2005 AGN JUL 19 I01 & I02 - Laserfiche WebLink

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LAW OFFICES OF BEST BEST & KRIEGER LLP July 15, 2005 MEMORANDUM To: City Council City of Colton, Board of Directors of the Colton Public Financing Authority and respective staffs FROM: Best Best & Krieger LLP RE: Colton Public Financing Authority 2005 Taxable Lease Revenue Note At the July 19, 2005, meetings of the City Council and the Board of Directors of the Colton Public Financing Authority, the attached resolutions and ordinance will be considered which, if approved, would authorize the issuance of the Authority's 2005 Taxable Lease Revenue Note (the "Note'). If issued, the Note would be sold to the Community Reinvestment Fund in a principal amount of not more than $5,000,000 at an interest rate of not more than 8.00% per year. The Note would be issued to finance improvements to the proposed Big League Dreams Project. The terms of operation and management of the Big League Dreams Project are still being negotiated between the City and representatives of Big League Dreams. If an acceptable agreement between Big League Dreams and the City is not reached within ninety (90) days after the adoption of the attached resolutions, additional Authority action would be acquired to authorize the issuance of the Note. The resolutions accomplish the following: Authority Resolution. The Authority Resolution authorizes the issuance of a Note that is subject to federal taxation and authorizes the City Manager and/or City Finance Director to establish the final terms and conditions of the Note so long as the principal amount does not exceed $5,000,000 and the interest rate does not exceed 8.00% per year. The Authority Resolution also establishes various funds from which payments on the Note will be made from the City's general fund and approves the agreements described below. It is anticipated that revenues received from Big League Dreams will significantly offset any exposure to the City's general fund. The Note will be secured by lease payments that the City will make to the Authority under a lease agreement (described below). Prior to the consideration of the Authority Resolution a joint public hearing of the Authority and the City will be held. City Resolution. The City Resolution authorizes the City to participate in the Note financing and approves the following agreements: -Lease Agreement: Under the Lease Agreement the City will lease the Big League Dreams site to the Authority and the Authority will immediately lease the site back to the City obligating the City to make lease payments to the Authority. These lease payments are then paid to the owner of the Note. -Depository Agreement: Proceeds from the sale of the Note will be deposited under this agreement between the Authority, the City and Community Reinvestment Fund. The agreement establishes the terms and conditions under which moneys may be applied to the Project. RVIMMAM697369.1