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Resolution 2019-21RESOLUTION NO.2019-21 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY AUTHORIZING THE ISSUANCE OF ITS 2019 GENERAL OBLIGATION REFUNDING BONDS, AUTHORIZING AND DIRECTING THE EXECUTION OF PAYING AGENT AGREEMENTS, AND CERTAIN OTHER RELATED DOCUMENTS, AND AUTHORIZING ACTIONS RELATED THERETO WHEREAS, more than two-thirds of the qualified voters in the City of Gilroy (the "City"), voting at an election held on November 4, 2008 (the "Election"), voted to approve a measure authorizing the issuance of up to $37,000,000 of general obligation bonds (the "Bond Measure") for the purpose of raising money to finance the acquisition, construction of public library facilities, as further described in the Bond Measure; and WHEREAS, pursuant to the authorization received at such election, together with the authorization contained in Chapter 4 of Division 4 of Title 4 of the Government Code of the State of California (commencing with Section 43600) (the "Bond Law"), the City issued its $10,500,000 2009 General Obligation Bonds (Gilroy Community Library Project) (the "2009 Bonds") and its $23,500,000 2010 General Obligation Bonds (Gilroy Community Library Project) (the "2010 Bonds" and, together with the 2009 Bonds, the "Prior Bonds"); and WHEREAS, the City Council has determined that prudent management of the fiscal affairs of the City requires that refunding bonds (the "2009 Refunding Bonds") be issued pursuant to Article 9 (commencing with Section 53550) and Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (collectively, the "Refunding Law") for the purpose of defeasing and refunding all or a portion of the 2009 Bonds (such 2009 Bonds to be defeased and refunded, the "2009 Refunded Bonds") pursuant to this resolution, in one or more series; and WHEREAS, the City Council has determined that prudent management of the fiscal affairs of the City requires that refunding bonds (the "2010 Refunding Bonds" and, together with the 2009 Refunding Bonds, the "Refunding Bonds") be issued pursuant to the Refunding Law for the purpose of defeasing and refunding all or a portion of the 2010 Bonds (such 2010 Bonds to be defeased and refunded, the "2010 Refunded Bonds" and, together with the 2009 Refunded Bonds, the "Refunded Bonds") pursuant to this resolution, in one or more series, delivered on a standard or forward delivery basis; and WHEREAS, pursuant to the Refunding Law, (i) the 2009 Refunding Bonds may be issued only if the total net interest cost to maturity on such 2009 Refunding Bonds plus the principal amount thereof is not in excess of the total net interest cost to maturity on the 2009 Refunded Bonds plus the principal amount of the 2009 Refunded Bonds, and (ii) the 2010 Refunding Bonds may be issued only if the total net interest cost to maturity on such 2010 Refunding Bonds plus the principal amount thereof is not in excess of the total net interest cost to maturity on the 2010 Refunded Bonds plus the principal amount of the 2010 Refunded Bonds; and 1 4850-2602-3571.3 RESOLUTION NO. 2019-21 WHEREAS, forms of the following documents have been presented to the City Council: (i) a Bond Purchase Agreement (the "Bond Purchase Agreement") whereby Hilltop Securities Inc., as underwriter (in such capacity, the "Underwriter") has offered to purchase one or more series of Refunding Bonds from the City; (ii) a Forward Delivery Bond Purchase Agreement (the "Forward Delivery Agreement") whereby the Underwriter has offered to purchase one or more series of Refunding Bonds from the City on a forward delivery basis; (iii) a Preliminary Official Statement (the "Preliminary Official Statement") relating to the Refunding Bonds; (iv) Paying Agent Agreement (the "Paying Agent Agreements") to be executed and delivered by the City and MUFG Union Bank, N.A., as paying agent (the "Paying Agent"); (v) an Escrow Deposit and Trust Agreement with respect to the defeasance and refunding of all or a portion of the 2009 Refunded Bonds (the "2009 Escrow Agreement") to be executed and delivered by the City and MUFG Union Bank, N.A., as escrow bank (the "Escrow Bank"); (vi) an Escrow Deposit and Trust Agreement with respect to the defeasance and refunding of all or a portion of the 2010 Refunded Bonds (the "2010 Escrow Agreement" and, together with the 2009 Escrow Agreement, the "Escrow Agreements") to be executed and delivered by the City and the Escrow Bank; and (vii) one or more Continuing Disclosure Certificates (each, a "Continuing Disclosure Certificate") in the form attached to the Preliminary Official Statement as Appendix D, to be executed and delivered by the City; and WHEREAS, this City Council recognizes that