(2)AR 102009 Proposition 1A - Laserfiche WebLink

Browse Search

If the City sells its Proposition 1A receivable under the Proposition 1A Securitization Program, California Communities will pledge the City's Proposition 1A receivable to secure the repayment of a corresponding amount of the Prop 1A bonds. The City's sale of its Proposition 1A receivable will be irrevocable. Bondholders will have no recourse to the City if the State does not make the Proposition 1 A repayment. The sponsoring agency for this program is the California Statewide Communities Development Authority ("California Communities"), which is a joint powers authority sponsored by the California State Association of Counties and the League of California Cities. Benefits of Participation in the Proposition 1A Securitization Program: The benefits to participating in the Proposition 1A Securitization Program include: • Immediate cash relief — the sale of the City of Colton's Proposition 1A receivable will provide the City with 100% of its Proposition 1A receivable in two equal installments, on January 15, 2010 and May 3, 2010. • Mitigates impact of 8% property tax withholding in January and _May_— per ABX4-14 and ABX4-15 and the proposed clean-up legislation SB 67, the State will withhold 8% of property tax receivables due to Cities, Counties, and Special Districts under Proposition 1A. The financing outlines bond proceeds to be distributed to coincide with the dates that the State will be shifting property tax from local agencies. • All costs of financing borne by the State of California — The City will not have to pay any interest cost or costs of issuance in connection with its participation. • No obligation on bonds — The City has no obligation with respect to the payment of the bonds, nor any reporting, disclosure or other compliance obligations associated with the bonds. Proceeds of the Sale of the City's Proposition 1A Receivable: Upon delivery of the Proposition 1A Bonds, California Communities will make available to the City its fixed purchase price, which will equal 100% of the local agency's Proposition 1A receivable. These funds may be used for any lawful purpose of the City and are not restricted by the program. Proposed Proposition 1A Receivables Sale Resolution: The proposed Proposition 1A Receivables Sale Resolution: (1) Authorizes the sale of the City's Proposition 1A receivable to California Communities for 100% of its receivable; and (2) Approves the form, and directs the execution and delivery, of the Purchase and Sale Agreement with California Communities and related documents; and (3) Authorizes and directs any Authorized Officer to send, or to cause to be sent, an irrevocable written instruction required by statute to the State Controller notifying the State of the sale of the Proposition 1A Receivable and instructing the disbursement of the Proposition 1 A receivable to the Proposition 1 A Bond Trustee; and (4) Appoints certain City officers and officials as Authorized Officers for purposes of signing documents; and