HomeMy WebLinkAboutResolution 2013-26 - California Municipal Finance Authority i
Dept. ID ED 13-18 Page 1 of 3
Meeting Date:7/1/2013
Apt* &
6 -O
CITY OF HUNTINGTON BEACH
- REQUEST FOR CITY COUNCIL ACTION
MEETING DATE: 7/1/2013
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Bob Hall, Assistant City Manager
SUBJECT: Adopt Resolution No. 2013-26 approving the issuance of the California Municipal
Finance Authority Revenue Bonds (AMG Huntington Beach, LLC/Notthoff
Engineering), Series 2013, principal amount not to exceed $5,000,000 for the
purpose of financing the acquisition and installation of manufacturing equipment
Statement of Issue: The City Council is asked to conduct a public hearing under the Tax and
Equity Fiscal Responsibility Act (TEFRA) in connection with the proposed tax-exempt Bond by
the California Municipal Finance Authority (CMFA) in an amount not to exceed $5,000,000, to
finance the acquisition and installation of manufacturing equipment for by AMG Huntington Beach,
LLC, doing business as Notthoff Engineering, located at 5416 Argosy Avenue, Huntington Beach.
Financial Impact: There is no fiscal impact to the City. CMFA is a joint exercise of powers
authority and public entity of the State of California and is the responsible fiscal agent for the
bonds. The City will receive 25% of the issuance fee, which will be $3,750, which will be applied to
the General Fund.
Recommended Action:
A) Conduct the public hearing under the requirements of TEFRA and the Internal Revenue Code of
1986, as amended (Code); and,
B) Adopt City Council Resolution No. 2013- 26, "A Resolution of the City Council of the City of
Huntington Beach Approving the Issuance of the California Municipal Finance Authority Revenue
Bonds (AMG Huntington Beach, LLC), Series 2013, In An Aggregate Principal Amount Not To
Exceed $5,000,000 For the Purpose of Financing the Acquisition and Installation of Manufacturing
Equipment and Certain Other Matters Relating Thereto" for the benefit of AMG Huntington Beach,
LLC, doing business as Notthoff Engineering, a limited liability company organized and existing
under the laws of the State of Delaware (the "Borrower"), to provide for the financing of the Project,
such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code and the
California Government Code Section 6500 (and following).
Alternative Action(s): Do not approve Resolution and direct staff as necessary
HB -255- Item 13. - I
Dept. ID ED 13-18 Page 2 of 3
Meeting Date:7/1/2013
Analysis:
Notthoff Engineering (Notthoff) was founded in 1941 and has been serving the aerospace industry
through supplying precision machined components and subassemblies to both commercial and
military aircraft. Notthoff must meet the ever-changing technology in the manufacturing of equipment.
Notthoff requested that the CMFA serve as the municipal issuer of bonds in an amount not to
exceed $5,000,000. Notthoff plans to use the proceeds of the Bonds to: (1) finance the acquisition
and installation of equipment and other capital items for the manufacture of metal components and
subassemblies for the aeronautic and defense industries (the "Project"), at a manufacturing facility
located at 5416 Argosy Avenue in the City of Huntington Beach, California (the "City"); and (2) pay
certain expenses incurred in connection with the issuance of the Bonds.
In order for all or a portion of the Bonds to qualify as tax-exempt Bonds, the City of Huntington
Beach must conduct a public hearing (TEFRA Hearing) providing the members of the
community an opportunity to speak in favor of or against the use of tax-exempt bonds for the
financing of the project. Following the close of the TEFRA Hearing, an "applicable elected
representative" of the governmental unit hosting the Project must provide its approval of the Loan
for the financing of the Project.
California Municipal Finance Authority:
The CMFA was created on January 1, 2004, pursuant to a joint exercise of powers
agreement to promote economic, cultural, and community development through the financing of
economic development and charitable activities throughout California. To date, over 175
municipalities, including the City of Huntington Beach, have become members of CMFA.
The CMFA was formed to assist local governments, non-profit organizations and businesses with
the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in
California. The CMFA's representatives and its Board of Directors have considerable
experience in bond financings.
