HomeMy WebLinkAbout2015 04 27NOTICE AND CALL
OF A
SPECIAL MEETING
OF THE
CITY COUNCIL
TO THE MEMBERS OF THE AFOREMENTIONED AGENCIES AND THE CITY CLERK OF
THE CITY OF BALDWIN PARK
NOTICE IS HEREBY GIVEN that a Special Meeting is hereby called to be held on
MONDAY, APRIL 27, 2015 at 5:00 PM. at City Hall — 3rd Floor Conference Room 307, 14403
East Pacific Avenue, Baldwin Park, CA 91706.
Said Special Meeting shall be for the purpose of conducting business in accordance with
the attached Agenda.
NO OTHER BUSINESS WILL BE DISCUSSED
Dated: April 23, 2015 /V[__P�
Manuel Lozano
Mayor
�. -* I I Z
I, Alejandra Avila, City Clerk of the City of Baldwin Park, certify that I caused the
aforementioned Notice and Call of a Special Meeting to be delivered via email (hard copy to
follow) to each Member and e-mail to the San Gabriel Valley Tribune, and that I posted said
notice as required by law on April 23, 2015.
Alejandra Avila
City Clerk
AGENDA
BALDWIN PARK
CITY COUNCIL
SPECIAL MEETING
Please note
time and
APRIL 27, 2015 oration
5:00 PM
CITY HALL - 3rd Floor, Conference Room 307
14403 EAST PACIFIC AVENUE
BALDWIN PARK, CA 91706
(626) 960 -4011
I//, la%L
BALD ' WIN
I R I
Manuel Lozano - Mayor
Cruz Baca - Mayor Pro Tern
Monica Garcia - Councilmember
Ricardo Pacheco - Councilmember
Susan Rubio - Councilmember
PLEASE TURN OFF CELL PHONES AND PAGERS WHILE MEETING IS IN PROCESS
POR FAVOR DEAPAGAR SUS TELEFONOS CELULARES YBEEPERS DURANTE LA JUNTA
PUBLIC COMMENTS COMENTARIOS DEL PUBLICO
The public is encouraged to address the City Se invita al publico a dirigirse al Concilio o cualquiera
Council or any of its Agencies listed on this otra de sus Agencias nombradas en esta agenda,
agenda on any matter posted on the agenda or para hablar sobre cualquier asunto publicado en la
on any other matter within its jurisdiction. If you agenda o cualquier tema que este bajo su jurisdiccion.
wish to address the City Council or any of its Si usted desea la oportunidad de dirigirse al Concilio o
Agencies, you may do so during the PUBLIC alguna de sus Agencias, podra hacerlo durante el
COMMUNICATIONS period noted on the periodo de Comentarios del Pieblico (Public
agenda. Each person is allowed three (3) Communications) anunciado en la agenda. A cada
minutes speaking time. A Spanish- speaking persona se le permite hablar por tres (3) minutos. Hay
interpreter is available for your convenience. un inter rete para su conveniencia.
CITY COUNCIL
SPECIAL MEETING — 5:00 P.M.
CALL TO ORDER
ROLL CALL: Council Members: Monica Garcia, Ricardo Pacheco,
Susan Rubio, Mayor Pro Tern Cruz Baca
and Mayor Manuel Lozano
PUBLIC COMMUNICATIONS
Three (3) minute speaking time limit
Tres (3) minutos sera el limite para hablar
THIS IS THE TIME SET ASIDE TO ADDRESS THE CITY COUNCIL
PLEASE NOTIFY THE CITY CLERK IF YOU REQUIRE THE SERVICES OF AN INTERPRETER
No action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special
circumstances exist. The legislative body or its staff may: 1) Briefly respond to statements made or questions
asked by persons; or 2) Direct staff to investigate and /or schedule matters for consideration at a future meeting.
[Government Code §54954.2]
ESTE ES EL PERIODO DESIGNADO PARA DIRIGIRSE AL CONCILIO
FAVOR DE NOTIFICAR A LA SECRETARIA SI REQUIERE LOS SERVICIOS DEL INTERPRETE
No se podra tomar accidn en algun asunto a menos que sea incluido en la agenda, o a menos que exista alguna
emergencia o circunstancia especial. El cuerpo legislative y su personal podran: 1) Responder brevemente a
declaracidnes o preguntas hechas por personas; o 2) Dirigir personal a investigar y/o fijar asuntos para tomar en
consideraci6n en juntas proximas. [Codigo de Gobierno §54954.2]
OPEN SESSION
1. APPROVE A RESOLUTION TO AUTHORIZE THE CITY OF BALDWIN PARK TO
PARTICIPATE IN THE HUD PUBLIC OFFERING AS PART OF THE SECTION 108 LOAN
GUARANTEE ASSISTANCE PROGRAM TO REFINANCE THE EXISTING NOTE OR
OTHER OBLIGATION FOR THE LEWIS RETAIL PROJECT
Staff recommends that Council approve and adopt Resolution No. 2015 -066, entitled "A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO PARTICIPATE IN THE HUD PUBLIC
OFFERING AS PART OF THE SECTION 108 LOAN GUARANTEE ASSISTANCE
PROGRAM TO REFINANCE THE EXISTING NOTE OR OTHER OBLIGATION IN THE
ORIGINAL PRINCIPAL AMOUNT OF $6,000,000 FOR THE LEWIS RETAIL PROJECT."
