HomeMy WebLinkAbout14 - Fire Station No. 2 — Authorizing the Preparation, Sale and Delivery of Certificates of Participation, and Award of Contract - Amended ResolutionNovember 11, 2020
Item No. 14
RESOLUTION NO. 2020-96
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, AUTHORIZING THE
PREPARATION, SALE AND DELIVERY OF NOT TO
EXCEED $10,000,000 PRINCIPAL AMOUNT OF
CERTIFICATES OF PARTICIPATION, SERIES 2020A (FIRE
STATION NO. 2 PROJECT) AND APPROVING CERTAIN
DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City of Newport Beach ("City") and the Newport Beach Public
Facilities Corporation ("Corporation") desire to enter into a Site Lease dated as of
December 1, 2020 ("Site Lease"), and a Lease/Purchaseent, dated as of
December 1, 2020 ("Lease"), whereby the City, as agent of the r ration, shall cause
the acquisition, improvement and equipping of a new Fire Sta No. 2, as described
therein ("Project"), and the City has agreed to lease the Leased Pr ses (defined below)
from the Corporation, the forms of which have been presented to this City Council at the
meeting of which the Resolution has been adopteg;
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WHEREAS, in order to finance the Project, the City and the Corporation desire to
authorize the sale of the City of Newport Beaci rtificates of Participation 2020A (Fire
Station No. 2 Project) (the "Certificates") aencing fractional interests in the Lease
Payments made by the City under the Lease;
WHEREAS, Section 5450 et seq. of the California Government Code
("Government Code") provides statutory authority for pledging collateral for the payment
of principal or prepayment price of, and interest on, any agreement, including certificates
of participation, and the Government Code creates a continuing perfected security
interest which shall attach immediately to such collateral irrespective of whether the
parties to the pledge document have notice of the pledge and without the need for any
physical delivery, recordation, filing or further act, and, therefore, the City and the
Corporation hereby warrant and represent that pursuant to the Lease, the Trust
Agreement, to be dated as of December 1, 2020, by and among The Bank of New York
Mellon Trust Company, N.A., as trustee ("Trustee"), the City and the Corporation ("Trust
Agreement"), and the Government Code, the Trustee will have a first priority perfected
security interest in the Lease Payments described in the Lease represented by the
Certificates pursuant to the Government Code;
Resolution 2020-96
Page 2 of 6
WHEREAS, the City Council desires to consent to the assignment of certain of the
Corporation's rights, title and interest in and to the Site Lease and the Lease Agreement,
including the right to receive such lease payments from the City, to the Trustee pursuant
to an Assignment Agreement, between the Corporation and the Trustee, to be dated as
of December 1, 2020 ("Assignment Agreement"), the form of which together with the form
of the Trust Agreement, are attached to Resolution PFC2020-2, and have been presented
to this City Council at the meeting at which this Resolution has been adopted;
WHEREAS, the City Council desires to approve the form of a Purchase Agreement
("Purchase Agreement"), by and among the Corporation, the City and Stifel, Nicolaus &
Company, Incorporated ("Purchaser"), pursuant to which the Purchaser will agree to buy
the Certificates on the terms and conditions set forth therein, the form of which is attached
to Resolution PFC2020-2, and has been presented to this City Council at the meeting at
which this Resolution has been adopted;
WHEREAS, the City Council desires to approve the form of a Preliminary Official
Statement relating to the Certificates ("Preliminary Official Statement") to be distributed
to potential investors, for the purposes of facilitating the sale of the Certificates at the
lowest feasible interest rate, the form of which has been presented to this City Council at
the meeting at which this Resolution has been adopted;
WHEREAS, the City Council desires to approve the form of a Continuing
Disclosure Agreement ("Disclosure Agreement") between the City and Digital Assurance
Certification, LLC, the form of which has been presented to this City Council at the
meeting at which the Resolution has been adopted;
WHEREAS, the City Council desires to approve the form of an Agency Agreement
between the City and the Corporation, the form of which has been presented to this City
Council at the meeting at which the Resolution has been adopted; and
WHEREAS, in compliance with Section 5852.1 of the Government Code, the City
has obtained from KNN Public Finance, LLC, the City's municipal advisor, the required
good faith estimates and such estimates are disclosed and set forth in Exhibit A attached
hereto.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The City Council hereby finds and determines that the total rental to
be paid under the Lease Agreement does not exceed the fair rental value of the leased
property identified in Exhibit A to the Lease (collectively, the "Leased Premises").
Resolution 2020-96
Page 3 of 6
Section 2: This City Council hereby consents to the preparation, sale and
delivery of the Certificates in an aggregate amount of not to exceed $10,000,000 in
accordance with the terms and provisions of the Trust Agreement, to pay the costs of the
Project and to pay all associated costs in connection therewith. The proceeds of the
Certificates shall be expended to finance the costs of the Project and to provide for a
reserve fund, if any, and the costs of the preparation, sale and delivery of the Certificates.
Section 3: The Bank of New York Mellon Trust Company, N.A. is hereby
appointed as Trustee on behalf of the owners of the Certificates, with the duties and
powers of such Trustee as set forth in the Trust Agreement.
