HomeMy WebLinkAboutResolution No. 2019-54COUNTY COUNCIL
COUNTY OF KAUA’I
31k t1~ol Ut to n No.2019-54
RESOLUTION APPROVING THE ISSUANCE OF UP
TO $23,000,000 AGGREGATE PRINCIPAL AMOUNT OF SPECIAL TAX
REVENUE BONDS OF THE COUNTY OF KAUA’I FOR THE COUNTY’S
COMMUNITY FACILITIES DISTRICT NO.2008-1
(KUKUI’ULA DEVELOPMENT PROJECT);
AUTHORIZING THE APPLICATION OF THE PROCEEDS OF THE BONDS,
TOGETHER WITH CERTAIN OTHER AVAILABLE FUNDS,
TO FUND THE COSTS OF CERTAIN FACILITIES RELATING TO SUCH
DISTRICT;APPROVING THE FORMS OF THE FIRST SUPPLEMENTAL
TRUST INDENTURE,SECOND AMENDMENT TO ACQUISITION AND
FUNDING AGREEMENT,PRELIMINARY OFFICIAL STATEMENT,
BOND PURCHASE AGREEMENT AND CONTINUING DISCLOSURE
AGREEMENTS RELATING TO THE BONDS;CLARIFYING CERTAIN
MATTERS RELATING TO THE RATE AND METHOD OF
APPORTIONMENT FOR THE DISTRICT;
AND AUTHORIZING THE TAKING OF FURTHER ACTIONS RELATING
TO THE BONDS AND THE DISTRICT
WHEREAS,pursuant to Ordinance No.872 (the “Ordinance of Formation”),
as adopted by the Council of the County of Kaua’i (the “County”)on September 24,
2008 and approved by the Mayor of the County on September 26,2008,the County
has established a community facilities district,designated as Community Facilities
District No.2008-1 (Kukui’ula Development Project)(the “District”),and authorized
the levy of a special tax (the “Special Tax”)on properties within the District in
accordance with Chapter 26,Kaua’i County Code 1987,as amended (“Chapter 26”),
and the Rate and Method of Apportionment of Special Tax (the “RMA”)approved for
the District pursuant to the Ordinance of Formation;and
WHEREAS,pursuant to Ordinance No.875 (the “Bond Ordinance”),as
adopted by the Council of the County on November 6,2008 and approved by the
Mayor of the County on November 12,2008,the County has authorized the issuance
of one or more series of special tax revenue bonds (including the Series 2012 Bonds
and the Series 2019 Bonds referred to below,the “Bonds”)in an aggregate principal
amount not to exceed $120,000,000 (excluding Bonds issued to refund other Bonds
previously issued)to fund all or a portion of the costs (including “Incidental
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Expenses”as defined in the Ordinance of Formation)of certain infrastructure
facilities related to the District (the “Facilities”),such funding being subject to (a)
the terms and conditions specified in the (i)Bond Ordinance,(ii)the Trust Indenture
dated as of April 15,2012 (the “Existing Bond Indenture”)between the County and
The Bank of New York Mellon Trust Company,N.A.,as trustee,(iii)the Acquisition
and Funding Agreement dated as of July 1,2008,as heretofore amended (the
“Existing Acquisition Agreement”)between the County and Kukui’ula Development
Company (Hawaii),LLC (the “Developer”),and (b)in the case of the Series 2019
Bonds referred to below,to the further approvals and authorizations referred to in this
Resolution;and
WHEREAS,at the request of the Developer,the County has heretofore issued
an initial series of the Bonds (the “Series 2012 Bonds”)in the aggregate principal
amount of $11,875,000,as authorized by Resolution 2012-25 of the County Council
approving,among other things,(a)the issuance and sale of the Series 2012 Bonds,
(b)the forms of the principal financing documents pertaining to the Series 2012
Bonds,(c)the use of Series 2012 Bond proceeds to fund the costs of Facilities
(including Facilities designated by the Developer and the County,respectively)in
accordance with the Existing Acquisition Agreement,and (d)the taking of all
necessary actions in connection with the foregoing;and
WHEREAS,at the further request of the Developer,the County proposes to
issue an additional series of Bonds (the “Series 2019 Bonds”)in an aggregate
principal amount not to exceed $23,000,000 and,in connection therewith,there
have been presented at this meeting forms of (a)the First Supplemental Trust
Indenture (the “Supplemental Indenture”)amending and supplementing the
Existing Bond Indenture (such Existing Bond Indenture,as so amended and
supplemented,being herein referred to as the “Bond Indenture”)with respect to the
issuance of the Series 2019 Bonds,(b)the Second Amendment to Acquisition and
Funding Agreement (the “Amendment to Acquisition Agreement”)amending and
supplementing the Existing Acquisition Agreement (the Existing Acquisition
Agreement,as so amended,being herein referred to as the “Acquisition Agreement”)
for the purposes of modifying certain definitions,extending the period during which
Special Taxes may be used to pay the cost of Facilities acquired from or constructed
by the Developer and reflecting an exchange of funding sources between
County-designated Facilities and Developer-designated Facilities as permitted by
the Existing Acquisition Agreement and the Existing Indenture,(c)the Preliminary
Official Statement (the “Preliminary Official Statement”)to be disseminated in
connection with the marketing of the Series 2019 Bonds,(d)the Bond Purchase
Agreement (the “Bond Purchase Agreement”)pursuant to which the Series 2019
Bonds will be sold,and (e)the respective Continuing Disclosure Agreements of the
County and the Developer (each,a “Disclosure Agreement”)relating to the
requirements of Rule No.15c2-12 of the Securities and Exchange Commission;and
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WHEREAS,the Developer has requested a clarification with respect to the
classification under the RMA of three parcels of land in the District (the “Mixed Use
Parcels”),a portion of which is currently used as part of a golf course and the
balance of which is intended to be developed for residential or other non-golf course
purposes;and
WHEREAS,the Council of the County of Kaua’i intends hereby to approve
the proposed issuance and sale of the Series 2019 Bonds and certain matters
pertaining to the Series 2019 Bonds and the District (including the Mixed Use
Parcels).
