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HomeMy WebLinkAboutCC Reso 2020-07 - Wastewater Revenue Refunding; Financial Agmt; City-Dist. Refinancing Agmt RESOLUTION NO. 2020-07 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH AUTHORIZING THE ISSUANCE OF SERIES 2020 WASTEWATER REVENUE REFUNDING OBLIGATIONS; APPROVING THE FORMS OF AND AUTHORIZING AND DIRECTING EXECUTION AND DELIVERY OF A FINANCING AGREEMENT, IRREVOCABLE DEPOSIT AND REFUNDING INSTRUCTIONS, AND A CITY-DISTRICT REFINANCING AGREEMENT; AND PROVIDING FOR OTHER MATTERS PROPERLY RELATED THERETO WHEREAS, the City owns a wastewater treatment plant(the"City W WTP") and a system for the collection and disposal of wastewater within the City, including sewer mains, laterals and related facilities (collectively with the City WWTP, the "City Wastewater System") for which the City provides wastewater collection, treatment, and effluent disposal services to customers within the City; and WHEREAS, the Ukiah Valley Sanitation District (the "District") owns a system for the collection and transmission of wastewater within the District, including sewer mains, laterals and related facilities (the "District Wastewater System"), which wastewater is treated at the City WWTP; and WHEREAS, in order to finance certain capital improvements relating to the City Wastewater System, the City previously entered into an Installment Sale Agreement, dated as of March 1, 2006 (the "2006 Installment Sale Agreement") with the Association of Bay Area Governments (the "Authority"), pursuant to which the City agreed to make certain installment ' payments (the"2006 Installment Payments"), and in connection therewith the Authority issued its $75,060,000 original aggregate principal amount of 2006 Water and Wastewater Revenue Bonds, Series A(the"2006 Bonds"), pursuant to a Trust Agreement dated as of March 1, 2006(the"2006 Trust Agreement"), between the Authority and Wells Fargo Bank, National Association, as trustee (the"Prior Trustee"); and WHEREAS, in order to provide revenue support to the City for the 2006 Installment Payments,the City and the District entered into a Financing Agreement dated March 2, 2006(the "2006 Financing Agreement"), whereby the District agreed to assume responsibility for an allocable share of the 2006 Installment Payments (the"District's Allocable Share"); and WHEREAS, the District is currently seeking private placement financing secured by and pursuant to an Indenture dated as of January 1, 2020 by and between U.S. Bank National Association, as trustee (the "Trustee") and the District (the "Indenture"), the proceeds of which the District intends to use to prepay the District's Allocable Share (the "District's 2020 Obligations"); and WHEREAS,the City has determined that it is in the interests of the City at this time to provide for the execution and delivery of its "City of Ukiah, Series 2020 Wastewater Revenue Refunding Obligations(2020 Wastewater Refunding Project)"(the"Obligation )pursuant to a 2020 Financing Agreement by and between BBVA USA(the"Bank") and the City(the Financing Agreement"), as evidenced by a Promissory Note, dated February _, 2020 (the "Note," and together with the Financing Agreement and Obligation, the"City's 2020 Obligations")the proceeds of which will be ' combined with the proceeds of the District's 2020 Obligations and used to prepay in full the principal components of the 2006 Installment Payments, which in turn will cause the corresponding optional prepayment and discharge of the 2006 Bonds in accordance with certain Irrevocable Deposit and Refunding Instructions given by the City to the Prior Trustee, dated as of Page 1 of 5 1 January 1, 2020 (the "Refunding Instructions"), the form of which has been presented at this meeting and is on file with the City Clerk; and ' WHEREAS, the City is authorized under the provisions of Articles 10 (commencing with Section 53570) and 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the"Refunding Bond Law), to issue its bonds for the purpose of prepaying and refunding certain outstanding obligations of the City, including the 2006 Installment Payments and 2006 Bonds; and WHEREAS, the principal of and interest and redemption premium (if any) on the 2020 Obligations, and any bonds or other obligations issued on a parity therewith as provided in the Financing Agreement, will be payable from and secured by a pledge of and lien on the Net Revenues (as defined in the Financing Agreement)derived from the City Wastewater System, as expressly set forth in the Financing Agreement; and WHEREAS,the City and the District have previously entered into an Operating Agreement dated October 3, 2018, as may be amended from time to time (the"Operating Agreement"),which sets forth, among other things, the responsibilities and the terms under which the City and the District provide wastewater collection and treatment services to their respective ratepayers and residents; and WHEREAS, in order to provide clarification as to certain of the terms and conditions upon which the District's 2020 Obligations and the City's 2020 Obligations, respectively, are to be issued and secured, the City Council desires to authorize the execution and delivery