HomeMy WebLinkAbout2013-05-21 e-packetP.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
CITY HALL
T19 ESD `II 'TT--22+,--22-0-Fj
2:00 P.M.
W91WW611119 I V 111SX404MIOM
You are invited to offer your suggestions. In order that you may know our method of conducting
Board business, we proceed as follows:
The regular meetings of the South San Francisco Oversight Board for the Successor Agency to the
City of South San Francisco Redevelopment Agency are held on the third Tuesday of each month at
2:00 p.m. in the in the Large Conference Room, Top Floor at City Hall, 400 Grand Avenue, South
San Francisco, California.
In accordance with California Government Code Section 54957.5, any writing or document that is a
public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a
regular meeting will be made available for public inspection in the City Clerk's Office located at City
Hall. If, however, the document or writing is not distributed until the regular meeting to which it
relates, then the document or writing will be made available to the public at the location of the
meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San
Francisco, California 94080.
In compliance with Americans with Disabilities Act, if you need special assistance to participate in
this meeting, please contact the South San Francisco City Clerk's Office at (650) 877-8518.
Notification 48 hours in advance of the meeting will enable the City to make reasonable
arrangements to ensure accessibility to this meeting.
Chai!Merson:
Neil Cullen
Selected by:
Largest Special District of the type in H&R
Code Section 34188
Vice Chair:
Denise Porterfield
Selected by:
San Mateo County Superintendent of Schools
Deputy Superintendent, Fiscal and Operational Services
San Mateo County Office of Education
Alternate: Patti Ernsberger
Assistant Superintendent, Business Services
South San Francisco Unified School District
Board Members:
Mark Addiego
Councilmember, City of South San Francisco
Alternate: Barry Nagel
City Manager, City of South San Francisco
Gerry Beaudin
Principal Planner, City of South San Francisco
Barbara Christensen
Director of Community/Government Relations,
San Mateo County Community College District
Reyna Farrales
Deputy County Manager, San Mateo County
Paul Scannell
Craig Labadie
Selected by:
Mayor of the City of South San Francisco
Mayor of the City of South San Francisco
Chancellor of California Community College
San Mateo County Board of Super-visors
San Mateo County Board of Supervisors
(Public Member)
.Advisory:
Marty Van Duyn — Assistant City Manager, City of South San Francisco
Jim Steele — Finance Director, City of South San Francisco
Steve Mattas — City Attorney, City of South San Francisco
Krista Martinelli — City Clerk, City of South San Francisco
Armando Sanchez — Redevelopment Consultant, City of South San Francisco
CALL TO ORDER
ROLL CALL
PLEDGE OF ALLEGIANCE
OVERSIGHT BOARD REGUIAR MEETING MAY 21, 2013
AGE,NDA PAGE 2
PUBLIC COMMENTS
Comments from members of the public on items not on this meeting agenda. The Chair may set time
limit for speakers. Since these topics are non-agenda items, the Board may briefly respond to
statements made or questions posed as allowed by the Brown Act (Government Code Section
54954.2). However, the Board may refer items to staff for attention, or have a matter placed on a
future agenda for a more comprehensive action report,
MATTERS FOR CONSIDERATION
1. Motion to approve the Minutes of the Special Meeting of April 16, 2013.
2. Resolution ratifying an executed Escrow Deposit and Trust Agreement with
the Bank of New York Mellon Trust Company, to provide a trust vehicle for
funding the Successor Agency's enforceable obligations pursuant to a
Disposition and Development Agreement with Oyster Point Ventures, LLC,
and making related findings pursuant to Health and Safety Code Section
3418 1 (E).
3. Future Agenda Items.
a) Reorganization of the Board (June Regular Meeting).
b) Long Range Property Management Plan.
c) Employee Staffing Report.
ADJOURNMENT
OVERSK&rr BOARD REGUIAR MEETING MAY 21, 2013
AGENDA PAGE 3
of
ROLL CALL
MINUTES DRAFT,
OVERSIGHT BOARD FOR THE
SUCCESSOR AGENCY TO THE CITY OF
SOUTH SAN FRANCISCO
REDEVELOPMENT AGENCY
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
CITY HALL
IARGE CONFERENCE RO()M,'I'()P FLOOR
400 GRAND AVENITE
PLEDGE OF ALLEGIANCE
AGENDA REVIEW
None.
PUBLIC COMMENTS
TUESDAY, APRIL 16, 20)13
2:00 p.m.
Time: 2:01 pm
Present: Board Members Beaudin,
Christensen, Farrales* and Scannell,
Alternate Boardmember Barry Nagel,
Alternate Vice Chairperson Ernsberger
and Chairperson Cullen.
*Boardmember Farrales arrived at 2.07
pm.
Led by Alternate Boardmember Nagel.
Mita Saba spoke regarding the 636 El Camino Real leasehold issue and stated that she hoped to be a
tenant and was anxiously waiting to sign the lease so she could bring her business back to South San
Francisco. She remarked that she would greatly appreciate any actions taken to expedite the process.
MATTERS FOR CONSIDERATION
Motion to approve the Minutes of the Regular Meeting of March 12, 2013.
Finance Director Steele proposed revisions to the minutes which were presented to the Board in
redlined format,
Motion- Boardmember Beaudin/Second- Boardmember Christensen: to approve the Minutes of the
Regular Meeting of March 12, 2013 as amended. Approved by the following voice vote: AYES:
Boardmembers Beaudin, Christensen, Scannell and Alternate Boardmember Nagel, Alternate Vice
Chair Emsberger and Chair Cullen; NOES: None; ABSTAIN: None; ABSENT: Boardmember
Farrates.
2. Resolution No 9-2013 setting the Regular Meeting of the Oversight Board as the
third (3rd) Tuesday of the month at 2:00 p.m. in the City Manager's Conference
Room at South San Francisco City Hall located at 400 Grand Avenue; and
removing the former Regular Meeting Schedule which was established by Motion
at the Board's April 10, 2012 Special Meeting.
Clerk Martinelli explained that in reviewing the Board's meeting history for 2013, it became evident that
the third (3`d) Tuesday at 2:00 p.m. monthly was a more suitable time for the Board's Regular Meeting
based on the flow of business from the Successor Agency to the Board.
Motion- Boardmember Beaudin/Second- Boardmember Christensen: to approve Resolution No.9-
2013. Approved by the following voice vote: AYES: Boardmembers Beaudin, Christensen, Scannell
and Alternate Boardmember Nagel, Alternate Vice Chair Ernsberger and Chair Cullen; NOES: None;
ABSTAIN: None; ABSENT: Boardmember Farrales.
3. Report on State Department of Finance and County of San Mateo reviews of
ROPS IV Items 13-14A and Report of State Department of Finance Review of
Non-Housing Due Diligence Report.
Finance Director Steele presented the informational staff report requiring no Board action and
reviewing the State Department of Finance ("DOF") and the County of San Mateo reviews of ROPS
IV as well as the DOF review of the Non-Housing Due Diligence Report ("DDR"). It appeared that
the agencies submitting the reviews intended to ensure Boardmembers were aware of certain items
and had additional opportunity to ask questions pertinent to any potential concerns.
Regarding the DOF's review of ROPS IV, it disallowed several items. Two of these items were
disallowed on timing grounds. First, was the $2.3 million in housing bond proceeds. Second, the
DOF disallowed a $2 million payment to the San Mateo County Harbor District. Regarding the
Harbor District payment, DOF stated that the Board should resubmit the payment request upon
receipt of actionable reports demonstrating completion of certain tasks. Director Steele advised that
in the meantime, a loan agreement with the City could be approved to fund the obligation.
