Loading...
HomeMy WebLinkAbout19-002 - ResolutionRESOLUTION NO. 19-002 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, AUTHORIZING PROCEEDINGS AND AGREEMENTS RELATING TO THE FINANCING OF THE ACQUISITION, DESIGN, CONSTRUCTION AND EQUIPPING OF A FIBER OPTIC NETWORK WITHIN THE CITY, APPROVING ISSUANCE AND SALE OF BONDS BY THE RANCHO CUCAMONGA PUBLIC FINANCE AUTHORITY, APPROVING AN OFFICIAL STATEMENT AND AUTHORIZING OFFICIAL ACTIONS WHEREAS, the Rancho Cucamonga Public Finance Authority (the "Authority") is a joint exercise of powers authority formed pursuant to a Joint Exercise of Powers Agreement by and between the City of Rancho Cucamonga (the "City"), the Rancho Cucamonga Fire Protection District, and the Former Rancho Cucamonga Redevelopment Agency and is authorized under said Agreement and under the laws of the State of California to finance the acquisition and construction of public capital improvements for the City; and WHEREAS, the City has requested that the Authority issue its revenue bonds (the "Bonds") for the purpose of providing funds to enable the City to finance certain improvements to the benefit of the City, specifically the costs of acquisition, design, construction and equipping of a fiber optic network located within the City (the "Project"), which the City believes will provide significant benefits to the City by allowing the City to provide services in a more efficient manner to residential and commercial development; and WHEREAS, Section 6586.5 of the California Government Code allows the City to participate in financings with the Authority to finance projects with significant benefits to the City; and WHEREAS, to provide such financing for the Project, the Authority proposes to issue its revenue bonds in an aggregate original principal amount of not to exceed $14,500,000 under the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act"), such Bonds may be issued as one or more series of tax-exempt bonds and/or taxable bonds in such amounts as may be determined by the City as stated herein, and which are proposed to be payable from lease payments to be paid to the Authority by the City pursuant to a Lease Agreement (the "Lease Agreement") as may be determined by the Authority; and WHEREAS, the City Council of the City has determined that the facility consisting of the Goldy S. Lewis Community Center and James L. Brulte Senior Center and accompanying parking lot should be the leased assets under the Lease Agreement (the "Leased Premises"); and Resolution No. 19-002 - Page 1 of 7 60285.00031\31484106.9 WHEREAS, a portion of the proceeds of the Bonds will be deposited in the Acquisition and Construction Fund established pursuant to an Indenture of Trust, by and between the Authority and Wells Fargo Bank, N.A. (the "Indenture"), and will be applied by the Authority and the City for the acquisition, design, construction and installation of the Project pursuant to the Lease Agreement; and WHEREAS, Stifel, Nicolaus & Company, Incorporated (the "Underwriter") has proposed to purchase and underwrite the Bonds and has presented to the City a form of Bond Purchase Agreement for the Bonds, to be entered into among the Authority, the City and the Underwriter (the "Purchase Agreement") and there is also presented to the City a proposed form of Official Statement describing the Bonds, to be used in connection with the marketing thereof by the Underwriter; and WHEREAS, the City Council has conducted a noticed public hearing held December 19, 2018 pursuant to Section 6586.5 of the California Government Code and published notice was given in accordance with the terms of the Government Code and Resolution No. 18-127 adopted on December 5, 2018; WHEREAS, Section 5852.1 of the Government Code of the State of California ("Section 5852.1") provides that the City 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 finance charge of the Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Bonds received less the finance charge described above 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 accordance with Section 5852.1, the City has obtained such good faith estimates from Fieldman, Rolapp & Associates, Inc., the City's municipal advisor (the "Municipal Advisor"), and such estimates are disclosed in Exhibit A attached hereto; and WHEREAS, the City wishes at this time to authorize all proceedings relating to the issuance and sale of the Bonds and all other agreements and documents relating thereto. NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the City Council as follows: Findings and Determinations. The City Council finds and determines that: (a) the above recitals are true and correct and it is in the prudent management of the fiscal affairs of the City that the proceeds to be deposited in the Acquisition and Construction Fund will be used for the acquisition, design, construction and equipping of the Project; Resolution No. 19-002 - Page 2 of 7 60285.00031\31484106.9 (b) The fair rental value of the Leased Premises exceeds the net present value of Lease Payments to be made under the Lease Agreement; and (c) Pursuant to Section 6586.5 of the California Government Code, the City Council hereby approves the financing of the Project by the Authority and finds that such financing will result in significant public benefits to the City by allowing efficient delivery of City services to residential and commercial properties. 