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HomeMy WebLinkAboutRes 2021-39' RESOLUTION NO. 2021-39 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, ACTING FOR ITSELF AND AS THE LEGISLATIVE BODY OF CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2021- 1 (UNIVERSITY PARK), TO AUTHORIZE THE ISSUANCE OF THE DISTRICT'S SPECIAL TAX BONDS, SERIES 2021, AND APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH RECITALS: WHEREAS, the City Council of the City of Palm Desert (the "City"), located in Riverside County, California (the "City Council", and hereinafter sometimes referred to also as the "legislative body of the District"), has heretofore undertaken proceedings and declared the necessity of City of Palm Desert Community Facilities District No. 2021-1 (University Park) (the "District") to issue bonds, pursuant to the terms and provisions of the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act"); and WHEREAS, based upon Resolution Nos.2021-10 (the "Resolution of Formation") and 2021-11 adopted by the legislative body of the District on April 22, 2021 ' and an election held on May 13, 2021 authorizing the levy of a special tax and the issuance of bonds by the District, the District is authorized to issue bonds for one or more series, pursuant to the Act, in an aggregate principal amount not to exceed $50,000,000; and WHEREAS, the property within the District is also located within and encompasses a portion of the property within the boundaries of City of Palm Desert Community Facilities District No. 2005-1 (University Park) ("CFD 2005-1"), which has previously issued its $50,000,000 aggregate initial principal amount Special Tax Bonds, Series 2006A (the "2006A Bonds"), of which $26,250,000 in aggregate principal amount is currently outstanding; and WHEREAS, on September 10, 2020, the City Council authorized and directed City staff to work with a team of financing professionals on the issuance of refunding bonds to refund the outstanding 2006A Bonds for debt service savings (the "Refunding Program"), including but not limited to the issuance of refunding bonds by CFD 2005-1 and the issuance of bonds by the District; and WHEREAS, at this time, the District intends to finance certain public facilities identified in the Resolution of Formation (including but not limited to the payment and defeasance of a portion of outstanding 2006A Bonds issued by, and secured by the special taxes of, CFD 2005-1) through the issuance of bonds up to an aggregate principal amount of 115,900,000, designated as the "City of Palm Desert Community Facilities District No. 2021-1 (University Park), Special Tax Bonds, Series 2021" (the "Series 2021 Bonds"); and -1- W1StaRRepom- Shored WtalfReports 06-24-2021W -City Clerk-0632 -2021U6 Res 2021-38 and 2021-39 UPI Refunding Bond CFD 2U21-Mg Resolution oflssuance (palm Desert CFD 2021.1 STBs 2021) 6.24.21.D0CX RESOLUTION NO. 2021-39 WHEREAS, the legislative body of the District has determined that it is prudent in the management of its fiscal affairs to issue the Series 2021 Bonds; and ' WHEREAS, the value of the real property in the District subject to the special tax to pay debt service on the Series 2021 Bonds is not less than three times the principal amount of the Series 2021 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District, which fact is required as a precondition to the issuance of the Series 2021 Bonds; and WHEREAS, on January 10, 2019, the City Council approved an updated local debt policy (the "Local Debt Policy") in furtherance of Section 8855(i) of the California Government Code, as amended by SB 1029, enacted as Chapter 307, Statutes of 2016; and WHEREAS, the Local Debt Policy provides that, except for instances in which a bullet payment or spike in debt service is being refinanced, absent a compelling reason or financial benefit to the City, any refinancing should not result in an increase to the weighted average life of the refinanced debt; and WHEREAS, the District was formed by the City Council at the request and petition of University Park Investor, LLC, the owner and developer of the property within the District (the "Developer") to finance, in addition to the payment and defeasance of a ' portion of the 2006A Bonds allocable to the District, certain public facilities necessary to meet the increased demands placed upon the public infrastructure, the City, and the Coachella Valley Water District as a result of the development of the property within the boundaries of the District (including development impact fees therefor) (the "New Public Facilities"), and the financing of such New Public Facilities is significantly constrained without an extension of the term and weighted average life of the refinanced debt; and WHEREAS, a compelling reason and a financial benefit to the City exist in this case, in accordance with the Local Debt Policy, to support the extension of the term and weighted average life of the refinanced debt, because (i) the District was formed to finance the New Public Facilities required for the development of the property in the District without affecting the CFD 2005-1 special tax of the other properties within CFD 2005-1, and the financing of such New Public Facilities is significantly constrained without an extension of the term and weighted average life of the refinanced debt; (ii) the City will benefit from the further development of the