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HomeMy WebLinkAboutURA RES 2018-02 RESOLUTION NO. 201.8- A RESOLUTION OF THE CALDWELL URBAN RENEWAL AGENCY AUTHORIZING THE EXECUTION OF THE BANNER BANK COMMITMENT LETTER FOR THE INDIAN CREEK PLAZA IN THE AMOUNT NOT 'TO EXCEED $4,400,000. BE IT HEREBY RESOLVED by the Caldwell Urban Renewal Agency authorizes the execution of the Banner Batik Commitment letter made a part hereof and set forth in full. PASSED BY THE CALDWELL URBAN RENEWAL AGENCY this 12"'day of February, 2018, APPROVED BY THE CHAIRMAN OF THE URBAN RENEWAL AGENCY OF THE CITY OF CALDWELL on this 12`h day offebmary, 2018. A A l'3 l ]p[ OVL,D-, 4CAIRMAN A,r-rES'l": 4-1111",oty 0 4�4 fir SECRETARY U 1,11,41011519100% - ^®mw �� 1»;�� ��-�°��� ��� `�� \��,� ( � � � ��\ w . % / fig . \�� ^� ^/® / �\ y\��`\� NNIER February 7,2018 4 BANK Mr. E1jay Waite, Treasurer Urban Renewal Agency of the City of Caldwell,Idaho 411 Blain St. Caldwell,ID 83605 Dear Mr. Waite, Banner Bank("Bank") is pleased to offer the Urban Renewal Agency of the City of Caldwell, Idaho ("Agency") a commitment not to exceed$4,400,000 for reimbursement of construction costs related to the Indian Creek Plaza proJect located in Caldwell, ID and to finance bond issuance costs. The Bank's commitment is for the Agency to issue and the Bank to purchase a Revenue Allocation (Tax Increment), Series 2018 - Indian Creek Plaza Project("Bond"), through a private bond sale for direct private placement into the Bank's portfolio where it will remain for the life of the Bond. This commitment letter constitutes a bond purchase agreement or commitment on the part of the Bank to provide financing to the Agency and substantially represents the terms and conditions, based upon information provided, under which the Bank will purchase the Bond frorn the Agency. These terms and conditions, which have been approved through a formal credit underwriting approval process, arc not all-inclusive but generally describe the Bank's commitment to the Agency. ISSUER/AGENCY: Urban Renewal Agency of the City of Caldwell, Idaho("Agency"). TRUSTEE: lions Bank, a division of ZB, National Association, Corporate Trust Department, Boise, ID. Trustee shall act as paying agent, bond registrar, authenticating agent, and transfer agent with respect to the Bonds. AMOUNT: Not to exceed $4,400,000 PROPOSED FORM: Indian Creek Plaza Revenue Allocation Bond, Series 2018 ("Bond"), a single bond in registered form. TERM/LIFE: Approximately four and one half(4.5)years. MATURITY DATE: September 15,2022 BANK FEES: A $6,625 Bank origination fee and a $3,000 fee for Bank's legal counsel is payable at closing. Agency is responsible for its bond counsel and financial advisor fees. Boise(1,onimercial B uikfttg Center*950 W 13,mmock,Suite 101 •Boise,ID 83702 Phone 20�4424-2360•Fax:208-424-23f.,51 •bannerbwik.com Member FDIC,Eqiisl flossing lAlaider LENDER INTEREST RATE: The tax-exempt, bank-qualified interest rate for the 4 and 1/2 years is based upon the February 6, 2018 Des Moines Federal Home Loan Bank ("FHLB")5-year Fixed-Rate Advances Regular Advance Rate("Index") of 2.74% plus 1.92% (192 basis points) for the taxable rate of 4.66%. Then multiply the taxable rate by 80% (0.80) for the tax-exempt bank- qualified interest rate of 3.73%. This conversion factor of 80% incorporates the decrease in the U.S. corporate tax rate from 35%to 21%. Interest will be calculated on the basis of the actual number of days elapsed over a year of 360 days. MARKET RATE: The tax-exempt bank-qualified fixed interest rate described above is based upon today's market interest rates and is subject to change, at the sole discretion of the Bank, if financial market conditions and/or market interest rates change prior to the URA board formally adopting the bond resolution authorizing the issuance of the Bond and/or if the closing on this Bond does not occur within forty(40) days following the formal adoption of bond resolution by the URA board, but in no event shall the closing occur prior to the expiration of the thirty(30)day contest period following the effective date of the bond resolution pursuant to Section 50-2027, Idaho Code. TAXABLE RATE: The tax-exempt fixed interest rate described above is based upon the Bond qualifying for tax-exempt status for the life of this Bond. In the event the Bond ceases to qualify for this tax-exempt status, the tax-exempt interest rate described above shall be converted to an equivalent taxable interest rate. The indicative taxable equivalent fixed rate would be based upon the then current FHLB five-year Fixed-Rate Advances - Regular Advance Rate ("Index") plus 1.92% (192 basis points). Based upon the FHLB Index rate as of February 6, 2018 (2.74%), the taxable interest rate would be approximately 4.66%. INTEREST ONLY: Accrued interest only from closing is due September 15,2018;followed by semiannual payment of principal and interest. REPAYMENT OF Bond will be structured with eight (8) equal semiannual payments of PRINCIPAL AND principal and interest payable each March 15 and September 15 beginning INTEREST: March 15, 2019. The final semiannual payment of principal and interest is due at Maturity on September 15,2022. Payments of principal and interest are to fully amortize the Bond on or before the Maturity Date and payments shall be applied first to interest and then to principal on the date the payments are actually received by Banner Bank. PREPAYMENT: The Agency may prepay the Bond, in whole or in part,on any semi annual scheduled payment date with ten days prior written notice to the Bank and with no prepayment penalty. A partial prepayment shall not change future Urban Renewal Agency of the City of Caldwell, Idaho February 7,2018-Page 2 scheduled semiannual payment amounts (except for the final payment as necessary)but will result in an earlier retirement of the Bond. FUND ACCOUNTS: For as long as the Bond is outstanding, the Agency will maintain its primary operating account presently known as the Urban Renewal Operating Account ("Account") at Banner Bank. This Account shall be designated to receive all Tax Increment Revenue receipts as disbursed by Canyon County to the Agency which arc designated as Pledged Revenues. All Pledged Tax Increment Revenues received by the Agency in trust shall be transferred biannually and held by the Trustee who will create and maintain the following fund accounts: 1) Revenue Allocation Fund held by the Trustee will receive all Pledged Revenues allocated by the Agency to repayment of the Bond which shall be used only for the following purposes and in the following order of priority: First, to pay or provide for payment of principal and interest on the Bond by deposit into the Bond Fund; Second, to pay or provide for the payment of the principal and redemption premium,if any,of the Bond by deposit into the Bond Fund. Third, to fund the Debt Service Reserve Account in an amount which satisfies the Reserve Account Requirement(as described below). Fourth, to pay for any repairs, or improvements to the project or any additional projects approved by the Agency in accordance with Law,or for any new project in the Revenue Allocation Area approved by the Agency or to pay tax increment revenue to the local taxing districts as required by the Agency Plan; provided there shall be retained in the fund the amount necessary to make all debt service payments due during the next twelve (12)months on the Bond and all prior and future bond issues with a parity lien on pledged revenue. 2) Bond Fund to be held by the Trustee, consisting of a Debt Service Account and a Debt Service Reserve Account to be held by the Trustee. Trustee will transfer amounts from the Revenue Allocation Fund to the Bond Fund in amounts and at the time required to make payment of principal,interest, or redemption price. 3) Debt Service Reserve Account to be established specific to Series 2018 Bond to hold an amount, including amounts on deposit in the respective reserve accounts of prior Bond issue obligations and any additional bonds, equal to at least 10% of the aggregate outstanding principal amount of the Series 2018 Bond, prior bond obligations and any additional bonds secured by the Debt Service Reserve Account. Urban Renewal Agency of the City of Caldwell,Idaho February 7,2018-Page 3 If on any scheduled payment date the amount in the Debt Service Account is less than the amount required to pay principal and interest, the Trustee shall apply amounts from the Debt Service Reserve Account to make up any deficiency. Any deficiency in the Debt Service Reserve Account shall be replaced as soon as practical by deposits of legally available funds from the Revenue Allocation Fund. When ever the amount in the Debt Service Reserve Account,together with the amount in in the Debt Service Account, is sufficient to pay in full the amount of all parity bonds outstanding including interest, the funds on deposit in the Debt Service Reserve Account may be transferred to the Debt Service Account. The Series 2018 Bond Debt Service Reserve can be used for final payment of principal and interest provided no event of default exists. PLEDGED The Agency shall pledge for payment of the Bond,equally and ratably, REVENUES/ subject to the parity lien of Prior Obligations,the Pledged Revenues and all SECURITY money in the Revenue Allocation Fund,Bond Fund and Debt Service Reserve Account. The Prior Obligations are defined collectively as the Agency's Revenue Allocation Bonds Series 2006A,Series 2008,Series 2012 and Series 2016. Pledged Revenues shall mean for each fiscal year, the Revenue Allocation revenues and investment earnings on money held by the Trustee in the Revenue Allocation Fund,Debt Service Reserve Account,and Bond Fund. This pledge will constitute a first,exclusive lien on the Pledged Revenues and other funds in the Revenue Allocation Fund,Bond Fund and Debt Service Reserve Account for payment of the Bond