Senate Bill No. 222 (Chapter 78, Statutes of 2015) ("S13222"), which provides for a statutory lien on the Pledged Moneys (as defined herein) when collected by the County of Santa Clara (the "County") to secure repayment of general obligation bonds, was passed by the Legislature of the State and approved by the Governor and became effective January 1, 2016; and WHEREAS, the pledge included in this Resolution to secure payment of the Refunding Bonds is intended to be a consensual agreement with the Owners; and WHEREAS, Section 5852.1 of the Government Code of the State of California ("Section 5852.1") provides that the City Council obtain from an underwriter, municipal advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the Refunding Bonds, good faith estimates of. (a) the true interest cost of the Refunding Bonds, (b) the finance charge of the Refunding Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Refunding Bonds received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the Refunding Bonds and (d) the sum total of all debt service payments on the Refunding Bonds calculated to the final maturity of the Refunding Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Refunding Bonds, all with respect to each series of Refunding Bonds; and WHEREAS, in accordance with Section 5852.1, the City Council has obtained such good faith estimates from NHA Advisors, LLC, the City's municipal advisor, and such estimates are disclosed in Exhibit A attached hereto; and WHEREAS, the City Council of the City has duly considered such transactions and desires at this time to approve said transactions and the documents related thereto; 2 4850-2602-3571.3 RESOLUTION NO. 2019-21 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GILROY DOES HEREBY RESOLVE: Secton 1. Findings as to Issuance of Bonds. The above recitals are true and correct, and this City Council determines that the prudent management of its fiscal affairs requires that the Refunding Bonds be issued for the purpose of defeasance and refunding all or a portion of the Prior Bonds pursuant to the Refunding Law. Secton 2. Authority for Resolution; Authorization. This Resolution is adopted pursuant to the Election, the Constitution of the State and the provisions of the Refunding Law. The Mayor, City Administrator and the Finance Director, or any delegate of any of them (collectively, the "Authorized Officers") are, and each of them acting alone is, hereby authorized and directed to issue and deliver the Refunding Bonds and to establish the initial aggregate principal amount thereof, provided, however, that such initial aggregate principal amount shall not exceed the maximum aggregate principal amount of $30,000,000. Such Refunding Bonds shall be general obligations of the City, payable as to principal, premium, if any, and interest from ad valorem taxes to be levied upon taxable property in the City (except certain property which is taxable at limited rates). The Refunding Bonds shall be designated the "City of Gilroy 2019 General Obligation Refunding Bonds" with such insertions or series designations as shall be appropriate to describe the authorizations for said Bonds, or any other changes as are agreed to by an Authorized Officer, as evidenced by his or her execution thereof. As provided in Section 53552 of the Refunding Law, (i) the 2009 Refunding Bonds shall not be issued unless the total net interest cost to maturity on the 2009 Refunding Bonds plus the principal amount of the 2009 Refunding Bonds is less than the total net interest cost to maturity on the 2009 Refunded Bonds to be refunded plus the principal amount of the 2009 Refunded Bonds to be refunded, and (ii) the 2010 Refunding Bonds shall not be issued unless the total net interest cost to maturity on the 2010 Refunding Bonds plus the principal amount of the 2010 Refunding Bonds is less than the total net interest cost to maturity on the 2010 Refunded Bonds to be refunded plus the principal amount of the 2010 Refunded Bonds to be refunded. The Refunding Bonds may be issued in one or more series, and delivered on a standard or forward delivery basis. The dated date; purchase, call or redemption provisions; authorized denominations; interest rates and maturity dates; place or places of payment of principal and interest; and costs of issuing the Refunding Bonds, shall all be as described in the applicable form of Paying Agent Agreement upon its execution by an Authorized Officer. The Authorized Officers are, and each of them acting alone is, hereby authorized and directed to determine the specific maturities and amounts of the Prior Bonds or portions thereof to be refunded based upon market conditions existing at the time of the pricing