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HomeMy WebLinkAboutRESO 979520181101 th 0140193 Resolution No. 9795 A Resolution of the City of Palo Alto Approving, Authorizing and Directing Execution of Certain Lease Financing Documents, Approving a Preliminary Official Statement, Declaring the Intention to Reimburse Expenditures, and Authorizing and Directing Certain Related Actions WHEREAS, the City desires to finance the costs of acquiring and constructing a parking WHEREAS, in order to finance the California Avenue Parking Garage, the City has determined to provide for the execution and delivery of City of Palo Alto 2018 Certificates of WHEREAS, staff has recommended that the City cause the Certificates to be executed and delivered in a single series the interest on which would be exempt from taxation under federal tax law; however, in order to ensure that the financing is ultimately structured in the most cost­effective manner, the City Council wishes to delegate to the City Manager or a designee appointed by any such officer (e.g. Administrative Services Director) the final be executed and delivered a second series of certificates of participation the interest on which would be subject to taxation under federal tax law; WHEREAS, staff has recommended that the City cause the Certificates to be sold on a competitive basis; however, in order to ensure that the financing is ultimately structured in the most cost­effective manner, the City Council wishes to delegate to the City Manager or a designee appointed by the City Manager (e.g. Administrative Services Director) the final of the Certificates on a negotiated basis; WHEREAS, the City further proposes to lease a City asset, initially the Rinconada Library, to the Palo Alto Public Improvement Corporation, a nonprofit public benefit corporation duly formed, organized, operating and acting pursuant to the laws of the State of California (the as les back to the City under a Lease Agreement, by and between the City, as lessee, and the he City of semi­ WHEREAS, as described in the Property Lease and the Lease Agreement, upon the construction and the substantial readiness of the California Avenue Parking Garage for use and occupancy by the City, as shall be evidenced by a certificate of completion delivered by the City, the California Avenue Parking Garage will be the Leased Property subject to the Property Lease and the Lease Agreement, and the Rinconada Library will be released; DocuSign Envelope ID: 43E9E150-1B89-4509-8054-69767CED8DB4 20181101 th 0140193 WHEREAS, the City further proposes to cause the Corporation to assign its right to and the Trustee, and in consideration of such assignment the Trustee has agreed to execute and deliver the Certificates, each evidencing a direct, undivided fractional interest in the Lease Payments, in accordance with a Trust Agreement to be executed by and among the Trustee, the WHEREAS, pursuant to the City's authorization, Quint & Thimmig LLP, as disclosure counsel to the City, has prepared and presented to the City a form of preliminary official statement containing information material to the offering and sale of the Certificates (the "Preliminary Official Statement"); WHEREAS, the documents described below have been filed with the City, the members of the City Council, with the aid of its staff, have reviewed said documents, and it is in the public interest and for the public benefit that the City authorize and direct execution of such documents; WHEREAS, United States Income Tax Regulations section 1.150­2 provides generally that proceeds of tax­exempt obligations are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of issuance of such obligations unless certain procedures are followed, one of which is a requirement that prior to the payment of any such expenditure, the issuer declares an intention to reimburse such expenditure; WHEREAS, it is in the public interest and for the public benefit that the City declares its official intent to reimburse expenditures related to the acquisition and construction of the California Avenue Parking Garage; and WHEREAS, pursuant to Government Code Section 5852.1, which became effective on January 1, 2018 by the enactment of Senate Bill 450, certain information relating to the Certificates is set forth in Appendix A attached to this Resolution, and such information is hereby disclosed and made public. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE, as follows: The below­enumerated documents be and are hereby approved, and the Mayor, the City Manager, the Administrative Services Director or a designee appointed by any such officer (in each case, an "Authorized Officer") are hereby separately authorized and directed to execute said documents, with such changes, insertions and omissions as may be approved by such official, and the City Clerk is hereby authorized and directed to attest to such Authorized Officer's signature: the Property Lease, relating to the lease of the Leased Property by the City to the Corporation, by and between the City, as lessor, and the Corporation, as lessee; the Lease Agreement, relating to the lease of the Leased Property by the Corporation back to the City, between the Corporation, as lessor, and the City, as lessee; DocuSign Envelope ID: 43E9E150-1B89-4509-8054-69767CED8DB4 20181101 th 0140193 the Trust Agreement, by and among the Corporation, the City and the Trustee, relating to the execution and delivery of the Certificates, evidencing the fractional interests of the owners thereof in the Lease Payments to be made by the City under the Lease Agreement; and a continuing disclosure certificate under which the City will agree to provide certain information on a continuing basis. The Council hereby authorizes the execution and delivery of the Certificates for the purpose of providing funds to finance the acquisition and construction of the California Avenue Parking Garage. The aggregate principal amount of the Certificates shall not exceed $50,000,000, the true interest cost of the Certificates may not exceed 5.0% and the The City Manager or a designee appointed by any such officer (e.g. Administrative Services Director) is hereby authorized and directed to determine whether it is desirable and in certificates of participation the interest on which would be subject to taxation under federal tax law to finance all or a portion of the California Avenue Parking Garage, either in lieu of or in addition to the tax­exempt series. If the City Manager or a designee appointed by any such officer determines that a second series should be executed and delivered, all references to the Certificates in this resolution shall refer to both series and the City Council hereby authorizes any necessary changes to the documents approved by this Resolution to reflect such second series. The Council hereby authorizes and directs the competitive public sale of the Certificates. The Certificates shall be sold in accordance with the Official Notice of Sale in substantially the form on file with the City, together with any changes therein or additions thereto deemed advisable by an Authorized Officer. The Authorized Officers are hereby authorized and directed to accept the best bid for the sale of the Certificates, as determined in accordance with the Notice of Sale. Pursuant to Section 53692 of the Government Code, Jones Hall, as bond counsel, is hereby authorized and directed to cause a Notice of Intention, in form and substance acceptable to said firm, to be published in the manner required by applicable law. The City Manager or a designee thereof (e.g. Administrative Services Director) is hereby counsel, to determine whether it is desirable and the Certificates on a negotiated basis, to select an underwriter to purchase the Certificates and to negotiate a purchase contract with the underwriter. The Authorized Officers are hereby separately authorized and directed to execute a purchase agreement with the underwriter as long as the Certificates will meet the parameters set forth in Section 2. Each Authorized Officer, the City Clerk and all other officials of the City are hereby authorized and directed to execute such other agreements, documents and certificates as may be necessary to effect the purposes of this resolution and the lease financing and refinancing herein authorized, and to revise the identity of the initial Leased Property as necessary in order to accomplish the purposes of this Resolution. Whenever in this resolution any officer of the DocuSign Envelope ID: 43E9E150-1B89-4509-8054-69767CED8DB4 20181101 th 0140193 City is authorized 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 shall be absent or unavailable. The City hereby approves the Preliminary Official Statement describing the advisor, PFM Financial Advisors LLC, is hereby authorized to distribute the Preliminary Official Statement in connection with the sale of the Certificates. An Authorized Officer is hereby authorized and directed to (a) execute and deliver a certificate deeming the Preliminary Official Statement to be final as of its date within the meaning of Rule 15c2­12 of the Securities Exchange Act of 1934 and (b) approve any changes in or additions to cause such Preliminary Official Statement to be put in final form. The Authorized Officers are separately authorized to approve corrections and additions to the Preliminary Official Statement by supplement or amendment thereto, or otherwise as appropriate, provided that any such corrections or additions shall be necessary to cause the information contained therein to conform with facts material to the Certificates, or to the proceedings of the City. The Final Official Statement, when prepared, is