of a City- District 2020 Refinancing Agreement, dated as of January 1, 2020, by and between the City and , District (the "City-District 2020 Refinancing Agreement"), the form of which has been presented at this meeting and is on file with the City Clerk; and WHEREAS, the City Council of the City wishes at this time to authorize all proceedings relating to the issuance of the City's 2020 Obligations, and to approve the execution and delivery of all agreements and documents relating thereto; and WHEREAS,the City Council,with the aid of its staff, has reviewed the Financing Agreement, the Refunding Instructions and the City-District 2020 Refinancing Agreement, the forms of which have been presented to the City Council and are on file with the City Clerk, and the City Council wishes at this time to approve the foregoing documents(collectively, the"Financing Documents") in the public interests of the City; and WHEREAS, Section 5852.1 ("Section 5852.1") of the Government Code (the "Code ) of the State of California provides that the City Council obtain from an underwriter, municipal advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the City's 2020 Obligations, good faith estimates of: (a)the true interest cost of the City's 2020 Obligations, (b) the finance charge of the City's 2020 Obligations, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the City's 2020 Obligations received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the City's 2020 Obligations and (d) the sum total of all debt service payments on the City's 2020 Obligations calculated to the final maturity of the City's 2020 Obligations plus the fees and charges paid to third parties not paid with the proceeds of the City's 2020 Obligations; and Page 2 of 5 WHEREAS, in accordance with Section 5852.1, the City Council has obtained such good faith estimates from the City's underwriter, and such estimates are disclosed in Section 9 hereof; and WHEREAS, this action does not constitute a "Project" under California Environmental Quality Act (CEQA) Guidelines Section 15378; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ukiah as follows: Section 1. Recitals and Findings. The City Council hereby specifically finds and declares that each of the statements, findings and determinations set forth in the recitals set forth above are true and correct and are incorporated herein by this reference, and finds further that the issuance of the City's 2020 Obligations is expected to result in significant public benefits to the City and its ratepayers. Section 2. Authorization of the City's 2020 Obligations.The City's 2020 Obligations are hereby authorized to be issued pursuant to this Resolution, the Refunding Bond Law and the Financing Agreement, and shall be payable exclusively from the Net Revenues of the City Wastewater System. Such Net Revenues constitute a trust fund for the security and payment of the principal or redemption price of and interest on the City's 2020 Obligations. The general fund of the City is not liable and the credit or taxing power of the Cay is not pledged for the payment of the principal or redemption price of and interest on the City's 2020 Obligations. The owners of the City's 2020 Obligations may not compel the exercise of the taxing power by the City or the forfeiture of its property, and the principal or redemption price of and interest on the City's 2020 ' Obligations are not a debt of the City, nor a legal or equitable pledge, charge, lien or encumbrance, upon any of its property, or upon any of its income, receipts, or revenues except the Net Revenues. Section 3. Authorized Representatives. The Mayor, Vice Mayor, City Manager, Finance Director, City Clerk, and any other person authorized by the Council or City Manager to act on behalf of the City shall each be an "Authorized Representative" of the City for the purposes of structuring and providing for the issuance of the City's 2020 Obligations, and are hereby authorized,jointly and severally, for and in the name of and on behalf of the City, to execute and deliver any and all documents and certificates that may be required to be executed in connection with the execution and delivery of the City's 2020 Obligations (including, but not limited to, the Financing Documents and any other documentation required or necessary in connection therewith), and to do any and all things and take any and all actions which may be necessary or advisable, in their discretion, to effectuate the actions which the City Council has approved in this Resolution and the Financing Documents. Section 4. Approval of the Financing Agreement. The City's 2020 Obligations shall be issued pursuant to and secured by the Financing Agreement, the form of which is on file with the City Clerk and is hereby referred to and incorporated herein by this reference. The Financing Agreement, in substantially the form on file with the City Clerk, is hereby approved by the City Council. Any Authorized Representative, on behalf of the City, each acting alone, are hereby authorized and directed, for and in the name of the City, to execute and deliver the Financing Agreement in such form, together with such changes, insertions and omissions as may be approved