of the Refunding Bonds. The Authorized Officers may apply for the issuance of a policy of municipal bond insurance respecting all or any portion of the Refunding Bonds and may execute a commitment therefor and other documents associated with such application. Secton 3. Resolution to Constitute Contract. In consideration of the purchase and acceptance of any and all of the Refunding Bonds authorized to be issued hereunder by those who shall own the same from time to time, this Resolution shall be deemed to be and shall constitute a contract among the City and the Owners from time to time of the Refunding Bonds; 4850-2602-3571.3 RESOLUTION NO. 2019-21 and the pledge made in this Resolution shall be for the equal benefit, protection and security of the Owners of any and all of the Refunding Bonds, all of which, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Refunding Bonds over any other thereof. Secton 4. Approval of Paving Aaent Agreements. The proposed forms of Paying Agent Agreements which are on file with the City Clerk are hereby approved, and the Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Paying Agent Agreements in said form, with said additions or changes thereto (including the insertion of the maturity dates, principal amounts and interest rates of the Refunding Bonds) and changes therein as the Authorized Officers, each acting alone, may approve, in his or her discretion, as being in the best interests of the City, such approval to be conclusively evidenced by the execution and delivery thereof. Pursuant to Section 53515 of the Government Code, the Refunding Bonds shall be secured by a statutory lien on all revenues received pursuant to the levy and collection of ad valorem property taxes for the payment thereof. The Debt Service Accounts established in the Paying Agent Agreements, all of the tax revenues, and all amounts (including proceeds of the Refunding Bonds and investment earnings) held in any fund or account established hereunder, are hereby pledged and a continuing lien and security interest is hereby granted by the City therein to secure, and constitute a trust fund for, the payment of the principal of and interest on the respective series of Refunding Bonds. This pledge (i) shall constitute a first lien on such Debt Service Account, the tax revenues, and amounts in such funds or accounts, (ii) shall be valid and binding from and after the date hereof without any physical delivery thereof or further act, and (iii) shall be irrevocable until all of the respective series of Refunding Bonds are no longer Outstanding. It is the intention of the City that (i) for purposes of 11 U.S.C. § 902(2)(E), the tax revenues constitute "taxes specifically levied to finance one or more projects or systems" of the City and are not "general property, sales or income taxes levied to finance the general purposes of the City, (ii) the pledge of the tax revenues constitutes a pledge of "special revenues" for purposes of 11 U.S.C. §§ 901 et seq., and (iii) a petition filed by the City under 11 U.S.C. §§ 901 et seq. will not operate as a stay under 11 U.S.C. §§ 362 and 922 of the application of such tax revenues to payment when due of principal of and interest on the Refunding Bonds. The City will not take any action inconsistent with its agreement and statement of intention hereunder and will not deny that the pledge of the tax revenues constitutes a pledge of special revenues for purposes of 11 U.S. C. § § 901 et seq. In addition, the pledges in this Resolution and in the Paying Agent Agreements are agreements between the City and the Owners (and bondowners for which the Owners serve as nominees) in addition to any statutory lien that may exist. Secton 5. Approval of Form of Refunding_ Bonds. The form of Refunding Bonds set forth in the forms of Paying Agent Agreements are hereby approved, and the members of the City Council and the Authorized Officers of the City, each acting alone, and the City Clerk, are hereby authorized and directed to execute the Refunding Bonds in the name and on behalf of the City and to cause the delivery thereof as provided for below. 