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RES-10706 Issuance of Special Tax Refunding BondsRESOLUTION NO. 10706 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORANGE AUTHORIZING THE ISSUANCE OF SPECIAL TAX REFUNDING BONDS OF THE CITY FOR AND ON BEHALF OF CITY OF ORANGE COMMUNITY FACILITIES DISTRICT NO. 91 -2 (SERRANO HEIGHTS PUBLIC IMPROVEMENTS), AND APPROVING RELATED DOCUMENTS AND ACTIONS. WHEREAS, the City Council of the City of Orange (the "City ") has conducted proceedings under and pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (the "Act "), to form the City of Orange Community Facilities District No. 91 -2 Serrano Heights Public Improvements) (the "District "), to authorize the levy of special taxes upon the land within the District, and to issue bonds secured by said special taxes to finance certain facilities; and WHEREAS, on February 24, 2004, the City issued for the District $35,330,000 initial principal amount of its City of Orange Community Facilities District No. 91 -2 (Serrano Heights Public Improvements) Special Tax Refunding Bonds, Series 2004A and $2,200,000 initial principal amount of its City of Orange Community Facilities District No. 91 -2 (Serrano Heights Public Improvements) Special Tax Bonds, Series 2004B (collectively, the "Prior Bonds "); and WHEREAS, the City Council has determined that due to favorable interest rates, it is in the best interests of the City and the District that the Prior Bonds now be refunded; and WHEREAS, there has been submitted to this City Council a fiscal agent agreement (the Fiscal Agent Agreement ") providing for the issuance of special tax refunding bonds of the City for and on behalf of the District (the "Bonds ") under the authority provided in the Act and Article 11, commencing with Section 53580, of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Refunding Law "), and this City Council, with the aid of City staff, has reviewed the Fiscal Agent Agreement and found it to be in proper order, and now desires to approve the Fiscal Agent Agreement and the issuance of the Bonds; and WHEREAS, there has been presented to this City Council an escrow agreement (the Escrow Agreement ") providing for the creation of an escrow fund which will be used to defease and refund the Prior Bonds, and this City Council now desires to approve such agreement in connection with the refunding of the Prior Bonds; and WHEREAS, the City proposes to sell the Bonds to Stifel, Nicolaus & Company, Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus (the "Underwriter ") pursuant to the terms of a bond purchase agreement (the "Bond Purchase Agreement ") by and between the City, for and on behalf of the District, and the Underwriter, and the Underwriter proposes to offer the Bonds to the investing public by means of a preliminary official statement (the Preliminary Official Statement "); and WHEREAS, it appears that each of said documents and instruments which are now before this meeting is in appropriate form and is an appropriate document or instrument to be executed and delivered for the purpose intended; and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the Bonds as contemplated by this Resolution and the documents referred to herein exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act and the Refunding Law. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Issuance of Bonds; Approval of Fiscal Agent Agreement and Escrow Agreement. Pursuant to the Act, the Refunding Law, this Resolution and the Fiscal Agent Agreement, special tax refunding bonds of the City for the District designated as "City of Orange Community Facilities District No. 91 -2 (Serrano Heights Public Improvements) 2013 Special Tax Refunding Bonds" in an aggregate principal amount not to exceed $35,000,000 are hereby authorized to be issued. The Bonds shall be executed in the form set forth in and otherwise as provided in the Fiscal Agent Agreement. In furtherance of the issuance of the Bonds, the City Council hereby makes the following findings and determinations: (a) it is prudent in the management of the fiscal affairs of the City, the City Council and the District to issue the Bonds for the purpose of refunding the Prior Bonds, b) the total net interest cost to maturity on the Bonds plus the principal amount of the Bonds will not exceed the total net interest cost to maturity on the Prior Bonds plus the principal amount of the Prior Bonds, (c) the Bonds satisfy the requirements of Section 53345.8(a) of the Act in that the assessed value of the land in the District is more than three times the principal amount of the Bonds, and (d) the Bonds, when issued, will be in compliance with the applicable requirements of the City's adopted Policy Guidelines Regulating the Use of Public Financing Mechanisms to Finance Public Improvements. The City Council hereby approves the Fiscal Agent Agreement in the form on file with the City Clerk. The Mayor is hereby authorized and directed to execute the Fiscal Agent Agreement, for and in the name and on behalf of the City and the District, in such form, together with any