NOW,THEREFORE,BE IT RESOLVED BY THE COUNCIL OF THE COUNTY
OF KAUA’I,STATE OF HAWAI’I AS FOLLOWS:
1.The issuance and sale of up to $23,000,000 aggregate principal amount
of Series 2019 Bonds is hereby approved,such Series 2019 Bonds to be issued and
sold at such time and upon such terms as shall be determined by the Director of
Finance in accordance with the Bond Ordinance,the Bond Indenture and the
Acquisition Agreement;provided that (i)the Series 2019 Bonds shall finally mature
not later than May 15,2049,(ii)the maximum interest rate on the Series 2019
Bonds shall not exceed 6%per annum,(iii)the maximum underwriting discount at
which the Series 2019 Bonds are sold by the County shall not exceed 2%,and (iv)
the County and the Trustee shall have received a certificate from the County’s
designated Special Tax Administrator confirming satisfaction of the applicable
financial ratio requirements for the issuance of the Series 2019 Bonds pursuant to
Section 2.12 of the Bond Indenture.It is expressly understood that the Bonds,
including the Series 2019 Bonds,shall be limited obligations of the County payable
solely from,and secured solely by,the Special Tax levied on taxable properties
within the District and certain funds and accounts established under the Bond
Indenture,and that the full faith and credit of the County shall not be pledged for
payment of the principal or redemption price of or interest on such Bonds.
2.The proceeds of the Series 2019 Bonds shall be applied toward the
costs (including Incidental Expenses)of the Facilities in accordance with terms and
conditions set forth in the Acquisition Agreement;provided that,pursuant to the
Acquisition Agreement,an amount equal to 15%of the “Net Construction Proceeds”
(as hereinafter defined)of the Series 2019 Bonds shall be used,together with
Special Tax collections available for such purpose under the Acquisition Agreement,
to fund the costs of the Facilities designated by the County and identified in Exhibit
A hereto.With respect to the Pa’anau Village Phase I &II Energy Self-Sufficiency
Upgrades identified in Exhibit A,the Council hereby determines that
privately-owned facilities included in such Upgrades will serve a public purpose and
are therefore eligible for funding pursuant to Chapter 26.For purposes of the
foregoing,the term “Net Construction Proceeds”shall mean (a)the par amount of
the Series 2019 Bonds,(b)plus original issue premium (if any),and (c)less the sum
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of (i)original issue discount (if any),(ii)underwriting discount,and (iii)proceeds of
the Series 2019 Bonds used to pay the costs of issuance,to fund capitalized interest
(if any)and to fund the Reserve Account established under the Bond Indenture.
3.The Council hereby approves the forms of the Supplemental Indenture,
the Amendment to Acquisition Agreement,the Preliminary Official Statement,the
Bond Purchase Agreement and the Disclosure Agreements as presented at this
meeting.The Mayor and Director of Finance (or either of them,as appropriate)are
hereby authorized to execute and deliver the Supplemental Indenture,the
Amendment to Acquisition Agreement,the Bond Purchase Agreement and the
County’s Disclosure Agreement,to approve the final form and execution of the
Developer’s Disclosure Agreement and to authorize the dissemination of the
Preliminary Official Statement,all in substantially the forms presented at this
meeting,with such modifications as such official or officials may approve.
