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Home My WebLink AboutRES FA-65RESOLUTION NO. FA-65 A RESOLUTION OF THE PALM DESERT FINANCING AUTHORITY SUPPLEMENTING RESOLUTION NO. FA-63 TO PROVIDE FOR A SAFEKEEPING SET -ASIDE FUND FOR ITS ENERGY INDEPENDENCE PROGRAM, VARIABLE RATE DEMAND LEASE REVENUE BONDS, SERIES 2009, IN CONNECTION WITH DEVELOPER CLAIM AGAINST CITY; APPROVING RELATED CHANGES TO CERTAIN DOCUMENTS IN CONNECTION THEREWITH; AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO RECITALS: WHEREAS, the Palm Desert Financing Authority (the "Authority") previously adopted its Resolution No. FA-63 on June 25, 2009 ("Resolution No. FA-63"); and WHEREAS, Resolution No. FA-63 authorized the issuance by the Authority of its Energy Independence Program, Variable Rate Demand Lease Revenue Bonds, Series 2009 (Federally Taxable) (the "Bonds") and approved the forms of, and the execution and delivery of, an Indenture (the "Indenture") and a Lease Agreement (the "Lease Agreement"); and WHEREAS, Resolution No. FA-63 also approved the forms of, and the execution and delivery of, a Site Lease, an Assignment Agreement, a Bond Purchase Contract, a Remarketing Agreement, Interest Rate Collar Documents (as defined in Resolution No. FA-63) (collectively, — the "Other Bond Documents"), and an Official Statement (the "Official Statement"); and WHEREAS, on July 13, 2009, subsequent to the adoption of Resolution No. FA-63 and prior to the issuance of the Bonds, the City Clerk of the City 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 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 W:\Agenda Items\2009-08-27\EIP Variable Rate demand LRB satekeeping\RES - Financing Authority (Palm Desert EIP 2009 LRBs).docx Resolution No. FA-65 Page 2 of 3 WHEREAS, in order to effect the issuance of the Bonds, the Authority Commission desires to approve revisions in substance to the forms of the Indenture and the Lease Agreement previously approved by Resolution No. FA-63, 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 and the Official Statement, the forms of which Indenture, Lease Agreement, Other Bond Documents, and Official Statement are on file with the Secretary of the Authority. NOW, THEREFORE, THE PALM DESERT FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2. Issuance of Bonds; Indenture. The Indenture, proposed to be entered into by and between the Authority and the Trustee, in the form presented at this meeting and on file with the Secretary of the Authority (the "Authority Secretary'), is hereby approved. Subject to the parameters set forth in Section 4 of Resolution No. FA-63, the issuance of the Bonds is hereby approved and authorized. Subject to Section 4 of Resolution No. FA-63, each of the President, the Vice -President, and the Chief Administrative Officer, and any deputy of such officers (each, an "Authorized Officer"), acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with such additions or changes 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 Aareement. The 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 Authority Secretary, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, 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. 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 Authority Secretary 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 Indenture and 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, the Remarketing Agreement, and the Interest Rate Collar Documents shall remain subject to terms and conditions set forth in, respectively, Sections 8, 9, and 10 of Resolution No. FA-63. Approval of such additions and changes shall be conclusively evidenced by the execution and delivery of such Other Bond Documents. Section 5. Official Statement. Approval of the form of the Official Statement previously presented on June 25, 2009, on file in the office of the Authority Secretary and incorporated herein by reference, is hereby reaffirmed, and any one of the Authorized Officers, acting singly, is hereby authorized to execute the Official Statement in substantially the form Resolution No. FA-65 Page 3 of 3 previously approved, with such changes therein to disclose Claim No. 646 and to reflect the revisions in the Indenture and the Lease Agreement approved by this Resolution on account of Claim No. 646 and the Additional Bank Terms as may be approved by such officer, the City Attorney of the City, Bond Counsel, and Disclosure Counsel. Approval of such additions and changes shall be conclusively evidenced by the execution and delivery of the final Official Statement. Section 6. Other Acts. The Authorized Officers and all other officers of the Authority 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 Indenture, the Site Lease, the Lease Agreement, the Assignment Agreement, the Remarketing Agreement, the Official Statement, the Bond Purchase Contract, and the Interest Rate Collar Documents and any such actions previously taken by such officers are hereby ratified and confirmed. Section 7. Effective Date. This Resolution shall take effect immediately upon adoption. PASSED AND ADOPTED by the Palm Desert Financing Authority Commission 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. SPIEG " , "- - "'' ENT ATTEST: RACHELLE D. KLASN, SECRETARY PALM DESERT FINANCING AUTHORITY