approved for distribution by the purchaser of the Certificates in connection with the offering and sale of the Certificates. The City hereby declares that it reasonably expects (i) to pay certain costs of acquiring and constructing the California Avenue Parking Garage prior to the date of execution and delivery of the Certificates, and (ii) to use a portion of the proceeds of the Certificates for reimbursement of expenditures related to the acquisition and construction of the California Avenue Parking Garage that are paid before the date of execution and delivery of the Certificates. The Mayor, the City Manager and the Administrative Services Director are separately authorized and directed to cause the Preliminary Official Statement to be brought Final Official Statement, dated as of the date of the sale of the Certificates, and the City Manager and Administrative Services Director are separately authorized and directed 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 Certificates, true and correct in all material respects and that the Final Official Statement did not, on the date of sale of the Certificates, and does not, as of the date of delivery of the Certificates, contain any untrue statement of a material fact with respect to the City or omit to state material facts with respect to the City required to be stated where necessary to make any statement made therein not misleading in the light of the circumstances under which it was made. The Mayor, the City Manager or the Administrative Services Director shall take such further actions prior to the signing of the Final Official Statement as are deemed necessary or appropriate to verify the accuracy thereof. The City hereby approves the selection of Jones Hall, A Professional Law Corporation, as bond counsel, Quint & Thimmig LLP, as disclosure counsel, and PFM Financial Advisors LLC, as financial advisor. Each Authorized Officer and other appropriate officials of the DocuSign Envelope ID: 43E9E150-1B89-4509-8054-69767CED8DB4 DocuSign Envelope ID: 43E9E150-1 B89-4509-8054-69767CED8DB4 City are authorized to execute a professional services agreement with such firms in connection with the proposed financing, and the execution of such agreements on behalf of the City shall be conclusive evidence of such approval. 12. This resolution shall take effect immediately upon its adoption. INTRODUCED AND PASSED: October 15, 1018 AYES: DUBOIS, FILSETH, HOLMAN, KOU, SCHARFF, TANAKA NOES: FINE, WOLBACH ABSENT: KNISS ABSTENTIONS: ATIEST: ~Ahs~ City Clerk APPROVED AS TO FORM: ~DocuSigned by: flMl1t s~r 3go1139553s11 on City Attorney Jones Hall, A Professional Law Corporation G, ........ "' By: ~:::!~47~~Acl Christopher K. Lynch, Jones Hall, A Professional Law Corporation Bond Counsel 20181101 th 0140193 ~~ Mao APPROVED: City Manager Director of Public Works Director of Administrative Services APPENDIX A Government Code Section 5852.1 Disclosure The following information consists of estimates that have municipal advisor which has been represented by such party to have been provided in good faith: True Interest Cost of the Certificates: All Tax­Exempt ­ 3.8354% and 75% Tax­Exempt and 25% Taxable ­ 3.9698% Finance Charge of the Certificates (Sum of all fees/charges paid to third parties): All Tax­ Exempt ­ $410,485 and 75% Tax­Exempt and 25% Taxable ­$417,385 Net Proceeds to be Received (net of finance charges, reserves and capitalized interest, if any): $39,500,000.00 Total Payment Amount Through Maturity: All Tax­Exempt ­ $72,441,083 and 75% Tax­ Exempt and 25% Taxable ­$73,548,855 The foregoing estimates constitute good faith estimates only. They assume either one series of tax­exempt bonds or two series of Certificates are sold, one tax­exempt (75% of the principal amount) and one taxable (25% of the principal amount). The principal amount of the Certificates, the true interest cost of the Certificates, 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 Certificates being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Certificates sold being different from the estimated amount used for purposes of such estimates, (c) the actual amortization of the Certificates being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Certificates being different than those estimated for purposes of such the mix of tax­ exempt and taxable Certificates), or a combination of such factors. The actual date of sale of the Certificates and the actual principal amount of Certificates sold will be determined by the City based on the timing of the need for proceeds of the Certificates and other factors. The actual interest rates borne by the Certificates will depend on market interest rates at the time of sale thereof. The actual amortization of the Certificates 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. 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