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HomeMy WebLinkAboutRESO 9941 20210208 tlh 0140214 Resolution No. 9941 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 public safety building located at 250 Sherman Avenue (the “Public Safety Building”); WHEREAS, in order to finance the Public Safety Building, the City has determined to provide for the execution and delivery of City of Palo Alto 2021 Certificates of Participation (Public Safety Building) (the “Certificates”); 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 cost‐ effective manner, the City Council wishes to delegate to the City Manager or the Administrative Services Director the final determination of whether it is desirable and in the City’s best interest to have the City cause to 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 cost‐effective manner, the City Council wishes to delegate to the City Manager or the Administrative Services Director the final determination of whether it is desirable and in the City’s best interest to sell the Certificates on a negotiated basis; WHEREAS, the City further proposes to lease a City asset, initially City Hall, located at 250 Hamilton Avenue (or another property identified by staff) (the “Leased Property”), 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 “Corporation”), under a Property Lease by and between the City, as lessor, and the Corporation, as lessee (the “Property Lease”), and to cause the Corporation to lease the Leased Property back to the City under a Lease Agreement, by and between the City, as lessee, and the Corporation, as lessor (the “Lease Agreement”), in consideration of the payment by the City of semi‐annual lease payments (the “Lease Payments”); WHEREAS, the City further proposes to cause the Corporation to assign its right to receive the Lease Payments to U.S. Bank National Association, as trustee (the “Trustee”), under an Assignment Agreement (the “Assignment Agreement”), by and between the Corporation and the Trustee, and in consideration of such assignment the Trustee has agreed to execute and deliver DocuSign Envelope ID: 1A4FAA2E-A6AC-49D6-8FF3-9742B1F8B388 -2- 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 City and the Corporation (the “Trust Agreement”); 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 1.150‐2 provides generally that proceeds of tax‐exempt 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 Public Safety Building; and WHEREAS, pursuant to Government Code Section 5852.1, 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: 1. The below‐enumerated 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, acting alone, 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: (a) 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; (b) 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; (c) 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 DocuSign Envelope ID: 1A4FAA2E-A6AC-49D6-8FF3-9742B1F8B388 -3- interests of the owners thereof in the Lease Payments to be made by the City under the Lease Agreement; and (d) a continuing disclosure certificate under which the City will agree to provide certain information on a continuing basis. 2. 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 Public Safety Building. The aggregate principal amount of the Certificates shall not exceed $120 million, the true interest cost of the Certificates may not exceed 3.5% and the Underwriter’s discount may not exceed 2.5% of the principal amount of the Certificates. 3. The City Manager or the Administrative Services Director is hereby authorized and directed to determine whether it is desirable and in the City’s best interest for the City to cause to be executed and delivered a second series of certificates of participation the interest on which would be subject to taxation under federal tax law to finance all or a portion of the Public Safety Building, either in lieu of or in addition to the tax‐exempt series. If the City Manager or Administrative Services Director 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. 4. 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 the Administrative Services Director is hereby authorized and directed, following consultation with the City’s municipal advisor and bond counsel, to determine whether it is desirable and in the City’s best interest for the City to sell 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. 5. The City hereby approves the Preliminary Official Statement describing the Certificates, in the form on file with the Director of Administrative Services. The City’s municipal 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 DocuSign Envelope ID: 1A4FAA2E-A6AC-49D6-8FF3-9742B1F8B388 -4- Statement to be final as of its date within the meaning of Rule 15c2‐12 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. 6. 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. 