HomeMy WebLinkAboutRESO 10318Resolution No.10318
Resolution of the Council of the City of Palo Alto Authorizing the Issuance and Sale of
Water Revenue Refunding Bonds in a Principal Amount Not to Exceed $20,000,000,
Approving an Indenture of Trust, Official Notice of Sale, Notice of Intention, Refunding
Instructions, and Official Statement, and Authorizing Official Actions and Documents
RECITALS
A. The City of Palo Alto (the “City”) is a chartered city and municipal
corporation organized and existing under the constitution and laws of the State of
California.
B. The City previously issued the $35,015,000 initial principal amount City of
Palo Alto Water Revenue Bonds, 2009 Series A (the “2009 Bonds”) under Chapter 12.28
of the Palo Alto Municipal Code to finance improvements to the City’s water system (the
"Water System").
C. The City is authorized under Articles 10 and 11 of Chapter 3 of Part 1 of
Division 2 of Title 5 of the California Government Code (the “Refunding Law”) to issue
revenue bonds for the purpose of refunding outstanding revenue bonds of the City.
D. The City, after due investigation and deliberation, has determined that it is
in the public interest of the City at this time to authorize the issuance of its water revenue
refunding bonds (the “Bonds”) under the Refunding Law for the purpose of refunding the
outstanding 2009 Bonds and to pay certain costs of issuing the Bonds. The City wishes
to refund the 2009 Bonds in order to generate debt service savings, if available, and
eliminate an operating reserve requirement imposed by the legal documents for the 2009
Bonds.
E. The Bonds will be secured by a pledge of and lien on net revenues of the
Water System.
F. Staff has worked with the City’s financing team to prepare the necessary
agreements and other documents, including a form of preliminary Official Statement to be
distributed in connection with the marketing of the Bonds, and the City Council has
reviewed the preliminary Official Statement to assure proper disclosure of all material facts
relating to the Bonds that are in the personal knowledge of the members of the City Council
and the City staff.
G. In accordance with Government Code Section 5852.1, the City Council has
obtained and wishes to disclose the information set forth in Exhibit A.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES, as follows:
SECTION 1. Recitals. The Council hereby finds that the foregoing recitals are
true and correct.
SECTION 2. Authorization of the Bonds. The Council hereby authorizes the
issuance of the Bonds under the Refunding Law in a principal amount not to exceed
$20,000,000. The Bonds shall be designated the “City of Palo Alto Water Revenue
1 027080326
Docusign Envelope ID: 68043F7C-A8ED-8289-83A9-82986BB12BA7
-2-
Refunding Bonds, 2026 Series A,” or such other designation given them by an
Authorized Officer (as defined below).
The Bonds shall be dated their date of issuance and mature no later than June 1,
2035. The Bonds shall accrue interest at a fixed interest rate, and the principal of and
interest on the Bonds shall be payable on the dates specified in the Indenture (defined
below). The terms of redemption of the Bonds shall be set forth in the Indenture.
The City Council hereby authorizes the issuance of the Bonds to refund the 2009
Bonds for the purpose of eliminating an operating reserve requirement imposed by the
legal documents for the 2009 Bonds regardless of whether the refunding of the 2009
Bonds will generate debt service savings.
SECTION 3. Sale of the Bonds. Staff has recommended that the Bonds be sold
in a competitive sale. The Director of Administrative Services (or their designee) is hereby
authorized to select a time and date at which bids will be received for the purchase of the
Bonds as described in and subject to the terms and conditions of the Official Notice of
Sale (defined below). The Director of Administrative Services (or their designee) is hereby
authorized to award the sale of the Bonds to the bidder whose responsive bid for the
Bonds results in the lowest true interest cost to the City, to be determined in accordance
with the Official Notice of Sale.
If, however, the Director of Administrative Services (or their designee) determines
that, as a result of market conditions, the Bonds should be sold in a negotiated sale, the
Director of Administrative Services (or their designee), after consultation with PFM
Financial Advisors LLC (”Municipal Advisor”), Jones Hall LLP (“Bond Counsel”) and the
City Attorney, may select an underwriting firm(s) (the “Underwriter”) and negotiate a bond
purchase agreement with the Underwriter.
SECTION 4. Notice of Sale; Notice of Intention; Bond Purchase Agreement. Staff
has caused to be prepared an official notice of sale of the Bonds (the "Official Notice of
Sale”) and a notice of intention to sell the Bonds (the "Notice of Intention") to be employed
in a competitive sale of the Bonds, copies of which are on file with the City Clerk.
The Director of Administrative Services (or their designee) is authorized and
directed to cause a notice of the proposed sale of the Bonds to be published in (i) a
financial publication in accordance with California Government Code Section 53692 and
(ii) a newspaper of general circulation circulated within the boundaries of the City in
accordance with California Government Code Section 53583.