RECESS TO CLOSED SESSION
2. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6:
Agency designated representatives: Shannon Yauchzee; Robert N. Tafoya; Jimmy Gutierrez
Employee Organizations: General Unit of Maintenance Employees, SEIU Local 721; Police
Officer Association; Professional and Technical Employees Association; Clerical Employees
Association; Police Management Employees Association; Classified Confidential Employees
Association; Classified Management Employees Association
Unrepresented EmpLoyee s
LJ: City Planner; Housing Authority Manager; Community
Development Director; Human Resource Manager; Police Chief; Finance Director; Public
Works Director; Recreation and Community Services Director
RECONVENE IN OPEN SESSION
REPORT FROM CLOSED SESSION
ADJOURNMENT
CERTIFICATION
1, Alejandra Avila, City Clerk of the City of Baldwin Park hereby that, certify under penalty of
perjury under the laws of the State of California, the foregoing agenda was posted on the City
Hall bulletin boa,Fdn, otJess than 24 hours prior to the meeting on April 23, 2015.
Alejandra Avila
City Clerk
PLEASE NOTE: Copies of staff reports and supporting documentation pertaining to each item on this agenda are
available for public viewing and inspection at City Hall, 2nd Floor Lobby Area or at the Los Angeles County Public Library
in the City of Baldwin Park. For further information regarding agenda items, please contact the office of the City Clerk at
(626) 960-4011 ext. 466 or e-mail krussell(ftaldwinpark.com.
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please
contact the Public Works Department or Risk Management at (626) 960-4011. Notification 48 hours prior to the meeting
will enable staff to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 34.102.104 ADA
TITLE I/)
L
EM,
ITEM NO.
TO: Honorable Mayor and City Councilmembers
FROM: Craig A. Graves, Director of Financ
ZV DATE:
61 $1 l►l ra:�L
Marc Castagnola, Director of
April 27, 2015 .
it 41fffelfo pment
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9
SUBJECT: RESOLUTION NO. 2015-066 A RESOLUTION OF
THE CITY COUNCIL FO THE CITY OF BALDWIN PARK,
CALIFORNIA AUTHORIZING THE CITY OF BALDWIN PARK
TO PARTICIPATE IN THE HUD PUBLIC OFFERING AS PART
OF THE SECTION 108 LOAN GUARANTEE ASSISTANCE
PROGRAM TO REFINANCE THE EXISTING NOTE OR OTHER
OBLIGATION IN THE ORIGINAL PRINCIPAL AMOUNT OF
$6,000,000 FOR THE LEWIS RETAIL PROJECT
The Department of Housing and Urban Development (HUD) is refinancing their Series 2002 -A
in Section 108 public offerings. The City of Baldwin Park initially received a $6,000,000 loan to
assist with the Lewis Retail Project (Walmart Site). The City is currently repaying the loan
through CDBG funds. HUD has estimated the City would receive a savings of $377, 936 on
paying the remaining balance of $2,902,000 if it refinanced the Section 108 Loan through a
HUD May 2015 public offering. The City currently has 6 and %2 years left on the loan. It would
mean an average annual savings of $58,144.
FISCAL IMPACT
The City would be able to reduce its loan payments through CDBG funds by $377,936 through
the remaining period of the loan which is August 2021. It would be an annual average savings of
$58,144 in CDBG funds that could be reallocated to other projects.
LEGAL REVIEW
The City Attorney's Office has reviewed the documents.
RECOMMENDATION
Staff recommends that the City Council approve Resolution No. 2015 -066 entitled "A
Resolution of the City Council of the City of Baldwin Park Authorizing the City of Baldwin Park
to participate in the HUD Public Offering as part of the Section 108 Loan Guarantee Assistance
Program to refinance the existing note or other obligation in the original principal amount of
$6,000,000 for the Lewis Retail Project" and to authorize the Chief Executive Officer to sign the
necessary documents.
April 27, 2015
Page 2
:• 'i 1
On October 18, 2000, the Mayor and City Council authorized the City to apply for a Section 108
Loan to assist with the development of the Lewis Retail Project (Walmart Site). The loan was to be
paid back with a portion of the City's CDBG annual allocation. HUD approved a loan for $6,000,000
and the contract was executed on March 8, 2002. The City, through CDBG funding, prepaid
$1,155,000, leaving a balance of $4,845,000 that was eventually financed by HUD's public offering.
The City has been paying an average of $503,400 from its CDBG allocations to repay the loan.
Late last month, HUD notified the City that it was refinancing its Series 2002 -A Section 108 public
offering. HUD has calculated that the City would have a savings of approximately $377,936 for the
remaining 6'/z years of the loan if it participated in the refinancing. This would free up approximately
$58,144 annually of the City's CDBG allocations that could be used for other projects.
Because of the projected savings, staff is recommending the City participate in the HUD refinancing.
HUD is requiring that it receive all approvals and documents by May 5, 2015, which makes this
approval time sensitive to take advantage of the potential savings to our CDBG allocations.
