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HomeMy WebLinkAboutORD 2022-033 2020-2022 • Seg1OF N�`• COUNTY OF HAWAII A STATE IF HAWAII :°-- 44,1"441P,-- BILL TF C •441BILL NO. 136 ORDINANCE NO. 22 33 AN ORDINANCE AUTHORIZING THE ISSUANCE OF SPECIAL TAX REVENUE BONDS OF THE COUNTY OF HAWAII FOR THE PURPOSE IAF FINANCING THE COSTS OF CERTAIN PUBLIC IMPROVEMENTS AND INCIDENTAL EXPENSES RELATING TO THE COUNTY'S COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT); AMENDING CERTAIN PROVISIONS OF THE ORDINANCE OF FORMATION FOR THE I ISTRICT RELATING TO THE LIEN OF THE SPECIAL TAXES SECURING SUCH 3 ONDS; FIXING OR AUTHORIZING THE FIXING OF THE FORM, DENOMINATIONS, AND CERTAIN OTHER DETAILS OF SUCH BONDS AND PROVIDING FOR THE SALE OF SUCH BONDS TO THE PUBLIC BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Findings and Determinations. The Council of the County of Hawai`i (the "Council" and the "County,"respectively) hereby finds and determines as follows: _ (a) Upon petition by RCFC Kaloko Heights, LLC, a Delaware limited liability company, Kaloko Heights B 1 A Holdings, LLC, a Delaware limited liability company, and Kaloko Heights Investors, LLC, a Delaware limited liability company (collectively, the "Petitioner"), the County has, pursuant to Chapter 32, Hawai`i County Code 1983 (2016 Edition, as Amended) ("Chapter 32," with all references herein to Articles and Sections, unless otherwise indicated, being intended to mean and refer to Articles and Sections within such Chapter) and Ordinance No. 21-67 (the "Ordinance of Formation"), established a community facilities district, designated as the "County of Hawai`i Community Facilities District No. 1-2021 (Kaloko Heights Project)" (the "District") for the purpose of financing the acquisition and construction of certain special improvements (as more fully described in the Ordinance of Formation, the "Improvements") and has further authorized the levy of a special tax on properties within the District pursuant to Chapter 32 (the "Special Tax"). (b) It is appropriate and in the interest of the County to authorize, and the Council intends hereby to authorize, the issuance and sale of special tax revenue bonds of the County (the "Bonds"), in an aggregate principal amount not to exceed $22,000,000 (excluding Bonds issued to refund other Bonds previously issued), in order to provide funds (i) for payment of the costs of acquiring and constructing the Improvements (the "Project Costs"), and (ii) for payment of incidental expenses incurred with respect to the District (as more fully described in the Ordinance of Formation, the "Incidental Expenses"). SECTION 2. Authorization of Bonds; Approval of Project Funditg Agreement. (a) Subject to the terms and conditions herein specified, the Bonds are hereby authorized for issuance and sale, in one or more series as determined by the Director of Finance of the County, in an aggregate principal amount not to exceed $22,000,000 (excluding Bonds issued to refund other Bonds previously issued), for the purpose of funding all or a portion of the Project Costs and Incidental Expenses incurred with respect to the District; subject to compliance, with respect to each series of Bonds, with all applicable terms, conditions and limitations specified in Chapter 32 (including, but not limited to, the limitation on the principal amount of Bonds specified in Section 32-57(c)) and with the further provisions of this Ordinance. The Bonds shall be special limited obligations of the County, payable solely from and secured solely by the Special Tax on properties within the District, such funds and accounts as may be established as security for the Bonds under the Trust Indenture providing for the issuance of the Bonds (as approved pursuant to Section 4 hereof, the "Indenture") and any credit enhancement obtained for the Bonds. The Bonds shall not constitute a general obligation of the County or charge on its general fund, nor shall the Bonds be secured, directly or indirectly, by the full faith and credit of the County or by any revenues or taxes of the County other than taxes collected from the levy of the Special Tax. (b) Pursuant to the Ordinance of Formation, the use of Bond proceeds to pay Project Costs shall be subject to the terms and conditions set forth in the Indenture and in a Project Acquisition and Funding Agreement (the "Project Funding Agreement") to be entered into by the County, acting through its Director of Finance and Director of Environmental Management, and the Petitioner. The form of Project Funding Agreement presented at this meeting is hereby approved, and the Director of Finance and the Director of Environmental Management are hereby authorized to execute and deliver the Project Funding Agreement in substantially such form, with such modifications as the County officials executing the same may approve, such approval to be conclusively evidenced by their execution thereof. SECTION 3. Details of Bonds. Subject to the further provisions hereof, including without limitation the provisions of Section 4 hereof, the Bonds of each series authorized for issuance and sale hereunder shall: (a) be dated as of the initial delivery date of the Bonds of such series; (b) mature on such date or dates and be payable as to interest on such dates and at such fixed or variable rate or rates as shall be specified in the Indenture, provided that the final maturity date for the Bonds of such series shall not be more than 30 years after the initial delivery date thereof and in no event later than the expiration of the term of the District; -2- (c) be issued in such denominations as shall be specified in the Indenture,; (d) be issued in the form, and executed in the manner, prescribed in the Indenture; (e) be registered as to both principal and interest, subject to registration, transfer and exchange upon such terms as shall be prescribed in the Indenture; (0 be payable (i) in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts, and (ii) at such place or places as shall be specified in the Indenture; (g) be subject to redemption prior to maturity, if applicable, at such times and upon such terms as shall be prescribed in the Indenture; (h) be secured under the Indenture bya pledge of(i) the Special Tax and the p g p lien thereof established pursuant to Chapter 32 and the Ordinance of Formation, and (ii) the funds and accounts established under the Indenture as security for the Bonds, including all amounts deposited into such funds and accounts pursuant to the Indenture; it being expressly understood that, except as otherwise provided in the Indenture, the foregoing pledge shall be superior to all other claims on the Special Tax and the pledged funds and accounts, and all series of Bonds shall be of equal rank and priority under the Indenture unless the issuance of senior and junior lien Bonds is expressly authorized thereunder; (i) be subject to such other terms, conditions and limitations as are set forth in the Indenture, including terms and conditions pertaining to (i) the establishment and handling of a special fund or funds to pay or secure the Bonds and/or to pay Project Costs or Incidental Expenses, (ii) the investment of moneys on deposit in the funds and accounts established under the Indenture, and (iii) any other matters relating to the Bonds, including provisions for issuance, payment, security, credit enhancement, handling of funds, defaults and remedies; and (j) contain such other provisions and be subject to such other terms and conditions as are required under Chapter 32. SECTION 4. Further Approvals by Council. The issuance and sale of any series of Bonds pursuant to this Ordinance shall be subject to approval by resolution of Council, prior to the marketing of such series of Bonds, of the following: (a) the maximum principal amount of the Bonds of such series, the maximum interest rate or true interest cost for the Bonds of such series, the maximum redemption price for the Bonds of such series, and the maximum underwriting discount at which such Bonds may be sold; -3 - (b) the proposed forms of (i) the Indenture (or applicable supplement to the Indenture)providing for the issuance of such series of Bonds, (ii) the Preliminary Official Statement (the "Preliminary Official Statement") pertaining to the offering of such series of Bonds, including all material exhibits and appendices thereto, (iii) the Bond Purchase Agreement (the "Bond Purchase Agreement") pursuant to which such series of Bonds will be sold, and (iv)the Continuing Disclosure Agreement or other similar instrument to be executed pursuant to SEC Rule 15c2-12, it being expressly understood that variations from the approved forms of the foregoing