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HomeMy WebLinkAboutPCDSA Resolution 2014-04 12/01/2014Resolution No. 2014-04 of the Petaluma Community Development Successor Agency REQUESTING OVERSIGHT BOARD APPROVAL OF THE ISSUANCE OF TAX ALLOCATION REFUNDING BONDS TO REFINANCE OUTSTANDING BONDS OF THE FORMER PETALUMA COMMUNITY DEVELOPMENT COMMISSION, AUTHORIZING THE ISSUANCE OF THE BONDS, APPROVING THE FORM OF AND EXECUTION AND DELIVERY OF SUPPLEMENTS TO INDENTURE AND OTHER DOCUMENTS, AND PROVIDING OTHER MATTERS RELATING TO THE ISSUANCE OF THE BONDS WHEREAS, the Petaluma Community Development Commission (the "Former Commission") was a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the Health and Safety Code of the State (the "Law"); and WHEREAS, the Former Commission issued its $23,630,000 aggregate principal amount of Petaluma Community Development Commission Petaluma Community Development Project Tax Allocation Bonds, Series 2003A (the "2003 Bonds") for the purpose of financing and refinancing portions of the Petaluma Community Development Project; and WHEREAS, the Former Commission issued its $18,355,000 aggregate principal amount of Petaluma Community Development Commission Petaluma Community Development Project Refunding Tax Allocation Bonds, Series 2005A (the "2005 Bonds") for the purpose of financing portions of the Petaluma Community Development Project; and WHEREAS, the Former Commission issued its $31,825,000 aggregate principal amount of Merged Project Area Subordinate Tax Allocation Bonds, Series 2007 (the "2007 Bonds") for the purpose of financing and refinancing redevelopment activities with respect to its merged Project Areas pursuant to an Indenture, dated as of April 1, 2007, by and between the Former Commission and the U.S. Bank National Association, as trustee (the "Master Indenture"); and WHEREAS, as of November 1, 2014, the 2003 Bonds are outstanding in the principal amount of $19,870,000; and WHEREAS, as of November 1, 2014, the 2005 Bonds are outstanding in the principal amount of $16,565,000; and WHEREAS, Assembly Bill Xl 26, effective June 29, 2011, together with AB 1484, effective June 27, 2012 ("AB 1484") resulted in the dissolution of the Former Commission as of February 1, 2012, and the vesting in this Petaluma Community Development Successor Agency (the "Successor Agency") of all of the authority, rights, powers, duties and obligations of the Former Commission; and PCDSA Resolution No. 2014-04 Page 1 WHEREAS, AB 1484, among other things, amended the Law to authorize the Successor Agency to issue bonds pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code (the "Refunding Law") for the purpose of achieving debt service savings within the parameters set forth in Section 34177.5(a)(1) of the Health and Safety Code (the "Statutory Minimum Savings"); and WHEREAS, pursuant to Section 34179, an oversight board (the "Oversight Board") has been established for the Successor Agency; and WHEREAS, the Successor Agency caused an independent financial advisor, Steven Gortler, to prepare an analysis of the potential debt service savings prepared by Steven Gortler demonstrating that: (1) (1) the total interest cost to maturity on the Series 2014 Bonds plus the principal amount of the Series 2014 Bonds will not exceed the total remaining interest cost to maturity on the 2003 Bonds plus the remaining principal of the 2003 Bonds, and (ii) the principal amount of the Series 2014 Bonds will not exceed the amount required to defease the 2003 Bonds, to establish customary debt service reserves, and to pay related costs of issuance; and (2) (i) the total interest cost to maturity on the Series 2015 Bonds plus the principal amount of the Series 2015 Bonds will not exceed the total remaining interest cost to maturity on the 2005 Bonds plus the remaining principal of the 2005 Bonds, and (ii) the principal amount of the Series 2015 Bonds will not exceed the amount required to defease the 2005 Bonds, to establish customary debt service reserves, and to pay related costs of issuance (the "Debt Service Savings Analysis") that will accrue to the Successor Agency and to applicable taxing entities as a result of the refunding of the 2003 Bonds and the 2005 Bonds, based on estimated interest rates as of the date of the Debt Service Savings Analysis; and WHEREAS, the Successor Agency has reviewed and wishes to approve the forms of and authorize the execution and delivery of (i) a Second Supplement to Indenture (the "Second Supplement") relating to the Master Indenture and providing for the issuance of the Series 2014 Bonds (as herein defined), (ii) a Third Supplement to Indenture (the "Third Supplement') relating to the Master Indenture and providing for the issuance of the Series 2015 Bonds (as herein defined) (iii) an Escrow Deposit and Trust Agreement to be executed by the Successor Agency and U.S. Bank National Association, as successor trustee for the 2003 