7. The Authorized Officers are separately authorized and directed to cause the Preliminary Official Statement to be brought into the form of a final official statement (the “Final Official Statement”) and to execute said 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 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. 8. The City hereby declares that it reasonably expects (i) to pay certain costs of acquiring and constructing the Public Safety Building 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 Public Safety Building that are paid before the date of execution and delivery of the Certificates. 9. 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 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. 10. 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 DocuSign Envelope ID: 1A4FAA2E-A6AC-49D6-8FF3-9742B1F8B388 -5- 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 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. This resolution shall take effect immediately upon its adoption. INTRODUCED AND PASSED: February 1, 2021 AYES: CORMACK, DUBOIS, FILSETH, KOU, STONE NOES: BURT, TANAKA ABSENT: ABSTENTIONS: ATTEST: APPROVED: City Clerk Mayor APPROVED AS TO FORM: Jones Hall, City Manager A Professional Law Corporation By: Christopher K. Lynch, Jones Hall, A Professional Law Corporation Bond Counsel Director of Public Works Director of Administrative Services City Attorney DocuSign Envelope ID: 1A4FAA2E-A6AC-49D6-8FF3-9742B1F8B388 Attachment A NOT YET APPROVED APPENDIX A Government Code Section 5852.1 Disclosure The following information consists of estimates that have been provided by the City’s municipal advisor which has been represented by such party to have been provided in good faith: (A) True Interest Cost of the Certificates: 2.34% (B) Finance Charge of the Certificates (Sum of all fees/charges paid to third parties): $1,975,200 (C) Net Proceeds to be Received (net of finance charges, reserves and capitalized interest, if any): $102,000,000 (D) Total Payment Amount Through Maturity: $151,488,586 The foregoing estimates constitute good faith estimates only. They assume a single, tax‐exempt series of Certificates is sold. 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 estimates, (e) other market conditions, or (f) alterations in the City’s financing plan (including 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. DocuSign Envelope ID: 1A4FAA2E-A6AC-49D6-8FF3-9742B1F8B388 Certificate Of Completion Envelope Id: 1A4FAA2EA6AC49D68FF39742B1F8B388 Status: Completed Subject: Please DocuSign: RESO 9941 Authorizing the Delivery and Sale of Certificates of Participation (... Source Envelope: Document Pages: 6 Signatures: 7 Envelope Originator: Certificate Pages: 2 Initials: 0 Danielle Kang AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Danielle.Kang@cityofpaloalto.org IP Address: 199.33.32.254 Record Tracking Status: Original 2/17/2021 9:52:51 AM Holder: Danielle Kang Danielle.Kang@cityofpaloalto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Christopher K. Lynch clynch@joneshall.com Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 71.198.250.117 Sent: 2/17/2021 9:58:46 AM Viewed: 2/17/2021 10:33:00 AM Signed: 2/17/2021 10:33:37 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Molly Stump Molly.Stump@CityofPaloAlto.org City Attorney City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 69.144.1.4 Sent: 2/17/2021 10:33:39 AM Viewed: 2/24/2021 6:09:00 PM Signed: 2/24/2021 6:09:17 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Kiely Nose Kiely.Nose@CityofPaloAlto.org Director, Administrative Services/CFO City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Uploaded Signature Image Using IP Address: 73.70.132.132 Sent: 2/24/2021 6:09:19 PM Viewed: 3/1/2021 9:25:01 AM Signed: 3/1/2021 9:26:50 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Brad Eggleston Brad.Eggleston@CityofPaloAlto.org Director of Public Works City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 3/1/2021 9:26:52 AM Viewed: 3/1/2021 10:31:41 AM Signed: 3/1/2021 10:32:03 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Signer Events Signature Timestamp Ed Shikada Ed.Shikada@CityofPaloAlto.org Ed Shikada, City Manager City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 3/1/2021 10:32:05 AM Viewed: 3/1/2021 10:39:51 AM Signed: 3/1/2021 10:40:16 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Tom DuBois tomforcouncil@gmail.com Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 24.5.55.204 Sent: 3/1/2021 10:40:19 AM Viewed: 3/1/2021 2:47:21 PM Signed: 3/1/2021 2:47:35 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Beth Minor beth.minor@cityofpaloalto.org City Clerk City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 3/1/2021 2:47:38 PM Viewed: 3/1/2021 2:53:34 PM Signed: 3/1/2021 2:53:57 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 2/17/2021 9:58:46 AM Certified Delivered Security Checked 3/1/2021 2:53:34 PM Signing Complete Security Checked 3/1/2021 2:53:57 PM Completed Security Checked 3/1/2021 2:53:57 PM Payment Events Status Timestamps