HomeMy WebLinkAboutRelease #31
TEMECULA PUBLIC FINANCING AUTHORITY RELEASE NO. 31 Dated: May 8, 2009 Relating to $51,250,000 Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch),
2006 Special Tax Bonds (the “Bonds”) Maturity (September 1) CUSIP No. Maturity (September 1) CUSIP No. Maturity (September 1) CUSIP No. 2009 87972Y BX3 2013 87972Y CB0 2026 87972Y CM6
2010 87972Y BY1 2014 87972Y CC8 2036 87972Y CN4 2011 87972Y BZ8 2015 87972Y CD6 2012 87972Y CA2 2016 87972Y CE4 The Temecula Public Financing Authority (the “Authority”) has previously
issued its Releases Nos. 1 through 30. In addition, on February 25, 2009, the Authority issued its Annual Continuing Disclosure Report (the “Report”). This Release No. 31 does not purport
to include every item that may be of interest to owners of the Bonds, nor does it purport to present “full and fair disclosure” with respect to the Bonds within the meaning of applicable
federal and state securities laws. Capitalized terms used but not defined in this Release Release No. 31 have the meanings given those terms in the official statement dated April 13,
2006 relating to the Bonds (the “Official Statement”). Agenda Report for City Council of the City of Temecula and Board of Directors of the Authority On the date hereof, May 8, 2009,
the City Attorney of the City of Temecula (the “City”) distributed an agenda report (the “Agenda Report”) to the City Manager, the members of the City Council and the members of the
Board of Directors of the Authority (who are the members of the City Council), which, collectively, purport to recommend to the members of the Board of Directors of the Authority to
approve the adoption of the Amended and Restated Acquisition Agreement. The Agenda Report, along with a redline version of the Amended and Restated Acquisition Agreement, are attached
hereto as Exhibit A. The City Attorney has distributed the Agenda Report as is necessary under ordinary procedures of the City Council and the Board of Directors to notify the public
of the possible possible actions that the Board of Directors may take at their meeting on May 12, 2009. Currently, the document that is the subject of the Agenda Report has not been
finalized and substantive discussions and negotiations may occur before such document is finalized. In addition, the Board of Directors are under no obligation or duty to approve such
document and retains full discretion to reject such document even if all other such parties have executed the document; the Board of Directors could also elect to delay their consideration
of the matter described in the Agenda Report to a later meeting. Steps by Beneficial Owners to Augment Transmission of Notices Owners of the Bonds should be aware of steps that they
can take to augment the transmission of notices with respect to the Bonds. In order to be assured of receiving notice, beneficial owners of the Bonds may wish to ascertain that the nominee
who holds the Bonds for their benefit has agreed to obtain and transmit notices to the beneficial owners, or in the alternative, beneficial owners may wish to provide their names
2 and addresses to the Authority and request that copies of future notices be provided directly to them. Such requests should be sent to: Temecula Public Financing Authority c/o Richards,
Watson & Gershon 355 South Grand Avenue, 40th Floor Los Angeles, California 90071 Attn: Peter Thorson or may be sent by e-mail to pthorson@rwglaw.com. Any requests to receive any prior
Releases by the Authority should be made to the same address or e-mail. Concluding Matters. ANY SUBSEQUENT STATEMENTS REGARDING THE BONDS, OTHER THAN A STATEMENT MADE BY THE AUTHORITY
IN AN OFFICIAL RELEASE OR SUBSEQUENT NOTICE AND/OR FILED WITH THE MUNICIPAL SECURITIES RULEMAKING BOARD OR A NATIONALLY RECOGNIZED MUNICIPAL SECURITIES INFORMATION REPOSITORY, ARE NOT
AUTHORIZED BY THE AUTHORITY. THE AUTHORITY SHALL NOT BE RESPONSIBLE FOR THE ACCURACY, COMPLETENESS OR FAIRNESS OF ANY SUCH UNAUTHORIZED STATEMENT. THIS OFFICIAL RELEASE MAY CONTAIN INFORMATION
MATERIAL TO BONDOWNERS AND DOES NOT PURPORT TO CONTAIN ALL MATERIAL INFORMATION WITH RESPECT TO THE BONDS OR THE FINANCIAL CONDITION OF THE COMMUNITY FACILITIES DISTRICT. THE INFORMATION
CONTAINED IN THIS OFFICIAL RELEASE IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS.
