R15 (PAS)Public Financing Authority Meeting: May 8, 2018 Santa Monica, California
RESOLUTION NO. 16 (PFAS)
(PUBLIC FINANCE AUTHORITY SERIES)
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SANTA
MONICA PUBLIC FINANCING AUTHORITY AUTHORIZING THE
EXECUTION AND DELIVERY OF A GROUND LEASE, A LEASE
AGREEMENT, AN INDENTURE AND A BOND PURCHASE
AGREEMENT IN CONNECTION WITH THE ISSUANCE OF SANTA
MONICA PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS,
SERIES 2018 (DOWNTOWN FIRE STATION PROJECT), AUTHORIZING
THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL
AMOUNT OF NOT TO EXCEED $38,000,000, AUTHORIZING THE
DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION
THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY
DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS
WHEREAS, the City of Santa Monica (the "City") desires to finance a portion of the
costs of the construction, installation and acquisition of certain capital improvements
constituting a fire station, fire training facilities and related improvements (the 'Project');
and
WHEREAS, the Santa Monica Public Financing Authority (the "Authority') desires
to assist the City with such financing; and
WHEREAS, in order to finance the Project, the City will lease certain real property,
and the improvements thereto (the `Property'), to the Authority pursuant to a Ground
Lease (such Ground Lease, 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 "Ground Lease"); and
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WHEREAS, the City will sublease the Property back from the Authority pursuant
to a Lease Agreement (such Lease 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 "Lease Agreement"); and
WHEREAS, in order to provide the funds necessary to finance the Project, the City
and the Authority desire that the Authority issue its Santa Monica Public Financing
Authority Lease Revenue Bonds, Series 2018 (Downtown Fire Station Project) (the
"Bonds"), in an aggregate principal amount not to exceed $38,000,000, payable from the
base rental payments (the 'Base Rental Payments") to be made by the City pursuant to
the Lease Agreement; and
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to
establish and declare the terms and conditions upon which the Bonds are to be issued
and secured and to secure the payment of the principal thereof, premium, if any, and
interest thereon, the City, the Authority and The Bank of New York Mellon Trust Company,
N.A., as Trustee (the `Trustee), propose to enter into an Indenture (such Indenture, 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 "Indenture"); and
WHEREAS, all rights to receive the Base Rental Payments will be assigned
without recourse by the Authority to the Trustee pursuant to the Indenture;
WHEREAS, Stifel, Nicolaus & Company, Incorporated (the 'Representative'), on
behalf of itself, Fidelity Capital Markets and UBS Financial Services Inc., has presented
a proposal, in the form of a Bond Purchase Agreement by and among the Representative,
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the Authority and the City, to purchase the Bonds from the Authority (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 referrecTto herein -as t e
"Purchase Agreement"); and
WHEREAS, a form of the Preliminary Official Statement to be distributed in
connection with the public offering of the Bonds has been prepared (such Preliminary
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'); and
WHEREAS, the City is a member of the Authority and the Project is to be located
within the boundaries of the City; and
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Ground Lease;
(b) the Lease Agreement;
(c) the Indenture;
(d) the Purchase Agreement; and
(e) the Preliminary Official Statement;
WHEREAS, the Authority desires to authorize the execution of such documents
and the performance of such acts as may be necessary or desirable to effect the offering,
sale and issuance of the Bonds; and
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WHEREAS, Section 5852.1 of the California Government Code (the "Government
Code') requires that the Board of Directors of the Authority ("Board of Directors") obtain
from an underwriter, financial advisor or private lender and disclose, in a meeting open to
the public, prior to authorization of the issuance of the Bonds, good faith estimates of (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 Government Code Section 5852.1, the Board of
Directors has obtained from Public Resources Advisory Group, as the City's municipal
advisor (the "Municipal Advisor"), the required good faith estimates and such estimates
are disclosed and set forth in Exhibit A attached hereto; and
WHEREAS, all acts, conditions and things 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 transactions authorized hereby do exist, have
happened and have been performed in regular and due time, form and manner as
required by law, and the Authority is now duly authorized and empowered, pursuant to
each and every requirement of law, to consummate such transactions for the purpose, in
the manner and upon the terms herein provided; and
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NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
THE SANTA MONICA PUBLIC FINANCING AUTHORITY, AS FOLLOWS:
SECTION 1. The foregoing recitals are true and correct, and the Board of
Directors so finds and determines.