Bonds, to be dated as of the date of the issuance and delivery of the Series 2014 Bonds (the "2003 Bonds Escrow Agreement'), and (iv) an Escrow Deposit and Trust Agreement to be executed by the Successor Agency and U.S. Bank National Association, as successor trustee for the 2005 Bonds, to be dated as of the date of the issuance and delivery of the Series 2015 Bonds (the "2005 Bonds Escrow Agreement' and together with the "2003 Bonds Escrow Agreement," the "Escrow Agreements"); and WHEREAS, the Successor Agency wishes to sell the Series 2014 Bonds to TPB Investments, Inc., a wholly owned subsidiary of Western Alliance Bank, an Arizona corporation (the "Series 2014 Bonds Purchaser"), pursuant to a Bond Purchase and Rate Lock Agreement (the "Series 2014 Bond Purchase Agreement'); and WHEREAS, the Successor Agency wishes to sell the Series 2015 Bonds to JPMorgan Chase Bank, N.A. (the "Series 2015 Bonds Purchaser"), pursuant to a Forward Delivery Bond Purchase Agreement (the "Series 2015 Bond Purchase Agreement' and together with the Series 2014 Bond Purchase Agreement, the "Bond Purchase Agreements"); and PCDSA Resolution No. 2014-04 Page 2 WHEREAS, the Successor Agency has reviewed and wishes to approve the forms of and authorize the execution and delivery of the Second Supplement, the Third Supplement, the Escrow Agreements and the Bond Purchase Agreements; and WHEREAS, the Successor Agency requests that the Oversight Board make certain determinations described below on which the Successor Agency will rely in undertaking the refunding proceedings; and WHEREAS, the Successor Agency requests that the Oversight Board approve the issuance of the Series 2014 Bonds (as defined below) and the Series 2015 Bonds (as defined below) by the Successor Agency, as authorized by Sections 34177.5(g) and 34180(b) of the Health and Safety Code; NOW, THEREFORE, BE IT RESOLVED by the Petaluma Community Development Successor Agency, as follows: Section 1. Determination That Savings will be achieved through Refunding. Based on the conclusions set forth in the Debt Service Savings Analysis, the Successor Agency has determined that it will achieve debt service savings that will exceed the Statutory Minimum Savings, and will achieve savings of at least 3%, on a net present value basis, of the principal amount of the 2003 Bonds and the 2005 Bonds being refunded (the "Savings Parameters"). The refunding of the 2003 Bonds and the 2005 Bonds will be accomplished through the issuance pursuant to the Law and the Refunding Law of its "Petaluma Community Development Successor Agency Merged Project Area Tax Allocation Refunding Bonds, Series 2014" (the "Series 2014 Bonds") and its "Petaluma Community Development Successor Agency Merged Project Area Tax Allocation Refunding Bonds, Series 2015" (tile "Series 2015 Bonds"), respectively. The Successor Agency directs that the 2003 Bonds and the 2005 Bonds will only be refunded with the proceeds of the Series 2014 Bonds and the Series 2015 Bonds, respectively, if the Savings Parameters attributable thereto are met. Section 2. Approval of Issuance of the Bonds. The Successor Agency hereby authorizes and approves the issuance of the Series 2014 Bonds and the Series 2015 Bonds under the Law and the Refunding Law, subject to the authorization to proceed from the Oversight Board, provided that the Savings Parameters are satisfied. Section 3. Supplements to Master Indenture. The Successor Agency hereby approves the Second Supplement prescribing the terms and provisions of the Series 2014 Bonds, the Third Supplement prescribing the terms of the Series 2015 Bonds and the application of the proceeds of such bonds to refund the 2003 Bonds and 2005 Bonds, respectively. Each of the Mayor, as the Chair and presiding officer of the Successor Agency, the City Manager of the City of Petaluma, as the chief administrative officer of the Successor Agency, and the Finance Director of the City of Petaluma (each, an "Authorized Officer"), is hereby authorized and directed to execute and deliver, and the City Clerk, as the secretary of the Successor Agency, is hereby authorized and directed to attest to, the Second Supplement and the Third Supplement for and in the name and on behalf of the Successor Agency, in substantially the forms thereof on file with the City Clerk, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer shall approve, such approval to be conclusively evidenced by the execution and delivery of the Second Supplement and the Third Supplement. The Successor Agency hereby authorizes the delivery and performance of the Second Supplement and the Third Supplement. PCDSA Resolution No. 2014-04 Page 3 Section 4. Approval of Escrow Agreements. The Successor Agency hereby approves the Escrow Agreements and each Authorized Officer is hereby authorized and directed to execute and deliver the Escrow Agreements for and in the name and on behalf of the Successor Agency, in substantially