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HomeMy WebLinkAboutResolutions - No. LPFA2022-03RESOLUTION NO. LPFA2022-03 A RESOLUTION OF THE LODI PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF LEASE REVENUE BONDS TO REFINANCE OUTSTANDING LEASE REVENUE BONDS AND PROVIDE FINANCING FOR ACQUISITION AND CONSTRUCTION OF CAPITAL IMPROVEMENTS, INCLUDING AN ANIMAL SHELTER AND PARKS AND PLAYGROUND IMPROVEMENTS AND UPGRADES, AND APPROVING RELATED DOCUMENTS AND OFFICIAL ACTIONS WHEREAS, the Lodi Public Financing Authority (the "Authority") previously issued its $19,080,000 Lodi Public Financing Authority 2012 Refunding Lease Revenue Bonds (the "2012 Bonds") for the purpose of refinancing outstanding certificates of participation that were executed and delivered to finance various municipal facilities of the City of Lodi (the "City"); and WHEREAS, in connection with the issuance of the 2012 Bonds, the City and the Authority entered into a Site Lease and a Lease Agreement, each of which was dated as of September 1, 2012, pursuant to which, respectively, the City leased to the Authority and subleased from the Authority the land and improvements constituting the City's police building and Carnegie Forum; and WHEREAS, in order to take advantage of prevailing bond market conditions, the City wishes to authorize the refinancing of the 2012 Bonds; and WHEREAS, the City further wishes to leverage the savings achieved by refinancing the 2012 Bonds to finance the acquisition and construction of capital improvements, including a new animal shelter and park and playground improvements and upgrades (the "Project"); and WHEREAS, to that end, the City has proposed to lease the land and improvements constituting the City's police building and its Fire Station #2 (the "Leased Property") to the Authority under a Site Lease, the form of which is on file with the Secretary, in consideration of the payment by the Authority of an upfront rental payment which is sufficient to provide funds to refinance the 2012 Bonds and finance the acquisition and construction of the Project; and WHEREAS, in order to raise funds for the upfront rental payment, the Authority proposes to issue and sell its Lodi Public Financing Authority 2022 Lease Revenue Bonds (2012 Refunding; Capital Projects Financing) (the "Bonds") under Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584 of said Code (the "Bond Law"); and WHEREAS, in order to secure the payments of principal of and interest on the Bonds, the Authority proposes to lease the Leased Property back to the City under a Lease Agreement (the "Lease Agreement"), the form of which is on file with the Secretary, under which the City is obligated to pay semiannual lease payments as rental for the Leased Property, and the Authority will assign substantially all of its rights under the Lease Agreement to U.S. Bank Trust Company, National Association, as trustee for the Bonds; and WHEREAS, there has been submitted to the Board of Directors a form of preliminary Official Statement in connection with the marketing of the Bonds and the Board of Directors, with the aid of its staff, has reviewed the preliminary Official Statement to assure proper disclosure of all material facts relating to the Bonds that are in the personal knowledge of the members of the Board of Directors; and WHEREAS, the Authority and the City propose to sell the Bonds to Piper Sandler & Co. (the "Underwriter") pursuant to a Bond Purchase Agreement (the "Bond Purchase Agreement"), the form of which is on file with the Secretary; and WHEREAS, as a condition precedent to the issuance by the Authority of the Bonds to provide financing for the Project, Section 6586.5 of the Bond Law requires that the City approve the proposed lease financing by the Authority and that the City make certain findings with respect to such financing, and Section 6586.5 further requires that such approval be given and findings be made only after a noticed public hearing; and WHEREAS, as required by Section 6586.5 of the Bond Law, the City has caused publication of a notice of a public hearing on the financing of the Project once at least five days prior to the hearing in a newspaper of general circulation in the City; and WHEREAS, the City Council held a public hearing at which all interested persons were provided the opportunity to speak on the subject of financing the Project; and WHEREAS, in accordance with Government Code Section 5852. 1, the Board of Directors has obtained and wishes to disclose the information set forth in Appendix A hereto; and WHEREAS, the Board of Directors wishes at this time to approve all proceedings to which it is a party relating to the issuance and sale of the Bonds, the refinancing of the 2012 Bonds and the financing of the Project; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Lodi Public Financing Authority as follows: SECTION 1. Issuance of Bonds. The Board of Directors hereby authorizes the issuance of the Bonds under the Bond Law in the maximum principal amount of $30,000,000, for the purpose of providing funds to refinance the 2012 Bonds and finance the Project. The Bonds shall be issued under the Bond Law and the Indenture of Trust that is approved below. SECTION 2. Approval of Related Financing Agreements. The Board of Directors hereby approves each of the following agreements required for the issuance and sale of the Bonds, the refinancing of the 2012 Bonds and the financing of the Project, in substantially the respective forms on file with the Secretary together with any changes therein or additions thereto deemed advisable by the Executive Director, the Treasurer or the General Counsel (each, an "Authorized Officer"), whose execution thereof shall be conclusive evidence of the approval of any such changes or additions. An Authorized Officer is hereby authorized and directed for and on behalf of the Authority to execute, and the Secretary is hereby authorized and directed to attest, the final form of each such agreement, as follows: • Indenture of