purchase Agreement under the terms of which, among other things, the Authority agrees to sell and the underwriter agrees to purchase the Bonds; and
(d) a Preliminary Official Statement describing the Bonds; and
WHEREAS, the Authority now desires to appoint the members of the financing team to enable the City and the Authority to pursue said proceedings; and
WHEREAS, being fully advised in the matter of the financing, this Board wishes to proceed with implementation of said financing; and
WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the refinancing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Authority is now duly authorized and empowered, pursuant to each and every requirement of law, to authorize the execution and delivery of certain documents in order to further implement the refinancing in the manner and upon the terms herein provided; and
WHEREAS, the City has determined that the issuance of the Bonds by the Authority will result in significant public benefits, including demonstrable savings in effective interest rate, bond preparation, bond underwriting and bond issuance costs;
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 firm of RBC Capital Markets is hereby appointed underwriter for the Bonds, the firm of Orrick, Herrington & Sutcliffe LLP is hereby appointed bond counsel for the Bonds and the firm of Jones Hall, a Professional Corporation, is hereby appointed disclosure counsel for the Bonds.
Section 3. Pursuant to the Law, the Bonds shall be issued in the aggregate principal amount of not to exceed Forty Million Dollars ($40,000,000) with such amount to be divided between the Series 2006A Bonds and the Series 2006B Bonds in such amounts as deemed in the best interest of the City by the Treasurer/Controller of the Authority; provided, however, that (a) the true interest cost of the Bonds shall not exceed [5.75]% and (b) the maximum term of any maturity shall not extend beyond the year 2034.
Section 4. The form and substance of the Amended and Restated Trust Agreement is hereby approved. The Treasurer/Controller of the Authority or designee thereof is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Amended and Restated Trust Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 5. The form and substance of the Escrow Agreement is hereby approved. The Treasurer/Controller of the Authority or designee thereof is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Escrow Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 6. The form and substance of the Bond Purchase Agreement is hereby approved. The Treasurer/Controller of the Authority or designee thereof is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 7. (a) The form and substance of the Preliminary Official Statement is hereby approved. The Treasurer/Controller or designee thereof is authorized to execute the final Official Statement to be derived therefrom.
(b) This Board hereby authorizes the Treasurer/Controller or designee thereof to find and determine that said Preliminary Official Statement in preliminary form is, and as of its date shall be deemed "final" for purpose of Rule 15c(2)-12 of the Securities and Exchange Commission, and the Treasurer/Controller of the Authority or designee thereof is hereby authorized to execute a certificate to such effect in the customary form.
(c) The Treasurer/Controller of the Authority or designee thereof is authorized to approve corrections and additions to the Preliminary Official Statement by supplement or amendment thereto, by appropriate insertions, or otherwise as appropriate, provided that such corrections or additions shall be regarded by such officer as necessary to cause the information contained therein to conform to facts material to the Bonds or the Local Obligations or to the proceedings of this Board or the City Council of the City of Brentwood or that such corrections or additions are in form rather than in substance.
(d) The underwriter of the Bonds is authorized to distribute said Preliminary Official Statement and the final Official Statement to be derived therefrom in connection with the sale and distribution of the Bonds.
Section 8. 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, including any leases or other agreements necessary to establish the City’s legal ability to make Legally Available Funds available under the Amended and Restated Trust Agreement, which they may deem necessary or advisable in order to obtain bond insurance and/or a reserve fund surety policy for the Series 2006A Bonds and 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 9. This resolution shall take effect immediately upon its passage.
PASSED, APPROVED AND ADOPTED by the Governing Board of the Brentwood Infrastructure Financing Authority at a special meeting on the 14th day of November, 2006 by the following vote:
 

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