HomeMy WebLinkAboutCC RES 09-64RESOLUTION NO. 09-64
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT SUPPLEMENTING RESOLUTION NO. 09-53 TO PROVIDE
FOR A SAFEKEEPING SET -ASIDE FUND FOR THE PALM DESERT
FINANCING AUTHORITY'S ENERGY INDEPENDENCE PROGRAM,
VARIABLE RATE DEMAND LEASE REVENUE BONDS, SERIES 2009;
APPROVING RELATED CHANGES TO CERTAIN DOCUMENTS IN
CONNECTION THEREWITH; AND AUTHORIZING CERTAIN OTHER
MATTERS RELATING THERETO
RECITALS:
WHEREAS, the City Council of the City of Palm Desert (the "City") previously
adopted its Resolution No. 09-53 on June 25, 2009 ("Resolution No. 09-53"); and
WHEREAS, in connection with the issuance by the Palm Desert Financing
Authority (the "Authority") of its Energy Independence Program, Variable Rate Demand
Lease Revenue Bonds, Series 2009 (Federally Taxable) (the "Bonds") at the City's
request, Resolution No. 09-53 approved the forms of, and the execution and delivery of,
a Lease Agreement (the "Lease Agreement"); and
WHEREAS, Resolution No. 09-53 also approved the forms of, and the execution
and delivery of, a Site Lease, a Reimbursement Agreement, Interest Rate Collar
Documents (as defined in Resolution No. 09-53), and a Bond Purchase Contract for the
Bonds (collectively, the "Other Bond Documents'); and
WHEREAS, on July 13, 2009, subsequent to the adoption of Resolution No. 09-
53 and prior to the issuance of the Bonds, the City Clerk received Claim No. 646 ("Claim
No. 646"), filed by LMI Co., LLC, Royce International Investment Company, Severin &
Company LLC, and Palm Desert Villa Portfolio I, LLC, which claim alleges, and seeks to
recover from the City, damages in excess of $100 million relating to the Villa Portofino
development project; and
WHEREAS, to mitigate certain risks associated with Claim No. 646 at this time,
Wells Fargo Bank, National Association, as provider of the irrevocable letter of credit
with respect to the Bonds (the "Letter of Credit"), now requires additional terms to be
added to the financing (the "Additional Bank Terms") in order to proceed with issuance
of the Letter of Credit; and
WHEREAS, if approved by the City and the Authority, the Additional Bank Terms
will require the City to (i) set aside funds in the amount of $2,455,000 in a safekeeping
fund (the "Safekeeping Set -Aside Fund") to be held by the trustee for the Bonds (the
"Trustee"), and used to pay debt service on the Bonds only in the event resolution of
Claim No. 646 results in a judgment against the City or a settlement of Claim No. 646 in
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such an amount and manner that would impair the ability of the City to make payments
to the Trustee for debt service on the Bonds (until such time as certain release tests are
met and in any event no longer than 5 years), and (ii) make its annual appropriation for
payments under the Lease Agreement (which will be used by the Trustee to pay debt
service on the Bonds) prior to any appropriation with respect to such fiscal year for
payment of a final judgment, if any, issued in connection with Claim No. 646, as
permitted under California Government Code Section 970.4; and
WHEREAS, in order to effect the issuance of the Bonds, the City Council desires
to approve revisions in substance to the form of the Lease Agreement previously
approved by Resolution No. 09-53, in order to establish the Safekeeping Set -Aside
Fund and otherwise incorporate the Additional Bank Terms, and to reaffirm its approval
of the Other Bond Documents, the forms of which Lease Agreement and Other Bond
Documents 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. The above recitals, and each of them, are true and correct.
Section 2. Lease Agreement. The Lease Agreement, proposed to be entered
into by and between the Authority and the City, in the form presented at this meeting
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 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 3. Other Bond Documents. Approval of the forms of the Other Bond
Documents previously presented on June 25, 2009, on file in the office of the City Clerk
and incorporated herein by reference, is hereby reaffirmed, and any one of the
Authorized Officers, acting singly, is hereby authorized to execute such Other Bond
Documents in substantially the form previously approved, with such changes therein to
reflect the revisions in the Lease Agreement approved by this Resolution to address
Claim No. 646 and the Additional Bank Terms as may be approved by such officer and
by Bond Counsel; provided, execution of the Bond Purchase Contract and the Interest
Rate Collar Documents shall remain subject to terms and conditions set forth in,
respectively, Sections 5 and 6 of Resolution No. 09-53. Approval of such additions and
changes shall be conclusively evidenced by the execution and delivery of such Other
Bond Documents.
Section 4. 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
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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.
Section 5. 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 27th day of August, 2009, by the following vote:
AYES: BENSON, FERGUSON, FINERTY, KELLY and SPIEGEL
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
ROBERT A. PIE EL, OR
ATTEST:
RACHELLE D`1CLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
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