Consideration of two resolutions: 1. HRCID-1-12: To engage Skinner Fawcett LLP to perform legal services to the District for the described bond work.

Transcription

1 To: Board of Directors, Harris Ranch Community Infrastructure District No. 1 From: Amanda C. Horton, Assistant City Attorney Date: May 3, 2012 Re: Bond Counsel Engagement Letter (HRCID-1-12 ) and General Obligation Bonds (HRCID-2-12). Consideration of two resolutions: 1. HRCID-1-12: To engage Skinner Fawcett LLP to perform legal services to the District for the described bond work. The engagement letter which is a contract for legal services provides for the legal services necessary to issue the bonds. The letter provides for fees of up to $24, for the first series of bonds and up to $17,500 for the subsequent series of bonds. The fees will be paid from the bond proceeds upon issuance; however, if for some reason the bonds are not issued then the fees will be paid by Barber Valley Development, Inc. 2. HRCID-2-12: To approve the General Obligation Bond Resolution allowing the issuance of up to $2,000,000 in debt by December 31, The resolution authorizing the issuance of general obligation bonds is described in the attached executive summary. The Board s approval will allow the parties to go forward to issue the debt under the legal conditions described in the resolution.

2 EXECUTIVE SUMMARY MEMORANDUM TO BOARD RE: 2012/2013 GENERAL OBLIGATION BONDS The District has been requested by the Harris Family Limited Partnership ( Owner ) and Barber Valley Development Inc. to adopt a resolution ( Resolution ) providing for the issuance of General Obligation Bonds ( Bonds ) in accordance with the Development Agreement between the Owner and the District. The resolution provides for issuance of the Bonds in one or more series provided that certain legal conditions are met for each series (the Legal Conditions ). The Legal Conditions are that the issuance amount of a series of the Bonds and all other outstanding general obligation bonds and indebtedness of the District does not exceed twelve percent (12%) (9% for Bonds issued on or after July 1, 2012) of the actual or adjusted market value for assessment purposes on all taxable real property within the District as such valuation existed on December 31 of the previous year as set forth in Idaho Code Section (4); and further that ninety-five percent (95%) of the amount of ad valorem taxes estimated to be collected at a tax rate of not greater than.003 (3 mills) of the assessed value of the taxable property within the District as of the time of issuance of the Bonds is sufficient to pay the highest combined debt service requirements for the proposed general obligation indebtedness and other general obligation indebtedness outstanding as provided in Section 6.3(c) of the Development Agreement between the District and Harris Family Limited Partnership. Evidence for compliance with the Legal Conditions is to be provided based on certificates or statements of the district treasurer and Ada County Assessor, the forms of which are attached to the Resolution. In addition to providing that Bonds must meet the Legal Conditions, the Resolution provides that the Bonds must meet certain financial parameters: 1) that the aggregate amount of all Bonds does not exceed $2,000,000, 2) the interest rate on the Bonds does not exceed 8.00%, 3) the maturity date of the Bonds is not later than 30 years following the date of issuance of the Bonds and 4) that all series of the Bonds must be issued by December 31, Subject to the Legal Conditions and the said financial parameters, the Bonds are authorized to be sold to Intermountain Community Bank, a division of Panhandle State Bank. In accordance with the statute the resolution also states that the District is not requiring additional financial assurances from the Owner in the form of a letter of credit or other credit enhancement but that the bond purchaser may impose such a requirement. The Resolution sets forth the form of the Bond, establishes certain accounts for the Bonds, provides for conditions for prepayment, provides for a levy to pay interest and principal on the Bonds and provides that the Bonds are to be held by or transferred to only an accredited investors or qualified institutional buyers within the federal securities laws. For the specific terms of each series of Bonds, the Resolution provides that a Terms Certificate will be filed with the District and included with the Bond closing documents which sets forth the specific rate, maturity,, principal amount, debt service schedule, closing date, costs of issuance, amount of capitalized interest, if any and any other terms. The Resolution permits the rate, maturity and the payment schedule to be adjustable, provided that the Legal Conditions continue to be met. In addition, the District agrees that refunding bonds may be issued to refund the Bonds, provided that the Legal Conditions and other provisions of applicable law are met. Thus, it is contemplated that under the Resolution there would be issued up to $2,000,000 of Bonds, in one or more series, at interest rates not to exceed 8.00% and maturities of not more than 30 years, provided that the said Legal Conditions are met. Initially, Bonds would be issued, likely within the next 30 days, in an amount that can meet the statutory and the 3 mil Legal Conditions. It is contemplated that some time after January 1, 2013, there will be increased taxable property values sufficient to allow issuance of an additional amount of the Bonds under the Legal Conditions. The remainder of such Bonds would be issued by December 31, 2013 in such amounts, etc. in accordance with the Legal Conditions and the financial conditions.

