Loading...
HomeMy WebLinkAboutResolution 2002-074 N.C.S. 05/20/2002 Resolution No. 2002-0~4~ C.S of the City of Petaluma, California RES®LUTION AIVIENDIl~G AND RESTATING RESOLUTI®N N®. 96-135, AUTO®ItIZING ISSiTANCE AND SALE ®F REFUNIDING D®NDS FOR REASSESSMENT DISTRICT NO. 1996-1 RES®LVED, by the City Council (the "Council") of the City of Petaluma (the "City"), County of Sonoma, State of California: WHEREAS, on May 20, 1996, the City of Petaluma (the "City") County of Sonoma, State of California, pursuant to Resolution No. 96-135 (the "1996 Resolution") adopted under the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division 11.5 of the California Streets and Highways Code (the "1984 Act") authorized, issued sold and delivered its bonds designated "Limited Obligation Refunding Improvement Bonds, City of Petaluma, Reassessment District No. 1996-1, Series No. 1996-1, dated June 11, 1996 (the "Refunding Improvement Bonds"); WHEREAS, in cooperation with the Petaluma Public Facilities Financing Authority, a joint exercise of powers authority (the "Authority"), the City, on June 11, 1996 sold the Refunding Improvement Bonds to the Authority and the Authority purchased the Refunding Improvement Bonds with the proceeds of its bonds designated "Petaluma Public Financing Authority, 1996 Authority Revenue Bonds" (the "Prior Bonds"); WHEREAS, this Council is informed. that the Authority wishes to conduct proceedings to issue its bonds designated "Petaluma Public Financing Authority, 2002 Authority Refunding Revenue Bonds, Series 2002, in an aggregate principal amount of not to exceed $6,200,000 (the "Bonds"), the proceeds of which will be used by the .Authority to .refund the Prior Bonds; WHEREAS, the City finds that such refunding is in the best financial interests of the City and wishes to cooperate with the Authority to facilitate the refunding by making certain technical amendments to the 1996 Resolution; and WHEREAS, this Council determines that such amendments maybe made by the adoption of'this resolution and that such amendments will not in any way adversely affect the rights of the Authority as the owner of the Prior Bonds or of the Bonds; N®W THEREF®RE, BE IT ®RDERED BY THE CITE' C®UNCIL that the 1996 Resolution be amended and restated as follows: 2002-074 Resolution No. N.C.S. Section 1. Definitions. The 1996 Resolution is hereby amended to add the fallowing definitions: "Authority" means the Petaluma Public Financing Authority, a joint exercise of powers authority organized and existing under Articles 1 through 4, commencing with Section 6500, of Chapter 5 of Division 7 of Title 1 of the California Government Code. "Authority Bonds" means the bonds of the Authority designated "Petaluma Public Financing Authority, 2002 Authority Refunding Revenue Bonds, Series 2002." "Bond" or "Bonds" means the bonds of the City designated "Limited Obligation Refunding Bonds, City of Petaluma, Reassessment District No.1996-1 ,Series No. 1996-1, issued by the City pursuant to Resolution No. 96-I35 N.C.S., as amended and as such bonds are more particularly described in Section. 2 of such resolution and herein. "Bond Law" means the Improvement Bond Act of 1915, Division 10 of the California Streets and Highways Code. "Bond Year" means each twelve-month period beginning on September 3 in any year and extending to the next succeeding September 2, both dates inclusive; except that the first Bond Year shall begin on the Closing Date and end on September 2, 1997. "Fair Market Value" means, with respect to any investment, the price at which a willing buyer would purchase such investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Tax Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as described above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement} that is acquired in accordance with applicable regulations under the Tax Code, (iii) the investment is a United States Treasury Security -State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the City .and related parties do not owr~ more than a ten percent (10%) beneficial interest therein if the return paid by the fund is without regard to the source of the investment. "Finance Director" means the official of the City who is the chief financial officer of the City or the deputy or designee of such official. "Interest Payment Dates" means. March 2 and September 2 of each calendar year.. Reso. No. 2002-074 N.C.S. 2 ` "Investment Agreements" means guaranteed investment contracts, funding agreements, or any other form of corporate note which represents the unconditional obligation of one or more banks, insurance companies or other financial institutions, or are guaranteed by a financial institution which has an unsecured rating, or which agreement is itself rated, as of the date of execution thereof, in one of the two highest Rating Categories by two or more Rating Agencies; provided that: (a) The invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days' prior notice; the City hereby agrees to give or to cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; (b) The investment agreement shall state that it is the unconditional and general obligation of, and is not subordinated to any other obligations of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; (c) The City receives an opinion of the domestic counsel (which opinion shall be addressed to the City) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in a form and substance acceptable, and addressed to the City; (d) Such agreement shall require that if during its term the provider's rating by either S&P or Moody's falls below AA- or Aa3, respectively, the provider shall, at its option, within 10 day of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider's books) to the City or a third party acting solely as agent therefor (the "Holder of the Collateral") collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody's to maintain an A rating in an A rated structured financing (with market value approach, or (ii) at the sole expense of the provider, the provider shall prepare written bid specifications for the unconditional assumption of their remaining obligations under the same terms and conditions of the investment agreement, solicit bids from eligible replacement providers whose ratings are at least AA- and Aa3 by S&P and Moody's, respectively, and award the unconditional assumption of the obligations to one of the replacement providers so long as such provider shall be approved by the Issuer. (e) If the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below A- or A3, respectively, the provider must, at the direction of the City, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Issuer, Reso. No. 2002-074 N.C.S. 3 (f) In the event that the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the City, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City. (g) Should the provider become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. ("event of insolvency"), the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City. "Original Districts" means the special assessment districts comprising the Reassessment District. "Permitted Investments" means any of the following investments, so long as they are acquired at Fair Market Value and are authorized under the laws of the State of California for investment of funds by the City (a) Federal Securities; (b) any of the following direct or indirect obligations of the following agencies of the United States of America: (i) direct obligations of the Export-Import Bank; (ii) certificates of beneficial ownership issued by the Farmers Home Administration; (iii) participation certificates issued by the General Services Administration; (iv) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Federal Housing Administration; (v) project notes issued by the United States Department of Housing and Urban Development; and (vi) public housing notes and bonds guaranteed by the United States of America; (c) interest-bearing demand or time deposits (including certificates of deposit) or deposit accounts in federal or state chartered savings and loan associations or in federal or State of California banks (including the Trustee), provided that (i) the unsecured short-term obligations of such commercial bank or savings and loan association shall be rated in the highest short-term rating category by any Rating Agency or (ii) such demand or time deposits shall be fully insured by the Federal Deposit Insurance Corporation; (d) commercial paper rated in the highest short-term rating category by any Rating Agency, issued by corporations which are organized and operating within the United States of America, and which matures not more than 180 days following the date of investment therein; (e) bankers acceptances, consisting of bills of exchange or time drafts drawn on and accepted by a commercial bank whose short-term obligations are rated. in the highest short-term rating category by any Rating Agency or whose long-term obligations Reso. No. 2002-074 N.C.S. 4 are rated A or better by each such Rating Agency, which mature not more than 270 days following the date of investment therein; (f) obligations the interest on which is excludable from gross income pursuant to Section 103 of the Tax Code and which are either (a) rated A or better by any Rating Agency or (b) fully secured as to the payment of principal and interest by Federal Securities; (g) obligations issued by any corporation organized and operating within the United States of America having assets in excess of Five Hundred Million Dollars ($500,000,000), which obligations are rated A or better by any Rating Agency; (h) money market funds (including money market funds for which 'the Trustee, its affiliates or subsidiaries provide investment advisory or other management services) which