by the City Attorney and/or an Authorized Representative, such execution to be conclusive evidence of such approval; and the City Clerk is hereby authorized and directed to attest such Financing Agreement and affix the seal of the City thereto. The City Council hereby authorizes the delivery and performance of the Financing Agreement. Page 3 of 5 Section 5. Approval of the Irrevocable Refunding Instructions. The City Council hereby ' approves the Refunding Instructions in substantially the form on file with the City Clerk, together with any additions thereto or changes therein (including, but not limited to, the final amount of the required deposits, the final payment schedules and prepayment notices) deemed necessary or advisable by an Authorized Representative of the City. Any Authorized Representative of the City is hereby authorized and directed to execute, and the City Clerk is hereby authorized and directed to attest and affix the seal of the City to, the final form of the Refunding Instructions for and in the name and on behalf of the City, and the execution thereof shall be conclusive evidence of the City Council's approval of any such additions and changes. The City Council hereby authorizes the delivery and performance of the Refunding Instructions, and directs each Authorized Representative to take such action as deemed necessary or appropriate to cause the prepayment and defeasance of the 2006 Installment Payments and the corresponding 2006 Bonds. Section 6. Terms of the City's 2020 Obligations. The City's 2020 Obligations shall be dated, shall bear interest at the rates, shall mature on the dates, shall be issued in the form, shall be subject to redemption, and shall otherwise be issued on the terms and conditions, all as set forth in the Refunding Bond Law and the Financing Agreement and in accordance with this Resolution. Section 7. Approval of the City-District 2020 Refinancing Agreement. The City Council hereby approves the City-District 2020 Refinancing Agreement in substantially the form on file with the City Clerk, together with any additions thereto or changes therein deemed necessary or advisable by City Attorney and/or an Authorized Representative of the City. Any Authorized Representative, on behalf of the City, each acting alone, are hereby authorized and directed, for ' and in the name of the City, to execute, and the City Clerk is hereby authorized and directed to attest and affix the seal of the City to, the final form of the City-District 2020 Refinancing Agreement, and the execution thereof shall be conclusive evidence of the City Council's approval of any such additions and changes. The City Council hereby authorizes the delivery and performance of the City-District 2020 Refinancing Agreement. Section 8. Financing Documents in Substantially Final Form; Further Authority.The Financing Documents on file with the City Clerk and herein approved are in substantially final forth; that is, they are final as to important business terms such as the rate covenant undertaken by the City as to the wastewater rates the City will enact so long as the City's 2020 Obligations are outstanding, and parity bond restrictions, governing limitations on future issues of bonds secured by Net Revenues, but do not contain such things as the numbers resulting from the sale of the City's 2020 Obligations, which numbers will be inserted once the City's 2020 Obligations are finalized. All Authorized Representatives of the City, each acting alone, is hereby authorized and directed to execute, and the City Clerk is hereby authorized and directed to attest to the final form of the Financing Documents for and in the name and on behalf of the City, and the execution thereof shall be conclusive evidence of the City Council's approval of any such additions and changes. Section 9. Good Faith Estimates Pertaining to the City's 2020 Obligations. Set forth below are good faith estimates Pertaining to the City's 2020 Obligations, as required under Section 5852.1. The following estimates have no bearing on, and should not be misconstrued as, any not-to-exceed financial parameters authorized by this resolution. ' (a) The true interest cost of the City's 2020 Obligations is estimated at 2.419972% calculated as provided in Section 5852.1(a)(1)(A) of the Code. Page 4 of 5 (b) The finance charge of the City's 2020 Obligations, including all fees and charges paid to third parties, is estimated at $534,805 (c) Proceeds of the City's 2020 Obligations received by the City of $24,940,000 less the finance charge set forth in (b) above, is equal to $24,408,195 (d) The total payment amount calculated as provided in Section 5852.1(a)(1)(D)of the Code is estimated at$29,898,032. The foregoing are estimates and the final costs will depend on market conditions and can be expected to vary from the estimated amounts set forth above. Section 10. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. PASSED AND ADOPTED by the City Council of the City of Ukiah on January 29, 202,0 by the following vote: AYES: Councilmembers Mulheren, Brown, Scalmanini, Orozco, and Mayor Crane NOES: None ABSENT: None ' ABSTAIN: None Douglas ne, ayor ATTEST: i Kristine Lawler, City Clerk �� Page 5 of 5