4 4850-2602-3571.3 RESOLUTION NO. 2019-21 Secton 6. Sale and Issuance of Refunding Bonds; Annroval of Bond Purchase Agreement and Forward Delivery Agreement. The City Council hereby approves the issuance and sale of the Refunding Bonds, or any series of such Bonds, (i) by negotiation with the Underwriter or (ii) by a private sale to a purchaser (the "Purchaser"), whereby the Purchaser agrees to a loan to the City evidenced by the Refunding Bonds, and in connection with such sale the City would be assisted by Hilltop Securities Inc., as placement agent (in such capacity, the "Placement Agent"). The Authorized Officers, and each of them alone, is directed to determine whether the Refunding Bonds, or any series of them, shall be sold by negotiated sale to the Underwriter or by private placement to the Purchaser, and if such Authorized Officers determine to sell the Refunding Bonds, or any series, of them, by private placement, to select the Purchaser thereof. The Bond Purchase Agreement and the Forward Delivery Agreement, pursuant to which the City agrees to sell the Refunding Bonds to the Underwriter, and the Underwriter agrees to purchase the Refunding Bonds from the City, are each hereby approved, provided that (a) the true interest cost of the Refunding Bonds shall not exceed 3.75%; (b) the principal amount of the Refunding Bonds shall not exceed $30,000,000; (c) the discount at which the Underwriter purchases all of the Refunding Bonds shall not be greater than an amount equal to 0.5% (exclusive of original issue discount) of the principal amount of the Refunding Bonds, (d) the final maturity date of the Refunding Bonds shall not be later than the final maturity date of the Refunded Bonds, and (e) the costs of issuing the Refunding Bonds are estimated to be $400,000. One or more private placement agreements, Bond Purchase Agreements, and one or more Forward Delivery Agreements may be utilized if necessary or advisable in connection with the issuance of the Standard Delivery Refunding Bonds and the Forward Delivery Refunding Bonds, as determined by an Authorized Officer. The Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Agreement and the Forward Delivery Agreement in the form on file with the City Clerk, with said additions or changes thereto (including the insertion of the maturity dates, principal amounts and interest rates of the Refunding Bonds) and changes therein as the Authorized Officers, each acting alone, may approve, in his or her discretion, as being in the best interests of the City, such approval to be conclusively evidenced by the execution and delivery thereof. The City Council further approves the issuance and delivery of the Refunding Bonds to the Underwriter pursuant to the Paying Agent Agreements. A negotiated sale has been selected by the City Council because it offers greater flexibility than a public sale process in setting and changing the time and terms of the sale of the Refunding Bonds, in structuring the Refunding Bonds to meet the particular needs of potential investors, in enhancing the sale of the Refunding Bonds to local investors, in evaluating the benefits of bond insurance, and in providing greater assurance that the tax outcome will conform to the expectations of voters. Secton 7. Approval of Preliminary and Final Official Statement. The form of the Preliminary Official Statement is hereby approved. This City Council also hereby authorizes the use and distribution of (i) the Preliminary Official Statement, with such changes as an Authorized Officer may approve, such approval to be conclusively evidenced by an Authorized Officer's execution of a certificate described below; and (ii) an Official Statement in substantially the form of the Preliminary Official Statement, with such changes as may be necessary or advisable in connection with the sale of the Refunding Bonds, as determined by an Authorized Officer, such determination to be conclusively evidenced by the execution and 5 4850-2602-3571.3 RESOLUTION NO. 2019-21 delivery of the Official Statement; and (iii) any amendments or supplements to the Preliminary Official Statement or the Official Statement which an Authorized Officer may deem necessary or desirable. Upon approval of the Preliminary Official Statement by an Authorized Officer, said Authorized Officer shall execute a certificate deeming the Preliminary Official Statement final as of its date, and upon such execution, the Preliminary Official Statement shall be deemed final as of its date, except for the omission of certain information as provided in and pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act. Secton 8. Approval of Escrow Agreements. The proposed forms of Escrow Agreements to be executed and delivered by the City and the Escrow Bank relating to the defeasance and redemption of the Refunded Bonds which are on file with the City Clerk are hereby approved, and the Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Escrow Agreements in said form, with said additions thereto and changes therein as the Authorized Officers, each acting alone, may approve, such approval to be conclusively evidenced by the execution and delivery thereof. Secton 9. Continuing Disclosure Certificate. The proposed form of Continuing Disclosure Certificate to be executed and delivered by the City, for the benefit of the owners of the Refunding Bonds and in order to assist the Underwriter in complying with Rule 15c2- 12(b)(5) of the Securities and Exchange Commission, as amended, which is on file with the City Clerk as Appendix D to the Preliminary Official Statement, is hereby approved, and the Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver one or more Continuing Disclosure Certificate in said form, with said additions thereto and changes therein as the Authorized Officers, each acting along, may approve, such approval to be conclusively evidence by the execution and delivery thereof. Secton 10. Delegation of Authoritv to Authorized Officer. The Authorized Officers are hereby authorized and directed to execute, sign and deliver any and all agreements, approvals, certificates, statements, requests, requisitions and orders of the City in connection with the sale and issuance of the Refunding Bonds, the refunding or defeasance of the Refunded Bonds and the other transactions described herein. The Authorized Officers may authorize such other officers of the City as they deem appropriate to undertake any of the actions which he is authorized or directed to undertake pursuant hereto Secton 11. Consultants. The City Council hereby approves (i) Hilltop Securities Inc., as Underwriter in connection with the issuance of the Refunding Bonds, and as Placement Agent in connection with the placement of the Refunding Bonds with the Purchaser, (ii) Nixon Peabody LLP, as bond counsel and disclosure counsel in connection with the issuance of the Refunding Bonds, (iii) N1UFG Union Bank, N.A., as Paying Agent for the Refunding Bonds and Escrow Bank for the Refunded Bonds, and (iv) NHA Advisors, LLC, as municipal advisor for the issuance of the Refunding Bonds and the Authorized Officers, each acting alone, are hereby authorize to enter into agreements with each of said firms in connection with their providing services with respect to the Refunding Bonds. 6 4850-2602-3571.3 RESOLUTION NO. 2019-21 Secton 12. General Authoritv. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the transactions described herein or to otherwise effectuate the purposes of this resolution, including preparing, or causing to be prepared, and executing all appropriate disclosure documents relating to the Refunding Bonds. Any such actions previously taken by such officers are hereby ratified and confirmed. Secton 13. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any remaining provisions hereof. Secton 14. Effective Date. This resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 20t' day of May, 2019, by the following vote: AYES: COUNCILMEMBERS: BLANKL,EY, LERO-MUNOZ, MARQUES, TOVAR, TUCKER, AND VELASCO NOES: ABSENT: A TTFCT COUNCILMEMBERS: NONE. COUNCILMEMBERS: BRACCO. APPRO`JED: cv / / - Rola icy Masco, Mayor 7 4850-2602-3571.3 RESOLUTION NO. 2019-21 GOOD FAITH ESTIMATES Set forth below are good faith estimates of NHA Advisors, Inc., the City's municipal advisor, as required under Section 5852.1 of the California Government Code (the "Code") for the City's 2019 General Obligation Refunding Bonds (the "Bonds"). The following estimates have no bearing on, and should not be misconstrued as, any not -to -exceed financial parameters authorized by resolution. (a) The true interest cost of the Refunding Bonds is estimated at 3.04%, calculated as provided in Section 5 852. 1 (a)(1)(A) of the Code. (b) The finance charge of the Refunding Bonds, including all fees and charges paid to third parties, is estimated at $385,000. (c) Net Proceeds to be Received for the sale of the Bonds (net of finance charges, reserves and capitalized interest, if any) is $28,405,000. (d) The total payment amount calculated as provided in Section 5852.1(a)(1)(1)) of the, Code is estimated at $3 8,175,000. The foregoing are good faith estimates only, and the final costs will depend on market conditions and can be expected to vary from the estimated amounts set forth above. The principal amount of the Bonds, the true interest cost of the Bonds, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the estimated amount used for purposes of such estimates, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, (f) federal tax law advice from the City's bond counsel or (g) alterations in the City's financing plan, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City. A-1 4850-2602-3571.3 I, SUZANNE GUZZETTA, Deputy City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2019-21 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 20d' day of May, 2019, 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 22nd day of May, 2019. Aanneetta Deputy City Clerk of the City of Gilroy (Seal)