property within the District, as it supports the City's land use, housing and open space priorities and is expected to generate additional property tax and sales tax revenues for the City; and (iii) the proposed term extension will be implemented in a manner such that the refinancing by the District of the allocable portion of the 2006A Bonds will still produce net present value savings of at least 3% of the debt being refinanced, as required by the Local Debt Policy; and WHEREAS, in order to effect the issuance of the Series 2021 Bonds, the ' City Council, for itself and as the legislative body of the District, desires to approve the form of a Preliminary Official Statement and to approve the forms of, and authorize the -2- W.VtaffReports- Shared 21StaffRepons 06342021W -City Clerk-06-242021\26 Res 2021-38 and 2021-39 UPI Refunding Rand CFD 2021.1\08 Resolution of Issuance (Palm Desert CFD 2021-1 SMs2021)6.N.21.D0CX RESOLUTION NO. 2021-39 ' execution and delivery of, a Bond Indenture for the Series 2021 Bonds, an Escrow Agreement relating to the defeasance and redemption of the 2006A Bonds, a Bond Purchase Agreement, an Acquisition Agreement, and a Continuing Disclosure Agreement, the forms of which are on file with the City Clerk. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT, ACTING FOR ITSELF AND AS THE LEGISLATIVE BODY OF CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2021-1 (UNIVERSITY PARK), DOES HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS: Section 1. Each of the above recitals is true and correct and is adopted by the City Council, acting for itself and as the legislative body of the District. Section 2. The City Council .hereby determines that (a) the Local Debt Policy is consistent with the requirements of Government Code Section 8855(i), and (b) the proposed Series 2021 Bonds to be issued in accordance with the parameters set forth in this Resolution are consistent with the Local Debt Policy. In connection with the foregoing determination, the City Council hereby finds and determines that a compelling reason and a financial benefit to the City exist in this case, in accordance with the Local Debt Policy, to support the extension of the term and weighted average life of the refinanced debt, because (i) the District was formed to finance the New Public Facilities required for the development of the property in the District without affecting the CFD 2005- 1 special tax of the other properties within CFD 2005-1, and the financing of such New Public Facilities is significantly constrained without an extension of the term and weighted average life of the refinanced debt; (ii) the City will benefit from the further development of the property within the District, as it supports the City's land use, housing and open space priorities and is expected to generate additional property tax and sales tax revenues for the City; and (iii) as provided in Section 8 below, the proposed term extension will be implemented in a manner such that the refinancing by the District of the allocable portion of the 2006A Bonds will still produce net present value savings of at least 3% of the debt being refinanced, as required by the Local Debt Policy. Section 3. The legislative body of the District hereby finds and determines that, as determined in accordance with Section 53345.8 of the Act and as required by the City's Goals and Policies for Community Facilities Districts adopted by Resolution No. 05-86 approved by the City Council on October 13, 2005 pursuant to Section 53312.7 of the Act (the "CFD Goals and Policies'), the value of the real property in the District subject to the special tax to pay debt service on the Series 2021 Bonds is not less than three times the principal amount of the Series 2021 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District. This determination is based on an appraisal with respect to the real property within the District, which appraisal has been made in a manner consistent with the CFD Goals and Policies, as further described in the Preliminary Official Statement (as defined in Section 10 below). Section 4. The issuance of the Series 2021 Bonds in an aggregate principal amount not to exceed $15,900,000 is hereby authorized, with the exact principal -3- WiSmlf ftom- Sl med 2VitaRR.,mM 06-24-2021W -City Cledc - 06-24-202IU6 Res 2021-38 and 2021-39 UPI Refunding Bond CFD 2021-1\08 Resolution oflssuam,e (Palm Desert CFD 2021-1 STBs 2021) 6.24.21.DOCX RESOLUTION NO.2021-39 amount of the Series 2021 Bonds to be determined by the official signing the Bond Purchase Agreement in accordance with Section 8 below. The Bonds may be issued as , a single issue, or as separate series, as determined by Bond Counsel to comply with applicable tax law. The legislative body of the District hereby determines that it is prudent in the management of its fiscal affairs to issue the Series 2021 Bonds. The Series 2021 Bonds shall mature on the dates and pay interest at the rates set forth in the Bond Purchase Agreement to be executed by the District in accordance with Section 8 hereof. The Series 2021 Bonds shall be governed by the terms and conditions of the Bond Indenture presented at this meeting, on file with the City Clerk and incorporated herein by reference (the "Indenture"). The Indenture shall be executed by any one of the Mayor of the City of Palm Desert, the Mayor Pro Tern of the City of Palm Desert (in the Mayor's absence), the City Manager of the City of Palm Desert, the Assistant City Manager of the City of Palm Desert (in the City Manager's absence), or any deputy of such officers (each, an "Authorized Officer"), acting singly, in substantially the form presented at this meeting, with such additions thereto and changes therein as may be approved by such officer upon consultation with Bond Counsel. Approval of such changes shall be conclusively evidenced by the execution and delivery of the Indenture by any one of the Authorized Officers. The date.or dates, maturity or maturities, pledge or assignment of any revenues of the District to the repayment of the Series 2021 Bonds, the manner of investment of any bond proceeds and other revenues, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption, rebate provisions, funds designated to pay the costs of issuance of the Series 2021 Bonds, and other terms of the Series 2021 Bonds shall be as provided in the Indenture as finally executed and shall be in conformance with any such terms set forth in the Bond Purchase Agreement described in Section 8 below and the Official Statement described in Section 10 below and delivered to the purchasers of the Series 2021 Bonds. Capitalized terms used in this Resolution which are not defined herein have the meanings ascribed to them in the Indenture. Section 5. The Series 2021 Bonds shall be executed on behalf of the District by the manual or facsimile signature of the Mayor of the City and attested with the manual or facsimile signature of the City Clerk. The appointment of U.S. Bank National Association, a national banking association, as trustee (the "Trustee") under the Indenture and as escrow agent (the "Escrow Agent") under the Escrow Agreement described in Section 7 is hereby approved. Section 6. Pursuant to Section 53356.1 of the Act, the legislative body of the District hereby covenants, for the benefit of the Bondowners, to commence and diligently pursue any foreclosure action regarding delinquent installments of any amount levied as a special tax for the payment of interest or principal of the Series 2021 Bonds, such foreclosure action to be commenced and pursued as more completely set forth in the Indenture. Section 7. The Escrow Agreement (the "Escrow Agreement") relating to the defeasance and redemption of the 2006A Bonds, proposed to be entered into by and ' among the District, CFD 2005-1, and the Escrow Agent, in the form presented and on file in the office of the City Clerk, is hereby approved. Each Authorized Officer, acting singly, -4- WMIeffReports-Shared 21SmffReports 06-24-MN-City Clerk - 06-24-2021V Res 2021J8mid =1J9U1Refunding Bond CM 2021-M8Resolution of Issuance (Palm Desert CM 2021-1 SfB.2021) 6.24.21.DDCX RESOLUTION NO. 2021-39 ' is hereby authorized and directed, for and in the name and on behalf of the District, to execute and deliver the Escrow Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such officer's execution and delivery thereof). The date on which the 2006A Bonds shall be defeased and no longer deemed to be outstanding shall be as provided in the Escrow Agreement as finally executed. Section 8. The form of the Bond Purchase Agreement by and between the District and the Underwriter presented at this meeting, on file with the City Clerk and incorporated herein by reference (the "Bond Purchase Agreement"), is hereby approved, and any one of the Authorized Officers is hereby authorized to execute the Bond Purchase Agreement in substantially the form hereby approved, with such additions thereto and changes therein as may be approved by such officer upon consultation with Bond Counsel. Approval of such additions and changes shall be conclusively evidenced by the execution and delivery of the Bond Purchase Agreement; provided, however, that the Bond Purchase Agreement shall be signed only if (i) the Series 2021 Bonds are purchased by the Underwriter at an overall interest rate that does not exceed 5.50% per annum for the issue as a whole (calculated utilizing the true interest cost method), (ii) the total interest cost to maturity on the Series 2021 Bonds plus the principal amount of the Series 2021 Bonds is less than the remaining total interest cost to maturity on the portion of outstanding 2006A Bonds being refunded by the Series 2021 Bonds plus the remaining principal amount of such portion of 2006A Bonds, (iii) the discount paid to the Underwriter (exclusive of original issue discount) does not exceed 1.239% of the principal amount of the Series 2021 Bonds, (iv) the aggregate principal amount of the Series 2021 Bonds does not exceed $15,900,000, and (v) the refinancing by the Series 2021 Bonds of the allocable portion of the 2006A Bonds and the proposed term extension in connection therewith produces net present value savings of at least 3% of the principal amount of such portion of 2006A Bonds being refinanced by the Series 2021 Bonds. The legislative body of the District hereby finds and determines, pursuant to Section 53360.4 of the Act, that the sale of the Series 2021 Bonds at a negotiated sale to the Underwriter, as contemplated by the Bond Purchase Agreement, will result in a lower overall cost than a public sale. Each of the Authorized Officers is authorized to determine the day on which the Series 2021 Bonds are to be priced in order to attempt to produce the lowest borrowing cost for the