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Resolution No. 2022-90 | 2013 Lease Revenue Bonds Refinancing | Adopted 12/05/2022 RESOLUTION NO. 2022-90 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY APPROVING THE ISSUANCE BY THE GILROY PUBLIC FACILITIES FINANCING AUTHORITY OF NOT TO EXCEED $15,000,000 OF GILROY PUBLIC FACILITIES FINANCING AUTHORITY LEASE REVENUE REFUNDING BONDS, SERIES 2022A (CONVERTIBLE); APPROVING THE EXECUTION AND DELIVERY OF VARIOUS RELATED DOCUMENTS IN CONNECTION WITH THE ISSUANCE AND DELIVERY OF SUCH BONDS; AND AUTHORIZING THE TAKING OF CERTAIN OTHER MATTERS RELATED THERETO WHEREAS, the Gilroy Public Facilities Financing Authority (the “Authority”) was established for the purpose, among others, of providing for the financing and refinancing of public capital improvements for the City of Gilroy (the “City”); and WHEREAS, the Authority has previously issued its $23,120,000 Gilroy Public Facilities Financing Authority Refunding Lease Revenue Bonds, Series 2013 (the “Series 2013 Bonds”), of which $15,185,000 are currently outstanding; and WHEREAS, the Authority and the City have determined, that it is necessary and desirable in order to refund the Series 2013 Bonds to authorize the issuance, sale and delivery of the Gilroy Public Facilities Financing Authority Lease Revenue Refunding Bonds, Series 2022A (Convertible) (the “Series 2022A Bonds”) in the aggregate principal amount of not to exceed $15,000,000, under the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Law”); and WHEREAS, the City desires to approve in connection with the sale of the Series 2022A Bonds, the form of a Bond Purchase Agreement (the “Bond Purchase Agreement”), among the Authority, the City and Wells Fargo Municipal Capital Strategies, LLC (including any affiliate thereof, the “Purchaser”) and the form of a Forward Fixed Rate Lock Agreement (the “Forward Fixed Rate Lock Agreement”) between the City and Wells Fargo Bank, National Association; and WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) (“SB 450”) requires that the City obtain from an underwriter, financial advisor or private lender and disclose, prior to authorization of the issuance of bonds with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public: (a) the true interest cost of the bonds, (b) the sum of all fees and charges paid to third parties with respect to the bonds, (c) the amount of proceeds of the bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the bonds, and (d) the sum total of all debt service payments on the bonds calculated to the final maturity of the bonds plus the fees and charges paid to third parties not paid with the proceeds of the bonds; and WHEREAS, in compliance with SB 450, the City has obtained from NHA Advisors, as Municipal Advisor, the required good faith estimates and such estimates are disclosed and set forth on Exhibit A attached hereto; and Resolution No. 2022-90 2013 Lease Revenue Bonds Refinancing City Council Regular Meeting | December 5, 2022 Page 2 of 5 WHEREAS, Senate Bill 1029 (“SB 1029”) was signed by the California Governor on September 12, 2016, and places additional responsibilities on any issuer of public debt including the adoption of debt management policies that meet certain criteria; and WHEREAS, the City has represented that it is in compliance with the applicable SB 1029 pre-issuance requirements and that it expects to comply with all post-issuance requirements of SB 1029 applicable to the Series 2022A Bonds; and WHEREAS, there have been presented to this meeting the proposed forms of the following documents: (a) the First Supplement to Indenture, dated as of December 1, 2022 (the “First Supplement to Indenture”), among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); (b) the Fourth Amendment to Lease Agreement, dated as of December 1, 2022 (the “Fourth Amendment to Lease”) between the City and the Authority; (c) the Forward Fixed Rate Lock Agreement; and (d) the Bond Purchase Agreement; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Gilroy, as follows: SECTION 1. Approval of Issuance of Series 2022A Bonds by the Authority. The issuance of the Series 2022A Bonds by the Authority on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture, dated as of August 1, 2020, by and among the Authority, the City and the Trustee, as amended by the First Supplement to Indenture, and this Resolution, is hereby approved; provided, however, that (i) the aggregate principal amount of Series 2022A Bonds shall not exceed $15,000,000, (ii) the maturity of the Series 2022A Bonds shall not exceed November 1, 2033, and (iii) there shall be expected present value savings with respect to the refunding of the Series 2013 Bonds of at least 5% (assuming a successful conversion from a taxable rate to a tax-exempt rate on or about August 8, 2022) of the principal amount of the Series 2013 Bonds using the yield on the Series 2022A Bonds as the discount rate. SECTION 2. Approval of First Supplement to Indenture. The form of First Supplement to Indenture presented at this meeting is hereby approved, and the Mayor, the City Administrator, the Finance Director and the City Clerk, or his or her designee (each, an “Authorized Officer”) are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the First Supplement to Indenture in