Attachments:
1. Resolution No. 2015 -066
2. HUD Contract for Refinancing
3. HUD Note for Series 2015 -A Certificates
RESOLUTION NO. 2015 -066
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF BALDWIN PARK, CALIFORNIA, AUTHORIZING THE
CITY OF BALDWIN PARK TO PARTICIPATE IN THE HUD
PUBLIC OFFERING AS PART OF THE SECTION 108
LOAN GUARANTEE ASSISTANCE PROGRAM TO
REFINANCE THE EXISTING NOTE OR OTHER
OBLIGATION IN THE ORIGINAL PRINCIPAL AMOUNT OF
$6,000,000 FOR THE LEWIS RETAIL PROJECT
WHEREAS, the City of Baldwin Park, by Resolution No. 2000 -100, adopted October
18, 2000, authorized an application seeking loan guarantee assistance under Section
108 of the Housing and Community Development Act of 1974, as amended, from the
United States Department of Housing and Urban Development ( "HUD "), and did
authorize its Chief Executive Officer to execute the documents necessary to accomplish
the transaction, and did accept HUD's guarantee of Section 108 Note Number B -00-
MC -06 -0554 for the Lewis Retail Project under a Section 108 Contract for Loan
Guarantee Assistance dated March 8, 2002; and
WHEREAS, the assistance provided by HUD was the guarantee of a note in the original
principal amount of $6,000,000 plus interest thereon; and
WHEREAS, HUD has notified the City of Baldwin Park that a public offering will occur in
May 2015, and to participate, the City of Baldwin Park must immediately notify HUD of
its intention to refinance all or a portion of its existing Section 108 commitment through
the public offering; and
WHEREAS, HUD may require, as a condition of participation in the public offering, that
the City of Baldwin Park execute documents related to the transaction; and
WHEREAS, the City of Baldwin Park has previously agreed to pay the City of Baldwin
Park's share, as determined by HUD, of the customary and usual issuance,
underwriting, and other costs related to the public offering and future administration of
the Note and the trust certificates; and
WHEREAS, it is economically sound and in the best interest of the City of Baldwin Park
to accept more favorable fixed rates of interest under the Section 108 Loan Guarantee
program offered by HUD under the public offering;
NOW, THEREFORE, BE IT RESOLVED BY the City Council of the City of Baldwin
Park:
SECTION 1. That the Mayor, Chief Executive Officer, or their duly authorized agent,
shall notify HUD of the City of Baldwin Park's desires to participate in the May 2015
1
public offering by HUD through the loan guarantee assistance program under Section
108 of the Housing and Community Development Act of 1974, as amended, for the
existing obligation Note Number B- 00 -MC -06 -0554 in the original principal amount of
$6,000,000 and to refinance the remaining principal amount of $2,902,000 at such rates
of interest that will be determined by HUD at the time of the public offering.
SECTION 2. That the Chief Executive Officer is authorized to execute the necessary
documents as required by HUD to refinance the existing guaranteed Section 108 Note,
and to execute such other documents, contracts, amendments and agreements with
HUD, and to authorize payment of any required fees as may be necessary to effectuate
this refinancing transaction.
SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and the
same shall be in full force and effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Baldwin
Park this 27th day of April, 2015.
MANUEL LOZANO
MAYOR
ATTEST:
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES S.
CITY OF BALDWIN PARK
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing resolution was duly and regularly approved and adopted by the City
Council of the City of Baldwin Park at an adjourned regular meeting of the City Council
on the 27th day of April, 2015 by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
ALEJANDRA AVILA
CITY CLERK
Contract for Fixed Rate Note, Entitlement, 04 -06 -15 *Defeasing*
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER
SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT
OF 1974, AS AMENDED, 42 U.S.C. §5308
For Series HUD 2015 -A Certificates
This Contract for Loan Guarantee Assistance ( "Contract ") is
entered into by the City of Baldwin Park, California, as
Borrower (the "Borrower "), and the Secretary of Housing and
Urban Development ( "Secretary "), as guarantor for the Guarantee
made pursuant to section 108 ( "Section 108 ") of title I of the
Housing and Community Development Act of 1974, as amended (the
"Act ") and 24 CFR Part 570, Subpart M, of the promissory note
executed contemporaneously herewith and numbered B- 00- MC -06-
0554, in the Aggregate Principal Amount of $2,902,000, and any
amended note or note issued in substitution for such note and
having the same note number (the "Note "). This is one of
multiple Contracts under the Funding Approval ( "Commitment ") of
the same number, which was approved by the Secretary on March
29, 2001. Such Aggregate Principal Amount will be paid or
credited to the account of the Borrower pursuant hereto, and all
such amounts are collectively referred to herein as the
"Guaranteed Loan Funds." The Note (including the Fiscal Agency
Agreement and the Trust Agreement as defined in the Note and
incorporated therein) is hereby incorporated into the Contract.
Terms used in the Contract with initial capital letters and not
otherwise defined in the text hereof shall have the respective
meanings given thereto in the Note. The Fiscal Agency Agreement
and the Trust Agreement are sometimes collectively referred to
herein as the "Fiscal Agency /Trust Agreements," and the Fiscal
Agent and the Trustee are sometimes collectively referred to as
the "Fiscal Agent /Trustee."
PART I
A. The Note. The Note is payable to the Trustee as Registered
Holder. On the Public Offering Date, it is expected that
trust certificates backed by the Note and similar notes
issued by other Section 108 borrowers, denominated "Section
108 Government Guaranteed Participation Certificates Series
HUD 2015 -A," will be purchased for a purchase price of the
full Aggregate Principal Amounts thereof by underwriters
selected by the Secretary (the "Underwriters ") pursuant to
an Underwriting Agreement between the Underwriters and the
Contract for Fixed Rate Note, Entitlement, 4 -06 -15 *Defeasing* 2
Secretary, at a closing on such Public Offering Date as
determined by the Secretary and the Underwriters. The
Borrower agrees that the interest rate at which the trust
certificate of a specified maturity is sold to the
Underwriters shall be the interest rate inserted on the
Public Offering Date in Schedule P &I of the Note for the
Principal Amount of corresponding maturity. The Note shall
be effective as an obligation of the Borrower only upon its
delivery by the Secretary to the Fiscal Agent /Trustee and
sale to the Underwriters at the closing on the Public
Offering Date. The Borrower authorizes the Secretary to
deliver the Note, together with the Secretary's Guarantee
thereof, to the Fiscal Agent /Trustee as of such closing on
the Public Offering Date, in accordance with the Fiscal
Agency /Trust Agreements. After the Public Offering Date, the
Borrower agrees that the Trustee pursuant to the Trust
Agreement will maintain the books and records of all
payments on the Note and all Principal Amounts and interest
rates on such Principal Amounts.