Section 4: The forms of the Site Lease, the Lease Agreement, the Trust
Agreement, the Disclosure Agreement, the Agency Agreement and the Assignment
Agreement presented at this meeting are hereby approved. Each of the Mayor and the
City Manager is hereby authorized for and in the name of the City to execute the Site
Lease, the Lease Agreement, the Disclosure Agreement, the Agency Agreement and the
Trust Agreement in substantially the forms on file with the City Clerk, hereby approved,
with such additions thereto and changes therein as are recommended or approved by
Stradling Yocca Carlson & Rauth, a Professional Corporation, as Special Counsel to the
City ("Special Counsel"), or the City Attorney and the officer or officers executing the
same. Approval of such changes shall be conclusively evidenced by the execution and
delivery of the foregoing documents by one or more of the authorized officers. The Mayor
and the City Manager each is hereby authorized to execute, acknowledge and deliver any
and all documents required to consummate the transactions contemplated by the Site
Lease, the Lease Agreement, the Disclosure Agreement, the Trust Agreement, the
Agency Agreement and the Assignment Agreement.
Section 5: The form of the Purchase Agreement presented at this meeting and
the sale of the Certificates pursuant thereto are hereby approved, and each of the Mayor
the City Manager is hereby authorized to evidence the City's acceptance of the terms and
provisions of the Purchase Agreement by executing and delivering the Purchase
Agreement in the form presented to the City at this meeting, with such additions thereto
and changes therein as are recommended or approved by the City Attorney and the
officers executing the same. Approval of such additions and changes shall be
conclusively evidenced by the execution and delivery of the Purchase Agreement;
provided, however, that the Purchase Agreement shall be signed only if: (a) the aggregate
principal amount of the Certificates does not exceed $101000,000; (b) the aggregate true
interest cost of the Certificates does not exceed 2.0% per annum; (c) the interest rate with
respect to the Certificates does not exceed 4.0% per annum; and
Resolution 2020-94.
Page 4 of
(d) an underwriting discount for the purchase of the Certificates does not exceed 0.5% of
the principal amount of the Certificates. The City Manager, or its designee, is authorized
to reject any terms presented by the Purchaser if determined not to be in the best interest
of the City.
Section 6: The form of the Certificates as set forth in the Trust Agreement (a
the Trust Agreement may be moded pursuant to Section 4 hereof) are hereby approvei
Section 7: In addition to the parameters relating to the Certificates set forth in
Sections 1 and 6 of this Resolution, the Certificates shall mature no later than July 1,
2030, and may be subject to all or certain of the proposed prepayment provisions relating
to the Certificates set forth in Exhibit B of this Resolution, as determined by the City
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changes therein as are determi
make such Preliminary Official .1
12 of the Securities and ExdhAdo
is hereby authorized to
Official Statement, tdgr
A as as oil
Finance Charge of th(;
idary Official Statement may be distributed t
Ved, together with such additions thereto an
try by the City Manager, or its designee, t
nal as of its date for purposes of Rule 15A
2�
. Commission. Each of the Mayor and the City Manag
6 final Official Statement in the form of the Preliminal
such changes as are determined necessary by the Cit�
anager, or its aesigneei and Tie—officer executing the same to make such Official
Statement complete and accurate as of its date. The Purchaser is further authorized to
distribute the final Official Statement for the Certificates to the purchasers thereof upon
its execution by an officer of the City as described above. The City Manager and its
written designee is hereby authorized and directed to take whatever steps are necessary
to comply with the requirements of Rule 15c2-12 applicable to the Certificates following
their execution and delivery.
Page 5 of Q
Section 10: The Mayor and the City Manager are hereby authorized, jointly and
severally, to do any and all things and to execute and deliver any and all documents which
they may deem necessary and advisable in order to consummate the sale and delivery
of the Certificates, as approved as to form by the City Attorney, and otherwise effectuate
the purposes of this Resolution (including but not limited to the execution and delivery of
any consents or agreements to remove encumbrances to title with respect to the Leased
Premises and to substitute, remove or add property to the Leased Premises that is
determined by the City Manager to be in the best interests of the City) and such actions
previously taken by such officers are hereby ratified and confirmed. In the event the
Mayor is unavailable or unable to execute and deliver any of the above -referenced
documents, any other member of the City Council may validly execute and deliver such
document.
lo,
Resolution 2020-96
Page 6 of 6
Section 15: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this 10th day of November, 2020.
Will O'Neill
Mayor
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Aaron C. Harp
City Attorney
Attachments: Exhibit A - Good Faith Estimates
Exhibit B - Prepayment Provisions
EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the
Certificates in accordance with California Government Code Section 5852.1. Such good
faith estimates have been provided to the City by KNN Public Finance, LLC, the City's
Municipal Advisor (the "Municipal Advisor").
Principal Amount The Municipal Advisor has informed the City that, based on the
City's financing plan and current market conditions, its good faith estimate of the
aggregate principal amount of the Certificates to be sold is $7,935,000 (the "Estimated
Principal Amounts").
Finance Cl'
that, assuming tV,
based on market
is faith estima-'
fees and charge�,
$182,165.
LTAD-46 are]
Total Payment Amount. The Municipal Advisor has informed the City that,
assuming that the Estimated Principal Amounts of the Certificates are sold, and based on
market interest rates prevailing at the time of preparation of such estimate, its good faith
estimate of the total payment amount, which means the sum total of all payments the City
will make to pay debt service on the Certificates, plus the finance charge for the
Certificates, as described above, not paid with the respective proceeds of the Certificates,
calculated to the final maturity of the Certificates, is $9,617,967 and the annual cost to
administer the Certificates, not paid with proceeds of the Certificates is $3,750.
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Optional Prepoyinent The 2020 Certificates are not expected to be subject
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