REPORT TO THE CITY COUNCIL
August 25, 2016
BY: R. RENENA SMITH, Assistant City Manager
SUBJECT
Title
***RESOLUTION - 7th amendment to the Annual Appropriation Resolution (AAR) No. 2016-118 appropriating $514,900 for the Redemption of the Blosser Judgment Obligation Bond Debt Service (Requires 5 affirmative votes)
Body
RECOMMENDATION
Staff recommends that the Council approve the 7th Amendment to the Annual Appropriation Resolution No. 2016-118 to appropriate $514,900 for the Redemption of the Blosser Judgment Obligation Bond Debt Service.
EXECUTIVE SUMMARY
The City of Fresno Judgment Obligation Bonds, Series 2002 (Bonds) were issued pursuant to a Trust Agreement dated June 1, 1994. The proceeds were applied to pay a litigation settlement and to take title to the property located on the southwest corner of Herndon and Brawley. Final maturity of the bond is August 15, 2017. The current balance required for redemption of this debt is $1,055,100. The FY 2017 Budget included $540,200 to be applied towards the FY 2017 debt service and fees. Additionally, the option to purchase agreement with Garreks, Inc., approved by the Council earlier this year, provides $450,400 proceeds along with $64,500 budgeted to apply towards redemption nine months ahead of schedule. Once the property is no longer encumbered by the debt the lien on the property will be released which allows title of the property to transfer consistent with the option to purchase agreement.
BACKGROUND
In October 1992, after a jury trial verdict, the Court entered Judgment, including litigation expenses against the City of Fresno in a suit brought forward by the Blosser Family. The magnitude of the settlement posed a hardship for the City. As a result, the Judgment Obligation Bonds, Series 1994 (Bonds) were issued pursuant to a Trust Agreement dated June 1, 1994. The Proceeds were applied to pay a litigation settlement and to take title to the property located on the southwest corner of...
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