B. Consents. By execution of this Contract, the Borrower
ratifies and consents to the Secretary's selection of the
Underwriters and authorizes the Secretary to negotiate With
the Underwriters the terms of the Underwriting Agreement and
of the public offering of interests in the trust
certificates to investors (including the applicable interest
rates). In addition, by execution hereof the Borrower
ratifies and consents to the Secretary's selection of the
Fiscal Agent /Trustee and agrees to the respective terms of
the Fiscal Agency /Trust Agreements.
C. Prior Contracts. As of the date of the Secretary's
Guarantee of the Note, this Contract supersedes any prior
Contract for Loan Guarantee Assistance entered into between
the parties with respect to the Guaranteed Loan Funds, the
terms of the Secretary's Guarantee, and any other matter
covered by this Contract, provided that any such prior
contract continues to govern any action taken by the Borrower
or the Secretary pursuant thereto and prior to the
Secretary's Guarantee of the Note (except for the provisions
of paragraph 4 of this Contract) , and further provided that
this Contract does not supersede such prior contract with
respect to any note having the same note number other than
the promissory note identified in paragraph 15(a).
Notwithstanding the preceding sentence, if such prior
contract contained provisions for security or other Borrower -
specific terms for the benefit of the Secretary or to ensure
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 3
program compliance in addition to the security identified in
paragraphs 5(a), 5(b), 5(d), or 5(e) hereof, which security
or other Borrower-specific terms may be generally set forth
or incorporated in paragraph 5(c) (and any related provisions
incorporated in paragraph 12) of such prior contract, or may
be set forth in paragraph 15 or any succeeding paragraphs
(including related provisions incorporated in paragraph 12)
of such prior contract or any Attachment thereto, such
additional security provisions or other Borrower-specific
terms of the prior contract are hereby incorporated in this
Contract and shall be deemed a part hereof.
PART II
1. Receipt, Deposit and Use of Guaranteed Loan Funds.
(a) Except for fees and charges deducted on the Public
Offering Date pursuant to paragraph 4(a) by the Fiscal
Agent/Trustee, or funds used to pay off any interim note
refinanced by the Note, the Guaranteed Loan Funds shall be
electronically transferred in accordance with the Borrower's
instructions for deposit in a separate, identifiable
custodial account (the "Guaranteed Loan Funds Account") with
a financial institution whose deposits or accounts are
Federally insured. The Guaranteed Loan Funds Account shall
be established and designated as prescribed in the attached
form document entitled "Letter Agreement for Section 108
Loan Guarantee Program Custodial Account" (Attachment 1) and
shall be continuously maintained for the Guaranteed Loan
Funds. Such Letter Agreement must be executed when the
Guaranteed Loan Funds Account is established. (A fully
executed copy of such Letter Agreement shall be submitted to
the Secretary within thirty days of its execution.)
The Borrower shall make withdrawals from said account only
for payment of the costs of Section 108 activities approved
by HUD, for transfer to the Loan Repayment Account or for
the temporary investment of funds pursuant to this paragraph
1(a). Such temporary investment of funds into the Guaranteed
Loan Funds Investment Account shall be required within three
Business Days after the balance of deposited funds exceeds
the amount of the Federal deposit insurance on the
Guaranteed Loan Funds Account. At that time, any balance of
funds in the Guaranteed Loan Funds Account exceeding such
insurance coverage shall be fully (1000) and continuously
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing*
invested in Government Obligations, as defined in paragraph
10 hereof, held in the Guaranteed Loan Funds Investment
Account.
All temporary investments, whether or not required as above,
shall be limited to Government Obligations having maturities
that are consistent with the cash requirements of the
approved activities. In no event shall the investments
mature on or after N/A . or have maturities
which exceed one year. All such investments shall be held in
trust for the benefit of the Secretary by the above
financial institution in an account (the "Guaranteed Loan
Funds Investment Account") established and designated as
prescribed in the attached form document entitled "Letter
Agreement for Section 108 Loan Guarantee Program Custodial
Investment Account" (Attachment 2), which account shall be
maintained for all Government Obligations purchased with
funds from the Guaranteed Loan Funds Account. The Guaranteed
Loan Funds Investment Account need only be established if
and when the Borrower is required to invest, or otherwise
invests, the Guaranteed Loan Funds in Government
Obligations. Such Letter Agreement must be executed when the
Guaranteed Loan Funds Investment Account is established. (A
fully executed copy of such Letter Agreement shall be
submitted to the Secretary within thirty days of its
execution.) All proceeds and income derived from such
investments shall be returned to the Guaranteed Loan Funds
Account.
All funds in the
Guaranteed Loan
and disbursed by
N/A
Guaranteed Loan Funds Account or the
Funds Investment Account must be withdrawn
the Borrower for approved activities by
Any funds remaining in either Account
after this date shall be immediately transferred to the Loan
Repayment Account established pursuant to paragraph 6 of
this Contract.
(b) The Borrower shall by the fifteenth day of each month
provide the Secretary with a written statement showing the
balance of funds in the Guaranteed Loan Funds Account and
the withdrawals from such account during the preceding
calendar month, and a statement identifying the obligations
and their assignments in the Guaranteed Loan Funds
Investment Account, until such Accounts are fully disbursed.
