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Resolution 2010-05 RESOLUTION NO. 2010-05 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY AUTHORIZING THE ISSUANCE AND SALE OF WASTEWATER REVENUE REFUNDING BONDS IN THE MAXIMUM AMOUNT OF $27,500,000 TO REFINANCE OUTSTANDING 1999 INSTALLMENT PAYMENT OBLIGATIONS, AND APPROVING RELATED AGREEMENTS AND ACTIONS WHEREAS, the South County Regional Wastewater Authority, a joint exercise of powers authority organized and existing under the laws of the State of California (the "Authority"), owns and operates a regional wastewater treatment facility for the treatment of wastewater which is collected by its member agencies, including the City of Gilroy (the "City"); and WHEREAS, the City owns and operates a public enterprise for the collection of wastewater within the service area of the City (the "Wastewater System"), and in order to refmance the City's share of the costs of improvements to such wastewater treatment facility, the City and the Authority have previously entered into a Refunding Installment Purchase Agreement Relating to Capacity Rights in Regional Wastewater Facilities, dated as of April 1, 1999 (the "1999 Installment Purchase Agreement"), under which the City has agreed to pay semiannual installment payments in the aggregate principal amount of $38,215,000 (the "1999 Installment Payments"); and WHEREAS, in order to realize debt service savings the City wishes at this time to refinance the 1999 Installment Payments, and the City is authorized under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the "Bond Law"), to issue its revenue bonds for that purpose; and WHEREAS, to that end the City Council wishes to authorize the issuance and sale of City of Gilroy 2010 Wastewater Revenue Refunding Bonds in the aggregate principal amount of not to exceed $27,500,000 (the "Refunding Bonds") under the Bond Law, which will be secured by a pledge of the net revenues of the Wastewater System; and WHEREAS, the City Council of the City has duly considered such transactions and wishes at this time to approve said transactions in the public interests of the City; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Gilroy as follows: Section 1. Issuance of Refunding Bonds; Approval of Indenture. The City Council hereby authorizes the issuance of the Refunding Bonds under the Bond Law, in the principal amount of not to exceed $27,500,000, for the purpose of providing funds to RESOLUTION NO. 2010-05 refmance the 1999 Installment Payments and thereby provide funds to refund the outstanding South County Regional Wastewater Authority Revenue Bonds (Regional Wastewater Facilities Project) Gilroy Refunding Series 1999A, issued by the Authority in the aggregate principal amount of$38,215,000 (the "1999 Authority Bonds"). The Refunding Bonds shall be issued under an Indenture of Trust between the City and Union Bank of California, N.A, as trustee, which is hereby approved in substantially the form on file with the City Clerk together with any changes therein or additions thereto deemed advisable by the City Administrator or the Finance Director (each, an "Authorized Officer"), and the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of such changes and additions. The City Council hereby authorizes and directs an Authorized Officer to execute, and the City Clerk to attest, said form of the Indenture of Trust for and in the name of the City. The City Council hereby authorizes the delivery and performance of the Indenture of Trust. Section 2. Refmancing of 1999 Installment Payments. The City Council hereby authorizes and approves the refinancing of the 1999 Installment Payments from the proceeds of the Refunding Bonds. Such refinancing shall be accomplished under the Escrow Deposit and Trust Agreement between the City and The Bank of New York Mellon Trust Company, N.A., as trustee for the 1999 Authority Bonds, in substantially the form on file with the City Clerk together with any changes therein or additions thereto deemed advisable by an Authorized Officer, and the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of such changes and additions. The City Council hereby authorizes and directs an Authorized Officer to execute the final form of the Escrow Deposit and Trust Agreement for and in the name of the City. The City Council hereby authorizes the delivery and performance of the Escrow Deposit and Trust Agreement. Section 3. Negotiated Sale of Refunding Bonds. In accordance with Section 53583 of the Bond Law, the City Council hereby authorizes and directs the negotiated sale of the Refunding Bonds to E.J. De La Rosa, Inc. and Stinson Securities, as underwriter (collectively, the "Underwriter") under the Bond Purchase Contract in substantially the form on file with the City Clerk together with any changes therein or additions thereto deemed advisable by an Authorized Officer, whose execution thereof shall be conclusive evidence of the approval of any such changes or additions. The amount of Underwriter's discount for the Refunding Bonds shall be not more than 1.00% of the par amount thereof and the average rate of interest to be borne by the Refunding Bonds (taking into account any original issue discount on the sale thereof) shall not exceed 4.50% per annum. Section 4. Official Statement. The City Council hereby approves the Preliminary Official Statement describing the Refunding Bonds in the form on file with the City Clerk, and authorizes an Authorized Officer to approve revisions to said Preliminary Official Statement. At the request of the Underwriter, an Authorized Officer shall execute a certificate deeming the Preliminary Official Statement, as so revised, to be nearly final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934. Distribution of the Preliminary Official Statement by the Underwriter to prospective -2- RESOLUTION NO. 2010-05 purchasers of the Refunding Bonds is hereby approved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to a fmal form of said Official Statement, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The City Council hereby authorizes the distribution of the final Official Statement by the Underwriter. The final Official Statement shall be executed in the name and on behalf of the City by an Authorized Officer. Section 5. Engagement of Professional Services. In connection with the issuance and sale of the Refunding Bonds, the City Council hereby authorizes the engagement of the services of Northcross, Hill & Ach, Inc. to act as financial advisor to the City, and the firm of Jones Hall, A Professional Law Corporation, to act as bond counsel and disclosure counsel to the City. The City Administrator is hereby authorized and directed to execute an agreement with each such firm, in the respective forms on file with the City Clerk. Section 6. Official Actions. The Mayor, the City Administrator, the Finance Director, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. 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 if such officer is absent or unavailable. Section 7. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. -3- RESOLUTION NO. 2010-05 PASSED AND ADOPTED this 1st day of February, 2010 by the following vote: AYES: COUNCILMEMBERS: NOES: COUCILMEMBERS: ARELLANO, BRACCO, DILLON, GARTMAN, TUCKER, and PINHEIRO NONE ABSENT: COUNCILMEMBERS: WOODWARD ATTEST: APPROVED: -4- RESOLUTION NO. 2010-05 I, SHA WNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2010-05 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 1 st day of February, 2010, 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 3rd day of February, 2010. (Seal)