substantially the form presented at this meeting with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 3. Approval of Fourth Amendment to Lease. The form of Fourth Amendment to Lease presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge Resolution No. 2022-90 2013 Lease Revenue Bonds Refinancing City Council Regular Meeting | December 5, 2022 Page 3 of 5 and deliver the Fourth Amendment to Lease in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 4. Approval of Forward Fixed Rate Lock Agreement. The City is hereby authorized to enter into the Forward Fixed Rate Lock Agreement and each Authorized Officer is hereby authorized and directed to execute and deliver the Forward Fixed Rate Lock Agreement on behalf of the City, in substantially the form presented to this meeting, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer shall approve in consultation with the City’s financial and legal consultants, which approval shall be conclusively evidenced by the execution and delivery thereof. SECTION 5.Approval of Bond Purchase Agreement. The City is hereby authorized to enter into the Bond Purchase Agreement and each Authorized Officer is hereby authorized and directed to execute and deliver the Bond Purchase Agreement on behalf of the City, in substantially the form presented to this meeting, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer shall approve in consultation with the City’s financial and legal consultants, which approval shall be conclusively evidenced by the execution and delivery thereof. SECTION 6. Other Acts. The officers and staff of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the City Attorney or with Nixon Peabody LLP, as bond counsel, they may deem necessary or advisable in order to effectuate the purposes of this Resolution, and any and all such actions previously taken by such officers or staff members are hereby ratified and confirmed. SECTION 7. Effective Date. This Resolution shall take effect upon adoption. Resolution No. 2022-90 2013 Lease Revenue Bonds Refinancing City Council Regular Meeting | December 5, 2022 Page 4 of 5 PASSED and ADOPTED this 5th day of December 2022 by the following roll call vote: AYES: COUNCIL MEMBERS: ARMENDARIZ, BRACCO, HILTON, LEROE-MUÑOZ, MARQUES, TOVAR, BLANKLEY NOES: COUNCIL MEMBERS: NONE ABSTAIN: COUNCIL MEMBERS: NONE ABSENT: COUNCIL MEMBERS: NONE APPROVED: Marie Blankley, Mayor ATTEST: _______________________ Thai Nam Pham, City Clerk Marie Blankley (Dec 6, 2022 10:02 PST) Marie Blankley EXHIBIT A GOOD FAITH ESTIMATES The following information was obtained from the City’s Municipal Advisor as of November 18, 2022, and is provided in compliance with Section 5852.1 of the California Government Code with respect to the base rental payments evidenced by the Series 2022A Bonds expected to be issued in the aggregate principal amount of $14,605,490: 1. True Interest Cost of the Base Rental Payments Evidenced by the Bonds. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the true interest cost of the base rental payments evidenced by the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 3.84%. 2. Finance Charge of the Bonds. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the City’s finance charge of the Bonds, which means the sum of all fees and charges paid to third parties (o r costs associated with the Bonds), is $175,000. 3. Amount of Proceeds to be Received. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the amount of proceeds expected to be received by the City following the Authority’s sale of the Bonds, less the finance charge of the Bonds described in paragraph 2 above and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $14,430,490. 4. Total Payment Amount. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay base rental payments evidenced by the Bonds plus the finance charge of the Bonds described in paragraph 2 above not paid with the proceeds of the Bonds, calculated to the final base rental payment evidenced by the Bonds, is $18,092,275. Attention is directed to the fact that the foregoing information constitutes good faith estimates only. The actual interest cost, finance charges, amount of proceeds and total payment amount may vary from those presently estimated due to variations from these estimates in the timing of the sale of the Bonds, the actual principal amount of Bonds sold, the amortization of the Bonds sold and market interest rates at the time of sale. The date of sale and the amount of Bonds sold will be determined by the City based on need for improvement funds and other factors. The actual interest rates at which the Bonds will be sold will depend on the bond market at the time of sale. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale. Market interest rates are affected by economic and other factors beyond the City’s control. CERTIFICATE OF THE CLERK I, THAI NAM PHAM, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2022-90 is an original resolution, or true and correct copy of a city Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said held on Council held Monday, December 5, 2022, at which meeting a quorum was present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this Monday, December 5, 2022. ____________________________________ Thai Nam Pham, CMC, CPMC City Clerk of the City of Gilroy (Seal)