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HomeMy WebLinkAboutCC RES 09-53RESOLUTION NO. 09-53 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT MAKING A FINDING OF SIGNIFICANT PUBLIC BENEFIT, APPROVING AS TO FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION WITH THE SALE AND ISSUANCE OF THE PALM DESERT FINANCING AUTHORITY'S ENERGY INDEPENDENCE PROGRAM, VARIABLE RATE DEMAND LEASE REVENUE BONDS, SERIES 2009 (FEDERALLY TAXABLE), AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO RECITALS: WHEREAS, the Palm Desert Financing Authority (the "Authority") is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated as of January 26, 1989, by and between the City of Palm Desert (the "City") and the Palm Desert Redevelopment Agency, and under the provisions of Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the "Act"), and is authorized pursuant to Article 4 of the Act to issue bonds for the purpose of financing and refinancing public capital improvements (as defined in the Act, including but not limited to paragraph (v) of Government Code Section 6546); and WHEREAS, the City desires that the Authority issue, and the Authority desires to issue, its Energy Independence Program, Variable Rate Demand Lease Revenue Bonds, Series 2009 (Federally Taxable) (the "Bonds") in order to (i) reimburse the City for the entire amount of its $2.5 million advance, authorized by Resolution No. 08-89 of the City Council of the City, adopted on August 28, 2008, to initially fund the Energy Independence Fund; (ii) finance the acquisition and construction or installation of distributed generation renewable energy sources and energy efficiency improvements on or in properties in the City pursuant to the City's Energy Independence Program; and (iii) pay certain costs related to the issuance of the Bonds; and WHEREAS, after notice duly published in accordance with law, this City Council held a public hearing on this date with respect to the issuance of the proposed Bonds and received evidence concerning the public benefits therefrom; and WHEREAS, in connection with the issuance of the Bonds and to provide security therefore, it is proposed that the Authority will enter into (i) a Site Lease (as defined herein), under which the Authority will lease the Parkview Office Complex, also known as 73710 and 73720 Fred Waring Drive, Palm Desert, California, including the land and the improvements thereon (the "Leased Property"), from the City, and (ii) a Lease Agreement, under which the City will sublease the Leased Property from the Authority and make rental payments, calculated to be sufficient to allow the Authority to pay debt service on the Bonds; and WHEREAS, pursuant to the City's "Request for Proposals — Energy Program Financing," dated February 2009 (the "RFP"), and the authorization provided by the City Council of the City P6401.1039\1142493.3 RESOLUTION NO. 09-53 on May 21, 2009, to select Wells Fargo Bank, National Association (the "Bank"), to assist the City with proceedings for a variable rate bond issue to provide financing for the City's Energy Independence Program, the Bonds will be issued as variable rate bonds; and WHEREAS, in order to provide for additional liquidity for the payment of debt service on the Bonds and to enhance the credit quality of the Bonds, as contemplated by the submission of the Bank, in response to the RFP, the Bank has agreed to provide an irrevocable letter of credit (the "Letter of Credit") with respect to the Bonds, on such terms as set forth in a term sheet, dated June 2, 2009, with respect to the Bonds; and WHEREAS, as part of the documentation for the Letter of Credit, a reimbursement agreement, by and between the City and the Bank is required (the "Reimbursement Agreement"); and WHEREAS, pursuant to Government Code Section 5922, in order to reduce the amount of interest rate risk or lower the cost of borrowing in connection with the issuance of the Bonds, and in a lower cost of lease financing to the City in connection therewith, the City (or the Authority, as the case may be) desires to enter into an ISDA Master Agreement, as supplemented by a Schedule and a Confirmation, each by and between the City (or the Authority, as the case may be) and Wells Fargo Bank, National Association (collectively, the "Interest Rate Collar Documents"); and WHEREAS, in order to effect the issuance of the Bonds, the City Council desires to approve the forms of, and authorize the execution and delivery of, the Site Lease, the Lease Agreement, the Reimbursement Agreement, the Interest Rate Collar Documents, and a Bond Purchase Contract for the Bonds, the forms of which are on file with the City Clerk. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals; Findings. The above recitals, and each of them, are true and correct. The City Council hereby finds that the financing of public capital improvements described above through the issuance by the Authority of the Bonds will result in significant public benefits to the constituents of the City, including demonstrable savings in effective interest rate and more efficient delivery of the City's Energy Independence Program to residential and commercial development within the City. Section 2. Site Lease. The Site Lease (the "Site Lease"), proposed to be entered into by and between the City and the Authority, in the form presented and on file in the office of the City Clerk, is hereby approved. Each of the Mayor (or in his absence, the Mayor Pro Tem) and the City Manager of the City (each an "Authorized Officer"), acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Site Lease 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 Authorized Officer's execution and delivery thereof). Section 3. Lease Agreement. The Lease Agreement (the "Lease Agreement"), proposed to be entered into by and between the Authority and the City, in the form presented and P6401.1039\1142493.3 2 RESOLUTION NO. 09-53 on file in the office of the City Clerk, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Lease 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 Authorized Officer's execution and delivery thereof). Section 4. Reimbursement Agreement. The Reimbursement Agreement, proposed to be entered into by and between the City and the Bank, in the form presented and on file in the office of the City Clerk, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Reimbursement 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 Authorized Officer's execution and delivery thereof). Section 5. Bond Purchase Contract. The Bond Purchase Contract (the "Bond Purchase Contract"), proposed to be entered into by and among the City, the Authority, and Wells Fargo Institutional Securities, LLC, as underwriter (the "Underwriter"), in the form presented and on file in the office of the City Clerk, is hereby approved. Subject to the parameters specified in the Authority's resolution approving the issuance of the Bonds, each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Contract 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 Authorized Officer's execution and delivery thereof). Section 6. Interest Rate Collar Documents. The forms of the Interest Rate Collar Documents, as presented at this meeting and on file with the City Clerk, are hereby approved. Each Authorized Officer, acting singly, is hereby further authorized to execute and deliver, for and in the name of and on behalf of the City, the Interest Rate Collar Documents in substantially said forms, with such changes therein as the Authorized Officer executing the documents may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof); provided, that the maximum interest rate under the Interest Rate Collar Documents shall not exceed 5.25%. Section 7. Government Code Section 5922 Findings. In accordance with California Government Code Section 5922, the City hereby finds and determines that Interest Rate Collar Documents entered into in accordance with this Resolution and consistent with the requirements set forth herein are designed to reduce the amount or duration of payment, interest rate, spread or similar risk or result in a lower cost of borrowing to the Authority, and in a lower cost of lease financing to the City, when used in combination with the issuance of the Bonds. Section 8. Other Acts. The Authorized Officers and all other officers of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents that they may deem necessary or advisable in order to consummate the sale, issuance and delivery of the Bonds, or otherwise to effectuate the purposes of this Resolution, the Site Lease, the Lease Agreement, the Reimbursement Agreement, the Interest Rate Collar Documents, and the Bond Purchase Contract, and any such actions previously taken by such officers, are hereby ratified and confirmed. P6401.1039\1142493.3 3 RESOLUTION NO. 09-53 Section 9. Effective Date. This Resolution shall take effect immediately upon adoption. PASSED AND ADOPTED by the City Council of the City of Palm Desert at a meeting held on the 25th day of June, 2009, by the following vote, to wit: AYES: BENSON, FERGUSON, FINERTY, and SPIEGEL NOES: NONE ABSENT: KELLY ABSTAIN: NONE ROBERT A. SPIEOR ATTEST: RA E LE D. ,ASSE CITY CLE )K CITY OF PALM DESERT, CALIFORNA P6401.1039\1142493.3 4