invest in Federal Securities or which are rated in the highest rating category by any Rating Agency; (i) shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the California Government Code which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the California Government Code, as it may be amended, including but .not limited to the California Asset Management Program (CAMP); (j) the Local Agency Investment Fund of the State of California, created pursuant to Section 16429.1 of the California Government Code, to the extent the Finance Director is authorized to register such investment in the City's name; and (k) Investment Agreements. "Moody's" means Moody's Investors Service, its successors and assigns. "Original Assessment Bonds" means the improvement bonds which were refunded in proceedings of the City in and for the Reassessment District. "Reassessment District" means the City of Petaluma, Reassessment District No. 1996-1 established by the City under the 1984 Act. "S&P" means Standard & Poor's Ratings Services, its successors and assigns. "Tax Code" means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official guidance published, under the Tax Code. Reso. No. 2002-074 N.C.S. 5 Section 2. Payanent on Bonds. Section 6 of the 1996 Resolution is amended to add as the first sentence the following: "The Finance Director of the City shall act as the registrar, transfer, authentication and paying agent for the Bonds." Section 3. Covenants. The entirety of Section 8 of the 1996 Resolution is hereby replaced with the following: Section 8. COVENANTS. The following covenants shall apply to the Bonds: Section 8.01. COLLECTION OF REASSESSMENTS. The City shall comply with all requirements of the Act, the Bond Law and this Resolution to assure the timely collection of the reassessments, including, without limitation, the enforcement of delinquent reassessments. To that end, the following shall apply: (A) Tax Roll Collection. The Reassessments as set forth on the list. thereof on file with the Finance Director together with the interest thereto, shall be payable in annual series corresponding in number and proportionate amount to the number of installments and principal amounts of the Bonds maturing or becoming subject to mandatory prior redemption. An annual proportion of each reassessment shall be payable in each fiscal year preceding the date of maturity or mandatory prior redemption date of each of the Bonds issued sufficient to pay the Bonds when due and such proportion of each reassessment coming due in any year, together with the annual interest thereon, shall be payable in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interests after delinquency as do the general taxes on real property. All sums received from the collection of the reassessments and of the interest and penalties thereon shall be placed in the Redemption Fund. (B) Auditor Record. The Finance Director shall, before the final date on which the Auditor of the County of Sonoma (the "Auditor") will accept the transmission of the Reassessments for the parcels within Reassessment District No. 1996-1 for inclusion on the next tax roll, prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the installments of the Reassessments on the next secured tax roll. The Finance Director is hereby authorized to employ consultants to assist in computing the installments of the reassessments hereunder and in reconciling reassessments billed to amounts received as provided in the subsection (C) of this Section 7.01. (C) Administrative Costs. In addition to any amounts authorized pursuant to section 8682 of the Bond Law to be included with the annual amounts of installments as aforesaid, the City, pursuant to section 8682.1 of the Bond Law may cause to be entered on the assessment roll on which taxes will next become due, opposite each lot or parcel of land within the Reassessment District in the manner set forth in said section 8682, each lot's pro rata share of the estimated annual expenses of the City in connection with the administrative duties thereof for the Bonds, Reso. No. 2002-074 N.C.S. 6 including, but not limited to, the costs of registration, authentication, transfer and compliance with the provisions of Article V hereof.' Delinquent Reassessments shall be subject to foreclosure pursuant to Section 7.02 hereof. Section 8.02. FORECLOSURE. The City hereby covenants with and for the benefit of the Owners of the Bonds that if the Finance Director determines that the total amount of uncured delinquent reassessments for the prior fiscal year for the entire District exceeds five percent (5%) of the total reassessments posted to the County tax roll for the prior fiscal year and if the amount in the special reserve fund is less than the Reserve Requirement, the City will order, and cause to be commenced, and thereafter diligently prosecute an action in the superior court to foreclose the