SPECIAL OVERSIGHT BOARD MEETING APRIL 16, 2013
MINUMS PAGE 2
Boardmember Scannell inquired as to the loan agreement funding mechanism.
Finance Director Steele explained that when the Department of Finance rejects an item on technical
grounds, such as a timing issue., and an invoice on an enforceable obligation has to be paid in a timely
fashion, the no-interest loan agreement with the City pen-nits timely funding of the obligation. The
loan then becomes an obligation of the Successor Agency reflected on the next ROPS cycle.
Assistant City Manager Van Duyn advised that in a meet and confer session, DOF had suggested this
as the preferred mechanism for funding such obligations.
Finance Director Steele continued with the ROPS review by the DOE He advised that DOF also
disallowed $42,660 of the $74,162 loan agreement for accounts payable stating this portion of the
loan agreement was not necessary since the Successor Agency received Redevelopment Property Tax
Trust Funds ("RPTTF").
Finally, the State remarked that several line items should have been absorbed under administrative
costs.
Boardmember Christensen inquired as to the disallowance of housing bond proceeds and whether the
bond proceeds could be used when the findings of completion were in hand or whether signed
contracts were required,
Finance Director Steele responded that the rejection was on a dual basis. Once findings of
completion and signed agreements were in hand, the DOF would entertain review of the obligations
on future ROPS.
Finance Director Steele turned to the County's review of ROPS IV, in which it flagged any line item
with more than a 20% or $ 10,000 difference from a prior ROPS as well as new items that hadn't been
on prior ROPS.
Regarding the Non-Housing DDR, the DOF issued its final determination letter. The review letter
noted that ROPS 1, row 74 outlined an estimated prepayment of $5.3 million for the Housing and
Urban Development (HUD) and Certificates of Participation (COPS) debt, while the actual
prepayment consisting of $407,517.20 in cash with fiscal agent and $5,216,643.92 in Successor
Agency held reserves exceeded the $5.3 million estimate by $324,161. Use of the funds was
necessary to call the bonds per the Board's direction. The additional amount would be a future loan
agreement item for Board approval.
In response to a query by Boardmember Christensen relating to the DOF's comments on the
acquisition of the former Ford properties, Finance Director Steele responded that DOF was pointing
out that the properties are now properly listed as assets of the Successor Agency with no net impact to
the taxing entities.
The DOF also pointed out that there were 3 items that were included in both loan agreements and the
DDR. This was due to the fact that staff was not sure where to place them at the time and wanted to
SPEUAL OVERSIGHT' BOARD MEFTING APRIL 16, 2013
MINI TES PAGE 3
make sure they were presented to DOF in some manner. Since the loans are on ROPS IV, staff will
remove them from the DDR.
Finally, DOF did not allow the funds that were approved by the Board to be set aside for calling the
2006 RDA bonds. Staff included an item on this Agenda to rectify this circumstance at DOF's
suggestion by asking the Board to adopt a resolution to make findings that the escrow agreement is in
the taxing entities' best financial interest.
4. Resolution 10-2013 approving a Loan Agreement in the amount of $5,445.87 with
the City of South San Francisco to allow the Successor Agency to make payment
for a Non-housing Recognized Obligation Payment expense shown on ROPS IV
but incurred during ROPS 111,
Finance Director Steele presented the staff report noting an obligation for train station improvements
on ROPS IV with a cost that came due during ROPS TIT. Accordingly, staff was recommending that
the Board approve a loan agreement in which the City would be making the payment presently due,
which would then be paid back out of future RPTTF. He anticipated such agreements would become
commonplace at every Board meeting.
As a point of clarification, Boardmember Scannell observed that since it was disallowed on ROPS IV
and the City had already funded the obligation, the loan document was essentially a clean-up measure.
Finance Director Steele affirmed that point and added that the loan was without interest.
Motion- Boardmember Scannell/Second- Alternate Boardmember Nagel: to approve Resolution No.
10-2013. Unanimously approved by voice vote,
5. Resolution 11 -2013 of the Oversight Board Authorizing an Escrow Deposit and
Trust Agreement with the Bank of New York Mellon Trust Company, N.A.
Related to the 2006 RDA Bonds and Making Related Findings Pursuant to Health
and Safety Code Section 34181(e).
Finance Director Steele presented the staff report recommending approval of a resolution making
findings pursuant to Health and Safety Code Section 3418 1 (e) consistent with the actions that the
Board made on May 17, 2012 for funding an Escrow Deposit and Trust Agreement to call the 2006
RDA Bonds in September 2016. At the time, the Board directed staff to hold the funds in order to
pay-off the redevelopment bonds at their first call date in 2016. This course of action was approved
on the ROPS, not to exceed $60 million. Since the books have now closed, the actual amount has
been certified as slightly over $50 million. The DOF was seeking to ensure the Board reviewed this
transaction and was fully aware of any economic consequences to the taxing entities. Accordingly, it
was asking the Board to formally adopt certain findings. Director Steele observed the findings
mirrored the Board's earlier discussions previous to approval of the agreement. He directed
Boardmembers to Page 3 of the redlined resolution, which identified minor text changes to clarify for
DOF that the Board had made the determination as was required and additionally called out the
benefits to the taxing entities. He assured the Board the agreement was still intact and the funds
. . .............. .
SPECIAL OVERSIGHT BOARD MEEAING APRIL 16, 2013
MINIT11',S PAGE 4
remained in the escrow account.
City Attorney Mattas advised that a meet and confer request on this issue had been filed with DOF
providing additional information, including a copy of the draft resolution.
In response to Boardmember Scannell's inquiry into the reasoning behind a meet and confer in light
of the current resolution, City Attorney Mattas responded this resolution was specifically responsive
to what DOF requested notwithstanding the fact that it already approved this item and now refused to
acknowledge its own approval. Attorney Mattas opined it would be best for the Board's position if
DOF changed its determination that the trust agreement was not an enforceable obligation.
Motion- B,oardmember Beaudin/Second- Boardmember Scannell: to approve Resolution No'. I I -
2013. Unanimously approved by roll call vote.
6. Resolutions making findings that the Commercial Space at 636 El Camino Real is
an integral and indivisible part of a housing asset and shall not be subject to
subdivision or a revenue sharing arrangement between the City and the Successor
Agency and the assignment of the Commercial Master Lease for 636 El Camino
Real by the Successor Agency of the Redevelopment Agency of the City of South
San Francisco.
Assistant City Manager Van Duyn presented the staff report recommending approval of resolutions:
1) approving the assignment of the Commercial Master Lease for 636 El Camino Real by the
Successor Agency to the City of South San Francisco; and 2) making findings that the Commercial
Space at 636 El Camino Real is an integral and indivisible part of a housing asset and shall not be
subject to subdivision or a revenue sharing arrangement between the City and the Successor Agency.
The recommendation was to move the leasehold interest wider the direct control of the City as
property owner so that DOF would not have to be routinely consulted for leasehold related matters.
The second objective related to whether or not a revenue sharing agreement outlining sharing
between the Agency and the City of South San Francisco would be necessary in the disposal of this
asset.