(c) Upon the Secretary giving notice that the Borrower is
in Default under this Contract or the Note, all right,
M
Contract for Fixed Rate Note, Entitlement, 4 -06 -15 *Defeasing* 5
title, and interest of the Borrower in and to the Guaranteed
Loan Funds and Guaranteed Loan Funds Investment Accounts
shall immediately vest in the Secretary for use in making
payment on the Note, purchase of Government Obligations in
accordance with paragraph 10, or payment of any other
obligations of the Borrower under this Contract or the
Fiscal Agency /Trust Agreements, in each case as elected by
the Secretary in his sole discretion.
2. Payments Due on Note. The Borrower shall pay to the Fiscal
Agent /Trustee, as collection agent for the Note, all amounts
due pursuant to the terms of the Note. In accordance with
the Note and the Fiscal Agency /Trust Agreements, payment
shall be made by 3:00 P.M. (New York City time) on the
seventh Business Day (the "Note Payment Date ") preceding the
relevant Interest Due Date or Principal Due Date (each as
defined in the Note). If any Note Payment Date falls on a
day that is not a Business Day, then the required payment
shall be made on the next Business Day. Payment may be made
by check or wire transfer.
Upon final payment of all amounts due to Holders under the
Note, including any payment made by the Secretary pursuant
to the Guarantee, the Fiscal Agent /Trustee is required by
the Fiscal Agency /Trust Agreements to return the Note to the
Secretary. Upon final payment to the Secretary of any
amounts due as a result of Guarantee Payments or otherwise
due under this Contract, the Secretary will cancel and
return the Note to the Borrower in discharge of the
Borrower's obligations under the Note.
3. Selection of New Fiscal Agent or Trustee. The Secretary
shall select a new Fiscal Agent or Trustee if the Fiscal
Agent or Trustee resigns or is removed by the Secretary. The
Borrower hereby consents in advance to any such selection
and to any changes in the Fiscal Agency /Trust Agreements
agreed to by any Fiscal Agent or Trustee and the Secretary,
subject to paragraph 4(d) of this Contract.
4. Payments Due Fiscal Agent or Trustee; Documents to the
Secretary.
(a) The Borrower agrees to pay the Borrower's share, as
determined by the Secretary, of the customary and usual
issuance, underwriting, and other costs related to the
public offering and future administration of the Note and
the trust certificates, as approved by the Secretary,
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 6
including the cost of reimbursement and/or compensation of
the Trustee pursuant to the Trust Agreement, including
Sections 3.11 and 7.01 thereof. In connection with the
public offering, such payment shall either be made by wire
transfer to the Trustee on the day prior to the Public
Offering Date or shall be deducted from the Guaranteed Loan
Funds on the Public Offering Date.
(b) The Borrower shall submit to the Secretary not later
than twelve (12) Business Days prior to the Public Offering
Date applicable to the Note, this executed Contract, the
executed Note, and an opinion acceptable to the Secretary
from the Borrower's counsel to the effect that: (i) the
governing body of the Borrower has authorized by resolution
or ordinance, in accordance with applicable State and local
law, the issuance of the Note and the execution of this
Contract; (ii) the Note and this Contract are valid, binding,
and enforceable obligations of the Borrower; (iii) the pledge
of funds pursuant to 24 CFR §570.705(b)(2) and paragraph 5(a)
of this Contract is valid and binding; and (iv) there is no
outstanding litigation that will affect the validity of the
Note or this Contract. In addition, the Borrower shall submit
any other additional documents or opinions specifically
required by this Contract (e.g., paragraph 5(c), or paragraph
15, et seq.), at the time required thereby.
(c) The Borrower agrees to reimburse the Underwriters upon
demand by the Secretary for the Borrower's share, as
determined by the Secretary, of all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of
counsel) incurred in connection with a proposed public
offering, if the Underwriters incur such additional costs for
the public offering because the Borrower withdraws from the
offering within ten Business Days of the Public Offering
Date, or if the Borrower fails for any reason timely to
submit in acceptable form any document required by this
Contract (including paragraph 4(b)) to be submitted before
the Public Offering Date. By execution and delivery of this
Contract to the Secretary, the Borrower hereby expressly
authorizes the Secretary to pay amounts due under this
paragraph from funds pledged under paragraph 5(a) of this
Contract.
(d) The undertakings in paragraphs 3 and 4 of this Contract
are expressly subject to the requirement that the Fiscal
Agency/Trust Agreements shall in no event require payment of
fees or charges, reimbursement of expenses, or any
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 7
indemnification by the Borrower from any source other than
funds or other security pledged, as may be augmented by
Borrower-specific terms for the benefit of the Secretary,
pursuant to paragraphs C, 5, or 15, et seq., of this
Contract.
5. Security. The Borrower hereby pledges as security for
repayment of the Note, and such other charges as may be
authorized in this Contract, the following:
(a) All allocations or grants which have been made or for
which the Borrower may become eligible under Section 106 of
the Act, as well as any grants which are or may become
available to the Borrower pursuant to Section 108(q).
(b) Program income, as defined at 24 CFR 570.500(a)(or any
successor regulation), directly generated from the use of
the Guaranteed Loan Funds.
(c) Other security as described in paragraph 15, et seq., or
incorporated herein by paragraph C hereof, as applicable.
4
(d) All proceeds (including insurance and condemnation
proceeds) from any of the foregoing.
(e) All funds or investments in the accounts established
pursuant to paragraphs 1 and 6 of this Contract.
