MINUTES OF THE SPECIAL MEETING OF
THE BOARD OF DIRECTORS OF THE
INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE COUNTY OF PIMA
JUNE 12, 2015
A special meeting of the Board of Directors of The Industrial Development Authority of the
County of Pima was held on June 12, 2015 at 12:00 p.m. at the Pima County Board of Supervisors’
Conference Room, 10th Floor, 130 West Congress, Tucson, Arizona. The Assistant Secretary called the
meeting to order and declared the same open to the public, and announced that the meeting had been duly
called according to law, and that the notice of the time, place and purpose of the meeting had been given
in accordance with the Bylaws of the Authority and provisions of the law. The Assistant Secretary ordered
that a copy of the Notice of the meeting be attached to the Minutes of this meeting and be made a part of
the proceedings.
The following Directors were present at the meeting, constituting a quorum:
John H. Payne (appeared telephonically)
Frank Y. Valenzuela
Virginia L. Yrun (appeared telephonically)
Cecilia Cruz and Stanley Lehman were excused. At the request and pleasure of the Board, Michael
A. Slania and Joseph D. Chimienti, counsel for the Authority, were also present.
APPROVAL OF MINUTES
The Assistant Secretary stated that the first item on the Agenda after roll call was the approval of
the Regular Meeting Minutes of May 15, 2015. Board Member Yrun made a motion that the Minutes be
approved as submitted and waived the reading. Board Member Payne seconded.
The Assistant Secretary called for a vote:
AYES
John H. Payne
Frank Y. Valenzuela
Virginia L. Yrun
NAYS
Whereby, the Assistant Secretary declared that the Minutes were approved.
The Assistant Secretary announced that, due to the public for the items under New Business items
and with the consent of the Board, the New Business would be taken out of order from the Agenda.
NEW BUSINESS
The Assistant Secretary announced that the first item of New Business on the Agenda was the
Revenue Bonds (Beacon Group Project), Series 2015 and the consideration of a resolution authorizing
and approving the issuance of such bonds in an aggregate principal amount not to exceed $6,700,000, the
proceeds of which will be loaned to Beacon Group, Inc., an Arizona nonprofit corporation, for the
purposes of (i) finance or refinance the acquisition, construction, improvement, equipping or operating of
office and administrative facilities located at 308 West Glenn Street and 2700 North Stone Avenue, all in
Tucson, Arizona, (ii) financing the costs of acquiring and improving real property located at 2824 North
Oracle Road and 331 West Laguna Street, all in Tucson, Arizona, and (iii) paying certain issuance
expenses. Mr. Slania presented that it will be a stand-alone financing purchased directly by Wells Fargo
Bank, National Association and that the bonds will be unrated, but must be sold to the accredited investors
with an investor letter. Mr. Slania then introduced Dwight M. Whitley, Jr., Board Chairman of Beacon
Group, who discussed the Project. General discussion ensued. Board Member Yrun moved to approve
the motion for the Resolution and Board Member Payne seconded the motion.
The Assistant Secretary called for a vote:
AYES
John H. Payne
Frank Y. Valenzuela
Virginia L. Yrun
NAYS
Whereby, the Assistant Secretary declared that the motion was carried, and said Resolution was
passed and adopted. The Secretary was directed to make the Resolution a part of the Minutes and to attach
a copy of the Resolution to the Minutes.
The Assistant Secretary announced that the second item of New Business on the Agenda was the
Education Facility Revenue Bonds (American Leadership Academy Project), Series 2015 and the
consideration of a resolution authorizing and approving the issuance of such bonds in an aggregate
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principal amount not to exceed $35,000,000, the proceeds of which will be loaned to American Leadership
Academy, Inc. for the purposes of (i) financing or refinancing the costs of acquisition, construction,
improvement, renovation, operation and equipping of land and charter school facilities located at 34696
North Village Lane in San Tan Valley, Arizona, 4507 South Mountain Road in Mesa, Arizona and 4308
North Hunt Highway in Florence, Arizona, (ii) funding of any required reserves, (iii) paying capitalized
interest, if any, on such bonds, and (iv) paying certain issuance expenses. Mr. Slania presented the
Application to the Authority and that the Borrower operates multiple charter schools. The Borrower has
also had a prior bond issue with the Authority, to be refunded by the 2015 bond issue. Mr. Slania further
presented that it will be a stand-alone financing sold by Herbert J. Sims & Co., Inc. and that the bonds
would be unrated, but must be sold to the accredited investors with an investor letter. General discussion
ensued. Board Member Yrun moved to approve the motion for the Resolution and Board Member Payne
seconded the motion.