Consultant Sanchez outlined the objectives further. With respect to the leasehold interest in the retail
space, it was requested to enable the facilitation of improvements and expedite the signing of leases
for the space. It was staff's belief that assigning the lease to the City would speed up the process and
benefit the entire community. In terms of a revenue sharing agreement, the retail space was an
investment of minimal value, if any. Despite that, the City of South San Francisco went through with
the project because it would provide community services and amenities. It invested $2 million to
create the y
space, but only $100,000 would be realized annually. Clearly the investment would not pay
p
for itself in the near future. Additionally, there would be roughly half a million dollars in tenant
improvements required to bring the space online. The City hoped for at least a refund on the housing
portion exclusive of the $1.5 million that went into creating the shell, the retail space and almost 7000
square feet of surface parking. The crux of the argument against a revenue sharing agreement was
that it was a terrible investment and there was no money to be made.
SPECIAL OVERSIGHT BOARD MU.,TING AI RJL 16, 217113
MINUns PAGE 5
In response to a question by Boardmember Christensen, Consultant Sanchez advised that after certain
funds were put in reserve, the remaining funds from the leases would go into the housing fund,
Chairperson Cullen shared his concern that it seemed from the report that MidPeninsula had
committed to financing the tenant improvements if it had money left over from the construction,
which it did, By reading the report, it seemed to him, that MidPen was being released of this
obligation.
Consultant Sanchez clarified that this was not the case. In fact, it would be deducted from the $9
million loan.
In response to Boardmember Christensen's inquiry, Consultant Sanchez advised the rent was close to
$2.00 per square foot for commercial space in the respective area. He reiterated the importance of
expediting leases for the space and believed the revenue sharing discussion could be delayed.
Nevertheless, the lease of the commercial space would not be a moneymaker. Indeed the space was
installed as part of a City requirement to ensure certain amenities were available to occupants and
abide by mixed-use housing standards. He restated that a discussion of how losses could be shared
over time could be postponed, but urged a determination on the leasehold interest was a priority at
this time.
In response to Boardmember Beaudin's query into revenue generation, Consultant Sanchez confirmed
that after the $510,000 ceiling was reached, the revenue would be shared amongst the housing fund,
the City and the Successor Agency. That formula could be determined in the future with another
discussion.
Chairperson Cullen expressed an interest in adopting the Resolution assigning the leasehold interest
and deferring a determination on a revenue sharing agreement.
Motion- Boardmember Christensen/Second- Boardmember Beaudin: to approve Resolution No. 12-
2013 assigning the Commercial Master Lease for 636 El Camino Real by the Successor Agency of
the Redevelopment Agency of the City of South San Francisco to the City of South San Francisco.
Unanimously approved by voice vote.
7. Future Agenda Items.
a) Long Range Property Management Plan.
b) Employee Staffing Report.
SPEVIAL OVITSIGHTBOARD METTING APRI 1, 16, 2013
MINITITS PAGF6
ADJOURNMENT
Motion- Boardmernber Scannell /Second- Boardmember Beaudin: to adjourn the meeting.
Unanimously approved by voice vote.
Pursuant to the above motion, Chairperson Cullen adjourned the meeting at 3:13 p.m.
Submitted: Approved:
kKrni)a J. M rtinel. C rk Neil Cullen, Chairperson
City f South Ij
City f Souih h Francisco Oversight Board for the Successor Agency to the
South San Francisco Redevelopment Agency
SPECIAL OVERSIGHT BOARD MEETING APRIL 16,2013
MINI TFES PAGE 7
Government Code Section 54957.!
SB 343
Item from Oversight Board
In response to a question by Boardmember Christensen, Consultant Sanchez advised that after certain
funds were put in reserve, the remaining funds from the leases would go into the housing fund.
Chairperson Cullen shared his concern that it seemed from the report that MidPeninsula had
committed to financing the tenant improvements if it had money left over from the construction,
which it did, By reading the report, it seemed to him, that MidPen was being released of this
obligation.
Consultant Sanchez clarified that this was not the case. In fact, it would be deducted from the $9
million loan.
In response to Boardmember Christensen's inquiry, Consultant Sanchez advised the rent was close to
$2.00 per square foot for commercial space in the respective area. He reiterated the importance of
expediting leases for the space and believed the revenue sharing discussion could be delayed.
Nevertheless, the lease of the commercial space would not be a moneymaker. Indeed the space was
installed as part of a City requirement to ensure certain amenities were available to occupants and
abide by mixed-use housing standards. He restated that a discussion of how losses could be shared
over time could be postponed, but urged a determination on the leasehold interest was a priority at
this time.
In response to Boardmember Beaudin's query into revenue generation, Consultant Sanchez confirmed
that after the $5 10,000 ceiling was reached, the revenue would be shared amongst the housing fund,
the City and the Successor Agency. That formula could be determined in the future with another
discussion.
Chairperson Cullen expressed an interest in adopting the Resolution assigning the leaschold interest
and deferring a determination on a revenue sharing agreement.
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br ing tile, i-CVeflLIC sh ria issue for reconsideration at a later date.
Motion- Boardmember Christensen/Second- Boardmember Beaudin: to approve Resolution No. 12-
2013 assigning the Commercial Master Lease for 636 El Camino Real by the Successor Agency of
the Redevelopment Agency of the City of South San Francisco to the City of South San Francisco.
Unanimously approved by voice vote.
7. Future Agenda Items,
a) Long Range Property Management Plan.
b) Employee Staffing Report,
I Del e ted:
Deleted:
Deleted;
SPECIAL OVLRSIGHT BOARD MEFTING APR] L 16, 2013
MIN"Urk's PAGE 6
DATE: May 21, 2013
TO: Members of the Oversight. Board
FROM: Jim Steele, Finance Director
SUBJECT: RESOLUTION RATIFYING AN EXECUTED ESCROW DEPOSIT AND TRUST
AGREEMENT WITH THE BANK OF NEW YORK. MELLON TRUST COMPANY, TO
PROVIDE A TRUST VEHICLE FOR FUNDING THE SUCCESSOR AGENCY'S
ENFORCEABLE OBLIGATIONS PURSUANT TO A DISPOSITION AND
DEVELOPMENT AGREEMENT WITH OYSTER POINT VENTURES, LLC, AND
MAKING RELATED FINDINGS PURSUANT TO HEALTH AND SAFETY CODE
SECTION 34181(E)
It is recommended that the Oversight Board approve the attached resolution ratifying an executed
Escrow Deposit and Trust Agreement with the Bank of New 'Fork Mellon Trust Company, to
provide a trust vehicle for funding the Successor Agency's enforceable obligations pursuant to a
Disposition and Development Agreement (DDA) with Oyster Point Ventures, LLC, and making
related findings pursuant to Health and Safety Code Section 34181(E).
11 !
The (DDA) dated March 23, 2011, between Oyster Point Ventures, LLC (the "Developer ") and the City
of South San Francisco, requires the former Redevelopment Agency (RDA) to provide payment for
certain infrastructure improvements estimated to cast $29,463,230 as outlined in the DDA to the
Developer. The DDA also required that an escrow account be set up to hold these funds, To minimize
impacts on future Redevelopment Property Tax Trust Funds (RPTTF), thereby maximizing revenue to
taxing entities, the Oversight Board directed staff on May 8, 2012 via row 18 of the January through June
2012 Recognized Obligations Payment Schedule (ROPE 1) to begin funding a reserve for this obligation..
The Board determined it would be in the taxing entities best interest to set funds aside over time, and not
on a one -time basis. ROPS I approved an initial $6 million to set aside, and each subsequent ROPE has
approved an additional $3 million (shown as row 12 in the most recent RODS 13 -14 A). The Board also
recognized that the DDA itself would maximize the future strewn of property tax revenues to all taxing
entities, because through the DDA the Developer will convert vacant and underutilized properties to a
large, more valuable research and development office parr that the Developer has been entitled far.