additions thereto or changes therein deemed necessary or advisable by the City Manager upon consultation with Bond Counsel and the City Attorney, the approval of such changes to be conclusively evidenced by the execution and delivery by the Mayor of the Fiscal Agent Agreement. The proceeds of the Bonds shall be applied by the City for the purposes and in the amounts as set forth in the Fiscal Agent Agreement. The City Council hereby authorizes the delivery and performance by the City of the Fiscal Agent Agreement. For purposes of Section 53363.2 of the Act, (a) it is expected that the purchase of the Bonds will occur on or after February 25, 2013, (b) the date, denomination, maturity dates, places of payment and form of the Bonds shall be as set forth in the Fiscal Agent Agreement, (c) the minimum rate of interest to be paid on the Bonds shall be not less than one quarter of one 2- percent (0.25 %) with the actual rate or rates to be set forth in the Fiscal Agent Agreement as executed, (d) the place of payment for the Prior Bonds shall be as set forth in the fiscal agent agreement for the Prior Bonds; and (e) the designated costs of issuing the Bonds shall be as described in Section 53363.8(a) of the Act, and as otherwise described in the Fiscal Agent Agreement and the Escrow Agreement hereafter approved, in the Official Statement for the Bonds and the closing certificates for the Bonds, including Bond Counsel and Disclosure Counsel fees and expenses, Financial Advisor fees and expenses, Underwriter's discount, printing costs for the Official Statement, escrow verification costs, initial fiscal agent fees, and costs of City staff incurred in connection with the sale and issuance of the Bonds. The City Council hereby approves the refunding of the Prior Bonds with the proceeds of the Bonds, in accordance with the provisions of the documents pursuant to which such Prior Bonds were sold and delivered, and the Escrow Agreement, between the City and U.S. Bank National Association as fiscal agent for the Prior Bonds and the escrow bank thereunder. The City Council hereby approves the Escrow Agreement in the form on file with the City Clerk. The City Council hereby authorizes and directs the Mayor to execute and deliver the Escrow Agreement for and in the name and on behalf of the City, in such form, together with such additions thereto or changes therein deemed necessary or advisable by the City Manager upon consultation with Bond Counsel and the City Attorney, the approval of such changes to be conclusively evidenced by the execution and delivery by the Mayor of the Escrow Agreement. The City Council hereby authorizes the delivery and performance by the City of the Escrow Agreement. Section 2. Delivery of the Bonds. The Bonds, when executed, shall be delivered to the Fiscal Agent for authentication. The Fiscal Agent is hereby requested and directed to authenticate the Bonds by executing the Fiscal Agent's certificate of authentication and registration appearing thereon, and to deliver the Bonds, when duly executed and authenticated, to the Underwriter or its order in accordance with written instructions executed on behalf of the City by the City Manager, which instructions such officer is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver to the Fiscal Agent. Such instructions shall provide for the delivery of the Bonds to the Underwriter or its order, in accordance with the Bond Purchase Agreement, upon payment of the purchase price therefor. Section 3. Sale of the Bonds. The City Council hereby approves the sale of the Bonds to the Underwriter. The Bond Purchase Agreement, in the form on file with the City Clerk, is hereby approved. The City Council hereby authorizes and directs the Mayor to execute the Bond Purchase Agreement for and in the name and on behalf of the City and the District in such form, together with such additions thereto or changes therein deemed necessary or advisable by the City Manager, provided that the aggregate principal amount of the Bonds does not exceed the amount set forth in Section 1 of this Resolution, the net interest cost of the Bonds is not in excess of 5.0 %, and the Underwriter's discount (without regard to any original issue discount) is not in excess of 0.8% of the principal amount of the Bonds, and, in any event, the finding in clause (b) of the second paragraph of Section 1 above is accurate. 