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HomeMy Public PortalAbout2019.117 (09-17-19) RESOLUTION NO. 2019.117 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE ISSUANCE BY THE LYNWOOD PUBLIC FINANCING AUTHORITY OF (I) NOT PUBLIC FINANCING AUTHORITY LEASE TO EXCEED $10,000,000 OF LYNWOOD P U REVENUE REFUNDING BONDS, SERIES 2019A (FEDERALLY TAXABLE) AND (II) NOT TO EXCEED $14,000,000 OF LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2019B (TAX EXEMPT); APPROVING THE EXECUTION AND DELIVERY OF VARIOUS RELATED DOCUMENTS IN CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS; AND OTHER MATTERS RELATED THERETO WHEREAS, the Lynwood Public 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 Lynwood (the "City"); and WHEREAS, the Authority has previously issued its Public Financing Authority Lease Revenue Bonds, 2010 Series A (Civic Center Improvement Project), in the aggregate principal amount of $8,985,000, of which $8,695,000 are currently outstanding (the "Series 2010 Bonds"), the proceeds of which were used to finance and refinance certain public capital improvements in the City; and WHEREAS, in order to obtain certain interest rate savings, the City desires that the Authority issue its Lease Revenue Refunding Bonds, Series 2019A (Federally Taxable) (the "Series 2019A Bonds") to provide funds for the refunding of the Series 2010 Bonds on a federally taxable basis; and WHEREAS, the City desires to finance certain park improvements within the boundaries of the City (the "Improvements); and WHEREAS, in order to provide funds to finance the Improvements, the City desires that the Authority issue its Lease Revenue Bonds, Series 2019B (Tax-Exempt) (the "Series 2019B Bonds" and together with the Series 2019A Bonds, the "Series 2019 Bonds"); and WHEREAS, in connection with the issuance of the Series 2019 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 2019 Bonds, the form of Bond Purchase Agreement (the "Purchase Contract"), among the Authority, the City and Raymond James & Associates, Inc. (the "Underwriter"); 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, 1 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 Wolf & Co., 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 2019A Bonds and the Series 2019B Bonds; and WHEREAS, as required by Section 6586.5 of the California Government Code, the City has caused the publication of a notice of a public hearing on the financing of the Improvements once at least five days prior to the hearing in a newspaper of general circulation in the City; and WHEREAS, the City held a public hearing at which all interested persons were provided the opportunity to speak on the subject of financing the Improvements; 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 October 1, 2019 (the "Indenture"), among the Authority, the City and U.S. Bank National Association, as trustee (the "Trustee"); (b) the Site Lease, dated as of October 1, 2019 (the "Site Lease") between the City and the Authority; (c) the Facility Lease, dated as of October 1, 2019 (the "Facility Lease") between the City and the Authority; 2 (d) the Escrow Agreement; (e) the Preliminary Official Statement; (f) the Purchase Contract;and (g) the Continuing Disclosure Agreement; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Lynwood, as follows: Section 1. Findings and Determinations. The City hereby specifically finds and declares that the actions authorized hereby constitute and are with respect to public affairs of the City and that the statements, findings and determinations of the City set forth above are true and correct and that the issuance of the Series 2019B Bonds by the Authority will result in the following public benefits (i) demonstrable savings in effective interest rate, bond underwriting, and bond issuance; (ii) employment benefits from undertaking the projects in a timely fashion, and (iii) more efficient delivery of local agency services to residential and commercial development. Section 2. Approval of Issuance of Series 2019A Bonds by the Authority. The issuance of the Series 2019A 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 2019A Bonds shall not exceed $10,000,000, (ii) the maturity of the Series 2019A Bonds shall not exceed September 1, 2040 and (iii) there shall be present value savings with respect to the refunding of the Series 2010 Bonds of at least 3.00% of the principal amount of the Series 2010 Bonds being refunded, using the yield on the Series 2019A Bonds as the discount rate. Section 3. Approval of Issuance of Series 2019B Bonds by the Authority. The issuance of the Series 2019B 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 2019B Bonds shall not exceed $14,000,000, (ii) the maturity of the Series 2019B Bonds shall not exceed September 1, 2049, and (iii) the true interest cost of the Series 2019B Bonds shall not exceed 5.50%. Section 4. Approval of Indenture. The form of Indenture presented at this meeting is hereby approved, and the City's Mayor, Mayor Pro Tern, City Manager or Finance Director, 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. 3 Section 5. Approval of Site Lease. The form of Site 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 and deliver the Site 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 6. Approval of Facility Lease. The form of Facility 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 and deliver the Facility 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 7. Approval of Purchase Contract. The City is hereby authorized to enter into the Purchase Contract and each Authorized Officer is hereby authorized and directed to execute and deliver the Purchase Contract 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; provided, that the underwriting discount payable by the City pursuant to the Purchase Contract shall not exceed 0.75% of the aggregate principal amount of the Series 2019 Bonds. Section 8. Approval of Escrow Agreement. The form of Escrow Agreement presented at this meeting are 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 9. 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 2019 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. 4 Section 10. 