Staff Report
Subject: Resolution of the Oversight Board Authorizing an Escrow Deposit and Trust Agreement
im
In staff discussions with the Oversight Board during the April-May 2012 time period, the Board directed
staff to set up an Escrow/Trust arrangement that would safeguard the funds in trust for completing the
obligations of the DDA. Staff carried out that direction and has executed a Trust Agreement with the
Bank of New York Mellon. Staff recommends the reserve be moved into that escrow account, and that the
Board adopt findings via the attached resolution that consent to that movement of funds, and to findings
that demonstrate that the Board has indeed made that direction in the best interest of the taxing entities,
The Trust is in the best interest of the taxing entities because it contains the following provisions:
Specifies that "all interest, profits and other income received from the investment of moneys
in the Escrow Account shall be retained in the Escrow Account;
2, Specifies that funds shall be disbursed as follows and consistent with the provisions of the DDA
and with the intent of Redevelopment Dissolution provisions:
a, "Amounts on deposit in the Escrow Account shall be disbursed upon the receipt by
the Escrow Agent of a written instruction from the Agency in the form set forth in
Exhibit B attached hereto and executed by both the City Manager and the City
Attorney of the City instructing the Escrow Agent to disburse funds for Phase IC
Improvement Costs or Phase IIC Improvement Costs;
b. " Provided that if Developer has not accepted conveyance of the Conveyed Property as
defined in the DDA by May 29, 2019, the Agency may terminate the DD�A and
provide written direction to the Escrow Agent to disburse the amounts on deposit in
the Escrow Account to the Agency for the following purposes in the following order
of priority: (i) first, for payment of the Kings Leases Purchase Price pursuant to the
DDA and (ii) second, for payment to the County of San Mateo for distribution to the
taxing entities (emphasis added)"; and
C. Specifies authorized investments that are prudent, conservative and designed to protect
principal while earning a safe rate of return by specifying investments in Exhibit A of the
Trust Agreement.
FISCAL IMPACT
The reserve for fiscal year 2012-13 is currently $12 million ($6 million approved by the State
Department of Finance (DOF) in BOPS 1, January through June 2012, plus $3 million approved by State
DOF in BOPS 11 July through December 2012, plus $3 million approved by State DOF in ROPS III
January through June 2013). BOPS IV, or RAPS 13-14A for the period July through December 2014 has
been approved by the State DOF, and will provide an additional $3 million for the first half of fiscal year
2013-14.
CONCLUSION
Consistent with BOPS I approval by the Board May 17, 2012 and subsequent ROPE 11, 111, and IV, all of
which are now approved by State Department of Finance (DOF), setting up a trust/escrow account will allow
the Successor Agency to satisfy its obligation under the Oyster Point DDA and will maximize revenues on
an ongoing basis.
Staff Report
Subject., Resolution of the Oversight Board Authorizing an Escrow Deposit and Trust Agreement
Page 3
By:
—Jim S teel
Finance I
ect
or
Approved:
Marty Van Duyn
Assistant City Manager an erector of
Economic and Community Development
Attachments: Resolution
Executed Escrow Deposit and Trust Agreement
JS/BN:cd
RESOLUTION NO
OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY OF THE CITY OF SOUTH SAN
FRANCISCO REDEVELOPMENT AGENCY
RESOLUTION RATIFYING AN EXECUTED ESCROW DEPOSIT
AND TRUST AGREEMENT WITH THE BAND. OF NEW YORK
MELLON TRUST COMPANY, TO PROVIDE A TRUST
VEHICLE FOR FUNDING THE SUCCESSOR AGENCY'S
ENFORCEABLE OBLIGATIONS PURSUANT TO A
DISPOSITION AND DEVELOPMENT AGREEMENT WITH
OYSTER POINT 'VENTURES, LLC, AND MAKING RELATED
FINDINGS PURSUANT TO HEALTH AND SAFETY CODE
SECTION 34181(E)
WHEREAS, on March 23, 2011, the former City of South. San Francisco
Redevelopment Agency ( "Agency ") entered into a Disposition and Development Agreement
( "DDA ") with Oyster Point Ventures, LLC ( "Developer "); and
WHEREAS, the DDA required that the Agency pay the Developer for certain specified
infrastructure improvements, at a total cost of $29,463,230, and
WHEREAS, following the dissolution of the Agency as of February 1, 2012, the
Successor Agency presented the DDA to the Oversight Board for consideration, in the course of
which the Oversight Board consented to fund the former Agency's DDA obligations over time to
minimize the immediate impact on taxing entities that would have resulted from paying the
obligations all at once; and
WHEREAS, the Oversight Board also agreed to honor the DDA provisions requiring
deposit of the obligated funds into an escrow account for protection of those funds, and
WHEREAS, following the dissolution of the Agency, the Successor Agency of the
Agency included a reserve for a first payment of $6,000,000 pursuant to the DDA, as line 18 on
the Recognized. Obligation Payment Schedule (°ROPS I ") for the period January through June
2012, which was approved by the Oversight Board and the State Department of Finance (DOS');
and
WHEREAS, the Successor Agency included additional payments of $3,000,000
pursuant to the DDA as line items on the RODS for the periods July through December, 2012;
January through June, 2013; and July through December, 2013 ( "ROPS 1I" "ROPS III," and
"ROPE 13- 14A,°" respectively); all of which were approved by the Oversight Board and DOF;
and
WHEREAS, as of January 1, 2013, the 'Successor Agency and The Bank of New York
Mellon Trust Company, N.A. ("Bank") entered into that certain Escrow Deposit and Trust
Agreement ("Agreement") providing for the deposit of funds into an escrow account to be
maintained in trust by the Bank for the purpose of fulfilling the Agency's infrastructure
improvement obligations to Developer; and
WHEREAS, the Agreement provides for an initial Successor Agency deposit of
$6,000,000, and a deposit of $3,000,000 every six months thereafter until completion of all
Successor Agency deposits pursuant to the direction provided by the Oversight Board as
referenced above and consistent with the DDA, and further provides for the disbursement of such
funds by the Bank in accordance with the terms and provisions of the Agreement; and
WHEREAS, in accordance with Assembly Bill x1 26, pursuant to its approval of ROPS
1, ROPS II, ROPS III and ROPS 13-14A, the Oversight Board approved the creation of a reserve
to fulfill the Successor Agency's enforceable obligations to the Developer pursuant to the DDA;
and
WHEREAS, DOF approved such reserve as an enforceable obligation listed in ROPS 1,
ROPS 11, ROPS III and ROPS 13-14A; and
WHEREAS, on June 27, 2012, Assembly Bill 1484 was enacted, modifying Assembly
Bill x1 26 in several respects, including adding a requirement that henceforth all Oversight
Board actions be taken by resolution and submitted to DOF; and
WHEREAS, Health and Safety Code Section 34181(c) authorizes the Oversight Board
to determine whether the Successor Agency should terminate or renegotiate the Agreement,
based on consideration of the best interest of the taxing entities; and
WHEREAS, the Oversight Board has reviewed its original direction to create a reserve
for the DDA obligations to Developer, and has reviewed and considered the terms of the
Agreement; and
WHEREAS, the Oversight Board has determined that it is still in the affected taxing
entities' best financial interest for the Agreement to be maintained so that the infrastructure
improvements may be timely completed and the taxing entities will realize the benefit of much
higher property taxes from the resulting development, which will intensify land use of either
currently vacant or underutilized land for research and development office space; and
WHEREAS, the Oversight Board has also determined that the Agreement will
safeguard all deposited funds so that any funds not needed to comply with obligations pursuant
to the DDA may be returned to the County for distribution; and, as stated in Section 5 of the
Agreement below:
"the Agency may terminate the DDA and provide written direction to the Escrow
Agent to disburse the amounts on deposit in the Escrow Account to the Agency for the
following purposes in the following order of priority: (i) first, for payment of the Kings
Leases Purchase Price pursuant to the DDA and (ii) second, for payment to the County
of San Mateo for distribution to the taxing entities; and
2082306.1 2
WHEREAS, the Agreement contains specific investment authorization instructions
which will further protect the principal of these funds and ensure they earn interest at a prudent
rate. ,
NOW, THEREFORE, BE IT RESOLVED that the Oversight Board for the Successor
Agency of the City of South San Francisco Redevelopment Agency hereby:
1. Finds that the foregoing Recitals are true and correct and made a part of this Resolution,
2. Reaffirms the creation and funding over time of a trust account in the amount of
$29,463,230 for payment to Oyster Point Ventures, LLC for infrastructure improvements
pursuant to the Disposition and Development Agreement dated as of March 23, 2011
3. Ratifies, authorizes and consents to the Successor Agency's execution of an Escrow
Deposit and Trust Agreement with The Bank of New York Mellon. Trust Company for
such purpose, and authorizes the funding of such Agreement pursuant to its terms over
time, consistent with duly approved ROPS.
