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HomeMy WebLinkAboutRES 2021-17RESOLUTION NO. 2021-1I A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE, LEASE AGREEMENT, INDENTURE, BOND PURCHASE AGREEMENT, CONTINUING DISCLOSURE CERTIFICATE AND ESCROW AGREEMENT IN CONNECTION WITH THE ISSUANCE OF CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY LEASE REVENUE REFUNDING BONDS, 2021 SERIES A, APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $8,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS. The City Council of the City of Diamond Bar does hereby find, order and resolve as follows: Section1. Recitals. A. The City of Diamond Bar (the "City"), a municipal corporation and general law city that is located in Los Angeles County, California, previously caused the City of Diamond Bar Public Financing Authority (the "Authority") to issue its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Original 2002 Bonds") in 2002 in order to finance certain capital improvements of the City, consisting primarily of a community/senior center in Summitridge Park (the "2002 Project"). B. In 2012, the City caused the Authority to effect: (i) a mandatory tender of the Original 2002 Bonds; (ii) a conversion of the Original 2002 Bonds to a fixed interest rate; and (iii) a remarketing of the Original 2002 Bonds at a fixed interest rate (such remarketed Original 2002 Bonds, which were redesignated as the City of Diamond Bar Public Financing Authority Fixed Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project), the "2002 Bonds"). C. The 2002 Bonds are currently outstanding in the aggregate principal amount of $8,315,000, of which $485,000 in principal amount is coming due on June 1, 2021 and will be paid by the City as regularly scheduled. D. The Authority and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the "City of Diamond Bar Public Financing Authority Lease Revenue Refunding Bonds, 2021 Series A" (the "Bonds") for the purposes of redeeming the 2002 Bonds maturing after June 1, 2021 and refinancing the 2002 Project. Resolution No. 2021-17 E. The 2002 Project constitutes "public capital improvements" within the meaning of the Marks -Roos Local Bond Pooling Act of 1985, commencing with Section 3584 of the California Government Code (the "Act"), all of which are or shall be located within the boundaries of the City. F. In order to facate the issuance of the Bonds, the City and the Authority desire to enter into a Ground Lease (the "Ground Lease") pursuant to which the City will lease certain real property of the City (which real property consists of the 2002 Project and the associated land), as described in the Ground Lease (collectively, the "Leased Assets")), to the Authority, and a Lease Agreement (the "Lease Agreement"), pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Rental Payments (as such term is defined in the Lease Agreement), which are pledged to the owners of the Bonds by the Authority pursuant to an Indenture, by and among U.S. Bank National Association (the "Trustee"), the City and the Authority (the 'Indenture"). G. The City and the Authority desire to undertake a negotiated sale of the Bonds to Raymond James & Associates, Inc., as the underwriter of the Bonds (the 'Underwriter"), pursuant to a purchase agreement by and among the City, the Authority and the Underwriter (the "Bond Purchase Agreement"). H. Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12") requires that, in order to be able to purchase or sell the Bonds, the Underwriter must have reasonably determined that the City has undertaken in a written agreement or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial information and certain events on an ongoing basis. I. In order to cause such requirement to be satisfied, the City desires to execute and deliver a Continuing Disclosure Certificate (the "Continuing Disclosure Certificate") in connection with the issuance of the Bonds. J. In order to effect the redemption of the 2002 Bonds, the City, the Authority and the Trustee desire to enter into an Escrow Agreement (2002 Bonds) (the "Escrow Agreement"). K. Rule 15c2-12 also requires that, in order to offer the Bonds for sale to the public, the Underwriter must receive a disclosure document with respect to the Bonds and the City. L. In order to cause such requirement to be satisfied, the City and the Authority have prepared a Preliminary Official Statement (the "POS") in connection with the issuance of the Bonds. M. In compliance with California Government Code Section 5852.1, the City has obtained from the Underwriter and the City's municipal advisor required good faith 2 Resolution No. 2021-17 estimates relating to the Bonds, and such estimates are disclosed and set forth in Exhibit A attached hereto. N. The City is a member of the Authority and the 2002 Project is located within the boundaries of the City. O. The City Council has been presented with the form of each document that is referred to herein relating to the refinancing that is contemplated hereby, and the City Council has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such refinancing. P. All acts, conditions and things that are required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the refinancing that are authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such refinancing and financing for the purpose, in the manner and upon the terms herein provided. Section 2. Findings. The City Council hereby approves the refinancing that is described in this Resolution and further finds and determines that there are significant public benefits to the citizens of the City through the approval of the issuance of the Bonds by the Authority pursuant to the Act and otherwise hereunder within the meaning of Section 6586(a) through (d), inclusive, of the Act, in that the issuance of the Bonds by the Authority and related transactions will result in demonstrable savings in effective interest rate to the City. Section 3. Approval of Lease Documents. The forms of Ground Lease and Lease Agreement presented at this meeting are hereby approved, and the Mayor of the City, the City Manager of the City and the Assistant City Manager of the City, or their respective designees (collectively, the "Authorized Officers"), are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Ground Lease and the Lease Agreement in substantially said forms, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that: (a) the term of the Ground Lease and the Lease Agreement shall terminate no later than June 1, 2033 (provided that such term may be extended as provided therein); and (b) the true interest cost applicable to the interest components of the Base Rental Payments under the Lease Agreement shall not exceed 3.00%. Section 4. Approval of Indenture. The form of Indenture presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Indenture in substantially said form, with such changes, insertions and omissions therein 3 Resolution No. 2021-17 as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 5. Approval of Bond Purchase Agreement. The form of Bond Purchase Agreement presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the Underwriter's discount shall not exceed 0.50% of the principal amount of the Bonds. Section 6. Approval of POS. The form of POS presented at this meeting, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the POS in connection with the offering and sale of the Bonds is hereby authorized and approved. Each Authorized Officer is hereby authorized to certify on behalf of the City that the POS is deemed final as of its date within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Bonds a reasonable number of copies of the POS. Section 7. Authorization of Official Statement. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the POS, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the City. Section 8. Approval of Continuing Disclosure Certificate. The form of Continuing Disclosure Cercate presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 9. Approval of Escrow Agreement. The form of Escrow Agreement presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Escrow Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Resolution No. 2021-17 Section 10. Further Action. The Authorized Officers are hereby authorized, empowered and directed, individually, to execute such other documents in addition to those enumerated herein and to take such other actions as each deems necessary or advisable in order to consummate the issuance of the Bonds and the redemption of the 2002 Bonds (including, but not limited to, causing terminations of or amendments to the lease documents related to the 2002 Bonds to be recorded in the Office of the Los Angeles County Recorder, causing the Indenture, the Lease Agreement and the Ground Lease, or memoranda thereof, to be recorded in the Office of the Los Angeles County Recorder, causing one or more title insurance policies to be issued relating to the Leased Assets and delivering instructions to the title company with respect thereto, executing escrow or redemption notices and/or instructions to be delivered in connection with the redemption of the 2002 Bonds, approving changes to the name and/or series designation of the Bonds to reflect the timing of the issuance of the Bonds or otherwise and entering into a commitment for municipal bond insurance or a debt service reserve fund insurance policy if determined to be in the best interest of the City). Such actions heretofore taken by the Authorized Officers or their designees are hereby ratified, confirmed and approved. Section 11. Special Services. Stradling Yocca Carlson & Rauth, a Professional Corporation is hereby appointed to serve as Bond Counsel and Disclosure Counsel with respect to the Bonds and Fieldman, Rolapp & Associates, Inc. ("FRA") is hereby appointed to serve as the City's Municipal Advisor. Each of the Authorized Officers is further authorized to provide for all other services that are necessary to effect the matters that are described in this Resolution. Such services shall include, but not be limited to, legal services, trustee services, title insurance services, escrow verification services and any other services that are deemed appropriate by an Authorized Officer. Any one of the Authorized Officers is authorized to pay for the cost of such services and to enter into agreements as needed to engage such consultants. Section 12. Attestations. The City Clerk and such person or persons as may have been designated by the City Clerk to act on the City Clerk's behalf, are hereby authorized and directed to attest the signature of the Authorized Officers designated herein to execute any documents described herein, and to affix and attest the seal of the City, as may be required or appropriate in connection with the execution and delivery of the documents that are described herein. Section 13. Effect. This Resolution shall take effect from and after its date of adoption. Section 14, Certification. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. 5 Resolution No. 2021-17 PASSED, APPROVED, and ADOPTED on this 4th day of May, 2021. 7 Nancy A. Lyo ATTEST: I, Kristina Santana, City Clerk of the City of Diamond Bar, California, do hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of Diamond Bar, California, at its regular meeting held on the 4th day of May, 2021, by the following vote: AYES: COUNCIL MEMBERS NOES: COUNCIL MEMBERS ABSENT: COUNCIL MEMBERS ABSTAIN: COUNCIL MEMBERS Chou, Liu, Tye, MPT/Low, M/Lyons None None None Kristina Santana, City Clerk k EXHIBIT A GOVERNMENT CODE SECTION 5852.1 DISCLOSURE The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by Fieldman, Rolapp & Associates, Inc. Principal Amount. Based on the City's financing plan and current market conditions, the good faith estimate of total gross proceeds of the Bonds is $8,024,669, which includes the estimated principal amount of the Bonds of $6,675,000 (the 'Estimated Principal Amount"), plus net original issue premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of such bonds. True Interest Cost. Assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of 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 1.01 %. Finance Charge of the Bonds. Assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation A such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $184,818. Amount of Proceeds to be Received. Assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $7,839,852. Total Payment Amount. Assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $8,578,267. The foregoing constitute good faith estimates only. 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 Principal Amount; (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; or (f) 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 %J Bonds sold will be determined by the City based on a variety of factors. Market interest rates are affected by economic and other factors beyond the control of the City.