Resolution 2003-40 City of Gilroy and Gilroy Public Facilities Financing Authority
RESOLUTION NO. 2003-40
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY
AUTHORIZING DELIVERY AND SALE OF AUCTION RATE
CERTIFICATES OF PARTICIPATION IN THE PRINCIPAL AMOUNT
OF NOT TO EXCEED $47,000,000 TO FINANCE THE CITY'S 2003
PUBLIC BUILDINGS PROJECT, AND APPROVING RELATED
DOCUMENTS AND ACTIONS
RESOLVED, by the City Council (the "Council") of the City of Gilroy (the
"City"), County of Santa Clara, State of California, that
WHEREAS, the City wishes to finance the construction and/ or improvement of
certain public buildings of the City, including a police station, a fire station, a
corporation yard, and a playfield sports complex (the "2003 Public Buildings Projecf')
on land which is currently owned by the City (the "Property") and the Gilroy Public
Facilities Financing Authority, a joint exercise of powers authority duly organized and
operating under California law (the" Authority") is authorized to assist the City in such
financing and the City has requested the Authority to assist it in such financing;
WHEREAS, in order to provide funds for such purposes, the City has proposed
to lease to the Authority certain real property including the Property under a Site and
Facilities Lease by and between the City as lessor and the Authority as lessee, for a
payment which the City will use to finance the 2003 Public Buildings Project, and the
Authority has proposed to lease the Property back to the City under a Lease (the
"Lease") by and between the Authority as lessor and the City as lessee; and
WHEREAS, the Authority has further proposed to assign its right to receive
lease payments under the Lease to Union Bank of California, N.A., as trustee (the
"Trustee"), and in consideration of such assignment the Trustee has agreed to execute
and deliver not to exceed $47,000,000 aggregate principal amount of Certificates of
Participation (City of Gilroy-Public Buildings Project), Series 2003 (Auction Rate) (the
"Certificates"), each evidencing a direct, undivided fractional interest in the lease
payments to be paid by the City under the Lease;
WHEREAS, the Council wishes at this time to authorize and approve the
financing proceedings described above in furtherance of the public purposes of the City;
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the
City of Gilroy as follows:
Section 1. Approval of Financing Plan and Related Documents. The Council
hereby approves the financing pIan outlined above. To that end, the Council hereby
approves each of the following financing documents in substantially the respective
forms on file with the City Clerk, together with any changes therein or additions
RESOLUTION NO. 2003-40
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thereto deemed advisable by the City Representative (as defined below), and the
execution of each of the following agreements by the City Representative shall be
conclusive evidence of such approval:
(A) Site and Facilities Lease between the City as lessor and the
Authority as lessee, whereby the City leases the Property to the Authority in
consideration of the agreement by the Authority to cause the Certificates to be
issued.
(B) Lease between the Authority as lessor and the City as lessee,
whereby the Authority agrees to lease the Property back to the City in
consideration of the payment by the City of periodic lease payments which are
equal to the payments coming due on the Certificates.
(C) Assignment Agreement by and between the Authority and the
Trustee, whereby the Authority assigns to the Trustee certain of its rights under
the Lease Agreement, including the right to receive the lease payments payable
by the City.
(D) Trust Agreement among the City, the Authority and Union Bank
of California, N.A., as trustee (the "Trustee"), whereby the Trustee agrees to
execute and deliver the Certificates and to apply the proceeds of the Certificates
to finance the 2003 Public Buildings. Project.
(E) Auction Agent Agreement between Deutsche Bank Trust
Company Americas as the Auction Agent and the Trustee relating to the
conduct of auction procedures under the Trust Agreement.
(F) Broker-Dealer Agreement between the Auction Agent and
Morgan Stanley & Co. Incorporated as broker-dealer (the "Broker-Dealer").
(G) Certificate Purchase Agreement by and among the City, the
Authority and Morgan Stanley &Co. Incorporated as purchaser of the
Certificates (the "Underwriter"), whereby the Underwriter agrees to purchase
the Certificates and the City and the Authority agree to sell the Certificates to
the Underwriter.