Staff has caused to be prepared a bond purchase agreement (the “Bond Purchase
Agreement”) to be employed in a negotiated sale of the Bonds, a copy of which is on file
with the City Clerk. The Bond Purchase Agreement, in substantially the form on file with
the City Clerk, is hereby approved, together with any changes therein or additions thereto
deemed advisable by the Mayor, the City Manager and the Director of Administrative
Services (the “Authorized Officials”; each, an “Authorized Official”), each acting alone. The
final form of the Bond Purchase Agreement shall be executed in the name and on behalf
of the City by an Authorized Official, and such execution shall be conclusive evidence of
the approval of the final form thereof.
Docusign Envelope ID: 68043F7C-A8ED-8289-83A9-82986BB12BA7
-3-
SECTION 5. Indenture of Trust. The Bonds shall be issued pursuant to an
Indenture of Trust (the “Indenture”), by and between the City and U.S. Bank Trust
Company, National Association, as trustee (the "Trustee"). As provided in the Indenture,
the Bonds shall be secured by the Net Revenues (as that term is defined in the Indenture)
of the Water System. The Indenture, in substantially the form on file with the City Clerk, is
hereby approved, together with any changes therein or additions thereto deemed
advisable by the Authorized Officials, each acting alone. The final form of the Indenture
shall be executed in the name and on behalf of the City by an Authorized Official, and such
execution shall be conclusive evidence of the approval of the final form thereof. The City
Clerk is hereby authorized and directed to attest to the Authorized Official’s signature.
SECTION 6. Preliminary Official Statement; Official Statement. Staff has caused
to be prepared a preliminary Official Statement relating to the Bonds, a copy of which is
on file with the City Clerk, for distribution to potential purchasers of the Bonds.
The City Council hereby approves and deems nearly final within the meaning of
Rule 15c2-12 of the Securities Exchange Act of 1934 (the “Rule”) the preliminary Official
Statement describing the Bonds, in the form on file with the City Clerk, together with such
modifications thereof as may be approved by an Authorized Official after consultation with
Stradling Yocca Carlson & Rauth LLP (“Disclosure Counsel”), the Municipal Advisor, the
Bond Counsel and the City Attorney. An Authorized Official is hereby authorized to
execute an appropriate certificate stating the Council's determination that the preliminary
Official Statement has been deemed nearly final within the meaning of the Rule.
The Municipal Advisor is hereby authorized and directed to cause copies of the
preliminary Official Statement to be printed and mailed to prospective bidders for the
Bonds, together with copies of the Official Notice of Sale, which Official Notice of Sale, in
substantially the form on file with the City Clerk, is hereby approved.
The Authorized Officials, each acting alone, are hereby authorized and directed,
upon consultation with the Municipal Advisor, Disclosure Counsel, Bond Counsel and the
City Attorney, to approve such changes to the preliminary Official Statement as shall be
necessary to cause such preliminary Official Statement to be brought into the form of a
final Official Statement, and an Authorized Official is hereby authorized and directed to
execute and deliver copies of the final Official Statement to the purchaser of the Bonds,
at the time of delivery of the Bonds.
SECTION 7. Escrow Agreement; Refunding Instructions. The City Council hereby
authorizes the Authorized Officials, each acting alone, to execute a refunding instruction
or escrow deposit and trust agreement to accomplish the refunding of the 2009 Bonds,
and such execution shall be conclusive evidence of the approval of the final form thereof.
SECTION 8. Preparation of Bonds. The Director of Administrative Services (or
their designee) is directed to cause the Bonds to be prepared in the form set forth in, and
in accordance with the provisions of, the Indenture of Trust and to cause their execution
by the proper officers of the City and authentication by the Trustee, and to cause the Bonds
to be delivered when so executed and authenticated to or on behalf of the purchaser or
purchasers thereof, upon the receipt of the purchase price therefor.
Docusign Envelope ID: 68043F7C-A8ED-8289-83A9-82986BB12BA7
-4-
SECTION 9. Additional Authority. The Mayor, Vice Mayor, City Manager, City
Clerk, Director of Administrative Services, Director of Utilities, Director of Public Works,
City Attorney and any and all other officers of the City, each acting alone, are authorized
and directed in the name and on behalf of the City to execute and deliver any and all
certificates, requisitions, agreements, notices, consents, warrants and other documents,
which they or any of them might deem necessary or appropriate in order to consummate
the lawful issuance, sale and delivery of the Bonds to the original purchaser thereof.
SECTION 10. Exemption from CEQA. The City Council finds that this resolution
and the issuance of the Bonds are not projects under Section 21065 of the California
Environmental Quality Act.
SECTION 11. Effective Date. This resolution shall be effective upon the date of
its adoption.
* * * * **
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
By:
Christopher K. Lynch,
Jones Hall LLP
Bond Counsel
City Manager
Director of Administrative Services
City Attorney or designee
SEPTEMBER 14, 2026
BURT, LAUING, LU, LYTHCOTT-HAIMS, RECKDAHL, STONE, VEENKER
Docusign Envelope ID: 68043F7C-A8ED-8289-83A9-82986BB12BA7
EXHIBIT A
GOVERNMENT CODE SECTION 5852.1 DISCLOSURE
The following information consists of estimates that have been provided by the Municipal
Advisor, which has been represented by such party to have been provided in good faith:
(A) True Interest Cost with respect to the Bonds: 2.923608%.
