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HomeMy Public PortalAbout2004-048 (03-16-04)LYNWOOD CITY COUNCIL RESOLUTION NO. 2004.048 RESOLUTION OF THE CITY OF LYNWOOD, CALIFORNIA AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF SUPPLEMENT NO. 2 TO INSTALLMENT PURCHASE AGREEMENT, A TRUST INDENTURE, AN ESCROW AGREEMENT, A BOND PURCHASE AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE ISSUANCE BY THE LYNWOOD PUBLIC FINANCING AUTHORITY OF ITS WATER REVENUE REFUNDING BONDS (WATER SYSTEM IMPROVEMENT PROJECT) SERIES 2004, AUTHORIZING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED THREE MILLION FIVE HUNDRED THOUSAND DOLLARS, AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT IN CONNECTION THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS WHEREAS, in 1995, the City of Lynwood, California (the "City") decided to finance certain improvements to its water system; and WHEREAS, the Lynwood Public Financing Authority (the "Financing Authority") assisted the City in this regard by issuing its Lynwood Public Financing Authority Water Revenue Bonds (Water System Improvement Project) Series 1995 (the "Prior Bonds"); and ""' WHEREAS, the City is obligated under an Installment Purchase Agreement dated as of October 1, 1995 by and between the City and the Financing Authority (the "Installment Purchase Agreement") to make installment payments to the Financing Authority to repay the Prior Bonds; and WHEREAS, in order to achieve certain interest rate savings on its installment payments, the City desires to refund the Prior Bonds and revise the Installment Purchase Agreement and the Financing Authority desires to assist the City in refunding the Prior Bonds; and WHEREAS, in order to provide funds to refund the Prior Bonds, the Financing Authority desires to issue its Water Revenue Refunding Bonds (Waaer System Improvement Project) Series 2004 (the "2004 Bonds"); and WHEREAS, the City recently leased its water and sewer system (the "System") to the Lynwood Utility Authority (the "Utility Authority") pursuant to an Enterprise Lease Agreement dated as of November 1, 2003 by and between the City and the Utility Authority; and ~~ WHEREAS, the Utility Authority is a public entity formed pursuant to a joint exercise of powers agreement by the City and the Lynwood Redevelopment Agency; and ,~ WHEREAS, the City has agreed to continue to manage the System for the Utility Authority pursuant to the terms of an Enterprise Management Agreement dated as of November I, 2003 by and between the Utility Authority and the City; and WHEREAS, the 2004 Bonds will be payable from and secured by installment payments (the "Installment Payments") to be made b~~ the City pursuant to the Installment Purchase Agreement as supplemented by Supplec;:ent No. 2 to Installment Purchase Agreement (such Supplement No. 2 to Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as aze made pursuant to this Resolution, being referred to herein as the "Supplement No. 2 to Installment Purchase Agreement"); and WHEREAS, the Financing Authority has also previously issued the Lynwood Public Financing Authority Water Revenue Bonds (Water System Improvement Project) Series 1999 in the aggregate original principal amount of $5,850,000 (the "1999 Bonds") to assist the City in financing certain additional improvements to its water system (the "1999 Project Improvements") described in Supplement No. 2 to the Installment Purchase Agreement; and ~ '~ WHEREAS, the Utility Authority issued its $6,930,000 aggregate original -1~` principal of Lynwood Utility Authority enterprise revenue bonds, 2003 Series (the "2003 Bonds"), which 2003 Bonds purport to be payable from the Net Revenues of the System on a parity with the installment payment for the 1995 Bonds and the 1999 Bonds; and WHEREAS, the installment payments for the 2004 Bonds will be made on a panty with the installment payments for the 1999 Bonds and 2003 Bonds; and WHEREAS, the City and the Financing Authority propose to issue the 2004 Bonds pursuant to a Trust Indenture by and among the Financing Authority, the Ciry and U.S. Bank National Association, as trustee (such Trust Indenture, in the form presented to this meeting, with such changes, insertions and omissions as aze made pursuant to this Resolution, being referred to herein as the "Indenture"); and WHEREAS, the City has determined that securing the timely payment of the principal of and interest on the 2004 Bonds by obtaining a bond insurance policy with respect thereto could be economically advantageous; and WHEREAS, the funds to pay the principal of, and