6. Loan Repayment Account.
(a) All amounts pledged pursuant to paragraphs 5(b), 5(c),
and 5(d) of this Contract shall be deposited immediately on
receipt in a separate identifiable custodial account (the
"Loan Repayment Account") with a financial institution whose
deposits or accounts are Federally insured. The Loan
Repayment Account shall be established and designated as
prescribed in the attached form document entitled "Letter
Agreement for Section 108 Loan Guarantee Program Custodial
Account" (Attachment 1) and shall be maintained for such
pledged funds. The Loan Repayment Account need only be
established if and when the Borrower receives amounts
pledged pursuant to paragraph 5(b), 5(c) or 5(d). Such
Letter Agreement must be executed when the Loan Repayment
Account is established. (A fully executed copy of such
Letter Agreement shall be submitted to the Secretary within
thirty days of its execution.) Borrower shall make
withdrawals from said account only for the purpose of paying
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 8
interest and principal due on the Note (including the
purchase of Government Obligations in accordance with
paragraph 10 hereof), for payment of any other obligation of
the Borrower under this Contract or the Fiscal Agency/Trust
Agreements, or for the temporary investment of funds
pursuant to this paragraph, until final payment and
discharge of the indebtedness evidenced by the Note, unless
otherwise expressly authorized by the Secretary in writing.
Such temporary investment of funds shall be required within
three Business Days after the balance of deposited funds
exceeds the amount of the Federal deposit insurance on the
Loan Repayment Account. At that time, any balance of funds
in the Loan Repayment Account exceeding such insurance
coverage shall be fully (1000) and continuously invested in
Government Obligations, as defined in paragraph 10 hereof.
All temporary investments, whether or not required as above,
shall be limited to Government Obligations having maturities
that are consistent with cash requirements for payment of
principal and interest as required under the Note. in no
event shall the maturities of such investments exceed one
year. All such investments shall be held in trust for the
benefit of the Secretary by the above financial institution
in an account (the "Loan Repayment Investment Account")
established and designated as prescribed in the attached
form document entitled "Letter Agreement for Section 108
Loan Guarantee Program Custodial Investment Account"
(Attachment 2), which account shall be maintained for all
Government obligations purchased with funds from the Loan
Repayment Account. Such Letter Agreement must be executed
when the Loan Repayment Investment Account is established.
(A fully executed copy of such Letter Agreement shall be
submitted to the Secretary within thirty days of its
execution.) All proceeds and income derived from such
investments shall be returned to the Loan Repayment Account.
(b) Borrower shall by the fifteenth day of each month,
provide the Secretary with a written statement showing the
balance of funds in the Loan Repayment Account and the
deposits and withdrawals of all funds in such account during
the preceding calendar month and a statement identifying the
obligations and their assignments in the Loan Repayment
Investment Account, for any month in which there are funds
in such Accounts.
(c) Upon the Secretary giving notice that the Borrower is
in Default under this Contract or the Note, all right,
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 9
title, and interest of the Borrower in and to the Loan
Repayment and Loan Repayment Investment Accounts shall
immediately vest in the Secretary for use in making payment
on the Note, purchase of Government Obligations in
accordance with paragraph 10, or payment of any other
obligation of the Borrower under this Contract or the Fiscal
Agency/Trust Agreements, in each case as elected by the
Secretary in his sole discretion.
7. Use of CDBG, EDI or BEDI Funds for Repayment. Any funds
available to the Borrower under Section 106 of the Act
(including program income derived therefrom) are authorized to
be used by the Borrower for payments due on the Note, Optional
Redemption (as defined in the Note), payment of any other
obligation of the Borrower under this Contract or the Fiscal
Agency/Trust Agreements, or the purchase of Government
Obligations in accordance with paragraph 10. Any funds
specifically available to the Borrower for such payments or as
a debt service reserve under an EDI Grant Agreement pursuant to
Section J-08(q) of the Act which supports the eligible
project(s) and activities financed by the Note may also be used
therefor; any other use of Section 108(q) funds for such
purposes shall require the prior written approval of the
Secretary. Unless otherwise specifically provided herein or
unless otherwise expressly authorized by the Secretary in
writing, the Borrower shall substantially disburse funds
available in the Loan Repayment or the Loan Repayment
Investment Accounts before funds from grants under Section 106
of the Act are withdrawn from the U.S. Treasury for such
purposes.
8. Secretary's Right to Restrict Use of CDBG Funds to Repayment.
Upon a determination by the Secretary that payments required by
paragraph 2 and/or paragraph 4 of this Contract are unlikely to
be made as specified, the Secretary may give the Borrower
notice that the availability to the Borrower of funds pledged
under paragraph 5(a) of this Contract for purposes other than
satisfaction of the pledge is being restricted. This
restriction shall be in an amount estimated by the Secretary to
be sufficient to ensure that the payments referred to in
paragraph 2 and/or paragraph 4 hereof are made when due. This
restriction may be given effect by conditioning the restricted
amounts to prohibit disbursement for purposes other than
satisfaction of the pledge at the time such restricted funds
are approved as grants, by limiting the Borrower's ability to
draw down or expend the restricted funds for other purposes,
and by disapproving payment requests submitted with respect to
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 10
such grants for purposes other than satisfaction of the pledge.
9. Secretary's Right to Use Pledged Funds for Repayment. The
Secretary may use funds pledged under paragraph 5(a) of this
Contract or funds restricted under grants pursuant to paragraph
8 of this Contract to make any payment required of the Borrower
under paragraph 2 and/or paragraph 4, if such payment has not
been timely made by the Borrower.