2. Approval of Bonds. The City Council hereby approves the issuance of the Bonds for the purpose of funding the Project by the Authority under and pursuant to the Act provided that the maximum aggregate principal amount of the Bonds shall not exceed $14,500,000. The Bonds will be issued as two series of Bonds, the "Tax -Exempt Series A Bonds" and the "Taxable Series B Bonds" provided that the provisions of Sections 2 and 4 of this Resolution shall have been met on the date of sale. 3. Approval of Financing Documents. The City Council hereby approves each of the following documents in substantially the respective forms on file with the City Clerk, together with such additions thereto and changes therein as the Bond Counsel shall deem necessary, desirable or appropriate, the execution of which by the Mayor, the Mayor Pro Tem, or the City Manager (the "Authorized Officers") shall be conclusive evidence of the approval of any such additions and changes. (a) the Lease Agreement relating to the lease and sub -lease of the Leased Premises between the City and the Authority; (b) the Purchase Agreement, by and among the Authority, the City and the Underwriter; and (c) the Continuing Disclosure Agreement. The Authorized Officers are each hereby authorized and directed to execute, and the City Clerk is hereby authorized (to the extent required by such documents) to attest and affix the seal of the City to, the final forms of each of the above-mentioned documents for and in the name and on behalf of the City. 4. Sale of Bonds. The City Council hereby approves the sale of the Bonds by the Authority by negotiation with the Underwriter, pursuant to the Purchase Agreement in substantially the form on file with the City Clerk, together with such additions thereto and changes therein as Bond Counsel shall deem necessary, desirable or appropriate. (a) The amount of Underwriter's discount for the Tax -Exempt Series A Bonds shall be not more than 0.65% of the aggregate principal amount thereof and the true interest cost to be represented by the Tax -Exempt Series A Bonds (taking into account any original issue discount or premium on the sale thereof) shall not exceed 4.50%; and (b) The amount of Underwriter's discount for the Taxable Series B Bonds shall be not more than 0.65% of the aggregate principal amount thereof and Resolution No. 19-002 - Page 3 of 7 60285.00031\31484106.9 the true interest cost to be represented by the Taxable Series B Bonds (taking into account any original issue discount or premium on the sale thereof) shall not exceed 4.50%. 5. Official Statement; Continuing Disclosure. The City Council approves the preparation of, and hereby authorizes the City Manager or the Finance Director to deem final within the meaning of Rule 15c2-12 of the Securities and Exchange Commission except for permitted omissions, a preliminary form of Official Statement describing the Bonds, the form of which is on file with the City Clerk together with such changes as may be approved by the officer executing the same. The Mayor, the City Manager or the Finance Director is hereby authorized to execute the final Official Statement in the name and on behalf of the City, including any modifications resulting from additions thereto and changes therein as the Disclosure Counsel shall deem necessary, desirable or appropriate, with the execution of the final Official Statement by the City Manager or the Finance Director to be conclusive evidence of the approval of any such additions and changes. The City Council has reviewed and approved the Continuing Disclosure Agreement, the form of which is on file with the City Clerk and the City Manager or the Finance Director is further authorized to sign the Continuing Disclosure Agreement on behalf of the City in such form as may be approved by the officer executing the same. 6. Appointment of Professionals. The following professionals are hereby approved to provide services in connection with the issuance of the Bonds: (a) Trustee. Wells Fargo Bank, N.A. is appointed as Trustee pursuant to the Indenture to take any and all action provided therein to be taken by the Trustee; (b) Municipal Advisor. Fieldman, Rolapp & Associates, Inc., is hereby appointed to provide municipal advisory services; and (c) Bond and Disclosure Counsel. Best Best & Krieger LLP is hereby appointed as bond and disclosure counsel in connection with the issuance of the Bonds. 7. Official Actions. The Authorized Officers and the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including obtaining title insurance on the Leased Premises, obtaining a rating on the Bonds and/or a municipal bond insurance policy and a debt reserve fund surety bond, and including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions as described herein in connection with the issuance and sale of the Bonds. 8. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. Resolution No. 19-002 - Page 4 of 7 60285.00031\31484106.9 PASSED, APPROVED, AND ADOPTED this 16th day of January, 2019. ATTEST: STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO CITY OF RANCHO CUCAMONGA ss L B. Kennedy, Mayor Proe I, Janice C. Reynolds, City Clerk of the City of Rancho Cucamonga, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the City Council of the City of Rancho Cucamonga, at a Regular Meeting of said Council held on the 16th day of January 2019. AYES: Hutchison, Kennedy, Scott, Spagnolo NOES: None ABSENT: Michael ABSTAINED: None Executed this 17th day of January, 2019, at Rancho Cucamonga, California. Resol 60285.00031\31484106.9 No. 19-002 - Page 5 of 7 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 the Municipal Advisor in consultation with the Underwriter. Principal Amount. The Municipal Advisor has informed the City 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 $12,160,000 (the "Estimated Principal Amount"), which excludes approximately $1,393,156.05 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of the bonds. 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 3.75%. 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 $291,794. 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 Authority, on behalf of the City, for the 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 $13,261,362. 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 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 $19,780,470 (excluding any offsets from reserves or capitalized interest). 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 Page 6 of 7 60285.00031\31484106.9 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 or finance charges, 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, on behalf of 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. Page 7 of 7 60285.00031 \31484106.9