Resolution No. 2008-45 | Authorizing Purchase of Outstanding 2003 Auction Rate Certificates | Adopted 10/20/2008
RESOLUTION NO. 2008-45
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GILROY AUTHORIZING THE PURCHASE OF OUTSTANDING 2003
AUCTION RATE CERTIFICATES OF PARTICIPATION AND
APPROVING RELATED DOCUMENTS AND ACTIONS
WHEREAS, in order to provide financing for the construction of public
buildings, including a police station, a fire station, a corporation yard, and a playfield
sports complex, the City of Gilroy (the "City") and the Gilroy Public Facilities Financing
Authority (the "Authority") have previously authorized the execution and delivery of
Certificates of Participation (City of Gilroy - Public Buildings Project) Series 2003
(Auction Rate) in the aggregate principal amount of $45,900,000 (the "2003
Certificates"); and
WHEREAS, the 2003 Certificates have been executed and delivered under a
Trust Agreement dated as of July 1,2003 (the "2003 Trust Agreement"), among the City,
the Authority and Union Bank of California, N.A., as trustee; and
WHEREAS, due to current conditions in the municipal bond market, the City has
determined that it is in its best interests at this time to acquire the 2003 Certificates in
order to remove the 2003 Certificates from the marketplace in anticipation of a possible
future conversion of the interest rate on the 2003 Certificates to a fixed or variable rate;
and
WHEREAS, funds for the purchase of the 2003 Certificates will be derived from
Fund 440 (Public Facilities Impact Fund), consisting of amounts transferred for that
purpose from Fund 700 (Sewer Fund), Fund 720 (Water Fund), Fund 600 (Fleet Fund)
and Fund 435 (Sewer Development Fund); and
WHEREAS, Section 5925 of the California Government Code provides that the
purchase of the 2003 Certificates by the City will not extinguish the obligations
represented thereby and IRS Notice 2008-88 provides that the purchase of the 2003
Certificates by the City will not result in a reissuance or retirement of the 2003
Certificates for federal tax purposes; and
WHEREAS, the City Council of the City wishes at this time to approve all
documentation and actions relative to the purchase of the 2003 Certificates, in
furtherance of the public purposes of the City;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Gilroy as follows:
RESOLUTION NO. 2008-45
Section 1. Authorization to Purchase 2003 Certificates. The City Council
hereby approves the purchase of the outstanding 2003 Certificates, in whole or in part, in
accordance with the provisions of the 2003 Trust Agreement. Funds for the purchase of
the 2003 Certificates shall be derived from the sources indicated in the recitals of this
Resolution.
Section 2. Amendment of Trust Agreement. The City Council hereby
approves the First Amendment to Trust Agreement in substantially the form on file with
the City Clerk together with any changes therein or additions thereto deemed advisable
by the City Administrator, whose execution thereof shall be conclusive evidence of such
approval. The City Administrator is hereby authorized and directed for and in the name
and on behalf of the City to execute, and the City Clerk is hereby authorized and directed
to attest, the final form of the First Amendment to Trust Agreement.
Section 3. Engagement of Professional Services. The City Council hereby
appoints the firm of Jones Hall, A Professional Law Corporation, to act as bond counsel
and disclosure counsel to the City and the firm of Northcross, Hill & Ach to act as
financial advisor to the City, in connection with the transactions described in this
Resolution. Compensation to each of said firms shall be on a time and materials basis.
The City Administrator is authorized and directed to execute an agreement with each of
such firms for their professional services hereunder.
Section 4. Official Actions. The Mayor, the City Administrator, the Finance
Director, the City Clerk 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 but not limited to any actions required to convert the rate of
interest represented by the Certificates and 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 purchase of the 2003 Certificates, the
amendment of the 2003 Trust Agreement and all transactions relating thereto. 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 case such officer is absent or unavailable.
Section 5. Effective Date. This resolution shall take effect immediately upon its
passage and adoption.
PASSED AND ADOPTED this 20th day of October, 2008 by the following vote:
AYES:
COUNCILMEMBERS:
ARELLANO, BRACCO, DILLON,
GARTIMAN, TUCKER and
PINHEIRO
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RESOLUTION NO. 2008-45
NOES:
COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
NONE
WOODWARD
APPROVED:
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_ A Pinheiro, Mayor
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RESOLUTION NO. 2008-45
I, SHA WNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Resolution No. 2008-45 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 20th day of October, 2008, 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 21 st day of October, 2008.
a Freels, _
City Clerk of the City of Gilroy
(Seal)