premium and interest on, the Prior Bonds through the redemption date or dates thereof will be applied to such purpose I l pursuant to an Escrow Agreement by and between the Financing Authority and U.S. Bank I` National Association, as escrow bank (such Escrow Agreement, in the form presented to ~„J _ this meeting, with such changes, insertions and omissions as aze made pursuant to this Resolution, being referred to herein as the "Escrow Agreement"); and WHEREAS, Backstrom McCazley Berry & Co., LLC, as underwriters (the "Underwriters"), have presented the Financing Authority and the City with a form of Bond Purchase Agreement, pursuant to which the Underwriters proposal to purchase the 2004 Bonds (such Bond Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Purchase Agreement"); and WHEREAS, 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 2004 Bonds, the Underwriters must have reasonably determined that the issuer or one or more obligated persons has undertaken in a written agreement or contract for the benefit of the holders of the 2004 Bonds to provide disclosure of certain financial and operating data and certain material events on an ongoing basis; and WHEREAS, in order to assist in providing for the satisfaction of su.;h requirement, the City desires to enter into a Continuing Disclosure Agreement with the U.S. Bank National Association, in its capacity as trustee and in its capacity as dissemination agent (such Continuing Disclosure Agreement, in the form presented to this meeting, with such changes, insertions and omissions as aze made pursuant to this Resolution, being referred to herein as the "Continuing Disclosure Agreement"); and WHEREAS, there have been prepazed and submitted to this meeting forms of; (a) Supplement No. 2 to Installment Purchase Agreement; (b) Indenture; (c) Escrow Agreement; (d) Purchase Agreement; (e) Continuing Disclosure Agreement; and (f) a drafr of the Preliminary Official Statement to be used in connection with the offering and sale of the 2004 Bonds (such Preliminazy Official Statement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution being referred to ~~ herein as the "Preliminary Official Statement"); WHEREAS, the City Council of the City (the "City") desires to authorize the issuance of the 2004 Bonds and the execution of such documents and the performance of such acts as may be necessary or desirable to effect the issuance of the 2004 Bonds; and WHEREAS, the City has duly obtain the consent and approval of the Utility Authority to enter into Supplement No. 2 to Installment Purchase Agreement and carry out its obligations thereunder, and to carry out and consummate all other transactions contemplated by Supplement No. 2 to Installment Purchase Agreement and the issuance of the 2004 Bonds. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Lynwood, California, as follows: Section I. All of the recitals herein contained are true and correct and the Council so finds. Section 2. The issuance of the 2004 Bonds, in an aggregate principal amount of not to exceed three million five hundred thousand dollars ($3,500,000), on the terms ~ and conditions set forth in the Indenture, is hereby authorized and approved; provided, i however, that the aggregate principal amount of 2004 Bonds shall not exceed $3,500,000, -- the final maturity date of the 2004 Bonds shall not be later than 18 years after the date of issuance thereof and the true interest cost for the 2004 Bonds shall not be in excess of 6.5%, and provided further that issuance of the 2004 Bonds shall result in a savings from the Section 3. The form of Supplement No. 2 to Installment Purchase Agreement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, is hereby approved, and each of the Mayor, the City Manager and the Assistant City Managers of the City (collectively, the "Authorized Officers") is hereby authorized, and the Mayor and any one of the Authorized Officers is hereby directed, for and in the name and on behalf of the City, to execute and deliver Supplement No. 2 ro Installment 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 aggregate principal amount of Installment Payments payable by the City under Supplement No. 2 to Installment Purchase Agreement shall not exceed $3,500,000, the term of the Supplement No. 2 Installment Purchase Agreement shall not exceed 18 yeazs and the true interest cost applicable to the Installment Payments payable by the City ruder Supplement No. 2 to Installment Purchase Agreement shall not exceed 6.5% per annum. Section 4. The form of Indenture, in substantially the form presented