10. Defeasance. For purposes of this Contract, the Note shall be
deemed to have been paid (defeased) if there shall have been
deposited with the Trustee either moneys or Government
Obligations (defined below), which in the sole determination of
the Secretary, mature and bear interest at times and in amounts
sufficient, together with any other moneys on deposit with the
Trustee for such purpose, to pay when due the principal and
interest to become due on the Note. The Aggregate Principal
Amount of the Note or any unpaid Principal Amount may be so
defeased, in whole or in part, as of any Interest Due Date, or
any other Business Day acceptable to both HUD and the Borrower.
In accordance with the Note and the Trust Agreement, the
Borrower shall give timely notice and written instructions to
the Secretary and the Trustee concerning any principal amounts
proposed to be defeased, including any Optional Redemptions
proposed, which instructions shall be approved by the
Secretary. If the unpaid Aggregate Principal Amount of the Note
guaranteed pursuant to this Contract shall be defeased and
deemed to have been paid in full, then the Borrower shall be
released from all agreements, covenants, and further
obligations under the Note.
"Government Obligation" means a direct obligation of, or any
obligation for which the full and timely payment of principal
and interest is guaranteed by, the United States of America,
including but not limited to, United States Treasury
Certificates of Indebtedness, Notes and Bonds - State and Local
Government Series or certificates of ownership of the principal
of or interest on direct obligations of, or obligations
unconditionally guaranteed by, the United States of America,
which obligations are held in trust by a commercial bank which
is a member of the Federal Reserve System and has capital and
surplus (exclusive of undivided profits) in excess of
$100,000,000.
11. Default.
(a) A Default under the Note and this Contract shall occur
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 11
upon failure by the Borrower to:
(i) pay when due an installment of principal or
interest on the Note; or (ii) punctually and properly
perform, observe, and comply with any covenant,
agreement, or condition contained in: (A) this
Contract, (B) any security agreement, deed of trust,
mortgage, assignment, guarantee, or other contract
securing payment of indebtedness evidenced by the Note,
or (C) any future amendments, modifications,
restatements, renewals, or extensions of any such
documents.
(b) The Borrower waives notice of Default and opportunity
for hearing with respect to a Default under paragraph 11(a).
(c) In addition to Defaults under paragraph 11(a), the
Secretary may declare the Note in Default if the Secretary
makes a final decision in accordance with the provisions of
section 111 of the Act and 24 CFR 570.913 (or any successor
provisions), including requirements for reasonable notice
and opportunity for hearing, that the Borrower has failed to
comply substantially with title I of the Act.
Notwithstanding any other provision, following the giving of
such reasonable notice, the Secretary may, in the
Secretary's sole discretion pending the Secretary's final
decision, withhold the guarantee of any or all obligations
not yet guaranteed on behalf of the Borrower under
outstanding commitments, and/or direct the Borrower's
financial institution to: refuse to honor any instruments
drawn upon, or withdrawals from, the Guaranteed Loan Funds
Account or the Loan Repayment Account initiated by the
Borrower, and/or refuse to release obligations and
assignments by the Borrower from the Guaranteed Loan Funds
Investment Account or the Loan Repayment Investment Account.
12. Remedial Actions. Upon a Default or declaration of Default
under this Contract, the Secretary may, in the Secretary's sole
discretion, take any or all of the following remedial actions:
(a) With any funds or security pledged under this Contract,
the Secretary may (i) continue to make payments due on the
Note, (ii) make an acceleration payment with respect to the
principal amount of the Note subject to Optional Redemption as
provided in Section B of the Note, (iii) purchase Government
Obligations in accordance with paragraph 10 of this Contract,
(iv) pay any interest due for late payment as provided in the
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 12
Note, this Contract, or the Fiscal Agency/Trust Agreements, (v)
pay any other obligation of the Borrower under this Contract or
the Fiscal Agency/Trust Agreements, and/or (vi) pay any
reasonable expenses incurred by the Secretary or the Fiscal
Agent/Trustee as result of the Borrower's Default.
(b) The Secretary may withhold the guarantee of any or all
obligations not yet guaranteed or the disbursement of any or
all grants not yet disbursed in full under outstanding
guarantee commitments or grant approvals for the Borrower under
Sections 108 and/or 106 of the Act.
(c) The Secretary may direct the Borrower's financial
institution to: refuse to honor any instruments drawn upon, or
withdrawals from, the Guaranteed Loan Funds Account or the Loan
Repayment Account by the Borrower, and/or refuse to release
obligations and assignments by the Borrower from the Guaranteed
Loan Funds Investment Account or the Loan Repayment Investment
Account; and/or direct the Borrower and/or the Borrower's
financial institution to transfer remaining balances from the
Guaranteed Loan Funds Account to the Loan Repayment Account.
(d) With respect to amounts subject to Optional Redemption,
the Secretary may accelerate the Note.
(e) The Secretary may exercise any other appropriate remedies
or sanctions available by law or regulation applicable to the
assistance provided under this Contract, or may institute any
other action available under law, to recover Guaranteed Loan
Funds or to reimburse the Secretary for any payment under the
Secretary's Guarantee or any reasonable expenses incurred by
the Secretary as a result of the Default.
(f) All notices and submissions provided for hereunder shall
be in writing (including by telex, telecopier or any other form
of facsimile communication) and mailed or sent or delivered, as
to each party hereto, at its address set forth below or at such
other address as shall be designated by such party in a written
notice to the other party hereto. All such notices and other
communications shall be effective when received as follows:
(i) if sent by hand delivery, upon delivery; (ii) if sent by
mail, upon the earlier of the date of receipt or five Business
Days after deposit in the mail, postage prepaid; (iii) if sent
by telex, upon receipt by the sender of an answer back; and
(iv) if sent by telecopier, upon confirmed receipt.
