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HomeMy WebLinkAboutReso 2020-128 - Authorize the issuance of WW system refunding Revenue Bonds, & Authorize execution of documents RESOLUTION NO. 2020-128 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING AUTHORIZING THE ISSUANCE OF WASTEWATER SYSTEM REFUNDING REVENUE BONDS, THE EXECUTION AND DELIVERY OF AN INDENTURE, A CONTINUING DISCLOSURE AGREEMENT, A PURCHASE CONTRACT AND AN OFFICIAL STATEMENT AND APPROVING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT; AND AUTHORIZING EXECUTION OF DOCUMENTS AND THE TAKING OF ALL NECESSARY ACTIONS RELATING THERETO WHEREAS, pursuant to a number of Installment Sale Agreements (the "Installment Sale Agreements"), by and between the City of Redding (the "City") and the State Water Resources Control Board (the "SWRCB"), the City is obligated to make installment sale payments (the "Installment Payments") to the SWRCB for purchase of various improvements to the City's Wastewater System; and WHEREAS, the City has determined that it is in the best interests of the City and its residents to refund all or a portion of the City's obligation to make installment sale payments under the Installment Sale Agreements through the issuance and sale of wastewater system revenue bonds to be designated "City of Redding Wastewater System Refunding Revenue Bonds, Series 2020A" and "City of Redding Wastewater System Refunding Revenue Bonds, Series 2020B (Taxable)" (collectively, the "Bonds"); and WHEREAS, to provide for the issuance and payment of the Bonds, the City desires to enter into an Indenture (the "Indenture") with U.S. Bank National Association, as Trustee (the "Trustee"); and WHEREAS, the City will enter into a Purchase Contract (the "Purchase Contract") with J.P. Morgan Securities LLC (the "Underwriter"); and WHEREAS, in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12, the City will execute and deliver a Continuing Disclosure Agreement (the "Continuing Disclosure Agreement"); and WHEREAS, there have been submitted and are on file with the City Clerk proposed forms of the Indenture, Purchase Contract, Continuing Disclosure Agreement and an Official Statement (as defined below) with respect to the Bonds; and WHEREAS, the City has engaged Orrick, Herrington & Sutcliffe LLP as bond counsel and disclosure counsel and PFM Financial Advisors LLC as municipal advisor (the "Municipal Advisor") with respect to the Bonds; and WHEREAS, California Government Code Section 5852.1 requires that the City Council obtain from an underwriter, financial advisor or private lender and disclose, prior to 4131-2725-9943.4 authorization of the issuance of bonds with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public: (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 City Council has obtained from the Municipal Advisor the required good faith estimates and such estimates are disclosed and set forth on Exhibit A attached hereto; NOW, THEREFORE, the City Council of the City of Redding hereby finds, determines, declares and resolves as follows: Section 1. All of the recitals set forth above are true and correct, and the City Council so finds and determines. Section 2. The City Council hereby approves the issuance of the Bonds, in an aggregate principal amount not to exceed $64,500,000, to refinance all or a portion of the Installment Payments. The particular Installment Payments to be refunded shall be as determined by the officer of the City executing the Purchase Contract. The officers of the City are hereby directed to perform the duties, if any, imposed upon the City by the provisions of the financing documents approved herein, including the Indenture, and the Director of Finance of the City is hereby authorized and directed to hold the funds and accounts created in said financing documents and directed or permitted to be held by the City. Section 3. The proposed form of Indenture by and between the City and the Trustee, on file with the City Clerk, is hereby approved. The Mayor or City Manager of the City (or other officer designated by the City Manager) is each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver an indenture in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the Bonds shall mature no later than June 1, 2036, and the interest rates result in a true interest cost for the Bonds of not to exceed two and one half percent (2.50%) per annum. Section 4. The proposed form of Purchase Contract, by and between the Underwriter and the City, on file with the City Clerk, is hereby approved. The Mayor or City Manager of the City (or other officer designated by the City Manager) is each hereby authorized and directed, on behalf of the City, to execute and deliver a purchase contract in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided, however, the underwriting discount (not including original issue discount) shall not exceed five tenths of one percent (0.5%) of the aggregate principal amount of the Bonds. -2- 4131-2725-9943.4 Section 5. The proposed form of Continuing Disclosure Agreement, by and between the City and U.S. Bank National Association, as trustee and dissemination agent, on file with the City Clerk, is hereby approved. The Mayor or City Manager of the City (or other officer designated by the City Manager) is each hereby authorized and directed to and in the name and on the behalf of the City, to execute and deliver a continuing disclosure agreement in substantially said form with said changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 