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HomeMy WebLinkAboutResolutions - No. 2017-220RESOLUTION NO. 2017-220 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING DOCUMENTS AND OFFICIAL ACTIONS RELATING TO THE REFINANCING OF AN OUTSTANDING INSTALLMENT PAYMENT OBLIGATION OF THE CITY OF LODI RELATING TO ITS WASTEWATER SYSTEM, APPROVING AN INSTALLMENT PURCHASE AGREEMENT AND IRREVOCABLE REFUNDING INSTRUCTIONS, AND APPROVING FINAL FORM OF FINANCING DOCUMENTS AND OFFICIAL ACTIONS WHEREAS, the City of Lodi (the "City") owns and operates facilities and property for the collection, treatment, and disposal of wastewater within the service area of the City (the "System"); and WHEREAS, the City previously entered into an Installment Purchase Agreement, dated as of December 1, 2007 (the "2007 Installment Purchase Agreement") with the Lodi Public Improvement Corporation (the "Corporation"), pursuant to which the City agreed to make certain installment payments in the aggregate principal amount of $30,320,000 (the "2007 Installment Payments"), and caused execution and delivery of Wastewater System Revenue Certificates of Participation, 2007 Series A (the "2007 Certificates"), pursuant to a Trust Agreement, dated as of December 1, 2007 (the "2007 Trust Agreement"), between the Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee (the "2007 Trustee"), all for the purpose of (i) financing the costs of certain improvements to the System (the "2007 Project") and (ii) refinancing, on a current basis, all outstanding installment payments under an Installment Sale Agreement, dated as of December 1, 1991, with the Corporation, and certain outstanding Certificates of Participation (1991 Wastewater Treatment Plant Expansion Refunding Project) (the "1991 Certificates"); and WHEREAS, the 1991 Certificates were executed and delivered to (i) finance certain capital improvements to the System (the "1991 Improvements") and (ii) prepay, on an advance basis, certain certificates of participation that were executed and delivered to finance the expansion of the City's White Slough Water Pollution Control Facility (the "White Slough Certificates"); and WHEREAS, under current economic conditions, it is possible for the City to refinance on a tax-exempt basis the portion of the 2007 Installment Payments attributable to the refinancing of the White Slough Certificates (the "Refinanced 2007 Installment Payments") for the purpose of achieving savings for the benefit of the customers of the System, and to cause a prepayment, on a current basis for purposes of federal tax law, of the related 2007 Certificates (the "Refunded 2007 Certificates"); and WHEREAS, there has been presented to the City Council for approval that certain Installment Purchase Agreement by and between the City, as purchaser, and the Lodi Public Financing Authority (the "Authority"), as seller (the "Installment Purchase Agreement"), pursuant to which the City will make installment payments to the Authority for the purchase price of the 2007 Project; and WHEREAS, concurrently with the execution of the Installment Purchase Agreement, the Authority will enter into an Assignment Agreement (the "Assignment Agreement") by and between the Authority, as assignor, and River City Bank, or such other institution(s) selected by an Authorized Officer, as defined below (the "Assignee"), as assignee, pursuant to which the Authority will assign to the Assignee substantially all of the Authority's rights, title and interest under the Installment Purchase Agreement; and WHEREAS, there have been presented to the City Council for approval Irrevocable Refunding Instructions (the Irrevocable Refunding Instructions") to be given by the City to the 2007 Trustee in order to accomplish the prepayment of the Refinanced 2007 Installment Payments and the Refunded 2007 Certificates; and WHEREAS, in connection therewith, it is in the public interest and for the common benefit and municipal purpose that the City authorize and direct execution of the Installment Purchase Agreement and the Irrevocable Refunding Instructions and certain other financing documents in connection therewith; and WHEREAS, the documents specified below have been filed with the City, and the members of the City Council, with the aid of its staff, have reviewed said documents; and WHEREAS, the City Council wishes at this time to take action approving such financing transactions and all related documents and actions. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lodi as follows: Section 1. Installment Purchase Agreement. The City Council hereby approves the Installment Purchase Agreement relating to the refinancing of the Refinanced 2007 Installment Payments and the prepayment of the Refunded 2007 Certificates, between the City and the Authority, in the form thereof on file with the City Clerk together with any changes therein or additions thereto deemed advisable by the City Manager, Deputy City Manager, or City Attorney (each, an "Authorized Officer"); provided that the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions; provided further that the purchase price to be funded by the Assignee shall not exceed $8,500,000; provided, further, that the entering into of the Installment Purchase Agreement, the refinancing of the Refinanced 2007 Installment Payments and the refunding of the Refunded 2007 Certificates shall result in net present value debt service savings of at least 3% of the principal amount of the Refinanced 2007 Installment Payments and the Refunded 2007 Certificates. An Authorized Officer is hereby authorized and directed for and in the name and on behalf of the City to execute, and the City Clerk is hereby authorized and directed to attest, the final form of the Installment Purchase Agreement. Section 2. Small Issuer Exemption from Bank Nondeductibility Restriction. The City hereby designates the Installment Purchase Agreement for purposes of paragraph (3) of section 265(b) of the Internal Revenue Code of 1986 (the "Code") and declares that not more than $10,000,000 aggregate principal amount of obligations the interest on which is excludable (under section 103(a) of the Code) from gross income for federal income tax purposes (excluding (i) private activity bonds, as defined in section 141 of the Code, except qualified 501(c)(3) bonds as defined in section 145 of the Code and (ii) current refunding obligations to the extent the amount of the refunding obligation does not exceed the outstanding amount of the refunded obligation), including the obligations under the Installment Purchase Agreement, has been or will be issued by the City, including all subordinate entities of the City, during the calendar year 2017. Section 3. Irrevocable Refunding Instructions. The City Council hereby approves the Irrevocable Refunding Instructions in the form thereof on file with the City Clerk together with any changes therein or additions thereto deemed advisable by an Authorized Officer. The execution of the Irrevocable Refunding Instructions by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions. An Authorized Officer is hereby authorized and directed for and in the name and on behalf of the City to execute the final form of the Irrevocable Refunding Instructions. Section 4. Assignment by Authority. The City Council hereby approves the assignment by the Authority of its rights under the Installment Purchase Agreement, including the right to receive the Installment Payments, to the Assignee. Such assignment shall be made pursuant to an Assignment Agreement between the Authority and the Assignee in substantially the form on file with the City Clerk, which the City Council hereby approves. Section 5. Official Actions. The City Manager, Deputy City Manager, City Attorney, the City Clerk and all other officers of the City are each authorized and directed in the name and on behalf of the City to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them deem necessary or appropriate in order to consummate any of the transactions contemplated by the agreements and documents approved under this Resolution. Whenever in this Resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 6. Engagement of Professional Services. In connection with the Installment Purchase Agreement, the City Council hereby approves the engagement of bond counsel services with the firm of Jones Hall, A Professional Law Corporation, municipal advisor services with the firm of Fieldman, Rolapp & Associates, Inc., and placement agent services with Piper Jaffray & Co. An Authorized Officer is hereby authorized and directed for and in the name and on behalf of the City to execute an agreement with each of such firms. Section 7. Effective Date. This Resolution shall take effect immediately upon its passage and adoption. Dated: December 6, 2017 I hereby certify that Resolution No. 2017-220 was passed and adopted by the City Council of the City of Lodi in a regular/joint meeting held December 6, 2017, by the following vote: AYES: COUNCIL MEMBERS — Chandler, Johnson, Mounce, Nakanishi, and Mayor Kuehne NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — None ABSTAIN. COUNCIL MEMBERS — None (NNIFER FERRAIOLO City Clerk 2017-220