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HomeMy WebLinkAboutOSB Resolution 2017-03 04/26/2017Resolution No. 2017 -03 Petaluma Oversight Board to the Petaluma Community Development Successor Agency RESOLUTION OF THE OVERSIGHT BOARD FORMED PURSUANT TO HEALTH AND SAFETY CODE SECTION 34179 DIRECTING THE PETALUMA COMMUNITY DEVELOPMENT SUCCESSOR AGENCY TO COMMENCE PROCEEDINGS FOR THE REFUNDING OF OUTSTANDING OBLIGATIONS OF THE FORMER PETALUMA COMMUNITY DEVELOPMENT COMMISSION, APPROVING ISSUANCE OF REFUNDING BONDS, AND MAKING CERTAIN DETERMINATIONS AND PROVIDING OTHER MATTERS RELATING THERETO WHEREAS, pursuant to Section 34172(a) of the California Health and Safety Code (all Section references hereinafter being to such Code), the Petaluma Community Development Commission (the "Former Commission ") has been dissolved and no longer exists as a public body, corporate and politic, and pursuant to Section 34173, the City of Petaluma (the "City") has become the successor entity to the Former Commission (in such capacity, the "Successor Agency"); WHEREAS, prior to its dissolution, the Former Commission issued its $31,825,000 aggregate principal amount of Petaluma Community Development Commission Merged Project Area Subordinate Tax Allocation Bonds, Series 2007 (the "2007 Bonds ") pursuant to an Indenture dated as of April 1, 2007 (the "Master Indenture ") by and between the Former Commission and U.S. Bank National Association for the purpose of financing and refinancing portions of projects in the Merged Project Area; WHEREAS, also prior to its dissolution, the Former Commission issued its $11,369,000 aggregate principal amount of Petaluma Community Development Commission Merged Project Area Subordinate Tax Allocation Bonds, Series 2011 (the "2011 Bonds ") pursuant to the Master Indenture and a supplement thereto for the purpose of financing portions of projects in the Merged Project Area; WHEREAS, Section 34177.5 authorizes the Successor Agency to undertake proceedings for the refunding of outstanding bonds and other obligations of the Former Commission, subject to the conditions precedent contained in Section 34177.5; WHEREAS, pursuant to Section 34179, this oversight board (the "Oversight Board ") has been established for the Successor Agency; WHEREAS, the Successor Agency has caused an analysis (the "Debt Service Savings Analysis ") to be made setting forth the potential savings that will accrue to the Successor Agency and to applicable taxing entities as a result of refunding the 2007 Bonds and the 2011 Bonds, and has presented the Debt Service Savings Analysis to the Oversight Board for its consideration and direction; OSB Resolution No. 2017 -03 Page 1 WHEREAS, the Successor Agency desires to achieve debt service savings on the 2007 Bonds and 2011 Bonds and to that end has requested that the Oversight Board direct the Successor Agency to undertake refunding proceedings for the 2007 Bonds and 2011 Bonds by issuance of Tax Allocation Refunding Bonds, Series 2017 (the "Refunding Bonds "), it being understood that the Successor Agency intends to act upon such direction by undertaking consideration of a resolution of the Board of the Successor Agency approving such refunding, and understanding further that such direction by the Oversight Board will enable the Successor Agency to recover its related costs in connection with the refunding proceedings, as authorized by Section 34177.5(1); WHEREAS, the Refunding Bonds are to be issued on parity with the Petaluma Community Development Successor Agency Tax Allocation Refunding Bonds, Series 2015A, issued in the original principal amount of $19,545,000 and currently outstanding in the principal amount of $18,600,000; and on parity with the Petaluma Community Development Successor Agency Tax Allocation Refunding Bonds, Series 2015B, issued in the original principal amount of $16,060,000 and currently outstanding in the principal amount of $14,745,000; WHEREAS, in connection with the Refunding Bonds the Successor Agency has caused the preparation of a Fourth Supplement to the Master Indenture (the "Fourth Supplement ") providing for the issuance of the Refunding Bonds and an Escrow Agreement (the "Escrow Agreement ") providing for the defeasance of the 2007 Bonds and 2011 Bonds, which Fourth Supplement and Escrow Agreement are on file with the Secretary of the Oversight Board; WHEREAS, the Successor Agency has further requested that the Oversight Board make certain determinations upon which the Successor Agency may rely in undertaking the refunding proceedings, and the Oversight Board herein makes such determinations as set forth below; WHEREAS, Sections 34177.5(0 and 34180(b) require the Oversight Board to approve issuance of the Refunding Bonds (as defined below) for the purpose of refunding the 2007 Bonds and 2011 Bonds; NOW, THEREFORE, BE IT RESOLVED that the Oversight Board, formed pursuant to Health and Safety Code Section 34179 to oversee the Petaluma Community Development Successor Agency, hereby finds, resolves, and determines, as follows: The foregoing recitals are true and correct. 