to this meeting and made a part hereof as il,ough set forth in full herein, is hereby approved, and each of the Authorized Officers is hereby authorized, and the Mayor and any one of the Authorized Officers is hereby 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 as tl-.e Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 5. The Council hereby confirms and reaffirms the pledge of Revenues to the payment of the 2004 Bonds as defined in and as set forth in the Indenture. Section 6. The form of Escrow Agreement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, is hereby approved, and each of the Authorized Officers is hereby authorized, and the Mayor and any one of the Authorized Officers is hereby 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. Section 7. The form of Purchase Agreement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, is hereby approved, and each of the Authorized Officers is hereby authorized, and the Mayor and any one of the Authorized Officers is hereby directed, for and in the name and on behalf of the City, to execute and deliver the 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 Underwriters' discount for the sale of the 2004 Bonds (exclusive of any original issue discount) shall not exceed 1.5% of the initial aggregate principal amount of the 2004 Bonds. Section 8. The form of Continuing Disclosure Agreement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, is hereby approved, and each of the Authorized Officers is hereby authorized, and the Mayor and any one of the Authorized Officers is hereby directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure 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. Section 9. The form of Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the distribution of the Preliminary Official Statement in connection with the offering and sale of the 2004 Bonds is hereby authorized and approved. The Authorized Officers aze hereby authorized to certify on behalf of the City that the Preliminary Official Statement 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). Section 10. The preparation and delivery of a final Official Statement (the "Official Statement"), and its use in connection with the offering and sale of the 2004 Bonds, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, 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. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto, for and in the name of the City. Section 11. The selection of Backstrom McCazley Berry & Co., LLC as Underwriters pursuant to the terms of the hereinabove approved Purchase Contract, the selection of U.S. Bank National Association as trustee under the herein and above approved Indenture and the selection of the Robinson & Pearman LLP as bond counsel for the 2004 Bonds aze hereby approve. The Authorized Officers are each hereby authorized and directed to select such additional professionals and professional services, including but not limited to an escrow verification agent and a financial printing company, as the Authorized Officer selecting the same shall deem necessary or prudent in connection with the issuance and sale of the 2004 Bonds. Section 12. The officers and employees of the City aze hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including determining the date on which the Prior Bonds of each maturity will be redeemed, and the payment of the costs of issuing the 2004 Bonds, including, but not limited to the fees and expenses of bond counsel, disclosure counsel, trustee, escrow agent, bond insurance, rating fees and the fees of the verification agent. Section 13. All actions heretofore taken by the officers and employees of the City with respect to the transactions herein authorized above are hereby approved, confirmed and ratified. Section 14. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED by the City of Lynwood on March lb , 2004. Louis Byrd, Mayor ATTEST: ~~ ~ ~l Andrea L. Hooper, City Clerk APPROVED AS TO FORM: .~`v~.~-c~-° Attorney i .~ C~ Section 1. That the City Clerk shall certify to the adoption of this ~, Resolution and shall deliver a certified copy thereof in his own records. i PASSED, APPROVED and ADOPTED this 16'" day of March 2004. ~~,~ ATTEST: i E'er,-°` ~ LOUIS BYRD, MAY R ANDREA L. HOOPER, CITY CLERK i ~ I certify that the above and foregoing Resolution No. 2004.048 was duly - --~ I adopted by the City of Lynwood at a regular meeting thereof held on the 16th day of March 2004. AYES: COUNCILMEN PEDROZA, RODRIGUEZ, SANTILLAN, VASQUEZ AND BYRD NOES: NONE ABSTAIN: NONE ABSENT: NONE ANDREA L. HOOPER, CITY CLERK