EXHIBIT A AGENDA REPORT
Approvals City Attorney Director of Finance City Manager TEMECULA PUBLIC FINANCING AUTHORITY AGENDA REPORT TO: Executive Director/Authority Members FROM: Peter Thorson, City Attorney
DATE: May 12, 2009 SUBJECT: Consideration of the adoption of an Amended and Restated Acquisition Agreement enabling the City of Temecula to construct certain Public Improvements for
Roripaugh Ranch, including Butterfield Hot Springs Road and Murrieta Hot Springs Road, with proceeds of the Community Facilities District No. 03-02 (Roripaugh Ranch) Bonds. PREPARED
BY: Peter Thorson, City Attorney RECOMMENDATION: That the Board of Directors: 1. Adopt a resolution entitled:RESOLUTION NO. TPFA 09-A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA
PUBLIC FINANCING AUTHORITY OF THE CITY OF TEMECULA APPROVING THAT CERTAIN AGREEMENT ENTITLED "AMENDED AND RESTATED ACQUISITION AGREEMENT BY AND BETWEEN THE TEMECULA PUBLIC FINANCING
AUTHORITY AND ASHBY USA, LLC" DATED AS OF MAY 12, 2009 RELATING TO COMMUNITY FACILITIES DISTRICT NO. 03-02 02 (RORIPAUGH RANCH) SUMMARY: The Developer of the Project, Ashby USA, is unable
to complete the public improvements required for the Project. The proposed Amended and Restated Acquisition Agreement ("Agreement") will enable the City to proceed with construction
of Butterfield Stage Road and Murrieta Hot Springs Road required for the Roripaugh Ranch Project using the proceeds of the Roripaugh Ranch Community Facilities District Bonds. The debt
service on the Bonds is paid with Special Taxes paid by the property owners within Roripaugh Ranch.
Several contractors and consultants who worked on these public improvements have filed stop notices and lawsuits against the Developer, as well as the City and the Authority, seeking
payment for the work performed. Although the City is not responsible for these claims, the Agreement provides for the payment of their invoices with funds that would otherwise be due
to the Developer. The Public Works Department is working towards the actual construction of Butterfield Stage Road and Murrieta Hot Springs Road. There are several right of way acquisition
issues that are yet to be resolved. Once the contractors and consultants are paid under the proposed Agreement, they will be able to provide the work product needed to complete plans
and specifications. Time estimates are never accurate on this Project because there are so many problems and so many different parts that must be coordinated. However, the best estimate
at this time is that a significant portion of the work could go out to bid by late 2009 or early 2010. BACKGROUND: Roripauah Ranch Project On November 26, 2002, the City Council approved
the Roripaugh Ranch Specific Plan (SP 11) which provides a specific plan for 804.7 acres consisting of the development of a maximum of 2,015 dwelling units, but is currently planned
for 1,745, 110,000 square feet of neighborhood commercial retail space, a 12 acre elementary school site, and a 20-acre middle school site, a 19.7 acre sports park (Planning Area 27),
a 5.1 acre neighborhood park (Planning Area 6), a fire station site and fire station (Planning Area 32), and 202.7 acres of natural open space, flood control improvements to Santa Gertrudes
Creek and long Valley Wash, and on-site and off-site public infrastructure improvements ("Project"). On December 17, 2002 the City Council also approved a Development Agreement for the
Project ("Development Agreement") that vests authorized land use requirements for the Project, provides for certain development fee credits based on Developer's construction of designated
public improvements, and conditions the issuance of building permits on the completion of designated public improvements necessary to mitigate the impacts of the development. CFD Bonds
for Public Improvements On April 27, 2006, the Temecula Public Financing Authority issued $51,250,000 Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh
Ranch), 2006 Special Tax Bonds ("Bonds"). The Community Facilities District comprises the area of the Roripaugh Ranch Specific Plan. The proceeds of the Bonds were to finance the construction
of certain designated public improvements to mitigate impacts of the Project. The debt service on the Bonds is paid for with Special Taxes levied on the property within the Roripaugh
Ranch Specific Plan. Several deficiencies in the Official Statement made by the Developer were noted shortly after the Bonds were issued. Other than the initial disbursement of the costs
of issuance and reimbursement of fire station costs and a small portion of Murrieta Hot Springs Road, no disbursements have been made for the Public Improvements. City Construction of
Priority Public Improvements (Butterfield Staae Road and Murrieta Hot Sprinas Road) On May 13, 2008, the City Council and Authority Board approved the City's use Bond Proceeds to complete
and/or construct certain Public Improvements required by the Development Agreement but
was not completed. The following Public Improvements are expected to be constructed and/or completed by the City ("Priority Public Improvements"): (1 ) Butterfield Stage Road--complete
full-width improvements from Murrieta Hot Springs Road to the south project boundary at Planning Area 32, including construction of two full-width bridges within and over Santa Gertrudes
Creek and Long Valley Wash; (2) Butterfield Stage Road--construct full width improvements from southern project boundary at Planning Area 32 south to La Serena Way; (3) Murrieta Hot
Springs Road--complete full-width improvements from east of Pourroy Road at the northern project boundary to the Butterfield Stage Road; (4) Intersection of Pourroy Road and Murrieta
Hot Springs Road-construct/install traffic signal; (5) South Loop Road--construct southerly half-width in front of fire station (Planning Area No. 32) including a portion Storm Drain
line J; (6) Nicolas Road--construct full improvements from Butterfield Stage Road to the western project boundary; and (7) Nicholas Road--construct 40-foot improvements 450 feet east
of the existing Nicolas Road/Calle Girosol intersection to the western project boundary. The Priority Public Improvements include the basic arterial road improvements for the Project.
Comments by representatives of the various lenders that have taken over portions of the Phase I properties, new owners, potential purchasers/merchant builders suggest that coordination
and funding of the construction of the Priority Public Improvements by these parties in the absence of a viable master developer will be difficult. The difficulty in completion of the
various Public Improvements could adversely impact the time of issuance of certain blocks of building permits pursuant to the schedule set forth in the Development Agreement. A substantial
portion of the Public Improvement component of the requirements for issuance of up to 500 building permits would be fulfilled by the City's completion of the Priority Public Improvements;
provided, however, issuance of building permits will require fulfillment of all applicable requirements of the Development Agreement and conditions of approval of the specific land use
entitlements. DISCUSSION OF TERMS OF AMENDED AND RESTATED ACQUISITION AGREEMENT: The proposed revisions to the Acquisition Agreement are: 1. 2. 3. 4. City is authorized to construct
and complete the designated Priority Public Improvements (principally Butterfield Stage Road and Murrieta Hot Springs Road) and may construct other public improvements authorized by
the Bond Documents if it elects to do so. City's costs to construct the Priority Public Improvements will be paid directly with Bond proceeds. The portions of the Priority Public Improvements
that have been partially constructed can be paid for even though the improvement has not been completed. Appropriate amounts have been deducted for the costs of bringing the partially
completed improvements into working order. Approximately $16.3 million will be paid to contractors, lienholders and Ashby USA for the work completed to date.
