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
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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");
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(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
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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.
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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
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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.
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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)