4. Finds that said Agreement should not be terminated or renegotiated, and instead
authorizes and consents to its continuation in its present form as being in the best interest
of the taxing entities, in that the continuation of the Agreement in its present form will
increase future property tax revenues to the taxing entities.
5. Authorizes the inclusion of the Agreement as an enforceable obligation on subsequent
Recognized Obligation Payment Schedules.
6. Directs staff to transmit this Resolution and such related information as the Successor
Agency deems appropriate to the State Department of Finance and other applicable
agencies in accordance with Assembly Bill x1 26, as modified by Assembly Bill 1484,
I hereby certify that the foregoing Resolution was regularly introduced and
adopted by the Oversight Board for the Successor Agency of the City of South San
Francisco Redevelopment Agency at a meeting held on the 21't day of May, 2013 by the
following vote:
AYES:
NOES:
U, -1.1 a KI "I
01 0.3 8
ATTEST:
KITIM41-IN
Successor Agency Secretary
Pa
ESCROW DEPOSIT AND TRUST AGREEMENT
by and between the
SOUTH SAN FRANCISCO SUCCESSOR AGENCY
THE BAND. OF NEW YORK MELLON TRUST COMPANY, N,A.
as Escrow Agent
Dated as of January 1, 2013
P5
This ESCROW DEPOSIT AND TRUST AGREEMENT (the "Escrow Agreement"),
dated as of January 1, 2013, is by and between SOUT14 SAN FRANCISCO SUCCESSOR
AGENCY, a public body corporate and politic (the "Agency"), and THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., a national banking association organized and
existing under the laws of the United States of America, as escrow agent (the "Escrow Agent")
(any capitalized terms not otherwise defined in this Escrow Agreement shall have the meaning
given to them in the DDA (as defined below)),
WITNESSETH:
WHEREAS, the Agency, Oyster Point Ventures, LLC a Delaware limited liability
company (the "Developer") and the City of South San Francisco, a municipal corporation
("City"), have entered into that certain Disposition and Development Agreement dated March
23, 2011 (the "DDA"), pursuant to which each of the Agency and the Developer has certain
responsibilities and obligations with respect to the development of certain land located in the
City of South San Francisco, County of San Mateo, State of California, as more particularly
described in Exhibit A to the DDA.
WHEREAS, pursuant to Section 3A of the DDA, the Agency agreed that the allocation
of costs and contributions in connection with the Phase IC Improvement Costs and Phase TIC
Improvement Costs shall be as set forth on Exhibit 3.4.1 to the DDA.
WHEREAS, to secure the Agency's performance of, and -ensure funds are available to
pay for, the Agency's share of the cost of the Phase IC Improvement Costs and Phase TIC
Improvement Costs, the Agency desires to deposit certain funds into the escrow account created
hereunder, as provided for herein.
WHEREAS, the Agency proposes to appoint the Escrow Agent hereunder for the purpose
of holding and administering the escrow account described above, and the Escrow Agent desires
to accept said appointment.
WHEREAS, the Escrow Agent has full powers to act with respect to the escrow account
and trust created herein and to perform the duties and obligations to be undertaken pursuant to
this Escrov,- Agreement.
NOW, THEREFORE, in consideration of the above premises and of the covenants and
agreements herein contained and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, the Agency and the Escrow Agent do
hereby agree as follows:
P6
Section 1, Appointment of Escrow Agent. The Agency hereby appoints the Escrow
Agent as escrow agent for all purposes of this Escrow Agreement and in accordance with the
terms and provisions of this Escrow Agreement, and the Escrow Agent hereby accepts such
appointment.
Section 2, Establishment of Escrow Account, There is hereby created by the Agency
with, and to be held by, the Escrow Agent, an escrow to be maintained in trust by the Escrow
Agent on behalf of the Agency, said escrow to be designated the "Escrow Account," All moneys
deposited in the Escrow Account shall be held as a separate account and pledged for the payment
of the Agency's share of the cost of the Phase IC Improvement Costs and Phase IJC
Improvement Costs as required under the DDA and as provided for herein.
Section 3. De omits into Escrow Account. The Agency hereby deposits with the Escrow
Agent the sum of Six Million Dollars ($6,000,000) for deposit into the Escrow Account. Every
six (6) months thereafter, the Agency may deposit with the Escrow Agent the sum of Three
Million Dollars ($3,000,000) for deposit into the Escrow Account until completion of all Agency
deposits as set forth on Exhibit 3A. 1 to the DDA.
Section 4. Investment of Amounts; Instructions as to APR!katic�n of De os (a) Upon
receipt of the written direction of an authorized officer of the Agency, the Escrow Agent shall
invest the moneys deposited into the Escrow Account in one or more of the investments listed in
Exhibit A attached hereto (the "Permitted Investments"),
(b) The Agency recognizes and agrees that the Escrow Agent will not provide
supervision, recommendations or advice relating to either the investment of moneys held in the
Escrow Account or the purchase, sale, retention or other disposition of any Permitted Investment,
The Escrow Agent may conclusively rely upon the Agency's written instructions as to both the
suitability and legality of the directed investments. Ratings of Permitted Investments shall be
determined at the time of purchase of such Permitted Investments and without regard to ratings
subcategories. In the absence of investment instructions from the Agency, the Escrow Agent
shall not be responsible or liable for keeping the moneys held by it hereunder fully invested in
Permitted Investments,
(c) The Escrow Agent is hereby authorized to execute purchases and sales Of
Permitted Investments through the facilities of its own trading or capital markets operations or
those of any affiliated entity, and may charge its ordinary and customary fees for such trades,
including cash sweep account fees. The Escrow Agent shall send statements to the Agency on a
monthly basis reflecting activity in the Escrow Account for the preceding month. Although the
Agency recognizes that it may obtain a broker confirmation or written statement containing
comparable information at no additional cost, the Agency hereby agrees that confirmations of
permitted investments are not required to be issued by the Escrow Agent for each month in
,which a monthly statement is rendered. No statement need be rendered for the Escrow Account
if no activity occurred for such month.