5. 6. 7. 8. 9. A. Of this amount approximately $8.4 million will be paid directly to contractors and consultants who worked on the Public Improvements authorized by the CFD and have
now sued the City and Authority or who have filed stop notices with the City and the Authority. The contractors and consultants will be paid only for the costs of their invoices and
not for attorney fees or interest. Each will sign a settement agreement that releases the City and the Authority from further liabilities but will allow them to pursue any further remedies
they may have against Ashby USA. B. The remainder of this amount will be "paid" to Ashby USA and AmTrust Bank, however, the City will make this payment through an "interpleader action"
that is essentially a court supervised escrow. This will enable all parties who have claims against Ashby USA on this Project to make their claims and argue over who has priority for
the funds without the involvement of the City or the Authority in those complicated proceedings. We anticipate that the contractors and consultants who are paid the amount of their invoices
by the City will claim their attorney fees and interest in this action. These claimants are currently litigating the distribution of the $2.5 millon in surplus foreclosure proceeds from
the Bank of the West's foreclosure of a portion of the Roripaugh Ranch property. C. All of the City or Authority's legal fees in connection with the contractor and consultant law suits
will be paid from these funds. Such fees have so far been paid from the penalties collected from payment of delinquent Special Taxes. This provision provides that they will be paid with
funds otherwise due to Ashby USA. Ashby USA must pay all delinquent Special Taxes and file required Semi-Annual Disclosure Reports prior to the payments being made unless the Authority
waives this requirement. The Authority is not obligated to "remarket" the Bonds, confirming that this cannot be accomplished given the financial condition of Ashby USA. If Ashby USA,
or its successors, undertake the construction of any public improvements not constructed by the City, Ashby USA must have performance and labor and material bonds for the work even if
sufficient Bond Proceeds are available to reimburse Ashby USA for such costs. Ashby USA and AmTrust Bank release the City and the Authority from any liability that they might claim through
the date of the revised Acquisition Agreement and agree not to seek damages against the City or Authority for allegations of a breach of the revised Acquisition Agreement in the future.
This updates similar provisions in the March 2007 revisions to the Acquisition Agreement. Other administrative provisions to implement these terms. The terms of the original Acquisition
Agreement and Supplement NO.1 to the Acquisition Agreement along with these changes have been combined into an "Amended and Restated Acquisition Agreement." As a practical matter, this
makes it easier to administer the Acquisition Agreement than having to reference three separate agreements. FISCAL IMPACT: None. The costs of construction of the Priority Public Improvements
will be paid for by the proceeds of the Bond Issue. Debt service for the Bond Issue is paid for with a Special Tax levied on the owners of the Roripaugh Ranch Project land. The City's
attorney fees and professional services fees are paid from the proceeds of the Bond Issue as welL. ATTACHMENTS: TPFA Resolution No. 09--
Redline version of Amended and Restated Acquisition Agreement showing changes from the original Acquisition Agreement as modified by Supplement NO.1 to Acquisition Agreement.
RESOLUTION NO. TPFA 09-A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY APPROVING APPROVING THAT CERTAIN AGREEMENT ENTITLED "AMENDED AND RESTATED ACQUISITION
AGREEMENT BY AND BETWEEN THE TEMECULA PUBLIC FINANCING AUTHORITY AND ASHBY USA, LLC" DATED AS OF MAY 12, 2009 RELATING TO COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) THE
BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The Board of Directors of the Temecula Public Financing Authority hereby approves
that certain agreement entitled "Amended and Restated Acquisition Agreement by and Between the Temecula Public Financing Authority and Ashby USA" dated as of May 12, 2009 with such changes
in said documents as may be mutually agreed upon by the parties, the Executive Director, Bond Counsel, and City Attorney as are in substantial conformance with the form of such agreements
as presented to the Authority. The Chairman is hereby authorized to execute said Agreements on behalf of the Authority. Section 2. The Executive Director (or his designee), is hereby
authorized, on behalf of the Authority, to take all actions necessary and appropriate to carry out and implement the Agreements and to administer the Authority's obligations, responsibilities
and duties to be performed under the Agreements. Section 3. The Authority Secretary shall certify the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Temecula Public Financing Authority this 12th day of May, 2009. Maryann Edwards, Chairperson ATTEST: Susan W. Jones, MMC
City Clerk/Board Secretary (SEAL) STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF TEMECULA )) ss ) I, Susan W. Jones, MMC, City Clerk/Board Secretary of the Temecula Public Financing
Authority, do hereby certify that the foregoing Resolution No. TPFA 09-was duly and regularly adopted by the Board of Directors of the Temecula Public Financing Authority at a meeting
thereof held on the 12th day of May, 2009, by the following vote: AYES: BOARD MEMBERS: Edwards, Comerchero, Naggar, Roberts, Washington NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: ABSTAIN:
BOARD MEMBERS: Susan W. Jones, MMC City Clerk/Board Secretary