SECTION 2. The form of the Ground Lease, on file with the Secretary of the
Authority (the "Secretary"), is hereby approved. Each of the Chairperson of the Authority,
or such other member of the Board of Directors as the Chairperson may designate, the
Executive Director of the Authority and the Treasurer of the Authority (each, an
"Authorized Officer") is hereby authorized, and any one of the Authorized Officers is
hereby directed, for and in the name of the Authority, to execute and deliver the Ground
Lease in the form submitted to this meeting, with such changes, insertions and omissions
as the Authorized Officer executing the same may require or approve, such requirement
or approval to be conclusively evidenced by the execution of the Ground Lease by such
Authorized Officer.
SECTION 3. The form of the Lease Agreement, on file with the Secretary, is
hereby approved. Each of the Authorized Officers is hereby authorized, and any one of
the Authorized Officers is hereby directed, for and in the name of the Authority, to execute
and deliver the Lease Agreement in the form submitted to this meeting, with such
changes, insertions and omissions as the Authorized Officer executing the same may
require or approve, such requirement or approval to be conclusively evidenced by the
execution of the Lease Agreement by such Authorized Officer; provided, however, that
such changes, insertions and omissions shall not result in an aggregate principal amount
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of the Bonds payable from the Base Rental Payments in excess of $38,000,000, shall not
result in the term of the Lease Agreement terminating later than July 1, 2048 (provided
that such term may be extended as provided therein) and shall not result in the true__
interest cost attributable to the Base Rental Payments exceeding 5.00% per annum.
SECTION 4. Subject to the provisions of Section 5 hereof, the issuance of the
Bonds, in an aggregate principal amount of not to exceed $38,000,000, on the terms and
conditions set forth in, and subject to the limitations specified in, the Indenture, be and
the same is hereby authorized and approved. The Bonds shall be dated, shall bear
interest at the rates, shall mature on the dates, shall be subject to call and redemption,
shall be issued in the form and shall be as otherwise provided in the Indenture, as the
same shall be completed as provided in this Resolution.
SECTION 5. The form of the Indenture, on file with the Secretary, is hereby
approved. Each of the Authorized Officers is hereby authorized, and any one of the
Authorized Officers is hereby directed, for and in the name of the Authority, to execute
and deliver the Indenture in the form submitted to this meeting, with such changes,
insertions and omissions as the Authorized Officer executing the same may require or
approve, such requirement or approval to be conclusively evidenced by the execution of
the Indenture by such Authorized Officer; provided, however, that such changes,
insertions and omissions shall not result in an aggregate principal amount of Bonds in
excess of $38,000,000, shall not result in a final maturity date of the Bonds later than
July 1, 2048 and shall not result in a true interest cost for the Bonds in excess of 5.00%.
SECTION 6. The form of the Purchase Agreement, on file with the Secretary, is
hereby approved. Each of the Authorized Officers is hereby authorized, and any one of
the Authorized Officers is hereby directed, for and in the name of the Authority, to execute
and deliver the Purchase Agreement in the form submitted to this meeting, with such
changes, insertions and omissions as the Authorized Officer executing the same may
require or approve, such requirement or approval to be conclusively evidenced by the
execution of the Indenture by such Authorized Officer; provided, however, that such
changes, insertions and omissions shall not result in an aggregate underwriters' discount
(not including any original issue discount) from the principal amount of the Bonds in
excess of 0.40% of the aggregate principal amount of the Bonds.