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 11. Approval of Legal and Financial Work on behalf of the City in connection with the Proposed Issuance of Bonds. The City has requested the Authority to issue the Series 2019A Bonds and the Series 2019B Bonds for the purpose of refunding the Series 2010 Bonds and for the purpose of financing the Improvements, respectively, as described herein, and in connection therewith the City approves legal and financial work on behalf of the City, and authorizes the Director of Finance to negotiate (i) an agreement to provide underwriting services with Raymond James & Associates, Inc., (ii) an agreement to provide municipal advisory services with Wolf & Co., and (iii) an agreement to provide bond disclosure counsel services with Nixon Peabody LLP. Section 12. 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. Any one of the Authorized Officers is hereby authorized and directed, for and in the name of and on behalf of the City, to evaluate and select one or more municipal bond insurers for all or any portion of the Series 2019A Bonds and the Series 2019B Bonds and to exeute 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 13. Effective Date. This Resolution shall take effect upon adoption 5 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lynwood, California this 17th day of September 2019. .L ra Jos 1 uis Solache, rayor ATTEST: / aria Quinonez, City Clerk APPROVED AS TO FORM: APPROVED AS TO CONTENT: Noel Tapia, V Jose Ometeotl, City Attorney City anager 6 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 2019A Bonds and the Series 2019B Bonds (collectively, the "Bonds"): Series 2019A Bonds: 1. True Interest Cost of the Base Rental Payments Evidenced by the Series 2019A Bonds. Assuming the estimated aggregate principal amount of the Series 2019A Bonds authorized to be issued by the Authority $8,505,000 is 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 base rental payments evidenced by the Series 2019A 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 Series 2019A Bonds, is 3.0549%. 2. Finance Charge of the Series 2019A Bonds. Assuming the estimated aggregate principal amount of the Series 2019A Bonds authorized to be issued by the Authority $8,505,000 is sold, and 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 Series 2019A Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2019A Bonds), is $263,649.71. 3. Amount of Proceeds to be Received. Assuming the estimated aggregate principal amount of the Series 2019A Bonds authorized to be issued by the Authority $8,505,000 is 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 City following the Authority's sale of the Series 2019A Bonds, less the finance charge of the Series 2019A Bonds described in paragraph 2 above and any reserves or capitalized interest paid or funded with proceeds of the Series 2019A Bonds, is $8,241,350.29. 4. Total Payment Amount. Assuming the estimated aggregate principal amount of the Series 2019A Bonds authorized to be issued by the Authority $8,505,000 is 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 City will make to pay base rental payments evidenced by the Series 2019A Bonds plus the finance charge of the Series 2019A Bonds described in paragraph 2 above not paid with the proceeds of the Series 2019A Bonds, calculated to the final base rental payment evidenced by the Series 2019A Bonds, is $11,182,590.25. A-1 4840-7178-2050.3 Series 2019B Bonds: 1. True Interest Cost of the Base Rental Payments Evidenced by the Series 2019B Bonds. Assuming the estimated aggregate principal amount of the Series 2019B Bonds authorized to be issued by the Authority $11,630,000 is 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 base rental payments evidenced by the Series 2019B 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 Series 2019B Bonds, is 3.2353%. 2. Finance Charge of the Series 2019B Bonds. Assuming the estimated aggregate principal amount of the Series 2019B Bonds authorized to be issued by the Authority $11,630,000 is sold, and 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 Series 2019B Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2019B Bonds), is $413,360.76. 3. Amount of Proceeds to be Received. Assuming the estimated aggregate principal amount of the Series 2019B Bonds authorized to be issued by the Authority $11,630,000 is 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 City following the Authority's sale of the Series 2019B Bonds, less the finance charge of the Series 2019B Bonds described in paragraph 2 above and any reserves or capitalized interest paid or funded with proceeds of the Series 2019B Bonds, is $12,805,107.89. 4. Total Payment Amount. Assuming the estimated aggregate principal amount of the Series 2019B Bonds authorized to be issued by the Authority $11,630,000 is 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 City will make to pay base rental payments evidenced by the Series 2019B Bonds plus the finance charge of the Series 2019B Bonds described in paragraph 2 above not paid with the proceeds of the Series 2019B Bonds, calculated to the final base rental payment evidenced by the Series 2019B Bonds, is $23,178,158.89. The Bonds 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 A-2 4840-7178-2050.3 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 3.00% of the principal amount of the related refunded obligations in the aggregate using the yield on the Bonds as the discount rate. A-3 4840-7178-2050.3 STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the above and foregoing resolution was duly adopted by the City Council of said City at its regular meeting thereof held in the City Hall of the City on the 17th day of September, 2019 and passed by the following vote: AYES: COUNCIL MEMBERS ALATORRE, CASANOVA, SANTANA, MAYOR PRO TEM CASTRO, AND MAYOR SOLACHE NOES: NONE ABSTAIN: NONE ABSENT: NONE / Alf/. Maria Quinonez, City Clerkdir STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, the undersigned City Clerk of the City of Lynwood, and Clerk of the City Council of said City, do hereby certify that the above and foregoing is a full, true and correct copy of Resolution No. 2019.117 on file in my office and that said resolution was adopted on the date and by the vote therein stated. Dated this 17th day of September, 2019. I / i i ii, aria a uinonez411,, City Clerk 7