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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 1 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, 2 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 3 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 CI 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 5 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 7 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: � r Lane Dilg Authority Counsel ri 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 A-1 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. A-2 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: A&Uv� Lo&&Jf�j�r� Denise Anderson -Warren, Agency Secretary