The Assistant Secretary called for a vote:
AYES
John H. Payne
Frank Y. Valenzuela
Virginia L. Yrun
NAYS
Whereby, the Assistant Secretary declared that the motion was carried, and said Resolution was
passed and adopted. The Secretary was directed to make the Resolution a part of the Minutes and to attach
a copy of the Resolution to the Minutes.
The Assistant Secretary announced that the next item of New Business on the Agenda was the
Education Facility Revenue Bonds (The Paideia Academies Project), Series 2015 and the consideration
of a resolution authorizing and approving the issuance of such bonds in an aggregate principal amount not
to exceed $13,500,000, the proceeds of which will be loaned to The Paideia Academies, Inc. for the
purposes of (i) financing or refinancing the costs of acquisition, construction, improvement, renovation,
operation and equipping of land and charter school facilities at 7777 South 15th Terrance, together with
property located at 1535 East Baseline Road and 1541 East Baseline Road, all in Phoenix, Arizona, (ii)
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funding of any required reserves, (iii) paying capitalized interest, if any, on such bonds, and (iv) paying
certain issuance expenses. Mr. Slania presented the Application and discussed that the Borrower was
currently leasing its charter school facilities. Like the American Leadership Academy Bonds, this will be
a stand-alone financing sold by Herbert J. Sims & Co., Inc., with the bonds to be unrated and sold to
accredited investors with an investor letter. General discussion ensued. Board Member Yrun moved to
approve the motion for the Resolution and Board Member Payne seconded the motion.
The Assistant Secretary called for a vote:
AYES
John H. Payne
Frank Y. Valenzuela
Virginia L. Yrun
NAYS
Whereby, the Assistant Secretary declared that the motion was carried, and said Resolution was
passed and adopted. The Secretary was directed to make the Resolution a part of the Minutes and to attach
a copy of the Resolution to the Minutes.
The Assistant Secretary announced that the next item of New Business on the Agenda was the
Education Revenue Bonds (Paradise Education Project), Series 2015 and the consideration of a resolution
authorizing and approving the issuance of such bonds in an aggregate principal amount not to exceed
$25,000,000, the proceeds of which will be loaned to Paragon Management, Inc., dba Paradise Schools
for the purposes of (i) refunding the Authority’s Education Revenue Bonds (Paradise Education Center
Project), Series 2003, and its Education Revenue Bonds (Paradise Education Center Project), Series 2006,
both of which financed or refinanced charter school facilities, (ii) financing or refinancing the costs of
acquiring, constructing, improving and furnishing certain charter school facilities (including additional
rooms at such facilities) located at 15533 West Paradise Lane in Surprise, Arizona and/or unincorporated
Maricopa County, Arizona, (iii) financing the costs of acquiring land adjacent to the Borrower’s high
school site located at 12775 North 175th Avenue in unincorporated Maricopa County, Arizona, (iv)
funding a deposit to the Debt Reserve Fund, (v) paying capitalized interest on such bonds, and (vi) paying
certain issuance expenses. Mr. Slania presented that the Authority previously issued bonds to the
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Borrower, including the to-be refunded Revenue Bonds, Series 2003 and Series 2006, as well as the
Education Revenue Bonds, Series 2010, for a high school at a new location in unincorporated Maricopa
County, Arizona. Mr. Slania further presented that this refinancing involves refunding the Authority’s
previously issued Education Revenue Bonds, Series 2003 and Series 2006, and the financing also includes
acquisition of additional land in Maricopa County and the financing of more classrooms. Mr. Slania
discussed that this will be a stand-alone financing sold by RBC Capital Markets, LLC and the Borrower
will be requesting a rating on the bonds; however, if the rating received is not investment grade, these
bonds would be sold as unrated bonds, with an investor letter from the accredited investors. General
discussion ensued. Board Member Yrun moved to approve the motion for the Resolution and Board
Member Payne seconded the motion.
The Assistant Secretary called for a vote:
AYES
John H. Payne
Frank Y. Valenzuela
Virginia L. Yrun
NAYS
Whereby, the Assistant Secretary declared that the motion was carried, and said Resolution was
passed and adopted. The Secretary was directed to make the Resolution a part of the Minutes and to attach
a copy of the Resolution to the Minutes.
The Assistant Secretary announced that the item of New Business on the Agenda was the grant to
Southern Arizona Land Trust, Inc. and the consideration of a motion approving a grant to Southern
Arizona Land Trust, Inc. in an amount not to exceed $1,900,000. Mr. Slania presented that the proposed
grant could be up to the outstanding amount of the consolidated Promissory Note that Southern Arizona
Land Trust, Inc. owes to the Authority, which currently is in the amount of $1,841,114.38, plus interest to
date. Prior funding and existing loans of Southern Arizona Land Trust, Inc. were discussed. General
discussion ensued, including that another $350,000 Promissory Note to the Authority from Southern
Arizona Land Trust, Inc. will remain outstanding. Board Member Yrun moved to approve the motion for
the Resolution and Board Member Payne seconded the motion.
