Resolution No. 2022-90 | 2013 Lease Revenue Bonds Refinancing | Adopted 12/05/2022
RESOLUTION NO. 2022-90
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 $15,000,000 OF GILROY PUBLIC
FACILITIES FINANCING AUTHORITY LEASE REVENUE
REFUNDING BONDS, SERIES 2022A (CONVERTIBLE);
APPROVING THE EXECUTION AND DELIVERY OF
VARIOUS RELATED DOCUMENTS IN CONNECTION
WITH THE ISSUANCE AND DELIVERY 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 $23,120,000 Gilroy Public Facilities
Financing Authority Refunding Lease Revenue Bonds, Series 2013 (the “Series 2013 Bonds”), of
which $15,185,000 are currently outstanding; and
WHEREAS, the Authority and the City have determined, that it is necessary and desirable
in order to refund the Series 2013 Bonds to authorize the issuance, sale and delivery of the Gilroy
Public Facilities Financing Authority Lease Revenue Refunding Bonds, Series 2022A
(Convertible) (the “Series 2022A Bonds”) in the aggregate principal amount of not to exceed
$15,000,000, 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, the City desires to approve in connection with the sale of the Series 2022A
Bonds, the form of a Bond Purchase Agreement (the “Bond Purchase Agreement”), among the
Authority, the City and Wells Fargo Municipal Capital Strategies, LLC (including any affiliate
thereof, the “Purchaser”) and the form of a Forward Fixed Rate Lock Agreement (the “Forward
Fixed Rate Lock Agreement”) between the City and Wells Fargo Bank, National Association; and
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
Municipal Advisor, the required good faith estimates and such estimates are disclosed and set forth
on Exhibit A attached hereto; and
Resolution No. 2022-90
2013 Lease Revenue Bonds Refinancing
City Council Regular Meeting | December 5, 2022
Page 2 of 5
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 2022A Bonds; and
WHEREAS, there have been presented to this meeting the proposed forms of the
following documents:
(a) the First Supplement to Indenture, dated as of December 1, 2022 (the “First
Supplement to Indenture”), among the Authority, the City and U.S. Bank Trust
Company, National Association, as trustee (the “Trustee”);
(b) the Fourth Amendment to Lease Agreement, dated as of December 1, 2022 (the
“Fourth Amendment to Lease”) between the City and the Authority;
(c) the Forward Fixed Rate Lock Agreement; and
(d) the Bond Purchase Agreement;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Gilroy, as
follows:
SECTION 1. Approval of Issuance of Series 2022A Bonds by the Authority. The
issuance of the Series 2022A Bonds by the Authority on the terms and conditions set forth in, and
subject to the limitations specified in, the Indenture, dated as of August 1, 2020, by and among the
Authority, the City and the Trustee, as amended by the First Supplement to Indenture, and this
Resolution, is hereby approved; provided, however, that (i) the aggregate principal amount of
Series 2022A Bonds shall not exceed $15,000,000, (ii) the maturity of the Series 2022A Bonds
shall not exceed November 1, 2033, and (iii) there shall be expected present value savings with
respect to the refunding of the Series 2013 Bonds of at least 5% (assuming a successful conversion
from a taxable rate to a tax-exempt rate on or about August 8, 2022) of the principal amount of the
Series 2013 Bonds using the yield on the Series 2022A Bonds as the discount rate.
SECTION 2. Approval of First Supplement to Indenture. The form of First Supplement
to 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 First Supplement to 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.
SECTION 3. Approval of Fourth Amendment to Lease. The form of Fourth Amendment
to Lease 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
Resolution No. 2022-90
2013 Lease Revenue Bonds Refinancing
City Council Regular Meeting | December 5, 2022
Page 3 of 5
and deliver the Fourth Amendment to Lease 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. Approval of Forward Fixed Rate Lock Agreement. The City is hereby
authorized to enter into the Forward Fixed Rate Lock Agreement and each Authorized Officer is
hereby authorized and directed to execute and deliver the Forward Fixed Rate Lock 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 thereof.
SECTION 5.Approval of Bond Purchase Agreement. The City is hereby authorized to
enter into the Bond Purchase Agreement and each Authorized Officer is hereby authorized and
directed to execute and deliver the Bond Purchase 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 thereof.
SECTION 6. 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 Peabody 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.
SECTION 7. Effective Date. This Resolution shall take effect upon adoption.
Resolution No. 2022-90
2013 Lease Revenue Bonds Refinancing
City Council Regular Meeting | December 5, 2022
Page 4 of 5
PASSED and ADOPTED this 5th day of December 2022 by the following roll call vote:
AYES: COUNCIL MEMBERS: ARMENDARIZ, BRACCO, HILTON,
LEROE-MUÑOZ, MARQUES, TOVAR,
BLANKLEY
NOES: COUNCIL MEMBERS: NONE
ABSTAIN: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
APPROVED:
Marie Blankley, Mayor
ATTEST:
_______________________
Thai Nam Pham, City Clerk
Marie Blankley (Dec 6, 2022 10:02 PST)
Marie Blankley
EXHIBIT A
GOOD FAITH ESTIMATES
The following information was obtained from the City’s Municipal Advisor as of
November 18, 2022, 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 2022A Bonds
expected to be issued in the aggregate principal amount of $14,605,490:
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 3.84%.
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 (o r costs associated with the
Bonds), is $175,000.
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 $14,430,490.
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
$18,092,275.
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.
CERTIFICATE OF THE CLERK
I, THAI NAM PHAM, City Clerk of the City of Gilroy, do hereby certify that the attached
Resolution No. 2022-90 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 Monday, December 5, 2022, 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 Monday, December 5, 2022.
____________________________________
Thai Nam Pham, CMC, CPMC
City Clerk of the City of Gilroy
(Seal)