(d) All interest, profits and other income received from the investment of moneys in
the Escrow Account shall be retained in the Escrow Account,
P7
Section 5. Disbursement of Funds in Escrow Account, Amounts on deposit in the
Escrow Account shall be disbursed upon the receipt by the Escrow Agent of a written instruction
from the Agency in the form set forth in Exhibit B attached hereto and executed by both the City
Manager and the City Attorney of the City instructing the Escrow Agent to disburse funds for
Phase IC Improvement Costs or Phase IIC Improvement Costs; provided that if Developer has
not accepted conveyance of the Conveyed Property as defined in the DDA by May 29, 2019, the
Agency may terminate the DDA and provide written direction to the Escrow Agent to disburse
the amounts on deposit in the Escrow Account to the Agency for the following purposes in the
following order of priority: (i) first, for payment of the Kings Leases Purchase Price pursuant to
the DDA and (ii) second, for payment to the County of San Mateo for distribution to the taxing
entities.
Section 6. Concerning the Escrow Agent. Notwithstanding any provision contained
he-rein to the contrary, the Escrow Agent, including its officers, directors, employees and agents,
shall:
(a) not be liable for any action taken or omitted under this Escrow Agreement except
for its own willful misconduct or negligence, and in no event shall the Escrow Agent be liable
for any special, punitive Or consequential damages, even if the Escrow Agent has been advised
of the possibility of such damages;
(b) have no responsibility to inquire into or determine the genuineness, authenticity,
or sufficiency of any securities, checks, or other documents or instruments subTrdtted to it in
connection with its duties hereunder;
(c) be entitled to deem the signatories of any documents Or instruments submitted to
it hereunder as being those purported to be authorized to sign such documents or instruments on
behalf of the Agency, and shall be entitled to rely upon the genuineness of the signatures of such
signatories without inquiry and without requiring substantiating evidence of any kind;
(d) be entitled to compensation for its services hereunder pursuant to Exhibit C
attached hereto, which is made a part hereof, and for reimbursement of its out-of-pocket
expenses including, but not by way of limitation, the fees and costs of attorneys or agents which
it may find necessary to engage in performance of its duties hereunder, all to be paid by the
Agency from funds in this Escrow Account;
(e) be, and hereby is, to the extent permitted by law, indemnified and saved harmless
by the Agency from all losses, liabilities, costs and expenses, including attorney fees and
expenses, which may be incurred by it as a result of its acceptance of the Escrow Account or
arising from the performance of its duties hereunder, unless such losses, liabilities, costs and
expenses shall have been finally adjudicated to have resulted from the willful misconduct or
negligence of the Escrow Agent, and such indemnification shall survive its resignation or
removal, or the termination of this Escrow Agreement;
have only those duties as are specifically provided herein, and this Escrow
Agreement sets forth all matters pertinent to the escrow contemplated hereunder, and no
PS
additional obligations of the Escrow Agent shall be inferred from the terms of this Escrow
Agreement or any other agreement;
(g) have the right, but not the obligation, to consult with counsel to the Agency and
shall not be liable for action taken or omitted to be taken by Escrow Agent in accordance with
the advice of such counsel; and
(h) have the right to perform any of its duties hereunder through agents, attorneys,
custodians or nominees appointed, and shall not be responsible for the Millful misconduct or
negligence of such agents, attorneys, custodians and nominees appointed by it with due care,
None of the provisions of this Escrow Agreement shall require the Escrow Agent to
expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the
performance of any of its duties hereunder, The Escrow Agent may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval or other paper or document
believed by it to be genuine and to have been signed or presented by the Agency,
The Escrow Agent agrees to accept and act upon instructions or directions pursuant to
this Escrow Agreement sent by unsecured e-mail, facsimile transmission or other similar
unsecured electronic methods, provided, however, that the Agency shall provide to the Escrow
Agent an incumbency certificate listing persons with authority to act hereunder, which
incumbency certificate shall be amended whenever a person is to be added or deleted from the
listing, If the Agency elects to give the Escrow Agent e-mail or facsimile instructions (or
instructions by a similar electronic method) and the Escrow Agent in its discretion elects to act
upon such instructions, the Escrow Agent's understanding of such instructions shall be deemed
controlling. The Escrow Agent shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Escrow Agent's reliance upon and compliance with such
instructions notwithstanding such instructions conflict or are inconsistent with a subsequent
written instruction. The Agency agrees, (i) to assume all risks arising out of the use Of such
electronic methods to submit instructions and directions to the Escrow Agent, including without
limitation the risk of the Escrow Agent acting on unauthorized instructions, and the risk of
interception and misuse by third parties; (ii) that it is fully informed of the protections and risks
associated with the various methods of transmitting instructions to the Escrow Agent and that
there may be more secure methods of transmitting instructions than the method(s) selected by the
Agency; and (iii) that the security procedures (if any) to be followed in connection with its
transmission of instructions provide to it a commercially reasonable degree of protection in light
of its particular needs and circumstances.
Any banking association or corporation into which the Escrow Agent may be merged,
converted or with which the Escrow Agent may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Escrow Agent shall be a party, or any
banking association or corporation to which all or substantially all of the corporate trust business
of the Escrow Agent shall be transferred, shall succeed to all the Escrow Agent's rights,
obligations and immunities hereunder without the execution or filing of any paper or any further
act on the part of the Agency, anything herein to the contrary notwithstanding,
4
The Escrow Agent shall not be obligated to perform any obligation hereunder and shall
not incur any liability for the nonperformance or breach of any obligation hereunder to the extent
that it is delayed in performing, unable to perform or breaches such obligation because of acts of
God, war, terrorism, fire, floods, strikes, electrical outages, equipment or transmission failures,
or other causes reasonably beyond its control; provided that the Escrow Agent shall use
Commercially reasonable efforts consistent with accepted corporate trust industry practices to
maintain performance without delay or resume performance as soon as reasonably practicable
under the circurnstances
Section 7. Tax Matters, The Escrow Agent shall have no responsibility for the
preparation and/or filing of any tax or information return with respect to any transaction, whether
or not related to this Escrow Agreement or a related agreement.
Section 8, ResiVnation or Removal of Escrow Agent, The Escrow Agent may resign
following the giving of thirty (30) days prior written notice to the Agency. Similarly, the Escrow
Agent may be removed and replaced following the giving of thirty (30) days prior written notice
to the Escrow Agent by the Agency. In either event, the duties of the Escrow Agent shall
terminate thirty (30) days after receipt of such notice (or as of such earlier date as may be
mutually agreeable), and the Escrow Agent shall then deliver the balance of the moneys then in
its possession to a successor escrow agent as shall be appointed by the Agency as evidenced by a
written notice filed with the Escrow Agent, If the Agency does not appoint a successor escrow
agent prior to the expiration of thirty (30) days following receipt of the notice of resignation or
removal, the Escrow Agent may petition any court of competent jurisdiction for the appointment
of a successor escrow agent, which court may thereupon as it may deem proper and prescribe
and as may be required by law, appoint a successor Escrow Agent,
Section 9. Notices. Any notice, consent or request to be given in connection with any of
the terms or provisions of this Escrow Agreement shall be in writing and be given in person, by
facsimile transmission, courier delivery service or by mail, and shall become effective (a) on
delivery if given in person, (b) on the date of delivery if sent by facsimile or by courier delivery
service, or (c) four business days after being deposited in the mails, with proper postage for first-
class registered or certified mail, prepaid.