lien of any reassessment or installment thereof which has been billed, but has not been paid, pursuant to and as provided in sections 8830 and 8835, inclusive of the Bond Law and the conditions specified in this Section 8.02. The Finance Director shall notify the City Attorney of any such delinquency of which the Finance Director is aware, and the City Attorney shall commence, or cause to be commenced, such foreclosure proceedings, including collection actions preparatory to the filing of any complaint. The City Attorney is hereby authorized to employ counsel to conduct any such foreclosure proceedings. Section 8 03 PUNCTUAL PAYMENT; COMPLIANCE WITH DOCUMENTS. The City shall punctually pay or cause to be paid the interest and principal to become due with respect to all of the Bonds in strict conformity with the terms of the Bonds and of this resolution, and will faithfully observe and perform all of the conditions, covenants and requirements of this resolution and all. supplemental resolutions. Section 8.04. NO PRIORITY FOR ADDITIONAL OBLIGATIONS. The City covenants that no additional bonds or other obligations shall be issued or incurred having any priority over the Bonds in payment of principal or interest out of the reassessments. Nothing in this resolution shall prohibit the City from issuing bonds or other obligations on a parity with or subordinate to the Bonds and secured by and payable from the reassessments upon such terms as the City may determine. Section 8.05. FURTHER ASSURANCES. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Resolution, and for the better assuring and confirming unto the owners of the Bonds the rights and benefits provided in this Resolution. Section 8.06. PRIVATE ACTIVITY BOND LIlVIITATION. The City shall assure that the proceeds of the Bonds are not soused as to cause the Authority Bonds to .satisfy the private business tests of section 141(b) of the Tax Code or the private loan financing test of section 141(c) of the Tax Code. Section 8.07. FEDERAL GUARANTEE PROHIBITION. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Authority Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Tax Code. Reso. No. 2002-074 N.C.S. 7 Section 8.08. NO ARBITRAGE. The City shall not take, or permit or suffer to be taken by the Finance Director or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Authority Bonds to be "arbitrage bonds" within the meaning of section 148 of the Tax Code. Section 8.09. REBATE REQUIREMENT. The City shall take any and all actions necessary to assure compliance with section 148(fj of the Tax Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Authority Bonds. Earnings on any reserve fund established for the Authority Bonds shall be used for rebate purposes before any application thereof as credits to the Redemption Fund. Section 8.10. YIELD OF THE BONDS. In determining the yield of the Bonds to comply with Sections 8.08 and 8.09 hereof, the City will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the City regarding prepayments of reassessments and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or Bonds redeemed. Section 8.11. AMENDMENT. Without the consent of the owners of the Bonds, the City may amend this Resolution to add, modify or delete provisions if necessary or desirable to assure compliance with Section 148(f) of the Tax Code, or as otherwise required, to assure the exemption from federal income taxation of interest on the Authority Bonds. Section 8.12. MAINTENANCE OF TAX-EXEMPTION. The City shall take all actions necessary to assure the exclusion of interest on the Authority Bonds from the gross income of the owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the date of issuance of the Authority Bonds. Section 8.13. CONTINUING DISCLOSURE. The City hereby covenants and agrees that it will cooperate with the Authority to carry out all of the provisions of the Continuing Disclosure Certificate of the Authority for the Authority Bonds. Reso, No. 2002-074 N.C.S. 8 Section 4. Restatement. To the extent not amended .herein, the 1996 Resolution is hereby restated and continued in full force and effect. Section 5. Effectiveness. This resolution shall be in full force and effect upon the date of its adoption by the Council. The City Clerk is hereby authorized directed to complete the Exhibits hereto and to provide a certification of such completion to the Authority. Under the power and authority conferred upon this Council by the Charter of said City. REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to Council of th~~Chty of Petaluma at Regular) (Adjourned) (Specia~meeting on the day of ..............y....................................., 20......, by the following vote: ~ Attorney AYES: Cader-Thompson, Vice Mayor Healy, Maguire, Moynihan, O'Brien, Mayor Thompson, Torliatt NOES: None ABSENT: N e ATTEST: City Clerk Mayor '~°F Council File Res. Nn.........2002-.07.4.......N.C.S.