documents shall be permitted in connection with the issuance and sale of the Bonds provided that the final documents shall be in substantially the forms approved by Council. SECTION 5. Issuance and Sale of Bonds. Subject to the foregoing, and subject also to compliance with the applicable requirements provided in the Project Funding Agreement, but otherwise without further authorization from or action by the Council, the Director of Finance is hereby authorized to issue and sell the Bonds at negotiated sale in one or more separate series, at such time or times, in such amounts, at suchprices and upon such terms and pp conditions as the Director of Finance shall approve and determine to be in the best interest of the County. In connection with each such issuance and sale, the Director of Finance and other appropriate officials of the County are hereby authorized: (a) to negotiate, execute and deliver the Bond Purchase Agreement and Indenture (or applicable supplement) relating to the Bonds or series of Bonds to be issued; (b) to prepare, execute (if applicable) and distribute a Preliminary Official Statement and a final official statement in substantially the form of the Preliminary Official Statement relating to the offering of the Bonds or series of Bonds to be issued; (c) subject to any applicable procurement laws, to appoint and retain such consultants, advisors, agents, appraisers, legal counsel, underwriters, trustee banks and other persons or firms as such official or officials may deem advisable to assist the County in connection with the Bonds or series of Bonds to be issued; and (d) to take such other actions and execute such documents and instruments as may be necessary or advisable in order to effectuate the issuance and sale of the Bonds or series of Bonds to be issued. r SECTION 6. Amendment to Section 3 of Ordinance of Formation Regarding Enforcement of Special Tax Liens. Pursuant to Section 32-53, the Special Tax "may be collected in the same manner as general real property taxes are collected, be subject to the same penalties and the same procedure, sale, and lien priority (subject to the provisions of section 32- 32(c)) in case of delinquency as is provided by general law for default on the payment of real property taxes, unless another procedure is adopted by the council in the ordinance of formation or special tax ordinance." In order to further provide for the security of the Bonds, the Council hereby finds and determines that it is appropriate and in the interests of the County, by amendment to Section 3 of the Ordinance of Formation, to authorize certain procedures for the -4- enforcement of the lien of delinquent Special Taxes for so long as any Bonds are outstanding. Accordingly, Section 3 of the Ordinance of Formation is hereby amended to read in its entirety as follows (with stricken material in brackets and new material underscored): SECTION 3. Levy of Special Tax. In accordance with Article 5, the Council hereby levies the Special Tax upon all taxable parcels of land within the District. The Special Tax shall be apportioned pursuant to the RMA, and the lien thereof shall be on a parity with the lien of general real property taxes and the lien of assessments levied under Section 46-80, Hawaii Revised Statutes; provided, however, that if collections of real property taxes, Special Taxes and assessments levied on a property (including any proceeds of foreclosure, if in a single foreclosure sale to satisfy all delinquent real property taxes, Special Taxes and assessments) are insufficient to pay the total amount due with respect to all real property taxes, Special Taxes and assessments on the.property, then the Director may apply the amount collected first to real property taxes, second to the Special Tax levied hereunder, and third to assessments. In the event of delinquency in the payment of the Special Tax, the Special Tax shall be enforced in the same manner and shall be subject to penalties, interest, fees and charges at the same rates as are applicable to delinquent real property taxes under Chapter 19, Hawaii County Code (2016 Edition, as Amended), as in effect from time to time; provided, however, that for so long as any Bonds are outstanding: (i) if the Special Tax on a property is not paid when due and the delinquency continues to exist not less than 60 days after the due