The Joint Exercise of Powers Agreement provides that the CMFA is a public entity, separate and
apart from each member executing such agreement. The debts, liabilities, and Bonds of the
CMFA do not constitute debts, liabilities or Bonds of the members executing such
agreement.
The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the
Borrower. The City will have no financial, legal, moral obligation, liability, or responsibility for the
Project or the repayment of the B o n d s for the financing of the Project. All financing
documents with respect to the Bonds will contain clear disclaimers that the Bonds are not an
obligation of the City or the State of California, but are to be paid for solely from funds provided by
the Borrower.
Participation by the City in the CMFA will not impact the City's appropriations limits and will not
constitute any type of indebtedness by the City. Outside of holding the TEFRA hearing,
adopting the required resolution and executing the Joint Exercise of Powers Agreement of
the CMFA, no other participation or activity of the City or the City Council with respect to the
issuance of the Bonds will be required.
As part of the City's Ten Point Plan for Local Business, there is an objective to provide funding
resources for our local business. By adopting this Resolution, the City is supporting Notthoff
Engineering's efforts to expand their business through this available financing tool.
The City will receive increased unsecured property tax for the new equipment.
Item 13. - 2 HB -256-
Dept.ID ED 13-18 Page 3 of 3
Meeting Date:7/1/2013
Environmental Status: Not applicable
Strategic Plan Goal:
Enhance economic development
Attachment(s):
1) Resolution No. 2013-26, "A Resolution of the City Council of the City of Huntington Beach
Approving the Issuance of the California Municipal Finance Authority Revenue Bonds
(AMG Huntington Beach, LLC), Series 2013, in an Aggregate Principal Amount Not To
Exceed $5,000,000 for the Purpose of Financing the Acquisition and Installation of
Manufacturing Equipment and Certain Other Matters Relating Thereto."
HB -257- Item 13. - 3
ATTACHMENT # °I
RESOLUTION NO. 2013-26
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF HUNTINGTON APPROVING THE ISSUANCE OF THE CALIFORNIA
MUNICIPAL FINANCE AUTHORITY REVENUE BONDS (AMG HUNTINGTON BEACH,
LLC), SERIES 2013, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$5,000,000 FOR THE PURPOSE OF FINANCING THE ACQUISITION AND
INSTALLATION OF MANUFACTURING EQUIPMENT AND
CERTAIN OTHER MATTERS RELATING THERETO
WHEREAS, AMG Huntington Beach, LLC, doing business as Notthoff Engineering, a
limited liability company organized and existing under the laws of the State of Delaware (the
"Borrower"), has requested that the California Municipal Finance Authority (the "Authority")
participate in the issuance of one or more series of revenue bonds in an aggregate principal
amount not to exceed $5,000,000 (the"Bonds") for the acquisition and installation of equipment
and other capital items for the manufacture of metal components and subassemblies for the
aeronautic and defense industries (the "Project"), to be owned by the Borrower at its facility
located at 5416 Argosy Avenue in the City of Huntington Beach, California(the "City"); and
Pursuant to Section 147(f) of the Internal Revenue Code of 1986 (the "Code"),the
issuance of the Bonds by the Authority must be approved by the City because the Project is to be
located within the territorial limits of the City; and
The City Council of the City(the "City Council") is the elected legislative body of the
City and is one of the"applicable elected representatives" required to approve the issuance of the
Bonds under Section 147(f) of the Code; and
The Authority has requested that the City Council approve the issuance of the Bonds by
the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code
and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the
California Municipal Finance Authority, dated as of January 1, 2004 (the "Agreement"), among
certain local agencies, including the City; and
Pursuant to Section 147(f) of the Code, the City Council has, following notice duly given,
held a public hearing regarding the issuance of the Bonds, and now desires to approve the
issuance of the Bonds by the Authority;
NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby
resolve as follows:
SECTION 1. The foregoing resolutions are true and correct.