6. The proposed form of Official Statement relating to the Bonds (the "Official Statement"), on file with the City Clerk, is hereby approved. The Mayor or City Manager of the City (or other officer designated by the City Manager) is each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver an Official Statement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. The Underwriters are hereby directed to distribute copies of the Official Statement to all actual purchasers of the Bonds. Distribution by the Underwriter of a preliminary Official Statement relating to the Bonds is hereby approved and the Mayor or City Manager of the City (or other officer designated by the City Manager) is each hereby authorized and directed, to execute a certificate confirming that the preliminary Official Statement has been "deemed final" by the City for purposes of Securities and Exchange Commission Rule 15c2-12. Section 7. The Mayor or City Manager of the City (or other officer designated by the City Manager) is each hereby authorized, upon a determination by such officer that the procurement of such policy is in the best interests of the City, to procure and maintain a policy of municipal bond insurance for the benefit of the registered owners of one or more maturities of the Bonds in such form and on such terms as such officer shall require or approve, such approval to be conclusively evidenced by the execution and delivery of the commitment for and on behalf of the City to the issuer of such municipal bond insurance policy or surety bond. Section 8. The City Clerk is hereby authorized and directed to attest the signature of the Mayor, City Manager or other officers of the City as may be required in connection with the issuance, sale and delivery of the Bonds and the execution and delivery of the Indenture, Purchase Contract and Continuing Disclosure Agreement in accordance with this Resolution. Section 9. The officers and City Council members of the City are hereby authorized and directed,jointly and severally, to do any and all things and to execute and deliver any and all documents and certificates which they deem necessary or advisable in order to consummate the execution and delivery of the documents mentioned herein including, without limitation, signature certificates, no-litigation certificates, tax certificates, investment instructions, redemption or defeasance notices, legal services agreements (with the approval of the City Attorney) with the firms identified in the recitals hereto and otherwise to effectuate the purposes of this Resolution and the transactions contemplated hereby. -3- 4131-2725-9943.4 Section 10. All actions heretofore taken by the officers and agents of the City with respect to the refinancing of the Installment Payments are hereby ratified, confirmed and approved. Section 11. This Resolution shall take effect from and after its adoption and approval. I HEREBY CERTIFY that the foregoing resolution was duly passed and adopted by the City Council of the City of Redding at a regular meeting thereof held on the 6th day of October, 2020, by the following vote of the members thereof: AYES: COUNCIL MEMBERS: Dacquisto,Resner,Schreder,Winter,and McElvain NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS: None ADAM McELVAIN, Mayor ATTEST: FORM APPROVAL: PAMELA MIA, City dek BAR Y E. DeWALT, City Attorney -4- 4131-2725-9943.4 EXHIBIT A GOOD FAITH ESTIMATES The good faith estimates set forth herein are provided with respect to the Bonds in compliance with Section 5852.1 of the California Government Code. Such good faith estimates have been provided to the City by PFM Financial Advisors LLC, as municipal advisor to the City (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 $51,590,000 (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 1.01%. 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 $555,898.50. 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 $63,815,303.80. 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 $68,174,788.91. 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 4131-2725-9943.4 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 a number of 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. The City Council has approved the issuance of the Bonds with a maximum true interest cost of 2.50%. -2- 4131-2725-9943.4 CERTIFICATE OF THE CLERK I, Pamela Mize, City Clerk of the City of Redding (the "City"), hereby certify that the foregoing Resolution No. 2020-128, is a full, true, and correct copy of a resolution duly adopted at a regular meeting of the City Council of the City duly held in Redding, California, on October 6, 2020, of which meeting all of the members of said City Council had due notice. I further certify that I have carefully compared the foregoing copy with the original minutes of said meeting on file and of record in my office; that said copy is a full, true, and correct copy of the original resolution adopted at said meeting and entered into said minutes, and that said resolution has not been amended, modified, rescinded, or revoked in any manner since the date of its adoption, and the same is now in full force and effect. An agenda of said meeting was posted at least 72 hours before the meeting at 777 Cypress Street, Redding, California 96001, a location freely accessible to members of the public, and a brief general description of said resolution appeared on said agenda. Dated: October 13, 2020. City Clerk of the Cityof-Redding 4131-272 -9943.4