Until notified in writing by the appropriate party of a change to a different address,
notices shall be addressed as follows:
if to the Agency;
City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
Attn.- Finance Director
Fax Number: (650) 829-6658
with a copy to
Meyers Nave
575 Market Street, Suite 2600
5
P9
Pie
San Francisco, California 94105
Attn: Steven T. Mattas, Agency Attorney
Fax Number: (415) 421-3767
if to the Escrow Agent:
The Bank of New York Mellon Trust Company, N.A.
100 Pine Street, Suite 3100
San Francisco, CA 94111
Attention: Corporate Trust
Fax Number: (415) 399-1647
Section 10, Amendment, Modification or Waiver. This Escrow Agreement may be
amended or modified and any term of this Escrow Agreement may be waived if such
amendment, modification or waiver is in writing and signed by all parties hereto,
Section 11, Severability. If any section, paragraph, sentence, clause or provision of this
Escrow Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such section, paragraph, sentence, clause or provision shall not affect any of
the remaining provisions of this Escrow Agreement,
Section 12, Governing Law, Lo
3mjqmarts, This Escrow Agreement shall be governed
by and construed and interpreted in accordance with the laws of the State of California, It may
be executed in several counterparts, each one of which shall constitute an original and all
collectively shall constitute but one instrument,
[SIGNATURE PAGE FOLLOWS]
INCUMBENCY AND SIGNATURE CERTIFICATE
The undersigned hereby states and certifies that:
1. 1 am the duly appointed, qualified and acting City Manager of the City of Soutli San
Francisco (the "City"), and, as such, I am familiar with the facts herein certified and am authorized
to certify the same on behalf of the South San Francisco Successor Agency (the, "Agency"),
2. The signatures set forth opposite the names and titles of the following persons are true
and correct specimens of the genuine signatures of the officers of the City authorized to provide
instructions on behalf of the Agency pursuant to the Escrow Deposit and Trust Agreement, dated as
of January 1, 2013 (the "Escrow Agreement"), between the Agency and The Bank of New York
Mellon Trust Company, MA., as escrow agent (the "Escrow Agent"),
Name and Office
Barry Nagel, City Manager
Marty Van Duyn, Assistant City Manager
Jim Steele, Director of Finance
Steven T. Mattas, City Attorney
Dated: January 9, 2013
CITY OF SOUTH SAN FRANCISCO, on behalf of
SOUTH SAN FRANCISCO SUCCESSOR AGENCY
By:
L L
City Manager
The undersigned Director of Finance of the City hereby certifies that the above signature is
the true and correct signature of the City Manager of the City.
By,. 49aa
Director of Finance
2022916.1
r2m
P12
IN WITNESS 'WHEREOF, the Agency and the Escrow Agent have each caused this
Escrow Agreement to be executed by their duly authorized officers as of the date first above
written,
SOUTH SAN FRANCISCO SUCCESSOR AGENCY
Approved as to form
By.-
------- —A–u- ied 0�fficcr��
sy:
City Attorney
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N. A., as Escrow Agent
By:
Authorize fficer
- Signature Page -
- Escrow Deposit and Trust Agreement -
P13
EXHIBIT A
INVESTMENT POLICY
The following investments are authorized:
U.S, TREASURY SECURITIES for which the -full faith and credit of the U.S. are
pledged for the payment of principal and interest. There is no limit to the percentage of the
portfolio that can be invested in U.S. Treasuries, However, their maturities shall be limited to 5
years or less.
FEDERAL AGENCY OR UNITED STATES GOVERNMENT SpONSORF
,D
ENTERPRISE OBLIGATIONS, or other instruments, including those issued by federal agencies
or United States goverrunent-sponsored enterprises. The amount of any one issuer shall not
exceed 25 percent of the portfolio, with the maturity not to exceed 5 years. Examples include the
Federal Farm Credit Bank System (FFCB), the Federal Home Loan Bank Board (FHLB), the
Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation
(FHLMC), Tennessee Valley Authority (TVA),
FDIC Insured CORPORATE NOTES issued by a corporation under the Federal Deposit
Insurance Corporation's (FDIC) Temporary Liquidity Guarantee Program (TLGP). These notes
are backed by the full faith and credit of the United States Government. The amount of any one
issuer shall not exceed 25 percent of the portfolio,
COMMERCIAL PAPER must be of prime quality of the highest rating by both Moody's
and Standard and Poor's (P-1 by Moody's and A-1 by Standard and Poor's), Eligible paper is
limited to corporations organized and operating within the U.S, and having total assets of at least
$500,000,,000. There are also limitations as to the total percent (10%) of the portfolio that may be
invested in commercial paper, the time of investment (270 days) and the amount of any one
issuer shall not exceed 5 percent of the portfolio,
REPURCHASE AGREEMENTS .(&epos allow a purchase of securities by a local
agency; by agreement, the seller will repurchase the securities on or before a specified date and
for a specified amount. The maturity should not exceed ninety days. Repos should only be
purchased when a purchase agreement is executed with a bank in which the underlying security
shall have a market value of at least: 102% for U.S. Treasuries or 105% for U,S. Agencies of the
funds borrowed. Pledged securities must be hold by a third party custodian. The issuing counter
party shall be rated in a rating category of "AA" or its equivalent or better by nationally
recognized rating services (Standard and Poor's and Moody's).
THE LOCAL AGENCY INVESTMENT FUND is a pooled fund managed by the State
Treasurer whose permitted investments are identified in the Government Code Section 164291.
LAIF offers high liquidity as deposits and withdrawals can be wired to and from South San
Francisco on the same day, provided the request is made before 10:00 A.M. No maximum limit
for LAIF is set by this investment policy,
Exhibit A
P14
MUTUAL FUNDS are shares of beneficial interest issued by diversified management
companies, as defined by Section 23701 M of the Revenue and Taxation Code. To be eligible for
investment, these funds must strive to maintain a net asset value of $ 1.00 per share at all times
and,
a) Attain the highest ranking in the highest letter and numerical rating provided by
not less than two of the three largest nationally recognized rating services; or
b) Have an investment advisor registered with the Securities and Exchange
Commission with not less than five years experience investing in securities and
obligations, and with assets under management in excess of five hundred million
dollars; and
c) Invest solely in those securities and obligations authorized by Sections 53601 and
53635 of the California Government Code. Where the Investment Policy may be
more restrictive than the State Code, the Investment Policy authorizes investments
in mutual funds that shall have minimal investment in securities otherwise
restricted by the Investment Policy, Minimal investment is defined as less than 5
percent of the mutual fund portfolio,
Mutual fund investments shall not exceed 20% of the portfolio, with no more than 10%
of the portfolio in-vested with any one institution. The 20% restriction shall not apply to mutual
funds that invest solely in US Treasuries, US Agency Securities, and/or repurchase agreements
consisting of US Treasuries or US Agency securities, The 10% restriction for any one institution
shall not apply if the underlying investments are US Treasuries, US Agency securities, and/or
repurchase agreements consisting of US Treasuries or US Agency securities.
Exhibit A
01190vo-Woo
TO: The Dank of New York Mellon Trust Company, N.A., as escrow agent (the "Escrow
Agent")
RE; Disbursement from the Escrow Account pursuant to Section 5 of the E screw Deposit and
Trust Agreement, dated as of January 1, 2013 (the "Escrow Agreement"), between the
Escrow Agent and the South San Francisco Successor Agency
You are hereby instructed to disburse the following amount(s) from the Escrow Account
to the payee(s) as set forth in Schedule A:
WSMI
CITY OF SOUTH SAN FRANCISCO, on behalf of
SOUTH SAN FRANCISCO SUCCESSOR AGENCY
By-
IN
Exhibit B
City Manager
City Attorney
P15
Payee
Schedule A
Exhibit B
ME
1890906A
EXHIBIT C
SCHEDULE OF ESCROW AGEXT FEES
(See Attached)
Exhibit C
L"
South San Francisco Successor Agency
Oyster Point Ventures, LLC
Escrow Agent
Fee Schedule
December 78, 2012
Presented By.