4.The Mixed Use Parcels consist of approximately 379.16 acres of land
(Tax Map Key (TMK)Parcel Nos.2-6-022-020,2-6-022-021 and 2-6-015-001),
including approximately 141.40 acres of land currently used for golf course purposes
and approximately 237.76 acres of land which is currently undeveloped.Although
the R1VIA classifies property used for golf course purposes as non-taxable “Golf
Course Property”and undeveloped land as taxable “Undeveloped Property,”the
Mixed Use Parcels have not been subdivided into land used for golf course purposes
and unimproved land and,unless so subdivided,are required to be classified in
their entireties as either non-taxable Golf Course Property or as taxable
Undeveloped Property under the R1VIA.Based on the current use of the Mixed Use
Parcels,in part,for golf course purposes,such Parcels have been classified in their
entireties as non-taxable Golf Course Property under the RMA.However,the
Developer has advised that it now intends to develop approximately 218.74 acres of
the unimproved land for residential or other non-golf course purposes and to
subdivide the current Mixed Use Parcels in connection with such development.In
view of its current plans for the undeveloped land within the Mixed Use Parcels,the
Developer has requested that,pending subdivision,the Mixed Use Parcels be
classified in their entireties as taxable Undeveloped Property on the understanding
that,upon subdivision,the subdivided parcels used for golf course purposes will be
reclassified as non-taxable Golf Course Property.Upon consideration of this
request,the Council hereby determines,based on the unimproved land included in
the Mixed Use Parcels,that such Parcels may be classified in their entireties as
taxable Undeveloped Property pending subdivision and that,upon subdivision,the
subdivided parcels used for golf course purposes may be reclassified as non-taxable
Golf Course Property;provided that,until such time as the Special Tax levied on all
taxable “Improved Lot Property”pursuant to the RMA is sufficient in the aggregate
to fully satisfy the “Special Tax Requirement”under the R1VIA (including the debt
service on all outstanding bonds under the Bond Indenture,administrative
expenses of the County relating to the District,amounts needed to replenish reserve
funds for outstanding bonds or to cover anticipated Special Tax delinquencies,and
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amounts needed to pay for authorized capital improvements),the total amount of
land classified as non-taxable Golf Course Property shall not exceed 225 acres.
5.The Mayor,the Director of Finance,and other appropriate officials of
the County are hereby authorized to take or to direct or authorize the taking of such
other actions as may be necessary or appropriate in connection with the issuance
and sale of the Series 2019 Bonds and the performance of the County’s covenants
and responsibilities with respect to the Series 2019 Bonds and the District,
including without limitation the performance of administrative services
contemplated by the Bond Indenture and the Ordinance of Formation and the
retention of staff or consultants to perform such services,all in accordance with the
Ordinance of Formation,the Bond Ordinance,the Acquisition Agreement,the Bond
Indenture and this Resolution.
6.This Resolution shall take effect immediately upon its adoption by the
Council.All prior resolutions or portions thereof inconsistent herewith are hereby
repealed.
Introduced by:
LUKE A.EVSLIN
(By Request)
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EXHIBIT A
Designated County Projects
The projects designated by the County for funding from the Net Construction
Proceeds of the Series 2019 Bonds,together with available Special Tax Collections,
are:
I.Implementation of transportation improvements in Köloa and Po’ipü
as identified in Figure 4-4,‘Multimodal Network,’in the South Kaua’i
Community Plan,including design and construction of the following:
•Sidewalk on Lopaka Paipa Boulevard between Ala Kalanikaumaka
and Po’ipü Road;
•Traffic calming on Lopaka Paipa Boulevard between Ala
Kalanikaumaka and Po’ipu Road;
•Shared use path along an existing cane haul road between the
Koa’e housing project at Po’ipa Road and Ala Kinoiki;
•Safe route to school improvements on Waikomo Road;
•Sidewalk or shared use path on Köloa Road between Ala
Kalanikaumaka and Po’ipu Road;
•Pedestrian and/or bicycle facilities on Ho’onani Road;
•Pedestrian and/or bicycle facilities on Kapili Road;
•Pedestrian and/or bicycle facilities on Ho’owili Road;
•Pedestrian and/or bicycle facilities on Ho’one Road along the
frontage of Po’ipü Beach Park;
•Sidewalks to fill gaps on Ho’one Road and Pe’e Road from Pane
Road to the end of County ownership;
•Sidewalks to fill gaps on Lãwa’i Road between Kukui’ula Harbor
and Ho’ona Road;
•Sidewalk or shared use path on Ainako Street from Po’ipu Road to
Keoniloa Bay parking area (Shipwrecks Beach);
•Pedestrian crossings for the above improvements,as needed;
•Hapa Trail Improvements from Hapa Road to Po’ipü Road;and
•Intersection improvements on Köloa Road at its intersections with
Po’ipU Road and Maluhia Road.
II.Pa’anau Village Phase I &II Energy Self-Sufficiency Upgrades.
The Net Construction Proceeds of the Series 2019 Bonds and Special Tax
collections available for such purpose under the Acquisition Agreement are
authorized to be used to pay all or a portion of the capital costs incurred by the
County and payable with respect to the foregoing projects in accordance with the
Acquisition Agreement,including without limitation costs incurred for the
construction,rehabilitation,renovation of the project sites,associated planning and
design costs,and costs for the acquisition and installation of fixtures,equipment,
and other capital improvements included in the projects.
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