SECTION 2. The City Council hereby approves the issuance of the Bonds by the
Authority. It is the purpose and intent of the City Council that this resolution constitute approval
of the issuance of the Bonds by the Authority, for the purposes of(a) Section 147(f) of the Code
by the applicable elected representative of the governmental unit having jurisdiction over the
area in which the Project is to be located, in accordance with said Section 147(f) and
(b) Section 4 of the Agreement.
13-3798/98016.doc 1
Resolution No. 2013-26
SECTION 3. The officers of the City are hereby authorized and directed,jointly and
severally, to do any and all things and to execute and deliver any and all documents which they
deem necessary or advisable in order to carry out, give effect to and comply with the terms and
intent of this resolution and the financing transaction approved hereby.
SECTION 4. This resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 1st day of July , 2013.
&Xw-PJ
Mayor
REVIE D APPROVED: APPROVED AS TO FORM:
City a r Ci y Atto y ,13
INIT D AND APPROVED:
A istant City Manager
13-3798/98016.doc 2
Res. No. 2013-26
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of
Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby
certify that the whole number of members of the City Council of the City of
Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a Regular meeting thereof held on July 1, 2013 by the following vote:
AYES: Sullivan, Hardy, Harper, Boardman, Carchio, Shaw, Katapodis
NOES: None
ABSENT: None
ABSTAIN: None
Cit Clerk and ex-officio. Jerk of the
City Council of the City of
Huntington Beach, California
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on July 1, 2013, a public hearing as required by
Section 147(f) of the Internal Revenue Code of 1986 will be held with respect to the proposed
issuance by the California Municipal Finance Authority of its revenue bonds in one or more
series in an amount not to exceed $5,000,000 (the "Bonds"). The proceeds of the Bonds will be
used to: (1) finance the acquisition and installation of equipment and other capital items for the
manufacture of metal components and subassemblies for the aeronautic and defense industries
(the "Project"), at a manufacturing facility located at 5416 Argosy Avenue in the City of
Huntington Beach, California (the "City"); and (2) pay certain expenses incurred in connection
with the issuance of the Bonds. The facilities are to be owned and operated by AMG Huntington
Beach, LLC, doing business as Notthoff Engineering (the "Borrower"), a limited liability
company organized and existing under the laws of the State of Delaware.
The Bonds and the obligation to pay principal of and interest thereon and any redemption
premium with respect thereto do not constitute indebtedness or an obligation of the Authority, the
State of California or any political subdivision thereof, within the meaning of any constitutional or
statutory debt limitation, or a charge against the general credit or taxing powers of any of them. The
Bonds shall be a limited obligation of the Authority, payable solely from certain revenues duly
pledged therefor and generally representing amounts paid by the Borrower.
The hearing will commence at 6:00 p.m. or as soon thereafter as the matter can be heard,
and will be held in the City Hall Council Chambers, 2000 Main Street, Huntington Beach,
California. Interested persons wishing to express their views on the issuance of the Bonds or on the
nature and location of the facilities proposed to be financed may attend the public hearing or, prior
to the time of the hearing, submit written comments.
Additional information concerning the above matter may be obtained from Kellee Fritzal,
Economic Development Department at (714) 374-1519 or at kfritzal ,surfcity-hb.org. Written
comments should be addressed to, City Clerk, City of Huntington Beach, 2000 Main Street, 2nd Floor,
Huntington Beach, CA 92648 or sent to http://huntingtonbeachca.qov/HBPublicComments/
Dated: June 13, 2013
NOTICE Of PUBUC HEARING
NOTICE IS HEREBY GIV-
EN that on July 1,2013,
a public hearing as re-
quired' by Section'
147(f) of.the Internal,
Revenue Code of -19861
will be, held.with re-!
spect to the proposedl
PROOF
®� issuance ci the Finance!
nia Municipal Finance,
Authority of its revenue I
®® 0 B■GL�I T1® bonds' in one or more
gQ.7 pV! series in an amount not,
to -exceed $5,000,0001
(the"Bonds"). The pro-�
ceeds.of the Bonds will
p C
be used to: (1).finance,
STATE ®� CALIFORNIA) the acquisition and in-
stallation of equipment
and other,capital items,
for the manufacture of!
