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Resolution 2019-73RESOLUTION NO.2019-73 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY APPROVING THE ISSUANCE BY THE GILROY PUBLIC FACILITIES FINANCING AUTHORITY OF NOT TO EXCEED $17,000,000 OF GILROY PUBLIC FACILITIES FINANCING AUTHORITY LEASE REVENUE REFUNDING BONDS, SERIES 2020A; APPROVING THE EXECUTION AND DELIVERY OF VARIOUS RELATED DOCUMENTS IN CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS; AND AUTHORIZING THE TAKING OF CERTAIN OTHER MATTERS RELATED THERETO WHEREAS, the Gilroy Public Facilities Financing Authority (the "Authority") was established for the purpose, among others, of providing for the financing and refinancing of public capital improvements for the City of Gilroy (the "City"); and WHEREAS, the Authority has previously issued its Gilroy Public Facilities Financing Authority Refunding Lease Revenue Bonds, Series 2010, in the aggregate principal amount of $24,475,000 (the "Series 2010 Bonds"); and WHEREAS, the Authority and the City have determined, that it is necessary and desirable in order to refund the Series 2010 Bonds to authorize the issuance, sale and delivery of the Gilroy Public Facilities Financing Authority Lease Revenue Refunding Bonds, Series 2020A (the "Series 2020A Bonds") in the aggregate principal amount of not to exceed $17,000,000, under the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Law"); and WHEREAS, in connection with the issuance of the Series 2020A Bonds the City desires to approve the form and distribution of a preliminary official statement (the "Preliminary Official Statement"); and WHEREAS, the City also desires to approve in connection with the sale of the Series 2020A Bonds, the form of a Forward Delivery Bond Purchase Agreement (the "Forward Agreement"), among the Authority, the City and Hilltop Securities Inc. (the "Underwriter"); and 4837-2545-5526.5 WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) ("SB 450") requires that the City obtain from an underwriter, financial advisor or private lender and disclose, prior to authorization of the issuance of bonds with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public: (a) the true interest cost of the bonds, (b) the sum of all fees and charges paid to third parties with respect to the bonds, (c) the amount of proceeds of the bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the bonds, and (d) the sum total of all debt service payments on the bonds calculated to the final maturity of the bonds plus the fees and charges paid to third parties not paid with the proceeds of the bonds; and WHEREAS, in compliance with SB 450, the City has obtained from NHA Advisors, as the City's municipal advisor, and the Underwriter, the required good faith estimates and such estimates are disclosed and set forth on Exhibit A attached hereto; and WHEREAS, Senate Bill 1029 ("SB 1029") was signed by the California Governor on September 12, 2016, and places additional responsibilities on any issuer of public debt including the adoption of debt management policies that meet certain criteria; and WHEREAS, the City has represented that it is in compliance with the applicable SB 1029 pre -issuance requirements and that it expects to comply with all post -issuance requirements of SB 1029 applicable to the Series 2020A Bonds; and WHEREAS, to fulfill the requirements of Rule 15c2-12 under the Securities Exchange Act of 1934 (as amended, the "Rule"), the City will enter into a Continuing Disclosure Agreement (the "Continuing Disclosure Agreement"), whereby the City will agree to provide certain continuing disclosure reports; and WHEREAS, there have been presented to this meeting the proposed forms of the following documents: (a) the Indenture, dated as of August 1, 2020 (the "Indenture"), among the Authority, the City and MUFG Union Bank, N.A., as trustee (the "Trustee"); -2- 4837-2545-5526.5 (b) the Third Amendment to Lease Agreement, dated as of August 1, 2020 (the "Third Amendment") between the City and the Authority; (c) the Escrow Agreement; (d) the Preliminary Official Statement; (e) the Forward Agreement; and (f) the Continuing Disclosure Agreement; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Gilroy, as follows: SECTION 1. Anoroval of Issuance of Series 2020A Bonds by the Authoritv. The issuance of the Series 2020A Bonds by the Authority on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture and this Resolution, is hereby approved; provided, however, that (i) the aggregate principal amount of Series 2020A Bonds shall not exceed $17,000,000, (ii) the maturity of the Series 2020A Bonds shall not exceed November 1, 2033, and (iii) there shall be present value savings with respect to the refunding of the Series 2010 Bonds of at least 3% of the principal amount of the Series 2010 Bonds using the yield on the Series 2020A Bonds as the discount rate. SECTION 2. Annroval of Indenture. The form of Indenture presented at this meeting is hereby approved, and the Mayor, the City Administrator, the Finance Director and the City Clerk, or his or her designee (each, an "Authorized Officer") are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the Indenture in substantially the form presented at this meeting with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof, including with respect to whether and what type(s) of credit enhancement supports the Bonds, or by other factors, as determined by the Authorized Officers in consultation with the City's financial and legal consultants as being in the best interests of the City. SECTION 3. Annroval of Third Amendment. The form of Third Amendment presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the Third Amendment in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 4. Annroval of Forward Agreement. The City is hereby authorized to enter into the Forward Agreement and each Authorized Officer is hereby authorized and directed to execute and deliver the Forward Agreement on behalf of the City, in substantially the form presented to this meeting, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer shall approve in consultation with the City's financial and legal consultants, which approval shall be conclusively evidenced by the execution and delivery -3- 4837-2545-5526.5 thereof, provided, that the underwriting discount payable by the City pursuant to the Forward Agreement shall not exceed 0.65% of the principal amount of the Series 2020A Bonds. SECTION 5. Approval of Escrow Agreement. The form of the Escrow Agreement presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the Escrow Agreement in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 6. Approval of Official Statement. The Preliminary Official Statement is hereby approved and the same may be used and is hereby authorized to be used and distributed in the market by the Underwriter incident to the marketing of the Series 2020A Bonds. Each Authorized Officer is hereby authorized to (a) make such changes in such form of the Preliminary Official Statement as such officer, in consultation with the City's financial and legal consultants and the Underwriter, shall determine to be appropriate, and (b) on behalf of the City, to deem such Preliminary Official Statement "final" pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). Each Authorized Officer is authorized and directed to prepare a final Official Statement, with such additional information as may be permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, which final Official Statement shall be executed and delivered in the name and on behalf of the City by an Authorized Officer, and such Authorized Officer is authorized and directed to prepare, execute and deliver in the name and on behalf of the City any supplemental filings related to such final Official Statement, including any supplemental filings required in connection with the delivery of the Series 2020A Bonds. SECTION 7. Approval of Continuing Disclosure Agreement. The form of Continuing Disclosure Agreement presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the Continuing Disclosure Agreement in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 8. Other Acts. The officers and staff of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the City Attorney or with Nixon Peaobdy LLP, as bond counsel, they may deem necessary or advisable in order to effectuate the purposes of this Resolution, and any and all such actions previously taken by such officers or staff members are hereby ratified and confirmed. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to evaluate and select one or more municipal bond insurers for all or any portion of the Series 2020A Bonds and to execute and deliver such contracts and agreements with such bond insurers as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. SECTION 9. Effective Date. This Resolution shall take effect upon adoption. -4- 4837-2545-5526.5 PASSED AND ADOPTED this 4"' day of November 2019 by the following roll call vote: AYES: COUNCILMEMBERS: BLANKLEY, BRACCO, LEROE- MUNOZ, MARQUES, TOVAR, TUCKER and VELASCO NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE Roland Velasco, Mayor TTES -5- 4837-2545-55265 EXHIBIT A GOOD FAITH ESTIMATES The following information was obtained from the City's Municipal Advisor and the Underwriter, and is provided in compliance with Section 5852.1 of the California Government Code with respect to the base rental payments evidenced by the Series 2020A Bonds expected to be issued in the aggregate principal amount of $14,090,000: 1. True Interest Cost of the Base Rental Payments Evidenced by the Bonds. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the true interest cost of the base rental payments evidenced by the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 2.29%. 2. Finance Charge of the Bonds. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the City's finance charge of the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $289,540. 3. Amount of Proceeds to be Received. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the amount of proceeds expected to be received by the City following the Authority's sale of the Bonds, less the finance charge of the Bonds described in paragraph 2 above and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $16,225,122. 4. Total Payment Amount. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay base rental payments evidenced by the Bonds plus the finance charge of the Bonds described in paragraph 2 above not paid with the proceeds of the Bonds, calculated to the final base rental payment evidenced by the Bonds, is $18,898,216. Attention is directed to the fact that the foregoing information constitutes good faith estimates only. The actual interest cost, finance charges, amount of proceeds and total payment amount may vary from those presently estimated due to variations from these estimates in the timing of the sale of the Bonds, the actual principal amount of Bonds sold, the amortization of the Bonds sold and market interest rates at the time of sale. The date of sale and the amount of Bonds sold will be determined by the City based on need for improvement funds and other factors. The actual interest rates at which the Bonds will be sold will depend on the bond market at the time of sale. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale. Market interest rates are affected by economic and other factors beyond the City's control. The City Council has approved the execution and delivery of the Facility Lease including the base rental payments evidenced by the Bonds with a present value savings with respect to the refunding of the related refunded obligations in the aggregate of at least 3% of the principal amount of the related refunded obligations in the aggregate using the yield on the Bonds as the discount rate. A-1 4837-2545-5526.5 I, SHAWNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2019-73 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 held on Council held on the 4 h day of November, 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'S`° day,�] iovember, 2019. Shawna Freels, MMC City Clerk of the City of Gilroy (Seal)