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R11355 4141-0150-4045.3 City Council Meeting July 27, 2021 Santa Monica, California RESOLUTION NO. 11355 (CCS) (CITY COUNCIL SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF AN INDENTURE, A BOND PURCHASE AGREEMENT AND A CONTINUING DISCLOSURE CERTIFICATE IN CONNECTION WITH THE ISSUANCE OF CITY OF SANTA MONICA WATER ENTERPRISE REVENUE BONDS, SERIES 2021, APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $78,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS WHEREAS, the City of Santa Monica (the “City”) is a municipal corporation and charter city, duly organized and existing under a freeholders’ charter pursuant to which the City has the right and power to make and enforce all laws and regulations in respect to municipal affairs and certain other matters in accordance with and as more particularly provided in sections 3, 5 and 7 of article XI of the Constitution of the State of California and section 400 of the Charter of the City; WHEREAS, the City Council of the City, acting under and pursuant to the powers reserved to the City under article XI of the Constitution of the State of California and section 400 of the Charter of the City, has enacted Chapter 2.36 of Article 2 of the Municipal Code of the City, relating to revenue bonds (the “Revenue Bond Act”), which incorporates, to the extent made applicable by the Revenue Bond Act, the Revenue Bond Law of 1941, being Chapter 6 of Division 2 of Title 5 of the California Government Code, as enacted and as thereafter amended; WHEREAS, the City owns and operates facilities for the production, storage, treatment and distribution of water for domestic use, industrial use, fire protection, recreation or any other public or private use and appurtenances necessary, useful or convenient for the production, storage, treatment and distribution of water and lands, rights of way and other real or personal property useful in connection therewith (the “Enterprise”); WHEREAS, the City has determined that it is necessary that funds be raised by the City for the purpose of constructing and financing certain improvements to the Enterprise; WHEREAS, in order to provide such funds, the City desires to provide for the issuance, pursuant to the Revenue Bond Act, of its City of Santa Monica Water Enterprise Revenue Bonds, Series 2021 (the “Bonds”), in the aggregate principal amount of not to exceed $78,000,000; DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016 2 4141-0150-4045.3 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 and U.S. Bank National Association, 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”); WHEREAS, Morgan Stanley & Co. LLC (the “Representative”), on behalf of itself Siebert Williams Shank & Co., LLC and Stifel, Nicolaus & Company, Incorporated, has presented a proposal, in the form of a Bond Purchase Agreement by and between the Representative and the City, to purchase the Bonds from the City (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”); 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 Bonds, the underwriters thereof must have reasonably determined that the issuer thereof has, or one or more appropriate obligated persons have, undertaken in a written agreement or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial information and certain material events on an ongoing basis; WHEREAS, in order to cause such requirement to be satisfied, the City desires to execute and deliver a Continuing Disclosure Certificate (such Continuing Disclosure Certificate, 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 “Continuing Disclosure Certificate”); 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”); WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Indenture; (b) the Purchase Agreement; (c) the Continuing Disclosure Certificate; and (d) the Preliminary Official Statement; WHEREAS, the City 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; WHEREAS, Section 5852.1 of the California Government Code (the “Government Code”) requires that the City Council of the City (the “City Council”) obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016 3 4141-0150-4045.3 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; WHEREAS, in compliance with Government Code Section 5852.1, the City Council 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 Constitution, laws of the State of California and the City Charter of the City 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 City 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; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Monica, as follows: Section 1. The foregoing recitals are true and correct, and the City Council of the City (the “City Council”) so finds and determines. Section 2. The form of the Indenture, on file with the City Clerk, is hereby approved. Each of the Mayor of the City, or such other member of the City Council as the Mayor may designate, the City Manager of the City, the Director of Finance/Treasurer of the City and the Assistant City Treasurer of the City (each, an “Authorized Officer”) is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the City, 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 the Bonds in excess of $78,000,000, shall not result in a planned final maturity date of the Bonds later than August 1, 2051 and shall not result in a true interest cost for the Bonds in excess of 3.50%. Section 3. The form of the Purchase Agreement, on file with the City Clerk, 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 City, to execute and deliver the Purchase Agreement in the form presented 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 Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016 4 4141-0150-4045.3 aggregate underwriters’ discount (not including any original issue discount) from the principal amount of the Bonds in excess of 0.50% of the aggregate principal amount of the Bonds. Section 4. The form of the Continuing Disclosure Certificate, on file with the City Clerk, 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 City, to execute and deliver the Continuing Disclosure Certificate in the form presented 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 Continuing Disclosure Certificate by such Authorized Officer. Section 5. The form of the Preliminary Official Statement, on file with the City Clerk, 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 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 6. 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 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 City, to execute the final Official Statement and any amendment or supplement thereto. Section 7. The City Council hereby approves the execution and delivery of all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the California Government Code using DocuSign. Section 8. The Authorized Officers and the officers and employees of the City are, and each of them is, hereby authorized and directed, for and in the name of the City 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 9. All actions heretofore taken by the officers and employees of the City 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. DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016 5 4141-0150-4045.3 Section 10. The City Clerk 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: GEORGE S. CARDONA Interim City Attorney Adopted and approved this __ day of _________, 2021. Sue Himmelrich, Mayor DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016 4141-0150-4045.3 I hereby certify that the foregoing Resolution No. __________ (CCS) was duly adopted by the City Council of the City of Santa Monica at a meeting thereof held on July 27, 2021 by the following Council vote: Ayes: Councilmembers: Noes: Councilmembers: Abstain: Councilmembers: Absent: Councilmembers: ATTEST: Denise Anderson-Warren, City Clerk DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016 A-1 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 City by Public Resources Advisory Group, the City’s municipal advisor (the “Municipal Advisor”). Principal Amount. The Municipal Advisor has informed the City 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 $66,635,000 (the “Estimated Principal Amount”). True Interest Cost of the Bonds. The Municipal Advisor has informed the City 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 2.28%. Finance Charge of the Bonds. The Municipal Advisor has informed the City 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 $461,419. Amount of Proceeds to be Received. The Municipal Advisor has informed the City 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 City 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 $78,000,000. Total Payment Amount. The Municipal Advisor has informed the City 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 City 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 $109,319,523, 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 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 DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016 A-2 4141-0150-4045.3 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 City 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 City. DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016 Adopted and approved this 27th day of July 2021. __________________________ Sue Himmelrich, Mayor I, Denise Anderson-Warren, City Clerk of the City of Santa Monica, do hereby certify that Resolution No. 11355 (CCS) was duly adopted at a meeting of the Santa Monica City Council held on the 27th day of July 2021, by the following vote: AYES: Councilmembers Brock, Davis, de la Torre, Negrete, Parra, Mayor Pro Tem McCowan, Mayor Himmelrich NOES: None ABSENT: None ATTEST: _____________________________________ Denise Anderson-Warren, City Clerk DocuSign Envelope ID: 8E2E2105-466F-4D68-A253-F9EBD041E016