1997 AGN DEC 16 I13 - Laserfiche WebLink

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CITY OF COLTON CITY COUNCIL AGENDA REPORT for the Meeting of December 16. 1997 TO: Honorable Mayor and Council Members FROM: Len Wood SUBJECT: Proposed Issuance of the Colton Public Financing Authority 1997 Bond Anticipation Notes (Santa Ana Redevelopment Project Subordinate Loan) DATE: December 11, 1997 BACKGROUND: In 1989, the Colton Public Financing Authority issued the $10,680,000 Colton Public Financing Authority 1989 Tax Allocation Revenue Notes, Series A (the "1989 Bonds") and made a loan of the proceeds to the Agency under a loan agreement (the "1989 Loan Agreement"). The 1989 Loan Agreement provides for the financing and refinancing of certain capital expenditures within the Santa Ana Redevelopment Project (the "Redevelopment Project"). The final maturity of the 1989 Bonds is 2019. The Redevelopment Plan for the Redevelopment Project provides that the period for the Agency to incur indebtedness in the Redevelopment Project expires on December 29, 1997. The Community Redevelopment Law does not restrict refunding of debt to this limitation period. Thus, in order to comply with the limitations imposed by the Redevelopment Plan, and at the same time,. preserve the Agency's ability to refinance the indebtedness in the future, the following financing structure has been proposed. The Authority would issue one year notes in an amount not to exceed $5,800,000 (this figure includes the full amount of the remaining amount of debt which may be incurred by the Agency.) The Authority would then loan the proceeds of the Notes to the Agency. The proceeds of the Notes would be held in escrow with the trustee until the Notes are redeemed or paid at maturity, January 1, 1999. The loan would be secured by surplus tax revenues of the Project Area, which equal all amounts released from the 1989 Bond Indenture. The Notes would be redeemable between March 1, 1998 and their due date, January 1, 1999, without premium. The interest rate on the Notes is estimated to not exceed 6%. Item # 13