`l OV =I-
wce President
The Bank of New York Mellon Trust
Company, N.A.
601 Union Street, Suite 520
Seattle, WA 98101
Phone: 206-336-1616
E-mail:
michael.a.iones(a)-boyLnellon.com
Combined Fee Schedule for Services of:
- Escrow Agent
P18
0
,N7
BNY M F ' Ll ONT
CORPORATE TR'�.'ST
Fee Schedule
P19
Upon appointment of The Bank of New York Mellon Trust Company N.A. CBNY-Nf Trust Company,
N.A."), as Escrow Agent, South San Francisco Successor Agency shall be responsible for the Payment of the
fees, expenses and charges as set forth in this Fee Schedule.
General Fees
Acceptance Fee-.
$1,000
This one time charge is payable at the time of the closing and includes the review and execution of the Escrow
Deposit and Trust Agreement and all documents submitted in support thereof and establishment of accounts,
Annual Administration Fee; $1,200
The Annual Escrow Agent fee is payable at closing and covers the consideration of documents and the normal
administrative duties of the Escrow Agent according to the governing documents, includes the review and
execution of the Escrow Deposit and Trust Agreement and all documents submitted in support thereof,
account set-up and covers the normal administrative Functions of the escrow agent Based on the information
provided, we do not anticipate hiring counsel but reserve the right to do so if required.
Additional Fee:
Per Disbursements from Escrow
Investment Compensation
$25
Please see explanation
With respect to investments in money market mutual funds the investment maintenance fee will be -0- basis
points. With respect to investments in money market mutual funds for which BNYM Trust Company, K.A.
provides shareholder services BNYM Trust Company, N.A, (or its affiliates) may also receive and retain
additional fees from the mutual funds (or their affiliates) for shareholder services as set forth in the
Authorization and Direction to BNYN1 Trust Company,
Purchases or sales of securities will incur -a $25 per trade transaction processing fee. Investments held outside
of the trust estate require $35 per trust account per month to reconcile investments. Such trade execution and
reconciliation fees do not apply- to money market fund investments on our automated "sweep- platform.
Counsel Fees — Internal Waived*
A fee covering the reasonable fees and expenses of Counsel for its services, including review of governing
documents, communication with members of the closing party (including representatives of the issuer,
investment banker(s), attorney(s) and (BNYNf Trust Company, N.A.), attendance at meetings and the closing,
and such other services as BNYM Trust Company, N.A. may deem necessary, The Counsel fee will be the
actual amount of the reasonable fees and expanses charged by Counsel and is payable at closing, Should
closing not occur, you shall still be responsible for payment of reasonable Counsel Fees and expenses, *Should
a counsel opinion be needed, outside counsel will need to provide such opinion(s) and an additional fee will be
charged.
PRIVILEGED AND CONFJ DENTAL
The information in this document, ants any attachment herewith, is confidential and for use by the addressee only.
December 28, 2012
Page 2 of 4
BNYMFLLON
CORPORATF TRUST
Out of Pocket Expenses
P20
W-
At Cost
Additional out-of-pocket expenses may include, but are not limited to statutory filing charges, including UCC
amendments, continuations, and termination fees-, and expenses of BNYM Trust Company, N,A.'s
representative(s) and Counsel for travel costs for attending the closing and special meetings. Fees and
expenses of BNYM Trust Company, N.A.'s representatives and Counsel will be charged at the actual amount
-of fees and expenses charged.
Nliscellaneous Fees & Services Please see explanation
The fees for performing extraordinary or other services not contemplated at the time of the execution of the
transaction or not specifically covered elsewhere in this schedule will be commensurate with the service to be
provided and will be charged in BNYM Trust Company, NAA sole reasonable discretion. These
extraordinary services may include, but are not limited to, supplemental agreements, consent operations,
unusual releases, and the preparation of special or interim reports. Counsel, accountants, special agents and
others will be charged at the actual amount of reasonable fees and expenses billed.
Default Administration Fees and Expenses Please see explanation
In the event that -a default occurs and is not cured within the appropriate time period required by the
governing document, BNYM Trust Company, N.A. shall be paid a Default Administration Fee calculated in
2ccordancc witli BNYM Trust Company, N.A.'s hourly rate in effect at the time of the default and as may be
modified by BNYM Trust Company, N.A. in its sole discretion from time to time thereafter, plus all expenses
incurred by BNYM Trust Company, N.A., which expenses will include the fees and expenses of Counsel. in
addition, if BNYM Trust Company, N.A. is required to advance any payments, 13NYM Trust Company, N.A.
shall be entitled to charge interest on such advances at The BNYM Trust Company, N.A.'s (or one of its
affiliates) prime rate in effect on the date of the advance.
Terms and Disclosures
Fin-al acceptance of the appointment as Escrow Agent is subject to approval of authorized officers of BNYM
Trust Company, N.A. and full review and execution of all documentation related hereto. We reserve the tight
to terminate this offer if we do not enter into final written documents within three months from the date this
document is First transmitted to you. Fees may be subject to adjustment during the life of the engagement,
MISCELLANEOUS
The terms of this Fee Schedule shall govern the matters set forth herein and shall not be superseded or
modified by the terms of the Escrow Deposit and Trust Agreement, This Fee Schedule shall be governed by
the laws of the State of California without reference to laws governing conflicts. BNYM Trust Company, N.A.
and the undersigned agree to jurisdiction of the federal and state courts located in the State of California. The
Issuer/Ob*r shall be responsible for filing any applicable information returns with the U.S. Department of
Treasury, Internal Revenue Service in connection with payments made by BNYM Trust Company, N.A. to
vendors who have not performed services for BNYM Trust Company, N.A.'s benefit under the various note
issuances or other undertakings contemplated by this fee agreement.
CUSTOIMEEA NOTICE, REQUIRED BY THE, USA PATRIOT ACT
To help the U5 government fight the funding of terrorism and money laundering activities, US Federal law
requires all financial institutions to obtain, verify, and record information that identifies each person (whether
an individual or organization) for which a relationship is established.
PRIVILEGED AND CONFIDENTIAL
The information in this document, and any attachment herewith, is confidential and for use by the addressee only.
December 28, 2012
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Wba.t this means to you: When you establish a relationship with BNYM Trust Company, :N.A., we will ask
you to provide certain information (and documents) that will help us to identify you. \N'e Will ask for your
organization's name, physical -address, tax identification or other government registration number and other
information that will help us to identify you. We may also ask for a Certificate of Incorporation or similar
document or other pertinent identifying documentation for your type of organization.
We thank you for your assistance,
Acceptec! By:
Signature:
Date:
Name: A-0 -f i t-4 A 6V-
FOr SNYM TP,15-c Company, NA;
-0=:mber 28, 2012
Michael A. Jones
Vice President/Business Development
Title: G -T --I P'�� officer
Upon acceptance, an authorized representative of the Issuer/Obligot is responsible for signing the fee
schedule and returning an original
Approv,ed a to form
y::
C ty Attome
PIRIVILEGED AND CONFIDENTIAL
The information In this document, and any attachment herewith, Is confidential and for use by the addressee only.
December 28, 2012
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