2. The Successor Agency has filed with the Oversight Board a Debt Service Savings Analysis (the "Debt Service Savings Analysis "), which is attached hereto as Exhibit A, and the Oversight Board hereby acknowledges that the Debt Service Savings Analysis demonstrates the following: (i) total principal plus interest payments to maturity on the Refunding Bonds will not exceed total remaining principal plus interest payments to maturity on the 2007 Bonds and 2011 Bonds, and OSB Resolution No. 2017 -03 Page 2 (ii) the principal amount of the Refunding Bonds will not exceed the amount required to defease the 2007 Bonds and 2011 Bonds, to establish customary debt service reserves, and to pay related costs of issuance; (iii) based on estimated interest rates as of the date of the Debt Service Savings Analysis, the Debt Service Savings Analysis concludes that potential debt service savings satisfies the savings requirements of Section 34177.5(a). 3. The Oversight Board hereby directs the Successor Agency to undertake proceedings to refund the 2007 Bonds and 2011 Bonds, subject to its discretion and subject to a final determination that said refunding shall in all respects comply with the debt service savings requirements of Section 34177.5(a). 4. The Oversight Board hereby approves issuance of the Refunding Bonds, and finds that such issuance is in the financial interests of the taxing entities, so long as the limitations set forth in Section 34177.5(a)(1) are satisfied with respect to lower debt service on the Refunding Bonds compared to scheduled debt service on the 2007 Bonds and the 2011 Bonds, as well as the limitations set forth in Section 34177.5(h). S. The Oversight Board hereby approves the Fourth Supplement prescribing the terms and provisions of the Refunding Bonds and the execution thereof by the Successor Agency, with such changes therein, deletions therefrom and additions thereto as the Successor Agency shall deem necessary and appropriate to accomplish the purpose for which the Refunding Bonds are issued and within the requirements of Section 34177.5. 6. The Oversight Board hereby approves the Escrow Agreement and the execution thereof by the Successor Agency, with such changes therein, deletions therefrom and additions thereto as the Successor Agency shall deem necessary and appropriate to accomplish the defeasance of the 2007 Bonds and 2011 Bonds. 7. The Oversight Board hereby makes the following determinations upon which the Successor Agency may rely in its issuance of the Refunding Bonds: (a) The Successor Agency is authorized, as provided in Section 34177.5 (f), to recover its costs related to the issuance of the Refunding Bonds from the proceeds of the Refunding Bonds, including the cost of reimbursing the City for administrative staff time spent with respect to the authorization, issuance, sale and delivery of the Refunding Bonds; (b) The application of proceeds of the Refunding Bonds by the Successor Agency to the refunding of the 2007 Bonds and the 2011 Bonds, respectively, as well as the funding of a reserve fund for the Refunding Bonds, and payment by the Successor Agency of costs of issuance of thereof, as provided in Section 34177.5 (a), shall be implemented by the Successor Agency promptly upon delivery of the Refunding Bonds to their initial purchaser, notwithstanding Section 34177.3 or any other provision of law to the contrary, without the further approval of the Oversight Board, the California Department of Finance, the Sonoma County Auditor - Controller or any other person or entity other than the Successor Agency; and OSB Resolution No. 2017 -03 Page 3 (c) The Successor Agency shall be entitled to receive its full allocation of $250,000 Administrative Cost Allowance under Section 34183(a) (3) without any deductions with respect to continuing costs related to the Refunding Bonds, such as trustee's fees, continuing disclosure fees, and auditing and fiscal consultant fees (collectively, "Continuing Costs of Issuance "), and such Continuing Costs of Issuance shall be payable from property tax revenues pursuant to Section 34183. 8. The Oversight Board hereby authorizes the Successor Agency to authorize and direct, for and in the name and on behalf of the Successor Agency, Authorized Officers 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 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 Refunding Bonds, the refunding of the 2007 Bonds and the 2011 Bonds, and the consummation of the transactions as described herein. REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Petaluma Oversight Board to the Petaluma Community Development Successor Agency at a Regular Meeting on the 26th of April, 2017, by the following vote: AYES: Duiven, Chair Healy, Herrington, Vice Chair Rabbitt, Scharer NOES: None ABSENT: Davis, Jolley ABSTAIN: None ATTEST: Recording Secretary Chair OSB Resolution No. 2017 -03 Page 4