(H) Official Statement which describe~ the Certificates and the
financing and the security for the payment of the Certificates
Section 2. Official Actiolls to (:Oll1plete Financing. The Mayor, Mayor
Protempore, City Administrator, Direc'tor of Administrative S~rvices, City Clerk, City
Attorney and all other officers of the City (each a "City Representative") are each
authorized and directed in the name and on behalf of the City, and with the advice of
the consultants described below and the Underwriter, as required, to revise, complete,
execute and deliver the foregoing documents and to make any and all assignments,
certificates, requisitions, agreements, notices, consents, leases and other instruments of
conveyance, warrants and other documents, which they or any of them might deem
RESOLUTION NO. 2003-40
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necessary or appropriate in order to consummate any of the transactions contemplated
by the agreements and documents approved pursuant to this Resolution. Whenever in
this resolution any officer of the City is authorized to execute or countersign any
document or take any action, such execution, countersigning or action may be taken on
behalf of such officer by any person designated by such officer to act on his or her
behalf in the case such officer is absent or unavailable. The schedule of lease payments
attached to the Lease Agreement shall correspond to the payments of principal and
interest represented by the Certificates, to be determined upon the sale thereof as set
forth in Section 3 below.
Section 3. Sale of Certificates of Participation. The Council hereby approves
the sale of the Certificates by negotiation with the Underwriter. The Certificates shall be
sold to the Underwriter under a Certificate Purchase Agreement by and among the
Authority, the City and the Underwriter in form and substance acceptable to an City
Representative, and a City Representative is hereby directed to execute and deliver such
agreement on behalf of the City, provided that the aggregate principal amount of the
Certificates shall not exceed $47,000,000, the total discounts shall not exceed 1.5% of the
such principal amount and the average rate of interest to be represented by the
Certificates (taking into account any original issue discount on the sale thereof) shall not
exceed 5% per annum.
Section 4. Official Statement. The Council hereby approves and deems nearly
final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934, a
preliminary Official Statement describing the Certificates in the form on file with the
City Clerk of the Council. The City Representative is hereby authorized to execute an
appropriate certificate stating the Council's determination that the Preliminary Official
Statement has been deemed nearly final within the meaning of such Rule. Distribution
of the preliminary Official Statement by the Underwriter in connection with the sale of
the Certificates is hereby approved. The City Representative is hereby authorized and
directed to approve any changes in or additions to a final form of said Official
Statement, and the execution thereof by the City Representative shall be conclusive
evidence of approval of any such changes and additions. The Council hereby
authorizes the distribution of the final Official Statement by the Underwriter.
Section 5. Consultants. For purposes of the conduct .ofthe proceedings for the
issuance, sale and delivery of the Certificates, the Board hereby approves the
appointment by the City of the following consultants: Northcross, Hill & Ach, San
Francisco, California, asfinaneial advisor; Jones Hall, A Professional Law Corporation,
San Francisco, California, as bond counsel and Nixon Peabody, San Francisco,
California, as disclosure counsel. The City Representative shall cause suitable
agreements to be executed with each of the foregoing consultants for their services.
Section 6. Effective Date. This Resolution shall take effect from and after the
date of its passage and adoption.
RESOLUTION NO. 2003-40
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PASSED AND ADOPTED this 16th day of June, 2003 by the following vote:
AYES:
COUNCILMEMBERS: ARELLANO, DILLON, GARTMAN,
MORALES, PINHEIRO, and SPRINGER
NOES:
COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: VELASCO
APPROVED:
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Thomas w. SPringer~~ ~
ATTEST:
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Rhonda Pellin, City Clerk
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I, RHONDA PELLIN, City Clerk of the City of Gilroy, do hereby certify that the attached
Resolution No, 2003-40 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 Council held on the
16th day of June, 2003, 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 23rd day of June, 2003.
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City Clerk of the City of Gilroy
(Seal)