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The Assistant Secretary called for a vote:
AYES
John H. Payne
Frank Y. Valenzuela
Virginia L. Yrun
NAYS
Whereby, the Assistant Secretary declared that the motion was carried, and said grant was made
and counsel directed to cancel that Promissory Note.
The Assistant Secretary announced that the last item of New Business on the Agenda was the
meeting schedule and the consideration of the schedule for regular meetings for the 2015/2016 fiscal year.
Mr. Slania presented the new draft Notice of Regular Meetings for the next fiscal year, which assumed
the same meeting schedule of every third Friday of every month. Board Member Yrun moved to approve
the motion for the meeting schedule and Board Member Payne seconded the motion.
The Assistant Secretary called for a vote:
AYES
John H. Payne
Frank Y. Valenzuela
Virginia L. Yrun
NAYS
Whereby, the Assistant Secretary declared that the motion was carried, and said meeting schedule
was passed and adopted.
OLD BUSINESS
The Assistant Secretary announced that the meeting would return to Old Business, and the first
item of Old Business on the Agenda was the Joint Revolving Taxable Single Family Mortgage Loan
Program of 2012 (Pima Tucson Homebuyer’s Solution Program) status update. Mr. Slania presented a
status update on the Program, including recent activity levels. Mr. Riffle presented the Freddie Mac
Program which the Authority (with The Industrial Development Authority of the City of Tucson, Arizona)
would be adding to the Pima Tucson Homebuyer’s Solution Program. General discussion ensued. No
action was necessary or taken.
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The Assistant Secretary announced that the second item of Old Business on the Agenda was the
Joint Single Family Mortgage Revenue Bonds with The Industrial Development Authority of the City of
Tucson, Arizona, Series 2006, 2007A, 2007B and 2008A and the consideration of a motion authorizing
certain actions, including potential purchase, regarding second position mortgage loans and the related
Joint Single Family Mortgage Revenue Bonds with The Industrial Development Authority of the City of
Tucson, Arizona. Mr. Slania presented that the second position mortgage loans are currently serviced by
Bank of America through the Servicing Agreements for the related bonds. Mr. Slania further presented
that the Series 2006A-2 Bonds have a balance of $55,000, but a value of $227,825 in current second
position mortgage loans and the Series 2007A-2 Bonds have a balance of $135,000, but a value of
$268,515 in current second position mortgage loans. Mr. Slania then discussed that Bank of America has
not been taking steps to advance the Authorities’ position on these loans and that the bonds may be able
to be purchased either by the Authority or jointly with The Industrial Development Authority of the City
of Tucson, Arizona and the collateral, at that time, to be reviewed. General discussion ensued. No action
was necessary or taken.
The Assistant Secretary announced that the last item of Old Business on the Agenda was the
consideration of further Nonprofit Loans and the consideration of a motion authorizing a possible loan
relating to the nonprofit loan program. Mr. Slania reminded the Authority of the discussion regarding the
prior Wells Fargo loans which had assisted in funding the Nonprofit Loan Program and possible
replacement loans made through the loan arranger relationship with George K. Baum & Company. Mr.
Slania presented that terms for any new loan, including collateral and the repayment provision, are not
known at this time, but would need to be reviewed by the Authority and its counsel. Mr. Riffle presented
the term sheets that George K. Baum & Company had received, after discussions with several banks. The
term sheets varied by amount, the required collateral and requirements for the Authority and some
included approval or re-underwriting of the nonprofit loans or a pledge of the Authority’s accounts
receivable.
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General discussion ensued. Board Member Yrun moved to decline the motion for an additional loan for
a nonprofit loan program at this time and Board Member Payne seconded the motion.
The Assistant Secretary called for a vote:
AYES
John H. Payne
Frank Y. Valenzuela
Virginia L. Yrun
NAYS
Whereby, the Assistant Secretary declared that the motion was carried, and said new loan for the
nonprofit program was declined.
DISCUSSION OF OTHER MATTERS
The Assistant Secretary asked if there were any other matters to discuss. No other matters were
presented.
CALL TO THE PUBLIC
The Assistant Secretary announced the call to the public. Mr. Slania introduced Gregory Cross
with Zions National Bank, who serves as the trustee on several of the Authority’s bond issues.
ADJOURNMENT
The Assistant Secretary then asked if there was any further business to come before the meeting,
and there being none, upon motion of Board Member Valenzuela and a second by Board Member Yrun,
and all in favor, the meeting was adjourned.
APPROVED this 18th day of September, 2015.
/s/
Virginia L. Yrun, Treasurer
/s/
John H. Payne, Secretary
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