Contract for Fixed Rate Note, Entitlement, 4 -06 -15 *Defeasing* 13
The Secretary:
U.S. Dept. of Housing and Urban Development
Attention: Paul Webster, Director
Financial Management Division
451 7th Street SW, Room 7180
Washinaton, DC 20410
Borrower:
13. Limited Liability. Notwithstanding any other provision of this
Contract, the Fiscal Agency /Trust Agreements or the Note, any
recovery against the Borrower for any liability for amounts due
pursuant to the Note, the Fiscal Agency /Trust Agreements and
this Contract shall be limited to the sources of security
pledged in paragraphs C, 5, or any Special Conditions of or
Modifications to this Contract, as applicable. Neither the
general credit nor the taxing power of the Borrower, or of the
State in which the Borrower is located, is pledged for any
payment due under the Note, the Contract, or the Fiscal
Agency /Trust Agreements.
14. Incorporated Grant Agreement. The Contract and the Note are
hereby incorporated in and made a part of the Grant Agreement
authorized by the Secretary on August 15, 2000 under the
Funding Approval for grant number B- 00 -MC -06 -0554 to the
Borrower. In carrying out activities with the Guaranteed Loan
Funds hereunder, the Borrower agrees to comply with the Act and
24 CFR Part 570, as provided in Subpart M thereof.
15. Special Conditions and Modifications:
(a) The Guaranteed Loan Funds shall be used only to pay
principal amounts due or payable on or after August 1,
2015, under that certain promissory note issued by the
Borrower and identified as Note Number B- 00- MC -06-
0554, Series 2002 -A. The Guaranteed Loan Funds shall
be deposited in a defeasance account established with
the Trustee pursuant to the Contract for Loan
Guarantee Assistance executed in connection with the
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 14
issuance of such promissory note. The Borrower agrees
to pay to the Trustee moneys in an amount equal to the
amount of the interest to become due on such
promissory note on August 1, 2015 for deposit in such
defeasance account. Such payment shall be in addition
to any payment required under paragraph 4(a) of this
Contract and shall be made by wire transfer to the
Trustee on the day prior to the Public Offering Date.
In addition to the Secretary's rights under paragraph
9 of this Contract, the Secretary may use funds
pledged under paragraph 5(a) of this Contract or funds
restricted under grants pursuant to paragraph 8 of
this Contract to make any payment required of the
Borrower under this paragraph 15(a), if such payment
has not been timely made by the Borrower.
(b) Additional Grounds for Default. Notice of Default.
Restriction of Pledged Grants. Availability of Other
Remedial Actions.
(i) The Borrower acknowledges and agrees that the
Secretary's guarantee of the Note is made in
reliance upon the availability of grants pledged
pursuant to paragraph 5(a) (individually, a
"Pledged Pledged Grant" and, collectively, the "Pledged
Grants") in any Federal fiscal year subsequent to
the Federal fiscal year ending September 30, 2014
to: (A) pay when due the payments to become due on
the Note, or (B) defease (or, if permitted,
prepay) the full amount outstanding on the Note.
The Borrower further acknowledges and agrees that
if the Secretary (in the Secretary's sole
discretion) determines that Pledged Grants are
unlikely to be available for either of such
purposes, such determination shall be a
permissible basis for any of the actions specified
in paragraphs (ii) and (iii) below (without notice
or hearing, which the Borrower expressly waives).
(ii) Upon written notice from the Secretary to the
Borrower at the address specified in paragraph
12(f) above that the Secretary (in the
Secretary's sole discretion) has determined that
Pledged Grants are unlikely to be available for
either of the purposes specified in (A) and (B)
of paragraph (i) above (such notice being
hereinafter referred to as the "Notice of
Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 15
Impaired Security"), the Secretary may limit the
availability of Pledged Grants by withholding
amounts at the time a Pledged Grant is approved
or by disapproving payment requests (drawdowns)
submitted with respect to Pledged Grants.
(iii) If after 60 days from the Notice of Impaired
Security the Secretary (in the Secretary's sole
discretion) determines that Pledged Grants are
still unlikely to be available for either of the
purposes specified in (A) and (B) of paragraph
(i) above, the Secretary may declare the Note in
Default and exercise any and all remedies
available under paragraph 12. This paragraph
(iii) shall not affect the right of the Secretary
to declare the Note and/or this Contract in
Default pursuant to paragraph 11 and to exercise
in connection therewith any and all remedies
available under paragraph 12.
(iv) All notices and submissions provided for
hereunder shall be submitted as directed in
paragraph 12(f) above.
[Rest of Page Intentionally Left Blank]
Contract for Fixed Rate Note, Entitlement, 4 -06 -15 *Defeasing* 16
THE UNDERSIGNED, as authorized officials on behalf of the
Borrower or the Secretary, have executed this Contract for Loan
Guarantee Assistance, which shall be effective upon delivery of
the Note and Guarantee as of the Public Offering Date (except
that paragraphs 4 and 15(a) hereof shall be effective when this
Contract is executed on behalf of the Borrower and delivered to
the Secretary).
The City of Baldwin Park, CA
BORROWER
��
(Signature)
(Name)
(Title)
(Date)
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
BY:
(Signature)
Marion Mollegen McFadden
(Name)
Deputy Assistant Secretary
for Grant Programs
(Title)
(Date)