SS. metal components and
p ^
subassemblies for the
COUNT i�/ OF ORANGE ) aeronautic and defense
industries' (the-�
"Project"), at a man-
ufacturing facility locat-
ed at 5416 Argosy Ave-
am a citizen of the United States and a H Huue in the city of
' ntington Beach,resident of the County of Los Angeles; 1 Cali-
fornia2) (the "City")- and
r (2) pay certain ex-,
am over the age of eighteen years, n and eectio incurred in.con-
tion with the issu-
ance of the Bonds. The
not a party to or interested in the notice facilities to be
published. I am a principal clerk of the AMG Hun ingtonated Beahy
LLC, doing business as
HUNTINGTON BEACH Notthoff Engineering
INDEPENDENT, which was adjudged a - (the ed gliiabilityr ' �
com-
pany organized and:ez-
newspaper of general circulation on istmg under the laws of�
the State of Delaware.
September '29, 1961, case A6214, and The Bonds and the ob-i
ligation to pay principal f
June 11, 1963, 'case A24831, for the of and interest thereon 1
on i
City of Huntington Beach, County. of and any with
rasppremium with' respect
thereto.do not consti-
Orange, and the State of California. tute indebtedness or an j
obligation of the Au-
Attaehed to this Affidavit is a true and thority, the State of
complete copy as was printed and California or any erepolof-
cal subdivision thereof,
within the. meaning of,
published on the following date(s): any constitutional or;
statutory debt limita-
tion, or a charge
Thursday June 13 2013 against the general'
f 7 credit or taxing powers
of any of them. The
Bonds shall be,a limited
obligation of the Au
thority; payable solely,
from certain revenues',
I certify (or declare) under penalty duly pledged 'therefor i
and generally repre-
of perjury that the foregoing is true bytheg amounts paid1
by the Borrower. 1
and correct. The hearing will coin-,
mence at 6:00 p.m. or',
as soon thereafter as
the matter can be
heard,and 'will be held!
in the'City Hall Council
Chambers, 2000 Main
Street,' Huntington
Executed on June 20, 2013 Beach, California. Inter-
ested persons wishing
at Los Angeles, California to express their views!
on the issuance of thel
Bonds or on the nature
and location of the fa-
cilities proposed to,be',
financed may attend
the public hearing or,1
prior to the time of the
�Ak*�
hearing,'submit writtencomments.
Additional information j
concerning the above'
Signature matter may be obtained i
from Kellee Fritzal,Eco-
nomic Development De-
partment at (714) 374-
1 5 1 9 o r a tl
kfritzatna surfcity hb.
org. Written comments
should be addressed to,i
City Clerk, City of Hun-
tington Beach, 20001
Main Street, 2nd Floor,
Huntington Beach, CA
92648 or sent to htt
huntin onbeachca.
og v u is omments
Pu . e n e-
pendent June 13,2013
Dated:June 13,2013
7/2/2013
FRA Public Hearing
Notthoff Engineering
July 1 , 2013
Project
► There is no fiscal impact to the City - the City
is a conduit to allow for the tax exempt
financing
► Notthoff Engineering, founded in 1941 ,is an
aerospace manufacture for components of
commercial and military aircraft
► To meet technology changes - Notthoff is
seeking a tax exempt bond for $5 million in
new equipment
.2 oi3 1
7/2/2013
California Municipal Finance
Authority (CMFA)
► CMFA was formed in 2004
► City is a member of the CMFA which is a joint
Exercise of Powers
► Issues taxable and tax-exempt bonds for
financing economic, cultural and community
development
► Works with local governments, non-profit
organizations and businesses
Public Hearing
To satisfy the Federal and State tax code, the City
is required to:
► Conduct tonight's public hearing under the
requirements of TEFRA and the Internal Revenue
Code of 1986;
► Adopt the Resolution approving the issuance of
the Bonds by the CMFA for the benefit of AMG
Huntington Beach (Notthoff Engineering), to
provide for the financing of the Project.
2
7/2/2013
Questions
3