3 RESOLUTION NO. BY THE BOARD: CLEGG, EBERLE, AND QUINTANA A RESOLUTION OF THE BOARD OF DIRECTORS OF THE HARRIS RANCH COMMUNITY INFRASTRUCTURE DISTRICT NO. 1 (CITY OF BOISE, IDAHO), ADA COUNTY, IDAHO, APPROVING BOND COUNSEL SERVICES FOR THE PREPARATION OF GENERAL OBLIGATION BONDS PROVIDED BY SKINNER FAWCETT LLP.; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the District is contemplating issuing an additional General Obligation Bonds, in one or more series (the Notes ) in the approximate amount of up to $2,000,000; and, WHEREAS, Skinner Fawcett, LLP. has agreed to furnish bond counsel services in connection with this financing to the District; and WHEREAS, in the event the bonds are not issued Barber Valley Development, Inc. will pay any accrued legal fees. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE HARRIS RANCH COMMUNITY INFRASTRUCTURE DISTRICT NO. 1 (CITY OF BOISE, IDAHO), ADA COUNTY, IDAHO, as follows: Section 1: That the Board of Directors of the Harris Ranch Community Infrastructure District No. 1 (City of Boise, Idaho), Ada County, Idaho, does hereby approve the acceptance of bond counsel services for the preparation of General Obligation Bonds provided by Skinner Fawcett LLP. In accordance with the terms and conditions provided for in the April 23, 2012, Engagement Letter, attached hereto as Exhibit A. Section 2. That this Resolution shall be in full force and effect immediately upon its adoption and approval. ADOPTED by the Board of Directors of the Harris Ranch Community Infrastructure District No. 1 (City of Boise, Idaho), Ada County, Idaho, this 8th day of May, APPROVED by the Chairman of the Board of the Harris Ranch Community Infrastructure District No. 1 (City of Boise, Idaho), Ada County, Idaho, this 8 th day of May, HRCID-1-12

4 HARRIS RANCH COMMUNITY INFRASTRUCTURE DISTRICT NO. 1 (CITY OF BOISE, IDAHO) Ada County, Idaho ATTEST: By: Chairman, Board of Directors District Clerk ( S E A L )

5 SKINNER FAWCETT LLP LAW OFFICES RICHARD A. SKINNER 515 SOUTH 6TH STREET CHARLES W. FAWCETT POST OFFICE BOX 700 DENNIS GIBALA BOISE, IDAHO HENRY C.RUDOLPH TELEPHONE (208) RYAN M. FAWCETT TELECOPIER (208) April 23, 2012 Board of Directors Harris Ranch Community Infrastructure District No. 1 (City of Boise, Idaho) Boise, Idaho RE: Bond Counsel Services General Obligation Bond Anticipation Notes Ladies and Gentlemen: We understand that the District is contemplating issuing an additional General Obligation Bond Anticipation Notes or Bonds, in one or more series (the Notes ) in the approximate amount of up to $2,000,000 and have been requested by Amanda Horton of the City Attorney s office to prepare engagement letter for our services in connection with the issuance of the Notes. We are, therefore, writing to provide to you a description of the bond counsel services we are prepared to undertake and render with regard to the issuance of the Notes. Accordingly, we are prepared to furnish bond counsel services in connection with this financing to the District, which services include preparation of bond resolutions, various notices; conferences with representatives of the District, as necessary; preparation and review of documentation as necessary for authorizing the issuance and sale of the Notes; review of procedural matters; preparation and arrangements for proceedings for authorization, sale and issuance of the Notes; consultations with the paying agent and registrar, the financial advisor, the Board and its attorney and consultants regarding issuance of the Notes; preparation of the Notes for delivery; preparation of closing documents; the rendering of final approving opinions as to the validity of the Notes and tax-exemption of interest thereon; and, the preparation and forwarding of a final transcript of the Notes documents. Please note that our description for services does not include preparation or review of any offering literature for the Notes or litigation proceedings without a separate agreement for those matters. Our engagement will end at the closing of the transaction unless additional arrangements are made in writing. We estimate our fees for the above services for this financing to be up to $24,500 for the first series of the Notes and $17,500 for a subsequent series of the Notes. This amount includes our usual out-of-pocket expenses, such as photocopies, bond transcript materials, postage, long distance telephone calls, word processing/computer time and similar expenses. If unusual or unforeseen complications arise in the financing which may result in larger legal fees than originally anticipated, we will notify you at that time prior to incurring those fees. The above fees and costs may be deferred and paid out of the proceeds of the Notes no later than the date of bond closing. If the initial series of Notes does not close within 90 days after the date hereof or if a subsequent series of Notes does close within 90 days after the date when work has begun on such additional

6 Harris Ranch Community Infrastructure District No. 1 (City of Boise, Idaho) May 4, 2012 Page 2 series of Notes, we will be paid for the work done on such series. It is understood that Boise Valley Development, Inc. shall pay for any amounts not paid for through the issuance of the Notes. Assuming that the above arrangements are acceptable, please execute the enclosed copy of this letter and return the same to our office. We look forward to working with you on this financing. Very truly yours, SKINNER FAWCETT LLP RAS/sg RICHARD A. SKINNER * * * * * * * * * * The foregoing has been approved by Harris Ranch Community Infrastructure District No. 1 (City of Boise, Idaho) as of the day of, By: Authorized Representative The undersigned Boise Valley Development, Inc.hereby agrees as of the above date to pay for the above services and to reimburse the District for any amounts billed for such services if the said Notes do not close within 90 days. Boise Valley Development, Inc. an Idaho corporation By Its: