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HomeMy Public PortalAbout2018.172 (10-02-18) RESOLUTION NO. 2018.172 A RESOLUTION OF THE CITY OF LYNWOOD APPROVING PLEDGE AGREEMENTS, PURCHASE AGREEMENTS, A CONTINUING DISCLOSURE AGREEMENT AND A PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO WHEREAS, the Lynwood Public Financing Authority (the "Authority") is empowered to assist the City of Lynwood, California (the "City") in financing certain public capital improvement projects pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act") and pursuant to that certain Joint Exercise of Powers Agreement, dated as of December 1, 1992, as amended, by and between the City and the Lynwood Redevelopment Agency; WHEREAS, the Los Angeles County Metropolitan Transportation Authority ("LACMTA") is authorized by Sections 130350.4 and 130350.5 of the California Public Utilities Code to impose a retail transactions and use tax at a rate of 0.5 percent that is applicable in the incorporated and unincorporated areas of the County of Los Angeles, California (the "County") if authorized by at least two-thirds of the electors voting on the issue; and WHEREAS, in accordance with such provision, LACMTA, on July 24, 2008, adopted Ordinance No. 08-01, known as the Traffic Relief and Rail Expansion Ordinance, Imposing a Transactions and Use Tax to be Administered by the State Board of Equalization (the "Measure R Ordinance") imposing the transactions and use tax for a ' period of 30 years, and the Ordinance was submitted to the electors of the County in the form of Measure R and approved by greater than a two-thirds vote at an election held on November 4, 2008; and WHEREAS, the Measure R Ordinance, as so approved, imposed for a period of 30 years, beginning July 1, 2009, a tax upon the sale of tangible personal property at retail at a rate of 1/2 of 1% of the gross receipts of the sale and a complementary tax upon the storage, use or other consumption in the County at a rate of 1/2 of 1% of the sales price of the property whose storage, use or other consumption is subject to the tax (the "Measure R Sales Tax"); and WHEREAS, LACMTA is authorized by Section 130350.7 of the California Public Utilities Code to impose a retail transactions and use tax that is applicable in the County, at a rate that, when combined with the Measure R Sales Tax during any period when the Measure R Sales Tax is in effect and upon expiration of the Measure R Sales Tax, shall not exceed one percent, if authorized by at least two-thirds of the electors voting on the issue; and - WHEREAS, in accordance with such provision, LACMTA, on July 23, 2016, adopted Ordinance No. 16-01, known as the Los Angeles County Traffic Improvement Plan (the "Measure M Ordinance"), imposing a transactions and use tax for transportation purposes subject to approval by the electors of the County; and WHEREAS, the Measure M Ordinance, as so approved, imposes a tax, beginning July 1, 2017, upon the sale of tangible personal property at retail at a rate of 1/2 of 1% of the gross receipts of the sale and a complementary tax upon the storage, use or other consumption in the County at a rate of 1/2 of 1% of the sales price of the property whose storage, use or other consumption is subject to the tax, with the rate increasing to 1% on July 1, 2039, following the expiration of the Measure R Sales Tax (the "Measure M Sales Tax"); and WHEREAS, a portion of the Measure R Sales Tax revenues are allocated and paid (the "Measure R Receipts") by LACMTA to the cities located within the County(the "Local Agencies") and to the County for the purpose of funding transportation projects (the "Measure R Projects") eligible to be funded with Measure R Receipts pursuant to the Measure R Ordinance and the guidelines prepared by LACMTA and disseminated to the Local Agencies, approved by the LACMTA Board on October 24, 2009 (the "Measure R Guidelines"), relating to the administration and use of the Measure R Sales Tax and the Measure R Receipts; and WHEREAS, under the Measure R Ordinance, the City is entitled to receive Measure R Receipts (the "Lynwood Measure R Receipts") in an amount determined pursuant to the Measure R Ordinance and the Measure R Guidelines; and WHEREAS, a portion of the Measure M Sales Tax revenues are allocated and paid (the "Measure M Receipts") by LACMTA to Local Agencies and to the County for the purpose of funding transportation projects (the "Measure M Projects" and, together with the Measure R Projects, the "Projects") eligible to be funded with Measure M Receipts pursuant to the Measure M Ordinance and the guidelines prepared by LACMTA and disseminated to the Local Agencies, approved by the LACMTA Board on June 22, 2017 (the "Measure M Guidelines"), relating to the administration and use of the Measure M Sales Tax and the Measure M Receipts; and WHEREAS, under the Measure M Ordinance, the City is entitled to receive Measure M Receipts (the "Lynwood Measure M Receipts") in an amount determined pursuant to the Measure M Ordinance and the Measure M Guidelines; and WHEREAS, the City has previously caused the Authority to issue $2,740,000 aggregate principal amount of Lynwood Public' Financing Authority 2018 Bond Anticipation Notes (the "BANs") to finance Measure R Projects within the City; and WHEREAS, the Authority intends to finance the delivery of certain Measure M Projects for the City, including the reimbursement of the City for certain amounts expended on the Measure M Projects prior to the issuance of the 2018A Bonds, by issuing its Lynwood Public Financing Authority Sales Tax Revenue Bonds (Limited Tax Bonds) (Measure M), Series 2018A (the "2018A Bonds"), which shall be payable only from the Lynwood Measure M Receipts, subject to the Authority's approval of an authorizing resolution (the "Authority Resolution"); and 2 WHEREAS, the Authority intends to finance the prepayment of the BANs by issuing its Lynwood Public Financing Authority Sales Tax Revenue Bonds (Limited Tax Bonds) (Measure R), Series 2018B (the "2018B Bonds" and, together with the 2018A Bonds, the "Bonds"), which shall be payable only from the Lynwood Measure R Receipts, subject to the Authority's approval of the Authority Resolution; and WHEREAS, in connection with the issuance of the 2018A Bonds, the City intends to enter into a Pledge Agreement (the"Measure M Pledge Agreement") with the Authority to commit the Lynwood Measure M Receipts to the payment of the 2018A Bonds, and in connection with the issuance of the 2018B Bonds, the City intends to enter into a Pledge Agreement (the "Measure R Pledge Agreement" and, together with the Measure M Pledge Agreement, the "Pledge Agreements") with the Authority to commit the Lynwood Measure R Receipts to the payment of the 2018B Bonds; and WHEREAS, to provide information about the Bonds, the Authority will prepare a Preliminary Official Statement (the "Preliminary Official Statement") and a final Official Statement (the "Official Statement"); WHEREAS, to set forth the terms of sale of the Bonds, the City proposes to enter into a separate Bond Purchase Agreement for each of the 2018A Bonds and the 2018B Bonds (collectively, the "Purchase Agreements") with Stifel, Nicolaus & Company, Incorporated, as underwriter for the Bonds (the "Underwriter") and the Authority; and WHEREAS, in connection with the sale of the Bonds, Securities and Exchange Commission Rule 15c2-12 (the "Rule") requires the Underwriter to confirm that the City will undertake certain continuing disclosure obligations as set forth in the Continuing Disclosure Agreement relating to the Bonds (the"Continuing Disclosure Agreement"); and WHEREAS, the City is a member of the Authority and the Projects of the City are to be located within the boundaries of the City; and WHEREAS, the improvement and reconstruction of the Projects of the City will enhance the City's transportation infrastructure and contribute to the improvement of traffic resulting in a significate public benefit; and WHEREAS, the City hereby finds that the financing of such public capital improvements within the City will result in significant public benefits in the form of a safe and reliable transportation network, improvement in traffic conditions and the more efficient delivery of City services to residential and commercial development; and WHEREAS, on this date, the City held a public hearing on the financing of such public capital improvements within the City in accordance with Section 6586.5 of the Act; and WHEREAS, in accordance with Section 6586.5 of the Act, notice of such hearing was published once at least five days prior to the hearing in a newspaper of general circulation in the City; and 3 WHEREAS, adoption of this Resolution shall constitute authorization of the Pledge Agreements within the meaning of Section 864 of the California Code of Civil Procedure and any validation act that is effective after this Resolution takes effect; and WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) ("SB 450") requires that the governing body of a public body obtain from an underwriter, financial advisor or private lender and disclose, prior to authorizing 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; WHEREAS, the City has determined that it is in the best interest of the City to approve the Pledge Agreements and authorize and approve the transactions contemplated thereby. NOW, THEREFORE, IT IS HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF LYNWOOD AS FOLLOWS: Section 1. The City hereby approves the issuance by the Authority of the 2018A Bonds in the aggregate principal amount not to exceed thirteen million five hundred thousand dollars ($13,500,000) and the 2018B Bonds in the aggregate principal amount not to exceed three million dollars ($3,000,000) and requests the assistance of the Authority in connection with such issuance, subject to the adoption of the Authority Resolution and all actions taken and to be taken in furtherance of such issuance. Section 2. Pursuant to California Government Code Section 5451, the City hereby acknowledges and affirms its assignment of all Lynwood Measure M Receipts and the pledge of such Lynwood Measure M Receipts established pursuant to the Measure M Pledge Agreement, unconditionally and irrevocably on a first priority basis, to the trustee for the 2018A Bonds for the payment of debt service on the 2018A Bonds, which shall take effect upon the execution of the Measure M Pledge Agreement. Section 3. Pursuant to California Government Code .Section 5451, the City hereby acknowledges and affirms its assignment of the Lynwood Measure R Receipts and the pledge of such Lynwood Measure R Receipts established pursuant to the Measure R Pledge Agreement, unconditionally and irrevocably on a first priority basis, on a parity with any outstanding contracts or obligations of the City payable from the Lynwood Measure R Receipts, to the trustee for the 2018B Bonds for the payment of debt service on the 2018B Bonds, which shall take effect upon the execution of the Measure R Pledge Agreement. 4 Section 4. The forms, terms and provisions of the Pledge Agreements in substantially the forms on file with the City Clerk and made a part hereof as though set forth in full, are hereby approved and each of the Mayor of the City, the City Manager of the City, the Finance Director of the City, their respective designee, or any member of the City Council (each, an "Authorized Officer") are hereby authorized and directed on behalf of the City and in its name to execute and deliver the Pledge Agreements in substantially the forms presented to and considered at this meeting of the City Council, with such changes therein, however, as may be approved by the Authorized Officer executing the same, such approval to be conclusively evidenced by his or her execution thereof. In addition, the each Authorized Officer is hereby authorized to enter into an agreement with LACMTA authorizing LACMTA, or a trustee on behalf of LACMTA, to transfer the Lynwood Measure M Receipts directly to the trustee for the 2018A Bonds. Section 5. The proposed forms of Purchase Agreements, in substantially the forms on file with the City Clerk and made a part hereof as though set forth in full, is hereby approved. Each Authorized Officer is hereby authorized and directed, for and in the name and on behalf of the City, to sell the Bonds to the Underwriter pursuant to the respective Purchase Agreement with the Underwriter's discount or compensation not to exceed 0.95% of the principal amount of the Bonds sold thereunder and to execute and deliver the Purchase Agreements, in substantially such forms, with such changes 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 6. The proposed form of Preliminary Official Statement, in substantially the form on file with the City Clerk and made a part hereof as though set forth in full, is hereby approved. Each Authorized Officer is hereby authorized and directed to execute and deliver to the Underwriter a certificate deeming the Preliminary Official Statement, in substantially the form on file with the City Clerk and presented to this meeting and with such changes as any Authorized Officer approves in the interest of the City, final within the meaning of the Rule. The Underwriter is hereby authorized to distribute the Preliminary Official Statement in the form so deemed final and the Official Statement referenced below. Each Authorized Officer is hereby authorized and directed, for and in the name and on behalf of the City, to cause the preparation of the Official Statement, in final form, with such changes 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 7. The proposed form of Continuing Disclosure Agreement, in substantially the form on file with the City Clerk and made a part,hereof as though set forth in full, is hereby approved. Each Authorized Officer is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Agreement in substantially such form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. 5 Section 8. In accordance with SB 450, good faith estimates of the following are set forth on Exhibit A attached hereto: (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. Section 9. Each Authorized Officer is hereby authorized and directed, jointly and severally, for and in the name on behalf of the City, to execute and deliver any and all agreements, assignments, documents, certificates, bond insurance policies, reserve fund surety policies and other instruments, and to do any and all things and take any and all actions which may be necessary or advisable in their discretion, to carry out and give effect to the actions which the City has approved in this Resolution. Section 10. All actions heretofore taken by the officers and agents of the City with respect to the issuance of the Bonds and the pledge and assignment of the Lynwood Measure M Receipts and Lynwood Measure R Receipts are hereby ratified, confirmed and approved. Section 11. The City Clerk shall certify to the adoption of this Resolution, and thereafter the same shall be in full force and effect. Notwithstanding the foregoing, such certification and any of the other duties and responsibilities assigned to the City Clerk pursuant to this Resolution may be performed by an Assistant City Clerk with the same force and effect as if performed by the City Clerk hereunder. 6 WHEREFORE, this Resolution is passed, approved and adopted this 2nd day of October, 2018. fI Jo/ Luis Solache, or ATTEST: r aria Quinonez, City' lerk Jose .3 meteotl, City Manager APPROVED AS TO FORM: APPROVED AS TO CONTENT: Francisco Leal, City Attorney J n Down,[rrecto • Finance 7 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 2nd day of October 2018, and passed by the following votes: COUNCIL MEMBER CASTRO, MAYOR PRO TEM SANTILLAN BEAS, AYES: AND MAYOR SOLACHE NOES: COUNCIL MEMBER ALATORRE ABSENT: COUNCIL MEMBER HERNANDEZ ABSTAIN: NONE IP Maria Quinonez, Cit Clerk dir STATE OF CALIFORNIA ) § COUNTY OF LOS ANGELES ) I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. 2018.172 on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this rd day of October 2018. r i L /,. r l,i4as, aria Quinonez, Ci y Clerk 09 8 EXHIBIT A GOOD FAITH ESTIMATES FOR THE 2018A BONDS The following information, based on cash flows prepared on September 25, 2018 provided by Stifel, Nicolaus & Company, Incorporated, underwriter for the bonds (the "2018A Bonds"), was obtained from Wolf & Company Inc., the municipal advisor with respect to the 2018A Bonds, and is provided in compliance with Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) with respect to the 2018A Bonds: 1. True Interest Cost of the 2018A Bonds. Assuming an aggregate principal amount of$12,150,000 of the 2018A Bonds are sold and 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 2018A 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 2018A Bonds, is 4.38%. 2. Finance Charge of the 2018A Bonds. Assuming an aggregate principal amount of$12,150,000 of the 2018A Bonds are sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the finance charge of the 2018A Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the 2018A Bonds), is $382,834. 3. Amount of Proceeds to be Received. Assuming an aggregate principal amount of$12,150,000 of the 2018A Bonds are sold and 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 Authority for sale of the 2018A Bonds less the finance charge of the 2018A Bonds described in 2 above and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $12,791,382. 4. Total Payment Amount. Assuming an aggregate principal amount of $12,150,000 of the 2018A Bonds are sold and 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 Authority will make to pay debt service on the 2018A Bonds plus the finance charge of the 2018A Bonds described in paragraph 2 above not paid with the proceeds of the 2018A Bonds, calculated to the final maturity of the 2018A Bonds, is $25,743,527. 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 the estimates above due to variations from these estimates in the timing of 2018A Bond sales, the amount of 2018A Bonds sold, the amortization of the 2018A Bonds sold and market interest rates at the time of each sale. The date of sale and the amount of 2018A Bonds sold will be determined by the Authority 9 based on need for project funds and other factors. The actual interest rates at which the 2018A Bonds will be sold will depend on the bond market at the time of each sale. The actual amortization of the 2018A 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 and the Authority's control. The Authority shall have approved the issuance of the 2018A Bonds with a maximum true interest cost of 5.00%. 10 GOOD FAITH ESTIMATES FOR THE 2018B BONDS The following information, based on cash flows prepared on September 25, 2018 provided by Stifel, Nicolaus & Company, Incorporated, underwriter for the bonds (the "2018B Bonds"), was obtained from Wolf & Company Inc., the municipal advisor with respect to the 2018B Bonds and is provided in compliance with Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) with respect to the 2018B Bonds: 1. True Interest Cost of the 20188 Bonds. Assuming an aggregate principal amount of $2,500,000 of the 2018B Bonds are sold and 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 2018B 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 2018B Bonds, is 3.83%. 2. Finance Charge of the 20188 Bonds. Assuming an aggregate principal amount of $2,500,000 of the 2018B Bonds are sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the finance charge of the 2018B Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the 2018B Bonds), is $86,746. 3. Amount of Proceeds to be Received. Assuming an aggregate principal amount of $2,500,000 of the 2018B Bonds are sold and 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 Authority for sale of the 2018B Bonds less the finance charge of the 2018B Bonds described in 2 above and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $2,674,466. 4. Total Payment Amount. Assuming an aggregate principal amount of $2,500,000 of the 2018B Bonds are sold and 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 Authority will make to pay debt service on the 2018B Bonds plus the finance charge of the 2018B Bonds described in paragraph 2 above not paid with the proceeds of the 2018B Bonds, calculated to the final maturity of the 2018B Bonds, is $3,985,110. 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 the estimates above due to variations from these estimates in the timing of 2018B Bond sales, the amount of 2018B Bonds sold, the amortization of the 2018B Bonds sold and market interest rates at the time of each sale. The date of sale and the amount of 2018B Bonds sold will be determined by the Authority based on need for project funds and other factors. The actual interest rates at which the 2018B Bonds will be sold will depend on the bond market at the time of each sale. The actual amortization of the 2018B 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 11 beyond the City's and the Authority's control. The Authority shall have approved the Y t issuance of the 20188 Bonds with a maximum true interest cost of 4.50%. • • 12