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GPFFA and City Resolution 2003-40 RESOLUTION NO. 2003-40 RESOLUTION OF THE CIlY COUNCIL OF THE CIlY OF GILROY AUTHORIZING DELIVERY AND SALE OF AUCfION RATE CERTIFICATES OF PARTICIPATION IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $47,000,000 TO FINANCE THE CIlY'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 Gara, 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 Project") 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 plan 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 -1- 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) Trost 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 describes the Certificates and the financing and the security for the payment of the 'Certificates Section 2. Official Actiolls '0 (:OUlplete Financing. The Mayor, Mayor Protempore, City Administrator, Director of Administrative ~rvjces, 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 -2- 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 of the 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, asfinaneiat 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 -3- 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: ~s~~~ Thomas W. Springer, Mayo ~ ATTEST: /-j --. .. ? ~/J. 61' .......-, ..---- ( v .. '1 .~,' ~c'-_ ---e-C-C-L*. Rhonda Pellin, City Gerk RESOLUTION NO. 2003-40 -4- 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. ~ (::J . ..~/~(~~ City Clerk of the City of Gilroy (Seal)