date q Y Y thereof, the Director of Finance may sell the delinquent property by foreclosure without suit in order to collect the delinquent Special Tax and applicable penalties, interest, fees and charges; (ii) if the Special Tax on a property is not paid when due and the delinquency continues to exist not less than 120 days after the due date thereof, unless foreclosure is pending under clause (i) above, the Director of Finance shall proceed with foreclosure on the delinquent property if required under Section 32-60 in order to collect the delinquent Special Tax and applicable penalties, interest, fees and charges; and (iii) enforcement of the lien of the Special Tax may be subject to such further covenants and agreements as may be set forth in the Indenture. The Director of Finance or such official's designee is hereby appointed as the CFD Administrator, as said term is defined in the RMA, to determine, adjust and levy the annual amount of Special Tax due from each owner of Taxable Property, as said term is defined in the RMA, all in accordance with the provisions of the RMA. Proceeds of the Special Tax shall be used only to pay the costs of the [Facilities] Improvements, to pay debt service on the Bonds or other debt authorized and issued for the District pursuant to Section 5 above, and to pay Incidental Expenses. The Special Tax shall be levied pursuant to this ordinance only as long as needed to pay such costs, debt service and Incidental Expenses. SECTION 7. Credit Enhancement. The Director of Finance is hereby authorized to procure bond insurance or other credit enhancement for the payment of the principal of and interest on some or all of the Bonds of a series if and upon such terms as may be required by the Project Funding Agreement or as otherwise deemed by the Director of Finance to be in the best interest of the County. The Director of Finance is authorized to execute such documents and certificates as may be necessary or appropriate to obtain such bond insurance or other credit enhancement. - 5- SECTION 8. Reimbursement of Expenditures. Pending the issuance of any particular series of Bonds, it is reasonably expected that the County or the Developer may advance funds from time to time to pay Project Costs and that such advances of funds will be reimbursed from proceeds of such series of Bonds when issued. The County hereby declares its official intent to use Bond proceeds to reimburse itself and/or the Developer for such future advances of funds to pay Project Costs. This ordinance is adopted in part for the purpose of establishing compliance with the requirements of Section 1.150-2 of the Treasury Regulations. SECTION 9. Repeal of Conflicts. All ordinances and resolutions, and any portions of ordinances and resolutions, heretofore enacted or adopted by the Council that are in conflict or inconsistent with any provision of this ordinance shall be and are hereby repealed to the extent of such conflict or inconsistency. SECTION 10. Severability. If any provision of this ordinance, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are severable. SECTION 11. Effective Date. This Ordinance shall take effect upon its approval. INTRODUCED BY: COUNCIL M► MBER, COUNTY OF HAWAII Kona , Hawai`i Date of Introduction: March 9, 2022 Date of 1st Reading: March 9, 2022 Date of 2nd Reading: March 23, 2022 Effective Date: April 7, 2022 REFERENCE Comm. 660 -6- COUNTY CLERK OFFICE OF THE COUNTY CLERK COUNTY OF HAV/A County of Hawai`i Kona, Hawai`i yid APR -7 Pli j: 02 Introduced By: Matt Kaneali'i-Kleinfelder (B/R) ROLL CALL VOTE Date Introduced: March 9, 2022 AYES NOES ABS EX First Reading: March 9, 2022 Chung X Published: March 18, 2022 David X Inaba X REMARKS. Kaneali`i-Kleinfelder X Kierkiewicz X Kimball X Lee Loy X Richards X Villegas X Second Reading: March 2 3 , 2 0 2 2 7 0 2 0 To Mayor: April 5, 2022 Returned: April 7, 2022 ROLL CALL VOTE Effective: April 7, 2022 AYES NOES ABS EX Published: April 22, 2022 Chung X REMARKS. David X Inaba X Kaneali`i-Kleinfelder X Kierkiewicz X Kimball X Lee Loy X Richards X Villegas X 9 0 0 0 I DO HEREBY CERTIFY that the foregoing BILL was adopted by the County Council published as indicated above. .4"iirorgep ader COUNCIL CHAIRPERSO prove isapproved this day of , 20 Z'P-Le_-- COUNTY CLERK Bill No.: 13 6 MAYOR, COUNTY OFHAWAI`I C-660/Waived FC Reference: Ord No.: 22 3a