Trust, between the Authority and U.S. Bank National Association, as trustee (the "Trustee"), setting forth the terms and provisions relating to the Bonds. • Site Lease, between the City as lessor and the Authority as lessee, under which the City leases the Leased Property to the Authority in consideration of -2- the payment of an amount which will be applied by the City to refinance the 2012 Bonds and finance the Project. • Lease Agreement, between the Authority as lessor and the City as lessee, under which the Authority leases the Leased Property back to the City and the City agrees to pay semiannual lease payments which are sufficient to provide revenues with which to pay principal of and interest on the Bonds when due. • Assignment Agreement, between the Authority and the Trustee, whereby the Authority assigns certain of its rights under the Lease Agreement to the Trustee for the benefit of the Refunding Bond owners. • Bond Purchase Agreement, among the City, the Authority and the Underwriter, which establishes the terms under which the Underwriter will purchase the Bonds from the Authority. • Irrevocable Refunding Instructions, to be given by the Authority to the trustee for the 2012 Bonds, and to be consented to by the City, providing for the deposit, investment and application of funds to defease and redeem the 2012 Bonds. SECTION 3. Negotiated Sale of Bonds. The Board of Directors hereby authorizes and directs the negotiated sale of the Bonds to the Underwriter. The Bonds shall be sold at a true interest cost not to exceed 4.0 percent. The Underwriter's discount shall not exceed 1.0 percent. SECTION 4. Official Statement. The Board of Directors hereby approves the preliminary Official Statement describing the Bonds in substantially the form on file with the Secretary. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to said preliminary Official Statement and to execute an appropriate certificate stating the Authorized Officer's determination that the preliminary Official Statement (together with any changes therein or additions thereto) has been deemed nearly final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934. Distribution of the preliminary Official Statement by the Underwriter is hereby approved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to a final form of said Official Statement, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The Board of Directors hereby authorizes the distribution of the final Official Statement by the Underwriter. The final Official Statement shall be executed on behalf of the Authority by an Adthorized Officer. SECTION 5. Official Actions. The Chair, the Executive Director, the Treasurer, the General Counsel and all other officers of the Authority are each authorized and directed on behalf of the Authority to make any and all assignments, certificates, requisitions, agreements (including an escrow deposit and trust agreement, if needed), notices, consents, instruments of conveyance 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, and the Executive Director may direct the Secretary to execute and deliver such other documents as the Executive Director determines are necessary or appropriate in order to consummate any of the transactions contemplated by the agreements and documents approved under this Resolution. An Authorized Officer may revise the identity of the Leased -3- Property as necessary in order to accomplish the purposes of this Resolution. An Authorized Officer may approve the purchase of municipal bond insurance or a debt service reserve fund policy if the Authorized Officer, in consultation with the City's municipal advisor, concludes such purchase would be economically beneficial for the City. Whenever in this resolution any officer of the Authority 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 if such officer is absent or unavailable. SECTION 6. Effective Date. This Resolution shall take effect immediately upon its passage and adoption. Dated: March 2, 2022 I hereby certify that Resolution No. 2022-03 was passed and adopted by the City Council of the City of Lodi in a regular meeting held March 2, 2022 by the following votes: AYES BOARD MEMBERS — Hothi, Khan, Kuehne, Nakanishi, and Chairperson Chandler NOES: BOARD MEMBERS — None ABSENT: BOARD MEMBERS — None ABSTAIN: BOARD MEMBERS — None MARK CHANDLER Chairperson PAMELA M. FARRIS Secretary LPFA2022-03 -4- APPENDIX A Government Code Section 5852.1 Disclosure 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 and the Authority by the Underwriter of the Bonds. Principal Amount. The Underwriter has informed the City and the Authority that, based on the financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $26,475,000 (the "Estimated Principal Amount"), which excludes net premium that might be generated in the sale under current market conditions. True Interest Cost of the Bonds. The Underwriter has informed the City and 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 3.34%. Finance Charge of the Bonds. The Underwriter has informed the City and 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 $611,071. Such fees and charges include fees for bond and disclosure counsel, municipal advisor, special tax consultant, fiscal agent, rating agencies, City and Authority expenses, City Attorney and staff time related to bond issuance, printing, and underwriting. Amount of Proceeds to be Received. The Underwriter has informed the City and 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 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 $28,330,255. Total Payment Amount. The Underwriter has informed the City and 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 that 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 $44,134,950. The foregoing estimates constitute good faith estimates only. 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 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 financing plan, delays in the financing, 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. A-2