District and may reject any terms presented by the Underwriter if determined not to be in the best interest of the District. Section 9. The form of the Acquisition Agreement by and among the City, the District, and the Developer presented at this meeting, on file with the City Clerk and incorporated herein by reference (the "Acquisition Agreement"), is hereby approved, and any one of the Authorized Officers is hereby authorized and directed to execute the Acquisition Agreement in substantially the form hereby approved, with such additions therein and changes thereto as the Authorized Officer or Authorized Officers executing the same may approve, with such approval to be conclusively evidenced by the execution and delivery of the Acquisition Agreement. ' Section 10. The form of the Preliminary Official Statement for the Series 2021 Bonds presented at this meeting, on file with the City Clerk and incorporated herein -5- WAStaffRepmts- Shared 2Zml Ra,m1a 06-24-2021\4 -City Clerk -06.24-2MI1 6 Res 2021-38 and 2021-39 M Refunding Bond CFO 2021-1\08 Resolution oflssuanw (Palm Desert CFO 2021-1 STBs 2021) 6.24.21.DOCX RESOLUTION NO. 2021-39 by reference (the "Preliminary Official Statement') is hereby approved. For purposes of ' this Section 10, the term "Authorized Officers" shall include the City Treasurer. The Underwriter is hereby authorized to distribute the Preliminary Official Statement to prospective purchasers of the Series 2021A Bonds in substantially the form hereby approved, together with such additions thereto and changes therein as are determined necessary by any one of the Authorized Officers, upon consultation with Bond Counsel and Disclosure Counsel, to make the Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 of the Securities and Exchange Commission, including, but not limited to, such additions and changes as are necessary to make all information set forth therein accurate and not misleading. Each of the Authorized Officers is hereby authorized to execute a final Official Statement in substantially the form of the Preliminary Official Statement, together with such changes as are determined necessary by the Authorized Officer executing the Official Statement, upon consultation with Bond Counsel, to make such Official Statement complete and accurate as of its date. The Underwriter is further authorized to distribute the final Official Statement for the Series 2021 Bonds and any supplement thereto to the purchasers thereof upon its execution on behalf of the District as described above. Section 11. The form of the Continuing Disclosure Agreement for the Series 2021 Bonds presented at this meeting and appended to the Preliminary Official Statement, on file with the City Clerk and incorporated herein by reference (the "Continuing Disclosure Agreement'), is hereby approved, and any one of the Authorized Officers is hereby authorized and directed to execute the Continuing Disclosure Agreement in substantially the form hereby approved, with such additions thereto and changes therein as may be approved by such officer upon consultation with Bond Counsel and Disclosure Counsel, with such approval to be conclusively evidenced by the execution and delivery of the Continuing Disclosure Agreement. Section 12. All actions heretofore taken by the officers and agents of the City and the District with respect to the establishment of the District, the issuance and sale of the Series 2021 Bonds, or in connection with or related to any of the agreements or documents referenced herein are hereby approved, confirmed, and ratified. The Mayor, each of the Authorized Officers, the Director of Finance, the Deputy Development Services Director, the Interim Public Works Director, and other officers and staff of the City and the District responsible for the fiscal affairs of the District are hereby authorized and directed to take any actions, and execute and deliver any and all documents as are necessary to accomplish (a) the issuance, sale and delivery of the Series 2021 Bonds in accordance with the provisions of this Resolution; (b) the transactions contemplated by the Indenture, the Bond Purchase Agreement, the Escrow Agreement, the Acquisition Agreement, and the Continuing Disclosure Agreement; and (c) the fulfillment of the purposes of the Series 2021 Bonds as described in the Indenture, including, but not limited to, providing certificates as to the accuracy of any information relating to the District which is included in the Official Statement. Any document authorized herein to be signed by the City Clerk may be signed by a duly appointed deputy clerk. Section 13. Effective Date. This Resolution shall take effect immediately ' upon adoption. -6- WiStaff Reports- Shand 2%,StalfRepons 06-24.2021\4 -City Cle lc-0624.2021\26 Res 2021-38 and 2021.39 UPI Refunding Bond CFD 2021-1\08 Resolution of Issuance (Palm Desert CFD 2021.1 STBs 2021) 6.24.21.1)DCX RESOLUTION NO. 2021-39 PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, California, on this 24h day of June, 2021, by the following vote, to wit: AYES: HARNIK, JONATHAN, NESTANDE, QUINTANILLA, and KELLY NOES: NONE ABSENT: NONE ABSTAIN: NONE ATTEST: __ /M_ ? M. GLORI S N CITY OF A [ ITY CLERK RNIA -7- W9Staff Reports - Shared MlaffRepOrts 06.24-2021W -City Clerk -0624-202M(i Res 2021-39 and 2021-39 M Refunding Bond CM 2021-lW8 Resolution oflssuanee (Palm Desert CFD 2021-1 STBs 2021) &24.21.D0CX