(B) Finance Charge with respect to the Bonds (Sum of all fees paid to third parties):
$288,827.25.
(C) Net Proceeds to be Received from the sale of the Bonds (net of finance charges,
reserves and capitalized interest, if any): $15,680,257.80.
(D) Total Payment Amount Through Maturity: $18,208,013.89.
The foregoing estimates constitute good faith estimates based on a refinancing of the
2009 Bonds. The principal amount of the Bonds, the true interest cost of the Bonds, 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 Bonds being different than the date assumed for purposes of such
estimates, (b) the actual principal amount of Bonds sold being different from the estimated
amount used for purposes of such estimates, (c) the actual amortization of the Bonds
being different than the amortization assumed for purposes of such estimates, (d) the
actual market interest rates at the time of sale of the Bonds being different than those
estimated for purposes of such estimates, (e) other market conditions, (f) alterations in the
City’s financing plan, or a combination of such factors and (g) the treatment of the interest
with respect to the Bonds under federal tax law. The actual date of sale of the Bonds and
the actual principal amount of Bonds sold will be determined by the City based on the
timing of the need for proceeds of the Bonds and other factors. The actual interest rates
borne by the Bonds will depend on market interest rates at the time of sale thereof. The
actual amortization of the Bonds 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.
027080326
Docusign Envelope ID: 68043F7C-A8ED-8289-83A9-82986BB12BA7
Certificate Of Completion
Envelope Id: 68043F7C-A8ED-8289-83A9-82986BB12BA7 Status: Completed
Subject: RESO 10318 - Water Revenue Bonds
Source Envelope:
Document Pages: 5 Signatures: 6 Envelope Originator:
Certificate Pages: 2 Initials: 0 Christine Prior
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
250 Hamilton Ave
Palo Alto , CA 94301
Christine.Prior@PaloAlto.gov
IP Address: 170.85.155.10
Record Tracking
Status: Original
9/18/2026 4:24:09 PM
Holder: Christine Prior
Christine.Prior@PaloAlto.gov
Location: DocuSign
Security Appliance Status: Connected Pool: StateLocal
Signer Events Signature Timestamp
Christopher K. Lynch
clynch@joneshall.com
Partner
Security Level: Email, Account Authentication
(None)Signature Adoption: Pre-selected Style
Using IP Address: 72.219.101.203
Sent: 9/18/2026 4:28:07 PM
Viewed: 9/19/2026 7:58:35 AM
Signed: 9/19/2026 7:59:03 AM
Electronic Record and Signature Disclosure:
Not Offered via Docusign
Aylin Bilir
Aylin.Bilir@PaloAlto.gov
Assistant City Attorney
Security Level: Email, Account Authentication
(None)Signature Adoption: Pre-selected Style
Using IP Address:
2600:1700:5438:fa10:b0b0:40a8:bd33:7b3c
Sent: 9/19/2026 7:59:04 AM
Viewed: 9/21/2026 9:27:32 AM
Signed: 9/21/2026 9:28:30 AM
Electronic Record and Signature Disclosure:
Not Offered via Docusign
Lauren Lai
Lauren.Lai@PaloAlto.gov
Director Administrative Services/CFO
COPA
Security Level: Email, Account Authentication
(None)
Signature Adoption: Drawn on Device
Using IP Address:
2601:647:c201:8af0:d0da:62f2:e2d7:6f11
Sent: 9/21/2026 9:28:31 AM
Viewed: 9/21/2026 9:29:01 AM
Signed: 9/21/2026 9:29:10 AM
Electronic Record and Signature Disclosure:
Not Offered via Docusign
Ed Shikada
Ed.Shikada@PaloAlto.gov
City Manager
City of Palo Alto
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 136.226.64.120
Sent: 9/21/2026 9:29:12 AM
Viewed: 9/21/2026 12:59:14 PM
Signed: 9/21/2026 12:59:49 PM
Electronic Record and Signature Disclosure:
Not Offered via Docusign
Signer Events Signature Timestamp
Veenker, Vicki
Vicki.Veenker@PaloAlto.gov
City of Palo Alto
Security Level: Email, Account Authentication
(None)Signature Adoption: Uploaded Signature Image
Using IP Address:
2601:647:4080:be0:6002:28c0:2807:38b9
Sent: 9/21/2026 12:59:51 PM
Viewed: 9/22/2026 10:15:15 AM
Signed: 9/22/2026 10:19:22 AM
Electronic Record and Signature Disclosure:
Not Offered via Docusign
Mahealani Ah Yun
Mahealani.AhYun@PaloAlto.gov
City Clerk
Security Level: Email, Account Authentication
(None)Signature Adoption: Pre-selected Style
Using IP Address: 170.85.155.21
Sent: 9/22/2026 10:19:24 AM
Viewed: 9/22/2026 10:20:03 AM
Signed: 9/22/2026 10:20:12 AM
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 9/18/2026 4:28:07 PM
Certified Delivered Security Checked 9/22/2026 10:20:03 AM
Signing Complete Security Checked 9/22/2026 10:20:12 AM
Completed Security Checked 9/22/2026 10:20:12 AM
Payment Events Status Timestamps