the forms thereof on file with the City Clerk, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer shall approve, such approval to be conclusively evidenced by the execution and delivery of the Escrow Agreements. The Successor Agency hereby authorizes the delivery and performance of the Escrow Agreements. Section 5. Bond Purchase Agreements. Subject to approval by the Oversight Board and either review and approval or failure to request review by the California Department of Finance, the Successor Agency hereby authorizes and directs an Authorized Officer of the Successor Agency to accept an offer to purchase the Series 2014 Bonds from the Series 2014 Bonds Purchaser and an offer to purchase the Series 2015 Bonds from the Series 2015 Bonds Purchaser. The Successor Agency hereby approves the respective forms of the Series 2014 Bond Purchase Agreement and the Series 2015 Bond Purchase Agreement on file with the City Clerk, as secretary of the Successor Agency, with such additions thereto and changes therein as an Authorized Officer deems necessary, desirable or appropriate upon consultation with the financial advisor and bond counsel to the Successor Agency, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions or changes, provided that no such addition or change may cause the Statutory Savings Parameters not to be satisfied. The Successor Agency hereby authorizes the delivery and performance of the Series 2014 Bond Purchase Agreement and the Series 2015 Bond Purchase Agreement. Section 6. Agreements with Financial Advisor, Bond Counsel and Placement Agent. The Successor Agency approves the agreements with Steven Gortler, as financial advisor (the "Financial Advisor'), approves the engagement of Jones Hall, A Professional Law Corporation, as bond counsel ("Bond Counsel"), approves the appointment of Southwest Securities, Inc., as placement agent, and approves execution and performance of agreements with said firms, in the respective forms on file with the City Clerk. Section 7. Surety Bond. The Authorized Officers, each acting alone, are hereby authorized and directed to obtain a reserve fund surety bond for each of the Series 2014 Bonds and the Series 2015 Bonds if it is determined, upon consultation with the Financial Advisor, that such reserve fund surety bonds will reduce the respective true interest cost for the Series 2014 Bonds and the Series 2015 Bonds or upon consultation with the Financial Advisor and Bond Counsel are determined to be required pursuant to the terms and conditions of the Master Indenture. The Authorized Officers, each acting alone, are hereby authorized and directed to execute any legal documents or certificates required in connection with such reserve fund surety bonds. Section 8. Oversight Board Approval of the Issuance of the Bonds; Certain Determinations. The Successor Agency hereby requests the Oversight Board to approve the issuance of the Series 2014 Bonds and the Series 2015 Bonds pursuant to this Resolution and the Second Supplement and the Third Supplement, and to make certain determinations. Section 9. Filing of this Resolution. The Secretary of the Successor Agency is hereby authorized and directed to file a certified copy of this Resolution and the Debt Service Savings Analysis, with the Oversight Board, and, as provided in §34180(j) of the Health and PCDSA Resolution No. 2014-04 Page 4 Safety Code, with the Sonoma County Administrative Officer, the Sonoma County Auditor - Controller and the California Department of Finance. Section 10. Official Actions. The Authorized Officers and any and all other officers of the Successor Agency are hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to do any and all things and take any and all actions, which they, or any of them, may deem necessary or advisable in obtaining the requested approvals by the Oversight Board and the California Department of Finance. The Authorized Officers and any and all other officers of the Successor Agency are authorized and directed, on behalf of the Successor Agency, to execute and deliver any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the Series 2014 Bonds and the Series 2015 Bonds, the refunding of the 2003 Bonds and the 2005 Bonds, and the consummation of the transactions as described herein. Whenever in this Resolution any officer of the Successor Agency is directed 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 in the case such officer is absent or unavailable. Section 11. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. REFERENCE: AYES: NOES: ABSENT: ABSTAIN: ATTEST: I hereby certify the Foregoing Resolution was introduced and adopted by the Petaluma Community Development Successor Agency at a Regular Meeting on the 111 of December, 2014, by the following vote: Barrett, Glass, Harris, Healy, Kearney, Miller None Albertson None Recording Secretary V r.. Chair Approved as to Form r General.Counsel PCDSA Resolution No. 2014-04 Page 5