3- The City Council hereby finds and determines that (a) the issuance of the Bonds should proceed for the public policy reason that, as a result of such issuance, the annual special taxes to be levied in the District will be lower than if the refunding contemplated with the proceeds of the Bonds did not occur, and (b) the sale of the Bonds by negotiated sale to the Underwriter as contemplated by the Bond Purchase Agreement will result in a lower overall cost. Section 4. Official Statement. The City Council hereby approves the preliminary official statement for the Bonds (the "Preliminary Official Statement ") in the form on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by the City Manager upon consultation with Disclosure Counsel. The City Council authorizes and directs the City Manager, on behalf of the City and the District, to deem "final" pursuant to Rule 15c2 -12 under the Securities Exchange Act of 1934 (the "Rule ") the Preliminary Official Statement prior to its distribution by the Underwriter to prospective purchasers of the Bonds. The Underwriter, on behalf of the City and the District, is authorized and directed to cause the Preliminary Official Statement to be distributed to such municipal bond broker - dealers, to such banking institutions and to such other persons as may be interested in purchasing the Bonds. The City Manager is authorized and directed to assist the Financial Advisor and Disclosure Counsel in causing the Preliminary Official Statement to be brought into the form of final official statement (the "Final Official Statement "), and the Mayor is hereby authorized and directed to execute said Final Official Statement and the City Manager is hereby authorized to execute a statement that the facts contained in the Final Official Statement, and any supplement or amendment thereto (which shall be deemed an original part thereof for the purpose of such statement) were, at the time of sale of the Bonds, true and correct in all material respects and that the Final Official Statement did not, on the date of sale of the Bonds, and do not, as of the date of delivery of the Bonds contain any untrue statement of material fact or omit to state material facts where necessary to make any statement made therein not misleading in the light of the circumstances under which it was made. The execution and delivery by the City of the Final Official Statement, which shall include such changes and additions thereto deemed advisable by the City Manager and such information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, shall be conclusive evidence of the approval of the Final Official Statement by the City. The Final Official Statement, when prepared, is approved for distribution in connection with the offering and sale of the Bonds. Section 5. Continuing Disclosure Certificate. The Continuing Disclosure Certificate, in the form on file with the City Clerk, is hereby approved. The Mayor is hereby authorized and directed to execute and deliver the Continuing Disclosure Certificate in such form, with such additions thereto or changes therein as are deemed necessary or advisable by the City Manager upon consultation with Disclosure Counsel, the approval of any such additions or changes to be conclusively evidenced by the execution and delivery by the Mayor of the Continuing Disclosure Certificate. Section 6. Foreclosure Covenant. The City hereby covenants, for the benefit of the Bondowners, to commence and diligently pursue to completion any foreclosure action regarding delinquent installments of any amount levied as a special tax for the payment of interest or principal of the Bonds, said foreclosure action to be commenced and pursued as more completely set forth in the Fiscal Agent Agreement. Section 7. Official Actions. All actions heretofore taken by the officers and agents of the City with respect to the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the proper officers of the City are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds and the refunding of the Prior Bonds in accordance with this Resolution and any certificate, agreement and other document described in the documents herein approved. In furtherance of the foregoing, the Director of Finance is hereby authorized to (a) provide the fiscal agent for the Prior Bonds with written direction to provide a notice of redemption of the Prior Bonds with the redemption conditioned upon the issuance of the Bonds and containing an indemnity of the District (not of the City) for such fiscal agent, as drafted by Bond Counsel, for any costs and expenses incurred by such fiscal agent should the redemption notice need to be rescinded or any claims, losses, damages, costs, liabilities, expenses or attorneys fees of the fiscal agent for the Prior Bonds related to such notice or any rescission thereof, and (b) obtain municipal bond insurance for the Bonds, and to approve changes to the documents approved by this Resolution as required in connection therewith if the Director of Finance, with the assistance of the City's Financial Advisor for the Bonds, determines that the provision of such insurance is economic in the circumstances. Whenever in this Resolution the Mayor is authorized to execute any document, such execution may be taken, if the Mayor is unavailable, by the Mayor Pro Tem. Section 8. Effective Date. This Resolution shall take effect from and after its adoption. ADOPTED this 12 "day of February, 2013. CZ e)a E Mayor, City of Orange ATTEST: Mary E. ity Clerk, City of range 5- I, MARY E. MURPHY, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the 12 day of February, 2013, by the following vote: AYES:COUNCIL MEMBERS:Bilodeau, Murphy, Smith, Whitaker, Alvarez NOES:COUNCIL MEMBERS:None ABSENT:COUNCIL MEMBERS:None ABSTAIN:COUNCIL MEMBERS:None Mary E. , City Cl , ' Orange rel