SECTION 7. The form of the Preliminary Official Statement, on file with the
Secretary, with such changes, insertions and omissions therein as may be approved by
an Authorized Officer, is hereby approved, and the use of the Preliminary Official
Statement in connection with the offering and sale of the Bonds is hereby authorized and
approved. The Authorized Officers are each hereby authorized to certify on behalf of the
Authority that the Preliminary Official Statement is deemed final as of its date, within the
meaning of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (except
for the omission of certain final pricing, rating and related information as permitted by said
Rule).
SECTION 8. The preparation and delivery of a final Official Statement (the "Official
Statement"), and its use in connection with the offering and sale of the 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
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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
of the Authority, to execute the final Official Statement and any amendment or supplement
thereto.
SECTION 9. The officers and agents of the Authority are, and each of them is,
hereby authorized and directed, for and in the name of the Authority to do any and all
things and to execute and deliver any and all documents which they or any of them deem
necessary or advisable in order to consummate the transactions contemplated by this
Resolution and otherwise to carry out, give effect to and comply with the terms and intent
of this Resolution.
SECTION 10. All actions heretofore taken by the officers and agents of the
Authority with respect to the issuance and sale of the Bonds, or in connection with or
related to any of the agreements or documents referred to herein, are hereby approved,
confirmed and ratified.
SECTION 11. The Secretary shall certify to the adoption of this Resolution and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
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Lane Dilg
Authority Counsel
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EXHIBIT A
GOOD FAITH ESTIMATES
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 Authority by Public Resources Advisory Group, the City's
municipal advisor (the "Municipal Advisor").
Principal Amount. The Municipal Advisor has informed the Authority that, based
on the City's financing plan and current market conditions, its good faith estimate of the
aggregate principal amount of the Bonds to be sold is $36,185,000 (the "Estimated
Principal Amount").
True Interest Cost of the Bonds. The Municipal Advisor has informed the Authority
that, 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 3.788%.
Finance Charge of the Bonds. The Municipal Advisor has informed the Authority
that, 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 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 $402,093.37.
Amount of Proceeds to be Received. The Municipal Advisor has informed the
Authority that, 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 Authority
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
$37,314,760.18.
Total Payment Amount. The Municipal Advisor has informed the Authority that,
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 Authority 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 $64,538,483.02, which excludes any reserves or capitalized interest paid
or funded with proceeds of the Bonds (which may offset such total payment amount).
The foregoing estimates constitute good faith estimates only and are based on
market conditions prevailing at the time of preparation of such estimates. The actual
principal amount of the Bonds issued and sold, the true interest cost thereof, the finance
charges thereof, the amount of proceeds received therefrom and total payment amount
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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 of Bonds sold will be determined by the Authority based on the timing of
the need for proceeds of the Bonds and other factors. The actual interest rates borne by
the Bonds will depend on market interest rates at the time of sale thereof. The actual
amortization of the Bonds will also depend, in part, on market interest rates at the time of
sale thereof. Market interest rates are affected by economic and other factors beyond the
control of the Authority.
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I hereby certify that the foregoing Resolution No. (PFAS) was duly
adopted by the Board of Directors of the Santa Monica Public Financing Authority at a
meeting thereof held on May 8, 2018 by the following vote of the Board of Directors
thereof:
Ayes:
Directors:
Noes:
Directors:
Abstain:
Directors:
Absent:
Directors:
ATTEST:
Secretary
Adopted and approved this 8th day of May, 2018.
Ted Winterer, Chair
I, Denise Anderson -Warren, City Clerk of the City of Santa Monica, do hereby
certify that Resolution No. 15 (PFAS) was duly adopted at a meeting of the Public
Financing Authority held on the 8th of May, 2018, by the following vote:
AYES: Authority members: Himmelrich, McKeown, O'Connor, Vazquez
Chair Pro Tem Davis, Chair Winterer
NOES: Authority members: None
ABSENT: Authority members: O'Day
ATTEST:
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Denise Anderson -Warren, Agency Secretary