subject only to the parity lien on Pledged Revenues of the Prior Obligations and additional bonds as permitted. Pledged Revenues,whether received by the agency in trust or deposited with the Trustee,will be disbursed,allocated and applied solely to the uses and purposes described herein,and shall be accounted for separately and apart from all other money, funds or accounts of the Agency. FINANCIAL Issuance of Future Parity Indebtedness. The Agency covenants that for as COVENANTS: long as the Bond remains outstanding,the Agency will not issue any bonds or notes having a greater or senior priority lien than the Bonds upon the "Pledged Revenue" defined as the Property Tax - General Revenue designated in the General Fund of the audited fiscal year end Statement of Activities and Governmental Fund Revenues,Expenditures and Changes in Fund Balance, and other sources of revenue as may be pledged to pay and secure the payment of principal and interest on the Bond. The Agency covenants that for as long as any Bonds remain outstanding, it Urban Renewal Agency of the City of Caldwell,Idaho February 7,2018-Page 4 will not incur future debt that constitutes a parity lien or pledge and charge upon the Agency's Pledged Revenue and other sources of pledged revenue unless the Agency can demonstrate that after the issuance of such parity bond debt the Agency's Property Tax-General Revenue and other pledged revenue will be at least 1.50 times the annual debt service of parity bond debt in any future year (Property Tax - General Revenue / Annual Debt Service of Parity Debt). LEGAL OPINION: Prior to closing, Bank shall receive a legal opinion from the Agency's bond counsel,satisfactory to the Bank,stating: (1) stating that all the terms and conditions of applicable bond documents and the transactions described therein are in full compliance with Idaho State Law and Federal Law, are binding upon and enforceable against the Agency and do not violate the Agency's formation or constituent documents,or any applicable law; (2) stating that the indebtedness being incurred is a legal and valid obligation of the Agency; (3) stating the Agency has designated the bonds as a qualified tax-exempt obligation pursuant to Section 265(b)(3) of the United States IRS Code and stating that the interest on the bonds is excluded from federal income tax pursuant to Section 103 of the IRS Code and is excluded from Idaho State income tax; (4)confirming the authority of the Agency to incur the indebtedness and to issue these bonds; (5) confirming that the Agency's Bond Resolution authorizing this indebtedness and irrevocably pledging the security for repayment of this indebtedness is valid and authorized. RESOLUTION: Bank shall receive a copy of the board resolution adopted by the Agency's board of commissioners authorizing the issuance of the debt and pledging the security for repayment. BOND: Bank shall receive the registered Bonds at closing. FORM 8038-G: Bank shall receive a copy of the IRS Form 8038-G and the Tax Certification for Bond evidencing the interest income as tax-exempt to the Bank. REPORTING: Financial information as requested by Bank, including the Agency's in- house financial statements/reports. The Agency shall provide Bank the Agency's audited annual financial statements within 180 days after the end of the Agency's fiscal year. Urban Renewal Agency of the City of Caldwell,Idaho February 7,2018-Page 5 DOCUMENTATION: Bond documentation to be prepared by the Agency's bond counsel and subject to review and acceptance by the Bank. OTHER TERMS/ Receipt and review of final audited financial statement for FYI; September CONDITIONS: 20,201?. This commitment shall terminate at our option if, in (lie Bank's opinion, a material adverse change in the property, business prospects, profits, Or financial condition of Agency has occurred or shall occur at any time prior to expiration of the commitment. This commitment is non-assignable by the Agency and the Agency will not disclose the terms of this commitment except to legal or financial advisors or as otherwise required by the Idaho Public Records Act. This commitment supersedes any prior commitments, offer or agrcementi, written or oral, concerning this financing and can only be modified in writing. Please acknowledge your agreement and acceptance of these ternts, by signing and returning a copy of this letter to our attention by February 15, 2019; otherwise, this commitment shall expire. Furthermore,this commitment shall expire if the Bond funding has not closed by April 15,2018. Banner Bank looks forward to continuing our partnership with the Agency in financing reimbursement of costs related the Indian Creek Plaza project. Sincerely, 1 4- W16*t Brian flathhorn Darwin W. Parker VP and Relationship Manager VP Public Finance Agreed to and accepted this A2- 4ayof E6Aiw� ,2018. Urba one al gene of the City of Caldwell,Idaho By: Its: Urban Renewal Agency of the City of Caldwell,Idaho February 7,2018-Page 6